9911796707
TMI Blog2017 (10) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... g the Chartered accountant of EGL, as well as in the backdrop of the disclaimer forming part of his certificate, thus does not inspire much confidence and cannot be accepted without making necessary verifications of the facts mentioned therein. We are also not impressed by the contention of the ld. A.R that the CIT-5, Mumbai while transferring the case records of the assessee to the CIT-8, Mumbai, had in his letter dated 13.08.2014 advised that as no adverse report was received from the Mauritius Revenue Authority, therefore, there was no requirement of reopening the case of the assessee for the year under consideration and the preceding years. As per the mandate of Sec. 263, the requirement contemplated under the said statutory provision is the satisfaction of the CIT in whose revisional jurisdiction the case of the assessee falls, therefore, the view or advise of the CIT-5, Mumbai, who was rendered functus officio as regards the case of the assessee, thus in the present case was not binding on the CIT-8, Mumbai, to whom the case of the assessee was transferred. We thus are of the considered view that the advice of the CIT-5, Mumbai did not have any bearing on the assumption of ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 263 of the Act and setting aside the order passed under Section 143(3) read with Section 147 of the Act. 2. The learned CIT erred in holding that the assessment order dated 28 March 2013 (erroneously mentioned by the learned CIT as 29 November 2012) is erroneous and prejudicial to the interest of the revenue in so far as the genuineness of the source of share application money credited in the books of accounts is concerned. 3. The learned CIT failed to appreciate that Section 68 of the Act has no application to facts of the case at hand. 4. The learned CIT erred in holding that ingredients of Section 68 of the Act remained unproved in the facts and circumstances of the case. 5. The learned CIT erred in holding that the assessment order was passed in a summary manner without considering the relevant aspects, details, making proper enquires and without any application of mind. The Appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal. The appellant prays that appropriate relief be granted based on the said grounds of appeal and the facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at though the assessee had increased its Reserves and Surplus during the year under consideration by an amount of 179,79,71,200/-, however, no evidence was filed on record which could enable the A.O to establish the identity, genuineness and creditworthiness of the transaction with reference to the increase in the Reserves and Surplus during the year under consideration. It was further gathered by the A.O that though the assessee had during the year under consideration increased its Current liabilities from ₹ 42,40,78,321/- to ₹ 264,42,29,879/-, however, the assessee had failed to come forth with a full and true disclosure in respect of the nature, mode and source of the current liabilities amounting to ₹ 264,42,29,879/-. The A.O inter alia for the said reasons, holding a bonafide belief that the income of the assessee chargeable to tax had escaped assessment, therefore, reopened the its case under Sec. 147 of the 'Act'. 4. That a perusal of the 'reasons to believe' recorded by the A.O for reopening the case of the assessee revealed that as a result of the investigations in the 2G scam, information was shared with the office of the A.O that the transactions invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Court monitored investigation, in or about August 2011, the CIT-V, Mumbai had received a secret/confidential communication containing factual report from the Directorate of Income-Tax investigations, New Delhi, on the basis of investigations carried out by the said directorate, naming the petitioner as being involved in the transactions having tax implications, which were required to be verified by the assessing officers by carrying out further verifications/ investigations by initiating necessary action, as deemed fit under the Income Tax Act. It was thus stated by the A.O that in the background of the aforesaid development and information obtained there from, and in order to assist in the Hon'ble Supreme Court monitored investigations, a Notice u/s 148 was issued to the assessee. 6. Be that as it may, the primary issue for reopening of the case of the assessee was to deliberate on the nature, mode and source of the amount involved in the transaction of ₹ 700 crores between the assessee and Loop Telecom Limited, in respect of which there was a failure on the part of the assessee to come forth with a full and true disclosure of all the material facts having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Limited in order to secure a business deal entered into with the said company for providing passive Infrastructure facility and maintenance services in all the 21 circles allotted to it. The A.O while enquiring into the source of the Share application money, as per the information provided by the assessee, resorted to getting the same verified by making a reference to the Mauritius Revenue Authorities through the Foreign Tax and Tax Research (for short 'FT & TR') division of the CBDT, under the provisions of the relevant Articles dealing with "Exchange of Information" of the Double Taxation Avoidance Agreement (DTAA) entered into between the said countries, i.e