ACIT Vs Prasanna Purple Mobility Solutions Private Limited (ITAT Pune)
ITAT Pune: Reopening After 4 Years Invalid When Share Premium Details Already Disclosed – Rs. 30 Cr Addition u/s 68 Deleted
The assessee company Prasanna Purple Mobility Solutions Pvt. Ltd. issued equity shares during AY 2011-12 at a premium of ₹1,584 per share, receiving about ₹30 crore from investors including Rainbow Ventures Ltd. (Mauritius) and Ambit Pragma Fund. The AO reopened the completed assessment and treated the entire share capital and premium as unexplained cash credit u/s 68, alleging lack of creditworthiness and unjustified high premium.
Before the CIT(A), the assessee submitted extensive evidence establishing identity, creditworthiness and genuineness of the investors, including incorporation documents, tax returns, financial statements, confirmations, bank statements, share certificates, ROC filings and valuation reports. The CIT(A) accepted the explanation and deleted the addition.
On further appeal, the ITAT first examined the validity of reopening beyond four years from the end of the assessment year. The Tribunal noted that the original assessment was completed u/s 143(3) and all details regarding share capital and premium were already disclosed in the return, financial statements and assessment proceedings. There was no failure by the assessee to disclose fully and truly all material facts, which is a mandatory condition for reopening after four years under the proviso to Section 147.
