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2019 (5) TMI 429 - AT - Income TaxReopening of assessment u/s 147 - addition u/s 68 - case reopen based of reasons that sale of shares held as investments represented assessee’s income escaping assessment - addition made regarding share capital raised - CIT-A quashed reopening notice - HELD THAT:- Unless in the order u/s 147 the AO makes addition on the ‘foundational’ issue for which the reason was recorded, the AO is not permitted to make addition in respect of ‘any other issue’ for which reason was not recorded prior to issue of the notice. See SOFTWARE CONSULTANTS [2012 (2) TMI 18 - DELHI HIGH COURT] and INDU ARTS VERSUS ACIT, CIRCLE 19 (1) , NEW DELHI. [2017 (6) TMI 449 - ITAT DELHI] The reasons which the AO recorded on 09/02/2015 and as set out in the foregoing, do not in any manner suggest that the AO was satisfied that the share subscription amounts received during the relevant year represented assessee’s income escaping assessment. Undeniably in the reasons set out, the AO has made reference to two separate and distinct transactions; one involving the shares which the assessee issued to twenty two share subscribing companies and another involving sale of investments which the assessee held in other bodies corporate. It may be so that Shri Mahavar or companies managed by him were connected with both the set of transactions. However both the sets of transactions were separate from each other and consequences flowing from these sets of transactions were also separate and could not be intermixed. In the reasons the AO recorded his satisfaction about escapement of income specifically with reference to assessee’s transactions involving sale of investments totaling ₹ 34 Crs. The satisfaction recorded did not any manner suggest that in AO’s opinion share subscription amount of ₹ 30.20 Crs. received during the year from 22 subscribers represented assessee’s income escaping assessment. We therefore concur with the findings of the Ld. CIT(A) that no addition was made in the order u/s 147/143(3) dated 31.03.2016 with reference to the reasons for which the assessment was reopened and in that view of the matter the impugned order u/s 147/143(3) is held to be legally unsustainable. No reason to interfere with the findings returned by the Ld. CIT(A) in his order. - Decided in favour of assessee.
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