TaxTMI 
TaxTMI 
2018 (12) TMI 1409
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....s of the information received from the Investigation Wing that the assessee company indulged in accommodation entries which was found during the course of post search investigations and while examining the seized records in the case of Shri S.K. Jain group of companies, the Assessing Officer reopened the assessment by issue of notice u/s 148 of the IT Act on 30.03..2012. The assessee, in response to the same, vide his letter dated 23rd April, 2012, requested the Assessing Officer to treat the original return of income filed by the assessee as the return filed in response to notice u/s 148 of the IT Act. The assessee also raised its objection for reopening of the case. The Assessing Officer, vide order dated 26.11.2012, disposed of the objections so raised by the assessee. Thereafter, the Assessing Officer asked the assessee to explain the accommodation entries so obtained by the assessee from the following companies:- Sl.No. Name of the Parties Amount 1. M/s Karishma Industries Ltd. 51,00,000/- 2. M/s StellerInvestment Ltd. 51,00,000/- 3. M/s Graph Financial Services Pvt. Ltd. 30,00,000/- 4. M/s Lovely Securities Pvt. Ltd. 40,50,000/- 5. M/s Hillridge Investment ....
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....ngs u/s 147 beyond a period of four years was barred by limitation. It was further submitted that the Assessing Officer had not disposed of the objections filed by the assessee against the initiation of reassessment proceedings by passing a speaking order. 6. Based on the arguments advanced by the assessee, the ld.CIT(A) deleted the addition on merit. So far as the legal ground is concerned, i.e., validity of the reassessment proceedings, the ld.CIT(A) quashed the reassessment proceedings on the ground that since the documents were seized during the search u/s 132 of the IT Act, the assessment proceedings could have been initiated u/s 153C of the IT Act. The ld.CIT(A) further held that since all the details with regard to share application received by the assessee were on record of the Assessing Officer during the course of proceedings u/s 143(3) of the IT Act, therefore, the reassessment proceedings initiated after a period of four years were barred by limitation. So far as the ground relating to non-disposal of the objections by the assessee by passing a speaking order is concerned, he decided the same against the assessee. 6.1 Aggrieved with such order of the CIT(A), the Reven....
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.... initiation of reassessment proceedings under section 147 / 148 of the Income tax Act, 1961 without having cogent and definite material on record for the alleged accommodation entries and also without making any independent enquiry about the information / report received from the Investigation Wing regarding escapement of income." 8. We have considered the rival arguments made by both the sides and perused the material available on record. We find the ld.CIT(A), in his order, while deleting the addition made by the Assessing Officer u/s 68 of the IT Act, on merit has also quashed the reassessment proceedings on two counts, i.e., (i) the Assessing Officer should have initiated the proceedings u/s 153C of the IT Act and not u/s 147 of the IT Act; and (ii) the reassessment proceedings initiated u/s 147 of the Act are barred by limitation. The relevant observations of the CIT(A) at para 3.1 onwards read as under:- "3.1 I have considered the facts of the case of the appellant and submissions made by the AR of the appellant before me. 3.2 The case of the appellant has already assessed under section 143(3) of the Act by the then AO at returned loss after examining all the details /do....
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....ent proceedings by invoking the 1st proviso to section 147 of the IT Act, i.e., barred by limitation. Once the CIT(A) has quashed the reassessment proceedings on account of limitation and the Revenue has not challenged the same, the order of the CIT(A) has attained finality so far as the same is barred by limitation. Once the reassessment proceedings are quashed, the other grounds raised by the Revenue in the appeal and the grounds raised by the assessee in the CO become infructuous and academic in nature. 10. Even otherwise on merit also, we find the ld.CIT(A) while deleting the addition made by the Assessing Officer has observed as under:- 4.1 I have considered the facts of the case of the appellant and submissions made by the AR of the appellant before me. 4.2 The brief fact of the case is that a search & seizure operation under section 132 of the Income tax Act, 1961 was carried out in the case of SK Jain group of companies on 14/09/2010 and certain documents / annexures were seized from which it has been revealed that the appellant has received share application money from five companies of Rs. 2,13,00,000/- during the financial year 2004 - 05. The appellant has received ....
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.... AR of the appellant has submitted before the undersigned that it is settled law that addition of cash credit under section 68 of the Income tax Act, 1961 cannot be made when the assessee discharged his initial onus by furnishing necessary documents to prove the identity, creditworthiness and genuineness of transactions. The burden shifts on AO when assessee has furnished all necessary documents to prove the identity, creditworthiness and genuineness of transactions and then the AO should embarked upon further inquiry. If the Assessing Officer(s) did not care to discharge the onus which was laid down, the assessee cannot be fastened with liability under section 68 of the Income tax Act, 1961 even in case some information has been received from Investigation wing etc. The Appellant has relied on the decision of jurisdictional Hon'ble High Court in the case of Commissioner of Income-tax v Gangeshwari Metal Private Limited [2013] 214 Taxman 423. The appellant also furnished decisions rendered by jurisdictional as well non-jurisdictional High Court / ITAT. The relevant portion of citation of the case of Commissioner of Income-tax v Gangeshwari Metal Private Limited [2013] 214 Taxman 42....
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....n favour of the revenue in that case. However, the facts of the present case are clearly distinguishable and fall in the second category and are more in line with facts of Lovely Exports (P) Ltd. (supra). There was a clear lack of inquiry on the part of the assessing officer once the assessee had furnished all the material which we have already referred to above. In such an eventuality no addition can be made under section 68 of the Act. Consequently, the question is answered in the negative. The decision of the Tribunal is correct in law. The appeal is dismissed. " The appellant submitted copies of relevant seized documents as per allegation of AO in the assessment order which is considered carefully. (A-36/Page-6, A-38/10, 11, 12, 33, 34, 35 pages) and back side of Page-7 of A-37, which is placed in record. In these seized records, no cash deposit/return is written anywhere. In my considered view, the ratio of the case of Commissioner of Income-tax v Gangeshwari Metal Private Limited [2013] 214 Taxman 423 in which two types of cases have been indicated one in which the assessing officer carries out the exercise which is required in law and the other in which the assessing o....
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....e during the course of assessment proceedings u/s 143(3) as well as during the course of proceedings u/s 147 of the Act filed various documents in order to prove the identity and credit worthiness of the parties as well as the genuineness of the transactions by filing documents such as financial statements of the parties, bank statements of the parties, income-tax returns of the parties, PAN nos. of the parties, confirmation of accounts and master data of the companies as per the ROC records. The Assessing Officer has not pointed out any discrepancy in the documents so filed and not made any further enquiries and simply made the addition on the basis of the report of the Investigation Wing of the Department. We find, while the Assessing Officer has accepted the share application and share premium in case of others, he doubted the premium at which the shares have been issued to the above five parties only. It is not the case of the Assessing Officer that he has issued any notices u/s 133(6) of the Act to the parties which were returned back unserved or that the shareholder companies are not available. The Assessing Officer, after going through the evidences furnished by the assessee....