Mauritius and India. The A.O further referred to the flow of inter company funds which were received by the assessee and advanced to Loop Telecom Ltd., as under: ECHL, Mauritius ETLPL(Assessee) LTL Cr. Dr. (Paid to LTL) 10.01.2008 Recd. ₹ 392.49 Crores Rs.392.5 Crores Paid 11.01.2008 Recd. ₹ 333.63 Crores Rs.307.5 Crores 8. That it was observed by the A.O that though the assessee had claimed to have received a sum of ₹ 726.12 crores from Essar Communications Holding Limited, Mauritius (for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extent the same survives and had been assailed before us, pertains to the transaction involving verification of the source of payment of an amount of ₹ 700 crores by the assessee to Loop Telecom Limited, was on the following grounds: (i) The amount of ₹ 726 crores which was claimed by the assessee company to have been received as share application money from ECHL was not disclosed by the assessee in the relevant part of the balance sheet explaining the source of funds. (ii) That as it was the claim of the assessee before the A.O, that an amount of ₹ 726 crores was received from ECHL, a Mauritius based company, on account of share application money, therefore, the A.O in order to verify the international money trail and the source of money, had thus in the course of the reassessment proceedings made a reference vide letter dated 22.11.2012 to the Jt. Secretary, FT&TR Division, CBDT, New Delhi, requesting that the information may be obtained from the authorities in Mauritius under the specific articles dealing with 'Exchange of Information' in the respective "Double Taxation Avoidance Agreement" between India and Mauritius. However, as the information was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee, nor the same could be gathered from the information received by the A.O from the Mauritius Revenue Authorities. There was also no evidence as to how the money was acquired by EGL. 10. Thus, on the basis of the aforesaid reasons the CIT held a strong conviction that the action of the A.O in treating the sources of money claimed by the assessee to have been received from ECHL as properly explained while passing the reassessment order, was backed up absence of any evidence about the source and capacity of the persons giving the money and the genuineness of the transaction. The CIT further observed that as the money credited in the books of account of the assessee and the capacity of the persons giving the money and genuineness of the transaction were neither verified by the A.O nor proved to his satisfaction, therefore, the order of the A.O was not only erroneous but also prejudicial to the interest of the revenue. 11. The assessee in its reply to the 'SCN', submitted before the CIT that the A.O had during the course of the reassessment proceedings called for all the relevant details in respect of the share application money received by the assessee, deliberated on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the facts borne from the record, however, did not find favour with the same and concluded that the reassessment order passed by the A.O under Sec. 143(3) r.w.s 147, dated. 28.03.2013 was erroneous and prejudicial to the interest of the revenue, on the following grounds: (i) That the original assessment which was earlier completed by the A.O vide order passed by him under Sec. 143(3), dated. 29.12.2010, was reopened under Sec. 147, primarily for the reason that the information received from the DGIT(Inv),New Delhi, revealed that the source of investments made by the assessee by way of advances given to Loop Telecom Limited was not properly examined/verified by the A.O while framing the assessment. Thus, as the primary issue which had weighed in the mind of the A.O while reopening the concluded assessment of the assessee was to verify the source of the amount of ₹ 700 crores advanced to Loop Telecom Limited, which as claimed by the assessee was from the amount of the share application money of ₹ 726 crores (USD 185 million) received by it from ECHL, a Mauritius based company, therefore, the A.O in order to verify the international money trail and source of money made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same had remained unverified and not subject to any enquiry by him while passing the reassessment order. It was further observed by the Principal CIT that the Authorised representative for the assessee had during the course of the revision proceedings categorically admitted before him that neither the A.O had during the course of the reassessment proceedings raised any specific queries as regards the alleged funds received from EGL, nor any such details were furnished by the assessee on its own with the A.O. The Principal CIT observed that it was for the very first time during the course of the revision proceedings before him, that the assessee had vide its letter dated 15.12.2015 placed on record a copy of the letter dated. 12.11.2014 received from ECHL, wherein the latter had confirmed the investment of USD 185 million towards subscription of shares of the assessee alongwith the source of the funds of such investment. The assessee again for the very first time during the course of the revision proceedings before the Principal CIT, had therein placed on his record another letter dated. 12.11.2014 received by ECHL from EGL, alongwith a certificate dated 11.11.2014 issued by Maz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing heard to the assessee. 