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2015 (9) TMI 903

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..... iii) in reasons recorded allegation was made for income escaping assessment of ₹ 24.50 lacs as mentioned of the impugned order also whereas income escaping assessment was found to be ₹ 16 lacs in the very same order. On these reasons merely based on investigation wing information without surveillance of substantiation and without any statement being mentioned therein and without nature of transaction being narrated therein and without tangible material, and further without application of mind on amount of income escaping assessment, shows that the reopening is bad in law and needs to be quashed. In the background of the aforesaid discussions, we are of the considered view that only effective ground in this appeal is reassessment proceedings u/s. 148 of the I.T. Act, the Assessee has reiterated that reassessment proceedings are illegal and without jurisdiction in the absence of any tangible evidence or material in respect of any undisclosed income and recording of requisite satisfaction in respect of any such undisclosed income. See Signature Hotels P. Ltd. vs. Income Tax Officer [2011 (7) TMI 361 - Delhi High Court] - Decided in favour of assessee. - I.T.A. No. 3475 .....

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..... ed for the reopening of the assessment. 6. Whether the order passed by CIT(A) in the facts and circumstances is just, fair and legal. REVENUE S APPEAL (A.Y. 2001-02) (ITA NO. 3475/DEL/2009) 4. The brief facts of the case are that the assessee is an investor company which is engaged in the business of dealing in shares and securities. For this year return declaring total income of ₹ 16,290/- was filed on 31.10.2011. The return was processed u/s. 143(1) but no scrutiny assessment was made. Subsequently on the basis of information received from the office of DIT(Inv.) a notice u/s. 148 was issued after recording of reasons and served on the assessee on 26.3.2008. In response to that the assessee requested to treat the original return as the return in response to notice u/s. 148. The assessment was made u/s. 147 by order dated 5.12.2008 determining the total income of ₹ 26,16,290/- and addition of ₹ 26,00,000/- passed u/s. 148/143(3) of the Income Tax Act, 1961. 5. Aggrieved with the aforesaid assessment order dated 5.12.2008, Assessee was in appeal before the Ld. CIT(A), who vide impugned order dated 4.5.2009 has deleted the addition in dispute by p .....

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..... proceedings the appellant's AR furnished the details of payments which the AO had noted in the order two reasons recorded by him for reopening as under:- S. No. Party Name Amount Cheque No. Date 1 Onyx Exim Sales Pvt. Ltd. 300000 61786 05/05/00 2 Onyx Exim Sales Pvt. Ltd. 300000 61786 05/05/00 3 Swastic Advertisement Agencies 100000 39349 05/05/00 4 Swastic Advertisement Agencies 100000 39349 05/05/00 5 AAY Kay Investment 200000 159478 05/05/00 6 Maa Shakumbarii Stone Crusher Pvt. Ltd. 400000 916362 22/03/00 7 Maa Shakumbarii Stone Crusher Pvt. Ltd. 400000 916362 22/03/00 8 Deeksha Fincap Securities Pvt. Ltd. 100000 131809 27/03/01 9 Deeksha Fincap Securities Pvt. Ltd. 100000 131809 27/03/01 10 MV Mar .....

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..... the appellant failed to comply with the notice u/s 142(1) was in correct because the details required by the AO were duly filed before him. On the other hand it was contended that the AO has mentioned in the names of Sujjit Husain Mallick, Krishna 'Cinema India Ltd and Amit Kr Singh without any relevance because no payments were received from these parties during the, year. These parties do not find mention in the reasons recorded by the AO. This shows non-application of mind on part of the AO. It was also contended that in the 147 proceedings the primary onus was upon the AO to produce some material 0:- information which could prove that these receipts were accommodation entries. The assessee has to be given opportunity to counter or rebut such material or evidence. However the AO did not confront the appellant with any evidence or material which could show that the appellant company had received accommodation entries. To sum up it was contended that a part of the payment was towards sale of assets which were reflected in the balance sheet of the appellant company in the earlier years and some part was towards share application money for which necessary evidence was filed. Th .....

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..... t of the transactions. All the transactions have been carried out through account payee cheque and confirmations, share application forms, written acknowledgement of these parties have been filed. The AO rejected the said explanation merely on the ground that the summons issued by him was not responded to. Since the concerned parties were assessed to tax and their return acknowledgements were submitted, the facts could have been verified from their assessment records. The appellant has furnished sufficient documents to prove the identity of the parties and therefore in view of the decision of Supreme Court in the case of Lovely Exports no additions in the company have been made as regards share application money. Therefore entire addition of ₹ 17 lacs is deleted 9.1 We have thoroughly gone through the aforesaid finding of the Ld. CIT(A) and we are of the considered view that Ld. CIT(A) has deleted the addition in dispute after considering all the relevant evidences produced by the assessee, as discussed above. Therefore, we are of the considered view that no interference is called for in the well reasoned order passed by the Ld. CIT(A), hence, we uphold the order on the .....

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..... submitted that assessee had discharged obligations and filed all necessary documents, confirmations at the time of original assessment sufficient to meet the satisfaction under section 148 proceedings when the assessing officer having accepted those confirmation and information in original assessment proceedings. To support his contention, he referred the various case laws of the Delhi High Court by which the present case of the assessee is covered including the case of Signature Hotel Pvt. Ltd. (2011) 338 ITR 51. He further relied upon the ITAT, C Bench, Delhi in which on the similar facts and circumstances the issue in dispute has been dealt by the Tribunal in the case of Shri Govind Kripa Builders and Promoters vs. ITO passed in ITA No. 304/Del/2013 (AY 2008-09) vide order dated 19.12.2014 in which Hotel Signatures Pvt. Ltd. decision (supra) was followed. Later the Department went in Appeal before the Delhi High Court, in ITA No. 486/2015 in the case of Pr. CIT vs. Sh. Govind Kripa Builders Pvt. Ltd. which was dismissed on 4.8.2015 by the Hon ble High Court of Delhi. Hence, he requested that the reassessment proceedings may be quashed. 15. On the other hand, Ld. DR relied u .....

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..... hatsoever in the ITAT coming to the above conclusion. In the facts and circumstances of the present case, no substantial question of law arises for determination by the Court. 16.2 We also find from the records that earlier scrutiny assessment u/s. 143(3) was completed vide order dated 28.2.2005 and (ii) four years have elapsed on date of instant reopening (23.3.2009) and (iii) in reasons recorded allegation was made for income escaping assessment of ₹ 24.50 lacs as mentioned on page no. 1 of the impugned order also whereas income escaping assessment was found to be ₹ 16 lacs in the very same order. On these reasons merely based on investigation wing information without surveillance of substantiation and without any statement being mentioned therein and without nature of transaction being narrated therein and without tangible material, and further without application of mind on amount of income escaping assessment, shows that the reopening is bad in law and needs to be quashed. 16.3 In the background of the aforesaid discussions, we are of the considered view that only effective ground in this appeal is reassessment proceedings u/s. 148 of the I.T. Act, the Ass .....

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