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2021 (1) TMI 739 - ITAT DELHIReopening of assessment u/s 148 - As argued notice has been issued purely on the borrowed satisfaction of DIT (Investigation) and no belief has been recorded in the reasons for reopening the case - bringing to tax the value of Sweat Equity issued by Rockland Hospital Ltd. to the assessee and which assessee was stated to have received without any consideration - HELD THAT:- We find force in the submissions of Ld AR that when the taxation of the value of sweat equity shares which is alleged to have escaped the assessment has itself been set to nought by the order of H’ble High Court in the company petition, then its taxability does not remain on the date of issuance of initiation of reassessment proceedings. By the same Sweat Equity agreement apart from assessee, Shri Umesh Upadhaya was also allotted Sweat Equity shares and in his case also the reopening was initiated on identical facts. When the matter in the case of Umesh Upadhaya was carried before CIT(A), CIT(A) had noted the aspect of reversal of share account, that was used to derive valuation and he has noted that as per the order of Hon’ble High Court, it was clear that no effective transaction can be said to the taken place and the reversal of share premium account were automatically related back to date of allotment. In such a situation, he noted that it was the case of hypothetical income and since the income did not result at all, there cannot be a tax and notional hypothetical income was not amenable to tax as ‘perquisite’. He accordingly decided the issue in favour of the assessee. Against the aforesaid order of CIT(A) in the case of Shri Umesh Upadhaya the matter was carried by the Revenue before the Tribunal. Considering the factual situation as noted by the CIT(A) in the case of Umesh Upadhaya, the Coordinate Bench of Tribunal has upheld the order of CIT(A) and dismissed the appeal of Revenue. We find that the facts of the case in the case of Umesh Upadhyaya (supra) and assessee are identical and in such a situation the decision in the case of Umesh Upadhaya would be squarely applicable to the present assessee’s case also. Considering the totality of these facts we find force in the argument of the assessee that the AO was not justified in invoking the reassessment proceedings. - Decided in favour of assessee.
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