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2016 (7) TMI 176 - HC - Income TaxReopening of assessment - issuance of share at premium - reasons to believe - Held that:- Question of issuance of share at premium, to whom such shares were allotted and the premium received, the resultant increase in the share premium were all placed before Assessing Officer for his verification of original assessment proceedings. He however, raised no further question and accepted the stand of the assessee. Any re-visit of such an issue without there being additional or undisclosed information would be merely in the nature of change of opinion. In reasons recorded AO referred to some information received from CCIT as per which the assessee company had allotted shares at a high premium. Further, AO observed from the balance sheet of assessee-company that it had received share premium of ₹ 1.45 crores during the year under consideration. He therefore, recorded that “the assessee has not explained the nature of such credit and has failed to prove the genuineness and justification of huge share premium received in its books of accounts. Hence, such receipts need detailed verification.” The approach of AO cannot be approved. His entire focus is on share premium amount of ₹ 1.45 crores and without any tangible material on record, he proceeds on the basis that shares were issued at a high premium. For any re-assessment, AO must have some tangible material to enable him to form a belief that the income chargeable to tax had escaped assessment. We find reference to no such material in the reasons recorded. There is no basis even to prima facie proceed on the premise that the allocation of shares was at an artificially high premium. Merely because a sizeable sum was received in the nature of share premium during the year under consideration, would not automatically mean that the same was artificially increased. Re-opening of assessment which was framed after scrutiny would not be permissible for a fishing inquiry. In the present case, we find the vital link missing from the reasons recorded, such link being the material at the command of the Assessing Officer to form such a belief - Decided in favour of assessee.
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