TMI Blog2022 (1) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... There is not a whisper regarding any opportunity to the assessee to substantiate the introduction of ₹ 1 crore towards share capital as well as share premium. The so-called statement of Shri Pramod Kumar Sharma, the entry operator who admitted to have provided entries to the assessee company has not been provided to the assessee nor the assessee was given an opportunity to cross-examine the entry provider Shri Pramod Kumar Sharma. Principles of natural justice demands that the assessee should be given an opportunity to rebut the statement of third party which is the basis for addition and an opportunity to cross-examine the same person, if demanded. We deem it proper to restore the issue to the file of A.O. with a direction to grant one more opportunity to the assessee to substantiate the introduction of ₹ 1 crore towards share capital/share premium and decide the issue as per fact and law. Needless to say the A.O. shall give due opportunity of being heard to the assessee. Appeal filed by the assessee partly allowed for statistical purposes. - ITA.No.7303/Del./2017 - - - Dated:- 27-1-2022 - Shri R.K. Panda, Accountant Member And Shri Kul Bharat, Judicial Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the garb of share capital/share premium in the assessee company in FY 2011-12 relevant to AY 2012-13. Most of the share applicant companies/concerns are found to be based in Kolkata. On being asked to justify genuineness of such share capital/share premium during the course of survey proceedings 1961, the assessee company could not produce any supporting details/documents as envisaged in section 68 of the IT Act. Neither the main director, Sh. Karan Singh Soni, nor the accountant, Sh. Yogendra Chauhan has any knowledge of share application form, share issue certificate, share allotment register, share holder registers or any other documentary evidence regarding issue of share capital/share premium in the assessee company. Even during the post survey proceedings, no documentary evidence was filed by the assessee to establish genuinity of aforesaid share application /share premium. 3. A Commission dated 27.12.2013 was sent to enquire the details of Kolkata based companies to the DDIT (Inv.) Unit-IV(l), Kolkata to enquire the genuineness of the transaction. The DDIT has recorded statement of Sh. Pramod Kumar Sharma, one of the entry operators who have admitted that he has provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt against reopening the case under section 147 of the IT Act. The fact of the case is that a survey action was carried out in the business premises of the appellant simultaneously enquiries were also carried out by the investigation wing, Kolkata and it was gathered that the appellant had introduced a sum of Rs.l crore in the garb of share application money in their books of accounts but the same was not found to be genuine. On investigation carried out, the appellant could not file any supporting document/detail in favour of the genuineness of the share application money shown to have been received by them. Therefore, after recording the reasons and following due procedure the case was reopened under section 147 of the IT Act. The reasons recorded by the A.O was got approved from the sanctioning authority u/s 151 of the IT Act who after recording his satisfaction approved the case for reopening. Under these circumstances, the case laws relied upon by the appellant in the case of CIT vs. M/s Kelvinator of India Ltd. is not applicable as in the present case there is no change of opinion but the case was reopened after carrying out proper enquiries/investigations. The entry provider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd any infirmity in the AO's order. 3. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds : 1. That on the facts and circumstances of the case and the provision of law the Ld CIT(A) has failed to appreciate that initiation of reassessment proceeding and notice u/s 147 r.w.s. 148 is illegal, bad in law, without jurisdiction and time barred. 2. That on the facts and circumstances of the case and the provision of law the Ld CIT(A) has failed to appreciate that impugned order passed u/s 147/143(3) of the IT Act, is illegal, bad in law, without jurisdiction and contrary to the facts. 3. That on the facts and circumstances of the case and the provision of law the Ld CIT(A) has failed to appreciate that assessment order passed by the Ld AO is against the principles of natural justice and has been passed without reasonable opportunity of being heard. 4. That on the facts and circumstances of the case and the provisions of the law, the Ld. CIT Appeal has erred in sustaining an addition of ₹ 1,00,00,000/- on account of increase in Share Capital and Premium as Unexplained Credit u/s 68. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2018 etc., order dated 05.07.2021. Therefore, the approval granted by the Addl. CIT being not in accordance with law, such reopening of the assessment is also invalid. 4.4. So far as the merit of the case is concerned, he submitted that the assessee was not given any opportunity to cross-examine the person whose statement was the basis for making the addition by the A.O. Further, the A.O. without confronting the assessee and merely observing that assessee has not substantiated with documentary evidence made the addition and the Ld. CIT(A) also upheld the same which is not in accordance with law. Referring to the decision of Hon ble Supreme Court in the case of Andaman Timber Industries vs., Commissioner of Central Excise, Kolkata-II vice Civil Appeal No.4228 of 2006 order dated 02.09.2015 and various other decisions filed in the case law compilation, he submitted that without affording cross-examination, when addition is made on the basis of statement of third party, such addition being not in accordance with law, has to be quashed. He submitted that the entire transaction was through banking channel and since the addition was made without affording any opportunity to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Admittedly, the survey operation under section 133A of the I.T. Act, 1961 was carried-out at the business premises of the assessee itself during which it was found that an amount of ₹ 1 crore was introduced in the garb of share application/share premium in the assessee company in the F.Y. 2011-12. It was also found that most of the share applicant companies/concerns are Kolkata based companies and the assessee during the course of survey proceedings could not produce any supporting details/ documents as provided in Section 68 of the I.T. Act, 1961. The Director of the assessee company namely Shri Karan Singh Soni and the Accountant Yogesh Chouhan had no knowledge of the share application forms, share issue certificate, share allotment register, share holder register or any other documentary evidences regarding the introduction of share capital/share premium in the assessee company. Since the assessee failed to provide any documentary evidences during the course of survey or post-survey proceedings, the A.O. has reopened the assessment after recording reasons and the reasons are already reproduced in the preceding paragraph. Therefore, the various decisions relied on by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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