The Bombay High Court in the case Lakshdeep Investments & Finance Pvt. Ltd. Versus Assistant Commissioner of Income-tax observed and has quashed the order of reassessment on the grounds that the only reason for issuing the notice under Section 148 of the Income Tax Act, 1961 which is being appeared to be that the Assessing Officer had come to a different opinion which is upon the question of valuation than the one which is adopted by the petitioner.
The division bench comprising of Justice Dheeraj Singh Thakur and Justice Valmiki SA Menezes in the case observed wherein rejecting the objection in an order that has not even once mentioned the valuation report submitted by the petitioner during the earlier assessment proceedings after scrutiny and nor does it refer to the method used by the petitioner for valuation.
In the present case, the petitioner or assessee is in the investment business. The petitioners against the share capital reserves and has surplus with securities, wherein it is held by it at the book value and fair market value for the shares quoted were for an amount of Rs. 30,11,66,00,359
Therefore, the petitioner received the notice under Section 148, wherein it has been alleged in the notice that there were reasons to be recorded—the petitioner’s income chargeable to tax for assessment years 2015–2016 had escaped assessment. The petitioner in the plea submitted that the Assessing Officer would assume jurisdiction under Section 147 only if the petitioner had reason to believe that the assessee’s income is chargeable to tax for the relevant year as it had escaped assessment. Earlier, it has been accepted by the assessment officer that the method of determining the fair market value of the rights shares issued, which was based upon the methods as provided under the Act. Therefore, they had recorded satisfaction in its assessment order which is passed under Section 143 (3), and thus, there being no such ground available at law to reopen the assessment. It has been observed by the court that the when the Assessing Officer, in his order to dispose of objections, does not deal of with the factual position which being asserted by the petitioner, the same would be safe for concluding that the revenue does not dispute the fact wherein stated by the petitioner, and thus, there could be no such reason for the Assessing Officer to believe that the income chargeable to tax has escaped assessment.
