HARYANA DISTILLERY LTD., NEW DELHI V. DCIT, CIRCLE- 11(1), NEW DELHI

ITA 1452/DEL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1569 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 01-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K SAMPATH SHRI RAJ KUMAR
• Keywords: Reopening of assessment; Search and seizure; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 68; 148; 6; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.1452/DEL/2018 ASSESSMENT YEAR: 2008-09 HARYANA DISTILLERY LTD., 16, COMMUNITY CENTRE, NEW FRIENDS COLONY, NEW DELHI. PAN: AABCH0933K VS. DCIT, CIRCLE-11(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH, ADVOCATE SHRI RAJ KUMAR, ADVOCATE REVENUE BY : SHRI ARUN KUMAR YADAV, SR. DR DATE OF HEARING : 31.08.2018 DATE OF PRONOUNCEMENT : 20.11.2018 ORDER PER R.K. PANDA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 4 TH DECEMBER, 2017 OF THE CIT(A)-35, NEW DELHI RELATING TO ASSESS MENT YEAR 2008-09. 2. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS A COMPANY AND FILED ITS RETURN OF INCOME ON 31 ST MARCH, 2010 DECLARING INCOME AT RS.1,73,82,410/-. THE ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 3 0 TH DECEMBER, 2010 AT AN INCOME ITA NO.1452/DEL/2018 2 OF RS.1,73,93,322/-. SUBSEQUENTLY, THE ASSESSING O FFICER REOPENED THE ASSESSMENT U/S 147 OF THE ACT BY RECORDING THE FOLLOWING REASONS:- CERTAIN INVESTIGATIONS WERE CARRIED OUT BY THE DIR ECTORATE OF INVESTIGATION, JHANDEWALAN, NEW DELHI IN RESPECT OF THE BOGUS/ACCO MMODATION ENTRIES PROVIDED BY SURENDRA KUMAR JAIN GROUP OF CASES, THE ASSESSEE CO MPANY IS IDENTIFIED AS ONE OF THE BENEFICIARIES OF THESE ALLEGED BOGUS TRANSACTIONS B Y THE DIRECTORATE AFTER MAKING THE NECESSARY ENQUIRIES. IT HAS BEEN REVEALED THAT THE FOLLOWING ENTRIES HAVE BEEN RECEIVED BY THE ASSESSEE: NAME OF BENEFICIARY AMOUNT (RS.) CHEQUE/ DD NO. DATE BANK DETAIL NAME OF THE COMPANY USED FOR PROVIDING ACCOMMODATION ENTRY NAME OF THE MIDDLEMAN/ MEDIATOR M/S HARYANA DISTILLERY LTD. 50,00,000 214327 18.12.2007 DCB FINAGE LEASE & FINA NCE INDIA LTD. KK GARG 'THE ABOVE AMOUNT OF RS. 50,00,000/- HAS BEEN CRED ITED INTO ASSESSEE'S BANK ACCOUNT IN F Y. 2007-08. INVESTIGATION MADE BY THE INVESTIGATI ON WING OF THE DEPARTMENT HAS FOUND THAT ASSESSEE IS A BENEFICIARY OF TAKING THE AFORESAID ACCOMMODATION ENTRIES. I HAVE ALSO PERUSED VARIOUS MATERIALS AND REPORT FROM INVESTIGATION WING AND ON THAT BASIS IT IS OBSERVED THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK ACCOUNT BY WAY OF ABOVE ACCOMMODA TION ENTRIES. ON PERUSAL OF THE DOCUMENTS ON RECORD AS WELL AS THE INFORMATION RECE IVED FROM THE INVESTIGATION WING, I AM SATISFIED AND HAVE REASON TO BELIEVE THAT THE IN COME OF THE ASSESSEE COMPANY AMOUNTING TO RS. 50,00,000/- HAS ESCAPED ASSESSMENT . THE ESCAPEMENT OF INCOME HAS BEEN CLEARLY ON ACCOUNT OF FAILURE ON THE PART OF T HE ASSESSEE COMPANY TO TRULY AND FULLY DISCLOSED ALL MATERIAL FACTS NECESSARY FOR ASSESSME NT. THUS, IT IS FIT CASE FOR INITIATION OF PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961. SUBMITTED FOR KIND PERUSAL AND APPROVAL AS PER PROV ISION OF SECTION 151(2) OF THE INCOME TAX ACT, 1961. 