TaxTMI 
TaxTMI 
2022 (2) TMI 604
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....ssessee, is without satisfying the requisite conditional precedent as stipulated u/s. 263 of the Act and therefore without jurisdiction and resultantly bad in law, so it has to be quashed. [Please note that since there are two assessment orders, and two Ld. Pr. CIT's involved in this Appeal, for better & easy understanding the case, the AO, who framed the original assessment order is called as 'First AO' and the re-assessment /second assessment framed AO will be called as the 'Second AO' and the first revisional order passed by Pr. CIT is called as 'First Ld. Pr. CIT' and the second incumbent, who passed the impugned order is called as 'Second Ld. Pr. CIT]. 3. Brief facts of the case are that the assessee company filed its return of income on 11.09.2012 declaring loss (- of Rs. 2615/-). The case was selected for scrutiny u/s. 143(2) of the Act under CASS and assessment u/s. 143(3) of the Act was framed by the AO (hereinafter referred to as the First AO) in the original first assessment on 12.03.2015 making addition of total income of Rs. 1,89,81,000/- under section 68 of the Act on account of alleged unexplained cash credit being share premium rec....
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.... lack of enquiry on the part of the AO, The decision on this issue could be taken only after examining and verifying the facts/ submission of the AR on this score. Not collecting the full facts and not taking enquiry to logical end which could enable AO to take decision based on the totality of facts makes this order erroneous in so far as prejudicial to the interest of revenue. After having considered the position of law and facts and circumstances of the instant case, I am of the considered opinion that the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of revenue in accordance with the Explanation 2(c) below section 263 (1) of the Act. Accordingly, the assessment is set aside to the table of A.O on the issue as outlined in para- 2 above. The A.O is directed to provide reasonable opportunity to the assessee company to produce documents & evidences which it may choose to rely upon for substantiating its own claim, The AO is further directed to adjudicate the said issue de novo and pass a fresh assessment order in accordance with the relevant provisions of law." 5. Aggrieved by the aforesaid impugned action of the second Ld. Pr.CI....
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....pted that the aforesaid details were examined. The Ld.AR also drew our attention to the fact that the second AO has clearly acknowledged that the investors identity, genuineness and creditworthiness as well as the source of funds have been verified by him. Therefore, according to Ld. AR, pursuant to the first revisional order of the First Ld. Pr. CIT passed u/s. 263 of the Act when was compiled in letter and spirit by the second AO, subsequent/impugned action of the next incumbent in the chair of Pr.CIT-4 (second) to undertake an exercise of revisional jurisdictional under section 263 (revision) which culminated in second revisional order dated 12.03.2019 tantamount to the new incumbent in the chair of Pr.CIT-4 (second) reviewing the order of his predecessor Pr. CIT4 (First) dated 21.09.2016, which is not permitted by Law. According to Ld. AR, the second Ld. Pr. CIT - 4 by passing the second revisional order dated 12.03.2019 has substituted the First Pr. CIT's order passed u/s. 263 of the Act dated 21.09.2016 with his own order which he cannot do since the second assessment order/re-assessment of the Second AO dated 03.11.2016 was pursuant to the first revisional order of the F....
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.... 2012-13) the onus on the assessee in respect of credit found in the books was confined to prove the identity, creditworthiness and genuineness of the Source i.e. only the first source not the second source also. And since that was the requirement of law, according to Ld AR, when the assessee face the scrutiny proceedings before the AO, he is bound to satisfy the AO as per the law in force during this relevant assessment year (AY 2012-13) and it cannot be expected from him/assessee to be a clairvoyant to anticipate the requirement of law for future years and satisfy those also before the AO in the present AY, when there is no such requirement of law that the assessee must be aware of the source of source of the share-applicant at the time when he collects the share capital itself and according to him, if it is insisted then it is unfair and unreasonable. According to Ld. AR, when the law was only that assessee need to be aware of first source only then the AO could not have gone and verified beyond the source of the share applicants from whom the assessee had received the share capital. So when the requirement of law is only that assessee must ascertain that the share-applicant, wh....
