TaxTMI 
TaxTMI 
2023 (11) TMI 1103
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the next ground of appeal of the assessee, which is against the action of the AO to have reopened the assessment u/s 147 of the Act by issuance of notice u/s 148 of the Act which according to the assessee is bad in law. Since it is a legal issue the same is dealt with. 4. For adjudicating the legal issue against the action of the AO re-opening the assessment u/s 147 of the Act, we have to first look at the reasons recorded by the AO for usurping the reopening jurisdiction u/s 147 of the Act. Before, we look into the reasons recorded let us re-visit the settled position of law regarding re-opening of assessment u/s 147 of the Act. It must be borne in mind that the very concept of assessment is governed by the time-barring rule; and an assessee acquires a right as to the finality of proceedings. Quietus of the completed assessments can be disturbed only when there is information or evidence regarding undisclosed income or AO had information in his possession showing escapement of income as stipulated u/s 147 of the Act. As per Section 147 of the Act, if the AO had to re- open the assessment, then AO has to record the reason to reopen the assessment, wherein he should record the "re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... AO receives adverse information, then, as noted it would only trigger "reason to suspect", and in such an event, the AO to make reasonable inquiry and collect material which would make him believe that there is in fact escapement of income and thereafter, record his 'reason to believe, escapement of income and then issue notice u/s 148 of the Act and proceed against the assessee. The reasons recorded by the AO for reopening the assessment is found placed at page nos. 31 & 32 of the PB which is reproduced as under: - Reason for reopening in the case of M/s. Shruti Vinimay Pvt. Ltd. Name of the assessee : M/s. Shruti Vinimay Pvt. Ltd. PAN : AAJCS4629R A.Y.  ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....income to the tune of Rs. NIL, Rs. 1,839/- and Rs. 24,58,276/- respectively. 5. Considering the financials of the assessee company, the shares issued could not have commanded such a high security premium. This view-also gets support from the decision rendered by the Hon'ble High Court of Bombay in the case of Major Metals Ltd Vs. Union of India [2012] 359 1TR 450 that the Settlement Commission was correct in its finding that the two companies which have invested Rs, 6 crores in the assessee company, and had been allotted shares at huge premium of Rs. 990/- have no financial standing to invest such a huge amount and further, past performance of the assessee company did not justify such huge premium that the purported transactions were not genuine. it held that the claim of having received such high premium on shares was fictitious and an attempt by the assessee to launder its own unaccounted funds in the guise of such receipts. it is, therefore, held that the amount shown in the books of account of the assessee as share premium was liable to taxed in accordance with the provision of section 68. 6. Further, the Hon'ble [TAT Delhi in the case of Zars Trading Pvt Ltd (2010)....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as to what was the reasons for which the AO has reopened the assessment. 7. With the aforesaid principles in mind, when we analyzed the "reasons recorded" by AO in the instant case (supra), we note from the contents of para no. 2 & 3 of the reasons recorded that pursuant to a search carried out on RK Kedia Group on 13.06.2014 and in the premises of some entry operators, it was found that those entry operators were managing and controlling several entities which were utilized for providing accommodation entry in the form of purchase and shares and unsecured loans for commission. And these entities/companies were registered in Kolkata/Mumbai and those accommodation providing companies/investors had very weak balance-sheet with meagre turnover, which facts narrated are general in nature and narrates partly the setting up of /modus operandi of accommodation entry operators through establishment of entities controlled by them. In para no. 4, the AO speaks about the activity of assessee and observes that it had issued 130000/- shares of face value of Rs. 10/- (i.e, Rs. 13 Lakhs) for a premium of Rs. 40 per share i.e. Rs. 52 Lakhs. According to the AO, the assessee had shown income for ....