TaxTMI 
TaxTMI 
2022 (12) TMI 161
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.... 2. On the facts and in the circumstances of this case, the CIT(A) has erred in deleting the addition of Rs. 35,00,000/- upholding that assessee company has received such amount from More and Patel, whereas finding of the CIT(A) is in contradiction to the details furnished by the assessee company, showing Shri Sanjay Damodar More had given loan to creditor companies and out of such loan fund creditor companies given loan to assessee company; 3. On the basis of facts and in the circumstances of this case, the CIT(A] has erred in deleting the addition at Rs. 1,47,28,143/-, without reasonable satisfaction of creditworthiness of creditor companies, whereas creditworthiness of creditor companies was an essential limb to accept such loan; 4. On the basis of facts and in the circumstances of this case, the CIT(A) has erred in deleting the addition at Rs. 1,47,28,143/-, whereas assessee company was unable to prove the creditworthiness of creditor companies in respect of such loan and also creditor companies were not approachable as it were already closed; 5. The appellant craves leave to add, alter, modify, delete, put forth additional grounds in respect o....
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....27.12.2016 suggest that he had initiated section 148/147 proceedings regarding the assessee's time deposits, cash deposit in bank accounts and interest income having figures of Rs.1,55,00,000/-, Rs.2,37,500/- and Rs.1,19,448/-; respectively totaling to Rs.1,58,56,948 whereas he ended up in adding section 68 unexplained cash credits in the nature of unsecured loans/ land advances amounting to Rs.2,64,31,847/- only. The CIT(A) which has partly reversed the impugned additions in his lower appellate discussion. 6. It is in view of forgoing admitted factual position that we hold that the Assessing Officer had not made any addition pertaining to his three folded reasons of reopening. That being the case, we quote CIT Vs. Jet Airways India Ltd. (2010) 331 ITR 236 (Bom.) holding that such a reopening is not sustainable in law as under - "14. The rival submissions which have been urged on behalf of the Revenue and the assessee can be dealt with, both as a matter of first principle, interpreting the section as it stands and on the basis of precedents on the subject. Interpreting the provision as it stands and without adding or deducting from the words used by Parliament, it is cl....
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....hich comes to" his notice subsequently in the course of the proceedings under the section as having escaped assessment. If upon the issuance of a notice under s. 148(2), the AO accepts the objections of the assessee and does not assess or reassess the income which was the basis of the notice, it would not be open to him to assess income under some other issue independently. Parliament when it enacted the provisions of s. 147 w.e.f. 1st April, 1989 clearly stipulated that the AO has to assess or reassess the income which he had reason to believe had escaped assessment and also any other income chargeable to tax which came to his notice during the proceedings. In the absence of the assessment or reassessment of the former, he cannot independently assess the latter. 16. In CIT vs. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), the Supreme Court dealt with the following question of law in the course of its judgment : "Where an item unconnected with the escapement of income has been concluded finally against the assessee, how far in reassessment on an escaped item of income is it open to the assessee to seek a review of the concluded ....
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....ice under s. 148 on certain specific issues, it was not open to him during the course of the proceedings for assessment or reassessment to assess or reassess any other income, which may have escaped assessment but which did not form the subject-matter of the notice under s. 148. This view was adopted in the judgment of the Punjab & Haryana High Court in Vipan Khanna (supra) and in the judgment of the Kerala High Court in Travancore Cements Ltd. (supra). This line of authority, would now cease to reflect the correct position in law, by virtue of the amendment which has been brought in by the insertion of Expln. 3 to s. 147 by Finance (No. 2) Act of 2009. The effect of the Explanation is that once an AO has formed a reason to believe that income chargeable to tax has escaped assessment and has proceeded to issue a notice under s. 148, it is open to him to assess or reassess income in respect of any other issue though the reasons for such issue had not been included in the reasons recorded under s. 148(2). 20. The second line of precedent is reflected in a judgment of the Rajasthan High Court in CIT vs. Shri Ram Singh (2008) 217 CTR (Raj) 345 : (2008) 306 ITR 343 (Raj). The R....
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....ourt in Travancore Cements Ltd. (supra) and of the Punjab & Haryana High Court in Vipan Khanna (supra) would, therefore, no longer hold the field. However, insofar as the second line of authority is concerned, which is reflected in the judgment of the Rajasthan High Court in Shri Ram Singh (supra), Expln. 3 as inserted by Parliament would not take away the basis of that decision. The view which was taken by the Rajasthan High Court was also taken in another judgment of the Punjab & Haryana High Court in CIT vs. Atlas Cycle Industries (1989) 180 ITR 319 (P&H) : (1989) 46 Taxman 315 (P&H). The decision in Atlas Cycle Industries (supra) held that the AO did not have jurisdiction to proceed with the reassessment, once he found that the two grounds mentioned in the notice under s. 148 were incorrect or nonexistent. The decisions of the Punjab & Haryana High Court in Atlas Cycle Industries (supra) and of the Rajasthan High Court in Shri Ram Singh (supra) would not be affected by the amendment brought in by the insertion of Expln. 3 to s. 147. 22. Explanation 3 lifts the embargo, which was inserted by judicial interpretation, on the making of an assessment or reassessment on grou....