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..../s. 263 of the Act and pointed out to us that the words used in Section 263 does not bar in any way second or third or fourth exercise of revisional jurisdiction, if he finds the assessment order/re-assessment order of AO is erroneous in so far as prejudicial to the Revenue. According to him, the AO has not conducted proper enquiry. And also he pointed out that the first Ld. Pr. CIT while setting aside the original/first assessment order has ordered the Second AO to frame re-assessment/second assessment de- novo meaning that AO was given full liberty to enquire on all issues including share capital and premium collected by assessee. So according to Ld. CIT /DR the contention of Ld. AR that the second Ld. Pr. CIT cannot have directed fresh assessment on share capital & premium is devoid of merit and no merger took place as contended by the Ld. AR, so the doctrine of merger did not take place in this case because the Ld. Pr.CIT (First) has directed de novo assessment. So according to Ld. CIT DR, the Second Ld. Pr. CIT's impugned action is correct since the AO's second assessment order was erroneous. And, therefore, he does not want us to interfere. 13. We have heard both the parti....
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....onal order of First Ld. Pr. CIT. In order to adjudicate both this legal issues, first of all we need to examine the basic jurisdictional issue i.e. whether the condition precedent stipulated by section 263 of the Act was satisfied, so that the Second Ld. Pr. CIT could have exercised his revisional power which he is empowered to do by the Act. For that, we note that the statutory condition precedent as prescribed by section 263 of the Act is that the Ld. Pr. CIT can invoke the revisional jurisdiction, if the assessment order is erroneous in so far as prejudicial to the Revenue. Keeping this in mind, we have to examine as to whether in the first place the order of the Second Assessing Officer found fault by the Second Principal CIT is erroneous as well as prejudicial to the interest of the Revenue. For that, let us take the guidance of judicial precedent laid down by the Hon'ble Apex Court in Malabar Industries Ltd. vs. CIT [2000] 243 ITR 83(SC), wherein their Lordship have held that twin conditions needs to be satisfied before exercising revisional jurisdiction u/s 263 of the Act by the Commissioner of Income Tax ( in short, 'CIT'). The twin conditions are that the order....
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.... set aside the original first assessment order dated12.03.2015 and directed the AO to de novo assess the income of the assessee and gave specific direction to enquire about share capital & premium. The operative portion of the first revisional order dated 28.03.2016 is again reproduced below for the sake of continuity:- "4(v) Considering the above facts and circumstances of the case, the assessment order passed on 12.03.2015 is set aside denovo with a direction to carry out proper examination of books of accounts and Bank accounts of assessee as well as investors. The AO is also directed to examine the source of share application, identity of investors and its genuineness. The assessment proceedings may be initiated at the earliest to be completed without waiting time barring date. The AO must provide sufficient opportunity of being heard to the assessee in order to meet natural justice, equity and fairness."(emphasis given by us) 17. Pursuant to the aforesaid direction of the First Ld. Pr. CIT, the Second AO has framed the re-assessment/second assessment order by accepting the return filed by the assessee & without making any addition in respect of share premi....
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.... capital & premium) while passing the second re-assessment order dated 03.11.2016. In order to appreciate this contention of Ld AR, we perused the first revisional order dated 21.09.2016 passed u/s. 263 of the Act by the first incumbent Ld. Pr. CIT while setting aside the original first assessment order dated 12.03.2015 wherein he has recorded certain finding of fact after perusal of the records (first assessment folder/records of assessee). The First Pr CIT has acknowledged that in the first round of assessment proceedings, the assessee company had duly furnished before the AO the following documents:- (i) audited financial statements; (ii) copy of Form filed with the ROC; (iii) copy of PAN Card of the assessee company; (iv) details and copy of share applicants; (v) bank statement reflecting the transaction; (vi)records relating to investors in order to establish identity, genuineness and creditworthiness of the share subscribers were filed by them pursuant to AO's notice u/s 133(6) of the Act. (viii) pursuant to the notices, the share applicants have duly filed their replies along with documents called for by the AO. ....
