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2016 (1) TMI 992 - HC - Income TaxReopening of assessment - allotment of shares at high premium - reason to believe or tangible material to form an opinion - Held that:- The assessee company had issued share capital of ₹ 2.66 crores (rounded off) during the Financial Year 2010-11. The assessee had issued 60,000/- shares at a face value of ₹ 10 per share with a premium of ₹ 990/- per share. The Assessing Officer, on the basis of assets and liabilities furnished by the assessee company in its balance sheet, after computing the net worth of the company, noted that the share valuation of the assessee company would come to ₹ 33/-, whereas shares have been allotted at ₹ 1,000/- per share, i.e. at a premium of ₹ 967/- per share. On the basis of such working out, he recorded his reason to believe that income to the extent of Rs. ₹ 5.80 crores had escaped assessment. We do not find that the reasons are perverse or so untenable as to terminate the assessment at this stage on the ground that the Assessing Officer cannot be stated to have any reason to believe or tangible material to form such an opinion that income chargeable to tax had escaped assessment. Prima facie, the facts appear to be glaring. Whether the assessee will be able to discharge the minimal burden of establishing identity, source and creditworthiness of the depositors is a question not possible to answer without scrutiny. Whether the assessee had started its manufacturing activity and consequently its business operations so as to earn income or not are the issues which cannot be gone into at this stage and must be made part of the reopened assessment to be judged on the basis of evidence which may be brought on record. It is always open for the assessee company to contend before the assessing authority that there has not been over valuation of the allotted shares or that for any legal reasons, in any case, addition cannot be made in the hands of the assessee, despite such glaring facts. These are the issues in the realm of assessment, once it is allowed to be reopened. We are not inclined to terminate the assessment proceedings at this stage on the grounds pressed in service by the petitioners. Decided against the assessee.
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