9911796707
TMI Blog2023 (7) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... terial fact. Even assuming, respondents case is petitioner should have disclosed that these were bogus or accommodation entries, still there is nothing on record to indicate that petitioner was aware that these were bogus shares capital/premium from bogus paper companies, viz., SHPL and SCPL and were accommodation entries. We hereby quash and set aside the notice issued u/s 148. Decided in favour of assessee. - K.R. SHRIRAM FIRDOSH. P. POONIWALLA, JJ For the Petitioner : Mr. R. V. Easwar, Senior Advocate a/w Mr. Rajendra i/b Mr. S. R. Londhe. For the Respondents : Mr. Suresh Kumar. (ORAL JUDGENT PER K. R. SHRIRAM, J.) 1. Petitioner is impugning the notice dated 19th March 2019 issued by respondent no. 3 under Section 148 of the Income Tax Act, 1961 (the Act). 2. Petitioner is engaged in the business of real estate and was regularly assessed to tax. For A.Y. 2012-2013, petitioner had filed its return of income on 21st September 2012 declaring an income of Rs. 1,05,318/- and had shown the said income under the head Profit and Gains from Business and Profession . The return of income was initially processed under Section 143(1) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice. Petitioner was provided a copy of the reasons to believe recorded for initiating reassessment proceedings under Section 147 of the Act. As per the reasons recorded by respondent no. 3, information had been received from the Deputy Commissioner of Income Tax, Central Circle-3(1), Kolkata(DC.CC-K), vide letter DCIT/CC-3(1)/PKA/Kol/2018-19/5096, dated 1st March 2019. Respondent no. 3 further mentioned that DC.CC-K had enclosed letter No. F.No. 35/2012-13/3606-14, dated 6th February 2013 from DIT (Inv.), Kolkata, that as per the information a search and seizure operation was conducted at the business and residential premises of one Mr. Praveen Agarwal and his group companies on 13th September 2012, that in his statement recorded in the course of search, Mr. Agarwal had accepted in his statement that he had registered a large number paper companies for providing various accommodation entries, that SCPL and SHPL were two such paper companies floated by Mr. Agarwal. As per information the assessee company is one of the beneficiaries who had taken accommodation entry in form of bogus share capital/premium from bogus paper companies, viz., SCPL and SHPL. As per respondent no. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries. Respondent no. 3 is in effect going on fresh assessment proceeding solely relying upon the statements of a person with whom petitioner was not related in any manner. There is no live link or close connection between the reasons recorded or the belief formed by respondent no. 3. c) It is a clear case of change of opinion though in the reasons recorded for reopening respondent no. 3 states the case under consideration is not the result of change of opinion. Respondent no. 3 has admitted in reasons recorded that petitioner had filed copies of audited profit and loss account and balance sheet along with the return of income where various information/material were disclosed. However, respondent no. 3 has, for reasons best known, ignored the fact that during the original assessment proceedings respondent no. 3 had issued notices under Section 133(6) of the Act to both the subscribers of the shares, i.e., SHPL and SCPL about the share money and the premium and that after considering the available material the then Assessing Officer (AO) had raised the issue about justification for high premium. d) Re-opening provisions of the Act cannot be used to overcome or to rever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of addition on account of share premium in question made during the course of scrutiny proceeding is much more than the amount as per the information received. It is not clear from where these information have been obtained because nothing of this nature is disclosed in the reasons to believe. h) The Revenue has challenged the order of ITAT before this court. Thus a parallel litigation for the same issue i.e. share capital and share premium received from SHPL and SCPL has been initiated by respondent no. 3 by issuing a notice under Section 148 of the Act. The notice issued under section 148 of the Act by respondent no. 3 seeks to re-agitate the issue on which petitioner has already succeeded before the appellate authorities. The action of issuing notice to reopen the assessment on the same grounds on which the respondents have suffered adverse orders, is subversive of the provisions of the Act as also the norms of judicial discipline and is wholly contrary to the judicial process. 9. Mr. Suresh Kumar, learned counsel for Revenue, in response, submitted that there was no change of opinion. The information that the two companies SHPL and SCPL are shell companies was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is a corporate entity and filed its Return of Income for AY 2012-13 on 21.09.2012 declaring total Income of Rs. 1,05,318. The return was processed u/s 143(1), Scrutiny assessment was completed u/s 143(3) on 30.03.2015 assessing total income at Rs 3,01,05,320/-. 