Experion Hospitality Pvt Ltd. Vs ITO (Delhi High Court)
Delhi High Court held that once the nature and source of receipts have been satisfactorily explained/proved and AO has not contradicted the explanation/information given by the assessee, there lies no cause for initiating the reassessment action. Accordingly, reassessment proceedings u/s. 148 quashed.
Facts- The present Writ Petitions under Article 226/227 of the Constitution of India are directed against separate notices issued by the respondents under Section 148 of the Income Tax Act, 1961 for the Assessment Years 2008-09 and 2011-12 and proceedings initiated pursuant thereto, including orders passed by the respondent, dismissing the objections filed by the petitioner. The grounds for reopening the assessment in these cases are result of the very same investigation and enquiry carried out by the DIT (Intell. & Cr. Inv.).
Conclusion- Held that the impugned reassessment proceedings had been initiated primarily for the reason that Gold Singapore does not appear to be carrying out any business activities in Singapore and has been floated to act as a conduit for further investments in Indian companies, but in the assessment order dated 22.04.2021, the Assessing Officer has accepted the transaction of share application money/share capital received from Gold Singapore without any addition in that regard and also accepted the status of the holding company i.e. Gold Singapore. The identity and creditworthiness of Gold Singapore and the genuineness of the transaction has been accepted by the Department while framing assessments for AY 2012-13, 2015-16 and 2020-2021. The transaction of investment of share capital in the petitioner company has been duly examined in subsequent assessment years and accepted in completed assessments/reassessments under Section 143(3) of the Act. Once the nature and source of receipts have been satisfactorily explained/proved and AO has not contradicted the explanation/information given by the assessee, there lies no cause for initiating the reassessment action for the impugned AYs 2008-09 & 2011-12.
