TaxTMI 
TaxTMI 
2022 (4) TMI 682
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.... 16,00,000/- u/s 69 of the IT Act, when the said investment was duly entered in the audited books of account and payment was made through a regular bank account of the company. Since, section 69 has no applicability deemed income assessed u/s 69 of the IT Act be deleted. 3. That on the facts and circumstances of the case and in law, the assessment made is illegal as it is against the principles of natural justice. In spite of repeated requests: a) Copy of information received from JCIT Indore used for reopening of assessment is not provided to the Appellant. b) Copy of satisfaction recorded separately u/s 151 of the IT Act is not provided for consideration and rebuttle. c) Proof of Service of Notice u/s 148 not provided d) No opportunity accorded for compliance of notices issued u/s 133(6) behind the back of the Appellant. 4. That on the facts and circumstances of the case and in law, the assessment is illegally reopened u/s 148, since: a) It is based on erroneous facts - it is reopened on the basis of proviso 2 sub-clause 'b' of section 147 which has not applicability in the instant case. b) It is reopened on ....
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....ions against the reopening of the assessment. The objections of the assessee were disposed of by the Assessing Officer and the objections taken by the assessee were rejected. Thereafter, the Assessing Officer proceeded to frame the assessment u/s 147 read with section 143(3) of the Act. Thereafter, he rejected the explanation offered by the assessee and made addition of Rs. 15,00,000/- on account of investment made by the assessee company in Brahaspati Iron & Steel Co. Pvt. Ltd. u/s 69 of the Act. 3. Aggrieved against this, the assessee preferred appeal before the learned CIT(Appeals), raising various grounds against the reopening and making the addition u/s 69 of the Act. The learned CIT(Appeals), after considering the submissions of the assessee, dismissed the appeal and sustained the addition made by the Assessing Officer. Now the assessee is in appeal before the Tribunal. 4. Ground nos. 1 to 7 are against reopening of the assessment and validity of the assessment. All the grounds are disposed of together for the sake of convenience. 5. Learned counsel for the assessee submitted that the assessment was reopened without any basis. He further submitted that the informatio....
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....e assessing officer has rightly invoked the provisions of section 147 of the act and had issued notice under section 148. I donot find any infirmity in the action of the AO resorting to re-open the case u/s 147/148. The AO had sufficient, reasons to believe that the income has escaped assessment to the extent of Rs. 16 lakhs. 7.3.2 It has been held in Raymond Woollen Mills Ltd. v. ITO And Others [236 ITR 34] by the Hon'ble Supreme Court that "in determining whether commencement of reassessment proceedings was valid it has whether there was prima facie some material on the basis of which the department could reopen the case. The sufficiency of the material is not a thing to be considered at this stage". 7.3.3. In ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. [2007] 161 Taxman 316 (SC)/[2007] 291 ITR 500 (SC)/[2007] 210 CTR 30 (SC): The Hon'ble Supreme Court held that "Section 147 authorizes and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification. If the Assess....
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....pening of the case are not maintainable and deserve to be rejected. Hence, dismissed." 8. Admittedly in this case the assessee has not filed the return of income and the assessee has also admitted the fact that it had made investment in company, namely, Brahaspati Iron & Steel Co. Pvt. Ltd. Therefore, in my considered view non filing of return of income and having an information regarding investment made by the assessee would be sufficient for the Assessing Officer to reopen the assessment for verifying the genuineness of the investment and source of such investment. Hence, I do not see any reason to interfere in the finding of the learned CIT(Appeals) in respect of the reopening of the case. Hence, ground nos. 1 to 7 of the assessee's appeal are dismissed. 9. Now coming to ground no. 8, on merit of addition, the learned counsel for the assessee submitted that assessee had provided all details regarding the impugned investment and source of such investment. He submitted that before the Assessing authority it was categorically stated vide letter dated 1.12.2017 that the funds were transferred from Royal bank of Scotland to Brahaspati Iron & Steel Co. Pvt. Ltd. on 20.03.2010. T....
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....ingly, AO made an addition of Rs. 16,00,000/- u/s 69 of the Act on account of unexplained investment in M/s Brahaspati Iron & Steel Co. Pvt. in share capital/share premium. 7.4.2 During the appellate proceedings the AR of the appellant attended once and also filed his submission through email. He filed written submissions and a paperbook relying upon the documents already filed before the AO. The submissions have been considered and are reproduced in this order supra. 7.4.3 I have considered the submissions of the AR of the appellant. It is noticed that there had been no serious efforts by the appellant to explain the source of investment of Rs. 16,00,000/- made in M/s Brahaspati Iron & Steel Co. Pvt. Ltd. The appellant did no efforts during the assessment proceedings or even before the undersigned for getting the compliance to the notices sent by the AO u/s 133(6) to this company as well as Mrs. Surabhi Bishnoi. If there had been any change in address of M/s Brahaspati Iron & Steel Co. Pvt. Ltd. then he could have provided the same to the AO, had there been a genuine investment. The bank account of Mrs. Surabhi Bishnoi was never produced. The appellant instead of....
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....ave been received from any of the above parties in response to notice u/s 133(6) sent. Further, the assessee has also not given any details on the present status of investment nor has submitted any details of the Share application/premium money paid as required vide notice u/s 142(1) dated 06.09.2017. As per the information in possession and also per information during the course of assessment proceedings in the case of M/s Brahaspati Iron & Steel Co. Pvt Ltd for AY 2010-11, the assessee company had invested in share application money/share capital in M/s Brahaspati Iron & Steel Co. Pvt Ltd during the AY 2010-11. The AR of the assessee company was also informed regarding the non-compliance of the information called u/s 133(6), however, no further details or explanation were filed. The assessee has also not offered any explanation regarding the present status of investment which would have shed some light on the nature of investment made. Any prudent company should keep track of its investment so that the capital it has invested do fetch returns for the company and also for its shareholders. If not then such investments come in the realm of unexplained investment. 13.2 Duri....
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....h that identity of the creditor as discussed by the assessee is meaningless in view of the above facts and also in view of the silence of the assessee to provide the latest or the current status of investment. These web of transactions have been created with a clear attempt to create a colorable device with attempt to evade taxes in the form of accommodation entry. Reliance on the above is also drawn from the judgment of the Hon'ble Supreme Court in the case of r. Mallika Vs. CIT reported in [2017] 79 Taxmann.com 117 (SC), wherein it was held that "where assessee had not discharged burden as regards source from which investment had been made, investment was an unexplained investment and same was rightly added to income of assessee." 13.5 The assessee company has made no serious efforts to justify the reasons for investment nor given details/ submission on the status of investment to justify its investment. In the civil law, a mere pre-ordnance of probability, is enough to fix the responsibility. Section 69 is enacted in these terms only. It is clearly indicated from the wordings of the section that where the assessee offers no explanation about the nature and source of inv....