| The Tax Publishers2019 TaxPub(DT) 1573 (Mum-Trib) INCOME TAX ACT, 1961
Section 68 Section 147
Reopening of assessment under section 147 on the ground of alleged share capital issued by assessee with high share premium was correctly invoked on basis of non-fulfilling of ingredients of section 68 being identity credit-worthiness and genuineness of transaction, hence, failure of CIT(A) to pass order on merits of section 68 was turned down and remitted for de novo adjudication.
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Income from undisclosed sources - Addition under section 68 - Unexplained share capital with high premium by shell companies -
Reopening of concluded assessment due to issue of shares at a very high share premium it was observed that the investor companies were all paper companies having no real business activities and the sources of the funds reveal modus operandi of entry providers. AO then went on to hold that the amount received by the assessee towards share capital was an unexplained cash credit which the assessee failed to substantiate through documentary evidences. Which was brought to tax by the AO under section 68.Held: It is for the assessee to discharge its onus to establish identity, creditworthiness of the subscribers and genuineness of the transactions for raising share capital including share premium. AO acted on the information as to very high rate of share premium charged by the assessee company considering the same to be tangible incriminating material forming a belief that income had escaped assessment. CIT(A) passed a very cryptic order which was not sustainable in the eyes of law as the CIT(A) was to see whether evidence on record satisfy the ingredients of provisions of section 68 as to identity and creditworthiness of the subscribers and genuineness of the transactions of raising of share capital and share premium. Thus, on merits also the appellate order passed by CIT(A) was not sustainable in the eyes of law.
Applied:Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P) Ltd. (2007) 161 Taxman 316 (SC) : 2007 TaxPub(DT) 1257 (SC), Rajmandir Estates (P) Ltd. v. Pr. CIT (2016) 70 Taxmann.com 124 (Cal-HC) : (2016) 386 ITR 162 (Cal-HC) : 2016 TaxPub(DT) 2834 (Cal-HC). Relied:CIT v. Lovely Exports (P) Ltd., (2008) 216 CTR 195(SC) : 2009 TaxPub(DT) 0261 (SC). Distinguished:CIT v. Maniben Valji Shah (2006) 204 CTR 249 (Bom), Pr.CIT v. Manzil Dinesh Kumar Shah ITA No. 451 of 2018 (Guj.) decided on 7-5-2018, Pr.CIT v. Shodiman Investment Private Ltd. ITA No. 1297 of 2015 (Bom) decided on 16-4-2018, Dy. CIT v. Piramal Reality Private Ltd. ITA No. 2317/Mum/2017 decided on 16-11-2018, Khubchandani Healthparks (P) Ltd. v. ITO in W.P No. 3027 of 2015 decided on 10-2-2016, CIT v. Batra Bhatta Company (2010) 321 ITR 526 (Del) decided on 8-8-2018, Chhugamal Rajpal v. S.P. Chaliha & Ors. (1971) 79 ITR 603 (SC) : 1971 TaxPub(DT) 0314 (SC), CIT v. Green Infra Limited ITA No. 1162 of 2014, dated 16-1-2017, CIT v. Gagandeep Infrastructure (P) Ltd. ITA No. 1613 of 2014, dated 20-3-2017, CIT v. SFIL Stock Broking Limited (2010) 325 ITR 285 (Del-HC) : 2010 TaxPub(DT) 1872 (Del-HC), ITO v. Smt. Gurinder Kaur (2006) 102 ITD 189 : 2006 TaxPub(DT) 1703 (Del-Trib) : (2007) 288 ITR (A.T.) 207, dt. 16-6-2006., CIT v. SFIL Stock Broking Limited (2010) 325 ITR 285 (Del-HC) : 2010 TaxPub(DT) 1872 (Del-HC)
REFERRED :
FAVOUR : Against the assessee/matter remanded.
A.Y. : 2009-10
IN THE ITAT MUMBAI 'H' BENCH
PAWAN SINGH, J.M. & RAMIT KOCHAR, A.M.
ITO v. Knowell Enterprises (P) Ltd.
ITA No. 4648/Mum/2017
A.Y. 2009-10
27 February, 2019
Revenue Allowed
Revenue by: Manoj Kumar Singh (DR)
Assessee by: U.C. Bothra & G.S. Toshniwal
Ramit Kochar, A.M.
This appeal, filed by Revenue, being ITA No. 4648/Mum/2017, is directed against appellate Order, dt. 12-4-2017 in Appeal No. Commissioner (Appeals)-12/ITO-6(3)(4)/205/15-16, passed by learned Commissioner (Appeals)-12, Mumbai (hereinafter called 'the Commissioner (Appeals)'), for assessment year 2009-10, the appellate proceedings had arisen before learned Commissioner (Appeals) from the assessment Order, dt. 27-3-2015 passed by learned assessing officer (hereinafter called 'the AO') under section 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter called 'the Act') for assessment year 2009-10.
2. The grounds of appeal raised by Revenue in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called 'the tribunal') read as under :--
1. 'On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in holding that reassessment made under section 147 is invalid and bad in law accordingly quashing the same on the ground that if the issue is not discussed in the assessment order would not lead to a conclusion that no opinion was formed as to subject of the query, without appreciating the fact that assessment was reopened as per the provisions of section 147 of the Income Tax Act.'
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