TMI Blog2012 (2) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal which read as under :- The Ld. CIT (A) is erred in holding that initiation of reassessment proceedings was not sustainable in law and that the proceedings were initiated without any cogent reasons and definite material. 2. The assessee is a private limited company engaged in the business of providing professional services and trading of shares. The return of income for the year under consideration was filed on 31.10.2001 declaring net income of ₹ 13,833/-. The reassessment proceedings under section 147 were initiated by issue a notice under section 148 on 28.03.2008. The assessee submitted that the return filed under section 139 (1) was treated as return of income filed under section 148 of the Act. The Assessing Officer made an addition of ₹ 36 lacs. The assessee has challenged the reassessment proceedings as well as the additions made before the CIT (A). The CIT (A) allowed the assessee s appeal on both the grounds, i.e., the initiation of reassessment proceedings as well as on merits of the addition. 3. The learned DR was heard in length on both the issues of reopening as well as on merits of the case. On the reopening issue, raised in additional gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a live connection between the information in reasons recorded and additions made by Assessing Officer. For the sufficiency of reasons, she also relied on the decision of Apex Court in the case of Phool Chand Bajrang Lal vs. ITO 203 ITR 456. For reopening, establishment of escapement of income is not necessary and for this proposition, she relied on CPMO vs. CIT 191 ITR 662(SC), MTNL vs. CIT 246 ITR 153(Del.), ITO vs. Gurvinder Kaur 102 ITD 189(Del.) and ITO vs. Selected Dalurband Coal Co.(P)Ltd. 217 ITR 597 (SC). She also pleaded that there was no necessity of supplying the reasons as law did mandate so. For this, she placed reliance on CIT vs. Seftag reported in 332 ITR 622. The Assessing Officer is not supposed suo motu to supply the copy of those reasons to believe. It is only when the assessee asked the Assessing Officer, the Assessing Officer has to provide the reasons recorded and thereafter the Assessing Officer is duty bound to dispose of the objections by making a specking order. The rejection of the objection by Assessing Officer gives a cause to the assessee to challenge the order of the Assessing Officer by filing appropriate writ petition. She also relied on the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceeding is permitted to be initiated on the basis of borrowed satisfaction. For this, he relied on the following decisions:- (i) CIT vs. Atul Jain - (2007) 164 Taxman 33 (Delhi); (ii) Durga Prashad Goyal vs. ITO (2006) 98 ITD 227 (Asr) (SB); (iii) CIT vs. Smt. Paramjit Kaur (2008) 168 Taxman 39 (HC-P H); ITA 7 No.4738/Del./2009 (iv) CIT vs. Vignesh Kumar Jewellers (2009) Taxman 18 (HC-Madras); (v) CIT vs. Shree Rajasthan Syntex Ltd. (2009) 178 Taxman 33 (HCRajasthan) Ld. AR further pleaded that for reopening of the case, there must be material for belief and not suspect. Ld. AR further pleaded that there should be circumstances in existence, the Assessing Officer cannot presume that circumstances deemed to have been existed for arriving at an opinion. He further pleaded that the reasons to believe must be honest and not based on suspicion, gossip, rumour or conjecture. The reasons recorded must disclose the process of reasoning by which the Assessing Officer reached at conclusion to reopen the case. Change of opinion on a particular issue will not confirm the jurisdiction for reassessment. Ld. AR further pleaded that there must be nexus between m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails of the bank from where the amounts were received. The variance in the quantum of amount shall not be so fatal which can make the reassessment proceedings null and void. After consideration of all the facts of the case minutely, we are of the view that the CIT (A) was not justified in holding that reassessment proceedings are not sustainable in law. Therefore, on this issue, we allow the revenue s appeal. 6. In the original grounds no.2 2.1, the issue is raised regarding the deletion of addition of ₹ 36 lacs made by Assessing Officer u/s 68 of the Income-tax Act treating the same as bogus cash credits. 