TaxTMI 
TaxTMI 
2021 (8) TMI 695
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....acts in deleting the addition of Rs. 5,46,83,750/- ignoring the facts brought out by the Assessing Officer that return of the investing company shows no credit worthiness and that investing company had merely transferred share application money and premium received from other parties to the assessee company. 3. The Ld. CIT (A) has erred in law and on facts in accepting the apparent facts as real while the actions of Investigation wing and subsequent data mining made by the assessing officer have proved that apparent is not real. 4. The Ld. CIT (A) has erred in law and on facts in comprehending the total facts indicating evasion of tax by corporate bodies through mischievous modes and it is a case of lifting of corporate veil." Additional Grounds of appeal "1. The Ld.CIT(A) failed to appreciate the fact that the assessee manipulated the share premium with impunity and without any justification, to plough back its unaccounted income in the garb of share capital/premium. 2. The Ld.ClT(A) failed to appreciate the fact that assessee company charged huge premium in one year and the same as reduced to 1/8" in the subsequent year without justifying an....
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....treet, Kolkata, which addition is bad in law and be deleted. 7. Because the CIT(A) has failed to appreciate the facts of the case and has erred in holding that the share capital of Rs. 65,00,000/-received from Supriya Fincom Pvt. Ltd. as unexplained, the addition made and upheld be deleted. 8. Because the CIT(A) has erred on facts and in law by relying upon the statement of Shri Sanjay Singhi which statement was recorded behind the back of the assessee, which does not relate to the assessee, in as much as it does not even contain the name of the assessee, never formed part of the reasons for reopening of the assessment, nor was ever confronted to the assessee, reliance by the CIT(A) on the said statement even without providing a copy of the same to the assessee, is totally misplaced, without jurisdiction, no addition on the basis of the same be made, the addition of Rs. 65,00,000/- made u/s.68 is against the principles of natural justice, be deleted. 9. Because the C!T(A) has erred on facts and in law upholding the addition of Rs. 65,00,000/- merely on the statement of Shri Sanjay Singhi recorded behind the back of the assessee, on mere presumption that t....
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....assessee had filed with complete documentary evidences as required by the Assessing Officer and in this respect our attention was invited to copy of notice issued u/s. 142(1) placed in P.B. page 124 to 133. Our attention was further invited to P.B. pages 129 to 133 where the reply to the queries raised by the Assessing Officer was placed. Our specific attention was invited to query no.1 whereby the Assessing Officer had required the assessee to furnish details of share holding with new share capital along with source of funds by shareholders along with their names and addresses and copy of income tax return of each of them. Our specific attention was invited to reply placed in P.B. Pages 129 to 133, wherein the complete reply along with names and addresses of the shareholders, copy of their bank account, copy of confirmation of the investment and copy of PAN card of the investor was placed. Therefore, it was submitted that assessee had discharged its initial onus of providing full and true disclosure of material facts which the Assessing Officer wanted the assessee to file and therefore there is no failure on the part of assessee and therefore the extended period beyond four years ....
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....n share issue alongwith source of funds by each shareholder with their name addresses, copy of I.T. return of each them and also premium on redemption of debentures." 6. Against this query, the assessee filed reply a copy of which is placed in P.B. page 129 to 133. The relevant answer to query no. 1 and 2 as extracted from the said reply and is made part of this order which is reproduced below: 7. Considering the reply of the assessee, the Assessing Officer accepted the evidences with regard to new share capital and passed the assessment order without making any addition in this respect. Before completion of assessment no further query was made by the Assessing Officer on account of new share capital and whatever information was required by the Assessing Officer through notice u/s. 142(1) of the Act was submitted by the assessee during the course of original assessment proceedings. 8. Admittedly the case of the assessee has been reopened after a period of four years and therefore, it is important to first visit the provisions of Section 147 of the Act which for the sake of completeness are reproduced below: "147. If the Assessing Officer has reason to believe that....
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....planation-1 to the above section states that production before Assessing Officer of account books or other evidence from which material evidence could have been discovered by Assessing Officer will not necessarily amount to disclosure within the meaning of foregoing proviso. 9. In the light of above provisions of law, let's examine the facts of the present case. We find that assessee duly filed the required information as required by Assessing Officer as is evident from the paper book pages 121 to 133 with respect to the query regarding share capital. There was only one query and which was duly replied and after that the Assessing Officer did not raise further query and made the assessment without making any additions on account of share capital. The query and its reply has already been made part of this order. The ld. CIT(A) in his order has held that since there was fresh material before the Assessing Officer, therefore, the extended period of six years will be applicable. However, while holding so he has not mentioned as to what is the failure on the part of the assessee in providing full and true information. In our view before coming to the second aspect of fresh material t....
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....tructure of these companies. We are not in agreement with this submission of the revenue. It is apparent from the records of the case that the revenue was aware of the entities which subscribed to the convertible bonds. It has been urged that these are bogus companies, but we are not concerned with that at this stage. The issue before us is whether the revenue can take the benefit of the extended period of limitation of 6 years for initiating proceedings under the first proviso Section 147 of the Act. This can only be done if the revenue can show that the assessee had failed to disclose fully and truly all material facts necessary for its assessment. The assessee, in our view had disclosed all the facts it was bound to disclose. If the revenue wanted to investigate the matter further at that stage it could have easily directed the assessee to furnish more facts. 27. The High Court held that there was no true and fair disclosure in view of the law laid down by this Court in Phool Chand's case (supra), and the judgment of the Delhi High Court in Honda Siel Power Products Limited vs. Deputy Commissioner Income−Tax and Another. We have already referred to the judgment in....
