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2016 (7) TMI 946 - ITAT DELHI

2016 (7) TMI 946 - ITAT DELHI - TMI - Reopening of assessment - Held that:- There was no new material given are produced before the Assessing Officer to start reassessment proceedings is right while going through the reasons annexed to the paper book. There was no mention of a superior authority in the assessment order as well as in the order for rejecting the assessee’s objections related to re-opening. Thus, the Assessing Officer prima facie has not acted upon as per the statute. - The tes .....

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o. 2793/Del/2012 is filed by the Revenue against the order dated 30/03/2012 passed by CIT(A) IV, New Delhi. 2. During the course of hearing, the assessee pointed out that the assessee s appeal is in respect of legal issue that the reassessment proceeding u/s 148 and 147 is bad in law and this main issue should be decided first. Therefore, the grounds of appeal are as follows:- ITA NO. 2806/Del/2012 1. That the order of the Commissioner of Income-tax (Appeals)-VI, New Delhi, dated 30/3/2012, is w .....

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authority to initiate the reassessment proceedings; 4. That the Commissioner of Income-tax (Appeals)- failed to appreciate that there was no new/fresh information/material in the possession of the Assessing Officer justifying that the income liable to tax has escaped assessment; 5. That the Commissioner of Income-tax (Appeals) failed to appreciate that was no reason justifying the reopening of the assessment. 6. That the Commissioner of Income-tax (Appeals) failed to appreciate that there was n .....

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on suspicions, conjectures, surmises and extraneous and irrelevant considerations; 10. That the reliefs prayed for may kindly be allowed and the orders(s) of the Assessing Officer and/ or Commissioner A9Appeals) may kindly be quashed, set aside, annulled or modified; 11. That the aforesaid Grounds of Appeal are without prejudice to each other. 3. The assessee is a company carrying on business of subbroking and dealing in shares & securities. Return of income for Assessment Year 2002-03 was d .....

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l material facts necessary for assessment, Further. It was submitted that its Return of Income earlier filed as per section 139(1) of the Act may be treated as Return filed in compliance to the notice. The assessee also requested the assessing officer to supply a copy of reason recorded under Section 148(2) of the Act to enable it to make its submissions regard to validity of reopening of assessment. 5. The Assessing Officer provided a copy of reason recorded by him to the representative of the .....

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etter dated 21.05.2009 requested the Assessing Officer to provide for copies of statements and affidavits along with report received by the assessing officer to enable assessee company to appreciate reference therein to the case of the Assessee and make its submissions in regard to validity of reassessment proceedings initiated in its case. The Assessees also specifically requested the Assessing Officer to make available a copy of proposal put-up for approval of reopening the assessment and copy .....

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on 10.07.2009. Copies of some of the documents, however, were nor provided in spite of repeated request by the representative of the assesse company to the assessing officer. The Assessing Officer without providing copy of remaining documents, issued notices under section 142(1) and 143(2) of the Act dated 01.09.2009 requiring the presence of the Assessee in connection with assessment proceedings before him on 10 09.2009 and also submit certain documents. The assessee in response to the notice a .....

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per book on pages 42-47. 7. The Assessee Company on going through the statements / affidavits of the persons named above read with the reasons recorded by the Assessing Officer submitted a letter dated 07.10.2009 to the Assessing Officer wherein it was strongly submitted that - Paras 1-5 of the reasons recorded contain only the facts regarding the modus operandi of the entry providers and these facts were not relevant to the Assessee Company. Further there was no reference to the case of the Ass .....

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to have been recorded. Reasons have been recorded in a routine manner on the basis of investigation made by the Addl. Director of Income Tax (Inv.) unit-1. New Delhi and there was no application of mind by the Assessing officer, which is as mandatory requirement. Reasons have been recorded without reference to the facts and the return of income filed by the assessee company and therefore allegation for escapement of income could not be levied. There was no basis or reason for arriving at the con .....

