TMI Blog2016 (7) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... e, such receipts need detailed verification.” The approach of AO cannot be approved. His entire focus is on share premium amount of ₹ 1.45 crores and without any tangible material on record, he proceeds on the basis that shares were issued at a high premium. For any re-assessment, AO must have some tangible material to enable him to form a belief that the income chargeable to tax had escaped assessment. We find reference to no such material in the reasons recorded. There is no basis even to prima facie proceed on the premise that the allocation of shares was at an artificially high premium. Merely because a sizeable sum was received in the nature of share premium during the year under consideration, would not automatically mean that the same was artificially increased. Re-opening of assessment which was framed after scrutiny would not be permissible for a fishing inquiry. In the present case, we find the vital link missing from the reasons recorded, such link being the material at the command of the Assessing Officer to form such a belief - Decided in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 18513 of 2015 - - - Dated:- 27-6-2016 - MR. AKIL KURESHI AND MR. A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Bom) such share premium is to be treated as income of assessee. 3. From the above facts, it is clear that the assessee had filed to disclose fully and truly all material facts in respect of receipt of share premium for its assessment for the A.Y.2009-10. In view of the above facts, I have reason to believe that income to the extent of ₹ 1,45,80,000/- chargeable to tax has escaped assessment by the reason of failure on the part of the assessee to disclose fully and truly all material facts within the meaning of section 147 of the I.T.Act, 1961. 4. In order to bring to tax above mentioned escaped income, as well as any other income which may have escaped assessment, found during the course of proceedings, notice under section 148 is issued. 3. Upon receipt of reasons, the petitioner represented to the Assessing Officer on 27.1.2015 and pointed out as under: 3. Company has allotted 16200 shares on 31.3.2009 @ ₹ 1000/- including share premium ₹ 900/- per share. Total premium of ₹ 1,45,80,000/-(16200 shares * ₹ 900/- each shares) 4. We herewith give the working of book value of shares as per last audited balance sheet dated 31.3.2008 under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 31st March, 2009 Particulars Schedule No. 31.3.2009 31.3.2008 Sources of Fund (a) Share capital A 7,440,000.00 5,820,000.00 (b) Share Application Money B 121,000,000.00 147,846,894.22. Reserve and Surplus 316,677,432.40-- 162,666,894.22 (a) Secured loans C 79,081,894.21 8. During scrutiny assessment, the Assessing Officer had raised multiple queries including with respect to share premium. In one of the letters written by the assessee to the Assessing Officer, relevant queries are reproduced alongwith the assessee's answers. Relevant portion of this letter reads as under: Q-7. Details of increase in share capital giving name and address, PAN and confirmation. A-7 : As per Annexure 7. Q-8: Details of share premium. Ans-8: As per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Parle (East), Mumbai 400057 AGVPP3740K 3000 900 2700000 4 Yash Mahesh Patel B/8, Sardar Patel society, Nehru Road, Vile Parle (East), Mumbai 400057 AONPP3367F 3000 900 2700000 5 Suchit Chandrakant Patel A/3, Sardar Patel society, Nehru Road, Vile Parle (East), Mumbai 400057 AJTPP1790L 3700 900 3330000 16200 14580000 9. It can thus be seen that question of issuance of share at premium, to whom such shares were allotted and the premium received, the resultant increase in the share premium were all placed before Assessing Officer for his verification of original assessment proceedings. He however, raised no further question and accepted the stand of the assessee. Any re-visit of such an issue without there being additional or undisclosed information would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o basis even to prima facie proceed on the premise that the allocation of shares was at an artificially high premium. Merely because a sizeable sum was received in the nature of share premium during the year under consideration, would not automatically mean that the same was artificially increased. The duty on part of the assessee to explain the nature of credits and genuineness and justification of the share premium would arise when called upon during the assessment or validly re-opened assessment. At any rate, re-opening of assessment which was framed after scrutiny would not be permissible for a fishing inquiry. 11. This is not to suggest that after original assessment was completed, if the Assessing Officer had tangible material to form a belief that the allocation of shares at a premium was a mere device to route some unaccounted money of the company or that the genuineness and creditworthiness of the investors was doubtful, the re-opening could not have been resorted to. However, in the present case, we find the vital link missing from the reasons recorded, such link being the material at the command of the Assessing Officer to form such a belief. 12. In the result, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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