Case Law Details
The assessee is aggrieved by the impugned order dated /9/08/20/6 of the Ld. First Appellate Authority, Mumbai. The first ground raised by the assessee pertains to reopening the proceedings u/s /48 of the Income Tax Act, /96/ (hereinafter the Act) by not treating the reassessment proceedings as invalid and bad in law. During hearing, Shri Nimesh Chotani, along with Shri Dharan Gandhi, ld. counsel for the assessee, did not press this ground. The ld. CIT-DR, Shri R.P. Meena, had no objection to the request of the assessee, therefore, this ground is dismissed as not pressed.
2. The only effective ground argued by the ld. counsel pertains to addition of Rs.20 lakh made u/s 68 of the Income Tax Act, /96/ (hereinafter the Act), being the share application money received by the assessee. The crux of argument advanced on behalf of the assessee is that the assessee duly filed the confirmation. It was explained that the addition was made by the Assessing Officer on the plea that no details were filed by the assessee. However, it was claimed that the necessary details were duly filed by the assessee and the whole addition was made on the basis of statements tendered by some person. It was pleaded that in spite of asking by the assessee, cross examination was not provided to the assessee. Our attention was invited to page-7 containing the reply of the assessee with a request for cross examination. It was claimed that the assessee is a public limited company, annual returns were filed with the registrar (pages 64 to 69 of the paper book). Details of allotted shares were duly filed with the Ministry of Corporate Affairs, as required under the Act (page-7/ of the paper book). Our attention was also invited to the page-8/ of the paper book containing the names of allottees by submitting that even all the details were duly made available to the Ministry of Corporate Affairs and also before the Assessing Officer, therefore, the onus has been discharged. A strong reliance was placed upon the decision from Hon’ble jurisdictional High Court in the case of CIT vs M/s Gagandeep Infrastructure Pvt. Ltd. (ITA No./6/3 of 20/4) (Bom.)(HC)(pages 3 to 9 of the paper book). Reliance was also placed upon the decision from Hon’ble Apex Court in CIT vs Lovely Exports Pvt. Ltd. 2/6 CTR /95 (SC), CIT vs Creative World Telly Films Ltd. (20//) 333 ITR /00 (Bom.) and Vitrag Metals Pvt. Ltd. vs Income Tax Officer (46 ITR (T.) 20/)(Bom.)(Pages /2 to /3 of the paper book). The ld. counsel also explained the source of investment, which was also filed before the Ld. Assessing Officer as well as before the Ld. First Appellate Authority.
2.1 . On the issue of non-providing cross examination, in spite of repeated request and violation of principle of natural justice, the ld. counsel placed reliance upon the decision in Adman Timber Industries vs CCE (28/ CTR 24/) (SC), H.R. Mehta vs ACIT 387 ITR 56/(Bom.) and G.K.N. Driveshafts (India) Ltd. vs Income Tax Officer 259 ITR /9 (SC). It was also contended that the Ld. Assessing Officer did not apply his independent mind while reopening the assessment and merely relied upon borrowed satisfaction provided by the investigation wing.
2.2. On the other hand, Shri R.P. Meena, Ld. CIT-DR strongly defended the order of the Ld. Assessing Officer and as well as of the Ld. Commissioner of Income Tax (Appeal) by contending that onus caste upon the assessee was not discharged and the necessary details, sought by the Assessing Officer were not filed by the assessee. Reliance was placed upon the decision in CIT vs Kundan Investment Ltd. 263 ITR 626 (Kol.), // ITR 95/ (Kol.), ITO vs Janak U. Bhatt 8 SOT 353 (Bom.) and Para 2.4./6 of the impugned order. The crux of the argument by the Ld. CIT-DR is that the onus caste upon the assessee was never discharged, therefore, the addition was rightly made.
2.3. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee company is engaged in the business of building and developing various projects. As per the Revenue, an information was received from the investigation wing that the assessee company has taken share application money from M/s Yash V-Jewells Ltd. and M/s Alka Diamond Industries Ltd. totalling Rs.20 lakhs. The assessment was reopened u/s /47 of the Act, therefore, notice u/s /48 of the Act was served upon the assessee. Notice u/s /43(2) dated 2///0/20/4 was also served upon the assessee. In response to notice u/s /33(6) of the Act, dated 2//0//20/5, M/s Alka Diamond Industries Ltd., vide communication dated 04/02/20/5, submitted the details. As per the Revenue, part details were submitted. The stand of the Revenue is that the assessee could not prove the creditworthiness of the investing company as well as genuineness of the transaction of share application money, thus, the Ld. Assessing Officer, treated the amount of Rs.20 lakh, as unexplained cash credit and added the same to the total income of the assessee u/s 68 of the Act.
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