TMI Blog2012 (7) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... through banking channel from directors, their wives and parents only and that all are income tax payees and has been filing returns since last year – creditworthiness of lender is also proved as they had declared source of income and are filing income tax return - appellant had given interest on the amount of loan and had deducted TDS thereon – Held that:- Assessee has filed necessary documents to prove the genuineness of transactions, identity of investors and creditworthiness of investors - CIT(A) has rightly deleted the addition – In favor of assessee - I.T.A. No.1125/Del/2012 - - - Dated:- 1-6-2012 - SHRI R.P. TOLANI, AND SHRI T.S. KAPOOR, JJ. Department by : Shri Umesh Chander Dubey, Sr. DR Appelant by : Shri G.N. Gupta, Advocate. ORDER PER TS KAPOOR, AM: This is an appeal filed by the revenue against the order of CIT(A), XXVIII, New Delhi dated 7.3.2012. The assessee has filed cross objection to the appeal vide memorandum of cross objection. These were heard together and therefore are being disposed off by a common order. The grounds of appeals taken by the revenue and in the cross objection are as under:- I.T.A. 1125/Del/2012 (Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal): 1. The CIT(A)-XXVIII, New Delhi has erred in holding that the Assessing Officer has rightly reopened the assessment u/s 147/148 of the Income Tax Act, 1961 . 2. The brief facts of the case are that the assessee filed a return of income on 31st October, 2002 declaring income of Rs.59,580/-.The case was reopen vide issuance of notice u/s 148 of the Act and re- assessment was completed at Rs. 22,01,580/- u/s 147/144 of the Act and the following additions were made:- 1. Rs..6,00,300/- On the basis of information from DIT (Inv.) that the assessee has received accommodation entries from one S/Shri Sanjay Kumar, Shree Ram Garg and Sushila Devi Garg for an amount of Rs. 2,00,300/-, Rs. 2,00,000/- and Rs. 2,00,000/- respectively from the above persons. 2. Rs. 3,00,070/- On account of share application money received from five persons as found from the reply filed vide this letter dated 27.11.2009. 3. Rs. 7,75,500/- On account of increase in un-secured loans from share holders. 4. Rs. 3,99,500/- On account of increase in un-secured loans from Director. 3. The re-assessment order was passed u/s 144 as according to Assessing Officer the assessee did not file detail t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e concerned parties. It is seen that the appellant had furnished details in the form of additional evidence which was referred back to the Assessing Officer for remand report. However, the Assessing Officer neither examined them nor offered his comments on the same. The appellant has filed a list of the share holders and also various documents in support of share capital including assessment particulars and PAN. In the case of CIT v. Divine Leasing and Finance Limited (2007) 158 Taxman 440) it has been held that if the relevant details of the address or PAN identity of the creditor are furnished to the Department it would constitute acceptable proof or acceptable explanation by the assessee. In this case the share applicants existence is recognized as the company is in the records of the IT Department, since the appellant has submitted their PAN and also copies of Income tax records. The Hon'ble Supreme Court in the case of CIT v. Lovely Exports Pvt. Limited 116 CTR 185 in its order dated 11.01.2008 has held as under:- Can the amount of share money be regarded as undisclosed income u/s 69 of the IT Act, 1961. We find no merit in this special leave petition for the simple reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore entire re-assessment is bad in law. 11. The Ld DR relied on the order of Ld CIT(A) regarding reopening of the case. 12. We have heard the rival submissions of both the parties and have gone through the material available on record. We have observed that the Ld CIT(A) had admitted additional ground of appeal on the request of assessee and she has extensively dealt with this matter regarding powers and limitation of Assessing Officer with respect to provisions of section 147/148 of the Act. Though Assessing Officer had made 2-3 mistakes while framing re-assessment order yet, there was sufficient material before Assessing Officer for initiation of proceedings u/s 147/148. The report of DIT (Inv.) is a primary source of evidence for initiating proceedings u/s 147/148 of the Act and the Assessing Officer had rightly initiated re-assessment proceedings. Therefore, we do not see any reason to interfere in the decision of Ld CIT(A). Hence, the cross objection filed by the assessee is dismissed. 13. Now regarding Department s appeal with respect to deletions made by Ld CIT(A). The Ld Dr argued that despite various requests, the assessee had not filed documents with Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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