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2011 (10) TMI 667 - ITAT DELHIReopening of assessment - addition on account of share application money for allotment of shares u/s 68 - Held that:- If the Assessing Officer for whatever reasons has reason to believe that income has escaped assessment, it confers jurisdiction to reopen the assessment. It is, however, to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to Section 147. It cannot be even the case of the assessee that its case is covered by the proviso u/s 147 as for application of proviso it is a condition precedent that assessment earlier should have been framed under Section 143 (3). Therefore, we find no force in the contention of the assessee that assessment should be quashed simply for the reason that initiation of re-assessment proceedings was invalid. We reject such ground of the assessee In the present case, the assessee filed copies of PAN, acknowledgement of filing income-tax returns of the companies, their bank account, statements for the relevant period i.e., for the period when the cheques were cleared and the parties were not produced in spite of specific directions of the Assessing Officer instead of taking opportunities in this behalf. Keeping in view the fact for non-production of these parties coupled with the outcome of inquiry made by the Investigation Wing, the Assessing Officer has made the addition. The amount paid to the assessee by the share applicants has been shown to be debited in the respective bank accounts of the share applicants and if all these facts are seen, then, it will be a case where addition upheld by the CIT (A) cannot be held to be justified. Therefore, keeping in view the evidence placed on record by the assessee, we are of the opinion that the addition upheld by CIT (A) was not justified and the same requires deletion Assessee has charged high premium on the shares for which no justification has been rendered - Held that:- During the year under consideration, the assessee has issued 2,50,000 shares of face value of ₹ 10 at a premium of ₹ 90 by way of private placement. The list of these parties is furnished at pages 249 and 250. To be precise, shares have been issued to 19 parties. The Assessing Officer has doubted the genuineness of share application money with respect to aforementioned 7 parties i.e., in respect of 34,500 shares allotted to those parties and, thus, in respect of balance 12 parties, share applicants of 2,15,500 shares, the Assessing Officer has accepted the genuineness of the share application. Therefore, it is not even the case of the Assessing Officer that the share application money rendered by the aforementioned seven parties was not genuine on the ground that it consisted of huge premium of ₹ 90 on the face value of ₹ 10/-. Thus, there is no force in the contention of the learned DR that on account of charging of heavy premium the share application should be considered non-genuine.
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