9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (5) TMI 156 - AT - Income TaxReopening of assessment u/s 147 - Addition u/s 68 - HELD THAT - As the primary onus as casted on the assessee in terms of the requirement of Section 68, was duly fulfilled and the onus was on revenue to controvert the evidences furnished by the assessee. However, we find that nothing has been brought on record by the revenue to substantiate the fact that the assessee s unaccounted money was routed in the books in the garb of share capital. It is trite law that no addition could be made merely on the basis of allegation, suspicion, conjectures or surmises. Upon perusal of assessee s written submissions as placed on record, another pertinent fact to be noted is that all the 16 investor entities has sufficient net worth (shares capital reserves surplus) to make investment in the assessee and the percentage of investment made by them in the assessee company is merely in the range of 0.02% to 11.86 % of their respective net worth. Hence, on the facts and circumstances of the case and respectfully following the earlier view of Tribunal in assessee s own case 2020 (12) TMI 768 - ITAT MUMBAI , we delete the impugned additions. Consequently, the set-off of losses, as allowable under law, would be available to the assessee. We order so. The Ld. AO is directed to re-compute assessee s income in terms of our above order. No infirmity could be found in Ld. AO s action in reopening the case of the assessee. The stand of Ld. CIT(A), in this regard, stands confirmed.
Issues Involved:
1. Reopening of the case under Section 148. 2. Validity of the assessment order passed under Section 143(3). 3. Opportunity to rebut material relied upon during reassessment. 4. Addition of Share Capital as unexplained cash credit under Section 68. 5. Denial of business loss. 6. Initiation of penalty proceedings under Section 274 read with Section 271(1)(c). 7. Calculation of interest under Sections 234A, 234B, and 234C. Detailed Analysis: 1. Reopening of the Case under Section 148: The assessee challenged the validity of the reassessment proceedings, arguing that the Assessing Officer (AO) had no jurisdiction to issue notice under Section 148 due to the lack of tangible material connecting the assessee with the entities involved. However, the CIT(A) upheld the reopening, noting that the AO had authentic information from the appraisal report of the search in the Lotus group and the assessee's admissions during the search. The Tribunal confirmed that the AO had sufficient reasons to believe that income had escaped assessment, thus dismissing the assessee's legal grounds. 2. Validity of the Assessment Order Passed under Section 143(3): The assessee contended that the assessment order was against the principles of natural justice. However, the Tribunal found that the AO had conducted an exhaustive inquiry and analysis before concluding that the share capital and premium received by the assessee were not genuine. The Tribunal upheld the assessment order, noting that the AO's findings were based on substantial evidence and not merely on suspicion. 3. Opportunity to Rebut Material Relied Upon During Reassessment: The assessee argued that the AO did not provide an opportunity to rebut the material relied upon during reassessment. The Tribunal observed that the AO had issued notices and conducted inquiries, and the assessee had the opportunity to present documentary evidence to establish the identity, creditworthiness, and genuineness of the transactions. Thus, the Tribunal found no merit in the assessee's claim. 4. Addition of Share Capital as Unexplained Cash Credit under Section 68: The primary issue was the addition of ?4,03,50,000 as unexplained cash credit under Section 68. The Tribunal noted that the assessee had provided extensive documentary evidence, including share application forms, bank statements, and financial statements of the investor entities, to establish the identity, creditworthiness, and genuineness of the transactions. The Tribunal found that the assessee had successfully discharged the onus cast upon it under Section 68. The Tribunal also noted that the AO's reliance on the retracted statement of a director was not sufficient to discredit the documentary evidence provided by the assessee. Consequently, the Tribunal deleted the addition. 5. Denial of Business Loss: The Tribunal allowed the set-off of business losses as allowable under law, following the deletion of the addition under Section 68. The Tribunal directed the AO to re-compute the assessee's income accordingly. 6. Initiation of Penalty Proceedings under Section 274 read with Section 271(1)(c): The Tribunal did not specifically adjudicate on the initiation of penalty proceedings, as it was consequential to the main issues. Given the deletion of the addition under Section 68, the penalty proceedings would also be impacted. 7. Calculation of Interest under Sections 234A, 234B, and 234C: The Tribunal noted that the calculation of interest under Sections 234A, 234B, and 234C was consequential in nature and did not require specific adjudication. Conclusion: The Tribunal allowed the appeal partly, deleting the addition of ?4,03,50,000 under Section 68 and permitting the set-off of business losses. The Tribunal dismissed the legal grounds challenging the reopening of the case and upheld the validity of the assessment order. The appeal was thus partly allowed, with directions to the AO to re-compute the assessee's income in terms of the Tribunal's order.
|
