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TMI Blog2021 (2) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT, D/R, appearing on behalf of the Revenue. ORDER Per J. Sudhakar Reddy, AM :- This appeal filed by the assessee is directed against the order of the Learned Pr. Commissioner of Income Tax (Appeals) 4, Kolkata, (hereinafter the ld. Pr. CIT ), passed u/s. 263 of the Income Tax Act, 1961 (the Act ), dt. 31/01/2020, for the Assessment Year 2012-13, wherein he set aside the order of the Assessing Officer passed u/s 263 r.w.s. 143(3) of the Act on 22/12/2017 for de novo assessment on the specified issue of addition u/s 68 of the Act of share capital received along with share premium. 2. The ld. Counsel for the assessee submitted that, the facts and circumstances of the case of this year are the same as that in the facts and circumstances of the assessee s own case for the Assessment Year 2013-14. He also submitted that the assessment order and the order passed u/s 263 of the Act, are identical and the grounds, reasons and basis of that order are the same and hence, the arguments taken by him in that case, may be considered as the arguments of the assessee in this case as well. The ld. D/R agreed with the contentions of the assessee that the facts etc., of bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iciously and that there were not enough enquiries made. This finding is factually incorrect. It is not the case of the ld. Pr. CIT that this is a case of no enquiry or a case where the Assessing Officer has not applied his mind. It is settled law that an assessment order passed u/s 143(3) of the Act, cannot be revised on the ground that, in the opinion of the ld. Pr. CIT, the enquiries were not adequate. The observations of the ld. Pr. CIT demonstrates that his grievance is that the conclusions drawn by the Assessing Officer based on the examination of evidence are different from the conclusions that might have been drawn by him had he been the Assessing Officer. This is no ground for making a revisions. The recordings of the ld. Pr. CIT that the Assessing Officer has not examined the justification of fixing of share premium or that has not examined or enquired into the authenticity of the transaction, and that he has not enquired the possibility of the transaction being sham and the activity being a case of laundering of unaccounted income etc., is against facts. In fact, the Assessing Officer has in detail described the enquiries made by him and his findings on such enquiries. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of assessee was completed in a very casual manner and hurried manner flouting all established procedures. The assessee had discharged its onus by furnishing/documents before the AO. Further, the First Ld. Pr. CIT mainly found fault with the AO s order for non-issuance of notice u/s. 133(6) of the Act to the shareholders. The First Ld. Pr. CIT found fault with the AO s order in not discussing the basis of evidence on which adverse inference was drawn against the assessee. Moreover, the First Ld. Pr. CIT found fault with the AO for not bothering to examine the contention of the assessee or to bring on record anything against the assessee and thus according to him, the AO with a pre-determined mind has simply jumped to the conclusion that the share capital collected by assessee as unexplained cash credit u/s. 68 of the Act. Therefore, according to the First Ld. Pr. CIT, the first original assessment order framed u/s. 143(3) of the Act dated 26-03-2015 was against the principle of natural justice and, therefore, he found it fit to order denovo assessment and gave specific direction in respect of share capital premium collected by assessee. 48. Thereafter, the ld. Pr. CIT wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yes 6. M/s. Shivashiv Pvt. Ltd. U74999WB2012PTC173749 AARCS0094C yes 7. M/s. Flowtop Agency Pvt. Ltd. U52190WB2012PTC173352 AABCF9036D yes 8. M/s. SukhSagar Residency Pvt. Ltd. U45400WB2011PTC170958 AARCS1553N yes 9. M/s. Kamaldhan Developers Pvt. Ltd. U45400WB2011PTC170944 AAECK6810D yes 10 M/s. LabhdhanImpex Pvt. . Ltd. U51909WB2011PTC171524 AACCL2111J yes 11 M/s. SubhsreeImpex Pvt. . Ltd. U51909WB2011PTC171513 AARCS1845D yes 12 M/s. Maharaja Merchants . Pvt. Ltd. U51109WB2005PTC102343 AAECM224E yes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate Affairs and the ITR Acknowledgments filed by them, will enable the AO to cross verify and collect details from the AO of the respective share applicants and independently from the Revenue s departmental data base. We note that all the share subscribing parties filed all the documents called for by the AO [PB-2] and were also examined by the AO along with audited accounts from which these details show their identity. 