Case Law Details
Future Tech IT Systems Pvt. Ltd. Vs ITO (ITAT Chandigarh)
Conclusion: Reassessment proceedings initiated upon report of the Investigation Wing was not valid as AO had not applied his mind independently and acted solely upon the report of the Investigation Wing.
Held: Assessee derived its income from IT services and filed its return of income declaring income of Rs. 2,55,860/-. Later on AO received the information from Director of Income Tax (Intelligence & Criminal Investigation) Chandigarh that assessee had received huge share premium during the year under consideration and there was nothing in return to justify the receipt of share premium at such higher rate. AO observed that the book value of share of assessee company was just Rs. 10 i.e; Face Value because prior to the receipt of premium, assessee company had nothing in its balance sheet and that assessee had shown NIL income during the year under consideration which could not justify such a large premium received. Assessee declined to furnish the information’s with the plea that there was no cause for furnishing the required information which were apparent from the documents already on record. AO pointed out that those information were not available on the record. He was of the view that assessee had no explanation to the receipt of share premium at such higher rate, he, therefore, issued the notice under section 148 after recording the reasons under section 147. It was held that since AO had not applied his mind independently and acted upon the report of the investigation wing and on that basis initiated the proceedings for reopening the assessment by issuing the notice under section 148 therefore, reassessment proceedings were not valid.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
These appeals by different assessee’s are directed against the separate orders each dt. 28/03/2019 of Ld. CIT(A)-3, Ludhiana. Since the issues involved in all the above appeals are common and the appeals were heard together so these are being disposed off by this consolidated order for the sake of convenience and brevity.
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