TaxTMI 
TaxTMI 
2016 (12) TMI 739
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....development expenses and bogus share capital. During the course of survey at G-29, 3rd floor, Vardhman Towers, Near PVR Sonia, Vikas Puri I New Delhi certain incriminating documents were found and impounded. The Aravali group has shown issue of shares to various companies and raised capital from these companies. These companies (listed below) do not have regular sources of income to invest such large amounts of capital. It has been gathered from enquiries that the various allottees referred below which have been allotted shares of the group companies are not actively involved in any substantial business activity. S. No. Name of the allottee which has invested in Aravalli group companies Amount invested as share capital FY Name of the Aravalli Group Company whose shares have been allotted 1. Shree Raj Shaymji Footwears P. Ltd. 8,90,00,000 2007-08 Aravali Infrapower Ltd. 2. Sigma Real Tech P. Ltd. 1,95,00,000 2007-08 Aravali Infrapower Ltd. 3. Spark Computech P. Ltd. 1,50,00,000 2007-08 Aravali Infrapower Ltd. 12,35,00,000 ....
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....escaped taxation. In the wake of the investigations done by the investigation wing, which a integral part of the department and facts of the case, I have a strong reason to believe that income of Rs. 12.35,00,000/- as detailed above has escaped assessment in the case of assessee relevant to AY 2008-09 and, hence, clearly attracts the provisions of clause (b) of Explanation 2 to Section 147 of the IT Act.. Since, the credible information has been received from investigation wing that an amount of Rs. 12,35,00,000/-has escaped assessment within the meaning of section 147 of the Act. The assessee has not disclosed fully and truly all material facts before the A.O. resulting in under assessment of income of Rs. 12,35,00,000/- by reason of failure on part of the assessee. Hence, the sum of Rs. 12,35,00,000/-has escaped assessment within the meaning of clause c(i) of Explanation 2 below 2nd proviso appended to section 147 of the IT Act. In view of the above, I have reason to believe that income to the tune of Rs. 12,35,00,000/- as discussed above, has escaped assessment within the meaning of Section 147 of the IT Act and it is a fit case for initiating....
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....ade during the assessment proceedings, in the absence of any fresh material to the contrary, it could not be said that there was suppression of material facts, justifying a notice under Section 147 of the Act. 4. The revenue's stand is that the impugned notice is valid. It is pointed out that after completion of assessment, information was received that the share applicants who are said to have invested in the petitioner's company were in fact bogus entities. Acting upon such information, a survey was conducted during the course of which certain documents were impounded from the assessee. It was urged that despite eliciting information in the course of original proceeding under Section 143(3), the assessee did not disclose full and material facts with respect to the share applicants who were specifically mentioned in the notice. It was stated that even replies to the queries by the AO dated 21.12.2009 were incomplete. The assessee had not furnished all the relevant materials; in any event, it was bound to do so given that the queries pointedly related to Section 68 of the Act. Highlighting that the requirements of this provision are that in order to establish that investments or....
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....r, will not necessarily amount to disclosure within the meaning of the said proviso. This Explanation, however, does not mean that production of account books and other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not "in any event" amount to disclosure within the meaning of the said proviso. The said explanation only stipulates that such evidence will not necessarily "amount to disclosure" within the meaning of the said proviso. However, we need not labour on this aspect any further inasmuch as we find that in this case, the Assessing officer had made specific queries, inter alia, with regard to the share application money of Rs. 5 lakhs received from Hallmark Healthcare Limited. The petitioner had supplied, in the course of the original assessment proceedings all the relevant documents such as the share application money form, confirmation from the applicant and the bank statement relating to the receipt of the cheque No.201845 dated October 17, 1997, from Hallmark Healthcare Limited. It is only thereafter that the assessment was completed by the Assessing Officer on March 7, 2001. We have already noted above th....