51. Thus, we note that the AO after verification as aforesaid, has not drawn any adverse opinion or doubted the identity of the share applicants which view of AO is a possible view in the light of the documents referred to and we also by applying the presumption in section 114 of Indian Evidence Act 1872, we presume that the quasi-judicial act of the second AO have been regularly performed. Coming to the contention of Ld. CIT, DR, that order sheet maintained by the Second AO does not reveal that AO had issued notice u/s. 133(6) of the Act to the share subscribers, we note that the AO in his reassessment/second assessment order has clearly asserted that he had issued notice u/s. 133(6) of the Act to all the share applicants as directed by the First Ld. Pr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name Source of investment Capital Reserves Sum invested in assessee s business M/s. K. R. Overseas Pvt. Ltd Page 8 Paper Book-2 Rs.66,77,47,921 (page 22 PB-2) Rs.1,30,000/- M/s. Kakrania Trading Pvt. Ltd Page 45 Paper Book-2 Rs.66,52,71,914 (page 62 PB-2) Rs.1,39,00,000/- M/s. AmbalaTrafinpvt. Ltd Page 88 Paper Book-2 Rs.624,711,003 (page 101 PB-2) Rs.4,40,00,000/- M/s. Subhiksha Pvt. Ltd Page 115 Paper Boo-2 Rs.222,397,317 (page 128 PB-2) Rs.45,00,000/- M/s. Shivarshi Construction Pvt. Ltd. Page 146 Paper Book-2 Rs.53,89,95,046 (page 153 PB-2) Rs.4,66,00,000/- M/s. Shivashiv Pvt. Ltd. Page 170 Paper Book-2 Rs.14,29,56,146 (page 178 PB-2) Rs.6,55,00,000/- M/s. Flowtop Agency Pvt. Ltd. Page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rials called for by the AO who accepted the same after verification is an act of enquiry. And we note that revenue has not brought on record any material to challenge the veracity of the documents referred to above. Moreover, the second Ld. Pr. CIT in his impugned order has not brought any material to rebut the presumption of second AO to justify his intervention u/s. 263 of the Act and which would have upset the decision of the second AO s factual view on the identity, creditworthiness and genuinity of the share transaction. In such a scenario, the second AO s view based on the documents referred to by him is a plausible view and in consonance with judicial precedents (supra) which we would like to discuss/ examine each share subscribers totaling thirteen (13) infra;- (i) On perusal of the paper book-2, it reveals that the documents are placed at page 12 to 37 of share applicant M/s. K.R. Overseas Pvt. Limited which is a Private Limited Company, and which has Permanent Account No. AACCK0101B and CIN U51109WB1994PTC061965 and its Net-worth as on 31.03.2012 (in total)- share capital reserve is to the tune of Rs.66,77,47,921/- (PB page 22) and the investment made in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the share applicant had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. (iii) We note from a perusal of the paper book-2 pages78 to 111, the details of share applicant M/s. Ambala Trafin Pvt. Ltd. It is a Private Limited Company which has a PAN AACCA1184G and its CIN number is U67120WB1995PTCO74397 and the Net worth of this company as on 31.3.2012 Rs.62,47,11,003- (PB-page101) and investment made in the assessee company is to the tune of Rs. 4,40,00,000/- and this share applicant has made the transaction through banking channel on 01.03.2012 Rs. 25 lakhs; and on 03.03.2012 Rs. 40 lakhs through NEFT; and by cheque on Rs. 3,75,00,000/-on 27.3.2012 . There is board resolution for investment in assessee s company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial statement available in the PB-page 79 to 111 in the PB-II. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed financial statements. Thus we note that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .4,66,00,000/-through Cheque. There is board resolution for investment in assessee s company and Share Application Form Bank statement, ITR acknowledgement, explanation of source of fund as well as financial statement available in the PB-page 139 to 159 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed financial statements. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement and thus we note that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing PAN as well as income-tax returns. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d its Bank statements and thus we note that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing PAN as well as income-tax returns. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. (viii) We note from a perusal of the paper book pages-2,207 to 226 the details of share applicant M/s. SukhSagar Residency Pvt. Ltd. It is a Private Limited Company which has a PAN AARCS1553N and its CIN number is U45400WB2011PTC170958and the net worth of this company as on 31.3.2012 Rs.56,18,93,960/-(P.B-2 pages-220) and investment made in the assessee company is to the tune of Rs.2,31,00,000/- and this share applicant has made the transaction through banking channel on 31.3.2012 Rs. 2,31,00,000/- through NEFT. