9911796707
TMI Blog2021 (2) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and circumstances of the assessee's own case for the Assessment Year 2013-14. He also submitted that the assessment order and the order passed u/s 263 of the Act, are identical and the grounds, reasons and basis of that order are the same and hence, the arguments taken by him in that case, may be considered as the arguments of the assessee in this case as well. The ld. D/R agreed with the contentions of the assessee that the facts etc., of both the assessment years are identical and submitted that the arguments made by the ld. D/R in that case, may be considered as arguments of the revenue in this case as well and the case may be disposed off accordingly. 3. After hearing rival contentions, we find that the facts and circumstances of the cases of both the Assessment Years 2013-14 and 2012-13, the basis of the assessment order and the order passed u/s 263 of the Act are identical. The arguments advanced being the same, we follow the order of the ITAT in the assessee's own case for the Assessment Year 2013-14, dt. 17/02/2021, wherein, the ITAT had held as follows:- "10. We have heard rival contentions. On careful consideration of the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT that the Assessing Officer has not examined the justification of fixing of share premium or that has not examined or enquired into the authenticity of the transaction, and that he has not enquired the possibility of the transaction being sham and the activity being a case of laundering of unaccounted income etc., is against facts. In fact, the Assessing Officer has in detail described the enquiries made by him and his findings on such enquiries. The ld. Pr. CIT further comments as follows:- "The interests of the revenue are not to be equate to rupees or paisa merely." Then, he goes on to state that, the Commissioner may think that the order is prejudicial to the revenue administration. These observation are not in accordance with law as can be seen from various judgments which are dismissed by us. 12. This Bench of the Tribunal under identical circumstances, in the case of Amritrashi Infra Pvt. Ltd. vs. PCIT in ITA No. 838/Kol/2019, dt. 12/08/2020, held as follows:- ""46. In the light of the afore-cited judicial precedents, let us examine the case in hand and find out whether pursuant to the specific direction of First Ld. Pr. CIT, the second AO has discharged his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lected by assessee as unexplained cash credit u/s. 68 of the Act. Therefore, according to the First Ld. Pr. CIT, the first original assessment order framed u/s. 143(3) of the Act dated 26-03-2015 was against the principle of natural justice and, therefore, he found it fit to order denovo assessment and gave specific direction in respect of share capital & premium collected by assessee. 48. Thereafter, the ld. Pr. CIT was pleased to direct "...............assessment order passed on 26.03.2015 is set aside de novo with the direction to the AO to carry out proper examination of books of account and bank statement of the assessee as well as the investor. The AO is also directed to examine the source of share application, entity of investor and its genuineness". (emphasis given by us). He also directed that the assessment proceedings to be initiated at the earliest and to be completed without waiting for time bar limit. With the aforesaid specific direction, the First Ld. Pr. CIT has set aside the first original assessment order dated 26-03-2015. 49. So we note that the second AO was specifically directed by the First Ld. Pr. CIT to carry out the followings actions in addition to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) audited accounts, (iii) details of directors, (iv) the details of the share-applicants, (v) details of business activity, (vi) details of increase in share capital, (vii) Form 2, (viii) Form 5, (ix) bank statements evidencing payment through banking transaction, which fact the AO has acknowledged in the reassessment order. [And here we should keep in mind that the First Ld. Pr. CIT's finding of fact after perusal of original assessment records that assessee in the first round before AO has produced PAN,ROC details, audited financial statements, details and copy of share applicants, bank statements reflecting the transaction, records relating to investors to establish identity, creditworthiness & genuineness. And the finding of First Ld. Pr. CIT that assessee had discharged its onus by furnishing/documents before the AO.]Secondly, after examining these documents, we also find that the second AO issued notices u/s. 133(6) of the Act to all the thirteen (13) share applicants and pursuant to the notice, all the shareholders have filed their respective (i) PAN details, (ii) CIN detail, (iii) Audited Annual Report for FY 2011-12 (AY 2012-13), (iv) ITR acknowledgment for AY 2012-13 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of AO and not the order-sheet maintained by him which has not been negatively commented upon by the Second Ld Pr CIT and it is not the fault for which the Ld Pr CIT exercised his power u/s 263 of the Act. Thus, we note that second AO issued sec. 133(6) notice and collected documents running more than 352 pages. Moreover, the First Ld. Pr. CIT while setting aside the first AO's order has returned a finding that assessee in the first round itself has filed the relevant documents to prove the identity, creditworthiness and genuineness of the share capital and that assessee