2014 (10) TMI 151 - ITAT KOLKATA

Revision u/s 263 - Reopening of assessment u/s 147 - Receipt of share application money with huge share premium – Held that:- Receipt of share application money with huge share premium warranted detailed enquiry by the AO and not a perfunctory enquiry – Relying upon CIT vs Durga Prasad More [1971 (8) TMI 17 - SUPREME Court] revenue authorities are also supposed to consider the surrounding circumstances and apply the test of human probability - the change in management took place in the assessment year 2010-11, i.e. year ended 31/3/2010, i.e. the period 1/4/2009 to 31/3/2010 - The reopening of the assessment and the reassessment proceedings took place during this time - This clearly shows the due diligence being attempted with the contumacious intent to attempt to obtain the seal of approval of the Income-tax department in respect of the bogus share capital introduced - after getting the certified copies the date is not incorporated on the certified copy but on a zerox copy of the certified copy and then by mistake such incorporated Xerox copy is used for making the paper book when all other copies are the certified copies - Even to an untrained mind obviously the sight of a document without the original blue coloured seal in a mass of papers should have drawn attention – thus, the order passed u/s 263 is upheld.

Issue of tangible material – Held that:- CIT has the power to give directions for assessment of a particular issue as also the powers to set aside the assessment for fresh consideration on specific issues or de novo - when the CIT is directing to assess a particular income then such directions must be on specific tangible material - the order u/s 263 clearly shows that the CIT did have very tangile information and material on the basis of which she has conducted the enquiry and then has set aside the assessment to conduct enquiry in respect of the three limbs of the transactions and grant the assessee the opportunity to explain its case - even on jurisdiction the CIT has rightly invoked her powers u/s 263 of the Act and it is upheld.

The assessee has also not cooperated in the assessment proceedings but in the first appeal has been raising allegations against the AO that he has not accepted documents submitted and has not granted adequate opportunity - This also clearly shows the evasionary tactics that are being adopted to wriggle its way out of the corner it has put itself into by its own acts and commissions - A peculiarity in such cases that is noticed is that sheaves of paper documents are readily produced but when a summon is issued the responsible persons conveniently disappear - only the assessee knows the intricacies of its accounts - It is for the assessee to prove its claim of share capital/ application money introduction and its affairs in respect of its accounts - Merely dumping papers and documents on the table of the assessing authority does not in any way mean compliance - The burden of proof cannot be shifted on the revenue by cart loads of documents - The documents submitted must be explained – Decided against assessee.