TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 1659
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....ax Act, 1961 (hereinafter referred to as the "Act") which is invalid and not sustainable in the eyes of law. 5. The facts in brief are that the assessee filed return of income on 29.09.2012 declaring total income of Rs. 56,34,611/-. The said return was selected for scrutiny and the assessment was framed vide order dated 24.03.2014 passed u/s. 143(3) of the Act assessing the total income at Rs. 4,03,09,100/- which was assailed before the Ld. CIT (A) and vide order dated 20.09.2018 passed by the appellate authority u/s. 250 of the Act a substantial relief was granted to the assessee. Thereafter, appeal effect order was passed by the AO determining the income at Rs. 1,87,83,014/-. In the meantime, the AO received information from ADIT (Inv,), Unit -1(2), Kolkata that assessee has availed accommodation entry in the guise of unsecured loan from M/s. Shyamli Fashion Traders Pvt. Ltd. (in short 'SFTPL') during the instant financial year. Upon receiving the information, the AO issued notice u/s. 133(6) of the Act to the assessee with prior approval of PCIT-3, Kolkata asking to furnish the details of transactions with SFTPL which was duly complied with by confirming the tr....
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.... of the lender. Thereafter, the Ld. AR referred to page no. 57 and 58 of the paper book-2 which comprised the details of unsecured loans for the FY 2011-12 and at Sl. No. 34 the loan from SFTPL appears which showed that assessee had taken Rs. 50,00,000/- as unsecured loan on which interest of Rs. 4,19,178/- was provided and a TDS of Rs. 41,918/- was also deducted and deposited in the government treasury. The Ld. AR, therefore, submitted that all the information relating to this loan was available before the AO in the original assessment proceeding which culminated u/s. 143(3) of the Act and duly examined and verified by the AO. The Ld. AR, therefore, submitted that the reopening of assessment which was invalidly done and conclusion of the AO is nothing but a mere change of opinion on the basis of same facts which is not permissible under the Act. In defense of his argument, the Ld. AR relied on the decision of Hon'ble Apex Court in the case of CIT Vs. Kelvinator India Ltd. (2010) 320 ITR 561 (SC). 7.1. Ld. AR also referred to page no. 37 of the paper book which is a letter addressed to the Dy. Commissioner of Income Tax dated 18.04.2019 raising objection to t....
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....furnished the details which were furnished vide letter dated 21.01.2015. The ld. AR vehemently contended that there was no failure of any kind whatsoever on the part of the assessee to disclose these information in the original assessment proceedings and in order to reopen the assessment beyond the period of four years has to be subject to the satisfaction of the conditions as laid down in the first proviso to section 147 of the Act. The ld. AR stated that the said proviso provides that where an assessment has been framed u/s. 143(3) of the Act, then action shall be taken after expiry of four years from the end of relevant assessment year if the income has escaped assessment because of failure of the assessee to disclose truly all material facts necessary for the assessment of income for the said assessment year. The Ld. AR contended that it is not the case in the instant assessment year as the assessee has fully disclosed all the material facts and information qua the above loan during the original assessment proceedings and, therefore, the reopening of assessment is also bad in law and may be quashed. In defense of his argument, the Ld. AR relied on the decision of Hon'ble Apex C....
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....ke of the Assessing Officer that resulted in under-assessment. 3. The hon'ble apex court in Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR -996 (SC) has held that an error discovered on a reconsideration of the same material (and no more) does not give power to the Assessing Officer to reopen the assessment. Paragraph 14 of the said judgment read as under (page 1004 of 119 ITR): 'Now, in the case before us, the Income-tax Officer had, when he made the original assessment, considered the provisions of sections 9 and 10. Any different view taken by him afterwards on the application of those provisions would amount to a change of opinion on material already considered by him. The Revenue contends that it is open to him to do so, and on that basis to reopen the assessment under section 147(b). Reliance is placed on Kalyanji Mavji and Co. v. CIT [1976] 102 ITR 287 (SC), where a Bench of two learned judges of this court observed that a case where income had escaped assessment due to the "oversight, inadvertence or mistake" of the Income-tax Officer must fall within section 34(1)(b) of the Indian Income-tax Act, 1922. It appears to us, with respect, that ....
