9911796707
TMI Blog2002 (12) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee states that the Assessing Officer does not have any relevant material in his possession for initiating action under section 148. The reasons recorded by him reflect that it was done merely on the basis of suspicion and pretence. There was no material with him to hold that the income has escaped assessment. The case of Trimurty Buildcon Pvt. Ltd. was before him for the assessment year 1996-97 while the assessee's case is for the assessment year 1993-94. M/s. Trimurty Buildcon Pvt. Ltd. which was made basis of initiation of proceedings under section 148 was not even in existence in the relevant year under appeal. There is also no material to hold that M/s. Trimurty Buildcon Pvt. Ltd. has any connection with the assessee. Any and ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to the escapement of income of the assessee. Reliance has been placed on the decision of Apex Court in the case of Ganga Saran & Sons (P.) Ltd. v. ITO [1981] 130 ITR 1 1. Reliance has also been placed of the following judgments and written submissions have been filed and placed on record : Chhugamal Rajpal v. S.P. Chaliha [1971] 79 ITR 603 (SC) CIT v. Smt. P.K. Noorjahan [1999] 237 ITR 570 (SC) CIT v. Bharat Engg. & Construction Co. [1987] 83 ITR 187 (SC) 3. On the other hand, the ld. D.R. vehemently relied upon the decision of the authorities below. She contends that it is wrong to suggest by the ld. A.R. that there are no reasons. The reasons were recorded and placed at assessee's Paper Book page 47. This was done prior to issuanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the reasons, he did not have any material or information with respect to any of the parties. Therefore, there was no escapement of income nor any reasons to believe the escapement and the notice so issued needs to be quashed. 5. Parties have been heard with reference to material on record and precedence relied upon by them. The reasons recorded by the Assessing Officer are reproduced as under:-- The assessee-company has been incorporated on 20-10-1992. It has filed its return of income for the first time for the assessment year 1994-95. For assessment year 1993-94, no return of income has been filed by the assessee-company. For the previous year, relevant to assessment year 1993-94, the assessee has issued shares for Rs. 20,99,700 ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 68 of I.T. Act, 1961 in the hands of M/s. Tirmurti Buildcon Pvt. Ltd. 7. On the similar analogy and facts, it was noticed that in the case of M/s. Umrao Construction Pvt. Ltd., the assessee before us has introduced share application of Rs. 20,99,700 and unsecured loans are shown to have been received for Rs. 18,05,000 in the accounting period relevant to assessment year 1993-94. In view of facts as decided in the case of M/s. Trimurti Buildcon Pvt. Ltd. it was observed by the Assessing Officer that the share application money introduced and loans received are not genuine in the hands of the appellant company for entertaining the belief that his income has escaped assessment for the assessment year 1993-94 for which no return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 M/s. Rakesh Kumar Rs. 50,000.00 Miscellaneous Expenses : Preliminary Expenses Rs. 22,960.00 The assets of the company were represented by share capital, unsecured loans and current liabilities on account of fee payable to the auditors. 9. The Assessing Officer observed that the assessee is a group case and by considering the similar analogy and facts as decided in the case of M/s. Trimurty Buildcon Pvt. Ltd. that the share application money introduced and loan received by the assessee M/s. Umrao Construction (P.) Ltd. are not genuine and as such its income has escaped for the assessment year 1993-94 for which no returns were filed. 10. The Assessing Officer does not appear to have brought any material on record to say that the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od faith. The entirety of the facts and evaluation of reasons recoded reveal that there could not be any prima facie satisfaction of the Assessing Officer for coming to conclusion that there has been escapement of income by the appellant more particularly when the appellant had not started any business operation even in the succeeding year i.e., assessment 1994-95 and whole of the expenses incurred were treated as capital work in progress. The share capital or deposits raised are found to have gone to finance capital assets to a larger extent. There could have been no scope of earning any real income by the assessee. Whether a cash credit could be brought to tax under section 68 or not is a matter of discretion vested in Assessing Officer a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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