TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 1531
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.... Senior Standing Counsel Ms. Mehta waives service of notice of rule on behalf of respondents. 3. Having regard to the controversy involved which is in narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing. 4. This petition is filed challenging the notice dated 31.03.2021 issued under section 148 of the Income Tax Act, 1961 [for short 'the Act'] for A.Y. 2015-16. The Notice is signed by the respondent- Assessing Officer at 6:53 p.m. on 31.03.2021. There is nothing on the record to show that the notice was not issued on 31.03.2021. It is not in dispute that the notice is issued on 31.03.2021 and accordingly, the notice cannot be said to be a time barred notice. 5. The above facts are ....
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....ital: Rs. 10,43,10,920/- Reserve & Surplus: Rs. 140,21,25,693/-) as on 03.09.2014 as per its books. The actual net-wroth of the said company should have been much higher considering that Land and some other assets continue to be reocrded on book value. Hence, the value of share in Mayur Dyechem Intermediates LLP received by Hetal Mayurkumar Patel as a result of this conversion of company into LLP amuonts to Rs. 1,57,02,090/- (i.e. 1.12% of Rs. 150,64,36,613/-) even at book value, which is a very conservative figure. 4. In short, Hetal Myurkumar Patel had originally invested amount of Rs. 11,68,390/- in equity shares of Mayur Dyechem Intermediates Limited and in lieu of such share, because of conversion of this company into LLP, got partn....
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....t of rights in a capital asset includes extinguishment of rights independent of and otherwise than on account of transfer. The value of share in Mayur Dyechem Intermediates LLP amounts to Rs. 1,68,725,090/- (i.e. 1.12% of Rs. 150,64,36,613/-) even at book value, which is very conservative figure. To sum up, Mr. Rajeshkumar Somabhai Patel had originally invested amount of Rs. 11,70,000/- in equity shares of Mayur Dyechem Intermediates Limited and in lieu of such shares, because of conversion of this Company into LLP, got partnership stake in LLP amounting to at least Rs. 1,68,72,090/- even @ book value (market value is much higher) and the capital gains of Rs. 1,57,02,090/- remained to be taxed in AY 2015-16 in view of the fact that the cond....
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....re, if any, is on the part of the Assessing Officer in not recording the correct reasons. It was therefore, submitted that the impugned notice issued by the respondent-Assessing Officer is liable to be quashed and set aside. 13. Per contra, learned Senior Standing Counsel Ms. Maithili Mehta for the respondent submitted that admittedly, the petitioner is not entitled to exemption under section 47(xiiib)(e) of the Act as the turnover of the company which is converted into LLP is more than Rs. 60 Lakh in the previous year. 14. It was submitted that the transfer of shares of the petitioner from the Company to LLP is liable to capital gains and therefore, the respondent-Assessing Officer has rightly formed a reason to believe that there is esc....
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....a prima facie conclusion that there is escapement of the income. 17. The Hon'ble Court in case of CIT vs. Kelvinator of India Ltd reported in 320 ITR 561 has held as under: "2. A short question which arises for determination in this batch of civil appeals is, whether the concept of "change of opinion" stands obliterated with effect from 1st April, 1989, i.e., after substitution of Section 147 of the Income Tax Act, 1961 by Direct Tax Laws (Amendment) Act, 1987? .... .... ..... ..... 6. ............prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147....