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dentity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. (x) We note from a perusal of the paper book-2, pages 262 to 283 the details of share applicant M/s. Labhdhan Impext Pvt. Ltd. It is a Private Limited Company which has a PAN AACCL2111J and its CIN number is U51909WB2011PTC171524 and the net worth of this company as on 31.3.2012 Rs.56,18,94,080/- (P.B-2, page 277) and investment made in the assessee company is to the tune of Rs.3,80,00,000/- and this share applicant has made the transaction through banking channel on 31.03.2012 a sum of Rs.3,80,00,000/-through NEFT. There is board resolution for investment in assessee s company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial statement available in the PB-page 163-283 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2012 a sum of Rs.50lakhs through Cheque. There is Share Application Form, Bank statement, ITR acknowledgement, financial statement available in the PB-page 304 to 326 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. (xiii)We note from a perusal of the paper book-2 pages 327 to 352 the details of share applicant M/s. Sristi Sales Pvt. Ltd. It is a Private Limited Company which has a PAN AAICS8900L and its CIN number is U51109WB2005PTC 102121 and the net worth of this company as on 31.3.2012 Rs.1,12,25,612/- and investment made in the assessee company is to the tune of Rs.50 lakhs and this share applicant has made the transaction through banking channel on 28.02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted by the assessee from the share subscribers, the satisfaction of AO as envisaged in sec. 68 of the Act is a plausible view and the fact that the share subscribers responded to sec. 133(6) notice and produced all documents along with the audited financial statements and other documents referred supra, the assessee had discharged the onus upon it about the identity creditworthiness and genuineness of the share capital and premium collected by the assessee from the respective share subscribers. Since the aforesaid exercise was carried out by the second AO in the reassessment proceedings and the documents referred to above are in the assessment folder, the Second Ld. Pr. CIT erred in holding the reassessment order of the AO in respect of share capital and premium collected by the assessee as erroneous as well as prejudicial to the interest of the revenue. In the light of the aforesaid discussions and on perusal of the documents, we are of the view that AO s view to accept the identity, creditworthiness and genuineness of the share capital and premium collected from the share subscribers was a plausible view and at any rate can be termed as an unsustainable view on law or facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any case can be classified as unsustainable in law since it is in line with plethora of judicial decisions of the subject. 56. To sum up, we find from the above said facts that the Second AO has conducted enquiry as directed by the First Ld. Pr. CIT on the specific subject matter i.e. share capital and premium collected by the assessee-company. Therefore, the finding of Second Pr. CIT that the Second AO has not conducted enquiry is incorrect and is flowing from suspicion only. And as discussed, the allegation/fault pointed out by the Second Ld. Pr. CIT that the Second AO failed to collect total facts also cannot be accepted for the simple reason that Ld. Pr. CIT has not spelt out in the impugned order what he meant by total facts or in the alternative when the assessee has discharged its onus, as required by the law in force in this AY 2012-13, then the Ld. Pr. CIT ought to have called for which ever additional documents/materials or issued summons or issued notices and collected those facts which according to Second Ld. Pr. CIT, the AO omitted to collect and then demonstrated that those actions/documents which he collected in that process gave result to a different fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been complied by the AO, brings into operation the doctrine of merger the subject matter i.e. share capital premium collected by assessee company. Resultantly the second Ld. Pr.CIT, again cannot rake-up the same subject matter without the second Ld. Pr.CIT in the second revisional order spells out where the error happened to second AO as an investigator or adjudicator, which exercise the Second Ld. Pr.CIT has not done, so the second Ld. Pr. CIT cannot be permitted to again ask the AO to start the investigation in the way he thinks it proper on the very same subject on which merger has taken place by virtue of the order of First Ld. Pr. CIT. And if this practice is allowed, then there will be no end to the assessment proceedings meaning no finality to assessment proceedings and that is exactly why the Parliament in its wisdom has brought in safe-guards, restrictions conditions precedent to be satisfied strictly before assumption of revisional jurisdiction. Be that as it may be, as discussed above, we find that the Second Ld. Pr. CIT without satisfying the condition precedent u/s 263 of the Act has invoked the revisional jurisdiction (second time), so all his actions are ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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