had discharged its onus by filing the same. So we find that during the second round, the AO issued notices to share-holders u/s. 133(6) and after perusing their replies and supporting documents and thereafter having verified their veracity, the second AO was satisfied with the explanation of assessee in respect to the nature and source of share capital which view of second AO cannot be faulted. And we also note that all the share-holders are regular income tax assessee's. Therefore in the light of the aforesaid documents discussed their identity cannot be disbelieved and the AO's satisfaction in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee (though not required as per law in force for AY 2012-13), bank statement, audited balance sheet etc except M/s Maharaja and M/s Sristi Sales. Thus the assessee had discharged the onus on it about the creditworthiness of the share- holders. So we note that the source of the investments has been clearly brought to the notice of the second AO during the assessment/reassessment proceedings. Further, the bank statements of all the shareholders as well as that of assessee were filed before the AO, which revealed that the share capital and premium have been subscribed by them through banking channel (NEFT or cheque) which goes on to show that the assessee has discharged the onus in respect of genuineness of the transaction. Based on the documents and materials called for by the AO who accepted the same after verification is an act of enquiry. And we note that revenue has not brought on record any material to challenge the veracity of the documents referred to above. Moreover, the second Ld. Pr. CIT in his impugned order has not brought any material to rebut the presumption of second AO to justify his intervention u/s. 263 of the Act and which would have upset the decision of the seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.03.2012 Rs.30,00,000 through NEFT; and by cheque on 02.03.2012a sum of Rs. 59,00,000/-; and on 7.3.2012 and by cheque on 12.3.2012 Rs. 25 lakh each. There is board resolution for investment in assessee's company and Share Application Form, Bank statement, ITR acknowledgement, and explanation of source of fund as well as financial statement available in the PB-page 39 to 77. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed financial statements and thus we note that the assessee had duly discharged its onus to prove the identity of the share applicant by adducing PAN as well as income-tax returns. The financial statement shows that the share applicants had enough funds to invest in the assessee-company and the transaction has happened through banking channel. Further, it is noted that the share applicant had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. (iii) We note from a perusal of the paper book-2 pages78 to 111, the details of share applicant M/s. Ambala Trafin Pvt. Ltd. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identity of the share applicants by adducing PAN as well as income-tax returns. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel. Further, it is noted that the share applicants had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. (v) We note from a perusal of the paper book-2, pages 138 to 159 the details of share applicant M/s. Shivarshi Construction Pvt. Ltd. It is a Private Limited Company which has a PAN AAQCS7848M and its CIN number is U45400WB2011PTC170957 and the net worth of this company as on 31.3.2012 Rs.53,89,95,046/- (PB-page 153) and investment made in the assessee company is to the tune of Rs. 4,66,00,000/- and this share applicant has made the transaction through banking channel on 29.03.2012 Rs.4,66,00,000/-through Cheque. There is board resolution for investment in assessee's company and Share Application Form Bank statement, ITR acknowledgement, explanation of source of fund as well as financial statement available in the PB-page 139 to 159 in the PB. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. (vii) We note from a perusal of the paper book-2, pages 185 to 206 the details of share applicant M/s. Flowtop Agency Pvt. Ltd. It is a Private Limited Company which has a PAN AABCF9036D and its CIN number is U52190WB2012PTC 173352and the net worth of this company as on 31.3.2012 Rs.15,38,94,946/- (PB-page 200 ) and investment made in the assessee company is to the tune of Rs. 4,49,00,000/- and this share applicant has made the transaction through banking channel on 30.03.2012 Rs.4,49,00,000/- through Cheque. . There is board resolution for investment in assessee's company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial statement available in the PB-page 186 to 206 n the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statements and thus we note that the assessee had duly discharged its onus to prove the identity of the share applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aldhan Developers Pvt. Ltd. It is a Private Limited Company which has a PAN AAECK6810D and its CIN number is U45400WB2011 PTC 170944 and the net worth of this company as on 31.3.2012 Rs.56,18,94,080/- and investment made in the assessee company is to the tune of Rs.12,54,00,000/- and this share applicant has made the transaction through banking channel on 31.03.2012 Rs. 12,54,00,000/- through NEFT. There is board resolution for investment in assessee's company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial statement available in the PB-page 228 to 261 in the PB. This share applicant regularlyfiled Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed financial statements. