9911796707
TMI Blog2021 (1) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... emain on the date of issuance of initiation of reassessment proceedings. By the same Sweat Equity agreement apart from assessee, Shri Umesh Upadhaya was also allotted Sweat Equity shares and in his case also the reopening was initiated on identical facts. When the matter in the case of Umesh Upadhaya was carried before CIT(A), CIT(A) had noted the aspect of reversal of share account, that was used to derive valuation and he has noted that as per the order of Hon ble High Court, it was clear that no effective transaction can be said to the taken place and the reversal of share premium account were automatically related back to date of allotment. In such a situation, he noted that it was the case of hypothetical income and since the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds are as under: 3. Assessee is an individual stated to be Doctor deriving income from profession, salary, house property and other sources. Assessee filed his return of income for A.Y. 2007-08 declaring total income at ₹ 5,84,935/- and the same was initially processed u/s 143(1) of the Act. Subsequently, the case was reopened for reassessment u/s 147 and accordingly notice u/s 148 was issued and served upon the assessee. Thereafter, the case was selected for scrutiny and assessment was framed u/s 147/143(3) of the Act vide order dated 11.03.2014 and the total income was determined at ₹ 15,84,940/-. 4. Aggrieved by the order of AO, assessee carried the matter before the CIT(A) who vide order dated 18.08.2015 in Appeal No.8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n law, in confirming that the conditional issue of shares is a perquisite. 6. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence. 7. That the appellant craves leave to add/ alter any/all grounds of appeal before or at the time of hearing of the Appeal. 6. AO has noted that a search and seizure operation u/s 132 of the Act was carried out by the Directorate of Income Tax (Investigation) on 06.09.2011 on Rockland Group of cases. After going through the information received as well as the documents available, it was found that Rockland Hospital Ltd. had issued Sweat Equity shares without any amount being paid as consideration to the directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of income. In the present case, ld AR submitted that the AO has merely proceeded on the basis of report of the ADIT for initiating the reassessment proceedings. 9. He thereafter, submitted that the Sweat Equity agreement was entered between Rockland Hospital and the various Doctors on 26.02.2007 by virtue of which shares were allotted to the assessee and other doctors/persons at the premium of ₹ 190 without any consideration. He pointed to the copy of the Sweat Equity agreement which is placed at page 33 to 39 of the paper book. He further submitted that the H ble Delhi High Court in Company Petition No 399/2009 order dated 26.02.2010 had held that the shares issued by Rockland Hospital were wrongly issued and hence directed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the order of CIT(A) and the Tribunal placed in the paper book. He therefore submitted that since on identical facts and under similar circumstances in the case of Umesh Upadhyaya, the matter has been decided in assessee s favour, then following the order of the appellate authorities,the issue be decided in assessee s favour. 11. Learned DR on the other hand supported the order of lower authorities and submitted that the Sweat Equity issue by Rockland Ltd. remained with the assessee and since the shares have not been cancelled and that assessee continues to hold the Sweat Equity, the submissions of AR are misplaced. He further submitted that in the case of Umesh Upadhyaya, it was Revenue s appeal and the issue was different. He thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scaped the assessment has itself been set to nought by the order of H ble High Court in the company petition, then its taxability does not remain on the date of issuance of initiation of reassessment proceedings. We further find that by the same Sweat Equity agreement apart from assessee, Shri Umesh Upadhaya was also allotted Sweat Equity shares and in his case also the reopening was initiated on identical facts. When the matter in the case of Umesh Upadhaya was carried before CIT(A), CIT(A) had noted the aspect of reversal of share account, that was used to derive valuation and he has noted that as per the order of Hon ble High Court, it was clear that no effective transaction can be said to the taken place and the reversal of share premiu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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