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.... AO are as under: (i) To carry out proper examination of the books of accounts and bank account of the assessee; (ii) To carry out proper examination of the books of accounts and bank account of the investors; (iii) AO to examine the source of the share applicants; (iv) The AO to examine the identity of the investor and its genuineness; (v) The AO to complete the assessment at the earliest without waiting for the time barring date. v) The AO to complete the assessment at the earliest without waiting for the time barring date. 25. Now let us examine whether the second AO carried out his role of an investigator. In this respect, we note that pursuant to the aforesaid direction of the First Ld. Pr. CIT (first revisional order) dated 21.09 2016, the Second AO has recorded in his reassessment second assessment order that pursuant to his notice u/s. 142(1) of the Act, Shri Ashish Trivedi, director of the assessee company appeared and produced the following documents:- (i) Copy of ITR (Income Tax Returns) (ii) Audited accounts iii) Computation of income iv) Details of business activities ....
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.... capital and premium collected by the assessee for AY 2012-13. Before we examine about the investigative role of the AO, we need to examine the law as it stood in AY 2012-13 and is applicable in this case. Section 68 of the Act reads as under:- Section 68: Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year: Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee company shall be deemed to be not satisfactory, unless- (a) The person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) Su....
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.... value- (i) As may be determined in accordance with such method as may be prescribed, or (ii) As may be substantiated by the company to the satisfaction of the Assessing Officer based on the value, on the date of issue of shares, of its assets, including intangible assets being goodwill, know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. Whichever is higher: (b) Venture capital company, venture capital fund, and venture capital undertaking shall have the meanings respectively assigned to them in clause (a), clause (b) and clause (c) of Explanation to clause (23FB) of section 10]". 33. So we note that in this assessment year before us i.e. AY 2012-13, the law in force was that if any sum is found credited in the books of an assessee in a financial year and, if the AO asks for the explanation of assessee in respect of the nature and source thereof, then the assessee is duty bound to explain the nature and source of the credit entry in the books and if the assessee fails to explain or if the AO is not satisfied, he may charge to income tax the sum so credited. So, the asse....
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.... to Section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1stApril, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. Infact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1stApril, 2013 was its normal meaning. The Parliament did not introduce to Section 68 of the Act with retrospective effect nor does the proviso so introduced that it was introduced "for removal of doubts" or that it is "declaratory". Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of section 68 of the Act both before and after the adding of the proviso. In any view of the matter the three essential tests while confirming the pre proviso Section 68 of the Act laid down by the Courts namely the genuineness of the transaction, identity and the capacity of the investor have all been examined by the impugned orde....
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....d . ". (C) The Mumbai Tribunal in the case of ACIT-I(I) vs. M/s. Gagandeep Infrastructure Pvt. Ltd. the ITAT has held as under: "We have carefully perused the orders of the lower authorities. In our considered view, the issue of shares at premium is always a commercial decision which does not require any justification. Further the premium is a capital receipt which has to be dealt with in accordance with Sec. 78 of the Companies Act, 1956. Further, the company is not required to prove the genuineness, purpose or justification for charging premium of shares, share premium by its very nature in a capital receipt and is not income for its ordinary sense. It is not in dispute that the assessee had filed all the requisite details/documents which are required to explain in the books of accounts by the provisions of Sec. 68 of the Act. The assessee has successfully established the identity of the companies who havepurchased shares at a premium. The assessee has also filed bank details to explain the source of the shareholders and the genuineness of the transaction was also established by filing copies of share application forms and Form No. 2 filed with the Registrar of ....
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...., the sum so credited may be charged to income tax as the income of the assessee of that previous year. The phraseology of section 68 is clear. The Legislature has laid down that in the absence of a satisfactory explanation, the unexplained cash credit may be charged to income-tax as the income of the assessee of that previous year. In this case the legislative mandate is not in terms of the words 'shall' be charged to income- tax as the income of the assessee of that previous year". The Hon'ble Supreme Court while interpreting similar phraseology used in section 69 has held that in creating the legal fiction the phraseology employs the word "may" and not "shall". Thus the un-satisfactoriness of the explanation does not and need not automatically result in deeming the amount credited in the books as the income of the assessee as held by the Hon'ble Supreme Court in the case of CIT v. Smt. P. K. Noorjahan [1999] 237 ITR 570. 37. In a case wherein the AO made the addition u/s 68 of the Act because the lenders of loan to assessee did not turn up before him [AO], the Hon'ble Apex Court in the case of Orissa Corpn. (P) Ltd. (supra) 159 ITR 78 has held that onus....
