Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 273 - ITAT JAIPURReopening of assessment u/s 147 - assessee as beneficiaries of accommodation entries of share capital/share premium provide by Shri Surendra Kumar Jain and Shri Virendra Kumar Jain - reopening based on report of the Investigation Wing - non independent application of mind by AO - non examination of statements so recorded during the course of search and the seized material - HELD THAT:- There is nothing in the reasons so recorded that the Assessing officer has gone through the statements so recorded during the course of search and the seized material to show prima facie linkage of assessee’s undisclosed income being routed back in form of share capital. This shows that the Assessing officer has merely gone by the report of the DIT, Investigation Wing and the said report even didn’t have the statements of these persons which either find mention in the report or as enclosures when the same was forwarded to the Assessing officer. Therefore, it transpires that there is no further examination which has been carried out by the Assessing officer. It is true that the Assessing officer can rely on the report of DIT, Investigation Wing but at the same time, where he is assuming jurisdiction u/s 147, he is required to carry out further examination and analysis in order to establish the nexus between the material and formation of belief that income has escaped assessment and in absence thereof, the assumption of jurisdiction u/s 147 has no legal basis and resultant reassessment proceedings deserve to be set-aside. The fact that the assessee has filed its return of income u/s 139(1) was very much in the knowledge of the Assessing officer and the latter could have verified the transactions with the reported transactions in the financial statements and could have asked for more information to establish the necessary nexus, however nothing of that sort has been done by the Assessing officer and he has merely gone by the report of DIT, Investigation Wing. On merits of the addition as find assessee has discharged the initial onus cast on it in terms of identity, creditworthiness and genuineness of the transaction. The assessment proceedings u/s 143(3) have been completed in case of the investor company M/s Pelicon Finance & lease for A.Y 2006-07 wherein investment in the assessee’s company has been accepted by the Revenue. There cannot be a situation where the same transaction is held to be genuine in hands of Investor Company and disputed in the hands of the Investee company. Further, M/s Pelicon Finance & lease has responded to notice u/s 133(6) and has confirmed the amount invested by way of share capital in the assessee company. Besides, necessary documentation in terms of Board resolution, share application form, bank statements of the investor company, annual financial statements, etc has been submitted by the assessee company before the Assessing officer. There is no mention of either the assessee company or the investor company in the statements so recorded of Surendra Kumar Jain and Virendra Kumar Jain. The statement of the so called mediator P C Agarwal is also not on record who is claimed by the Revenue to have facilitated the transaction. Therefore, no linkage which can be said to have been established by the Revenue between the assessee’s undisclosed income which is routed back in form of share capital - merely relying on the report of the Investigation Wing without any further examination or investigation or disputing the documentation submitted by the assessee company, the addition cannot be sustained in the hands of the assessee company - Decided in favour of assessee.
|