Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 2 - AT - Income TaxReopening of assessment u/s 148 - issue of share premium at more than intrinsic value - HELD THAT:- We note that the provisions of issue of share of share market value has been introduced on the statute books under section 56(2)(viib) of the Act in the Finance Act, 2012 w.e.f. 01.04.2013 and is applicable from A.Y. 2013-14. We, therefore, find merit in the contention of the Ld. A.R. that the reopening of the assessment of the assessee on this basis is not valid. See M/S. MALCHAND DINDAYAL SALTS PVT. LTD. AND (VICE-VERSA) [2020 (12) TMI 1033 - ITAT MUMBAI] and BALBIR ISPAT PVT. LTD. VERSUS THE INCOME TAX OFFICER, WARD 6 (1) (2) , MUMBAI [2019 (1) TMI 1840 - ITAT MUMBAI] Even on merits the assessee has a very strong case. We note that the assessee filed all the documents before the authorities below i.e. AO as well as CIT (A) to prove the identity, creditworthiness of the shareholders and genuineness of the transactions. We also note that the shares issued at a premium were repurchased by family members/relatives at a price less than face value of shares. The money received by the assessee/appellant had been invested in the shares of associate concern M/s. Premium Paper and Board Industries Ltd. business whereof had failed miserably to the extent that said associate concern went into liquidation and thus the whole investment was jeopardized. It is only because of this, the shares were bought back by the investors at a distress price determined by both the investors and assessee appellant. Therefore, we are inclined to hold that the order of Ld. CIT (A) is not correct and is reversed. Even the issue in third ground of appeal has wrongly been decided by Ld. CIT (A) despite the facts having raised before the Ld. CIT (A) that expenses were incurred to maintain the office of the company such as accounts, writing charges, audit fee, bank charges and to give a corporate office intact and therefore this has to be allowed to the assessee.
|