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TMI Blog2020 (12) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... came into notice that on the basis of similar facts and circumstances the Hon ble ITAT has decided the issue in case titled as Balbir Ispat Pvt. Ltd. [ 2019 (1) TMI 1840 - ITAT MUMBAI] in which the notice u/s 147 of the Act nowhere justified. AO has absolutely no material to even suspect, forget believe that income has escaped assessment. Hence, we quashed the reopening and accordingly, the issue of assessee s appeal on jurisdiction is hereby allowed. - I.T.A. No. 6908/M/2018, I.T.A. No. 7097/M/2018 - - - Dated:- 1-12-2020 - Shri Shamim Yahya, AM And Shri Amarjit Singh, JM For the Assessee : Shri Neelkanth Khandelwal For the Revenue : Shri Vijay Kumar G. Subramanyam (Sr. AR) ORDER PER AMARJIT SINGH, JM: The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 28.03.2016 by determining the total income of the appellant under normal provisions of ₹ 2,62,26,960/-. Aggrieved by the order, assessee filed an appeal before the CIT(A) who deleted the addition to the extent of 2,53,04,800/- and retained the addition to the tune of ₹ 28,00,000/- in connection with the investment made by the Florence Multimedia Pvt. Ltd. The assessee is aggrieved by the addition of ₹ 28,00,000/- whereas the revenue is aggrieved by the deletion of addition of ₹ 2,53,04,800/-. Accordingly, both the parties are under appeal. ISSUE NO. 1 5. Under this issue the assessee has challenged the reopening of the assessment u/s 147 of the Act. The Ld. Representative of the assessee has argued that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome returned. 2. From the perusal of balance sheet filed, it is observed that the assessee company has shown the share premium of ₹ 2,12,66,700/-. it is gathered that during the year under consideration, the assessee company has issued 4,03,810/-shares having face value of ₹ 10 / and at a premium of ₹ 70/- per share Total share premium received during the year is ₹ 2,12,66,700/- 3. At this backdrop, financials of the assessee company have been analyzed. From the perusal or computation of income, the assessee company has shown taxable income of Ps. 9,22,160/-. Fixed assets have been shown at Rs. Nill. Cash and bank balances are shown at ₹ 2004/-. Business activity also does justify charging of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was made u/s 143(3) of the Income-tax Act, 1961 and the re-opening was held to be valid. 7. Moreover, the Hon‟ble Bombay High Court in the case of ECGC Vs. ADDl. CIT Writ Petition No. 502 of 2012 dated 10-11 January, 2013, their Lordships have held that when the assessment is sought to be reopened within a period of four years. Then what is required is reason to believe but not established fact that escapement of income. At this stage of issue of notice, the only question is where there is relevant material on which the reasonable person can form a requisite belief. When an assessment is sought o be reopened within a period of four years, the test to be applied is whether there is tangible material to do so. Something which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e through the facts and circumstances of the case. We find from the reasons recorded reproduced above that the AO failed to appreciate that the law does not permit him to reopen assessment unless he has tangible material on the basis of which he forms reason to belief that income has escaped assessment. The mere fact that the assessee has issued shares at a certain premium itself cannot be a reason to belief that income hasescaped assessment. The AO has neither mentioned by how much the shares are overvalued i.e. by what amount the premium exceeds the instinct value of the shares nor the amount, which according to him, has escaped assessment. The reasons are reproduced above but for the sake of brevity the relevant part of reasons are that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emium 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 premium over and above intrinsic value of the share premium. 7. In the basis of similar facts and circumstances, the Hon ble Bombay High Court has held in case titled as Khubchandani Healthparks (P.) Ltd. Vs. Income Tax Officer 6(3)(4), Mumbai (2016) 68 taxmann.com 91 (Bom). :- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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