TaxTMI 
TaxTMI 
2026 (1) TMI 183
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.... consequential to 263 of the Act including assessment framed are invalid and nullity. The issue is not being decided at this stage and left open to be decided at later on if the need arises for the same. 3. The second issue raised by the assessee in ground no.3,4 and 5 is against the confirmation of addition of Rs. 32,04,00,000/- by the ld. CIT(A) as made by the ld. AO on account of unexplained cash credit u/s 68 of the Act by ignoring the fact that all the evidences were produced during the re-assessment proceedings as well as in the set aside assessment proceedings. 3.1. First of all, we are deciding the issue raised on merit against confirmation of addition by ld. CIT(A).The facts in brief are that the order u/s 143(3)/147 of the Act was passed on 27.12.2010, assessing the total income at Rs. 2,15,920/- as against the returned income of Rs. 5,422/-. Thereafter, the ld. PCIT vide order dated 22.03.2013, passed the revisionary order u/s 263 of the Act, revising the said assessment order passed u/s 143(3)/147 of the Act on the ground of being erroneous and prejudicial to the interest of the Revenue. In the Consequential proceedings, the assessee was issued notice u/s 142(1) o....
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....ancy fee of Rs. 1,05,500/- was not included in the return of income and thus has escaped assessment. The ld AR submitted that, however, the ld. AO by applying the explanation 3 to Section 147 of the Act called upon the assessee to explain the share capital/ share premium raised during the impugned financial year amounting to Rs. 32,04,00,000/-. The ld. AR submitted that the ld. AO during the assessment proceedings issued notice u/s 142(1) of the Act and directed the assessee to furnish names, addresses, PANs of the share subscribers and the amounts received along with bank statements and confirmation of the subscribers, which were duly furnished by the assessee before the ld. Assessing Officer. The ld. AR further referred to the notices issued u/s 133(6) of the Act to the share applicants which were duly responded and replies are available in the assessment folder. The ld. AR submitted that the ld. AO having examined the evidences furnished by the assessee as well as by the share subscribers came to the conclusion that the assessee has proved the identity, creditworthiness of the subscribers and the transactions were found to be genuine. Therefore, no addition was made u/s 68 of th....
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....M/s Remahay Stores Pvt. ltd. & M/s Matshri Wires Pvt. Ltd. Similarly, no opportunity to cross-examine the director of the share subscribing companies as provided to the assessee before using their statement to the detriment of the assessee. In defense of his arguments the ld. AR relied on the decisions of i) Andaman Timber Industries Vs. CIT 2015(10) TMI 442 (SC) and Pr. Commissioner of Income Tax Vs. M/s. Sreeleathers ITAT/18/2022 (IA No.GA/02/2022) dated 14.07.2022 (Cal). 3.6. The ld. AR also vehemently referred to the provisions of Section 142(1) and 143(3) of the Act and emphasized that as per provisions of Section 142(2) the ld. AO is required to make all enquiries as it deems and consider necessary for the purpose of obtaining full information in respect of loss or income of the assessee and in the very next sub section 142(3) of the Act, it is provided that in respect of material gathered on the basis of said enquiry made u/s 142(2) of the Act and which is proposed to be used for the purpose of assessment, the ld. AO has to give any opportunity of being heard qua the same to the assessee but the same has not been granted to the assessee. Therefore, the mandate of Section ....
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....were not served and all of them were returned with remark that no such company existed, which was also confirmed by the inspector who was send to the addresses of share applicants for verification. However, in the present case, the ld. AO issued notice u/s 133(6) of the Act which were duly replied by the subscribers by furnishing the documents such as bank statements, ITR acknowledgements and audited statements and in the second assessment proceedings, most of the share applicants filed their response to summons issued u/s 131 of the Act. The assessee submitted the summons was replied by 23 subscribers' details whereof are as under: - Sr no. Name of the share Applicant Relevant page No. of the paper book. 1 Sriram Dealcom Pvt Ltd 72 2 Manish Merchants Pvt Ltd. 74 3 Wise Vyapaar Ltd. 77 4 Ekco Plastics Pvt Ltd. 80 5 Rajgharana Projects Pvt Ltd. 82 6 Puja Promoter (P) Ltd 84 7 Mayukh Construction (P) Ltd. 86 8 Premier Dealcom (P) Ltd 88 9 Jindal Vincom Pvt Ltd. 90 10 Gulmohar Towers Pvt Ltd. 108 11 Godhuli Sales Pvt Ltd 109 12 Tirupati Mansion Pvt Ltd 110 13 Wise....
