TaxTMI 
TaxTMI 
2012 (10) TMI 314
X X X X Extracts X X X X
X X X X Extracts X X X X
....erred in upholding the re-opening of assessment u/s 148 which was framed u/s 143(3) vide order dated 24.12.2008 as there was neither any fresh material nor any application mind by the AO. 2. That the appellant craves leave to add or amend any of the grounds of cross objection before the same is finally heard and disposed off." 4. In the course of present appellate proceedings, ld. 'AR' contended that notice issued by the AO, is not based on any fresh material nor on application of mind, at his level. He, further, stated that the assessment in this case, was framed u/s 143(3) of the Act, vide order dated 24.12.2008. He referred to para 6 of the CI T(A)'s order, whereby, the addition made by the AO has been deleted by the CIT(A). Ld. 'AR', further, referred to para 3.3 of the order of the CIT(A), wherein decision in the case of CI T V Paramjit Kaur 311 I TR 38 has been discussed and analyzed by the CI T(A). In that case, initiation of re-assessment proceedings was undertaken, on the basis of information received from Survey Circle and the belief for escapement of income, chargeable to tax was founded on suspicion. Accordingly, the Hon'ble jurisdictional High Court held that notice ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see appellant, were duly disposed of by the AO, as is evident from 2 n d para, page 14 of the assessment order. In view of this, the CIT(A) upheld the re-opening of the case, u/s 148 of the Act and dismissed the ground raised by the assessee, in the matter. 7. In this case, original assessment u/s 143(3) of the Act was framed on 24.12.2008. Subsequently, notice u/s 148 of the Act was issued by the AO, on 18.09.2009, and duly served upon the assessee, on 22.09.2009. Accordingly, the notice u/s 148 of the Act has been issued to the assessee before expiry of four years, from the end of the relevant assessment year. Consequently, the case of the assessee does not fall under the proviso to Section 147 of the Act. 8. Ld. 'DR' argued that reasons recorded u/s 148 are valid, to initiate action u/s 147 read with Section 148 of the Act. Ld. 'DR', further, stated that information was received, after completion of the original assessment order. He also made reference to the search conducted in the case of Shri Tarun Goyal, on 15.09.2008, whereby certain information was collected regarding his business of providing accommodation entries. Ld. 'DR' supported the findings, on the issue of validi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s relied upon by the assessee. 11. Let us discuss, the relevance of information supplied by the Investigation Wing. The Hon'ble Supreme Court, in the case of CI T V P.V.S.Beedies Pvt. Ltd. (1999) 237 ITR 13 (S.C) held that factual error or omission in the assessment order, pointed out by the Audit Party, is permissible under law to invoke the provisions of Section 147 r.w. Section 148 of the Act. Relevant part of the decision is reproduced hereunder (Head Note) : "Reassessment -Information-Internal audit party entitled to point out f actual error or omission in assessment-re-opening of case on basis of f actual error pointed out by internal audit party is permissible under law-ITO granting deduction under Section 80G on account of donation to charitable trust overlooking fact that recognition granted to charitable trust had expired- Re-opening was on basis of f actual information given by internal audit party-Re-opening of assessment valid- Income-tax Act,1961, s.147(b)." 11(i). The Hon'ble Delhi High Court in the case of AGR Investment Ltd. V Addl. CI T 333 ITR 146 (Del) has held as under: "Held, dismissing the petition, that the transactions involving Rs.27 lakhs constituted ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee had taken accommodation entry from in the amount of Rs. 3 lakhs. S had been described as an entry provider and the instrument number, date, name of the bank and the branch as well as account number were given. This information constituted reason to believe, prima facie, that income chargeable to tax had escaped assessment in the hands of the assessee. The material before the AO was relevant and afforded a live link or nexus to the formation of the prima facie belief that income chargeable to tax had escaped assessment in the assessee's hands. Admittedly, the information received from the Director of Income-tax (Investigation) did not contain material linking, stated to be an entry provided, with the assessee. The reasons to believe recorded in writing by the AO were detailed and showed application of mind. It was therefore unnecessary to go into whether the assessee had been implicated in the statement of the director of S." 11(iv) In view of the above discussed case-laws, the contention of the ld. 'AR' that action cannot be taken u/s 147 r.w.s. 148, on the basis of report from investigation wing of the deptt., is not legally tenable. The report emanating from investigati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ers to the share capital. The ld. 'AR' filed necessary evidences, (in the shape of Paper Books) with a view to proving the identity of the subscribers, genuineness of the transactions and credit-worthiness of the subscribers. The details of such evidence are as under: S.No. Particulars a. Mis Sidhvandan Enterprises Private Limited - Affidavit relating to the application and allotment of shares - Acknowledgement of Income Tax Return of the company for A/Y 2005-06 & 2006-07 - Bank Account of the company showing the transaction - Auditor's Report, Balance Sheet and Profit & Loss Account of the company for the A/Y 2006-07 b. M/s G N Credits Private Limited - Affidavit relating to the application and allotment of shares - Acknowledgement of Income Tax Return of the company for A/Y 2005-06 and 2006-07 - Bank Account of the company showing the transaction - Auditor's Report, Balance Sheet and Profit & Loss Account of the company for the A/Y 2006-07 c. M/s Vishakha Infotech Limited - Affidavit relating to the application and allotment of shares - Acknowledgement of Income Tax Return of the company for A/Y 2005-06 & 2006-07 - Bank Account of the company showing the trans....