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2024 (3) TMI 610 - AT - Income TaxValidity of reopening of the case u/s. 147 - Reasons to believe - addition as unexplained cash credit u/s. 68 - transactions are in the nature of sale of shares questioned - HELD THAT:- Admittedly, it is a fact on record that the transaction undertaken by the assessee in both the years under appeal before us are in respect of sale of shares held as investment which had been duly reported in the audited financial statements, giving their opening balances from the preceding years. The reasons recorded by the assessee for reopening the case do not in any way point out towards this nature of transaction. They only suggest that assessee had received the amounts from these companies which have been alleged to be fictitious shell companies. Further, in AY 2012-13, the AO himself has taken note of the approval granted u/s. 151 which in itself suggest that it is mechanical in nature without application of mind. As gone through the documents placed in the paper book which evidently demonstrates that the assessee has sold its shares which were held as investment and the amount has been received through proper banking channel from the companies, against the said sale of shares. We have also taken note of the basis of addition which has been noted by the authorities below as amount received towards issue of share capital and share premium by the assessee to the respective companies from whom the amount is received, as not a correct fact. Thus we hold that the reassessment proceeding initiated u/s. 147 are not in accordance with law. Further, on the merits of the case, assessee has evidently demonstrated the nature and source of the amount received in its bank account which is against the investment held by it in the Balance sheet. Accordingly, grounds taken by the assessee filed on the legal and merits of the case are allowed. Penalty u/s 271(1)(c) - HELD THAT:- Since the quantum appeal is held in favour of the assessee in terms of the observations and findings noted above, the penalty so imposed is not justified, since there is no tax sought to be evaded as contained in explanation to section 271(1)(c). Also notice issued for the penalty proceedings does not have any specific charge. Thus as decided in Dr. Murari Mohan Koley [2018 (9) TMI 1 - CALCUTTA HIGH COURT] specific charge ought to be mentioned in the notice for levy of penalty u/s. 271(1)(c). Thus,assessee succeeds and the penalty is accordingly deleted. All the appeals of the assessee are allowed.
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