9911796707
TMI Blog2021 (7) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... isposing of the objections submitted by the petitioner. 2. The petitioner-Company filed the Return of Income for the assessment year 2013-2014 on 31.03.2015. The Return was duly processed under Section 143(1) of the Act. The case was selected for scrutiny assessment by issue of notice under Section 143(2) of the Act and the assessment order was passed by the Competent Authority on 31.03.2016. 3. The petitioner states that in the assessment order dated 31.03.2016, the Assessing Officer reassessed the total income at Rs. 3,68,43,816/- and increased the net balance tax payable to Rs. 96,15,940/-. Out of the total addition made, an amount of Rs. 1,23,58,000/- was made according to Section 56(2)(viib) of the Income Tax Act, 1961 on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence between the market value and the share value in respect of 10,00,151 shares to the tune of Rs. 2,09,33,160 /- was not brought to tax under Section 56(2)(viib) of the Act, proceedings are claimed to have been initiated. 6. The learned counsel appearing on behalf of the writ petitioner strenuously contended that there is no tangible material available to satisfy the requirement of Section 147 of the Act. Thus, the reopening of assessment by issuing notice under Section 148 of the Act, is nothing but change of opinion by the Assessing Officer. 7. The petitioner submitted various documents, including Return of Income, Balance Sheet for the relevant assessment year, Auditor's Report etc., and the respondents without considering any of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be accepted. But in this case, the projections made are so unrealistic and hence the deviations thereon are not acceptable. Hence Valuation made at the Growth rate of 3% held as reasonable and accordingly the market value of share is taken at Rs. 79.07. Here the entire projected financials are not rejected . Only Growth rate 3% is adopted. The excess of amount of Share value of Rs. 100 over the market value of share Rs. 79.07 (100-79.07), Rs. 20.93 relating 600000 fresh issue of value of shares worksout to Rs. 1,25,58,000/-. By invoking provisions of Section 56(2)(viib) of the Income Tax Act, 1961 Rs. 1,25,58,000 is added to the total income. Additions made under Section 56(2)(viib) Rs. 1,25,58,000 Total Income admitted Rs. 55,02,960 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Senior Standing Counsel, appearing on behalf of the respondents, objected the contentions raised on behalf of the petitioner by stating that the reason for reopening of assessment is clearly stated in proceedings dated 05.09.2017. 15. It is a case where Section 148 notice was issued before expiry of 4 years and further, the reason furnished for the purpose of reopening of assessment is no way connected with the subject matter of the issues pending before the Commissioner of Income Tax (Appeals). The issues pending subjudice before the Commissioner of Income Tax (Appeals) are entirely different one, which are unconnected with the reasons furnished for reopening of the assessment by initiating proceedings under Section 147 of the Act. 16. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 147 of the Act, is stated in proceedings dated 05.09.2017, which reads as under:- "The reason recorded for reopening the assessment for the AY 2013-14 is as under:- "During the year, the company has converted 50,01,514 preference shares into equity shares in the ratio of 10:1 i.e., 500151 equity shares and Rs. 5,00,00,000/- worth debentures into equity shares of Rs. 10/- each at the premium of Rs. 90 per share i.e., 5,00,000 equity shares. The Total of preference shares and debentures converted into equity shares totals to 10,00,151 Nos. In the assessment order passed under Section 143(3) of the Income Tax Act dated 31.03.2016, the difference between the market value and share value in respect of 1000151 equity shares to the tune of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly amount to disclosure within the meaning of the foregoing Proviso". 22. It is further contended that reasons furnished for reopening of the assessment is no way connected with the pending appeal before the Commissioner of Income Tax (Appeals). Even Explanation 2(c)(i) states that where an assessment has been made, but income chargeable to tax has been underassessed. Then also reopening of assessment is permissible. Thus, mere production of Account Books or other evidence, is insufficient to hold that the Authority has no power to reopen the assessment. Even in case of underassessment, the Authority may reopen the assessment. 23. In the present case, the appeal filed by the petitioner before the Commissioner of Income Tax (Appeals) reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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