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ompany showing the transaction - Cheque relating to credit entry in the bank on 09.09.2005 - Notice for the AGM, Director's Report, Auditor's Report, Balance Sheet and Profit & Loss Account of the company for the A/Y 2006-07 j. M/s Sadguru Finman Private Limited -Affidavit relating to the application and allotment of shares -Acknowledgement of Income Tax Return of the company for A /Y 2004-05 - Copy of PAN of the company - Source of money applied for the allotment of the shares of the assesse - Notice for the AGM, Director's Report, Auditor's Report, Balance Sheet and Profit & Loss Account of the company for the A/Y 2006-07 k. M/s Tejasvi Investments Private Limited - Affidavit relating to the application and allotment of shares - Acknowledgement of Income Tax Return of the company for A/Y 2004-05 & 2006-07 - Copy of PAN of the company - Bank Account of the company showing the transaction - Cheque relating to credit entry in the bank on 30.08.2005 - Notice for the AGM, Director's Report, Auditor's Report, Balance sheet and Profit & Loss Account of the company for the A/Y 2006-07." 15(ii) To support his contention, ld. 'AR' placed reliance, on the decision....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ould not give the Revenue the right to invoke s. 68-- Revenue has all the power and where withal to trace any person--Moreover, it is settled law that the assessee need not to prove the 'source of source'--In the instant case, the Tribunal has confirmed the order of the CIT(A) deleting the impugned addition holding that the assessee has been able to prove the identity of the share applicants and the share application money has been received by way of account payee cheques-- No question of law arises--CIT vs. Lovely Exports (P) Ltd. (2008) 216 CTR (SC) 195 : (2008) 6 DTR (SC) 308, CIT vs. Divine Leasing & Finance Ltd. (2007) 207 CTR (Del) 38 : (2008) 299 ITR 268 (Del) and CIT vs. Dwarikadjnish Investment (P) Ltd. (2008) 2 DTR (Del) 7 (2008) 167 Taxman 321 (Del) followed" 3. CIT V Ujala Dyeing & Printing Mills (P) Ltd. "Where the Tribunal has come to a finding that as the assessee has discharged its onus of proving identity of parties, genuineness of transaction and creditworthiness of share applications in as much as evidently their returns of income, assessment orders, balance-sheets showing investment, explanation regarding how they raised funds have been submitted before the low....
X X X X Extracts X X X X
X X X X Extracts X X X X
....harge the onus del iberately with a motive and from which it can be aptly concluded that the assessee has obtained accommodation entries to the tune of Rs. 1,95,00,000/-. Even the inf ormation received from the Addl. D1T (Inv), New Delhi that the assessee has obtained accommodations J entries from the bogus companies floated by Sh. Tarun Goyal, C.A. on the basis of which proceedings u/s 147 of the Income Tax Act, 1961 were re-opened also strengthens the above f act. The various case laws quoted by the assessee are of no help when the assessee has f ailed to discharge the onus of producing the persons f or examination to whom it has allotted the shares. Thus in vie w of the above discussions, it is evidently clear that the assessee company has obtained accommodation entries to the tune of Rs. 1,95,00,000/- and the same is assessed as assessee's income from undisclosed sources." 17. A bare perusal of the findings of the AO reveals that as the assessee had failed to produce the persons, for verification, to whom shares were allotted, during the period from 1.4.2005 to 31.3.2006, for an amount of Rs.1,95,00,000/-, the AO observed that the assessee had failed to discharge the primary o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....action at their end. In the result, appeal of the appellant is partly allowed." 18. The revenue has placed reliance on the decision in the case of Aggarwal Coal Corporation (P) Ltd. V Addl.CIT, I TAT Indore Bench (2012) 142 TTJ (Ind) 409. A bare perusal of the facts of this case and the ratio laid down by the Hon'ble Bench reveals that the issue of cash credit/share application money has been decided by the Hon'ble Bench of the Tribunal, on the ground of non-existent of HC Ltd. & OT Ltd., the subscribers to the share capital of the assessee. As the assessee, in that case failed to establish the existence of such companies, the issue was accordingly decided by the Bench. In the present case, the existence of such subscribers, has not been challenged by the revenue. The AO, merely made the addition on the ground of non- production of the persons, who subscribed to the share capital of the assessee company, as is evident from the above discussions. In view of this, the facts of the present case are entirely different and distinguishable, hence the case-law relied upon by the revenue does not aid the case of the revenue. The revenue, further, placed reliance on the decision in the cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the AO ignored such request of the assessee. In the present case, the assessee filed evidences before the AO and the CIT(A), showing identity of the shareholders, credit worthiness of such parties and the genuineness of transactions. In view of this, the onus stands shifted to the revenue. The Hon'ble Rajasthan High Court, in the case of CIT V First Point Finance Ltd. (2006) 286 ITR 477 (Raj) found that company had furnished not only the addresses of the shareholders, but even copies of returns of income filed by them, so that the AO's doubt on their creditworthiness was not justified, inter-alia, following the rationale of the decision in CIT V Steller Investment Ltd. (2001) 251 ITR 263 (S.C). It was pointed out that there is no presumption of benami in respect of the existing persons. It was, in this view that Deduction departmental appeal was not admitted, as not involving any question of law. In the light of such findings, it is evident that the case of the assessee is covered by the ratio of the Hon'ble High Court, as the assessee has filed evidences to prove the tripple ingredients in respect of the evidences, required to be adduced under Section 68 of the Act. On the contrar....