Reopening of assessment u/s 147 for addition u/s 68 on share ...

Tax Dept's reopening of assessment on share premium from Singapore co. quashed after accepting genuineness earlier.

Case Laws     Income Tax

October 30, 2024

Reopening of assessment u/s 147 for addition u/s 68 on share premium received by petitioner from Gold Singapore was challenged. Reassessment proceedings initiated primarily due to Gold Singapore not carrying out business activities in Singapore and acting as a conduit for investments in Indian companies. However, in assessment order for AY 2012-13, Assessing Officer accepted the transaction of share application money/share capital received from Gold Singapore without any addition and also accepted the status of the holding company. The identity, creditworthiness of Gold Singapore, and genuineness of the transaction were accepted by the Department while framing assessments for AY 2012-13, 2015-16, and 2020-2021. The transaction of investment of share capital in the petitioner company was examined in subsequent assessment years and accepted in completed assessments/reassessments u/s 143(3). Once the nature and source of receipts were satisfactorily explained/proved and the Assessing Officer did not contradict the explanation/information given by the assessee, there was no cause for initiating reassessment action for the impugned AYs 2008-09 & 2011-12. The impugned notices issued u/s 148 and the proceedings initiated pursuant thereto were quashed, decided in favor of the assessee.

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