16. Aggrieved, the assessee had assailed the order passed by the Principal CIT under Sec. 263 of the 'Act', before us. The Authorised representative (for short 'A.R') for the assessee Sh. Porus F. Kaka, the ld. Senior Counsel, took us through the 'SCN', dated. 09.09.2014 that was issued by the Principal CIT. The ld. A.R taking us through Page No. 3 of the 'SCN', submitted that out of the amounts mentioned, it was only the disbursement made on 09.01.2008 towards investment in equity shares of USD 70,409,257 (out of the remitted amount of 100,000,000) which pertained to the year under consideration, while for all the other amounts were not relatable to the year under consideration. The ld. A.R submitted that the Principal CIT had initiated the revision proceedings under Sec. 263 to look into the sources of the source of the entity from whom the share application money was received by the assessee. The ld. A.R submitted that the A.O had during the course of the reassessment proceedings called for all the relevant details in respect of the share application money received by the assessee, and only after deliberating at length on the same to his satisfaction, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details from the Mauritius Tax Authorities (including letter dated 22.11.2012 and reminder dated. 05.03.2013); (ii). the letter written by FTD to Mauritius Tax Authorities; and (iii). the letter written by the FTD to the A.O with respect to the response received from the Mauritius Tax Authorities, alongwith the date of receipt of the same by the A.O were however not made available. The ld. A.R further drew our attention to the copy of the resolutions each dated. 28.05.2008 pertaining to the allotment of 10000000 equity shares and 45500000 equity shares of ₹ 10/- each by the assessee company to Essar Communication Holding Ltd (ECHL), at a premium of ₹ 90/- per share. The ld. A.R further took us through the copy of the letter dated. 18.03.2013 which was received by the Joint Secretary (FT & TR-II) and Competent Authority, Foreign Tax & Tax Research Division, New Delhi, from the Mauritius Revenue Authority. The ld. A.R drew our attention to Page 2 of the aforesaid letter (Page 98 of 'APB'), which revealed that the source of funds received by the assessee company was the share application money received from the parent company, viz. EGL, and in lieu of the said remittance b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground that there was failure on the part of the assessee to fully and truly disclose all the material facts in respect of the nature, mode and source of the amount of ₹ 700 crores which was advanced by the assessee to Loop Telecom Limited. In the backdrop of the aforesaid facts, it was averred by the ld. A.R that the revision proceedings had been embarked upon by the Principal CIT on the ground that the A.O had failed to verify the source of the share application money of ₹ 726 crores received from ECHL (i.e the amount out of which ₹ 700 crores was paid to Loop Telecom Limited). It was submitted by the ld. A.R that it was beyond comprehension that now when the concluded assessment was reopened for verifying the nature, mode and source of the share application money received by the assessee (from which amount of ₹ 700 crores was given to Loop Telecom Limited), how could the very issue which formed the foundation of such proceedings would have escaped attention and not deliberated upon by the A.O during the course of the reassessment proceedings. It was the case of the ld. A.R that not only the very basis for initiating the revision proceedings by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is a letter addressed by the CIT-5, Mumbai to the CIT-8, Mumbai, while transferring the assessment folder of the assessee to the latters office. That in the aforesaid letter it was stated by the CIT-5, Mumbai that a perusal of the report received from Mauritius Revenue Authority revealed that there was no adverse report in respect of receipt of share application money by the assessee from ECHL, the source of which was the amounts received from EGL. The ld. A.R drew our attention to the observation of the CIT-5, Mumbai, wherein the latter had advised the CIT-8, Mumbai, that in the absence of any adverse report from the Mauritius Revenue Authority, there was no necessity of making addition in the year under consideration or reopening of the case of the assessee for the earlier years. The ld. A.R in the backdrop of the aforesaid facts vehemently submitted that the validity of the revision proceedings could be gathered from the fact that the revenue in itself was satisfied that the source of the share application money received by the assessee was found to be well in order, and in the absence of an adverse report, no proceedings for the year under consideration were called for in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. A.R in order to fortify his contention that the first proviso of Sec. 68 is to be given a prospective effect, relied on the judgment of the Hon'ble High Court of Bombay in the case of CIT-1 v. M/s Gagandeep Infrastructure Pvt. Ltd. (ITA No. 1613 of 2014; dated. 