TMI Blog2019 (4) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... view the already concluded issues u/s 143(3) and review in the garb of reassessment was not permissible under the law. Further, mere reasons to suspect could not substitute reasons to believe. - Decided in favour of assessee. - I.T.A. No.170/Mum/2017, I.T.A. No.515/Mum/2017 - - - Dated:- 10-4-2019 - Shri Mahavir Singh, JM And Shri Manoj Kumar Aggarwal, AM For the Assessee : Jitendra Jain/Mahesh Rajora-Ld.ARs For the Revenue : Abhi Rama Kartikeyan - Ld.DR ORDER PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1.1 These cross appeals for Assessment Year [AY] 2009-10 contest the order of Ld. Commissioner of Income-Tax (Appeals)-2, Mumbai, [CIT(A)], Appeal No. CIT(A)-2/IT-111/2015-16 dated 25/10/2016. 1.2 The grounds raised by the assessee read as under: - 1(a) The Commissioner of Income Tax (Appeals)-2, Mumbai [CIT(A)] erred confirming the reopening of the assessment by the AO invoking the provisions of Section 147read with section 148 of the Income Tax Act, 1961. The Appellant submits that the notice issued u/s 148 and reopening of assessment u/s 147 is bad in law, illegal, ultra-vires and contrary to the provisions of the I.T.Act and shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax returns filed, bank statements, the mode of payment etc of share holders, and that the share premium has been received through banking channel ? iv. Whether, on the facts and circumstances of the case and in law, the CIT(A) was justified in deleting the additions of ₹ 5,20,00,000/-, ignoring the facts brought out by the AO that the investor was merely a conduit having no fixed assets and no credit worthiness and had received the said amount of ₹ 5,20,00,000/-on 17/03/2009 which was given to the assessee company on same date? v. Whether on the facts and circumstances of the case and in Law the Ld.CIT(A) was correct in deciding the issue in favour of assessee by relying on the decision of Hon'ble ITAT in the case of M/s. Green Infra Vs. ITO (ITA NO 7716/MUM/2012),without appreciating the legal position that the said issue had not attained finality since departments appeal filed u/s 260A against the said decision was still pending before Hon'ble Bombay High Court? vi. Whether, on the facts and circumstances of the case and in law, the CIT(A) was justified in allowing the appeal of the assessee by relying on the decision of Apex court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Premium. Upon going through the financials of the said entity, Ld. AO came to a conclusion that the said entity was merely an accommodation entry provider with no genuine business. The valuation report furnished by the assessee to justify the share premium was also disregarded alleging the same to be bogus piece of document to cover up real nature of the transaction. Reliance was placed on the decision of Hon ble Bombay High Court rendered in Major Metals Ltd. Vs. Union of India [19 Taxmann.com 176] to upheld the applicability of Section 68 to such transactions. It was also concluded that the assessee failed to justify high premium of ₹ 900/- per share and also failed to prove the creditworthiness of the investor company. Finally, not convinced with assessee s explanations submissions, the aforesaid amount of ₹ 520 Lacs was added back to the income of the assessee u/s 68 as unexplained cash credit. 3.1 Aggrieved, the assessee contested the reassessment proceedings on legal grounds and quantum additions on merit before Ld. first appellate authority with partial success vide impugned order dated 25/10/2016. On legal grounds, it was submitted that the subject ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and the same were initiated on borrowed satisfaction on investigation wing so as to make fishing / roving inquiries. It has been submitted that Ld. AO was not empowered to review the issues already examined during the original assessment proceedings and the reassessment proceedings were initiated merely on change of opinion, which was impermissible under law. On merits, our attention has been drawn to the documentary evidences submitted by the assessee during original assessment proceedings u/s 143(3) to prove the identity, genuineness and creditworthiness of the investor company and also to justify the share premium commanded by the assessee from the investor company. Reliance has been placed on following judicial pronouncement to support various submissions: - i) Hon ble Bombay High Court in Navi Trading Ltd. Vs Union of India [375 ITR 308] ii) Hon ble Bombay High Court in Hindustan Lever Ltd. Vs R.B.Wadkar [190 ITR 166] iii) Hon ble Bombay High Court in NYK Line (India) Ltd. Vs. DCIT [346 ITR 361] iv) Hon ble Bombay High Court in PCIT Vs Century Textiles Industries Limited [167 DTR (Bom) 105] v) Hon ble Delhi High Court in Unitech Holdings L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India Ltd. [320 ITR 561] has succinctly put the legal proposition in the following manner: - Assessing Officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfillment of certain preconditions and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of change of opinion as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, the Assessing Officer has power to reopen, provided there is tangible material to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief . 