TMI Blog2021 (8) TMI 1166X X X X Extracts X X X X X X X X Extracts X X X X ..... de the issue in favour of the assessee - I.T.A. No. 309/Mum/2017 - - - Dated:- 24-8-2021 - Shri Shamim Yahya (AM) And Shri Pavan Kumar Gadale (JM) For the Assessee : Shri Neelkanth Khandelwal, Shri Poojan Mehta For the Department : Shri Prabhat Kumar Gupta, Shri Tharian Oomen ORDER PER SHAMIM YAHYA (AM) :- This appeal by the Assessee is directed against the order of learned CIT(A)-21 dated 01.10.2016 and pertains to Assessment Year 2009-10. 2. The grounds of appeal read as under : 1. On the facts and circumstances of the case and in law, the learned CIT (A) has failed to appreciate that the Appellant has established the Identity, Credit worthiness and Genuineness (ICG Test) in respect of share capital and premium of ₹ 1, 50,00, 007- received from the three share holder companies during the assessment proceedings by filing various documents with the AO. 2. On the facts and circumstances of the case and in law, the learned CIT (A) has erred in sustaining the impugned addition of ₹ 1,50,00,000/- (a) by making certain observations in the concluding para which reflect suspicion in his mind and which were never confronte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off by an exparte order dated 14/02/2019. Subsequently, the same was recalled in M.A.No.479/Mum/2019 for AY 2009-10 by order dated 18/11/2019. 6. Pursuant to the aforesaid recall, this appeal has been heard by us. 7. Brief facts of the case and the reasons for reopening are recorded in the AO s order, which reads as under:- The return of income was filed by the assessee on 29.03.2010 declaring income of Rs.NIL. The return was processed u/s 143(1) of the Income Tax Act. 1961. 2. Subsequently, after recording reasons, assessment for AY 2009-10 was reopened by issuing notice u/s 148 of the IT Act 1951 dated 28.03.2014, which was duly served on the assessee 2.1 In response to the said notice, assessee's AR vide letter filed in this office on 30.04 2014 has furnished copy of return of income for AY 2009-10 filed on 29.03,2010 in response to notice u/s 148 The assessee further requested to provide copy of reasons recorded for reopening of the assessment. Thereafter, notice u/s 143(2) was issued and served on the assessee. Reasons for reopening the assessment were also provided to assessee during the course of assessment proceedings. The reasons for reopening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be failed. Accordingly, the amount of ₹ 1,42,50,000/- and ₹ 7,50,000/-, are treated as unexplained cash credit in the books of the assessee company and added to the income of the assessee u/s 68 of the Income Tax Act, 1961. Penalty proceedings u/s 271(l)(c) are initiated separately for furnishing inaccurate particulars of income. 6. Subject to the above the taxable income of the assessee company u/s. 147 r.w.s 143(3) of the I.T.Act, 1961 is determinate as under: Computation of Total Income I. Taxable Income as per statement of Total income Rs. NIL/- Add As discussed in para.5 above ₹ 1,50.00.000/- Total Income ₹ 1,50.00,000/- Assessed Taxable Income ₹ 1,50,00,000- Rounded off u/s.288 A of the I.T. Act,1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation from three companies namely, (i) Talent Infoway Ltd. - 50000 shares, (ii) Aarika Steels Metal Pvt.Ltd. - 12500 shares and (iii) Alliance Intermediaries Network Pvt, Lid. - 12500 shares. The share applications were received through proper banking channels which was reflected in the bank statements of the appellant company. The details of appellant specifying the name of the bank from which the cheques were issued, date of cheque, cheque number, amount of share application, number of shares applied for and the rate of the shares was furnished to the AO. The shares allotted were reported in the return filed with Registrar of Companies. Thus the identity, credit worthiness and genuineness of the transaction has been established. The fact that the notice u/s 133(6) was served or was not replied by the parties was not communicated to the appellant. The opportunity to contact the parties or to locate them was not granted by the AO. The AO could have made further enquiries and the details of the balance sheet and profit loss account of these companies could be obtained from the ROC website. Reliance was placed by the appellant on the decision of the Supreme Court in CIT v. Ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee submitted that reopening of this case is bad inasmuch as from the reasons recorded for reopening, it is clear that all the information on which reopening is done were already in the assessment record. No outside tangible material come to AO AO s possession. Hence, ld. Counsel submitted that reopening in bad on the touchstone of Hon ble Supreme Court decision in Kelvinator of India 256 ITR 1. He further submitted that this is clearly a change of opinion also not sustainable in law. In this regard, he referred to the decision of ITAT in the case of Malchand Dindayal Salts Pvt.Ltd..in ITA No. 6908/Mum/2018 for AY 2010-11 vide order dated 01/12/2018, where in the reopening similarly done on the basis of material available in the assessment records was quashed. 15. Furthermore, Ld. Counsel of the assessee submitted that the reasons for reopening mentions that the same has been reopened to examine the issue of unreasonable share premium. Ld. Counsel submitted that amendment in the Act by way of proviso to section 68 (which creates an obligation on the assessee to explain the source of share capital and share premium) was brought into statute books w.e.f. Finance Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 190/per share. The respondent furnished the list of its shareholders, copy of the share application form, copy of share certificate and Form no.2 filed with the Registrar of Companies. The justification for charging share premium was on the basis of the future prospects of the business of the assessee. The Assessing Officer did not accept the explanation/justification of the respondent and invoked Section 68 of the Act to treat the amount of ₹ 7.53 crores i.e. the aggregate of the issue price and the premium on the shares issued as unexplained cash credit within the meaning of Section 68 of the Act. This addition was deleted by the CIT(A) and the Tribunal. Before the High Court, the department contended that the proviso to Section 68 of the Act which was introduced with effect from 1st April, 2013 would apply in the facts of the present case even for A.Y. 2008-09. The basis of the above submission was that the de hors the proviso also the requirements as set out therein would have to be satisfied. HELD by the High Court dismissing the appeal: (i) We find that the proviso to Section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April ..... X X X X Extracts X X X X X X X X Extracts X X X X
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