TMI Blog2016 (1) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... s and since the said information was not available with the AO at the time of original assessment and thus assessee had failed to disclose all material facts fully and truly. However in our opinion the assessee had fully disclosed all the facts qua allotment of shares and receiving loans and even filed confirmations from all these companies. - Decided in favour of assessee. - ITA No. 5435/Mum/2015 - - - Dated:- 29-1-2016 - Amit Shukla, JM And Rajesh Kumar, AM For the Appellant : Shri Dr P Daniel For the Respondent : Shri Rajesh Ojha ORDER Per Rajesh Kumar, AM This appeal by the assessee is directed against the order dated 01/10/2015 of Commissioner of Income Tax (Appeals)-12, Mumbai (Hereinafter called as the CIT(A) ) for assessment year 2006-07.The assessee has raised following grounds of appeal: 1. The learned Assessing Officer erred on facts and in law in making the impugned addition of ₹ 75,00,000/- being share capital and ₹ 25,39,180/- being unsecured loans of the appellant company. 2. The Learned Assessing Officer failed to appreciate the fact that the original assessment of the company is completed u/s. 143(3) of Income Tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 147 r.w.s 148 of the Act are that the assessee filed his return of income u/s 139(1) on 28.10.2006 which was processed u/s 143(1) of the Act on 17.01.2008. Later on case of the assessee was selected for scrutiny and notices u/s 143(2) 142(1) of the Act were issued and served upon the assessee. The assessment u/s 143(3) of the Act was framed vide order dated 23.12.2008 at Rs. Nil by the AO by rejecting the entire expenses claimed of ₹ 1,34,350/- in the profit and loss account by the assessee on the ground that no business activity was carried on during the year by the assessee. Thereafter the assessment concluded u/s 143(3) of the Act was reopened u/s 147 of the Act and notice u/s 148 of the Act dated 18.3.2013 was issued and served on the assesee on 19.3.2013 after expiry of four years from the end of the assessment year 2006-07. The reason recorded for reopening the assessment are as under: The assessee filed its return of income on 28.10.2006 declaring loss of ₹ 1,34,350/-. The assessment was completed under section 143(3) on 23.12.2008 disallowing the expenses claimed and thereby the income was assessed at rupees nil. In search and seizure action unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt u/s 143(3) r.w.s. 147 of the Act vide order dated 13.3.2014 at ₹ 1,00,39,180/- by making addition of ₹ 75,00,000/- for increase in share capital and ₹ 25,39,180/- as un-proved loans during the year under the provisions of sections 68 of the Act. The ld. CIT(A) held the reopening u/s 148 of the Act to be valid on the ground that tangible material was available before the AO for issue notice u/s 148 of the Act and the assessment was reopened after recording the reasons to effect that the assessee failed to disclose fully and truly all material facts in respect of income during the year and consequently upheld the addition of ₹ 75,00,000/- made towards share capital and ₹ 25,39,180/- for the unproved loans u/s 68 of the Act on the ground that appellant could not prove the genuineness, identity and creditworthiness of the persons/ entities from whom these amounts were received and it was established that the assessee was involved in taking the accommodation entries from Shri. Mukesh M Chokshi, Mahasagar Securities Pvt. Ltd and other associated companies. 4. Before us the ld. Counsel for the assessee Shri. Dr. P. Daniel submitted that the assessee fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. vs. A.C.I.T. (2015) 174 TTJ (Chd.) (UO) 41 in support of case of the assessee. The ld. Counsel further submitted that the assessment was re-opened by the AO on the basis of information passed by the investigation wing of the Dept which stated that the assessee was involved in taking accommodation entries from Mr Mukesh M Chokshi and associated companies whereas as a matter of fact there was no mention of assessee name in the statement of Mukesh M Chokshi and the reasons recorded were merely on suspicion and no new materials had come in the possession of the AO as the issue raised while recording reasons stood verified and confirmed during the original assessment proceedings with specific findings which were duly recorded by the AO in the assessment order by way of office note. The ld. Counsel also submitted that merely re-opening the assessment on the basis of information from the investigation wing was also bad in law as has been held in the following decisions namely :- (i) Sarthak Securities Co. Pvt. Ltd. (2010) 329 ITR 110 (Delhi) (ii) CIT VS.SFIL Stock Broking Ltd. 325 ITR 285 (Delhi) (iii) Shri. Hirachand Kanuga vs. the DCIT The assessment was reopened ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation entries from Mukesh Chokshi and associated companies and failed to prove the creditworthiness, genuinity and identity of the share applicants and loan creditors and prayed for upholding the orders of authorities below. 6. We have heard the rival submissions and perused the materials on records. We find that the assessee filed the return of income on the AY 2006-07 on 28.10.2006 declaring a loss of ₹ 1,34,350/-. The said return was processed u/s 143(1) of the Act on 17.01.2008. The case of the assessee was selected for scrutiny and the assessment u/s 143(3) of the Act was completed at Nil vide order dated 23.12.2008 by rejecting the claim of the assessee of ₹ 1,34,350/- for various expenses charged to the profit and loss account on the ground that the assessee was not carrying on any business activity during the year. Thereafter the assessment completed u/s 143(3) was re-opened u/s 147 of the Act by issuing notice u/s 148 of the Act dated 18.03.2013 which was served upon the assessee on 23.12.2008 after a period of four years from the end of the assessment year 2006-07. It was argued before us that the assessment can only be re-opened u/s 147 of the Act after fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share capital issued have been filed. Confirmation of the share applicants are filed and no adverse inference can be drawn therefrom. (iii) General examination of Books The assessee maintains Cash/Bank Book, Ledger, Purchase/ Sales Register and Journal. The same are produced before me along with the supporting bills/vouchers and are test checked. No adverse inference can be drawn from them. 7.1 From the above facts it is clear that the assessee had duly filed its return of income u/s 139(1) and also filed all the necessary records/details/confirmations before the AO who completed the assessment after examining the records and recorded his satisfaction in assessment order itself by way of office note and thus it is a case where the income had definitely not escaped because of the assessee having failed to make full and true disclosure as envisaged in the 1st proviso to section 147 of the Act and the AO had wrongly assumed jurisdiction to re-open the assessment. It is also clear from the reasons recorded that assessment was reopened on the basis that the assessee had allotted shares to and borrowed money from the companies which were associated with Mr Mukesh M Choksh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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