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....e under section 68 of the Act, by holding that the same should be decided by taking into consideration also the provision of section 106 of the Evidence Act which says that a person can be required to prove only such facts which are in his knowledge. The Hon'bleCourt in the said case held that, once it is found that an assessee has actually taken money from (depositor/lender who has been fully identified, the assessee/borrower cannot be called upon to explain, much prove the affairs of such third party, which he is not even supposed to know or about which he cannot be held to be accredited with any knowledge. In this view, the Hon'ble Court has laid down that section 68 of Income-tax Act, should be read along with section 106 of Evidence Act. The relevant observations at page 260 to 262, 264 and 265 of the order are reproduced herein below:- "While interpreting the meaning and scope of section 68, one has to bear in mind that normally, interpretation of a statute shall be general, in nature, subject only to such exceptions as may be logically permitted by the statute itself or by some other law connected therewith or relevant thereto. Keeping in vie v these fundame....
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....he sub-creditors. If section 706 and section 68 are to stand together, which they must, then, the interpretation of section 68 are to stand together, which they must, then the interpretation of section 68 has to be in such a way that it does not make section 706 redundant. Hence, the harmonious construction of section 706 of the Evidence Act and section 68 of the Income- tax Act will be that though apart from establishing the identity of the creditor, the assessee must establish the genuineness of the transaction as well as the creditworthiness of his creditor, the burden of the assessee to prove the genuineness of the transactions as well as the creditworthiness of the creditor must remain confined to the transactions, which have taken place between the assessee and the creditor. What follows, as a corollary, is that it is not the burden of the assessee to prove the genuineness of the transactions between his creditor and sub-creditors nor is it the burden of the assessee to prove that the subcreditor had the creditworthiness to advance the cash credit to the creditor from whom the cash credit has been eventually, received by the assessee. It, therefore, further logically follows ....
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.... advanced by the subcreditor to the creditor was income of the assessee from undisclosed source unless there is evidence, direct or circumstantial, to show that the amount which has been advanced by the sub-creditor to the creditor, had actually been received by the sub-creditor from the assessee .... " ********** "Keeping in view the above position of law, when we turn to the factual matrix of the present case, we find that so far as the appellant is concerned, he has established the identity of the creditors, namely, NemichandNahata and Sons (HUF) and Pawan Kumar Agarwalla. The appellant had also shown, in accordance with the burden, which rested on him under section 106 of the Evidence Act, that the said amounts had been received by him by way of cheques from the creditors aforementioned. In fact the fact that the assessee had received the said amounts by way of cheques was not in dispute. Once the assessee had established that he had received the said amounts from the creditors aforementioned by way of cheques, the assessee must be taken to have proved that the creditor had the creditworthiness to advance the loans. Thereafter the burden had shifted to the Ass....
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....ine transaction, the initial onus is always upon the assessee and if no explanation is given or the explanation given by the appellant is not satisfactory, the Assessing Officer can disbelieve the alleged transaction of loan. But the law is equally settled that if the initial burden is discharged by the assessee by producing sufficient materials in support of the loan transaction, the onus shifts upon the Assessing Officer and after verification, he can call for further explanation from the assessee and in the process, the onus may again shift from the Assessing Officer to assessee. 16. In the case before us, the appellant by producing the loan-confirmationcertificates signed by the creditors, disclosing their permanent account numbers and address and further indicating that the loan was taken by account payee cheques, no doubt, prima facie, discharged the initial burden and those materials disclosed by the assessee prompted the Assessing Officer to enquire through the Inspector to verify the statements." 40. In a case where the issue was whether the assessee availed cash credit as against future sale of product, the AO issued summons to the creditors who did not turn u....
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....of the submissions of the learned counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore, it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter the creditworthiness. As rightly pointed out by the learned counsel that the Commissioner of Income-tax (Appeals) has taken the trouble of examining of all other materials and documents, viz; confirmatory statements, invoices, challans and vouchers showing supply of bidis as against the advance. Therefore, the attendance of the witnesses pursuant to the summons issued, in our view, is not important. The important is to prove as to whether the said cash credit was received as against the future sale of the product of the assessee or not. When it was found by the Commissioner of Incometax (Appeals) on facts having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored thisfact finding. Indeed the Tribunal did not really touch the aforesaid fact finding of the Commissioner of Income-tax (Appeals) as righ....
