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2019 (3) TMI 327 - AT - Income TaxReopening of assessment u/s 147 - reasons recorded were due to issue of shares at a very high share premium of ₹ 90/- per share raised by a private company - eligibility of reason to believe - reopening within four years from the end of the assessment year - meagre income earned by the assessee - identity and creditworthiness of the subscribers and genuineness of the transaction - HELD THAT:- In the instant case, CCIT based on intelligence inputs from DGIT(Intelligence and Criminal Investigation) has informed the AO that the assessee has issued equity shares at a high premium. The return of income was originally processed u/s 143(1) and no scrutiny assessment was framed u/s 143(3). The reopening u/s 147 was sought to be done within four years from the end of the assessment year and amended provisions of Section 147 shall be applicable. The processing of return of income u/s 143(1) cannot be called as an assessment as was held in the case of Rajesh Jhaveri Stock Brokers Private Limited [2007 (5) TMI 197 - SUPREME COURT] - AO must have tangible material to come to formation of a belief that income has escaped assessment. The assessee was incorporated only on 14.01.2009 and this is the first year of its operation. There is a meagre income earned by the assessee for the year ended 31.03.2009. There are no assets base nor any business of the assessee as is discernible from the financial statements filed before us. The assessee being a newly incorporated company has issued equity shares of ₹ 10 each at a premium of ₹ 90 per share. The outsiders having no connection with Promoters/Directors of the assessee company had subscribed 90.12% of the total fund infusion in the assessee company while the promoters/directors have infused 9.88% of the total fund infused in the assessee company. The AO acted on the information as to very high rate of share premium charged by the assessee company considering the same to be tangible incriminating material forming a belief that income has escaped assessment. Each case is to be decided on its own factual matrix and present case before us is a fit case for invocation of reopening of assessment u/s 147 of the 1961 Act. We have no hesitation in upholding invocation of provisions of Section 147 of the 1961 Act for reopening of the concluded assessment based on factual matrix of the case. CIT(A) passed a very cryptic order which in our opinion is not sustainable in the eyes of law as the learned CIT(A) whose powers are co-terminus with the powers of the AO is required to adjudicate on the factual matrix of the case keeping in view provisions of Section 68 to see whether evidence on record satisfy the ingredients of provisions of Section 68 as to identity and creditworthiness of the subscribers and genuineness of the transaction of raising of share capital and share premium. Thus, on merits also the appellate order passed by learned CIT(A) is not sustainable in the eyes of law and we set aside the same on merits too. Setting aside the issues in this appeal on merits to the file of learned CIT(A) for denovo adjudication of the issue of raising share capital and share premium to be adjudicated keeping in view provisions of Section 68 and all other relevant provisions of the 1961 Act. - Decided in favour of revenue for statistical purposes.
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