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2023 (7) TMI 745 - AT - Income TaxRevision u/s 263 - Reopening of assessment u/s 147 - unexplained share capital - CIT observed that the A.O while framing the assessment had failed to make enquiries and verifications which he should have made to ascertain the identity, creditworthiness and genuineness of the transaction of receipt of share capital by the assessee company - HELD THAT:- As observed by the Pr. CIT and, rightly so, as the AO while framing the assessment had failed to carry out necessary verification as regards the very issue which had formed the basis of reopening of its case u/s 147 and had summarily accepted the authenticity of the assessee’s claim of having received share capital from M/s. Cherry Vintrade Pvt. Ltd., therefore, the same had rendered his order as erroneous in so far it was prejudicial to the interest of the revenue as per “Explanation 2” to Sec. 263 of the Act. Our aforesaid conviction that failure of the AO to carry out necessary verification while framing assessment and summarily accepting the explanation of the assessee would render the order passed by him amenable for revision u/s 263 of the Act is supported by the judgment of Deniel Merchants (P) Ltd [2017 (12) TMI 476 - SUPREME COURT]. On a perusal of the “reasons to believe” as per the information, the investment made with the assessee company of Rs. 21.20 lac (supra) by M/s Cherry Vintrade Pvt. Ltd. was sourced out of a receipt of Rs. 51 lac in the latters bank account, which amount had no business rationale or basis but was only received for layering purpose. We are unable to fathom that as to on what basis it is claimed by the ld. AR that reopening of the assessee’s case was based on non-descript information. In our considered view, as the A.O had sufficient material with him to arrive at a bonafide belief that the income of the assessee company that was chargeable to tax had escaped assessment, therefore, the claim of the Ld. AR that the reopening of its case was based on non-descript information being absolutely misconceived is accordingly rejected. We, thus, in terms of our aforesaid observations concur with the view taken by the Pr. CIT who had rightly set-aside the assessment order passed by the A.O u/s. 143(3) r.w.s. 147 and, uphold the same. Decided against assessee.
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