TaxTMI 
TaxTMI 
2017 (9) TMI 1589
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....g details and documents as a part of the assessment proceedings. One such detail sought for was with respect to 'share application money received, if any, during the year'. The Petitioner replied to the questionnaire on 11th October, 2010. In its reply, the Petitioner disclosed the details of share capital allotted during the AY as under:-  S.NO. Name of the Party Assessment Particulars No. of Shares Issued Amount 1. CHANDELIER TRACON PVT. LTD. 6, HANS PUKUR LANE, KOLKATA-7 AABCC1624N WBG/W/110/2 ITO WD 10(2) 4,000 400,000.00 2. ELEGANCE TRADE & HOLDING PVT. LTD. 6, HANS PUKUR LANE, KOLKATA-7 AAACE7011L WBG/W/105/3 ITO WD 5(3) 4,000 400,000.00 3. ECHOLAC VINIMAY PVT. LTD. 6, HANS PUKUR LANE, KOLKATA-7 AAACE5809N WBG/N/109/2 ITO WD 9(2) 4,000 400,000.00 4. GALORE SUPPLIERS PVT. LTD. 2, DIGAMBER, JAIN TEMPLE ROAD, KOLKATA-7 AAACG9662P WBG/W/109/1 DC AC Cir 9 2,000 200,000.00 5. SUGAM COMMODEAL PVT. LTD. 2, DIGAMBER, JAIN TEMPLE ROAD, KOLKATA-7 AAECS3360A WBG/W/110/3 ITO WD 10(3) 6,000 600,000.00 TOTAL 20,000 2,00,00,000.00 3. On 19th November, 2010, the Petitioner further submit....
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....cture Limited had received share premium wherein share premium of Rs. 400 per share was received on the nominal value per share of Rs. 100 each. The sum total of the value of the shares so subscribed was Rs. 1.00crore in M/s Sabh Infrastructure Limited as details given hereunder: Date 31.03.2008 Name & Address of Company Investing SAM + Premium paid per share No. of shares subscribed Value Chandelier Tracon PL. 6, Hans Pukur Lane, Kolkata (PAN - AABCC1624N) 100+400 4000 20,00,000 Galore Suppliers PL. 2 Digamber Jain Temple Road, Kolkata (PAN - AAACG9662P) 100+400 2000 10,00,000 Echolac Vinimay PL. 6, Hans Pukur Lane, Kolkata (PAN - AAACE5809N) 100+400 4000 20,00,000 Sugam Commondeal PL. 2, Digamber Jain Temple Road, Kolkata (PAN - AAECS3360A) 100+400 6000 30,00,000 Elegance Trade & Holdings PL. 6, Hans Pukur Lane, Kolkata (PAN - AAACE7011L) 100+400 4000 20,00,000 1,00,00,000 Since in the light of new facts, it has been established that these companies, from whom share premium has been received by M/s Sabh Infrastructure Limited are not....
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....te easy for the AO to cross verify if the need was felt. The order under Section 143 (3) of the Act having been passed in the Petitioner's assessment proceedings for the relevant AY and the notice under Section 147 having been issued after the expiry of four years from the end of the relevant AY, the first proviso to Section 147 is squarely attracted. Therefore, there exists a higher onus upon the Revenue to discharge its burden of proving that there was non-disclosure by the Petitioner. 7. Mr. Kapoor specifically relies on various judgments including CIT v. Kelvinator of India Ltd. (2010) 187 Taxman 312 (hereafter 'Kelvinator') and the judgments thereafter of this Court. He submits that on a perusal of the reasons to believe, it can be seen that the AO has merely relied upon information received from an investigation carried out by DDIT (Inv.) Unit III, Kolkata, in which a statement of Mr. Navneet Kumar Singhania was recorded on 18th March, 2014 under Section 131 of the Act. The AO came to the conclusion that the said five companies were 'paper companies' without examining if the said statement was enquired into. He submits that the AO did not himself verify any of the facts co....
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....d Findings 10. The law on this subject is well settled. As held in Kelvinator (supra), the powers under Section 147 of the Act have to be exercised after a period of four years only if there is a failure to disclose fully and truly all material facts and information, by the Assessee. This legal position has been reiterated recently by this Court in Oracle India Pvt. Ltd. v. ACIT 2017 SCC OnLine Del 9360, Unitech Limited v. DCIT 2017 SCC OnLine Del 9408, BDR Builders and Developers Pvt. Ltd. v. ACIT 2017 SCC OnLine Del 9425 and in judgment dated 30th August, 2017 in W.P.(C) 5807/2014 (Swarovski India Pvt. Ltd. v. Deputy Commissioner of Income Tax). 11. Thus, it is also now well settled that the reasons to believe have to be self explanatory. The reasons cannot be thereafter supported by any extraneous material. The order disposing of the objections cannot act as a substitute for the reasons to believe and neither can any counter affidavit filed before this court in writ proceedings. 12. In the present case, the reasons to believe contained the names of the very same five companies which were initially disclosed by the Petitioner during the assessment proceedings. The number....
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....were in fact 'paper companies'. No effort has been made to establish the connection between the statement of Mr. Navneet Kumar Singhania and the five companies. 16. Mr. Chaudhary's submission that this Court cannot dictate the manner and content of what is to be written in the reasons to believe is correct as a legal proposition. However, the Court has to examine the reasons to believe to see if it satisfies the rigour of the provisions. The observations of this court in Multiplex (supra) are relevant in this respect and are set out below: "24. In our view, the question whether the Assessee could have been stated to disclosed fully and truly all material facts have to be examined in the light of facts of each case and also the reasons that led the AO to believe that income of an Assessee has escaped assessment. In a case where the primary facts have been truly disclosed and the issue is only with respect to the inference drawn, the AO would not have the jurisdiction to reopen assessment. But in cases where the primary facts as asserted by the Assessee for framing of assessment are subsequently discovered as false, the reopening of assessment may be justified"." 17. In the ....