3. IN RESPONSE TO NOTICE U/S 148 OF THE IT ACT, THE ASSESSEE FILED A LETTER DATED 13 TH APRIL, 2015 STATING THAT THE ORIGINAL RETURN FILED FOR THE YEAR UNDER CONSIDERATION MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/ S 148 OF THE IT ACT. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE U/S 143(2) OF THE A CT IN RESPONSE TO WHICH THE ASSESSEE ATTENDED THE PROCEEDINGS FROM TIME TO TIME AS REQUI RED. ITA NO.1452/DEL/2018 3 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE, DURING THE YEAR UNDER CONSIDERAT ION, HAS INTRODUCED THE SHARE CAPITAL FROM VARIOUS PARTIES, THE DETAILS OF WHICH ARE AS U NDER:- S.NO. NAME OF INVESTOR AMOUNT IN RS. NO. OF SHARES ALLOTTED 1. ANUPAM SECURITIES PVT. LTD. 15,00,000 150000 2. FINAGE LEASING & FINANCE (INDIA) LTD. 50,00,000 500000 3. DHIRAJ COMMERCIAL PVT. LTD. 83,50,000 835000 4. COMSHARE INVESTMENT PVT. LTD. 11,75,000 117500 5. PHOTONICS PVT. LTD. 1,00,00,000 1000000 6. PRAVESH BUILD & DEV. P. LTD. 1,20,00,000 1200000 7. SKYRISE CONSTRUCTION CO PVT. LTD. 61,00,000 760000 8. FIRST ALERT FIRE SYS. PVT. LTD. 17,90,000 179000 9. INDO FRENCH COSMETICS PVT. LTD. 16,00,000 160000 10. JEWEL ELECTRO IMPEX PVT. LTD. 16,00,000 160000 11. LAOLEEN INVESTMENT PVT. LTD. 17,00,000 170000 12. UPASANA INVESTMENT PVT. LTD. 8,00,000 80000 13. PHOTONICS FIRE PLOT SYS P. LTD. 8,25,000 82500 14. SETWELL CEMENT P LTD. 16,00,000 160000 15. RAHUL COMMERCIAL PVT. LTD. 86,50,000 865000 16. VIKEE COMMERCIAL PVT. LTD. 75,00,000 750000 17. APPOLO BREW. P. LTD. 84,00,000 840000 TOTAL 5,08,15,000 5. HE OBSERVED THAT THE ASSESSEE COMPANY HAS ISSUED SHARES TO ABOVE MENTIONED COMPANIES AT PAR. HE EXAMINED THE AUDITED BALANCE SHEET OF THE ASSESSEE COMPANY AND NOTED THAT THE EARNING PER SHARE OF THE ASSESSE E COMPANY AS ON 31.03.2008 WAS RS.0.51 PER SHARE. HE ASKED THE ASSESSEE TO EXPLAI N REGARDING THE IDENTITY AND CREDIT WORTHINESS OF THE SHARE APPLICANTS AND THE GENUINEN ESS OF THE TRANSACTIONS WITHIN THE MEANING OF SECTION 68 OF THE IT ACT. FROM THE DETA ILS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER NOTED THAT THE APPLICANT COMPANIE S ARE EITHER NOT HAVING ANY INCOME OR HAVING NEGLIGIBLE INCOME AS PER THEIR BALANCE SH EET. HE FURTHER OBSERVED THAT THE ASSESSEE HAS ALSO TAKEN SHARE CAPITAL OF RS.50 LAKH S FROM FINAGE LEASING & FINANCE ITA NO.1452/DEL/2018 4 (INDIA) LTD. THROUGH S.K. JAIN WHO IS AN INTERMEDIA RY. HE REFERRED TO THE SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT ACT CONDUCTED A T THE BUSINESS AND RESIDENTIAL PREMISES OF S.K. JAIN GROUP OF CASES, THE MODUS OPERANDI ADOPTED BY THEM AND OBSERVED THAT AS PER THE REPORT OF THE INVESTIGATIO N WING, THE ASSESSEE, M/S HARYANA DISTILLERY LTD., HAS BEEN IDENTIFIED AS ONE OF THE BENEFICIARIES FROM THESE COMPANIES HANDLED BY S.K. JAIN GROUP OF CASES. SINCE FINAGE LEASING & FINANCE (INDIA) LTD., IS A DUMMY COMPANY AND NOT HAVING CAPACITY TO DEPOSIT SUCH A HUGE AMOUNT AS SHARE CAPITAL, THE ASSESSING OFFICER HAD CERTAIN DOUBTS A BOUT THIS. REJECTING VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND OBSERVING TH AT THE ASSESSEE FAILED TO DISCHARGE ITS ONUS TO SUBSTANTIATE THE IDENTITY, CREDIT WORTH INESS AND GENUINENESS OF THE TRANSACTION IN TERMS OF THE PROVISIONS OF SECTION 6 8 OF THE IT ACT, THE ASSESSING OFFICER, RELYING ON VARIOUS DECISIONS, MADE ADDITIO N OF RS.5,08,15,000/- TO THE TOTAL INCOME OF THE ASSESSEE BY INVOKING THE PROVISIONS O F SECTION 68 OF THE IT ACT. THE ASSESSING OFFICER FURTHER MADE ADDITION OF RS.9,14, 670/- BEING THE COMMISSION PAID FOR GETTING ACCOMMODATION ENTRY OF THE SAID AMOUNT OF RS.5,08,15,000/-. 