TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 1430
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....ed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") in ITA no. 3291/Mum/2017 for AY 2011-12 read as under:- "1. On the facts and in the circumstances of the case, and in law, the Hon'ble CIT(A) erred in not appreciating the fact that, the transactions executed by the companies namely 1. Kanchan Developers Pvt. Ltd. , 2. Shri Manav Shah, 3. M/s Hubtown Limited ( formerly known asAckruti City limited), 4. M/s Bhimrao Mercantile Pvt. Ltd. are not free from doubt and are clearly just to legalise the unaccounted money. 2. The Hon'ble CIT(A) erred in not appreciating the facts that, though the financial statement of M/s Bhimrao Mercantile Pvt. Ltd. reflected the loan advanced to the assessee, the source of loan was not beyond the shadow of doubt as during the relevant period the lender company has not carried out any business activities and that the lender company is closely related to the assessee company. 3. The Hon'ble CIT(A), erred in not appreciating the facts that the sundry creditors claimed by the assessee company are towards purchase of shares and that no adequate evidence had come before the AO to substantiate the transactions. 4. The o....
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....nd period of limitation prescribed u/s 249(2) read with Section 249(3) of the 1961 Act . The learned CIT(A) was pleased to condone the aforesaid delay. Revenue is not aggrieved by such condonation of delay by leaned CIT(A) as no ground of appeal challenging condonation of delay is filed by Revenue in its appeal before tribunal. 4.2 On merits, the learned CIT(A) was pleased to allow the appeal of the assessee by deleting both the aforesaid additions as were made by the AO to the income of the assessee vide best judgment assessment u/s 144. The assessee filed replies before the learned CIT(A) as to both the additions along with additional evidences and request was made by the assessee before learned CIT(A) to admit these additional evidences under Rule 46A of the Income-tax Rules, 1962. Theseadditional evidences were forwarded by learned CIT(A) to the AO for submitting remand report. 4.3 The AO in its remand report objected to the submission of these additional evidences before the learned CIT(A) during appellant proceedings which were not earlier submitted by the assessee before the AO during assessment proceedings as in the opinion of the AO there was no reasonable cause shown by....
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.... of the assessee for acquisition of equity shares of M/s Asmeeta Infratech Private Limited as detailed in para 4.4 and 4.5 , were reflected under the head other liabilities in the books of accounts of the assessee. The assessee and M/s Bhimrao Mercantile Private Limited are related parties. The AO noted that M/s Bhimrao Mercantile Private Limited was amalgamated with Majboot Trading Private Limited with effect from 19.12.2014. The AO also noted that the said M/s Bhimrao Mercantile Private Limited had raised loans from other parties to advance loans to the assessee . The AO also noted that said M/s Bhimrao Mercantile Private Limited has shown loss of Rs. 55,149/- and has not carried on any business activities during the year under consideration. 4.8. The AO also submitted second remand report wherein the AO submitted that the assessee had acquired shares of M/s Asmeeta Infratech Private Limited from M/s Kanchan Developers Private Limited and Mr. Malav Shah , but no valuation report was submitted by the assessee to substantiate fair market value of the shares so acquired. The AO required learned CIT(A) to verify whether any incomearose to the assessee keeping in view provisions of S....
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....the AO made necessary verifications during remand proceedings and thereafter remand report was submitted by the AO before learned CIT(A) accepting genuineness of the transactions. It was explained that second remand report submitted by the AO before learned CIT(A) asking learned CIT(A) to look into applicability of Section 56(2)(viia) was never forwarded to the assessee for rebuttal. It was fairly accepted by learned counsel for the assessee that learned CIT(A) did not look into applicability of provision of Section 56(2)(viia) of the 1961 Act. 6. We have considered rival contentions and perused the material on record. We have observed that the assessee filed its return of income for AY 2011-12 declaring Nil income on 27.09.2012. The return of income of the assessee was processed by Revenue u/s 143(1) of the 1961 Act. The case of the assessee was selected through CASS for framing scrutiny assessment and notices both u/s 143(2) and 142(1) of the 1961 Act were issued and served by the AO on the assessee but the assessee chose not to co-operate with the AO and no details were furnished before the AO as the assessee never entered appearance before the AO. Even the AO is not aware of t....
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....ed and Malav Shah. The AO also specified in remand report that valuation report to determine fair market value of shares of M/s Asmeeta Infratech Private Limited was not submitted by the assessee. The facts concerning investments made in shares of M/s Asmeeta Infratech Private Limited by theassessee and its sources are narrated in preceding para‟s of this order which are undisputed. It is undisputed that powers of learned CIT(A) is co-terminus with the powers of learned AO , including power of enhancement of assessment keeping in view provisions of Section 251 of the 1961 Act. The learned CIT(A) deleted the additions without applying his independent mind and without addressing the comments of the AO. The learned CIT(A) did not appreciated that the assessee did not co-operated during assessment proceedings and the AO was left to frame best judgment assessment u/s 144 of the 1961 Act in the absence of the assessee. The additions were made by the AO based on material available on record while framing assessment u/s 144 originally. It was incumbent on the part of learned CIT(A) to have made proper enquiries and to satisfy independently as to the satisfaction of the ingredients of....