TaxTMI 
TaxTMI 
2025 (3) TMI 1779
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....the same may kindly be quashed. 2. Rs. 4,50,000/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 4,50,000/- made by the ld. AO on account of alleged unexplained investment for purchase of shares u/s 69. The ld. AO and CIT(A) both have also erred in not considering the vital facts and material available on record in their true perspective and sense available on record. Hence the addition so made by the ld. AO and confirmed by the ld. CIT(A) is also being contrary to the real facts of the case and not according to the provision of law, hence the same may kindly be deleted in full. 3. The ld. AO has grossly erred in law as well as on the facts of the case in charging the interest u/s 234A, B, C. The interest so charged is being totally contrary to the provision of law and on facts of the case and hence same may kindly be deleted in full. 4. That the appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing. 3. The brief facts of the case are that the assessee is an Individual and derives income from salary and intere....
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....der section 69 of the IT Act. Aggrieved by the order of the AO, the assessee preferred appeal before the ld. CIT(A). The ld. CIT(A) considered the detailed written submissions and paper book furnished before him, but being not satisfied, he confirmed the addition made by the AO, by observing in para 6.2 and 6.3 as under :- "6.2 I have carefully considered the facts of the case, AO's order and submissions of the appellant. On the basis of information available from the ITBA System, it was observed by the AO that the appellant purchased shares of Rs. 4,50,000/- but did not file the return for the year under consideration. The case was reopened by the AO for reassessment u/s 147 by issuing notice u/s 148 of the Act. Assessment in this case was completed u/s 144 r.w.s. 147 of the IT Act on 05.12.2018 assessing the income at Rs. 8,77,100/-. During the course of assessment proceedings, the AO found that the appellant purchased shares of Rs. 4,50,000/-. The AO sought details regarding the sources of purchase. However, the appellant did not file any reply with supporting documents regarding the source of investment made by her. Therefore, the AO added the amount of Rs. 4,50,000/- ....
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....s recorded it is also mentioned that the assessee has filed her ROI on 14.12.2011. In the reasons the ld. AO noted that for the ROI filed the no Scrutiny assessment was made u/s 143(3), hence income has escaped assessment. In this regard it is submitted that the ld. AO has issued the notice u/s 148 only on the basis of information received from Kolkata Wing and the ld. AO has not verified the ROI. Hence the notice u/s 148 was given on wrong facts and information and without any material in the possession of the ld. AO because all the information and material has been either gathered or provided during the course of assessment proceeding. Hence when the reason for reopening as per assessment order and as per the ld. CIT(A) itself wrong, incorrect and without material and all together reverse then all the proceedings are void ab-initio and liable to be quashed. In the case of Vijay Harish chandra Patel vs. ITO 400 ITR 167(Guj.) (2018) where it has been held that" When very basis for reopening no longer survives, assumption of jurisdiction u/s 147 by AO by issuing notice u/s 148 was without authority of law and could not be sustained. Recently the Honble ITA....
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....s, which continues right since inception till date, are "reason to believe" and not "reason to suspect". The word "believe" has to be understood in contradistinction of suspicion or opinion. Belief indicates something concrete or reliable. Kindly refer Gangasharan& Sons Pvt. Ltd. 130 ITR 1 (SC), and ITO v. LakhmaniMewal Das, (1976) 103 ITR 437 (SC). 3.2 The belief of the Officer should be as to escapement of income and the belief should not be a product of imagination or speculation. There must be reason to induce the belief. 3.3 Further, the belief must be of an honest and reasonable person based upon reasonable grounds. The officer may act on direct or circumstantial evidence; but his belief must not be based on mere suspicion, gossip or rumor as appearing from the reasons recorded and assessment order in the present case. The AO would be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the provision of law. The Court can always examine this aspect though the declaration or sufficiency of the reasons for the belief cannot be investigated by the Court....
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.... clear his doubts and suspicions to re-examine the material which were already available on record at time of passing of t earlier assessment orders. The legislature under Section 147 has not clothed AO with such jurisdiction therefore the action could not be upheld in the background of facts of instant case. One more redeeming fact which had direct nexus with the subsequent re-assessment proceedings and ramification of the same had culminated into re-assessment orders was the impugned order where AO rejected the objections submitted by Assessees pursuant to notice under Section 147/148. Order passed by AO in this behalf was not a speaking order which could not be sustained. In view of legal infirmity in the notice under Section 147/148 and laconic order of AO while rejecting objections Assessee the consequential assessment Orders were liable to be annulled. (para 16) In the present case on the perusal of the reason recorded that it is clear that the AO was having reason to suspect not reason to believe. Because the ld. AO has issued the notice u/s 148 only on the basis that assessee has purchased the shares for Rs. 4,50,000/-but no transaction of the same has been shown i....
