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2012 (10) TMI 52 - AT - Income TaxValidity of reopening of assessment u/s 147 - buy back of shares at low price in AY 05-06, originally issued on premium - addition made u/s 68 - AY 04-05 - Held that:- There was sufficient reason for reopening of assessment, in sofar as original assessment completed u/s 143(3) was reopened within a period of three years. From the record, we found that statement of Director of assessee company was recorded, wherein it was stated that shares of Rs. 10/- which was issued at a premium of Rs. 90/- were purchased back by the Directors at a face value of Rs. 10/- only. This statement is valid information for the purpose of reason to believe that there is escapement of income, accordingly, we uphold the action of the Assessing Officer for reopening the assessment. So far as merit of addition is concerned, it is observed that AO should have brought on record positive material to substantiate the transaction of issue and repurchase of shares as bogus, having been done by paper company. However, no effort was made by the Assessing Officer or CIT(A) to establish identity of the share applicants. Matter is restored back to the file of Assessing Officer for deciding afresh as per law - Appeal of assessee allowed in part for statistical purposes.
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