TaxTMI 
TaxTMI 
2024 (1) TMI 1513
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....ce to the buyer parties due to non existence of the companies. 3. The appellant craves the right to add, alter, amend or withdraw any ground or grounds of appeal before or at the time of hearing of the case." 2. Brief facts of the case are that the assessee filed its return of income for the A.Y. 2011-12 by declaring income of Rs. 21,021/-. Subsequently, the case of the assessee was reopened u/s 148 of the I.T. Act and consequent to that the notice u/s 148 of the Act was issued to the assessee company. The ld. AO in continuance of further proceeding issued notices u/s 143(2) and 142(1) of the Act and in response to the notices, the AR of the assessee appeared before the AO from time to time and furnished necessary documents as asked for. During the assessment proceeding, the ld. AO noticed that assessee company had received an amount of Rs. 2,35,00,000/- and Rs. 30,00,000/- from Shivshakti Communication & Investment Pvt. Ltd. and Carnation Tradelink Pvt. Ltd. respectively. Further, he observed that the alleged funds are received from shell companies and added the aforesaid sum as undisclosed income in the hands of assessee u/s 68 of the Act. 3. Dissatisfied with the ....
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....entities had not responded to the enquiry made by the AO u/s 133(6) of the Act was not correct. The ld. AR also relied on the finding of Co-ordinate Delhi Bench given in the case of Srishti Fincap Pvt. Ltd. vs DLIT in ITA No. 2264/Del/2013 dated 07.10.2015, wherein Co-ordinate Bench held as under: "...that the issue in controversy is squarely covered by the judgements: Vishal Holding and Capital Pvt. Ltd. and Jatin Investment Pvt. Ltd. (supra) as the assessee in the instant case has purchased the shares to the tune of Rs. 25, 10,000/- in the Assessment Year 2003-04 and then credited the receipt on account of sale of shares to the tune of Rs. 25,10,000/- to its P & L account, which has already been declared and considered as its income by the appellant /assessee. So Ld. CIT(A) has legally and rightly deleted the addition of Rs.25, 10,000/- vide impugned order. 5. Therefore, he prayed before the bench by stating that the ld. CIT(A) has rightly deleted the addition of Rs. 2,65,00,000/- as made in the hands of assessee. Therefore, the instant appeal filed by the revenue may be dismissed and no need to interfere in the order passed by the ld. CIT(A). 6. We after hearing t....
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.... London, this Customs authority had come to know that the assessee had declared very low price in respect of the consignment of Manganese exported by them out of India After due inquiries and investigations, the Customs authorities found that the assessee was systematically undervoicing the value of Manganese as compared with the prevailing market price. The Income Tax Officer on coming to know about the proceedings before the Customs Collector in this respect issued notice for reopening of the assessment. In the reasons that the Assessing Officer relied on the facts as found by the Customs Authorities that the assessee had undervoiced goods during export. Under such circumstances, upholding the validity of the notice for reopening the Supreme Court held and observed as under: "So far as the first condition is concerned, the Income Tax Officer, in his recorded reasons, has relied upon the fact as found by the Customs Authorities that the appellant had under invoiced the goods it exported. It is not doubt correct that the said finding may not be binding upon the income tax authorities but it can be a valid reason to believe that the chargeable income has been under assessed....
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.... tax had escaped assessment for the relevant assessment years. For the reasons aforementioned, we are unable to uphold the impugned judgment of the High Court. The appeal is, therefore, allowed, the impugned judgment of the High Court is set aside and the Writ Petitions filed by the respondents are dismissed. No order as to costs." 12. In case of Income Tax Officer v. Selected Dalurband Coal Co. Pvt. Ltd. (supra), the assessment was reopened on the basis of the information contained in letter from Chief Mining Officer that the colliery of the assessee had been inspected and there had been under reporting of coal raised. Upholding the validity of re-opening of assessment, the Supreme Court held and observed as under: "After hearing the learned counsel for the parties at length, we are of the opinion that we cannot say that the letter aforesaid does not constitute relevant material or that on that basis, the Income Tax Officer could not have reasonably formed the requisite belief. The letter shows that a joint inspection was conducted in the colliery of the respondent on January 9, 1967, by the officers of the Mining Department in the presence of the representatives....
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....rmation in respect of the assessee as a beneficiary of bogus accommodation entries provided to it and represents the undisclosed income. The assessing officer has referred to the subsequent information and adverted to the concept of true and full disclosure of facts. It is also noticeable that there was specific information received from the office of the DIT (INV-V) as regards the transactions entered into by the assessee company with number of concerns which had made accommodation entries and they were not genuine transactions. As we perceive, it is neither a change of opinion nor does it convey a particular interpretation of a specific provision which was done in a particular manner in the original assessment and sought to be done in a different manner in the proceeding under Section 147 of the Act. The reason to believe has been appropriately understood by the assessing officer and there is material on the basis of which the notice was issued. As has been held in Phool Chand Bajrang Lal (supra), Bombay Pharma Products (supra) and Anant Kumar Saharia (supra), the Court, in exercise of jurisdiction under Article 226 of the Constitution of India pertaining to sufficiency of reason....