5.2 Proceeding further in the above backdrop, at the outset, we deem it fit to reproduce the reason recorded by Ld. AO to reopen the assessment which have been placed on page no. 204 of the paper-book : - REASONS FOR RE-OPENING M/s. Capri Global Advisory Services Pvt. Ltd. (Earlier Known as Money Matters Advisory Services Ltd.) PAN No. AACCP2478C A.Y.2009-10 The assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income Tax along with Annexure containing reasons recorded for re-opening of assessment to submit that detailed reasons were recorded to initiate the reassessment proceedings against the assessee for the impugned AY. However, in our opinion, no cognizance of the same could have been taken in view of the fact that the said approval has been signed by the sanctioning authority only on 31/03/2016 whereas notice u/s 148 was already issued to the assessee on 27/03/2014 and re-assessment was framed on 20/03/2015. Secondly, nothing could be placed on record to establish that the detailed reasons recorded by revenue as given in the attached Annexure were ever supplied to the assessee. Therefore, the only reasons recorded for re-opening, which were to be considered so as to adjudicate the jurisdictional issue, were the reasons dated 27/03/2014 as supplied to the assessee and as extracted by us here-in-above. It is trite law that reasons once recorded could not be altered, modified, substituted or amended subsequently so as to justify the reassessment proceedings since the primary requirement that Ld. AO had reasons to believe was to be seen only with reference to the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uding justification of share premium and therefore, the onus casted upon him, in this regard, was duly discharged during original assessment proceedings itself. Therefore, the argument that no opinion was formed by Ld. AO during original assessment proceedings, in our opinion, would hold no legs to stand. To emphasis, review in the garb of reassessment was not permissible under law and reassessment proceedings upon mere change of opinion could not be sustained. 5.4 Our observations as well as conclusion draws strength from various case laws cited by Ld. AR before us, which have already been enumerated in para 4.1 above . To be more precise, on similar facts circumstances, Hon ble Bombay High Court in the case of PCIT Vs Century Textiles Industries Limited [99 Taxmann.com 205] observed as under: - 11. The undisputed position in the present case is that the regular assessment was completed under Section 143(3) of the Act and the re-opening has been issued within a period of four years from the end of the relevant Assessment Year. Thus, the rigour of the first proviso to Section 147 of the Act is not to be satisfied for issue of a reopening notice i.e. failure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had taken a view on the claim of deduction under Section 80IC of the Act. 12. Moreover, we find that the reasons in support of the impugned notice is not premised on the fact that he had not applied his mind to the claim for deduction under Section 80IC of the Act during the regular assessment proceedings in respect of the income/receipts which were not derived from its paper and pulp unit to claim benefit under Section 80IC of the Act. It proceeds to exclude the above income from the claim for deduction on account of omission by the Assessing Officer during the regular assessment proceedings. This is different from non-application of mind to claim for deduction under Section 80IC of the Act. As held by this Court in Hindustan Lever v. R.B. Wadkar [2004] 268 ITR 339/138 Taxman 40 (Bom.), the reasons in support of the reopening notice has to be read as it is. No additions and/or inferences are permissible. Moreover, the power under Section 147/148 of the Act is not to be exercised to correct mistakes made during the regular assessment proceedings. 13. In the above facts, the view taken by the impugned order of the Tribunal is a view in accordance with the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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