AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2010 (2) TMI 1237
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....lhi. Accordingly, the case was reopened. During the course of assessment. AO observed that "on going through the bank statement of the companies from whom amounts have been received by the assessee company, it is revealed that from the frequency of deposit/ withdrawal regularly in a short interval, it can be inferred that these companies from whom the assessee was received amounts are being used for routing accommodation entries. The deposits in the bank account are by way of clearing entries, which are immediately transferred out. The balance in the accounts is very low on any day. All the transactions are intra-day transactions which reflect that the account is just being used to route such money. The money does not stay in the accounts, so as to suggest that it had been received as and investment. So it is clear that these companies had no actual business and had been used to give accommodation entries." 3.1 AO asked the assessee to produce the Directors of these companies, but nobody attended. However the asessee has filed the affidavits from the Directors of the above companies. The assessee also submitted that in the letter that "the law have vested very wide power to AO un....
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....sed share capital can be assessed in the hands of the company itself". The addition of Rs. 16 lacs made on this ground is hereby deleted." 5. Against this order the revenue is in appeal before us. 6. We have heard both the counsels and perused the records. This is not a case of simple share application money. The case is that share premium of Rs. 90/- has been given on application of shares of Rs. 10/- each. We find that in this case the assessee has submitted that the four companies had applied for 4000/- equity shares of Rs. 10/- each at a premium of Rs. 90/-. In this regard, the assessee has only submitted affidavit from the Directors of the company. The AO request is that the Directors be present was not fulfilled. Though the assessee had submitted before the AO that necessary summons under section 131 may be issued. The AO has not done so and concluded that assessee had failed to discharge the onus. Upon assessee's appeal ld. CIT(A) noted that it is not disputed by the AO that an amount was received from companies which are registered under the Companies Act with (ROC) and the identity is established. In this regard, we fail to understand how the CIT(A) has inferred this fro....
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....emitted to the files of the AO to enable him to examine the matter afresh. Accordingly, the matter is remitted to the files of the AO. 6.3 In the result the revenue appeal is allowed for statistical purposes. C.O. NO. 293/DEL/2009 7. In the cross objection the assessee had pleaded that notice issued under section 148 is illegal and void ab initio and is, therefore, liable to be quashed. In this regard the assessee's submission are as under:- " That there was no "reason to believe" that petitioner's income has escaped assessment which is "must" for assuming lawful jurisdiction u/s 147 and such absence of reason to believe is evident from the plain reading of the reason recorded which does not contain event his basic jurisdictional element." "That the reopening can be done on the basis of "reason to believe" that income has escaped assessment and recording of "reason" before the issue of notice u/s 148 is must as per provision of Sec. 148 which in this case has not been recorded and thus basic jurisdictional fact is missing in this case thus vitiating the issue of valid notice u/s 148. All that has been recorded in the garb of the purported "reason" is the proposal to the Addit....
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....ome having escaped the assessment. In the instant case there was information in the hands of the AO in terms of report of the DIT that the appellant was a beneficiary to certain entry transactions, he was right in assuming the jurisdiction u/s 147." 8.2 Ld. CIT(A) has hence concluded that since the ITO has in his possession, information from the Investigation Wing, relying on the judgement of the Hon'ble Apex Court in the case of ITO vs. Purshottamdas Bangur 224 ITR 362, he was of the opinion that issue had rightly been reopened. 8.3 We have carefully considered the submissions. We find that in this case the return was processed under section 143(1). Hon'ble Apex court in the case of Rajesh Jhaveri cited above has held that intimation under section 143(1)(a) cannot be treated to be an order of reassessment. It was held that there is no question of forming of opinion in such a case and therefore, no question of change of opinion can be raised in this regard. 8.4 Section 147 of the IT Act mandates that AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may assess or reassess of such income. Now in this case AO has informat....