TaxTMI 
TaxTMI 
2016 (3) TMI 634
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....ng notice u/s 148 of the Act and notice u/s 148 of the Act dated 23.03.2009 was issued. 3. In the proceedings u/s 148 of the Act AO called upon the assessee to explain the receipt of Rs. 1,74,00,000/- as share application money towards share capital during the previous year. 3.1. The AO firstly held that the four companies referred to by the Director of Income Tax (Investigation) New Delhi were non-existent companies and did not have capacity to invest in the share capital of the assessee. Accordingly the following amounts received as share application money from the following companies were treated as unexplained by the AO a) Ram Sons Drugs Ltd. - 1/56, Sunder Vihar, N.Delhi-87 Rs. 5,00,000/- b) Prateek Securities (P)Ltd. Rs. 5,00,000/- c) Roopin Capital (P)Ltd-301, Dhaka Chamber, N.Delhi-5. Rs.10,00,000/- d) Enpol (P)Ltd-1756 Naya Gatai, N.Delhi. Rs. 6,00,000/- Rs.26,00,000/- 3.2. Thereafter the AO issued notice u/s 133(6) of the Act to the other share applicants. The result of exercise carried out by the AO has been summarized in the following chart given by the AO in the order of Assessment. 3.2. T....
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....., Shakti Nagar, N.Delhi-110007. Rs.5,00,000/- 15. Total Inf.Solution (P)Ltd. 208, Agarwal Chamber-IV, 27-Ver Savarkar Block , Shakarpur, N.Delhi-110092. Rs.1,00,000/- Total Rs.77,50,000/- 3.5 Some of the above mentioned persons sent letter to the office of AO confirming that had invested monies in the form of share application money for subscription of share capital of the Assessee. The letters contained the following form:- "I am being informed by M/s. Great Wall Marketing Private Limited that their assessment for the A.Y. 2002-03 has been re-opened and as I was one of the applicant they want me to send the following" The AO therefore concluded that from the contents of these letters it was evident that the assessee itself sent these letters where the notices sent by the department came unserved from the addresses furnished by the assessee. Therefore, the AO did not take cognizance to such letters, which were not in response to our notice u/s 133(6). The AO accordingly held that the existence and definitely the creditworthiness (the capacity to invest) is very much doubtful in respect of above mentioned 15 parties and the 4 par....
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....ies as unexplained. The CIT(A) was of the view that by filing these' documents the assessee discharged its, onus to prove the genuineness of the share application money received from these parties. The onus was on the AO to prove it otherwise. The CIT(A) held that the AO has failed, to bring any evidence on record to show that the share application money received belonged to the assessee. 3. As regards 15 parties whose share application money has been treated by the AO as unexplained on the basis of his own inquiries, the CIT(A) was of the view that in respect of the 5 individual parties listed at Nos. 1,3,9, 10 and 11 in the list made on page 4 of the, assessment' order( and reproduced in the earlier part of this order) that in the assessment records the letters of confirmations sent by them through 'post' were available. The AO has rejected their confirmations only on the ground that in their letters they have mentioned to have sent these letters on the advice of the assessee. The CIT(A) was of the view that this approach was wrong. The CIT(A) also observed that share application money was given in the year 2001-02 and hence it was about 7-8 years old mat....
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.... in an appeal, though he may not have appealed, may support the order appealed against any of the grounds raised against him. Since the issue with regard to the validity of initiation of proceedings u/s 148 of the Act was decided against the asessee, the assessee without filing a cross objection has sought to challenge the order of CIT(A) upholding the validity of initiation of re-assessment proceedings u/s 148 of the Act. The application under Rule 27 has therefore to be decided. 8. We have heard the submissions of the learned counsel for the assessee both on the validity of initiation of re-assessment proceedings as well as the merits of the appeal. None appeared on behalf of the department. 8.1.We have considered the submissions of the learned counsel for the assessee. As far as the validity of initiation of re-assessment proceedings are concerned the reasons recorded by the AO for initiating proceedings u/s 148 are as follows :- "No.DCIT/Cir-6/reasons for reopening/09-10 Dated 22/04/2009 To The Principal Officer Greatwall Marketing (P) Ltd. clo Sri. S.M. Daga 11, Clive Row, Room No. 2 .z-. Fir. Kolkata- 700....
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....ssee relied on the order of CIT(A). 9. We have given a careful consideration of the submissions made by the learned counsel for the assessee. It is clear from the reasons recorded by the AO that the AO acted only on the basis of a letter received from Investigation Wing , New Delhi. The reasons recorded does not give as to who has given the bogus entries to the assessee. The reasons recorded also does not mention as to on which dates and through which mode the bogus entries were made by the assessee. The reasons recorded which are extracted in the earlier part of the order does not show, what was the information given by DIT(Inv.),New Delhi. The date of the information received by the AO were not spelt out in the reasons recorded. The involvement of the assessee is also not spelt out, except mentioning the corporate bodies who had subscribed to the share capital of the assessee were non-existent and not creditworthy. On identical facts the Hon'ble Dlehi High Court in the case of CIT vs Insecticides (India) Ltd (supra) has taken a view that the reasons recorded were vague and uncertain and cannot be construed as satisfaction on the basis of the relevant material on the basis of w....
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....ncial Services (P)Ltd. Left 208/27, V.S.Block, Vikas Marg, Shkarpur,N.Delhi-110092. 11. Asija Securities (P)Ltd. Left FF-43, Mangal Bazar, Laxmi Nagar, New Delhi. 12. Rs.1,00,000/- Rs. 10,00,000/- 13 13. 14. 15. ན༠16. 17. 18. Ridhkaran Gollcha No such person at this Rs1.2,50,000/- A-156, Gerawal Nagar, N.Delhi- address 110009. Kaushalya Devi Sharma Sadar Bazar, Makrana, Rajasthan Manju Devi Bhama Sadar Bazar, Madrana, Rajasthan Profound Exports (P)Ltd B-4456 Gali Nihal Singh, 3rd Flr., Pahari Dhiraj, N.Delhi-110006. Protend Services (P) Ltd. B-4456 Gali Nihal Singh, 3rd Flr., Kajaro Djorak., N.Delhi-110006. Associated Finlease Ltd. Sawak House, 1E/12, Jhandewatan Extension, N.Delhi-110055. ECO Star Securities & Credits (P)Ltd. Incomplete address Incomplete address Es.2,50,000/- Rs.2,50,000/- Nothing found at this Rs. 12,00,000/- address. May be left from this place. Nothing found at this Rs.10,00,000/- address. May be left from this place. Nothing found at this Rs.5,00,000/- address May be left from this place. Nothi....