20.03.2017) (Bom), wherein the Hon'ble High Court had observed that the proviso of Sec. 68 which was introduced vide the Finance Act, 2012 w.e.f 1st April, 2013, would be effective only from the Assessment Year 2013-14 onwards. Alternatively, the ld. A.R further submitted that the said first proviso would only be applicable where the person in whose name such credit is recorded in the books of account of the assessee company is a 'resident'. Thus, it was submitted by the ld. A.R that for both of the aforesaid reasons the first proviso would not be applicable in the case of the assessee company. The ld. A.R putting to rest any scope of revision by the Principal CIT, on the ground that the A.O had failed to apply the first proviso of Sec. 68, further submitted that even if for a moment it was assumed (not admitted) that the first proviso of Sec. 68 was to be applied retrospectively, even then, as the same was made available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led enquiries in respect of certain cash credits appearing in the books of account of the assessee, took a view that the assessee had duly proved the identity, source and creditworthiness of the parties and accepted the genuineness of the transaction, the CIT without indicating any doubt as regards the genuineness of the evidence produced by the assessee could not revise the order in exercise of his revisional jurisdiction under Sec. 263. The ld. A.R further taking support of the aforesaid judicial pronouncement, submitted that if during the course of the assessment proceedings queries were raised by the A.O and the assessee responded to the same, then even if an assessment order does not mention the same, it would not mean that the A.O had not applied his mind to the issues. In the backdrop of the aforesaid facts, it was thus averred by the ld. A.R that even a non-speaking order passed by an A.O cannot form the basis for revision under Sec. 263. The ld. A.R placed heavy reliance on the judgment of the Hon'ble jurisdictional High Court in the case of Nirav Modi (supra),to support his contention that now when in the present case the A.O in the course of the reassessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been recorded by the Principal CIT, which contradicts the information provided by the assessee or the Mauritius Revenue Authorities. (v) That the first proviso of Sec. 68 which had been made available on the statute vide the Finance act, 2012, with prospective effect from 01.04.2013, was not applicable to the case of the assessee for three reasons, viz. (i). the proviso which was applicable prospectively w.e.f 01.04.2013, thus, would not apply to the case of the assessee; (ii). the proviso was applicable only where the person in whose name such credit is recorded in the books of the company is a 'resident', thus, on the said count also was not applicable to the case of the assessee as the share subscriber, viz. ECHL was a resident of Mauritus ;and (iii). that even if the proviso was to be given retrospective applicability, the reassessment order passed by the A.O on 28.03.2013 could not be revised for not invoking of the proviso by the A.O, as the same was not available on the statute at the time when the reassessment order was passed. 23. Per contra, the ld. Departmental representative (for short 'D.R') submitted that as the report from the Mauritius Revenue Authority which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed by the A.O under Sec. 147 r.w.s 143(3) on 29.12.2010 was erroneous and prejudicial to the interest of the revenue, had thus rightly revised the order in exercise of the powers vested with him under Sec. 263. 25. We shall now advert to and deal with the multiple objections that had been raised by the ld. A.R before us while assailing the validity of the order of revision passed by the Principal CIT under Sec. 263, as under:- (i) The ld A.R had at the very outset submitted before us that the concluded original assessment of the assessee, which was framed by the A.O vide his order passed under Sec. 143(3), dated. 29.12.2010, was reopened on the ground that there was failure on the part of the assessee to fully and truly disclose all the material facts in respect of the nature, mode and source of the amount of ₹ 700 crores which was advanced by the assessee to Loop Telecom Limited. In the backdrop of the aforesaid facts, it was averred by the ld. A.R that the revision proceedings had been embarked upon by the Principal CIT on the very same ground that the A.O while passing the reassessment order had failed to make verifications as regards the claim of the assessee tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the deliberation of the facts by us herein below, it emerges that the reassessment order passed by the A.O is erroneous and prejudicial to the interest of the revenue. (ii) The ld. A.R had further averred before us that the first proviso of Sec. 68 which was made available on the statute vide the Finance act, 2012, with prospective effect from 01.04.2013, was not applicable to the case of the assessee for three reasons, viz. (i). the proviso which was applicable prospectively w.e.f 01.01.04.2013, thus, would not apply to the case of the assessee; (ii). the proviso was applicable only where the person in whose name such credit is recorded in the books of the company is a 'resident', thus, on the said count also was not applicable to the case of the assessee as the share subscriber in its case, viz. ECHL from whom share application money was claimed by the assessee to have been received was a resident of Mauritus; and (iii). that even if the proviso was to be given retrospective applicability, the reassessment order passed by the A.O on 28.03.2013 could not be revised for not invoking of the proviso by the A.O, as the same was not available on the statute at the time when the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scharge the onus as stood cast upon it