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....e assessee's group case namely in Yashpal Agrawal the Honble ITAT In ITA No. 268/Jp/2023 dt. 30.06.2023 has quashed the assessment order on the grounds that the objections filled by the assessee against the proceedings u/s 147/148 has not been decided here is also the same position, the Group is same AO same order same issue are same. Copy of Honble ITAT order is enclosed. 8. Hence in view of the above facts, circumstances and legal position the assessment proceedings may kindly be quashed. GOA-2: Addition of Rs. 4,50,000/- on account of unexplained investment in purchase of commodity transactions: SUBMISSIONS: 1. Correct Facts of the case: At the very outset we have to bring on record the correct facts before your honor which have been ignored by both the ld. AO and CIT(A) despite available before them. That the assessee is a regular IT assessee and filling her ROI regularly last so many years, she is maintaining the books of account as she has also filed her balance sheet before the ld. AO and the ld. AO has not found any defects nor rejected the same but also accepted the all other transaction mentioned therein. The assessee is having income f....
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.... ie much later the due date mentioned in Sec.139(1)." When in our submissions we nowhere stated that no return is filled u/s 139(1), when in the paper book filed before the ld. CIT(A) we had filed the ITR at PB 1-3 and filed the ITR filed on dt. 17.04.2018 in response to the notice u/s 148 vide PB 6-10, these shows that how the ld. CIT(A) has proceed and passed the order by giving the wrong finding, which is deserve to be deleted. Our WS is also enclosed herewith at PB 35-43. The ld. CIT(A) has not tried to look the documents and WS in properly. It is also the admitted facts on the revenue record that the income of the assessee is being assessed regularly last so many years and not doubted by the ld. AO and the ld. AO has also nowhere stated that the accumulated capital of the assessee are bogus and not utilized in purchase of shares and also ignored by the ld. CIT(A) despite available before him. 2. In support the assessee has submitted Balance sheet as at 31.03.2010 and 31.03.2011 (PB15), Bank statement (PB20-22), ledger account (PB23-25), share accounts (PB25-26), ledger account of M/s S.R Proteins (PB30 and 30) from where she was getting the salary, s....
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....ng to the all above facts and evidences on the record. 5. However both the lower authorities have not rebutted those evidence as above with the help of any documentary evidences or material rather proceeds his own presumption, assumption and suspicion. Whether any addition can be made without any basis or material, without disproving the details furnished, no addition can be made only on the assumptions, presumptions or guess work. And looking to the record and assessment order it is very clear that the ld. AO has proceeded only suspicion, without any cogent material evidence. It is settled principle of law that an allegation remains a mere allegation unless proved. Suspicion cannot take the place of reality, are the settled principles kindly refer Dhakeshwari Cotton Mills 26 ITR 775 (SC) also refer R.B.N.J. Naidu v/s CIT 29 ITR 194 (Nag), Kanpur Steel Co. Ltd. v/s CIT 32 ITR 56 (All). Also refer CIT v/s Kulwant Rai 291 ITR 36(Del). In CIT v/s Shalimar Buildwell Pvt Ltd 86 CCH 250(All) it has been held that the AO made the addition merely on suspicion which was not desirable in the eye of law. In the case of St. Wilfred Educational Society vs. Pr. CIT (CENTRAL)18t....
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.... lower authorities in support of investment made in purchase of shares. The appellant has also furnished ledger account of Shares of Global Capital (APB 23), ledger account of Shriyam Financial P Ltd. (APB 24), Global report of share transactions for the relevant year executed through Shriam Financial P Ltd. (APB 25), ledger account of the appellant in the books of Shriam Financial P Ltd. (APB 26) and on verification of all such documents we notice that the appellant had purchased 30000 shares of Global Capital Market @ Rs. 15/- each totaling to Rs. 4,50,000/- on 03.01.2011 for which the broker Shriam Financial P Ltd. had issued a contract note dated 03.01.2011 for Rs. 4,51,628/- comprising of cost of purchase for Rs. 4,50,000/- and other charges such as STT, Turnover Tax, brokerage etc. and the assessee had paid a sum of Rs. 4,52,378/- to the above named broker on 13.01.2011 which entry is verifiable from the entry dated 13.01.2011 appearing in bank statement of the assessee (APB 21) and source of such payment is receipt of a sum of Rs. 4,52,378/- from S.R. Proteins P Ltd. vide cheque cleared in the bank account of the assessee on 01.01.2011 and same stands verified with the accou....