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2019 (3) TMI 1560 - HC - Income TaxReopening of assessment - Addition u/s 68 - genuineness of the transaction or credit and the credit worthiness of the individual providing the money not established - HELD THAT:- Revenue gets hold of information or material which tends to or has the potential of undermining its findings (previously made in the assessment proceedings) and have an important bearing, invocation of the power to reassessment is warranted. Now in the present case, the Revenue presses several such circumstances: one, that the SEBI application was made in 2014 after a questionnaire was issued by the AO; two there was nothing to justify the premium of 457 per cent over the face value of the shares – even the market value of the share according to the Revenue on the date of issue of the shares was only ₹ 318/- per share. Three, the SEBI approval was given much later; four, when the authorized capital of company was ₹ 20 lakhs (mostly paid) the necessity for issuing shares worth ₹ 87 crores remained unanswered. The reassessment notice in this case was clearly warranted. Though the assessee had sought to explain that the share application amounts were received and later the shareholding rights were transferred by Mr. Analjit Singh to his family trust. The identity of Shri Analjit Singh was known; however, looking at the transaction (i.e. allotment of shares vastly in excess of the authorized capital, in the absence of any SEBI approval and retention of that money by the assessee which did not show any reason for issuing the shares) the other ingredients of Section 68 (i.e. genuineness of the transaction or credit and the credit worthiness of the individual providing the money) were apparently not established. - Decided in favour of revenue
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