TaxTMI 
TaxTMI 
2019 (4) TMI 777
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....law, illegal, ultra-vires and contrary to the provisions of the I.T.Act and shall be quashed. (b) The CIT(A) erred in confirming the action of AO in reopening the assessment u/s 148 of the Act recording factually incorrect reasons for reopening that 'the issue of share premium was not subject matter of verification by the A.O. and therefore no opinion has been formed on the issue in original assessment u/s 143(3).' The Appellant submits that the issue of share premium has been verified by the AO during assessment proceedings u/s 143(3) hence the reasons for reopening is factually incorrect which renders the assessment proceedings as bad in law, ultra vires and shall be quashed. (c) The CIT(A) erred in confirming the reopening the assessment u/s 148 merely on the basis of change of opinion on same set of facts which renders the assessment proceedings as bad in law, ultra vires and shall be quashed. (d) The CIT(A) erred in confirming the reopening the assessment merely on the basis of information received from Investigation Wing without having any satisfaction of AO which constitutes a 'borrowed satisfaction' rendering reassessment proceeding as bad in law and ult....
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....y relying on the decision of Apex court in the case of CIT Vs Lovely Exports Pvt Ltd 216 CTR 195(SC) without appreciating that the facts in the instant case were different than those in the case relied upon, as in the instant case, the AO did not sit idle but made investigations with the share holder before making an adverse inference and hence the case law relied upon is not applicable in this case?" As evident from respective grounds of appeal, the assessee is challenging the reassessment proceedings on legal grounds whereas the revenue is challenging the relief granted by Ld. first appellate authority, on merits, against quantum additions. 2.1 Facts in brief are that the assessee being resident corporate entity stated to be engaged in financial advisory services, trading and investment in shares was subjected to reassessment proceedings for the impugned AY u/s 143(3) read with Section 147 on 20/03/2015 by Ld. Deputy Commissioner of Income Tax-Circle-1(1)(1), Mumbai [AO] wherein the assessee was saddled with certain addition of Rs. 520 Lacs on account of Share Premium and Share Capital. 2.2 The original assessment for impugned AY was already completed u/s 143(3) on 30/12....
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.... reassessment proceedings was already been examined by Ld. AO during scrutiny assessment proceedings u/s 143(3) wherein the assessee substantiated the transactions with proper documentary evidences and therefore, the reassessment proceedings was nothing but review by Ld. AO and therefore, the same were bad in law. Another plea was that the reassessment proceedings were initiated merely on borrowed satisfaction. However, these submissions on legal grounds could not find favor with Ld. first appellate authority, who upheld the action of Ld. AO in reopening the assessment since the reassessment proceedings were triggered upon receipt of information from the investigation wing. 3.2 However, after considering assessee's submissions on merits, Ld. first appellate authority came to a conclusion that the assessee discharged the onus of proving identity, creditworthiness & genuineness of the transactions and therefore, the impugned additions could not be sustained in the eyes of law. Reliance was placed, inter-alia, on the judgment of this Tribunal rendered in Green Infra Ltd. Vs ITO [159 TTJ 728] & Hon'ble Apex Court rendered in CIT Vs. Lovely Exports P. Ltd. [216 CTR 195] to arrive at ....
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....] vi) Hon'ble Gujarat High Court in Cliantha Research Ltd. Vs DCIT [35 Taxmann.com 61] 4.2 Per Contra, Ld. DR submitted that receipt of information from investigation wing was quite sufficient to trigger the reassessment proceedings and the same were initiated with due application of mind by Ld. AO and therefore, valid proceedings in the eyes of law. It has also been submitted that no opinion was formed by Ld. AO on the stated issue during original assessment proceedings and therefore, there was no question of change of opinion. On merits, the relief granted by first appellate authority has been contested by drawing our attention to the pertinent observations made by Ld. AO in the assessment order which led to the conclusion that the assessee failed to prove the creditworthiness of the investor and genuineness of the transactions. Reliance has been placed on following judicial pronouncement to buttress the submissions: - i) Hon'ble Bombay High Court in Dr. Amin's Pathology Laboratory Vs JCIT [252 ITR 673] 5.1 We have carefully heard the rival submissions and perused relevant material on record. Since the assessee's appeal contest the very jurisdiction assumed by Ld. ....
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....own as M/s Money Matters Advisory Services Ltd) having PAN AAACI7387P, is an assessee of this circle. The assessee for the A.Y.2009-10 has filed a return of income on 26.09.2009 declaring income at Rs. 87,69,58,332/-. in this case, assessment u/s 143(3) of the I.T. Act was completed on 30.12.2011 assessing total income at Rs. 88,43,36,030/- From the records, it is seen that during the F.Y.2008-09 relevant to A.Y.2009-10 assessee has shown receipt of share application money amounting to Rs. Nil. Where as information has been received from investigation wing that share premium was Rs. 46,800,000/-. The issue of share premium was not a subject matter of verification by the A.O. and therefore no opinion has been formed on the issue in original assessment u/s 143(3). At the same time the, the assessee has also not filed complete details showing the nature of this share premium (justification for the excess premium received in comparison to the intrinsic value of the share). In view of the above facts, I have reason to believe that income, in the garb of share application money received in this case has escaped assessment in terms of provisions of section 147 of the I.T.Act. Not....
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....areful perusal of reasons, it has already been observed that no new tangible material came into the possession of Ld. AO which suggested escapement of income in the hands of the assessee and secondly, no reasonable belief was formed by Ld. AO to arrive at a conclusion that certain income escaped assessment in the hands of the assessee. 5.3 Another factor to be noted is that original assessment was already framed in scrutiny assessment u/s 143(3) and the assessee, in response to Ld. AO's queries raised during those proceedings, had vide its submissions dated 29/11/2011 & 21/12/2011, furnished following details / documents in support of these transactions: - i) Details of addition to share capital during the impugned AY including number of shares issued and premium thereupon along with name of the investor company, address and PAN ii) Assessee's bank statement for relevant period evidencing receipt of share application money through banking channels iii) Return of Allotment filed by the assessee in Form No. 2 with Registrar of Companies indicating date of share allotment as 17/03/2009 iv) Payment Challan in support of filing of Form No. 2 v) Audited financial statem....
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....ment proceedings, queries were raised in respect of claim under Section 80IC of the Act and the same were responded to by the Respondent-Assessee resulting in reduction of claim for deduction under Section 80IC of the Act. In the above facts, it is self-evident that the Assessing Officer was conscious of the claim of deduction made by the Respondent-Assessee under Section 80IC of the Act which led to the enquiry. It is for the Assessing Officer to decide the extent and nature of enquiry in respect of claim under Section 80IC of the Act. Therefore, when the Assessing Officer has taken a conscious decision of making enquiry under Section 80IC of the Act then it is not open to him to turn around and claim that certain aspects of the claim under Section 80IC of the Act were not considered by him. It is undisputed as pointed out above, Section 80IC of the Act was a subject matter of enquiry and this resulted in disallowance of Rs. 11.49 Crores out of the claim for Rs. 33.67 Crores made by the Respondent under Section 80IC of the Act. The decision of this Court in Export Credit Guarantee Corpn. of India Ltd. (supra), in our view, would have no application to the present facts as in that ....