TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 102
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....dated 28.11.2016 raising a solitary issue confirming the addition of Rs. 10,00,000/- under Section 68 of the Income Tax Act, 1961 (the Act) on account of amount received from one company and further against the re-opening of the assessment by the ld. Assessing Officer. 04. Brief facts of the case shows that assessee is deriving income from salary, house property, business income and income from other sources. She is engaged in running a restaurant. She filed return of income on 20.02.2008 declaring an income of Rs. 7,71,400/-. The same was accepted as it is. 05. Subsequently, the ld. Assessing Officer issued a notice under Section 148 of the Act on 27th of March 2014. The reasons for re-opening are placed at para No. 3 of the assessment order as under:- "The case of the above assessee for the A.Y. 2011-12 was assessed u/s 143(3) at an income of Rs. 7,35, 76,210/- against the returned income of Rs. 63,16,210/- derived from business of running restaurant under name and style (Dhaba T.O.T.), income from rental and interest income. The assessee has filed return of income for the A Y 2007-08 declaring total income of Rs. 7,71,400/- which included income from Business & Profession, L....
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.... produced agreement entered into with the above party and submitted that as the business transaction could not conclude assessee has also refunded the sum to the above party. The ld. Assessing Officer rejected the agreement produced by the assessee and further noted that assessee has failed to provide satisfactory explanation for the genuineness of the above transaction and, therefore, provisions of Section 68 of the Act are applicable. Therefore, he made the addition of the sum of Rs. 10,00,000/- under Section 68 of the Act and assessed the total income of the assessee at Rs. 17,71,400/- against the returned income of Rs. 7,71,400/- by passing an order dated 27th March, 2015 under Section 147 read with Section 143(3) of the Act. 08. The assessee challenged the above order before the ld. CIT (Appeals) who dismissed the appeal of the assessee as per para No. 4.1 of the order holding that from the copy of MOU, it is evident that there are certain facts, which makes it clear that assessee has failed to establish the genuineness of the transaction in question, which are discussed as under: i. As per alleged copy of MOU, M/s PACL India Ltd., authorized the appellant to commence negot....
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....ell for verification. x. As per MOU the same has been entered through Mr. Gurmeet Singh and Mr. S. Bhattacharya, who were appointed as whole time Directors of the Company only on 01.02.2009, whereas the MOU is dt.26.02.2007. During the appellate proceedings a general reply has been filed in this regard by the Ld. AR that a clerical mistake has crept in while drafting the above MOU. 09. Such order was passed on 28.11.2016 and assessee is aggrieved with that. Therefore has preferred this appeal. 10. At the time of hearing assessee raised an additional ground of appeal:- "The impugned assessment order dated 27.03.2015 as passed under Section 147 read with Section 143(3) of the Act deserves to be quashed as the initiation of proceedings is bad in law." 11. The assessee submitted that the requisite application has been filed on 31st December, 2019 stating that it is purely a legal ground, do not require any fresh facts to be investigated and goes to the root of the matter and, therefore, it deserves to be admitted. It was stated that this issue was raised before the ld. CIT (Appeals) as per para No. 1 of the written submissions. Assessee relied on the decision of Hon'ble Supreme ....
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....(3) of the Act at an income of Rs. 7,35,76,210/-. He submitted that how the Assessing Officer could have stated on 27th of March 2014 so where assessment order for AY 2011-12 was passed on 31.03.2014. He further submitted that how the approval could have been granted on the above reason under Section 151 of the Act on 27th of March, 2014 wherein the first para of the reasons recorded by the ld. Assessing Officer itself did not happen on that date. In short, he submitted that the reasons recorded by the ld. Assessing Officer are backdated. 18. He further submitted that the above sum was received in three different financial years as advance. He submitted that in assessment year 2011-12 Assessing Officer could not have said that assessee has failed to prove the genuine creditworthiness and the advance received in earlier years. He further submitted that :- i. reasons are not based on any tangible material and does not have any live link. ii. The reasons have been recorded by the ACIT, Circle 32(1), New Delhi, based on the assessment order for assessment year 2011-12 passed by JCIT, Range 32, New Delhi. iii. No independent enquiries have been made. iv. The satisfaction record....
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....mitted that the reasons are recorded simultaneously. 21. With respect to the merits of the addition, it was stated that assessee has failed to prove the genuineness of the transaction. He referred to para No. 5 of the order for assessment year 2011-12 and submitted that the case of the assessee is re-opened based on that. He vehemently supported the orders of the lower authorities. 22. We have carefully considered the rival contentions and perused the orders of the lower authorities. In the present case , the ld. Assessing Officer has recorded the reasons which are already reproduced above wherein it is stated that for assessment year 2011-12 assessee was assessed under Section 143(3) of the Act at an income of Rs. 7,35,76,210/- against the returned income of Rs. 63,16,210/- derived from the business of running the restaurant under the name and style of 'Dhaba TOT'. Based on this fact the notice was issued under Section 148 of the Act on 27th of March 2014. The assessee has shown that the assessment order for assessment year 2011-12 was passed by the Assessing Officer only on 31st of March 2014. Therefore, it is clear that at the time of recording the reasons, there was no assess....