Case Law Details
ACIT Vs Goldmohur Design And Apparel Park Ltd (ITAT Mumbai)
Bombay High Court in CIT vs Gangadeep Infrastructure Pvt. Ltd. (394 ITR 680)(Bom.) held in this context to the pre-amended section 68 has held that where the Revenue urges that the amount of share application money has been received from bogus shareholders then it is for the Income-tax Officer to proceed by reopening the assessment of such shareholder and assessing them to tax in accordance with law. It does not entitle the revenue to add the same to the assessee’s income as unexplained cash credit. Identically in the case of Green Infra vs Income Tax Officer (2013) 38 taxman.com 253 (Mum. Trib.), decided in favour of the assessee and this order was confirmed by Hon’ble High Court in CIT vs Green Infra Ltd. (2017) 392 ITR 7 (Bom.). The ratio laid down in Pr. CIT vs Apeak Infotech & Ors. (ITA No.26 to 31/2017) order dated 08/06/2017 (Bombay High Court) and Hon’ble Madras High Court in CIT vs Pranav Foundation Ltd. (2015) 229 taxman 58 (Madras) further supports the case of the assessee.
FULL TEXT OF THE ITAT JUDGMENT
The Revenue is aggrieved by the impugned order dated 30/11/2015 of the Ld. First Appellate Authority, Mumbai in setting aside the reopening of assessment holding that information was already available with the Assessing Officer while completing the assessment u/s 143(3) of the Act without appreciating the fact that explanation-1 to section 147 of the Income Tax Act, 1961 (hereinafter the Act) that the production of books of accounts or other evidences in itself by the assessee would not necessarily amounts to disclosure where the escapement arises out of the failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment.
2. During hearing, the Ld. CIT-DR, Shri Abhijit Patankar, invited our attention to the provision of section 147 of the Act, reasons for reopening of assessment (page-52 of the paper book), para 4.3. (page-5 of the impugned order) by contending that the reopening was done within four years by following the procedure prescribed in the section and there was information with the Assessing Officer from the ROC that the premium was at higher value. Reliance was placed upon the decision from Hon’ble Apex Court in the case of Rajesh Jhaveri (291 ITR 500) (Supreme Court). It was pleaded that sufficient and correctness is not required at early stages for which reliance was placed upon the decision in Raymond Woollen Mills Ltd. vs Income-Tax Officer And Ors. 236 ITR 34 (Supreme Court). In reply, the ld. counsel for the assessee, Shri Vipul Jain, defended the impugned order by contending that it is not a case of bogus shares and the assessee is a government owned company and the issue pertains to excess share premium. It was pleaded that the source is doubted and the premium is mentioned in the agreement itself. Our attention was invited to paper book pages 43, 44 and 47. In reply, the Ld. CIT-DR, contended that it is a case of abnormal share premium. He relied upon the decision in COMMISSIONER OF INCOME-TAX vs PRECISION FINANCE PVT. LTD. 208 ITR 465 (Cal.) and CIT vs Vir Bhan & Sons 273 ITR 206 (P & H).
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