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....income tax appeal against the judgment of the Tribunal holding that the re-opening of assessment was bad in law. 14. In the result, petition is dismissed. All contentions on merits of the petitioner however kept open. In view of the above therefore, the AO is noted to have fulfilled the conditions precedent for reopening the assessment and thus the AO's action of reopening of assessment u/s 147 is held to be valid. Accordingly, Ground Nos. 1 to 7 are dismissed. Ground 8 and 9 I have considered the submissions filed by the appellant in the light of the findings of the AO in the assessment order and the remand report. I have also gone through the material placed on record. The AO in his assessment order had noted that the assessee had received a sum of Rs.2,65,00,000/- from M/s Shivshakti Communication & Investment Private Limited and M/s Carnation Tradelink Private Limited, which according to him, had emanated out of the bank account of Mr. Surendra Agarwal. Since the enquiries made by the AO from these entities did not yield any fruitful results, the AO concluded that the identity, genuineness and creditworthiness of these payers remained uns....
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.... Schedule-4 of the Balance Sheet. According to the assessee, only because the purchasers did not respond to the notices which have been issued after more than 12 years post the transaction, cannot be reason to doubt the genuineness of the same. Having considered the above, it is noted that the admitted fact is that the assessee had sold shares held by way of 'investments' during the/year to M/s Shivshakti Communication & Investment Private Limited and M/s Carnation Tradelink Private Limited for Rs.2,35,00,000/- and Rs.30,00,000/- respectively. It is therefore, in any case, not the receipt of 'unsecured loan' as alleged by the AO. It is noted that the purchase of investments in earlier years, its cost of acquisition and source of funds is not in dispute in the present case. It is also an admitted position that proceeds from sale of shares to the aforementioned entities were received through proper bank channel, and are duly accounted for in the books of accounts. The appellant has rightly pointed out that after netting of the cost of acquisition from sale consideration, the net taxable capital gain was NIL in terms of Section 45 of the Act. It is therefore n....
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.... more than 8 to 10 years after the impugned transaction. At the point of sale of investments, the sale bill/invoice was issued, physical share certificates were handed over and the payment was received. Apart from the foregoing, no other act was performed either by the seller or the purchaser. It is purely a case of two unrelated parties, a buyer and a seller, who conducted a trading transaction and the considerations were exchanged at the same time. The transactions involving sale of investments in FY 2011-12 is noted to be a one-off transactions with such persons with the AO not bringing on record any evidence of a continues relationship of the appellant with these parties. It appears to be a case of two unrelated parties buyer and a seller, who conducted a trade and the considerations were exchanged at the same time. Accordingly, I find merit in the plea of the appellant that there is no existing or to be continuing relationship, with the purchasers and therefore the appellant cannot be reasonably expected to continue to be in touch and be informed about the whereabouts of these bodies corporate. For the reasons set out in the foregoing therefore the appellant submits that no ad....
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.... "The money listed in asst. order is out these aggregate to Rs. 93,45,000/- encashed by sale for which entry to entry details were filed before the ITO. So, these deposits are neither loan nor share application money as alleged mindlessly by the ITO in his order. Sec 68 is focused on loans and shares capital. It does not include sale proceeds of goods. When opening stock and new acquisition of goods stands accepted and closing stock at the year end is also accepted, the sale proceeds can not be doubted where the payment received is by cheque from tax paying entity. The third party might not appear for confirmation, the ITO had other sources of direct verification. The one asset has converted into other shape and no new deposit is there in this year. It is important to mention that an income/receipt can be brought to tax only once. Law do not provide for tax twice on a transaction. When sale proceeds of these shares appear in credit side, being offered as income, the same once again can not be brought to tax as income from undisclosed sources. What the ITO has done is double taxation of same receipt- once as sale of investments and again as income from undisclosed sour....
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....ontained in Section 68 of the Act are not attracted and holding the same as income would tantamount to double taxation which is not permissible under law and as such, the Ld. CIT(A) has rightly deleted the addition made by the A.O. Consequently, no ground to interfere in the impugned order, the appeal of Revenue is hereby dismissed. It has been brought to my notice that the Hon'ble ITAT, Kolkata has also decided a similar issue in the case of Abdhut Vinimay Pvt Ltd Vs ITO (ITA No. 2404/Kol/2017) dated 24.10.2018. In the decided case the assessee had sold investments from which it received proceeds of Rs.62,50,000/-. In the course of assessment the AO tried to make enquiries u/s 131 from the purchasers but the summons were unserved. The AO accordingly disbelieved the genuineness of the transactions and added the proceeds received by the appellant u/s 68 of the Act. On appeal the Tribunal deleted the impugned addition by observing as under: "4. We, therefore, considering the totality of the facts do not see any valid ground to interfere with the findings of the Ld. CIT(A). Accordingly, we do not see any merit in this appeal of the department. In ITA no. 4326/Del....
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....n this year had indeed been purchased in the preceding years. In response, the appellant has submitted copies of Form 20B under Companies Act of the companies whose shares were sold during the impugned year and the sale of which is at the heart of the present controversy. These documents have been obtained by the appellant from the MCA records and show that the name of the appellant company appears in the list of shareholders of the companies the sale of whose shares is presently under dispute. These records indicate that the appellant company's name appeared in the list of shareholders of these companies from as early as 31.3.2006 and 31.3.2007 onwards in the official and statutory records of the concerned companies. Since this information is part of the public records, there cannot be any disputing the fact that the appellant had been holding the shares of the said companies, the sale of those shares is presently under dispute, for several years, without there being any adverse observations made by the department. I find that no effort had been made to make any enquiries from the MCA database of the said companies or even from the appellant's own balance sheets of the immediately....