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TMI Blog2022 (11) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... based on information received from Investigation Wing and statement recorded of Shri Akshay Doshi u/s. 131. Confirming the initiation of reassessment proceedings, in absence of any failure on the part of appellant to disclose material facts necessary for assessment, is bad in law and consequently the reassessment order needs to be quashed. 2. Without prejudice to the above and without admitting, on the facts and circumstances of the case and in law, Ld CIT(A) erred in confirming the reopening proceedings inspite of the fact that the objections against reopening of the assessment raised by the appellant were not rejected by the Ld AO in a meaningful manner. The Ld CIT(A) ought to have quashed the reassessment proceedings and consequential assessment order. 3. The appellant company craves leave to add, to amend, alter, delete and/or modify the above grounds of cross-objections on or before the final hearing. 1.2 At the time of hearing, the Ld.AR has raised the additional grounds of appeal as under: 1. That the CIT(A) erred in facts and in law, in issuing reopening notice u/s 147 of the Act without appreciating the fact that in the case of search and seizure of third party, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of TDR generation and Shri Amit M. Jain, being one of the partner in the project has made capital contribution in the cash as follows: TOTAL The amount so invested in cash as capital contribution is undisclosed income of F.Y. Amt. (Rs.) 2008-2009 6,80,00,000/ 2009-2010 2,50,00,000/ Total 9,30,00,000/ The amount so invested in cash as capital contribution undisclosed income of Shri Amit M. Jain 3.1.1. On the basis of the information passed, reasons have been recorded and once all the approvals were in place, notice U/'s 148 has been issued on 28.03.2016, thereby reopening the assessment. This notice U/s 148 was duly served on the assessee on 29.03.2016. The reason recorded being as under: "As a result of Search and Survey action conducted by the Investigation Wing, Mumbai, information has been received from DDIT(Inv.) Unit 3(4), Mumbai that Shri Amit Mangilal Jain in the capacity of partner has introduced capital in cash amounting to Rs. 6,80,00,000/-. This capital introduction in cash is nothing but money generated out of undisclosed income of Shri Amit Mangilal Jain. As such, it is also failure on the part of the assessee to make full and true dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Para 4 and 5 of the order as under: 4. Before concluding, it will not be out of place to discuss the issue of reopening of assessment of the joint venture AOP by ACIT Central. Circle 6(2), Mumbai. On the basis of statements recorded during the course of survey proceedings of Shri Amit Mangilal Jain and statements recorded during the post survey proceedings of Shri Akshay Doshi and cross examination provided to Shri Amit Mangilal Jain, I was duty bound to pass the information to the assessing officers of the Joint Ventures of Arkade Bhoomi Developers and Arkade Bhoomi Enterprise. This was done in the interest of revenue with reason that the inference so drawn from the information could be utilized in any pending assessments which were getting barred by limitation on 31.12.2016. Further, on the basis of this information passed, the DCIT Central Circle 6(2), Mumbai has arrived to a reasoning which is sufficient enough for her to reopen the assessment. During the course of reassessment proceedings, the assessing officer will reach to a finality whether the addition is required to be made in the hands of AOP or not. There is no need to jump to the conclusion that since, the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch and seizure of third party and the AO is bound to issue notice u/s 153C of the Act in case of a person relating to material found, therefore the A.O. initiating proceedings u/sec148 instead of U/sec153C of the Act is null and avoid. Further contended that the Reassessment proceedings U/sec 148 of the Act shall not be applicable and assessee is bound by the provisions U/sec 153C of the Act which the AO has erred in not considering the facts and made the addition. The Ld.AR supported the submissions with the paper book and decisions and prayed for allowing the appeal. Contra, the Ld. DR supported the order of the CIT(A) on the validity of the reassessment proceedings. 9. We heard the rival submissions and perused the material on record in respect of validity of reassessment proceedings. The contention raised by the Ld. AR that the search and seizure operations took place and certain incriminating documents have been found and the A.O is bound to issue the notice u/s 153C of the Act and not U/sec147 of the Act therefore the proceedings are illegal and in valid. The Ld. DR submitted that the A.O. has dealt on the facts, law, objections filed by the assessee and followed the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded for reopening of the assessment. It is also noticed that the AO supplied reasons recorded to the assessee and the assessee filed objections on the same. The AO also disposed of the objections. The argument of the assessee is that the assessing officer completely ignored the objections filed by the assessee and also failed to apply his mind to any of the facts or material presented by the assessee. 