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TMI Blog2008 (7) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in the first assessment and also in this assessment. (c) That the authorities below did not appreciate that the total of balance sheet had increased from Rs. 10,54,463 to Rs. 19,11,962 and the fresh borrowing from M/s V.K. Dua of Rs. 9,39,230 (accepted as proved) fully explained it (12,39,230 -3,00,000). (d) That the learned CIT(A) erred in not appreciating the submissions dt. 23rd June, 2003 in which the investment in share application money as on 31st March, 1995 was linked to refund of previous share application money made out of borrowings from V.K. Dua Co. (Rs. 9,00,000), opening balance of share application money (Rs. 3,00,000), and realization from sundry debtors and further erred in ignoring that there was no cash deposit in the account in SBI from which cheques were issued towards share application. 2. At the outset of the appellate proceedings before us, learned Authorised Representative for the assessee did not press ground No. 1(a) of the appeal and accordingly, the same is rejected as not pressed. 3. In brief the relevant facts leading to the filing of the appeal before the Tribunal by the assessee are that original assessment under s. 143(3) of the IT Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unexplained money and investment. 6. Aggrieved, the assessee filed an appeal and on considering the submissions of the assessee and the order of the AO, the CIT(A) observed that the sources of depositing the share application money were not explained by the assessee before the AO and for the first time the matter was examined when the CIT(A) was deciding the appeal for the following year while examination of the papers produced by the assessee before the CIT(A). The CIT(A) decided that the unexplained addition should have been made a year earlier than in the year in which the appeal had been filed. The CIT(A), thereafter, observed that in the instant case the action of the AO was based on the findings of the CIT(A), hence, the reopening of the assessment was clearly covered by the provisions of s. 150(1) and not under s. 150(2) of the Act. Therefore, the case law cited by the assessee, K.M. Sharma vs. ITO (2002) 174 CTR (SC) 210 : (2002) 254 ITR 772 (SC), to support that the case was covered by s. 150(2) and not under s. 150(1) of the Act was not applicable. Regarding the arguments that the AO has erred in not appreciating and accepting the fact that the total of the balance she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank transfer'. The learned Authorised Representative has stated that there is no difference between clearing and bank transfer, and since both are different from cash, all such entries are to be treated as unexplained entries. In my opinion, it is possible to deposit cash in one bank account, issue a cheque on this account and deposit this cheque in another bank account. Such deposits would show up as 'clearing' or 'b.t.' in the other bank account, depending on whether the first bank account was in a different bank or in the same bank. Therefore, a credit in a bank account cannot be treated as explained merely because it is described as a 'clearing' or a 'b.t.' entry. There cannot be such a simple explanation to the question whether the appellant's huge investments in share were explained by the loan taken from V.K. Dua Co. A clear link between the loan and the deposits in the bank account needs to be established with evidence. No such evidence is forthcoming. On the facts as analyzed above, I have no reason to differ from my predecessor's finding of fact that the share applications were made out of unexplained deposits." 7. The CIT(A), thereafter, upholding the order of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before 31st March, 2000 and, therefore, the order passed under s. 150(1) of the Act should also have been passed by the CIT(A) before 31st March, 2000, whereas, in the instant case the CIT(A) while disposing of the appeal for asst. yr. 1996-97 passed the order on 21st Nov., 2001 so despite the findings/directions of CIT(A), the AO was precluded from reopening the assessment by issuing notice under s. 148 of the Act in view of the bar created under s. 150(2) of the Act. In support thereof, learned Authorised Representative for the assessee relied upon Smt. Saroj Gupta vs. ITO (2007) 106 TTJ (Del) 1073; Smt. Neelam Gupta vs. ITO (2007) 110 TTJ (Lucknow) 714 and Col. Sir Harinder Singh Brar vs. ITO (2006) 202 CTR (P H) 536 : (2006) 282 ITR 371 (P H). 10. On the other hand, learned Departmental Representative for the Revenue placed reliance on the reasoning given in the order of the CIT(A). 11. We have considered the oral arguments put forth by both the parties as well as the written submissions filed by the learned Authorised Representative for the assessee and also gone through the relevant case law cited by both the parties. 12. In the instant case, the undisputed facts are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time-barred keeping in view only the provisions of s. 149(1). However, as per provisions of s. 150(1) of the Act, the notice could be issued even after the expiry of four years from the end of the assessment year i.e. after 31st March, 2000 in case the CIT(A) while considering deletion of the addition made by the AO for asst. yr. 1996-97 had given a specific finding or issued a specific direction to the AO to make the addition in asst. yr. 1995-96 and the AO, on the basis of the finding or direction issued under s. 150(1) of the Act by the CIT(A), reopens the assessment for asst. yr. 1995-96 by issuing a notice under s. 148 of the Act. It means that this s. 150(1) has been enacted to give power to the AO to issue a notice under s. 148 at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by the CIT(A) or any other Court in any proceeding before it. It further means that resort to s. 150(1) can be taken only in cases where it becomes necessary to make assessment or reassessment or recomputation in consequence of, or to give effect to, any finding or direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so the same is invalid and without jurisdiction. Hence, reopening the assessment and the reassessment framed is invalid and illegal and accordingly the same is liable to be cancelled/quashed. 17. On examining the order of the CIT(A) passed for asst. yr. 1996-97 while considering the deletion of addition of Rs. 13,15,000, we find that the CIT(A) simply observed that he was of the view that the addition of Rs. 13,15,000 should have been made in the asst. yr. 1995-96 and it could not be made in the assessment year under consideration. Even if we consider this as a finding of CIT(A) under s. 150(1) the assessment for asst. yr. 1995-96 could not be validly reopened because on the date of passing of the assessment order on 21st Nov., 2001 under s. 143(3) for asst. yr. 1995-96 the period of 4 years has already elapsed from the end of asst. yr. 1995-96 and as pointed out there was no failure on the part of the assessee in filing truly and fully all material facts relevant for the assessment. Thus, it can be said that if the reopening of the assessment in respect of the particular assessment year (i.e. 1995-96 in the instant case) became time-barred at the time of original assessment from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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