under Sec. 68. We have given a thoughtful consideration to the contention of the ld. A.R as regards the non-applicability of the first proviso of Sec. 68 to its case, and being of the considered view that as the same does not emerge from the order of lower authorities, therefore, our indulgence for adjudicating the same does not arise. We thus decline to admit the aforesaid contention of the ld. A.R (iii) The ld. A.R had further submitted before us that as per the settled position of law, in a case where share application money is received by a company from alleged bogus shareholders, who had been identified, there the department though remains well within its jurisdiction to reopen the individual assessments of such shareholders in accordance with law, but, the amount of the share application money cannot be regarded as the undisclosed income of the company. The ld. A.R in order to buttress his aforesaid contention had relied on the judgments of the Hon'ble Supreme Court in the case of CIT v. Lovely Exports (P) Ltd. [2008] 216 CTR (SC) 195and CIT v. Stellar Investment Ltd. [2001] 251 ITR 263 (SC), as well as the judgment of the Hon'ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly confined for adjudicating the validity of the order of revision passed by the Principal CIT under Sec. 263. We are afraid that the contention of the ld. A.R that the amount of the share application money received by the assessee company in light of the aforesaid settled position of law could not be assessed as the undisclosed income of the assessee company, is absolutely premature. That as observed by us hereinabove, we are confined to adjudication of the validity of the order of revision passed under Sec. 263 by the Principal CIT, which had been assailed before us. We are of the considered view that the aforesaid contention raised by the ld. A.R before us, does not have any bearing on the adjudication of the validity of the order passed by the Principal CIT under Sec. 263. We are further of the view that the aforesaid contention so raised before us is seriously premature, and seeking an adjudication on the same by us, would be nothing short of putting the cart before the horse. We thus in the backdrop of our aforesaid observations, thus, refrain from entertaining the aforesaid contention raised by the ld. A.R before us. (iv) The ld. A.R had further submitted before us that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the reassessment proceedings, which were duly made available on his record by the assessee. We find that as claimed by the ld. A.R, the assessee had during the course of the reassessment proceedings furnished details of the shareholders (name, address and percentage holding), details of subscribers of the share capital, number of shares, amount of share capital, amount of securities premium, copies of the resolutions, each dated. 28.05.2008, pertaining to the allotment of 10000000 equity shares and 45500000 equity shares of ₹ 10/- each by the assessee company to Essar Communication Holding Ltd (ECHL) at a premium of ₹ 90/- per share etc. It was further submitted by the ld. A.R that details of the share application money received by the assessee from ECHL, a Mauritian company, alongwith the bank statement evidencing the identity of the share applicant, genuineness of the infusion of funds by way of share application money were also furnished to the satisfaction of the A.O. Thus, it was the contention of the ld. A.R that substantial documentary evidence to substantiate the nature and source of the amount of USD 185 million was furnished by the assessee to the satisfacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... categorically admitted before him that neither the A.O had during the course of the reassessment proceedings raised any specific queries as regards the alleged funds received from EGL, nor any such details were furnished by the assessee on its own to the A.O during the course of the said reassessment proceedings. We further find that the Principal CIT had in his order of revision observed that it was for the very first time during the course of the revision proceedings before him, that the assessee had vide its letter dated 15.12.2015 placed on record a copy of the letter dated. 12.11.2014 received from ECHL, wherein the latter had confirmed the investment of USD 185 million towards subscription of shares of the assessee alongwith the source of the funds of such investment. We further find that the assessee had again for the very first time during the course of the revision proceedings before the Principal CIT, placed on his record another letter dated. 12.11.2014 which was received by ECHL from EGL, alongwith a certificate dated 11.11.2014 issued by Mazars, Chartered Accountants, Mauritius, in respect of investment of USD 185 million by EGL in ECHL, alongwith the source of such fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions of the Principal CIT to the A.O to also make necessary verifications as regards the amounts received from EGL, which as observed by us hereinabove to the extent of USD 100 million happens to be the first or immediate source of the amount received by the assessee, therefore, cannot be faulted with. Be that as it may, in the backdrop of the aforesaid state of facts, we are not persuaded to accept the contention of the ld. A.R that the Principal Commissioner of Income-tax had embarked into verification of the sources of the source from which the amount of USD 185 million was received by the assessee. (v) We now