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TMI Blog2025 (1) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... (AY) 2011-12. The CIT(A) deleted the addition of Rs. 2.75 crores made by the Assessing Officer [hereinafter referred to as "AO"] under Section 68 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"] on account of share capital and premium treated as unexplained cash credit vide his order dated 28-12-2016 passed u/s 143(3) r.w.s. 147 of the Act. The assessee has filed Cross Objection No. 38/Ahd/2024 in case of the said appeal filed before us. The assessee's cross-objection supports the order of the CIT(A) and raises additional contentions related to the procedural lapses in the reopening of the assessment. Therefore, we dispose both the appeal and cross objection by this common order. Facts of the Case: 2. The original return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his physical appearance to verify the transaction. The AO claimed that Mr. Parikh did not respond to the summons and stated that his whereabouts were unknown. The AO doubted Mr. Parikh's financial capacity based on his gross declared income in his tax return, which was significantly lower than the investment made. The AO remarked that the documents were submitted close to the time-barring date (21/12/2016), making it difficult for the AO to complete further verification. The AO treated the entire amount of Rs. 2.75 crores as unexplained cash credit under Section 68 of the Act. 4. The assessee filed an appeal before the CIT(A) with additional grounds of appeal. The CIT(A) admitted the assessee's additional grounds of appeal regarding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment). The CIT(A) held that the frequent debits and credits in the bank account were non-cash transactions and did not indicate any adverse inference. The CIT(A) referred to the judgment in the case of Gagandeep Infrastructure P. Ltd. [2017] 80 taxmann.com 272 (Bombay HC) to conclude that the amended proviso to Section 68, requiring an explanation of the "source of source," was applicable only prospectively from 01/04/2013 and did not apply to A.Y. 2011-12. Since the only substantive addition under Section 68 was deleted, the CIT(A) deemed the adjudication of the additional grounds challenging the reopening as academic and did not decide on them separately. 5. Aggrieved by the order of the CIT(A), the revenue is in appeal before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent balance, ITR acknowledgment and computation of income and ledger accounts confirming the transaction. The AR contended that the AO failed to record Mr. Parikh's statement despite his appearance. 8. On the legal grounds of Cross Objection, the AR contended that the notice under Section 148 was issued on 19/02/2016 after obtaining approval under Section 151. The AR placed reliance on the decision of the co-ordinate bench in case of Shri Tehmul B. Sethana Vs. DICT (ITA No.1743/Ahd/2019), wherein it was held that the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, were invalid due to a procedural flaw in obtaining approval under Section 151 of the Act as the AO sought approval from the JCIT before recordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the necessity for a remand report is significantly reduced, as all records and submissions are electronically available. The CIT(A) exercised these powers appropriately by thoroughly analyzing the evidence submitted by the assessee. 9.2. The CIT(A) rightly concluded that the assessee discharged its onus under Section 68 by proving the identity, genuineness, and creditworthiness of the investor, Mr. Bhavik Parikh: * Identity: The investor's identity was undisputed, supported by his PAN, address, and ITR acknowledgment. * Genuineness: The transaction was conducted through banking channels, with payments made via cheque. The bank statement clearly reflected the transfer of share application money. * Creditworthiness: Though the inves ..... X X X X Extracts X X X X X X X X Extracts X X X X
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