TMI Blog2020 (4) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, or where such objections have been decided alongwith the assessment order, the notice issued u/s 148 of the Act deserves to be quashed. Accordingly, the assessment order passed by the Assessing Officer is reversed as null and void in the absence of separate specific order disposing of the assessee s objections against the reasons recorded. - Decided in favour of assessee. - ITA No.60/ALLD/2019, S.A. No.01/Alld/2019 [In ITA No.60/ALLD/2019] - - - Dated:- 14-2-2020 - Shri. A. D. Jain, Vice President And Shri T. S. Kapoor, Accountant Member For the Assessee : Shri Abhinav Mehrotra, Advocate For the Department : Shri S. K. Madhuk, CIT (DR) ORDER PER A. D. JAIN, V.P.: This is assessee s appeal against the order of the ld. CIT(A), Allahabad, dated 7/2/2019 for assessment year 2008-09, taking the following grounds: 1. BECAUSE, on the facts and in the circumstances of the case, the impugned order of Assessment as also that of Commissioner of Income Tax (Appeals) confirming such order, is both bad in law and on facts and is liable to be quashed since the objections of the assessee to the reasons recorded for reopening assessment were not disposed-of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. It was therefore incumbent for the Assessing Officer to have caused addition in the hands of such person and not the instant assessee which is a company. The ratio of the judgment of the Hon'ble Apex Court in the case of Divine Leasing and Lovely Exports is squarely applicable. The reasons recorded and the additions made are de-hors to each other and hence as per the judgments, [Ranbaxy, Jet Airways KLM Royal Dutch Airline etc.] no valid order of re-assessment is made. 7. BECAUSE, on the facts and in the circumstances of the case, the order of assessment is bad in law being barred by limitation and hence deserves to be quashed. The sanction U/s 151 of the Act is also bad in law merely saying I am satisfied on the reason is no sanction. 8. BECAUSE, on the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals] has erred in confirming an illegal order of assessment and the order has been passed on surmises and conjectures. 2. The ld. Counsel for the assessee has pointed out, referring to pages 120 to 128 of the paper book, that a letter dated 29/3/2016 was filed before the Assessing Officer, wherein, specific objections against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide speed post number RU063629795IN. By virtue of this notice, your honour had proposed to assess/reassess the income for the Assessment Year 2008-09 and required us to deliver a return of income in the prescribed form for the said assessment year. This notice was duly replied on 29/04/2015. That, the assessee company had duly replied the notice no. F.No. CIT/Ald./133(6)/RAC/2013-14/286 dated 23rd May, 2014 which was acknowledged by the department on 13/06/2014 vide ASK No. 105130614001632, wherein the assessee company had disclosed all the particulars inter-alia the name and address of each such subscribers to the shares of the assessee-company to prove the identity and existence of those subscribers including those as named in the reason i.e. M/s, Peekay Credit Services Private Limited and M/s. Jeweirock Barter Private Limited (Copy of the reply annexed as Annexure-A Page No. 1 to 4 ). It is pertinent to re-iterate the fact that the subscribers to the shares of the assessee-company as named in the reason recorded, get legal birth by virtue of getting themselves incorporated under the Companies Act, 1956 and their identity and existence could be verified on website of Ministr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - The company had also issued 15,000 shares to the Directors of the company and/or their family members @ ₹ 10/- only. 2. The assessee vide notice under section 133(6) was requested to furnish copies of share application forms submitted by above two companies and also details of payments received. The company was also requested to provide reasons for charging premium of ₹ 90/- per share especially when no business activities were existing during the year. No details were submitted even till the morning of 31st March, 2015. Further, it is seen that the assessee has issued 6,05,250/- number of shares during the F.Y. 2009-10 @ only ₹ 16/- (i.e. ₹ 10/- F.Y. + ₹ 6/- premium) to the Directors/relatives. 3. It is also seen that the shares issued to these two companies @ ₹ 10/- had been finally purchased by one Mr Arjun Kochar of Allahabad (known to be a business associate of the company/its directors) at only ₹ 10/- in the F.Y.2009- 10. This is a typical way in which unaccounted money is brought into the company whose shares are issued to totally unrelated companies (generally located in Kolkata) at a hefty and unrealistic premium a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for in the books of account of the company. This amount was subscriber's money which they contributed while subscribing or applying for shares to be issued by the assessee-company and under no circumstances the amount of ₹ 2l,60,000/- be regarded as unaccounted money of the assessee-company. M/s. Harakh Chand Glass Private limited- Assessee-company, is a company incorporated under the Companies Act, 1956. The company is unlisted company and hence not registered with SEBI. Depending on future prospects etc., and to have a proper mix of capital and reserves to strengthen the capital base of the company, promoters / directors of the company had decided to issue shares at premium. The company had decided to issue shares at premium with a view to keep authorized and paid-up capital low, book value of share high, EPS high and incidentally to reduce cash outflow on account of dividend, if paid (which is paid as a percentage of paid up share capital) and also on account of filing feet for higher authorized capital. It is pertinent to mention here that during the financial year 2007-08 relevant to the assessment year 2008-09 i.e. the assessment year under consideration, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness and genuineness of transaction. [Annexure- 3 Page No.1 to 8] 4. Copies of bank account statement in which the money received from tie subscribers of shares were deposited. [Annexure-K Page No.1] 5. Details of shares issued to Mr. Arjun Kochhar. [Please refer annexure -F of reply dated 13/06/2014- Annexure-A supra]. It is pertinent to mention here that Mr. Arjun Kochar is neither related to assessee-company nor to the directors of the assessee-company, either directly or indirectly. 6. Reasons for charging premium of ₹ 90/- per share. [Annexure- L Page No. 1 to 2 ]. 7. Copies of ledger accounts of M/s. Peekay Credit Securities Private Limited and M/s. Jewelrock Barter Private Limited for the accounting year in which their accounts were squaredup. In view of the aforesaid submissions, the directors of the assessee company hereby request your honour to drop the proceedings as the amount of ₹ 21,60,000/- mentioned in the reasons is not the assessee-company's money rather share subscribers money to whom the assessee-company had allotted shares. PRAYER In view of our aforesaid submissions, with folded hands the directors of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
