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TMI Blog2022 (6) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... of the first appeal, on merits. There is no material change in facts and circumstances of the case as before Their Lordships as before us now. The two companies investing in the assessee before us are Mauritian companies and seem to be special purpose vehicles, and, at the stage of the hearing of stay petition and based on the material before us, it is not possible for us to, even prima facie, take a call on their bonafides and genuineness. On the face of it, the computation of share premium is devoid of any basis inasmuch as once the person computing the net present value of the discounted cash flow, which anyway varies significantly in the different certificates issued by the same firm, is unable to form a well-considered opinion on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks a stay on collection/recovery of the tax and interest demands aggregating to Rs 123,18,75,369, which are impugned in appeal before and us and which pertain to the assessment under section 143(3) of the Income Tax Act 1961 [from now on referred to as the Act ], for the assessment year 2018-19. 2. The assessee has not paid any part of the tax and interest demands raised on the assessee. As learned counsel candidly submits, the assessee does not intend to pay or is in a position to pay any such demands even now. When asked whether the assessee has approached the revenue authorities below, learned counsel submits that the assessee has not moved the stay petition before any of the administrative officers after disposal of the first appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heless grant a stay, after the rejection of the first appeal, during the pendency of the second appeal before us. It is also emphatically submitted that the assessee seeks a blanket stay, as the assessee is not in a position to pay any part of the outstanding dues at all. 3. The assessee before us is a private limited company, and it commenced its business, of manufacturing non-alcoholic beverages- mainly fruit juices in the brand name of raw pressery , on 22nd November 2013. While the losses incurred by the company increased day by day, from Rs 25.72 crores to Rs 48.01 crores during the financial years 2016-17 and 2017-18, the assessee has issued shares to certain entities, mainly Mauritius based entities, a resident director of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Supreme Court s judgment in the case of PCT Vs NRA Iron and Steel Ltd. The Assessing Officer rejected these valuations and proceeded to hold the issuance of shares at such a huge premium as unrealistic and unexplained. It appears that even in the succeeding years, the assessee company continued to make huge losses, and was eventually sold for mere Rs 100 crores to Wingreens Farms. He also expressed the suspicion that the money which has come from the Mauritian companies is nothing but assessee s fund and recommended action under the laws meant for preventing such unscrupulous transactions. As against a returned loss of Rs 46,14,31,723, the assessment was thus framed at Rs 115,56,95,385. Aggrieved, the assessee carried the matter in appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h flows, the entire valuation exercise is degraded to a mechanical calculation. That does not, in the absence of any additional material So far as foreign investors are concerned, based on the material before us at the stage of hearing of this stay petitions, prima facie the genuineness, a necessary ingredient of tests envisaged under section 68, is far from established. Additionally, so far as domestic investors are concerned, as of the stage of the hearing of this stay petition, there is no material whatsoever to show the reasonableness of the share premium received vis- -vis the fair market value of shares. The taxability under section 56(2)(vii) is thus far from even seriously challenged. While the assessee has the liberty to make detai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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