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2010 (2) TMI 1237 - AT - Income TaxAddition u/s 68 - Share application money unexplained - onus to prove the identity of the creditors - genuineness of the transactions, creditworthiness of the creditors not proved - as per AO all the transactions are intra-day transactions which reflect that the account is just being used to route such money. The money does not stay in the accounts, so as to suggest that it had been received as and investment. So it is clear that these companies had no actual business and had been used to give accommodation entries - HELD THAT- We find that no document has been submitted to establish identity of the share applicants. It was also not the case of simple share application money. ₹ 10/- worth of shares were purportedly applied for at a premium of ₹ 90/- by strangers. No justification or record whatsoever as to whether the companies’ credentials commanded a premium of ₹ 90 for shares of ₹ 10 is on record. We find that the Hon’ble Apex court decision in the case of Kapurchand Shrimal Vs. CIT, [1981 (8) TMI 2 - SUPREME COURT], it was held that the appellate authority has jurisdiction as well as the duty to correct the errors in the proceedings under appeal. Hon’ble Apex Court has further held that in the case of Durga Prasad More [1971 (8) TMI 17 - SUPREME COURT] and in the case of Sumati Dayal [1995 (3) TMI 3 - SUPREME COURT] has observed that the authorities should not put on blinkers, but should look at the surrounding circumstances also. Therefore, In our opinion, this matter needs to be remitted to the files of the AO to enable him to examine the matter afresh. Accordingly, the matter is remitted to the files of the AO. Revenue appeal is allowed for statistical purposes. Reopening of assessment - reason to believe - HELD THAT:- The return was processed u/s 143(1). Hon’ble Apex court in the case of Rajesh Jhaveri [2007 (5) TMI 197 - SUPREME COURT] has held that intimation u/s143(1)(a) cannot be treated to be an order of reassessment. Therefore, there is no question of forming of opinion in such a case. Section 147 of the IT Act mandates that AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may assess or reassess of such income. Now in this case AO has information from the Investigation Wing of the Department that assessee has taken accommodation entries to the tune of ₹ 16 lacs (Rs. 4 lacs each) and these amounts were found credited in the companies accounts maintained with the SBI, Hyderabad, Karol Bagh, New Delhi during the period relating to 2003-04. Hon’ble Apex Court in the case Raymond Woolen Mills Vs. ITO [1997 (12) TMI 12 - SUPREME COURT] has held that regarding the reason for reopening there should be prima-facie material, the sufficiency or correctness of material need not be established at the time of recording of reasons for reopening. Hence, objections from the assessee regarding reopening are untenable. Therefore, we uphold the order of the ld. CIT(A) holding the reopening as valid. Accordingly, the cross objection filed by the assessee is dismissed.
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