| The Tax Publishers2019 TaxPub(DT) 4495 (Mum-Trib) INCOME TAX ACT, 1961
Section 147 r/w Sections 68 & 143(3)
As Revenue could not prove that of notice under section 148 was properly/issued and served on the assessee within the time prescribed, reassessment on such basis, therefore, could not be treated as valid hence, quashed, and even on merits addition under section 68 was not justified since assessee had proved the identity, genuineness, and creditworthiness of share applicants.
|
Reassessment - Notice under section 148 - Proper service of notice within limitation period -
AO issued notice, dated 30-3-2016 under section 148 and reopened the assessment for the assessment year 2009-10. The assessee was asked to provide justification and past performance of the company to receive huge share premium and also to provide details such as income-tax returns, copies of balance sheets, copy of bank statements of the shareholders. Assessee filed basic documents relating to the said share application money in respect of both the investors to prove the identity, genuineness and creditworthiness of the shareholders. Assessee filed valuation report of the premium received from the shareholders. In the course of the assessment proceedings assessee also contended that the notice under section 148, dated 30-3-2016 which was sent through speed post was not served on the assessee within the time prescribed and therefore, the assessment was time, barred. AO treated share application money received from two shareholders as unexplained cash credit under section 68. Commissioner (Appeals) quashed the re-assessment on the ground that there was no proper service of notice under section 148 and the notice was served beyond the time limit and therefore, assessment was time barred. Held: As the Revenue could not prove that there was proper service of notice under section 148 on the assessee within the time prescribed, i.e., on or before 31-3-2016 for the assessment year 2009-10, the Commissioner (Appeals) had rightly concluded that the reopening under section 147 was bad in law. On this ground alone the assessment framed under section 143(3) read with section 147 was liable to be quashed. Even on merits the Commissioner (Appeals) examined the addition made by AO with references to the evidences furnished by the assessee and the averments of the AO and concluded that the assessee had proved the identity, genuineness, and creditworthiness of the share applicants. Once the assessee had discharged his initial burden, the burden shifts to the AO to prove otherwise. No addition can be made only on the basis of information received from the investigation wing without there being any evidences to disprove the same.
Followed:M/s. Shree Laxmi Estate (P) Ltd. v. ITO in ITA No. 5954/Mum/2016 and M/s. Shree Laxmi Developers v. ITO in ITA No. 2562/Mum/2017, dt. 29-12-2017, M/s. Shree Laxmi Developers v. JCIT in ITA No. 6090/Mum/2017, dt. 7-3-2018Distinguished:CIT v. NRE Iron and Steel (P) Ltd. (2019) 412 ITR 161 (SC) : 2019 TaxPub(DT) 1628 (SC)
REFERRED : Knubhai M. Patel (HUF) v. Hiren Bhatt (2010) 43 DTR 329 (Mum) : 2010 TaxPub(DT) 1226 (Mum-Trib), CIT v. Orissa Corporation reported in (1986) 159 ITR 78 (SC) : 1986 TaxPub(DT) 1425 (SC), CIT v. Divine Leasing & Finance Ltd. (2008) 299 ITR 268 (Delhi) : 2008 TaxPub(DT) 400 (Del-HC), MOD Creations (P) Ltd., v. ITO (2013) 354 ITR 282 (Del) : 2012 TaxPub(DT) 3314 (Del-HC), ACIT v. Shri Ramesh Ramswarupdas Jindal in ITA No. 3091 to 3096/Mum/2017, dt. 15-11-2017, ACIT v. M/s. H.K. Pujara Builders in ITA. No. 930/Mum/2017, dt. 31-10-2018 and DCIT v. Bairaga Builders (P) Ltd., reported in (2017) 51 CCH 107 in ITA No. 4691 and 4692/Mum/2015, dated 14-9-2017
 SUBSCRIBE FOR FULL CONTENT
|