TMI Blog2022 (2) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order made by the AO. Consequently, grounds of appeal of the assessee are allowed on the preliminary issue. - ITA No.1915/Ahd/2013 And ITA No.2008/Ahd/2013 - - - Dated:- 16-2-2022 - Ms. Annapurna Gupta, Accountant Memeber And T.R. Senthil Kumar, Judicial Member For the Assessee : Ms. Nupur Shah, AR And Shri Dhiren Shah, AR For the Revenue : Shri Rameshkumar L. Sadhu, Sr.DR ORDER PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER: These are cross appeals one filed by the assessee in ITA No.1915/Ahd/2013 and another filed by the Revenue in ITA No.2008/Ahd/2013 against order dated 9.5.2013 passed by the Ld.Commissioner of Income-tax (Appeals)-XIV, Ahmedabad [in short referred as Ld.CIT(A) ] relating to the assessment year 2008-09. 2. Original grounds of appeal raised by the assessee are as follows: 1. The Ld. CIT(A) has erred in law and on facts in confirming the addition of unexplained cash credit u/s.68 of the Act of ₹ 92,00,000/- on account of share application money received in cash. 2. The Ld.CIT(A) as well as the Ld.AO failed to properly considered the submissions made by the appellant company. Thereafter, the assessee filed addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) ] wherein by a detailed order confirmed addition of ₹ 92 lakhs on account of share application received in cash and deleted addition of ₹ 1.75 crores received in cheque payment, and thereby partly allowed assessee s appeal. 5. As against the appellate order both the assessee and the Revenue are in appeals before the Tribunal. 6. The ld.counsel for the assessee by taking us through additional grounds raised before the Tribunal for the first time, and also took us through page no.63 of the paper book wherein reasons for reopening of the assessment were recorded is reproduced as under: REASON FOR REOPENING THE ASSESSMENT U/S.147 OF THE I.T.ACT In this case, return of income was filed for AY 2008-09 vide Efiling on 21.3.2009 acknowledgement No.60018330210309 declaring total income at Nil and copy of Hit filed has also been filed on 27.3.2009. 2. In the case of M/s.Vyom Developers / Vishal Developers, survey proceedings carried on 10.2.2009 and they have offered undisclosed income of ₹ 15 crores. It from the impounded material that the group is having association with the asssessee company i.e. Varij Builders Pvt. Ltd. 3. It is seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). . .. [Issue of notice where income has escaped assessment. Section 148. Before making the assessment, reassessment or Re-computation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided . .. Section 149. (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if three years have elapsed from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in the case of Martech Peripherals P.Ltd Vs. DCIT (supra) held as under: 19. In the instant case, the reasons supplied by respondent No. 2 vide communication dated 25.07.2012 showed that the notice under Section 148 of the Act to reopen the assessment was issued on account of reduction in the investments made in mutual funds (from ₹ 2,52,00,000/-, for the year ending 31.03.2007 to ₹ 2,26,21,274/-, for the year ending 31.03.2008), which had not been shown/offered to tax in the form of gain or loss, on account of the sale of investments made in mutual funds. This information, perhaps, was available on record, as the assessee, in his objections dated 30.08.2012, adverted to the fact that the reduction in investment was brought about consequent to redemption being made at par. Respondent No. 2 having, perhaps realised the futility of going down this path and, having, during the course of reassessment proceedings, discovered this aspect of the matter, chose to tax the forfeited share application money, on the ground that, it was a receipt, which was taxable in the hands of the petitioner/assessee under the provisions of Section 28(iv) of the Act. 20. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cations given by the assessee regarding the items viz., club fees, gifts and presents and provision for leave encashment, but, however, during the assessment proceedings, he found the deduction under sections 80HH and 80-I as claimed by the assessee to be not admissible. He consequently while not making additions on those items of club fees, gifts and presents, etc., proceeded to make deductions under sections 80HH and 80-I and accordingly reduced the claim on these accounts. 20. The very basis of initiation of proceedings for which reasons to believe were recorded were income escaping assessment in respect of items of club fees, gifts and presents, etc., but the same having not been done, the Assessing Officer proceeded to reduce the claim of deduction under sections 80HH and 80-I which as per our discussion was not permissible. Had the Assessing Officer proceeded not to make disallowance in respect of the items of club fees, gifts and presents, etc., then in view of our discussion as above, he would have been justified as per Explanation 3 to reduce the claim of deduction under sections 80HH and 80-I as well. 21. In view of our above discussions, the Tribunal wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated, we do not regard the decision of the Tribunal in the present case as being in error. The question of law shall, accordingly, stand answered against the revenue and in favour of the assessee. The appeal is, accordingly, dismissed. There shall be no order as to costs. 13. Going through the ratio of the judgments rendered by various High Courts and including that a jurisdictional High Court judgment, respectfully following the same, we hold that reopening of assessment is bad in law and therefore we quash reassessment order made by the AO. Consequently, grounds of appeal of the assessee are allowed on the preliminary issue and we are not adjudicating other grounds. 14. The Department in ITA No.2008/Ahd/2013 has raised the following grounds: 1a). The Ld. Commissioner of income-Tax (Appeals)-XJV, Ahmedabad has erred in law and on facts in deleting the addition of ₹ 1,75,00,000/- out of total addition of ₹ 2,67,00,000/- made on account of unexplained cash credit u/s. 68 of the Act. 1b). The Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts by ignoring the fact that Assessee was unable to produce these depositors even ..... X X X X Extracts X X X X X X X X Extracts X X X X
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