TaxTMI 
TaxTMI 
2026 (2) TMI 809
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....India & Ors. vs. Ashish Agarwal [2022] 444 ITR 1 (SC), the said notice was considered as issued u/s 148A of the Act and information available was supplied to the assessee. After considering the submissions of the assessee, order u/s 148A(d) of the Act was passed wherein it is alleged that assessee has received deposits in the bank account to the extent of Rs. 13,58,00,000/- which remained unexplained. Thereafter, the assessment order was passed u/s 147 r.w.s. 144B of the Act dated 22.05.2023 by making addition of Rs. 13,58,00,000/- u/s 68 of Act. 3. Against the said order, assessee preferred an appeal before Ld. CIT(A) who allowed part relief to the assessee and deleted the additions of Rs. 1,58,00,000/- on account of loans received, however, confirmed the additions of Rs. 12,00,00,000/- being amount received as consideration from the sale of shares owned by assessee by holding the same as unexplained cash credit. 4. Aggrieved by the said order, assessee filed the present appeal before the Tribunal by taking following grounds of appeal: 1. "That the order dated 27.03.2025 passed u/s 250 of the Income -tax Act, 1961 (hereinafter called the "Act") by the Commissioner o....
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....Act. In response the assessee submits that during the year assessee has not entered into any transactions with M/s Concise Exim Pvt. Ltd. Thereafter, in order passed u/s 148A(d) of the Act, AO has recorded the satisfaction of escapement of income that assessee has credits entries of Rs. 13,58,00,000/- in its bank account which remained unexplained. Once the earlier notice u/s 148 was issued for the reason that assessee has made transaction with Concise Exim (P) Ltd. which were alleged as rotation of money and such information was supplied to the assessee alongwith the notice u/s 148A(b) of the Act, in the final order passed u/s 148A(d) satisfaction was recorded on different issues, therefore, assessee was never confronted on the issue on which reassessment proceedings were initiated by recording the satisfaction in the order passed u/s 148A(d) of the Act which is against the principal of natural justice and, therefore, the order passed u/s 148A(d) and subsequent notice issued u/s 148 cannot be held as valid. 6. It is further observed that the AO has made addition of Rs. 13,58,00,000/- u/s 68 of the Act towards the amounts received from various companies tabulated at pages 49 to ....
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.... held that the said amount is received against the issue of share capital. 8. It is further observed that an amendment is made vide Finance Act, 2022 wherein second proviso to section 68 is added, so as to provide that the nature and source of any sum, whether in the form of loan or borrowing, or any other liability credited in the books of an assessee shall be treated as explained only if the source of funds is also explained in the hands of the creditor or entry provider. This amendment has taken effect from 1st April, 2023 and accordingly applies on and from Assessment Year 2023-24 and onwards. Since the year before us is AY 2013- 14 thus, the said amendment is not applicable. 9. From the perusal of the financial statements, it is further observed that share capital of the assessee company remained the same and no fresh shares were issued not any application money was received during the year under appeal, therefore, the allegation of the lower authorities that the sum of Rs. 12.00 crores was received against the issue of share capital is contrary to the facts on records. At this juncture, we refer to the provision of section 68 of the Act, which reads as under: C....
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....ion" means where the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee. It is true that the opinion of the Assessing Officer for not accepting the explanation offered by the assessee as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. The opinion of the Assessing Officer is required to be formed objectively with reference to the material available on record. Application of mind is the sine qua non for forming the opinion. 11. Coming to the facts of the present case in the line of the above proposition of Act, from the perusal of details filed by the assessee, it is observed that not only assessee explained the nature of credits as consideration received from the sale of shares but also filed their confirmations, Bank statement, audited financial statements, copy of ITR acknowledgement and share transfer deeds. It is further seen that the assessee not only prove the source in the hands of the buyer but further prove the source of source of the funds received by the assessee company. 12. Since, by filing the ....
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....roved that the assessee has "created" evidence, the Revenue is supposed to make thorough probe before it could nail the assessee and fasten the assessee with such a liability under Section 68 and 69 of the Act..." 15. The Hon'ble Apex Court in the case of CIT vs. Orchid Industries (P.) Ltd reported in [2020] 116 taxmann.com 113 (SC) dismissed the SLP filed by the department against the judgment of Hon'ble Bombay High court in the case of CIT Vs. Orchid Industries (P.) Ltd reported in [2017] 88 taxmann.com 502 (Bombay), where it was held as under: 'The assessee had produced on record the documents to establish the genuineness of the party such as PAN of all the creditors along with the confirmation, their bank statements showing payment of share application money, only because those persons had not appeared before the Assessing Officer would not negate the case of the assessee. Therefore, the addition was liable to be deleted." 16. Further, the Hon'ble Apex Court in PCIT Vs. Himachal Fibres Ltd. reported in (2018) 259 Taxmann 5 in which the decision of Hon'ble Delhi High Court was confirmed, held as under: "In a case where the assessee has fur....