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.... 21 st September, 2011 whereinthe Hon'ble Court held as follows: "In our opinion, in such circumstances, the Assessing officer of the assessee cannot take the burden of assessing the profit and loss account of the creditor when admittedly the creditor himself is an income tax assessee. After getting the PAN number and getting the information that the creditor is assessed under the Act, the Assessing officer should enquire from the Assessing Officer of the creditor as to the genuineness" of the transaction and whether such transaction has been accepted by the Assessing officer of the creditor but instead of adopting such course, the Assessing officer himself could not enter into the return of the creditor and brand the same as unworthy of credence. So long it is not established that the return submitted by the creditor has been rejected by its Assessing Officer, the Assessing officer of the assessee is bound to accept the same as genuine when the identity of the creditor and the genuineness" of transaction through account payee cheque has been established. We find that both the Commissioner of Income Tax (Appeal) and the Tribunal below followed the wel....
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.... On appeal the Learned CIT (A) by following the decision of the Supreme Court in the case of CIT. vs. M/s. Lovely Exports Pvt. Ltd., reported in (2008) 216 CTR 195 allowed the appeal by holding that share capital/premium of Rs. 24,00,000/- received from the investors was not liable to be treated under Section 68 as unexplained credits and it should not be taxed in the hands of the appellant company. As indicated earlier, the Tribunal below dismissed the appeal filed by the Revenue. After hearing the learned counsel for the appellant and after going through the decision of the Supreme Court in the case of CIT. vs. M/s. Lovely Exports Pvt. Ltd. [supra}, we are at one with the Tribunal below that the point involved in this appeal is covered by the said Supreme Court decision in favour of the assessee and thus, no substantial question of law is involved in this appeal. The appeal is devoid of any substance and is dismissed. 44. Our attention was drawn to the decision of the Hon'ble High Court, Calcutta in the case of Commissioner Of Income Tax vs M/s. Nishan Indo Commerce Ltd dated 2 December, 2013 in INCOME TAX APPEAL NO.52 OF 2001 wherein the Court held as f....
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....he nature and source of investment by any shareholder, in shares of the Assessee Company remained unexplained, liability could not be foisted on the company. The concerned shareholders would have to explain the source of their fund. The learned Commissioner on considering the submissions of the, respective parties and considering the materials, found that the Assessing Officer had applied the provisions of Section 68 of the Income Tax Act arbitrarily and illegally and in any case without giving the assessee adequate opportunity of representation and/or hearing. Learned Tribunal agreed with the factual findings of the learned Commissioner and accordingly the learned Tribunal dismissed the appeal of the Revenue and affirmed the decision of the learned Commissioner. Mr.Dutta appearing on behalf of the petitioners cited judgment of the Division Bench of this Court in Commissioner of Income Tax Vs. Ruby Traders and Exporters Limited reported in 236 (2003) ITR 3000 where a Division Bench of this Court held that when Section 68 is resorted to, it is incumbent on the assessee company to prove and establish the identity of the subscribers, their credit worthiness ....
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....cation money were received by the assessee by way of account payee cheques and the assessee also disclosed the complete list of shareholders with their complete addresses and GIR Numbers for the relevant assessment years in which share application was contributed. It further appears that all the payments were made by the applicants by account payee cheques. It appears from the Assessing Officers order that his grievance was that the assessee was not willing to produce the parties who had allegedly advanced the fund. In our opinion, both the Commissioner of Income-tax (Appeals) and the Tribunal below were justified in holding that after disclosure of the full particulars indicated above, the initial onus of the assessee was shifted and it was the duty of the Assessing Officer to enquire whether those particulars were correct or not and if the Assessing Officer was of the view that the particulars supplied were insufficient to detect the real share applicants, to ask for further particulars. The Assessing Officer has not adopted either of the aforesaid courses but has simply blamed the assessee for not producing those share applicants. In our view, in the c....