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....tion 68 of the Act was inserted by Finace Act, 2012, with effect from 01.04.2013 and the said amendment is not retrospective in nature and is effective from A.Y. 2013-14 onwards. The Hon'ble Bombay High Court in case of CIT Vs. M/s Gagandeep Infrastructure Pvt. Ltd. (2017) 80 taxmann.com 272 (Bombay), wherein it has been held that the amendment u/s 68 of the Act is prospective and source of source is not required to be proved. The ld. AR therefore prayed that in view of this facts the case of the assessee may kindly be allowed by setting aside the order of ld. CIT(A) by directing the ld. AO to delete the addition. 3.12. The ld. DR on the other hand relied heavily on the orders of the authorities below by submitting that the assessee has raised a share capital/ share premium from subscribers whose identity, creditworthiness were doubtful and genuineness of the transactions could not be proved by the assessee and therefore, the appeal of the assessee may be dismissed by upholding the order of the ld. CIT(A). The ld. DR submitted that in this case, mere furnishing of documents along with the share subscribers details or they are replying to the notices issued u/s 133(6) of the ....
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....e, the assessee has discharged its onus cast upon it by the statute. The ld. AO has made the addition on the ground that there was no compliance to summons u/s 131 of the Act by most of the subscribers and also on the basis of statements recorded of two directors Shri Rao Birendra Singh and Shri Binod Kumar Dugar, who appeared before the ld. AO in compliance to summons u/s 131 of the Act. Shri Rao Birendra Singh director of M/s Maateswari Vanijya Pvt. Ltd., M/s Nirnidhi commercial Pvt. Ltd. & M/s Poddar Agro Co. Pvt. Ltd., whereas Shri Binod Kumar Dugardirector of M/s Sunray Tie-up Pvt. Ltd., M/s Bhaneswari Delacom Pvt. ltd., M/s Remahay Stores Pvt. ltd. & M/s Matshri Wires Pvt. ltd. Even this statement recorded during the assessment proceedings u/s 131 of the Act were not provided to the assessee and no cross-examination was allowed of these individuals, which in our opinion is in violation of principle of natural justice as has been held by the Hon'ble Apex Court in the case of Andaman Timber Industries (supra). Besides, in our opinion, the ld. AO cannot make addition on the ground that there was no compliance to the summons when the assessee has furnished all the evidences a....
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....appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter creditworthiness. As rightly pointed out by the learned counsel that the Ld. CIT(A) has taken the trouble of examining of all other materials and documents viz., confirmatory statements, invoices, challans and vouchers showing supply of bidi as against the advance. Therefore, the attendance of the witnesses pursuant to the summons issued in our view is not important. The important is to prove as to whether the said cash credit was received as against the future sale of the product of the assessee or note. When it was found by the Ld. CIT(A) on fact having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this fact findings. Indeed the Tribunal did not really touch the aforesaid fact finding of the Ld. CIT(A) as rightly pointed out by the learned counsel. The Supreme Court has already stated as to what should be the duty of the learned Tribunal to decide i....
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....e similar ruling of the ITAT Kolkata bench in the case of ITO vs. Devinder Singh Shant in ITA No. 208/Kol/2009 vide order dated 17.04.2009. 9. We have considered the rival submissions. We are of the view that order of Ld. CIT(A) does not call for any interference. It may be seen from the grounds of appeal raised by the revenue that the revenue disputed only the proof of identity of share holder. In this regard it is seen that for AY 2004-05 Shree Shyam Trexim Pvt. Ltd. was assessed by ITO, Ward-9(4), Kolkata and the order of assessment u/s 143(3) dated 25.01.2006 is placed in the paper book. Similarly Navalco Commodities Pvt. Ltd. was assessed to tax u/s 143(3) for AY 2005-06 by ITO, Ward-9(4), Kolkata by order dated 20.03.2007. Similarly Jewellock Trexim Pvt. Ltd. was assessed to tax for AY 2005-06 by the very same ITO, Ward-9(3), Kolkata assessing the assessee. In the light of the above factual position which is not disputed by the revenue, it cannot be said that the identity of the share applicants remained not proved by the assessee. The decision of the Hon'ble Allahabad High Court as well as ITAT, Kolkata Bench on which reliance was placed by the learned counsel for t....
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....portunity of hearing in respect of any material gathered on the basis of enquiry u/s 142(2) of the Act or any audit under sub section 2A of the Act, which are proposed to be relied for the purpose of assessment. However, in the present case, we note that the material gathered by the ld. AO during the course of enquiry were never confronted to the assessee thereby violating the mandate of provisions of Section 142(2) and 142(3) of the Act as the information gathered at the back of the assessee was used in framing the assessment against the assessee without providing any opportunity to the assessee. The case of the assessee find support from the decision of the co-ordinate Bench in case of M/s SPML Infra Ltd. Vs DCIT (supra), wherein it has been held as under:- ""14. To conclude: We note that none of the statements were recorded by the assessing officer of the assessee company, and no opportunity for cross examination has been provided to the assessee company. The mandate of law to conduct enquiry by the Assessing Officer on due information coming to him to verify authenticity of information was not done as per section 142 of the Act. Therefore, mere receipt of unsubstantiat....