TaxTMI 
TaxTMI 
2015 (9) TMI 1299
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....ng the creditworthiness of the creditors and genuineness of the transactions. 3. The appellant craves leave to add, to alter, or amend any grounds of appeal raised above at the time of hearing. 3. The assessee has raised the following grounds in its Cross Objection:- 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that assessment made by the AO by reopening the assessment made is bad and liable to be quashed as conditions and procedure prescribed under section 147 read with section 148 have not been complied with. 2. On the facts and circumstances of the case, the order passed by Ld. CIT(A) is bad both on facts and in law in ignoring the contention of the assessee that the order passed by the AO is bad and is liable to be quashed as the reasons on the basis of which the assessment has been reopened does not have any live link with the belief of the AO that the income has escaped assessment, in the absence of the name of the assessee in the alleged statement on the basis of which the assessment has been reopened. 3. That the appellant craves leave to add, amend or alter any of the....
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....pies of their IT returns, confirmations and bank statements in order to prove the identity and creditworthiness of the share applicant and genuineness of the transaction. In response to the same, the AR of the assessee filed the copy of ITR of the above mentioned parties to verify the same. AO issued summon u/s. 131 of the I.T. Act to all the above 6 companies which received back with the comments "No Such Firm" the same. For 3 firms the AO also issued notice to the concerned Bank which also received back from the post authorities with the remarks that "no such Bank at Nai Sarak". After considering the evidence filed by the assessee and the facts and circumstances of the case, AO has held that assessee has given its unaccounted cash to the entry provider and the same had been received by the assessee. Therefore, the amount of Rs. 13,70,000/- has been credited into the books of the assessee company and the creditworthiness of the company depositing the cash in its bank account and genuineness of the transaction have not been proved and he made the addition of Rs. 13,70,000 and completed the assessment u/s. 143(3) of the Income Tax Act, 143(3)/147 of the Income Tax Act, 1961 vide ord....
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....sed (iv) the mode of payment and (v) other information which the assessee knows or possesses, then it can be said that initial burden on the assessee can be said to be discharged. Once the identity of the shareholders was established it also stands established that the shareholders have invested money in the purchase of shares and hence the onus, on the part of the assessee company, is discharged and there cannot be any addition in the hands of the assessee company on account of share application money. Reliance is placed on the following decisions of the Apex Court and the jurisdictional High Court of Delhi:- i) CIT vs. Lovely Exports (P) Ltd. (2008) 216 CTR (SC) 195. ii) CIT vs. Divine Leasing & Finance Ltd. (2007) 299 ITR 268 (Del.). iii) CIT vs. Value Capital Services Ltd. (2008) 307 ITR 334 (Del.). iv) CIT vs. TDI Marketing Pvt. Ltd. (2009) 26 DTR (Del.) 358. In the present case the assessee can be said to have discharged its onus under section 68 of the Act. The appellant has given all the necessary details in order to establish the identity of the share applicants. After considering the entire material placed on record, it is fair to conclude that the share app....
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....f the share applicants and deleted the addition in dispute. Ld. CIT(A) has also cited various decision rendered by the Hon'ble Jurisdictional High Court as well as the Hon'ble Supreme Court of India which includes CIT vs. Lovely Exports Pvt. Ltd. [2008] 216 CTR (SC) 195; CIT vs. Divine Leasing & Finance Ltd. (2007) 299 ITR 268 (Del.) and CIT vs. Value Capital Services Ltd. (2008) 307 ITR 334 (Del.). 10. After going through the impugned order passed by the Ld. CIT(A) as well as the citations referred by the Ld. CIT(A) in the impugned order, we are of the considered view that Ld. CIT(A) has rightly deleted the addition of Rs. 13,70,000/- on the basis of the various documentary evidences, which is as per law. Therefore, no interference is called for in the well reasoned order passed by the Ld. CIT(A) on the deletion of the addition in dispute, hence, we uphold the same. 11. As regards the validity of reassessment proceedings u/s. 147 of the I.T. Act, initiated by the AO which is the dispute raised by the assessee in its cross objection is concerned, after hearing both the parties and relevant records, we are of the view that the Ld. CIT(A) has decided the issue in dispute vide para ....
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.... 148 had been provided by the A.O. to it but A.O. did not dispose of the objections raised by it against the reopening of assessment ignoring the judgment of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. VS. ITO 259 ITR 19 (SC). It is well-settled that when a notice uls 148 is issued, the proper course for the assessee is to file a return and then seek reasons for re-opening the assessment, if he desires. If such request is made the A.O. is bound to furnish the reasons within a reasonable time as held by the Supreme Court in G.K.N. Driveshafts India Ltd. V. ITO (supra). In the instant case, the undisputed fact is that the copy of reasons was given to the assessee during the reassessment proceedings. Without prejudice to the observations made above, I find that there was an earlier judgment of the Supreme Court by a Bench of three Id. Judges in the case of S. Narayanppa V. CIT (1967) 63 ITR 219 (SC) wherein it was held that the reasons for reopening the assessment need not be communicated to the assessee since they are administrative in character and not quasijudicial & this judgment was not brought to the notice of the Supreme Court in the later judgment....