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....d. Pr.CIT in his first revisional order, found that AO in the first assessment proceedings though has been provided with the aforesaid documents has not examined these documents, which according to him, should have been carried out by the AO. Further, the Ld PCIT held at para 4, that by submitting these documents the assessee had discharged its onus. Moreover, the First Ld. Pr. CIT found fault with the AO for not bothering to examine the contention of the assessee or to bring on record anything against the assessee and thus according to him, the AO has not discussed the basis of evidence to draw adverse inference against the assessee and therefore, was pleased to set aside the actions of AO to add the share premium collected by assessee as unexplained cash credit u/s. 68 of the Act. Therefore, according to the First Ld. Pr. CIT, the first original assessment order framed u/s. 143(3) of the Act dated 12.03.2015 was against the principle of natural justice and, therefore, he found it fit to order denovo assessment and gave specific direction in respect of share capital & premium collected by assessee. 48. Thereafter, the Id. Pr. CIT was pleased to direct "........assessment order ....
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....O has produced PAN,ROC details, audited financial statements, details and copy of share applicants, bank statements reflecting the transaction records relating to investors to establish identity, creditworthiness & genuineness. And the finding of First Ld. Pr. CIT that pursuant to notice u/s. 133(6), the investors had filed documents confirming the share transactions& premium filed documents as required by the AO. Further, the Ld PCIT held at para 4, that by submitting these documents the assessee had discharged its onus.] And after examining these documents, we find that the second AO taking note that all the six (6) shareholders, all the shareholders have filed their respective (i) PAN details (ii) CIN detail (iii) Audited Annual Report for FY 2011-12 (AY 2012-13), (iv) ITR acknowledgement for AY 2012-13 which the AO acknowledges that he verified the same and thus we note that the identity of the investors were duly furnished by the assessee's director; and the AO verified the veracity of the same which facts were already in the assessment folder as found by Ld. First PCIT which were obtained by AO (first) from all the share applicants by issuing notice u/s 133(6) of the Act ....
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.... shareholders is a possible view and cannot be termed as unsustainable in law or facts. 52. Coming to the creditworthiness of the shareholders, our attention was drawn to the balance sheet of the shareholders (PB-I) which was filed before the AO and the Ld. Pr. CIT and we note that their source of investment and net worth as per balance sheet as on 31.03.2012 as well as the sum invested by them in the assessee is discernible as under:- SL NO NAME OF ALLOTTEE Share Capital Subscribed Networth as per audited accounts Networt h, P/b Page No. Bank Statemen t, P/b, Page No. Source of Investment, P/b, Page No. 1 Nayan Tie Up Pvt Ltd 20,00,000 6,76,05,253 39 44 31 2 Tribhuvan Deal Trade Pvt Ltd 60,00,000 26,04,94,448 55 49 48 3 ManomayCommosale Pvt Ltd 35,00,000 10,32,95,047 70 77 63 4 Intellect Fincon Pvt Ltd 40,00,000 21,18,73,887 87 96 80 5 BalajiFinvest Pvt Ltd 15,00,000 31,54,34,318 107 100 99 6 Aakriti Overseas Pvt Ltd 20,00,000 13,92,74,548 124 115 117 53. So, from a perusal of the above chart, we note that the assessee and the sha....
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....ents (supra) which we would like to discuss/ examine each share subscribers. 1. Nayan Tie Up Pvt Ltd On perusal of the paper book, it reveals that documents are placed at page 29-44a of share applicant, Nayan Tie Up Pvt Ltd which is a Private Limited Company, and which has Permanent Account No.AACCN9155G and CINU50404MH2009PTC204355.We note that this share applicant company has filed its Pan Card, ITR acknowledgment, relevant Bank Statement, source of funds and audited accounts in response to the notice issued u/s 133(6) of the Act. A copy of its Income Tax Return Acknowledgment for AY 2012-13 is placed at page 32 of the paper book. On perusal of the Audited Accounts of this share applicant (Page 34-43), it is noted that its Net-worth (Share Capital plus Reserves and Surplus) as on 31.03.2012 was Rs. 6,76,05,253/-, page 39 of the paper book and the investment made in the assessee-company including share premium was Rs. 20,00,000/-. Entire Share Application money of Rs. 20,00,000/- was received by the assessee through normal banking channels on 22-09-2011. The financial statement of this share applicant shows that it had enough funds to invest in the assessee-company and the t....