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....ets, and profit and loss account for the relevant period as was mandatory under the provisions of the Indian Companies Act, 1956. It is not disputed that the assessee had obtained an exemption from the competent authority under the Companies Act, 1956 from providing such details in its final accounts, balance sheets, etc. As such it cannot be said that the assessee was bound to disclose this to the Assessing Officer. The Assessing Officer before finalising the assessment of 03.08.2012 had never asked the assessee to furnish the details. 31. The revenue now has come up with the plea that certain documents were not supplied but according to us all these documents cannot be said to be documents which the assessee was bound to disclose at the time of assessment. The main ground raised by the revenue is that the assessee did not disclose as to who had subscribed what amount and what was its relationship with the assessee. As far as the first part is concerned it does not appear to be correct. There is material on record to show that on 08.04.2011 NNPLC had sent a communication to the Deputy Director of Income Tax (Investigation), wherein it had not only disclosed the names of a....
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....t books or other evidence has been produced, there is no duty on the assessee to disclose further facts, which on due diligence, the Income− tax Officer might have discovered, the Legislature has put in the Explanation, which has been set out above. In view of the Explanation, it will not be open to the assessee to say, for example I have produced the account books and the documents: You, the assessing officer examine them, and find out the facts necessary for your purpose: My duty is done with disclosing these account−books and the documents. His omission to bring to the assessing authority's attention these particular items in the account books, or the particular portions of the documents, which are relevant, will amount to omission to disclose fully and truly all material facts necessary for his assessment. Nor will he be able to contend successfully that by disclosing certain evidence, he should be deemed to have disclosed other evidence, which might have been discovered by the assessing authority if he had pursued investigation on the basis of what has been disclosed. The Explanation to the section, gives a quietus to all such contentions; and the position remains ....
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..... In the present case the assessing officer on the basis of the facts disclosed to him did not doubt the genuineness of the transaction set up by the assessee. This the assessing officer could have done even at that stage on the basis of the facts which he already knew. The other facts relied upon by the revenue are the proceedings before the DRP and facts subsequent to the assessment order, and we have already dealt with the same while deciding Issue NO.1. However, that cannot lead to the conclusion that there is non−disclosure of true and material facts by the assessee. 34. It is interesting to note that whereas before this Court the revenue is strenuously urging that the assessee is guilty of non− disclosure of material facts, before the High Court the case of the revenue was just opposite. We may quote a portion of the counter affidavit filed by the revenue in response to the writ petition filed by the assessee before the High Court which reads as follows:− It is evident from these facts that second proviso to Section 147 is clearly attracted in this case and first proviso to Section 147 is not applicable to facts of this case, i.e. in this case, the ....
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....ccounts of investors, acknowledgment of return of income of investors, confirmation of invest and a copy of such documents is placed in P.B. pages 222 to 453. These are all primary evidences which the assessee had filed and there was no further query from Assessing Officer and therefore, there is no failure on the part of assessee as the assessee had disclosed all the material facts which it was bound to disclose and if the Revenue wanted to further investigate the matter at that stage it could have easily directed the assessee to furnish more facts. The above documents filed during original assessment proceedings clearly contains the names, addresses, PAN numbers and copy of returns and copy of Bank account of investors and the Assessing Officer could have investigated further to examine as to whether these entities were entry providers or not. These documents also contain the fact that new shares of Rs. 10/- each were issued to new shareholders at a premium of Rs. 240/- each. The assessee during original assessment proceedings had filed copy of bank accouns of investors also and Assessing Officer could have examined bank accounts of such investors to examine as to whether any fun....
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....olkata- 12400 700001 6. Radha Fincom Limited 133 Canning Street, Kolkata- 26000 700001 7. Beaulah Enterprises Private D-10,3d Floor Babu Bazaar, 29200 Limited Guwahati-78 8. Supriya Fincom Private Limited 133 Canning Street, Kolkata- 26000 700001 9. Pravesh Credit & Securities Limited BG-40-41 Pushpa Shopping 25000 Complex Hisar, Haryana-125001 10. Mainland Finance Private Limited H No 381 Sector 8 Haryana- 10000 121006 11. Orchid Vinjya Private Limited 52, Weston Street Kolkata- 700012 5800 Document 2 12. 13. 14. Rich Field Suppliers Private Limited Shivaangan Merchandies Private Limited Highlight Housing Advisory Private Limited 10, Clive Row G Floor Kolkata- 700001 33000 3 Saklat Palace Kolkata-700072 10000 10, Clive Row G Floor Kolkata- 8000 700001 15. Strong Dealtrade Private Limited 52, Weston Street Kolkata- 6000 700012 All the above shareholders are the regular assessee of Income Tax department. All have given nature & source of their investment in the company. With regard to the details mentioned supra we ....