9911796707
TMI Blog2016 (6) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, allowed in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 20109 of 2015 - - - Dated:- 6-5-2016 - MS. HARSHA DEVANI MR.G.R.UDHWANI JJ. For the Petitioner: Mr. Manish J Shah, Advocate For the Respondent: Mr. Pranav G Desai, Advocate JUDGMENT ORAL JUDGMENT (Per : Ms. Harsha Devani) 1. Rule. Mr. Pranav Desai, learned Senior Standing Counsel waives service of notice of rule on behalf of the respondent. 2. Having regard to the nature of the controversy involved in the present case and with the consent of the learned counsel for the respective parties, the matter was taken up for final hearing today. 3. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 02.03.2015 issued by the respondent under section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act ), seeking to reopen the assessment of the petitioner for assessment year 2011-12. 4. The petitioner, a Private Limited Company, was incorporated on 15.01.2010. For assessment year 2011-12, the petitioner submitted its return of income on 19.09.2011 showing total loss of ₹ 77,51, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Guj.), wherein, the court had recorded that when the tax payable as per the reasons recorded is less than the tax paid by the petitioner under the assessment framed under section 143(3) of the Act, the question of any income having escaped assessment does not arise. The court recorded that the order recording reasons itself indicates that in fact no income has escaped assessment and as such, there is no basis for the formation of belief that income has escaped assessment. Reliance was also placed upon the decision of this court in the case of India Gelatine and Chemicals Ltd. v. Assistant Commissioner of Income Tax (No.1), (2014) 364 ITR 649 (Guj.), wherein, the court had recorded that even if the addition proposed by the Assessing Officer is sustained, it would make no difference to the ultimate tax liability of the assessee since on the computation of book profit under section 115JA of the Act, the assessee had paid tax on much higher income of ₹ 2.89 crores. The court recorded that under the normal computation, the assessee had declared a loss of ₹ 1.44 crores (rounded off). Even if the disallowance of ₹ 116.86 lakhs is made, there would be no differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be no increase in the tax liability of the petitioner, the learned counsel submitted that this is a case where no scrutiny assessment has been made under section 143(3) of the Act and that the petitioner had declared income of ₹ 35.96 lacs under section115JB of the Act. It was submitted that in the present case, the tax levied under section 115JB of the Act is on the book profit. Even if any addition is made to the total income shown in the return of income filed, the same results into reduction of loss to be carried forward to subsequent years. In case of reduction in loss in the year under consideration, the revenue effect will be in the year in which the assessee claims such set off. Therefore, the contention of the petitioner that there will be no revenue effect in its case is not correct. It was submitted that the tax payable/paid by the assessee under section 115JB of the Act is only the minimum alternative tax payable during the year under consideration and that the assessee is eligible to get the credit of such tax paid against the tax liability of the assessment year in which the tax becomes payable on the total income computed in accordance with the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case, it may be germane to refer to the reasons recorded for reopening the assessment, which read thus: Reasons for reopening of assessment: In this case, on verification of records, it is found that the Assessee is a Private Ltd. Company engaged in the business of manufacturing of Ceramic Tiles. On the basis of the information available with this office,assessee company had issued its shares at huge premiums during F.Y. 2010-11. On verification of PART-A BS of return of income filed by the assessee company, it is found that the assessee company has shown Issued, Subscribed and Paid-up share capital of ₹ 75,91,600/=. During the F.Y. 2010-11, the assessee had issued 9,000 shares at a face value of ₹ 10 per share with a premium of ₹ 990/- per share. Hence, the premium received by the assessee per share is ₹ 990 for the share of face value of ₹ 10/-. On the basis of the assets and liabilities furnished by the assessee company in its balance sheet, and computing the net worth of the company, per share valuation of the assessee company comes out to be ₹ 98/-. Hence, the shares of the company have been subscribed by the shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, had upheld the reopening and had dismissed the petitions. The court did not find the reasons to be perverse or so untenable as to terminate the assessment on the ground that the Assessing Officer could not be stated to have any reason to believe or tangible material to form such an opinion that income chargeable to tax had escaped assessment. Therefore, on the merits of the reopening, the present case is squarely covered by the above decision against the petitioner. 9. However, on behalf of the petitioner, it has been pointed out that in terms of the reasons recorded, the income chargeable to tax to the extent of ₹ 81,18,000/- has escaped assessment. In the return of income filed by the petitioner, the petitioner has disclosed loss of ₹ 77,51,810/- and the petitioner has been assessed at an income of ₹ 35,96,518/- on the book profit under section 115JB of the Act. It has, accordingly, been contended that even after making the proposed addition, there would be no difference in the taxable income of the petitioner and it will still be governed by the provisions of section 115JB of the Act. 10. The learned counsel for the petitioner has also drawn t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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