2017 (10) TMI 525 - ITAT CHANDIGARH

Reopening of assessment u/s 148 - receipt of share application money and addition u/s 68 - Held that:- Instead of referring in the reasons recorded to the specific facts of assessee's case for justifying the assumption of jurisdiction, the AO addresses the legal position on what would constitute information. Even on merits, it is seen that the AO has proceeded selectively. No justification has been given why share application on a premium is considered not questionable for two concerns when the facts and circumstances of assessee's case remained identical i.e. if the assessee company was worth investing into on a premium in a specific year by two other concerns why only for M/s Genesis Fashions Pvt. Ltd., the share application money on a premium is questioned.

The existence of M/s Genesis Fashions Pvt.Ltd. at the very same address by itself, we hold, does not give cause to any infirmity. On the contrary, the existence in-fact stands proved. The documents in support of the transactions, we note, have not been rebutted. Considering the law as it stands and the provisions of the Act, neither assumption of jurisdiction can be upheld nor the addition made on the basis of suspicions, surmises and conjectures. The statement of the Director by itself recorded u/s 133A having no evidentiary value in the face of the documentary evidence on record in the peculiar facts of the present case cannot be brushed aside by the tax authorities on the basis of suspicions and surmises. Accordingly, we allow relief to the assessee both on the jurisdictional issue addressed in Ground No. 1 and 2 and on merits addressed in Ground Nos. 3 to 5 - Decided in favour of assessee.