9911796707
Advanced Search 
TMI Blog2020 (2) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirming the addition of Rs. 56,00,000/- by treating the investment of Rs. 25,00,000/- in shares of Pradip Overseas Ltd and Rs. 31,00,000/- in shares of Pradip Enterprise Ltd as unexplained investment under section 69 of the I.T. Act, 1961. 3. The learned CIT (A) erred in law and on the facts of the case in- confirming interest charged U/s. 234 B and 234 C of the Act. 4. The appellant craves for leave to add, amend or alter all or any of the grounds of appeal before or during the course of hearing of this appeal. The assessee has also raised the additional ground of appeal which was received dated 25 July 2018 which reads as under: 1. The Ld.AO erred in law and in the facts of the case in reopening the case of the appellant u/s.147 of the act. The appellant craves for leave to add, amend or alter all or any of the grounds of appeal before or during the course of hearing of this appeal. 2. First, we take up the additional ground of appeal raised by the assessee. The assessee in the additional ground of appeal has challenged the reopening of the case under section 147 of the Act. 3. The facts in brief as culled out from the records available before us are that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed under section 132(4) of the Act, that its companies have received share capital/premium from its unaccounted/undisclosed income through the channel of various companies including the assessee. The learned DR also filed the details of both the companies where the name of the assessee was appearing as subscriber of shares. The learned DR vehemently supported the order of the authorities below. 5. We have heard the rival contentions of both the parties and perused the materials available on record. The AO under section 147 of the Act has been empowered to initiate the proceedings under this section if he has reason to believe that income chargeable to tax has escaped assessment for any assessment year. There are various authoritative pronouncements which have interpreted the words 'reasons to believe' for initiating the proceedings under section 147 of the Act. However, we do not want to recapitulate all of them at this stage but suffice to say that i. The AO should have prime facie material in his hands to form the opinion that there is escapement of income. Furthermore, he is not expected to verify the sufficiency or correctness of the material at the time of recording his s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elieve that income for any assessment year has escaped assessment. The word 'reason' in the phrase 'reason to believe' will mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income has escaped assessment, it can be said to have 'reason to believe' that an income has escaped assessment. The said expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an in-built idea of fairness to taxpayers. [Para 16] In view of the above, we hold that the AO proceeded to initiate the proceedings under section 147 of the Act after receiving some reliable information from the outside source. As such, the AO after receiving the information verified the balance sheet of the assessee wherein the investment was shown at Rs. 1.43 crore. Thus, the AO after receiving the information applied his mind by referring the balance sheet of the assessee and after that recorded his satisfaction under section 147 of the Act. Thus the allegation of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts as well, an examination of various documents, now submitted, show that the documents do not serve the purpose. The appellant has furnished a confirmation of an amount of Rs. 40 lakhs accepted by it as share capital from K C Bokadia films Ltd. However the confirmation has been signed under the Seal of Asian Films Production and Distribution Ltd. The source of this money is not explained though the bank account has been submitted. The bank account also show that there is a series of clearing and issuing of checks. It appears from the bank account that the money has been routed through, that bank account. It appears that various accommodation entries have been issued through that bank account as the cheques issued, in favour of Kajal Agro Farms Ltd, which has also given accommodation entries to the Pradeep Overseas group are also appearing in the bank account. The appellant has given another confirmation from Hitesh Agrawal . A copy of acknowledgement of IT return for the assessment year 2006 - 07 has also been attached. An examination of the details shows that the depositor has earned an income of Rs. 122707/-. No further details in that respect are available. Accordingly the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplies that same amount has also been added in the hands of other companies as discussed above on substantive basis. 11.1 There is no specific provision in the Act for the purpose of making a protective assessment. However, now it is well-settled by judicial precedent that in order to protect the interest of the revenue, protective assessment can be made. A protective assessment comes to an end when the substantive assessment is made in the case of a different person. 11.2 Now, the controversy arises if the addition on substantive basis has been confirmed in the hands of the other parties and reached to the finality, then the addition on protective basis will not survive. Thus, it is necessary to ascertain the fact of the final outcome of substantive addition in the hands of other companies before reaching to the conclusion in the present case. But no such detail is arising from the order of the authorities below. 11.3 Besides the above, we also note that the assessee has filed certain additional/new evidences to justify the source of investment in the companies as discussed above which were not accepted by the learned CIT (A). These additional/new evidences were not admitted b ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
