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TMI Blog2017 (12) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the reopening and consequent reassessment, not being in accordance with the statutory conditions prescribed under Section 147 read with Section 148 of the Act is bad in law. 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention that the assessment order passed by the AO in the absence of notice under section 143(2) is bad in law. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of ₹ 13,00,000/- on account of unexplained cash credit. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in ignoring the contention of the appellant that the addition of ₹ 5,00,000/- on account of share capital received from Thar Steel Pvt. Ltd. is not legally sustainable during the year under consideration as this amount was not received during the year. 6. On the facts and circumstances of the case, the learned CIT(A) has erred both V on facts and in law in confirmi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olous ground. It was further submitted that as per the provisions of Section 147 of the Act, the satisfaction has to be that of the AO, not of anyone else and that the AO cannot blindly issue a notice u/s 148 of the Act simply on any information available. It was stated that the amount received from all the three parties on account of share application money received had been clearly shown by the assessee in the computation of income filed alongwith return of income. Therefore, there was no reason to form an opinion that a sum of ₹ 13,00,000/- had escaped assessment. It was contended that in the reasons recorded, there was no reference to any statement or any evidence on the basis of which a satisfaction had been reached by the AO. Therefore, the reopening of the assessment merely on the basis of doubt was unjustified and legally untenable. The reliance was placed on the following case laws: * ITO Vs Lakhmani Mewal Das 103 ITR 437 (SC) * ITO Vs Dwarka Dass & Bros. 131 ITR 571 (Del.) * United Electrical Company Pvt. Ltd. Vs CIT & Ors. 258 ITR 317 (Del.) * IAC Vs Nasik Eggs. Enterprises 42 ITD 105 (Pune) * Raja Bahadur Motilal Pvt. Ltd. Vs K.R. Vishwanathan, ITO & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by stating that the said transactions were done with the bogus companies which was a mere belief as the AO never put on the record any evidence supporting his contention. It was also pointed out that the AO issued notices to the parties u/s 133(6) of the Act which were duly replied by them and that the assessee had produced the following details with regard to every transaction related to the share capital/application money: "a) PAN details b) Certificate of incorporation c) Copy of Memorandum and Articles of Association d) Audited Balance sheet & profit and Loss A/c e) Copy of Share Application Form f) Copy of Compliance Certificate from C.S." 8. It was contended that the assessee had discharged primary onus to prove the identity, genuineness and creditworthiness of the share applicant. Therefore, no addition could have been made on the basis of material collected at the back of the assessee. The reliance was placed on the following case laws: * CIT Vs Lovely Exports Pvt. Ltd. (2008) 216 CTR 195 (SC) * CIT Vs Steller Investment Ltd. (2001) 251 ITR 263 (SC) * CIT Vs Sophia Finance Ltd. (1993) 205 ITR 98 (Del.) * CIT Vs Achal Investments Ltd. (2004) 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Pr. CIT Vs Meenakshi Overseas Pvt. Ltd. (2017) 395 ITR 677 * Pr. CIT Vs RMG Polyvinyl (I) Ltd. (2017) 396 ITR 5 * Pr. CIT Vs G & G Pharma India Ltd. (2016) 384 ITR 147 (Del.) * Sabharwal Properties Industries Pvt. Ltd. Vs ITO (2016) 382 ITR 547 (Del.) * CIT Vs Independent Media Pvt. Ltd. in ITA No. 108/2015 order dated 19.11.2015 * ITO Vs Navodaya Castles Pvt. Ltd. in ITA No. 4613/Del/2010 order dated 24.08.2016 * Pr. CIT Vs G & G Pharma Ltd. 384 ITR 147 (Del.) 11. In his rival submissions, the ld. DR strongly supported the orders passed by the authorities below and reiterated the observations made therein. 12. I have considered the submissions of both the parties and perused the material available on the record. In the present case, it is not in dispute that the AO reopened the assessment only on the basis of information received from the Investigation Wing i.e. from the Addl. DIT, (Investigation)-IV, Jhandewalen Extension, New Delhi. In the present case, the AO had the reason for belief that the income had escaped assessment only on the basis of information received from the Investigation Wing and did not apply his own mind. 13. On a similar issue the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to be a "known entry operator" were not mentioned. The source for all the conclusions was the investigation report. The tangible material which formed the basis for the belief that income had escaped assessment must be evident from a reading of the reasons. The reasons failed to demonstrate the link between the tangible material and the formation of the reason to believe that income had escaped assessment. The Assessing Officer had not independently considered the tangible material which formed the basis for the reasons to believe that income had escaped assessment. No error had been committed by the Appellate Tribunal in concluding that the initiation of the reassessment proceedings under section 147/148 to reopen the assessments for the assessment year 2004-05, was not legal." 15. On a similar issue the Hon'ble Jurisdictional High Court in the case of Pr. CIT Vs RMG Polyvinyl (I) Ltd. (2017) 396 ITR 5 (supra) held as under: "That no link between the tangible material and the formation of the reasons to believe that income had escaped assessment, could be discerned. The information received from the Investigation Wing was not tangible material per se without a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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