7. We have heard both the sides on the issue. We have also gone through the records minutely. In the present case, the assessee has submitted evidences which have been placed on record. The assessee has filed the audited balance sheet and accounts for the year ending on 31.3.2001 wherein the closing balance of the previous year which is opening balance for the year under consideration and the closing balance of the year under consideration year has been shown (page 9 of paper book). Assessee also furnished the details of opening stock of investment in shares as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details and nature of transactions were solely in the domain of assessee which were never informed to revenue. Stalling tactics were adopted to thwart investigation to its logical conclusion. Thus, the facts of CIT vs. Vishal Holding and Capital (P) Ltd. are distinguishable. The case of Intercity Finest Pvt. Ltd., cited by assessee, is also distinguishable. In this case also, the contract notes and proof of sales were produced while in assessee s case, no such documents were submitted. She finally pleaded that assessee has not submitted true and fair disclosures as the details of the credit entries being questioned by the revenue u/s 148 proceedings. Finally, she pleaded to set aside the order of CIT (A). She also pleaded to restore the issue to the file of the Assessing Officer for providing the assessee adequate opportunity to produce the share applicants as also the purchasers of the shares, as has been done in the case of ITO vs. M/s. New Tech Steels Pvt. Ltd. 2010-TIOL-496-ITAT-DEL. 9. Learned. AR submitted before us that the shares were sold through Batra Investments and on similar facts, the ITAT in the case of ITO vs. Intercity Finvest Pvt. Ltd. in ITA No.3131/Del/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment as on 31.03.2000 through M/s. Batra Investments. These sale proceeds have been taken into account while preparing the profit loss account of the assessee for the year. The assessee had earned profit of ₹ 1,92,900/- on the sale of such shares held as investment as on 31.03.2000 which has been duly declared in the return of income for the assessment year under consideration. This amount has been received through various cheques aggregating to ₹ 22 lacs from M/s. Batra Investments on account of sale of shares. These receipts had been deposited in the account maintained by the assessee with Centurian Bank of Punjab, copy of which was filed before Assessing Officer. Although the learned DR has pleaded that there was distinguishable features and subsequent judgments to be taken into account by the ITAT, however, no decision of ITAT has been filed before us which is having same facts as of assessee. We also hold that to perpetuate an error is no heroism and to rectify it is the compulsion of the judicial conscience, as held by the Hon'ble Supreme Court in the case of Distributors (Baroda)(P.) Ltd., cited supra. However, the learned DR is failed to pinpoint the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances, the sale proceeds received by the assessee cannot be termed as unexplained credit u/s 68 of the Act. Therefore, we are of the view that the ld. CIT(Appeals) was right in deleting the addition. Similarly, recently in the case of ITO vs. Goodwill Cresec Pvt. Ltd., ITAT Bench C , New Delhi in ITA no.4151/Del/2010 dated 25.01.2012 held that such transaction has been held genuine on the basis that the shares which were subject matter of sale were standing in the balance sheet of the assessee. The relevant paras 14 to 16 of the said order is reproduced hereunder :- 14. We have carefully considered the rival submissions in the light of the material placed before us. In the present case, the assessee had submitted ample evidence which has already been discussed in the above part of this order to contend that the share transaction entered into by it with MKM Finsec Pvt. Ltd. was a genuine transaction. The shares which were subject matter of sale were standing in the balance sheet of the assessee which were subject matter of sale. The party to whom the sales have been made have confirmed the transactions and the transaction was supported by documentary evidence. It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. The assessee has also produced best possible evidence to support its claim. Consequently the addition made by the Assessing Officer cannot be sustained. 7. In any event, the factual findings of the final fact finding authority are neither perverse nor contrary to record. Accordingly, we find that no substantial question of law arises in the present appeal which, being bereft of merit, is dismissed in limine but with no order as to costs. 16. In this view of the situation, we find that so far as it relates to issue on merits, the case of the assessee is covered by the aforementioned decision of the Tribunal which has been confirmed by Hon ble High Court. Therefore, we decline to interfere in the deletion made by the learned CIT (A) and the appeal filed by the revenue is dismissed. In the case of ITO vs. Capital Audit Video Limited in ITA No.2921/Del/2011 dated 23.09.2011, the ITAT has held as under :- 5. We have duly considered the rival contentions and gone through the record carefully. The assessee has purchased the shares in the year 2000. These shares were shown in the books of account. Payment was made through account payee cheques for the purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X
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