TMI Blog2021 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... urchased 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. - ITA No. 1675/M/2020 and 176/M/2021 - - - Dated:- 8-6-2021 - Rajesh Kumar , Member (A) And Amarjit Singh , Member (J) For the Appellant : Neelkanth Khandelwal , A.R. For the Respondents : Sunil Deshpande , D.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to disclose fully and truly all material facts necessary for its assessment coming within the meaning of sec 147 of the Income tax Act 1961. 4. I have, therefore, reason to believe that income of ₹ 12,92,000/- chargeable to tax has escaped assessment by the reasons of failure on the part of the Assessee to disclose fully and truly and notice u/s. 148 of the Income-Tax Act is to be issued in the aforesaid case for A.Y. 2008-09 accordingly. 5. The assessee also filed objections to reopening of assessment which was disposed of vide order dated 10.12.2015. Thereafter, the AO during the course of assessment proceedings called for various information and detail from the assessee. As regards the issue of share capital to various parties of 3,23,000 equity shares of face value ₹ 10 each at a premium of ₹ 40 each thereby raising a total capital of ₹ 1,61,50,000/-. The AO observed from the balance sheet that authorised capital of the assessee has increased from ₹ 30 lakh to ₹ 55 lakh and issued subscription and paid up capital has increased from 1,95,000 equity shares to 5,18,000 equity shares. The AO noted that these transactions are unnat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is more than the intrinsic value of the shares and therefore the appeal of the assessee on this issue may be dismissed. 9. We have heard the rival submissions of both the parties and perused the material on record. Undisputedly, the reasons under section 148(2) have been recorded only to verify the issue of share premium at more than intrinsic value. 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. The case of the assessee is supported by the decision of the coordinate bench in the case of ITO Vs. M/S. Malchand Dindayal Salts Pvt. Ltd. ITA No. 6908/Mum/2018 others which has been passed by the coordinate bench after following Balbir Ispat Pvt. Ltd. Vs. ITO ITA No. 6953/Mum/2016 of Mumbai tribunal and Khubchandani Healthparks Pvt. Ltd. 384 ITR 322 (Bom.). The operative part is as under:- 6. On appraisal of the above mentioned reasons, we are of the view that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of share application money received in this case has escaped assessment but he could not point out on what basis/material does he belief that the share capital is not genuine. In the similar circumstances, Hon'ble Bombay High Court in the case of Khubchandani Healthparks Pvt. Ltd. (supra) held that regular Return of income was assessed by Intimation under Section 143(1) of the Act and no scrutiny assessment was done. In the above view, to ascertain the nature and the justification for charging share premium, the Assessing Officer has reason to believe that charging of share premium over and above the intrinsic value of the share is income which has escaped assessment. The Notice itself does not indicate the approximate amount of income, which the Assessing Officer has reason to believe has escaped assessment nor does it quantify the extent to which the share premium received was in excess of intrinsic value, which has escaped assessment. It gives no reasons to indicate the basis of coming to the conclusion that share premium is excessive and, therefore, income. Moreover, the Notice also does not dispute that this is a share premium but seek justification for charging the share ..... X X X X Extracts X X X X X X X X Extracts X X X X
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