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.... the investment made in the assessee-company including share premium was Rs. 35,00,000/-. Entire Share Application money of Rs. 35,00,000/- was received by the assessee through normal banking channels on 18-08-2011. The financial statement of this share applicant shows that it had enough funds to invest in the assesseecompany and the transaction has happened through normal banking channel. Further, it is noted that the share applicant had furnished the source of investment made in the assesseecompany after getting the notice under section 133(6) of the Act. 4. Intellect Fincon Pvt Ltd On perusal of the paper book, it reveals that documents are placed at page 78-96a of share applicant M/s Intellect Fincon Pvt Ltd which is a Private Limited Company and which has Permanent Account No.AAGCS8100G and CINU51909WB1994PTC062889.We note that this share applicant company has filed its Pan Card, ITR acknowledgment, source of funds, relevant Bank Statement and audited accounts in response to the notice issued u/s 133(6) of the Act. A copy of its Income Tax Return Acknowledgment for AY 2012-13 is placed at page 81 of the paper book. On perusal of the Audited Accounts of this share applica....
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....cant company has filed its Pan Card, ITR acknowledgment, source of funds, relevant Bank Statement and audited accounts in response to the notice issued u/s 133(6) of the Act. A copy of its Income Tax Return Acknowledgment for AY 2012-13 is placed at page 118 of the paper book. On perusal of the Audited Accounts of this share applicant (Page 119-129), it is noted that its Net-worth (Share Capital plus Reserves and Surplus) as on 31.03.2012 was Rs. 13,92,74,548/-, page 124 of the paper book and the investment made in the assessee-company including share premium was Rs. 20,00,000/-. Entire Share Application money of Rs. 20,00,000/- was received by the assessee through normal banking channels on 22-09-2011. The financial statement of this share applicant shows that it had enough funds to invest in the assessee-company and the transaction has happened through normal banking channel. Further, it is noted that the share applicant had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. 55. So, from the aforesaid facts revealed during the second round, we note that second AO has discharged his duty as an Investigator a....
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....the share subscribers was a plausible view which is not a unsustainable view in law. 56. To sum up, we find from the above said facts that the Second AO has conducted enquiry on the specific subject matter i.e. share capital and premium collected by the assessee-company (CASS items). Therefore, the finding of Second Pr. CIT that the Second AO has not conducted enquiry is incorrect and is flowing from suspicion only. And as discussed, the allegation/fault pointed out by the Second Ld. Pr. CIT that the Second AO failed to collect total facts also cannot be accepted for the simple reason that Ld. Pr. CIT has not spelt out in the impugned order what he meant by total facts or in the alternative when the assessee has discharged its onus, as required by the law in force in this AY 2012-13, then the Ld. Pr. CIT ought to have called for which ever additional documents/materials or issued summons or issued notices and collected those facts which according to Second Ld. Pr. CIT, the AO omitted to collect and then demonstrated that those actions/documents which he collected in that process gave result to a different finding of fact which will turn upside down the claim of the assessee and ....
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....pital & premium collected by assessee company. Resultantly the second Ld. Pr.CIT, again cannot rake-up the same subject matter without the second Ld. Pr.CIT in the second revisional order spells out where the error happened to second AO as an investigator or adjudicator, which exercise the Second Ld. Pr.CIT has not done, so the second Ld. Pr. CIT cannot be permitted to again ask the AO to start the investigation in the way he thinks it proper on the very same subject on which merger has taken place by virtue of the order of First Ld. Pr. CIT. And if this practice is allowed, then there will be no end to the assessment proceedings meaning no finality to assessment proceedings and that is exactly why the Parliament in its wisdom has brought in safe-guards, restrictions & conditions precedent to be satisfied strictly before assumption of revisional jurisdiction. Be that as it may be, as discussed above, we find that the Second Ld. Pr. CIT without satisfying the condition precedent u/s 263 of the Act has invoked the revisional jurisdiction (second time), so all his actions are ab initio void. 57. Lastly, coming to the observations of the Second Ld. Pr.CIT that the assessment order p....