3.4 Whether those facts stated in material are true or not, is not the concern at the stage of reopening. This is so because the formation of belief by the Assessing Officer is within his subjective satisfaction -refer Supreme Court's decision in the cases of ITO vs. Select Dalurband Coal Company Pvt. Ltd. (1996) 217 ITR 597, 599 (SC) and Central Province Manganese Ore Company Ltd. vs. ITO (1991) ITR 662, 666 (SC).The action u/s.147 is possible despite complete disclosure of material facts if there is any escapement of assessment proceedings vide Praful Chunilal Patel, Vasant Chunilal Patel vs. ACIT (1999) 236 ITR 832, 840 (Guj), Stock Exchange vs. ACIT (1997) 227 ITR 906 (Guj) and ITO vs. LabjmaniMewal Das (1976) 103 ITR 437 (SC). Reliance is further placed on the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bridge Land in Kandivali and this information was tangible based on which the AO had reason to believe that income had escaped assessment. The proviso does not apply because the said information was not disclosed by the assessee in the return filed or during the original assessment. In the light of these facts, I do not find any merit in the contention of the appellant. This ground of appeal is dismissed and the reopening of the assessment is upheld. 10. We find that the provisions of Sec153A/153C of the Act are the special provisions dealing exclusively in the search cases and whereas the provisions of section 147 of the Act are invoked to all the types of escapement of income were the A.O. has recorded the satisfaction and has reason to believe. The Ld.DR submitted the relevant portion of statement of Shri Akshay Doshi recorded u/sec131 of the Act dated 2812-2015 & 4-01-2016 and the assessee was provided the opportunity of cross examination of Shri.Akshay doshi in the course of assesseement proceedings and complete statement recorded U/sec131 of the Act and cross examination statement made on 26-10-2016 placed at page 8 to 16 of the revenues factual paper book. We find the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored." 4. "The appellant craves leave to amend or to alter any ground or add a new ground, which may be necessary." 13. At the time of hearing, the Ld. DR submitted that the CIT(A) erred in granting the relief and failed to appreciate that the assessee has introduced the cash and it was not reflected in the regular books of accounts and it was pertaining to the purchase of land to the share of the assesee and irrespective of the facts, the CIT(A) has wrongly considered the assessee contribution as the attribution of cash offered by the AOP in the their assessments and no nexus is established or proved. Further, the CIT(A) is not clear to which assessment year the said amount has to be taxed and prayed for allowing the revenue appeal. Contra, the Ld. AR supported the order of the CIT(A) on the disputed issue and submitted that the CIT(A) has granted relief as the cash introduced was part of AOP transactions. 14. We heard the rival submissions and perused the material on record. The sole grievance of the revenue that the CIT(A) has erred in granting the relief by directing the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome earned in cash in the returns filed in response to the notices. It is also seen that the assessments have been completed by the DCIT Central Circle 6(2) accepting the returns filed showing the additional income relating to the on money earned in cash. It is a different technical matter because of non-availability of time for reopening the notices were not issued by the jurisdictional AO, DCIT, Central Circle 6(2) for A.Y.2009-10. However, the fact remains that the source for the cash invested on behalf of/as a contribution of the assessee was the on money generated in the other projects, where the assessee was a partner and the same is liable to be taxed in the hands of AOPs, which has been accepted by the department in the assessments of the said AOPs. Therefore, the same amount cannot be taxed in the hands of the assessee, which amounts to double taxation. Further, the AO brushed aside the explanation given by the assessee without bringing any other corroborative document on record and without finding fault with the explanation and disproving the evidences filed by the assessee. Therefore, the addition does not stand the test of appeal and the AO is directed to delete the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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