AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 57
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.... and in law, the learned Assessing Officer erred in reopening the assessment under section 147 of the Income-tax Act, 1961, without appreciating the fact that the conditions prescribed under the said section were not satisfied." 2. In addition to the above, the following ground was filed as additional ground : On the facts and in law, the learned Assessing Officer erred in reopening the assessment under section 147 of the Income-tax Act, without appreciating the fact that the conditions prescribed under the said section were not satisfied. 3. During the course of hearing, arguments were made by Shri Sanjiv M. Shah, authorised representative (AR) on behalf of the assessee and by Shri Arvind Kumar, Departmental representative (DR) on behalf of the Revenue. 4. Ground No. 1 : In this ground the assessee has challenged the action of the learned Commissioner of Income-tax (Appeals) in confirming the addition of share application money of Rs. 55,25,000 as unexplained cash credit under section 68 of the Income-tax Act 1961. 5. In this case the brief facts are that the original assessment was completed under section 143(3) of the Act on October 21, 2009, accepting the returned income o....
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.... any control over the filing of financial statements of Buniyaad Chemicals Ltd. and do not know what figures were filed by them before their Assessing Officer. However, in response to the notice under section 133(6) they have furnished the audited balance-sheet and profit and loss account. 4. Without prejudice to the above submissions, even if some discrepancies are found in the financial 'statements' of Buniyaad Chemicals Ltd. then the additions should be made in their hands for setting right the discrepancies and the assessee-company should not be penalised for the same. 5. Addition cannot be made in the hands of the assessee-company as identity and genuineness of the investment made is established by producing the documentary evidences as referred above and a confirmation letter from the director Mukesh Choksi on the basis of whose generalised 'statement' addition is proposed to be made is also furnished. For the above contention reliance is placed on the decision of the hon'ble Rajasthan High Court in the case of Shree Barkha Synthetics Ltd. v. Asst. CIT [2006] 283 ITR 377 (Raj) ; [2006] 155 Taxman 289 (Raj), where it is held that once the receipt of con....
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....essee to the Assessing Officer to prove the identity, creditworthiness and genuineness of the share capital received by the assessee-company. It was further submitted by him that the Assessing Officer also made direct inquiry from the aforesaid shareholder companies, and therefore, whatever was further required to clear doubts to the Assessing Officer, the same should have been asked by the Assessing Officer, from the said company directly. Without bringing anything contrary to negate the evidences brought on record by the assessee, the Assessing Officer made addition on the basis of general and vague "statement" of Mr. Mukesh Choksi. It was submitted that the "statement" of Mukesh Choksi was not recorded in the presence of the assessee nor was it recorded by the Assessing Officer of the assessee. Under these circumstances, the Assessing Officer could not have blindly relied upon the said "statement" and that too after disregarding the documentary evidences placed on record by the assessee. It was further submitted that in any case name of the assessee-company has not been taken specifically, as may be seen from the perusal of the "statement", as has been produced by the Assessing ....
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.... assessee-company showing receipt of capital by cheques. (v) Copy of statutory register of members maintained by the assessee- company showing the name of M/s. Buniyaad Chemicals Ltd. in the list of members. (vi) Copy of share application form duly signed by the said company and also giving other particulars. (vii) Copy of letter issued by the assessee-company in favour of the said company, showing issuance of share certificate to the said company. (viii) Copies of share certificates issued by the assessee-company in favour of the said company. (ix) Copy of balance-sheet of the said company. (x) Copy of certificate in certificate of incorporation, certificate of commencement of business and memorandum and articles of association of the said company to show that the said company was registered with the Registrar of Companies, Government of India. 14. It is further noted by us that the Assessing Officer had issued show- cause notice under section 142(1) dated December 3, 2010 to the assessee, wherein this fact was acknowledged by him that he had made direct inquiries with the said company, and in response to the same, he had received confirmation from the said company an....
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....the assessee-company. Merely because Shri Mukesh Choksi is indulged in clandestine activities would not make the trans actions with the assessee-company non-genuine. The transactions have been done through account payee cheque and it is not a case of the Revenue authorities that prior to issuing the cheques the applicants have deposited cash in their respective bank account. The hon'ble Supreme Court in the case of CIT v. Lovely Exports P. Ltd. [2009] 319 ITR (St.) 5 (SC) ; [2008] 216 CTR (SC) 195 has held that if the share application money is received by the assessee-company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the Department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of the assessee-company. 6.1 In respect of other two companies, viz., (1) M/s. Premier Soya Ltd., (2) M/s. Indo Con Core Pvt. Ltd., the Assessing Officer at page 19 of his order has observed that on verification of the details submitted by the assessee it is seen that the money has been advanced by the assessees themselves which have been ploughed back as share capital in the ....
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....through his share broking company. The Assessing Officer in the remand proceedings, however, insisted to produce said Mr. Chokshi for examination as a witness before him. The assessee though could request Mr. Chokshi to appear before the Assessing Officer, however had no authority or power to force Mr. Chokshi to appear before the Assessing Officer. On the other hand, the Assessing Officer under section 131 of the Act has been given powers as are vested in a civil court to summon and enforce the attendance of witnesses or to compel the production of records before him. Hence under such circumstances, merely because the assessee could not produce Mr. Chokshi before the Assessing Officer, that itself is not a sufficient ground for the confirmation of the additions. If the Assessing Officer required the presence of Mr. Chokshi before him, he could have exercised his powers under the Act to secure the presence of Mr. Chokshi before him. Even the learned Assessing Officer, in his remand report, has not controverted the evidences filed by the assessee. In view of the above discussion of the matter and also respectfully following the above noted decisions of the co-ordinate Benches of t....