TaxTMI 
TaxTMI 
2025 (7) TMI 968
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.... the case was selected under scrutiny through CASS and the regular assessment was completed on 23.03.2015 u/s 143(3) of the Act at the returned income. A search and seizure operation u/s 132 of the Act was conducted in the case of M/s Bhushan Steel Ltd. (BSL) group and its group concerns on 13.06.2014. The case of the assessee was also covered in operation u/s 132 of the Act. The assessee filed return u/s 153A of the Act on 07.07.2016 declaring the same income as filed u/s 139 of the Act. The assessment u/s 153A r.w.s. 143(3) for AY 2012-13 was completed on 13.12.2016 at an income of Rs. 9,000/-. Then, based on the information received from Asstt. Director of Income-tax (Inv.), Unit-3(4), New Delhi, the case of the assessee was selected for reassessment by issuing a notice on 31.03.2019 u/s 148 of the Act. The sum and substance of the information as reflected in the assessment order was that the assessee was found to have received credit from M/s Jawahar Credit and Holdings Pvt. Ltd. amounting to Rs. 25 crore by sale of 1,25,000 equity shares. During AY 2012-13, this company, Jawahar Credit and Holdings Pvt. Ltd. issued 3 lakh shares at Rs. 200/- per share of face value of Rs. 10/-....
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.... Ld. CIT(A) in his order no.5/0126/2015-16 dated 25.03.2019 in the case of Jawahar Credits deleted the addition because he was of the view that. M/s Jawahar credit was only a conduit company for routing of funds and not the beneficiary. The relevant portion of the order of CIT(A) is reproduced as under- "7.8 All these features as discussed in the foregoing paragraphs, 7.5 to 7.7 indicates that though the documentations are complete with respect to the investors and the appellant company, payments received and made through banking channels and other formalities are complete, however, inability to produce directors In the case Of Investor company, investment at such high premium without justification and having no net worth or reserves and surplus and immediate investment in appellant company after receiving the funds, which was further invested by the appellant company to other companies for such amount received, same address etc. shows that the appellant company and its investors, especially companies are nothing but a creation of paper companies to transfer its funds from Bhushan Steel Ltd. and other individuals related to them, to various companies as shown in flow chart....
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....9. The above findings of the Id. CIT(A) is not contrary to the findings of the Assessing Officer in the present case. It is not a case wherein the same amount is added once again in the case of Jawahar Credit only, The present order of the Assessing Officer is the logical consequence to the order of the CIT(A) because he rightly held that the Jawahar Credit was not the beneficiary but only a conduit for routing the transaction. If that be so, then the addition needs to be made in the case of the appellant company because he has received Rs. 25,00,00,000/- from the Jawahar Credit and is the beneficiary of such funds/money. 10. The appellant is a group company of Bhushan Steel Group and was found to be engaged in money laundering in a big way. The transaction of the appellant is basically part & parcel of organised financial crime wherein various modus operandi like bogus LTCG, bogus share capital etc. was employed to bring unaccounted money in the books of accounts. The money was routed through various entities to evade investigation. The transactions were camouflaged as that of share application like in the present case. The appellant company has -no regular business activ....
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....as the words 'assessment' and 'reassessment' are mentioned in section 153D of the Act for grant of approval, therefore, when the AO intended to reopen an assessment concluded u/s 153A of the Act, then, the provisions of section 153D of the Act would again come into application and as in the case of assessee no such approval under section 153D of the Act has been taken, therefore, the assessment order is void ab initio. 5.1 However, the contention is not sustainable in law as we are of the considered view that assessment and reassessment mentioned u/s 153D of the Act refers to assessment and reassessment in consequence to the search. Here, in this case search assessment stood concluded, therefore, when there was a reopening on account of escapement of income the fact of earlier assessments being concluded u/s 143(3) or u/s 153A of the Act are of no consequence except where the reopening is being challenged on the basis that it is a case of mere change of opinion. Thus, the additional ground as raised has no substance. The same is decided against the assessee. 6. Then, coming to main grounds involving issue on merits and law it was submitted by the ld. AR that this ground no. 1....
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....e AO to examine the genuineness of the transaction when concluding assessment u/s 143(3) of the Act. Therefore, the reopening is valid. 8. However, after taking into consideration the reopening reasons available at pages 87-91 of the paper book, we find that the AO himself mentions in the reopening as follows:- "It is true that the assessee has filed a copy of annual report and audited P&L. A/c and balance sheet along with return of income but has not been disclosed various information/facts necessary for assessment as noted above. It is pertinent to mention here that even though the assessee has produced books of accounts, annual report, audited P&L A/c and balance sheet and other evidence as mentioned above, the requisite material facts as noted above in the reasons for reopening were embedded in such a manner that material evidence could not be discovered by the AO and could have been discovered with due diligence accordingly attracting provisions of Explanation I of section 147 of the Act. It is evident from the above discussion that in this case, the issues under consideration were never examined by the A.O. during the course of regular assessment. This fa....
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....money in the form of share capital in M/s Bhushan Steel Ltd. Information was also sought to give details of share application money received by the company during the year and at page 140 of the PB, the assessee has provided a copy of the reply dated 02.11.2016, wherein all the necessary information with regard to share capital in the form of confirmations, bank statements, ITRs of the investors, copy of ROC return, resolution, annual returns were provided and based upon the same, the assessment u/s 153A r.w.s 143(3) of the Act was concluded on 30.12.2016. 9.2 Thus, there is no force in the contention of the ld. DR that the AO had no opportunity to examine the genuineness of the investment in earlier assessments. Rather, we are of the considered view that the manner in which the information was sought and responded by the assessee and then the assessments were concluded in the timeline provided under the Act, the intention of the AO seems to be to conclude the assessments for the time being and to reopen at convenience and it is for this reason very conveniently the AO observes in the reopening, as reproduced above with our emphasis on relevant part in bold, that although inform....
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..... 11 In the present case, there is no justification whatsoever for charging very high share premium (Rs.190/- per share) against the face value of Rs. 10/- per share. At no point of time in any of the proceedings, the appellant or any entity was able to establish the genuineness of the transaction. Further, Jawahar Credit could not explain the transaction when opportunity was provided to them. If the transactions are genuine, in that case the directors of the companies concerned has an obligation to depose and state the facts. However, in this case, at no point of time any director appeared to explain the genuineness of the transaction. 12. M/s Jawahar Credits & Holdings Pvt. Ltd. has no creditworthiness to invest an amount of Rs. 25,00,00,000/- in the appellant company. M/s Jawahar Credits has simply collected the money and invested in the appellant company. It was only a paper company and not doing any business. The creditworthiness of Jawahar Credits has not been established till date during any of the proceedings including the impugned one." 11. Now, as a matter of fact, all these assertions of the ld. CIT(A) stands subsumed in the findings of the Tribunal ....