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed financial statements. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is board resolution for investment in assessee's company and Share Application Form , Bank statement, ITR acknowledgement, explanation of source of fund as well as financial statement available in the PB-page 285-303 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed financial statements. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. (xii) We note from a perusal of the paper book-2, pages 304 to 326 the details of share applicant M/s. Maharaja Merchants Pvt. Ltd. It is a Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus we note that the AO on the basis of the aforesaid documents has taken a plausible view and did not draw any adverse inference against the assessee, and the view thus taken by the AO cannot be termed as unsustainable in law. 54. So, from the aforesaid facts revealed during the second round, we note that AO has discharged his duty as an Investigator and enquired as per the direction of the First Ld. Pr. CIT dated 23.08.2016 u/s. 263 of the Act (First 263 order) and further we note that the Second Ld. Pr. CIT while issuing the Show Cause Notice while exercising his revisional jurisdiction for second time has not made even a single allegation about the non-compliance/failure on the part of Second AO in respect of the specific direction given by the First Ld. Pr. CIT dated 23.08.2016 while setting aside the original assessment order passed by the AO dated 26.03.2016. In other words, in the impugned order the second Ld. Pr. CIT has not found fault with the action of the second AO in giving effect to the specific directions given by him while passing the first revisional order on 23.08.2016. Thus, we note that when the second AO while framing the reassessment order pursuant to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act, if any, which the Second Ld. Pr. CIT has not made in the impugned order. So the inference that can be drawn is that the veracity of the factual contents of the documents running more than 352 pages (PB-2) could not be factually controverted by the Second Ld. Pr. CIT. And still if the Ld. Pr. CIT is not satisfied and wanted to interfere invoking jurisdiction u/s. 263 of the Act, he has to show that the enquiry conducted by AO was flawed or the enquiry conducted by AO was on a wrong direction or on wrong assumption of fact/law or that the AO misdirected himself in factual investigation or applied the law erroneously in respect of the facts collected by him. For doing so, in the facts discussed supra, he second (Ld. Pr. CIT) should himself had conducted an enquiry or at least conducted a preliminary enquiry and was able to bring some evidence/material on record to upset the AO's satisfaction in respect of identity, creditworthiness or genuineness of the share subscribers and thus recorded a finding of fact that the decision of AO's enquiry was faulted or wrong and in that process tried to show that it has resulted in a view wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his impugned order as to what effect those additional documents would have made on the second assessment order/reassessment order or in other words the impact on the decision making process of framing the second assessment order due to the failure of second AO's omission to collect the additional documents. However, we note that the Second Pr. CIT has not carried out any such exercise or even spelled out in his impugned order, which all documents the second AO failed to collect for considering the total facts; and even if we presume he has conducted such an exercise, then he has not been able to bring out any adverse factual finding to upset the view of Second AO. So we find no merit in the vague allegation of second Pr. CIT that the second AO has not collected the full facts necessary to decide the issue of share capital & premium.So we note that the Second AO, the assessing authority who is a quasi- judicial office has discharged his dual role as an investigator as well as an adjudicator. Looking from another angle of doctrine of merger canvassed before us, we note from the facts of this case that the second Ld. Pr. CIT - 4 by passing the second revisional order dated 14.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer follows the direction of the ld. Pr. CIT, in his order passed u/s 263 of the Act, no revision can be done u/s 263 of the Act on the ground that the Assessing Officer has not travelled beyond these directions. 14. The Hon'ble Delhi High Court in the case of CIT vs. K.L. Ahuja (supra), has approved the following observations of the Tribunal:- "When the Income-tax Officer passes an order in his own discretion and that order is found to be erroneous or prejudicial to the interests of the Revenue under Section 263 is the power to the Commissioner of Income-tax to rectify it but when an Income-tax Officer passes an order not in his own discretion or wisdom but following the directions of the Commissioner of Income-tax who follows in turn the direction of the Central Board of Direct Taxes, to whom both' of them are subordinate, the Commissioner of Income-tax who succeeds the Commissioner of Income-tax who had issued the impugned instructions in a circular letter to the Inspecting Assistant Commissioner cannot treat the order of the Income-tax Officer as erroneous or prejudicial to the interests of the Revenue because it would in fact amount to rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