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.... required to be satisfied. Having gone through the reasons recorded for reopening, we are of the opinion that the conditions precedent for reopening of the assessment beyond four years are not satisfied. The reassessment was on change of opinion. There are no allegations of suppression of material fact. Under the circumstances, no error has been committed by the High Court in setting aside the reopening notice under section 148 of the Income-tax Act. We are in complete agreement with the view taken by the High Court. The special leave petition stands dismissed." 9.1 Since the facts of the instant case are materially same as that of the decision taken by the Hon'ble Apex Court in the above decision, accordingly, we are inclined to quash the reopening of assessment. 9.2. We further also note that the assessee has specifically requested the AO to allow the cross examination vide letter addressed to the Dy. Commissioner of Income Tax dated 18.04.2019 of the person whose statement is alleged to be used against the assessee company by the department but in spite of this the assessee has not been provided the cross examination by the AO thereby causing grave miscarriage of justi....
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.... taxmann.com 370 vi) ITO Vs. Smt Pratima Ashar, ITA No. 105/Mum/2018 (2019) 107 taxmann.com 135 (Mum. Trib) 11. We have perused the orders of the lower authorities and have carefully gone through the facts of the case. We have also perused the decision cited supra. From the perusal of the said decisions that the various judicial forums have held that one loans were taken and repaid through banking channel the same cannot be added u/s. 68 of the Act. Besides, we note that assessee has filed all the evidence proving identity, creditworthiness of the loan and genuineness of the transaction which has not been considered by the authorities below and on this count also even on merit the case of the assessee is succeeded. Consequently, we quash the reopening of assessment made u/s. 147 of the Act by setting aside the order of the Ld. CIT(A). ITA No. 1424//Kol/2023 A.Y.2013-14 12. The ground no. 1 & 2 are general in nature and do not require any adjudication. 13. The first issue raised in ground no. 3 is against the order of ld. CIT (A) confirming the addition of Rs. 1,25,00,000/- and of Rs. 12,05,344/- as made by the AO u/s 68 of the Act on account....
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.... statements, memorandum of article of associations, source of source and ledger copies etc. But both the authorities below have failed to carry out any further enquiry/investigation into these evidences. The Ld. A.R argued that the AO has solely and merely made an addition on the ground that though the assessee furnished all the evidences concerning the lenders however, the summons issued by DDIT(inv) u/s 131 of the Act were not complied with. The Ld. A.R contended that since both the authorities below have failed to carry out any meaningful enquiry into the said evidences furnished by the assessee and jumped to the conclusion that the identity, creditworthiness of the investors and genuineness of the transactions were not proved by overlooking and ignoring the facts on record. The Ld. A.R stated that all these facts are placed before the authorities below however the same had been overlooked and disregarded. The Ld. A.R vehemently argued that the addition made on the ground of non-compliance to the summons issued u/s 131 of the Act is unsustainable in the eyes of law where the assessee has furnished all the evidences concerning the investments/subscriptions received by the assesse....
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....e note that the similar details/evidences were also furnished before the Ld. CIT (A) but the Ld. CIT (A) has passed very cryptic order without giving any clear finding. The Ld. CIT (A) has affirmed the order of AO which was passed by the AO on the sole basis and foundation that the summon issued u/s 131 of the Act by DDIT (Inv) were not complied with by the assessee. We note that though the authorities below have failed to carry out any meaningful and substantive enquiry into the evidences filed by the assessee and without any enquiry, the identity and creditworthiness of the investors and genuineness of the transactions were doubted which seemed without any basis. On the other hand the assessee has discharged its onus by furnishing all the evidences before the AO as well as before CIT (A) and thereafter the burden shifted to the authorities below which have not been discharged. Moreover the addition was made on the ground of non-compliance to summons u/s 131. In our opinion, the said appellate order affirming the addition appears to be incorrect and cannot be sustained. We find support from the decision of Hon'ble Supreme Court in the case of CIT Vs Orissa Corporation Ltd. (supra)....
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....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 in this situation. In the said judgment noted by us at page 463, the Supreme Court has observed as follows: "The Income-Tax Appellate Tribunals performs a judicial function under the Indian Income-tax Act. It is invested with authority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and records its findings on all the contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law." The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its findings on all contentions raised by the assessee and the Commissioner, ....
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...., 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 the assessee also supports the view that for non-production of directors of the investor company for examination by the AO it cannot be held that the identity of a limited company has not been established. For the reasons given above we uphold the order of Ld. CIT (A) and dismiss the appeal of the revenue." 18.3. Similar ratio has been laid down by the Hon'ble Mumbai High Court in the case of CIT Vs Orchid Industries (P) Ltd (supra) by holding that provisions of section 68 of the Act cannot be invoked for the reasons that the person has not appeared before the AO where the assessee had produced on records documents to establish genuineness of the party such as PAN, financial and bank statements showi....