advert to the core issue on the basis of which the Principal CIT had revised the reassessment order passed by the A.O under Sec. 147 r.w.s. 143(3), dated 28.03.2013. We find that the Principal CIT after deliberating on the facts of the case, held a conviction that the A.O had completed the assessment without considering the information which was called for by him from the Mauritius Tax Authorities. It was observed by the Principal CIT that the A.O had not made proper enquiries with regard to the preliminary or basic facts about the source of the share application money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Principal CIT observed that the information was received by the A.O only as on 28.03.2013, which was the date on which the A.O had passed the reassessment order under Sec. 143(3) r.w.s 147 of the 'Act'. We find that it was observed by the Principal CIT that as the A.O had passed the reassessment order without waiting for and examining the information received from the Mauritius Revenue Authorities, therefore, the failure on the part of the A.O to wait for, examine and verify the aforesaid information which was called for by the A.O himself, therefore, due to the non-verification of the nature and source of the amount of USD 185 million by the A.O, on the said count itself rendered the reassessment order passed by him as erroneous and prejudicial to the interest of the revenue. (vi) We further find that the Principal CIT, independent of the aforesaid fact of non-verification of the report received from the Mauritius Revenue Authorities by the A.O, observed, that even otherwise the information received from the Mauritius Revenue Authorities was neither complete, nor explained the source and creditworthiness of the persons giving the share application money. We find that on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, therefore, the same had remained unverified and not subject to any enquiry by him while passing the reassessment order. Thus, in the backdrop of his aforesaid observations, it was concluded by the Principal CIT that the non-verification and non application of mind by the A.O rendered the reassessment order passed by him under Sec. 147 r.w.s 143(3) as erroneous and prejudicial to the interest of the revenue. (vii) We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record. We have given a thoughtful consideration to the issue before us. We find that as observed by us hereinabove, the original assessment which was framed by the A.O vide his order passed under Sec. 143(3), dated. 29.12.2010, was reopened under Sec. 147 on the basis of information received from the DGIT(Inv),New Delhi, that the source of advances of ₹ 700 crores given by the assessee company to Loop Telecom Limited were not properly examined/verified by the A.O while framing the assessment. That as the primary issue which had weighed in the mind of the A.O while reopening the concluded assessment of the assessee was to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auritius "Double Taxation Avoidance Agreement", as regards the aforesaid claim of the assessee. We thus are of the considered view that the importance of the verification of the aforesaid claim of the assessee in respect of the source of the amount of USD 185 million, was well recognized by the A.O. We further find that as the necessary information was not forthcoming, therefore, the A.O who had triggered the seeking of the said information from the Mauritius Revenue Authorities, being well aware of the fact that the said information was indispensably required to facilitate verification of the aforesaid claim of the assessee, therefore, issued a reminder on 05.03.2013 for obtaining the information. Now, interestingly it can safely be gathered that the importance of the report from the Mauritius Revenue Authority for making necessary verifications as regards the claim of the assessee, remained as such from 22.11.2012 (i.e date of reference by A.O) till 05.03.2013 (filing of reminder by the A.O). The pressing on the part of the A.O as regards the report of the Mauritius Revenue Authority can be appreciated from the very fact that even as on 05.03.2013 the A.O required the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itius Revenue Authority, which was followed by a reminder from him, was however most surprisingly aborted without any rhyme and reason, therefore, it can safely and rather inescapably be concluded that he had absolutely failed to examine the report received from the Mauritius Revenue Authority and thus failed to examine the veracity of the aforesaid claim of the assessee as regards the source of the amount of USD 185 million. We are persuaded to be in agreement with the Principal CIT that the A.O while passing the reassessment order had summarily accepted the claim of the assessee as regards the source of the amount of USD 185 million without making any verification as regards the same, therefore, is clearly a case of non-application of mind by the A.O. That in the backdrop of the aforesaid facts, we are of the considered view that the proposition of law as laid down by the Hon'ble High Court of Bombay in the case of Commissioner of Income-tax, Central-III v. Nirav Modi [2016] 71 taxmann.com272 (Bombay), as had been relied upon by the assessee before us, is found to be distinguishable on facts, and thus would not assist the case of the assessee. We have further deliberated on the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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