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2022 (6) TMI 828 - AT - Income TaxStay on collection/recovery of the tax and interest demands - assessee had filed a petition, seeking blanket stay on demand during the pendency of the first appeal, before the learned Principal Commissioner of Income Tax-V, Mumbai - taxability of share premium under section 56(2)(viib) of the Act, and later as also under section 68 - HELD THAT:- As it is not a fit case for the grant of blanket stay- as prayed by the assessee. In any event, the matter has come up for consideration before Hon’ble jurisdictional High Court, and Their Lordships have declined a similar prayer of the assesee, during the pendency of the first appeal, on merits. There is no material change in facts and circumstances of the case as before Their Lordships as before us now. The two companies investing in the assessee before us are Mauritian companies and seem to be special purpose vehicles, and, at the stage of the hearing of stay petition and based on the material before us, it is not possible for us to, even prima facie, take a call on their bonafides and genuineness. On the face of it, the computation of share premium is devoid of any basis inasmuch as once the person computing the net present value of the discounted cash flow, which anyway varies significantly in the different certificates issued by the same firm, is unable to form a well-considered opinion on the correctness of projected future cash flows, the entire valuation exercise is degraded to a mechanical calculation. That does not, in the absence of any additional material So far as foreign investors are concerned, based on the material before us at the stage of hearing of this stay petitions, prima facie the genuineness, a necessary ingredient of tests envisaged under section 68, is far from established. Additionally, so far as domestic investors are concerned, as of the stage of the hearing of this stay petition, there is no material whatsoever to show the reasonableness of the share premium received vis-à-vis the fair market value of shares. The taxability under section 56(2)(vii) is thus far from even seriously challenged. While the assessee has the liberty to make detailed arguments, and also to bring to our notice any material demolishing these prima facie observations, as and when the occasion to do so arises, as the things are before us at present, we do not think it is a fit case for even the grant of stay- leave aside the grant of a blanket stay, as is prayed for by the assessee. We decline to interfere in the matter.
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