TaxTMI 
TaxTMI 
2021 (1) TMI 477
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....nover of the assessee of Rs.16,73,69,568.06 and an addition of Rs.2,10,00,000/- u/s 68 of the Act. The assessee during the year has received share capital at a face value of Rs.10 and a share premium of Rs.490/- from five companies. The AO has issued notices u/s 133(6) of the Act to all the share applicant companies. Notices issued to M/s. Shivrashi Construction Pvt. Ltd. and M/s. Sidhant Residency Pvt. Ltd. were returned to the Department by the Postal Department with the comment "No such building exists". The other two companies M/s. Khetrapati Vinimay Pvt. Ltd. and M/s. BPMK Energy Systems Pvt. Ltd. replied to the notices issued u/s 133(6) of the Act. In the case of M/s. Panghat Textiles Pvt. Ltd. notices have been served but no reply was received by the AO. 2.1. The AO issued a show cause notice dated 05.03.2015 to the assessee company, requiring it to explain as to why the amount of Rs.2,10,00,000/- should not be treated as unexplained cash credit. This notice was given by the Addl. CIT, Range-10, Kolkata who was the then AO. Thereafter, the Addl. CIT, Range-10, Kolkata issued notices u/s 131 of the Act to each of the principal officers of the five share applicant companies....
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....rom M/s. Khetrapati Vinimay Pvt. Ltd. and M/s. BPMK Energy Systems Pvt. Ltd. on various grounds given in his order. He dismissed the other grounds raised by the assessee against the estimation of income at 8% of the turnover. Nevertheless he granted the benefit of telescoping to avoid double taxation. 4. Aggrieved, the assessee is before us challenging, both the enhancement of assessment made by the ld. CIT(A) as well as, the confirmation of the addition of Rs.2,10,00,000/- u/s 68 of the Act. 5. As far as the estimation of profit at the rate of 8% of the turnover amounting to Rs.1,33,89,565.44, the ld. Counsel for the assessee submitted that he is not pressing the same. Thus, ground no. 4 is dismissed as not pressed. 5.1. The ld. Counsel for the assessee submitted that the ld. CIT(A) is wrong in enhancing the assessment for the following reasons. 5.2. The powers of the ld. CIT(A) are coterminous and co-extensive as that of the AO, and thus he cannot do what the AO himself could not do. He submitted that the AO has in this case, after giving summons u/s 131 of the Act to the parties making requisitions for Section 133(6) of the Act to the share applicant companies and....
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....ector's report, as well as the other papers and documents on record, came to a conclusion that the AO was wrong in accepting as genuine, the share application money received by the assessee company from M/s. Khetrapati Vinimay Pvt. Ltd. and M/s. BPMK Energy Systems Pvt. Ltd. He relied on the order of the ld. CIT(A) and submitted that a clear finding of the fact has been given that none of these companies have creditworthiness. He argued that first because some transactions have been made by account payee cheques and because these share applicant companies are regularly filing their returns with Registered Companies and the Income Tax Department etc., it cannot be held that the transaction was genuine and that the identity and the creditworthiness of the share applicant companies have been proved. He prayed that the additions be upheld or in the alternative, that the entire addition be restored to the file of the AO, for enabling the assessee company to furnish correct addresses, provided the assessee provides undertaking that principal officers of the particular share applicant companies would be produced before the AO for examination. 7. Rival contentions heard. On a careful co....
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...., the notice of enhancement returned back un-served with the postal remark "Unclaimed". According to the Ld. CIT(A), second notice of hearing dated 24-03-2017 for enhancement of addition was issued fixing the case on 31-03-2017. However, the Ld. CIT(A) notes that this notice was also returned back with the remark 'no such company exists'. Therefore, he passed the impugned order on that day itself i.e. 31-3-2017 enhancing the income as assessed by the AO at Rs. 84 lakhs to Rs. 21.38 crs, thereby enhanced total amount of Rs. 21.54 crs. It was brought to our notice by the Ld. AR that even though the Ld. CIT(A) fixed the appeal on six (6) occasions, first three (3) notices were posted to the earlier address which got changed, but this fact of change of address was brought to the notice of AO as well as Ld. CIT(A) and, therefore, assessee company cannot be faulted for non-service of notice. According to the Ld. AR when the assessment order was passed on 30-03-2015 itself, the assessee has changed its address from 6/3 Ola Bibi Tala Lane, Howrah-711104, which was informed to the AO vide a letter dated 14-01-2015. However, the AO while passing the assessment order has wrongly reflected the....
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....7 and the Ld. CIT(A) has passed the impugned order on that date itself 31-3-2017. In this regard, we note that within a short span of 23 days after issuing the first show cause notice for enhancement, the ld. CIT(A) had enhanced the assessment to Rs. 21.38 crores from Rs. 84 lakhs as made by the AO. This action of the Ld. CIT(A) to pass the enhancement order in haste (when there is no time barring as per statute ) goes against the spirit of the statutory mandate of section 251(2) of the Act to provide reasonable opportunity to the assessee. Therefore we note that the impugned order was passed enhancing the income without giving proper / reasonable opportunity to the assessee. 9. Be that as it may be, we note that the ld. CIT(A) has passed the impugned order after going through the assessment folder which contained the order-sheet maintained by Assessing Officer in assessee's case and the statutory notices issued by Assessing Officer and replies filed by the assessee and the thirty eight (38) share-applicants / shareholders as well as the recorded statement of assessee company's director on oath u/s 131 of the Act. We note that reply of assessee is found placed at 17-55 (PB....
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....share applicants, and made an addition of Rs. 84 lakhs u/s 68 of the Act. However, the ld. CIT(A) despite the aforesaid documents which were found in the assessment folder, has decided to overturn the decisions of the Assessing Officer, cannot be countenanced since the view of the AO on facts or law is a plausible view and cannot be termed as perverse. And according to us, if he has to be upset a possible view of Assessing Officer, then he has to demonstrate that Assessing Officer was wrong in arriving at the finding of fact about identity, creditworthiness and genuineness of the thirty six (36) share applicants. In other words, when the Ld. CIT(A) perused the documents kept in the assessment folder and still if he felt that he was not satisfied with the replies filed by the share applicant companies, then he could have insisted on the personal attendance of the Directors of the share applicant companies by exercising his plenary powers and issue summons u/s 131 of the Act to the Directors of the share applicant companies and examine them on oath. However, we note that no summons/notices were issued by the ld. CIT(A) to the share subscribers in the present case. I....
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....tion 143(3) of the Act, any of the following situation may occur: (a) the Assessing Officer may accept the return of income without making any addition or disallowance; or (b) the assessment is framed and the Assessing Officer makes certain addition or disallowance and in making such additions or disallowances, he deals with such item or items of income in the body of order of assessment but he underassessed such sums; or (c) he makes no addition in respect of some of the items, though in the course of hearing before him holds a discussion of such items of income; (d) yet, there can be another situation where the Assessing Officer inadvertently omits to tax an amount which ought to have been taxed and in respect of which he does not make any enquiry; (e) further another situation may arise, where an item or items of income or expenditure, incurred and claimed is not at all considered and an assessment is framed, as a result thereof, a prejudice is caused to the Revenue, or (f) where an item of income which ought to have been taxed remained untaxed, and there is an escapement of income, as a result of the assessee's failure to di....