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TMI Blog2021 (3) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosed comes into his possession which tends to expose the untruthfulness of those facts. In that case, the ITO was held to have rightly initiated the reassessment proceedings on the basis of subsequent information, which was specific, relevant and reliable. As such, we do not find any infirmity in the initiation of reassessment proceedings in the facts of the case under consideration. That apart, the assessee has also challenged that the ld. Addl. CIT erred in according approval to the reasons recorded by the AO for reassessment. In view of the elaborate discussion above about the factual panorama prevailing in the extant case, we do not concur with the submission advanced by the assessee. Any person properly instructed in law, would not hesitate, even once, in according his imprimatur to proposal for re-assessment in the facts of the case as are obtaining herein. We, therefore, uphold the impugned order and dismiss the grounds raised by the assessee. Addition u/s.68 of the Act on account of share capital and share premium - Section 68 requires making of an addition when the identity of the creditor, his capacity or genuineness of the transaction are not proved. Here is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith no option but to dispose of the appeal ex parte qua the assessee, on merits. 3. The first issue raised in this appeal through ground nos. 1 and 2 is against the initiation of re-assessment proceedings. Briefly stated, the facts of the case are that the AO initiated re-assessment proceedings with the following remarks as reproduced on pages 2 and 3 of the assessment order: The Income Tax Department have carried out enquiries and investigated in this case, wherein the DCIT Cir-1, Jalgaon after obtaining prior approval of the Commissioner of Income Tax-2, Nashik have issued letters u/s.133(6) to the investors which are 15 in Nos and postal remarks are as under : S. No. Name of the person making investment Date of issue of 133(6) letters Remarks 1 Nico Securities Pvt. Ltd., Jogeshwari (W), Mumbai 21/11/2013 Return back Left 2 Doldrem Investment Finance Pvt. Ltd. Dahisar (E), Mumbai 21/11/2013 Refused 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntroduce non income tax paid money of the beneficiary company, i.e. Gopal Extrusions (P) Ltd., Jalgaon. In view of the facts mentioned above, there is evidence to show that there is an escapement of income to the tune of ₹ 6,98,41,500/- within the meaning of section 147(c) of the Income Tax Act, 1961 for the A.Y. 2008-09. Since the assessment for the A.Y. 2008-09 exceeds four years and there is no assessment u/s.143(3) completed, sanction for issue of notice u/s.148 of the Income Tax Act, 1961 of the Hon ble Addl. Commissioner of Income Tax, Range-1, Jalgaon for reopening of proceedings u/s.151 of the I T Act, 1961 for the A.Y. 2008-09 by issue of notice u/s.148 is requested. Hence, the proposal. 4. In response to the notice, the assessee requested that the return originally filed on 21-11-2008 may be treated as a return filed in response to the notice u/s 148 of the Act. Simultaneously, the assessee also requested for supplying the certified copy of reasons recorded for the reopening. Such reasons were supplied to the assessee. The assessee raised objections. The objections were disposed of and thereafter the reassessment was taken up. The assessee remained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO is within the realm of subjective satisfaction. 7. At this stage, it would be apt to take note of the judgment of the Hon ble Supreme Court in Phoolchand Bajrang Lal and Anr vs. ITO and Anr (1993) 203 ITR 456 (SC), in which the AO s jurisdiction to initiate reassessment was challenged. Repelling the assessee s arguments, the Hon ble Supreme Court held that an ITO acquires jurisdiction to reopen assessment under s. 147(a) r/w s. 148 only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons which he must record, to believe that by reason of omission of failure on the part of the assessee to make a true and full disclosure of all material facts necessary for his assessment during the concluded assessment proceedings, any part of his income, profit or gains chargeable to income-tax has escaped assessment. He may start reassessment proceedings either because some fresh facts come to light which were not previously disclosed or some information with regard to the facts previously disclosed comes into his possession which tends to expose the untruthfulness of those facts. In that case, the ITO was held to have righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VC pipe and fitting in F.Y. 2006-07 . A further question was asked whether any dividend or any return on the investments was given by the assessee to these so called shareholder companies till date, the answer was again vague submitting that he did not remember exactly about it. 11. Section 68 requires making of an addition when the identity of the creditor, his capacity or genuineness of the transaction are not proved. Here is a case in which though the identity is proved because of the alleged shareholders being companies, but the genuineness of the transactions is wanting. In the absence of any business activity of a company, which was closed since 2007, we fail to appreciate as to how all the corporate investors coming exclusively from Mumbai and Kolkata would join and invest in the shares of such a company, and that too at a premium of 300% of the face value, which had no running business and further there were no returns on such investment. None of the alleged investors responded to the AO s notices u/s.133(6) except one company which also denied to have any transaction with the assessee company. It is further worth mentioning that no correspondence took place between the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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