2. Information in this case has been received from DCIT, CC- 3(1),Kolkata vide letter DCIT/CC-3(1)/PKA/Kol/2018-19/5096 dated 01.03.2019 in respect of shell companies floated by Shri Praveen Agarwal (Entry Operator). He has enclosed letter no F.No. 35/2012- 13/3606-3614 dated 06.02.2013 from DIT(Inv), Kolkata. As per the information a search and seizure operation u/s 132 of IT Act 1961 was conducted at the business residential premises of Shri Praveen Agarwal and his group companies at Kolkata on 13.09.2012. Shri Praveen Agarwal is one of the known entry operators of Kolkata. In his statement recorded in course of search, Shri Praveen Agarwal has accepted on oath that he had registered a large number of paper companies for providing various accommodation entries. M/s Subhdristi Complex Pvt Ltd M/s Subhshree Hirise Pvt Ltd are two such paper company floated by Shri Praveen Agarwal. As per informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modation entries in the form of share capital/premium and availed the benefit of Rs. 2,50,00,000/- for A.Y. 2012-13. Therefore, I have reason to believe that income to the extent of Rs. 2,50,00,000/- has escaped assessment within the meaning of section 147 of the I.T. act. of Section 147 of the IT act. 12. We can see from the reasons that respondent no. 3 had received information from DCIT, Central Circle-3(1), Kolkatta vide letter dated 1st March 2019. Respondent no. 3 further mentions that DC Kolkatta had enclosed a letter dated 6th February 2013 from DIT(Inv.) Kolkatta. That as per the information a search and seizure operation u/s 132 of IT Act 1961 was conducted at the business residential premises of Mr. Agarwal and his group companies at Kolkata on 13th September 2012. That Mr. Agarwal in his statement recorded in course of search has accepted that he had registered a large number of paper companies for providing various accommodation entries and SCPL and SHPL were two such paper companies. As per information the assessee company is one of the beneficiaries who has taken accommodation entry in the form of bogus share capital/premium from the bogus paper companies. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch huge share application money and share premium should not be treated as unexplained income brought in by way of equity contribution and added to your income for the year under consideration. The hearing in your case is accordingly fixed at 11.30 Am on 27.03.2015, your attention is also invited to the facts that the proceedings are bound by limitation of time, which expires on 31.03.2015, therefore the matter may please be given priority. In case of non-compliance, this office shall be constrained to complete the proceedings u/s. 144 of the IT Act. Ex-parte on the of materials available on record. 15. Petitioner replied by its letter dated 27th March 2015 and made available the shareholding agreement with SHPL and SCPL. Many other details sought were also made available. Thereafter, the assessment order dated 30th March 2015 under Section 143(3) of the Act came to be passed in which, the AO rejected the explanation of petitioner and concluded that the amount of Rs. 3,00,00,000/- on account of share application money with premium amount was grossly unjustified to be an allowable share premium and hence an amount of Rs. 3,00,00,000/- was added back to the total income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has made addition towards share capital receipt from two subscribers basically on the ground that the transactions between the parties did not pass the test of genuineness as assessee was not justified in charging of higher premium on shares without there being any corresponding business activity to justify projections and estimates relied upon for arriving at share premium. The AO never doubted the identity of the parties. ITAT also recorded that petitioner had filed complete details in respect of SHPL and SCPL including their names and addresses, PAN, IT returns, copies of the financial statements, bank statements, letter of allotment etc. It is also recorded that both SHPL and SCPL have replied to notices under Section 133(6) alongwith whatever details sought by the A.O. Paragraph 7 of the order of ITAT reads as under: 7. We have heard both the parties, perused materials available on record and gone through the orders of authorities below. We have also considered case laws cited by both the parties. The AO has made addition towards share capital received from 2 subscribers, basically on the ground that although identity of subscribers has been proved, but the transaction b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt transactions. Therefore, we are of the considered view that the AO was erred in bringing to tax share capital received from 2 companies u/s 68 of the Income-tax Act, 1961 as unexplained credit. 17. In the circumstances, the issue regarding subscription of shares by SHPL and SCPL in petitioner has been thoroughly examined by the AO, who also in fact, did not accept petitioner s explanation and added the amount of Rs. 3,00,00,000/- to petitioner s income. That addition was deleted by CIT(A) and the order of CIT(A) has been upheld by ITAT. All these only goes to prove that there was no failure on the part of petitioner to truly and fully disclose material facts. As Section 147 of the Act is very clear that no action shall be taken under the said Section after the expiry of 4 years from the end of the relevant assessment years unless any income chargeable to tax has escaped assessment by reason of the failure on the part of assessee to disclose fully and truly all material facts. First of all, it is not spelt out in the reasons to believe as to what was the material fact which was not truly and fully disclosed. Further, having considered the submissions of petitioner during ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
