TaxTMI 
TaxTMI 
TaxTMI 
2022 (1) TMI 1154
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....y in F.Y. 2011-12 relevant to A.Y. 2012-13. Most of the share applicant companies/concerns are found based in Kolkata. On being asked to justify the genuineness of such share capital/share premium during the course of survey proceedings, the assessee could not produce any supporting details/documents as envisaged in section 68 of the IT Act. Neither the main director, Sh, Karan Singh Soni, nor the accountant, Sh. Yogendra Chauhan has any knowledge of share application form, share issue certificate, share allotment register, share holder registers or any other documentary evidence regarding induction of share capital /share premium in the assessee company. Even during the post survey proceedings no documentary evidence was filed by the assessee to establish genuinity of aforesaid share capital/share premium. 2.1. Accordingly, on the basis of information received from the Investigation Wing, the A.O. reopened the assessment as per the provisions of Section 147 of the I.T. Act, 1961 by recording the following reasons : "Recording reasons for initiating proceedings u/s 148 r.w.s. 147 of the 1. T. Act. 1961. An Information was received from the Investigation Wing of the Income Tax ....
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....r section 148 of the I.T. Act, 1961 which were disposed of by the A.O. by passing a detailed order on 06.09.2016 dismissing the objections raised by the assessee. During the course of assessment proceedings, the A.O. noted that to enquire and verify the genuineness of the transaction details of the Kolkata based companies, a Commission dated 27.09.2013 was sent to the DDIT who recorded statement of Shri Pramod Kumar Sharma, one of the entry operators, who has admitted that he has provided entries to the assessee company. Further enquiry/ investigation also revealed that most of the companies are not found located at their given address. In view of the above and in absence of any documentary evidences to the satisfaction of the A.O. within the meaning of Section 68 of the I.T. Act, 1961, the A.O. made addition of Rs. 1 crore to the total income of the assessee under section 68 of the I.T. Act, 1961. 2.3. Before the Ld. CIT(A), the assessee apart from challenging the addition on merit, challenged the validity of re-assessment proceedings. However, the Ld. CIT(A) was also not satisfied with the arguments advanced by the assessee and upheld the addition made by the A.O. as well as val....
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..... In view of the above discussion, the ground raised by the appellant are dismissed." 2.5. So far as addition on merit is concerned, the Ld. CIT(A) upheld the same by observing as under : "8. Ground no.4 relates to the contention of appellant against addition of Rs.l crore made by the AO. The fact of the case is that a survey action was carried out at the business premises of the appellant. It was found that the appellant had shown to have received share application money of Rs. 1 crore, however, the same was not found to be genuine as the appellant could not file any supporting document/detail to prove the transactions to be genuine. Further, Sh. Karan Singh Soni, Director had also admitted the fact that they received share application money from the Kolkata based companies which were not genuine. Further, on investigation carried out by the investigation wing of Kolkata, it was gathered that Sh. Pramod Kumar Sharma has admitted that he was engaged in giving accommodation entries through the concerns managed/controlled by him and the appellant was also one of the beneficiary in this regard. Since, it was established by the AO that the unaccounted income of the appellant was rou....
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....e, the re-assessment proceedings initiated by the A.O. and upheld by the Ld. CIT(A) should be quashed. He also relied on the following decisions for the above proposition. 1. CIT vs., Atul Jain reported in [2008] 299 ITR 383 (Del.). 2. Signature Hotels (P) Ltd., vs., ITO and Anr. 338 ITR 51 (Del.) . 3. Nancy Sales Pvt. Ltd., New Delhi vs., ITO, Ward- 13(1), New Delhi vide ITA.No.4129/Del./2017 dated 19.01.2018 [SMC Bench]. 4. SABH Infrastructure Ltd., vs., ACIT vide W.P. (C) No.1357/2016 order dated 25.09.2017 [Delhi-High Court]. 4.1. Relying on various other decisions, he submitted that since the A.O. has reopened the assessment in a mechanical manner without independent application of mind and on borrowed satisfaction, such reopening of the assessment is invalid. 4.2. Referring to the approval granted by the Addl. CIT, he submitted that he has simply granted his approval by observing as under : "Sanction under section 151 accorded in view of the reasons recorded and information available on record." 4.3. He submitted that this type of approval is not correct approval as per law as held by the Hon'le Delhi High Court in the cases of Synfonia Tradelinks Pvt. Ltd., vs. ....
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....n approval given by the Addl. CIT is also justified who after recording his satisfaction has given approval for reopening of the case. Therefore, the reopening of the assessment is also in accordance with law and, therefore, the ground raised by the assessee on this issue should be dismissed. 6. We have considered the rival arguments made by both the sides, perused the orders of the A.O. and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the A.O. in the instant case reopened the assessment as per the provisions of Section 147 of the I.T. Act, 1961 after recording reasons which has already been reproduced in the preceding paragraph. It is the submission of the Learned Counsel for the Assessee that the A.O. has reopened the assessment on the basis of report of the Investigation Wing and in a mechanical manner without independent application of mind and on borrowed satisfaction and, therefore, such reopening of assessment being not in accordance with law should be quashed. It is also his submission that approving authority has not given approval in accordance with the provisions of law since th....