TMI Blog2014 (10) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... d u/s 143(3) after four years, mere escapement of income, cannot give jurisdiction to him to reopen the assessment - The reasons recorded by AO have to be examined to find out whether the mandate of proviso to section 147 in such cases have been met or not. Relying upon CIT. Versus VINIYAS FINANCE AND INVESTMENT PVT LTD. [2013 (3) TMI 35 - DELHI HIGH COURT] - assessee had filed all the details in regard to the loans in the original assessment proceedings u/s 143(3), which were examined by AO, the escapement cannot be said to be on account of failure on the part of assessee to disclose fully and truly all material facts, necessary for assessment – thus, the reopening of assessment proceedings, initiated by the AO u/s 147 is are bad in law – Decided in favour of assessee. - ITA No. 1210/Del/2010 - - - Dated:- 3-9-2014 - Shri S. V. Mehrotra And Shri H. S. Sidhu,JJ. For the Appellant : Shri Salil Aggarwal Adv. Shri Shailesh Gupta Adv. For the Respondent : Shri Rakesh Kumar Sr. DR ORDER Per S. V. Mehrotra, A.M:- This appeal, preferred by the assessee, is directed against the order dated 5-1-2010 passed by the ld. CIT(A)-XI, New Delhi, in appeal no. 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a facie form such a belief from the material available on record. Thus, in sum and substance, the ld. CIT(A) concluded that there was omission or failure on the part of the assessee in disclosing fully and truly the correct facts and the income had escaped assessment. The decision of the assessing officer could not be faulted. He, accordingly, upheld the initiation of proceedings u/s 147. 2.4. On merits, ld. CIT(A), after consideration of various case laws, confirmed the addition. 3. Before us, the assessee has raised following grounds of appeal: 1. That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in upholding the addition of ₹ 7,50,000/- representing share capital received by the appellant and held to be alleged unexplained cash credit under section 68 of the Act in an order of assessment under section 147/143(3) of the Act dated 5.1.2010. 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the initiation of proceedings under section 147 of the Act and assessment framed under section 147/143(3) of the Act without appreciating that the same were without jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 195 wherein it has been held that, even if share capital received by the appellant is from the alleged bogus shareholders then too, no action can be taken against the appellant and therefore, addition so confirmed is apparently unsustainable. 3.4 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that in absence of any evidence led by the learned AO to establish that moneys so received as share capital from the shareholders arose from the coffers of the appellant, the same could not have been assessed to tax as unexplained cash credit under section 68 of the Act in terms of judgment of Delhi High Court in the case of CIT v Value Capital Services Ltd reported in 307 ITR 334. 3.5 That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in. not appreciating the detailed written submission along with judicial pronouncements relied upon by the appellant and infact, proceeded to rely upon the judgments which are wholly inapplicable to the facts of the instant case. 3.6 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the levying of interest under section 234B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose fully and truly all material facts, necessary for assessment. It is to be shown that the escapement of income was a result of failure on the part of the assessee to disclose fully and truly all material facts, necessary for reassessment and this should be reflected in the reasons recorded by assessing officer. 5.3. Ld. Counsel relied on the decision in the case of CIT Vs. Viniyas Finance Investment (P) Ltd. [2013] 33 taxmann.com 86 (Del.). In this case the Hon ble High Court, on going through the purported reasons, observed that there was no mention of the assessee not having made full and true disclosure of the material facts, necessary for assessment. On the contrary, it was found that purported reasons indicated that the amounts mentioned therein had been shown in the books of a/c as receipts from the companies, mentioned therein. It was also noticed that at sl. No. 5 of the list of companies, from which amounts had been allegedly received, the name of the assessee had been shown. From this, Hon ble High Court concluded that there could hardly be any allegation that the assessee received money from business. Accordingly, it concluded that the Tribunal was justified in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s bank statement showing deposits of such cheques and copy of the list of the shareholders as on 31- 03-2001, filed by the assessee with the ROC. He, therefore, submitted that due inquiries were made at the time of assessment. 5.6. Ld. Counsel further referred to pages 10 11 of the PB, wherein the reasons recorded by the assessing officer are contained and pointed out that assessing officer itself has noted that figures were there in the books of a/c on 5-3-2008. 6. Ld. DR relied on the order of CIT(A) and submitted that assessing officer had reason/ tangible information, having direct nexus with the formation of belief regarding escapement of income. He submitted that at the time of recording of reasons, only prima facie belief of assessing officer is relevant and the sufficiency of reasons cannot be examined at that stage. For this proposition, ld. DR relied on the decisions in the cases of Calcutta Discount Co. Ltd. Vs. ITO 41 ITR 191(SC); and Phool Chand Bajranglal Another Vs. ITO another 203 ITR 456 (SC). 6.1. Ld. DR submitted reasons have to be read as a whole and that really leads to the conclusion that there was escapement of income. He submitted that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls P. Ltd. 7.2. From the above reasons recorded, it is evident that the assessing officer has no where stated in the reasons recorded that the escapement of income was on account of failure on the part of assessee to disclose fully and truly all material facts. 7.3. In the case of Viniyas Finance Investment (P) Ltd. (supra), following reasons were recorded: 6. In the present case the purported reasons to believe that income had escaped assessment were as under:- Reasons of the belief that income has escaped Assessemnt. In this case the assessment for the asstt. Year 2002-03 was made u/s 14(3) on 22.12.2004. A special information has been received from Director of Income Tax (investigation)-I, New Delhi vide letter dated 05.02.2007 that the assessee company has received a sum of ₹ 77,00,000/-from the companies as detailed below:- .. . 7. According to the special information received, the entries are in the nature of accommodation entries and in the reality it is the assessee s own unaccounted money which has been shown in the books of accounts as a receipt from aforesaid companies. In view of the above, I have reason to believe that income to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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