2017 (12) TMI 1343

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....in the absence of notice under section 143(2) is bad in law. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 13,00,000/- on account of unexplained cash credit. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in ignoring the contention of the appellant that the addition of Rs. 5,00,000/- on account of share capital received from Thar Steel Pvt. Ltd. is not legally sustainable during the year under consideration as this amount was not received during the year. 6. On the facts and circumstances of the case, the learned CIT(A) has erred both V on facts and in law in confirming the addition of Rs. 8,00,000/- on account of share capital received from Bhavani Portfolio Ltd despite the assessee bringing all material facts and evidences in support of its contention. 7. That the appellant craves leave to add, amend or alter any of the grounds of appeal. 3. Ground Nos. 1 & 7 are general in nature and Ground No. 3 was not pressed, so these grounds do not require any comments on my part. 4. Vide Ground No. 2, the grievance of the assessee rel....

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....ason to form an opinion that a sum of Rs. 13,00,000/- had escaped assessment. It was contended that in the reasons recorded, there was no reference to any statement or any evidence on the basis of which a satisfaction had been reached by the AO. Therefore, the reopening of the assessment merely on the basis of doubt was unjustified and legally untenable. The reliance was placed on the following case laws: * ITO Vs Lakhmani Mewal Das 103 ITR 437 (SC) * ITO Vs Dwarka Dass & Bros. 131 ITR 571 (Del.) * United Electrical Company Pvt. Ltd. Vs CIT & Ors. 258 ITR 317 (Del.) * IAC Vs Nasik Eggs. Enterprises 42 ITD 105 (Pune) * Raja Bahadur Motilal Pvt. Ltd. Vs K.R. Vishwanathan, ITO & Ano 183 ITR 80 (Bom.) * C.D. Singh Vs ITO (2002) 77 TTJ 282 (AII-Tri) * Panchananhati Vs CIT 115 ITR 336 (Cal.) * Sheonarain Jaiswal Vs ITO 1989 (1796) ITR 352 (Pat.) * Ganga Saran & Sons (P) Ltd. (1981) 130 ITR 1 (SC) * CST Vs Bhagwan Industries (P) Ltd. (1973) 31 STC 293 (SC) * Calcutta Discount Co. Ltd. Vs ITO (1961) 41 ITR 191 * Ashok Kumar Sen Vs ITO 132 ITR 707 (Del.) * Sheo Nath Singh Vs AAC (1971) 82 ITR 147 (SC) * Technocraft Industries Vs AO (1990) 186 ITR 514....

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....nd Articles of Association d) Audited Balance sheet & profit and Loss A/c e) Copy of Share Application Form f) Copy of Compliance Certificate from C.S." 8. It was contended that the assessee had discharged primary onus to prove the identity, genuineness and creditworthiness of the share applicant. Therefore, no addition could have been made on the basis of material collected at the back of the assessee. The reliance was placed on the following case laws: * CIT Vs Lovely Exports Pvt. Ltd. (2008) 216 CTR 195 (SC) * CIT Vs Steller Investment Ltd. (2001) 251 ITR 263 (SC) * CIT Vs Sophia Finance Ltd. (1993) 205 ITR 98 (Del.) * CIT Vs Achal Investments Ltd. (2004) 268 ITR 211 (Del.) * CIT Vs Divine Leasing & Finance Ltd. 299 ITR 268 (Del.) * CIT Vs Orissa Vs Orissa Corporation Pvt. Ltd. (1986) 159 ITR 78 (SC) * CIT Vs Value Capital Services Pvt. Ltd. 307 ITR 334 * Sarthak Securities Co. (P) ltd. Vs ITO 329 ITR 110 (Del.) 9. The ld. CIT(A) after considering the submissions of the assessee observed that there were sufficient reasons for the AO to belief that the income had escaped assessment and proceedings were initiated after recording the reasons and t....

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....ns, the ld. DR strongly supported the orders passed by the authorities below and reiterated the observations made therein. 12. I have considered the submissions of both the parties and perused the material available on the record. In the present case, it is not in dispute that the AO reopened the assessment only on the basis of information received from the Investigation Wing i.e. from the Addl. DIT, (Investigation)-IV, Jhandewalen Extension, New Delhi. In the present case, the AO had the reason for belief that the income had escaped assessment only on the basis of information received from the Investigation Wing and did not apply his own mind. 13. On a similar issue the Hon'ble Jurisdictional High Court in the case of Principal Commissioner of Income Tax-4 Vs G & G Pharma Ltd. 384 ITR 147 (supra) held as under: "The basic requirement of law for reopening an assessment is application of mind by the Assessing Officer, to the materials produced prior to reopening the assessment, to conclude that he has reason to believe that income has escaped assessment. Unless that basic jurisdictional requirement is satisfied a post mortem exercise of analysing materials produced subsequent to....