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TMI Blog2012 (10) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee from M/s Star Garments Pvt. Ltd. and M/s Manju Agencies), introduced as share capital by the assessee, was bogus unexplained credit. This amount was added by the Assessing Officer to the assessee's income u/s 68 of the IT Act. 3. By virtue of the impugned order, the Ld. CIT (A) deleted the aforesaid addition, bringing the department before us by way of the present appeal. 4. Challenging the impugned order, the Ld. DR has strongly relied on the assessment order. It was contended that the Ld. CIT (A) has wrongly deleted the addition; that while doing so, the Ld. CIT (A) has not considered that neither of the assessee's creditors were carrying on any business and that they were engaged in the business of providing accommodation entries; and that the Ld. CIT (A) has also failed to appreciate that the assessee miserably failed to prove the genuineness and credit-worthiness of the share applicants. The Ld. DR has placed reliance on "Nova Promoters", 342 ITR 169 (Del). 5. The ld. counsel for the assessee, on the other hand, has strongly supported the order under appeal. He submitted that even as per the grounds of appeal raised by the department, the department has not di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year and the original assessment being u/s 143 (3) of the Act and there being no finding to the effect that there was any omission or failure on the part of the assessee in disclosing correct particulars of its income, the Assessing Officer was not justified in assuming jurisdiction in disregard of the provisions of Section 147 of the Act; it had also been contended that even otherwise, the Assessing Officer had no material of any income having escaped assessment or about the genuineness of the share capital and the proceedings had been initiated merely on the basis of reference from the DIT (Inv.) without any evidence or material in possession of the Assessing Officer and in the absence of proper and requisite satisfaction, due to which, the reopening proceedings was illegal and invalid. The ld. counsel for the assessee has contended that the Ld. CIT (A) has, in this regard, wrongly held that the notice for reopening the completed assessment proceedings was valid, being within the time limit and having been issued with due permission as laid down in Sections 149/151 of the Act. It has further been contended that the Ld. CIT (A) has also erred in holding that the reason to beli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee before the Assessing Officer. It is further on record that vide letter dated 05.12.2008, filed by the assessee before the Assessing Officer, along with affidavit of the director, it was submitted that the assessee had not allotted any shares to Manju Agencies; that rather, during the year, shares were allotted to Star Garments Pvt. Ltd. and Rajshree Marketing and Services Pvt. Ltd., with regard to both of which parties, the assessee had furnished all the relevant documents, as above. From the assessment order also, it is available that the Assessing Officer had accepted the assessee having proved the identity and genuineness of the shareholders. The payment of the share application money was through account payee cheques, which fact was also accepted. The Assessing Officer challenged the assessee's claim for the reason that the source of the amount and the credit-worthiness of the parties had not been established by the assessee. 12. The Assessing Officer, vide letter dated 05.08.2011, submitted his remand report which was duly considered by the Ld. CIT (A). It was observed that the share application money was to be treated to have come from Rajshree Marketing and Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y considered in "M/s Excellence Town Planner (P) Ltd." (supra) and it has been held therein, inter alia, as follows:- "10. The Ld DR at the time of hearing relied upon the judgment of Hon'ble Delhi High Court in the case of Nova Promotors, it was pointed out to us by the Ld Counsel for the Assessee that the judgment in the case of Goyal Sons Golden Estate Pvt. Ltd. is subsequent to the judgment of Nova Promotors. In that case, the Assessing Officer had issued summons to the share applicants which were returned unserved. The assessee did not produce the share applicants however, subsequently, filed their affidavits. They suggest that an inquiry made by the Assessing Officer in the case of Nova Promotors about the antecedents of the share applicants but in the present case, no inquiry was made by the Assessing Officer. He simply treated the information collected by the Investigating Wing as a gospel truth. To our mind that information could be sufficient for starting investigation to that cannot be a substitution of all sort of evidence. On due consideration of the facts and circumstances and the order of Ld CIT (A) in the light of Hon'ble Delhi High Court's decision referred above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ROC particulars and bank account statements. On the basis of these, the CIT (A) held that the share application money or the source of the share application money had been satisfactorily explained. The ITAT was of the opinion that no interference was warranted having regard to the facts of this case. This Court is of the opinion that the only sentence in paragraph-6 of the impugned order that amounts were refunded to the applicants itself should not be a ground to conclude that the findings recorded by the lower authorities are not on the basis of evidence. The entire controversy sought to be raised is purely factual." 15. Thus, considering the above, and the fact that in "Nova Promoters" (supra), there was adverse material against the assessee, which was not the case herein, "Nova Promoters" (supra) is not applicable to the present case. 16. Hence, finding no error or irregularity or illegality in the order passed by the Ld. CIT (A) and finding the same to be an elaborate well reasoned order, we hereby confirm it, rejecting the grievance sought to be raised by the department by way of the grounds of appeal taken. 17. Since the matter has been decided on merits, as above, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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