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of the escapement of income in the case of the Assessee on the basis of the available material and therefore, the notice had not been issued earlier. Same had been issued only on 30.03.2009 as the limitation of time was expiring on 31.03.2009. Copy proposal put up to the Jt. Commissioner of Income Tax for approval for reopening of Assessment and his approval have not been provided to the Assessee Company and therefore, it appears that notice has been issued without approval of JCIT and/or it is .....

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e with which decision the Assessing Officer was required to firstly dispose of objections of the Assessee Company by passing a speaking order before proceedings further in regard to the assessment. A copy of the above referred letter dated 07.10.2009 is given in the proper book on pages 48-55. 8. The Assessing Officer further passed an order dated 28/10/2009 on objections filed by the Assessee Company in regard to the reopening of assessment in the aforesaid order he has however, not specificall .....

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He has also not specifically dealt with other objections raised by the Assessee Company in his aforesaid order. The Assessee Company has filed a separate Appeal before the CIT(A) VI, N Delhi against the aforesaid order, which has been listed as Appeal no. 130/09-10. 9. The Assessing Officer thereafter issued another notice to the Assessee Company requiring certain details. Details as required by the Assessing Officer were duly submitted vide letter dated 09.11.009. A copy of each of notice issue .....

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ital Limited, which have been referred to in the reasons recorded. The Assessee company vide its letter dated 25/11/2009 explained to the assessing officer that the transactions with M/S S.J. capital Limited, having the membership of Delhi stock Exchange, were relating to the share trading undertaken by the Assessee company through them. Copy of ledger account of M/S S.J. capital Limited in the books of the Assessee Company along with the copies of bills and contract notes regarding the share tr .....

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ash payments. The representative of the Assessee Company specifically requested hirn during the course of hearing to make available Shri Trilok Chand Bansal and also Shri Mahesh Garg for cress examination by the Assessee Company in case the Assessing Officer is relying upon their statements in regard to the entries under reference. It was also submitted that in their statements there is no specific reference to the effect that the entries between M/s S.J. Capital Limited were not relating to gen .....

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nt order dated 24-12-2009. 12. The Assessee Company has filed appeal before the CIT(A). Each of the grounds of appeal are being discussed herein after 13. The CIT (A) held that the reassessment proceedings are in consonance with Section 148 of the Income-tax Act and rejected the contention of the assessee on that ground, but partly allowed the appeal on merit. 14. The Ld. AR submitted that the Assessee had categorically submitted before the Assessing Officer that notice issued under Section 148 .....

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e without the evidence and explanations in respect of entries under reference submitted by the Assessee before the Assessing Officer vide its letter dated 25-11-2009. Further, additions had been made on the basis of the statements of Shri Mahesh Garg and Shri Trilok Chand Bansal stated to have been given before the Addl. Director of Investigation, without providing the opportunity to the Assessee Company for cross examination of above mentioned persons. Therefore Ld.AR submitted that the princip .....

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Assessing Officer. It is also submitted that investigations had commenced on the basis of survey in the case of M/s Gurcharan Jewellers. In paras 2 to 4 Modus Operandi adopted by the entry providers has been discussed. Para 5 of the reasons recorded by the Assessing Officer states that investigation carried out by DIT, Investigation. New Delhi has assailed genuineness of transactions, whether shown by beneficiaries as inflow of share capital or receipt of gifts or consideration for sale - purcha .....

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ar Chang:a given before Addl. DIT, Investigation. Unit I, New Delhi, In all the paragraphs mentioned above there is no specific reference to any document or information on the basis of which it could be alleged that the entries were received by the assessee company and same were bogus. Copies of affidavit and statements made available by the Assessing Officer to the Assessee Company also have no reference to the transactions with the Assessee Company. There is no averment to the effect that entr .....

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ncome in the case of the assessee has escaped assessment. Accordingly, the conclusion of the Assessing Officer if the reasons recorded by him to the effect that amount of ₹ 34,50,000/- represents income of the Appeal and chargeable to tax which has escaped assessment, is not supported by any information / material on record. 16. The Ld. AR further submitted that as per the settled legal position, the Assessing Officer is required to form his view and record the reasons for issuing the noti .....

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