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TMI Blog2021 (7) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... of 10:1 i.e., 500151 equity shares and ₹ 5,00,00,000/- worth debentures into equity shares of ₹ 10/- each at the premium of ₹ 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 ₹ 2,09,33,160/- (1000151*20.93) was not brought to tax under Section 56(2)(viib) of the Income Tax Act, 1961. Therefore grounds of appeal filed by the petitioner before the Commissioner of Income Tax (Appeals) cannot be a ground for the purpose of quashing the reopening of assessment proceedings issued on certain specific grounds. As far as the ground of change of opinion raised by the petitioner is concerned, this Court is of the considered opinion that reading of Explanation 1 and Explanation 2 (c)(i) of Section 147 is unambiguous that even in case of production of Books of Account or other evidence and also in the cases of underassessment, reopening of assessment is permissible. - Decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeking reasons for reopening. The second respondent, in letter dated 05.09.2017, furnished the reasons stating that the petitioner-Company has converted 50,01,514 preference shares into equity shares and ₹ 5,00,00,000/- worth debentures into equity shares of ₹ 10/- each at the premium of ₹ 90/- per share which totals to 10,00,151 shares. Since, in the assessment order passed under Section 143(3) of the Act, dated 31.03.2016, the difference between the market value and the share value in respect of 10,00,151 shares to the tune of ₹ 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 witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 36(va ₹ 14,67,297 (2)Additions made u/s 43B ₹ 24,32,500 (3)Additions made u/s 40(ia) ₹ 80,00,000 (4)Additions made u/s 40(ia) ₹ 68,83,059 (5)Additions made u/s57(2)(viib) ₹ 1,25,58,000 Total Assessed Income ₹ 3,68,43,816 10. It is contended even in the grounds of appeal filed by the petitioner before the Commissioner of Income Tax (Appeals), ground No.5 reveals that The Learned Assessing Officer erred in adding the excess of share value over the market value of 6,00,000 fresh issue of equity shares amounting to ₹ 1,25,58,000/- invoking Section 56(2)(viib) of the Act. . 11. The petitioner states that in view of the fact that the grounds taken before the Commissioner of Income Tax (Appeals) with reference to the reasons furnished for reopening of the assessment, it is improper on the part of the respondents for initiation of reopening proceedings under Section 147 of the Act. 12. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Proviso to Section 147 of the Act as stated in Explanation 1. Thus, the petitioner has to participate in the further proceedings in order to defend his case and the respondents may be permitted to pass assessment order by following the procedures and therefore, the writ petition is to be dismissed. 18. This Court is of the considered opinion that the reasons furnished for reopening of assessment under Section 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 ₹ 5,00,00,000/- worth debentures into equity shares of ₹ 10/- each at the premium of ₹ 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 ..... shares amounting to ₹ 1,25,58,000/- invoking Section 56(2)(viib) of the Act. However, the reasons for reopening of the assessment furnished in proceedings dated 05.09.2017 states that 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 ₹ 5,00,00,000/- worth debentures into equity shares of ₹ 10/- each at the premium of ₹ 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 ₹ 2,09,33,160/- (1000151*20.93) was not brought to tax under Section 56(2)(viib) of the Income Tax Act, 1961. 24. Therefore grounds of appeal filed by the petitioner before the Commissioner of Income Tax (Appeals) cannot be a ground for the purpose of quashing the reopening of assessment proceedings issued on certain specific grounds. 25. As far as the ground of change of opinion raised by the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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