6. BEFORE THE CIT(A), THE ASSESSEE, APART FROM CHAL LENGING THE ADDITION ON MERIT, CHALLENGED THE VALIDITY OF THE REOPENING OF THE ASS ESSMENT ON THE GROUND THAT IT IS BARRED BY LIMITATION SINCE THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) AND THE PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR HAS ELAPSED AND, THEREFORE, IN TERMS OF FIRST PROVISO TO SECTION 147 , THE REASSESSMENT PROCEEDINGS ARE NULL AND VOID. SO FAR AS THE MERIT OF THE CASE IS C ONCERNED, IT WAS ARGUED THAT THE ITA NO.1452/DEL/2018 5 ASSESSEE HAS DISCHARGED THE ONUS CAST ON IT BY FURN ISHING THE REQUISITE DETAILS. IT WAS ARGUED THAT ALL THE SUBSCRIBERS TO THE SHARE CAPITA L ARE EXISTING ENTITIES BELONGING TO THE ASSESSEES GROUP EXCEPT FINAGE LEASING & FINANCE ( INDIA) LTD. IT WAS ARGUED THAT IN RESPECT OF ALL THE COMPANIES, CONFIRMATIONS, BANK A CCOUNTS, COPIES OF INCOME-TAX RETURN ACKNOWLEDGEMENTS, COPIES OF ASSESSMENT ORDER S AND VARIOUS OTHER EVIDENCES WERE FURNISHED TO SUBSTANTIATE THE IDENTITY AND CRE DIT WORTHINESS OF THE SHARE APPLICANTS AND THE GENUINENESS OF THE TRANSACTIONS. IT WAS SU BMITTED THAT THE COPY OF ASSESSMENT ORDER PASSED U/S 153C/153A IN THE CASE OF M/S FINA GE LEASING & FINANCE (INDIA) LTD., WAS SUBMITTED BEFORE THE A.O. TO SUBSTANTIATE THAT THE RETURNED LOSS WAS ACCEPTED IN THE CASE OF THE COMPANY AND NO ADDITION WAS MADE IN THE HANDS OF THAT COMPANY AND THE A.O. HAS COMPLETELY IGNORED THE SAME. 6.1 HOWEVER, THE LD.CIT(A) WAS NOT SATISFIED WITH T HE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD THE ACTION OF THE A.O. IN REOPE NING OF THE ASSESSMENT AND ADDITION U/S 68 OF THE IT ACT, 1961. SO FAR AS THE VALIDITY OF THE RE-ASSESSMENT PROCEEDINGS ARE CONCERNED, SHE HELD THAT THE A.O. HAS ISSUED THE NO TICE U/S 148 AS PER THE PROVISIONS OF THE IT ACT, 1961. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, THE CIT(A), RELYING ON VARIOUS DECISIONS, HELD THAT THE INITIAL ONUS CAST ON THE ASSESSEE TO PROVE THE IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE PERSONS IN WHOSE NAME THE CREDIT ENTRIES ARE APPEARING BY WAY OF SHARE CAPITAL/SHARE PREMIUM, LO AN OR CREDIT, ETC., HAS NOT BEEN DISCHARGED. DISTINGUISHING VARIOUS DECISIONS CITED BEFORE HIM AND RELYING ON VARIOUS ITA NO.1452/DEL/2018 6 OTHER DECISIONS, THE LD.CIT(A) HELD THAT THE ASSESS ING OFFICER HAS CORRECTLY MADE THE ADDITION U/S 68 OF THE IT ACT. 6.2. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE A SSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS:- 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) ERRED IN:- 1. INITIATING PROCEEDINGS U/S 147 OF THE INCOME-TAX A CT, 1961 (THE ACT) IN THE ABSENCE OF ANY PLAUSIBLE REASON FOR THE FORMATION O F A BELIEF AS TO THE ESCAPEMENT OF ANY INCOME; 2. ISSUING NOTICE U/S 148 OF THE ACT AS THE SAME WAS BARRED BY LIMITATION IN TERMS OF FIRST PROVISO TO SECTION 147 OF THE ACT; 3. NOT DISPOSING OF THE OBJECTIONS FILED U/S 147/148 I N RESPONSE TO REOPENING OF ASSESSMENT U/S 147 OF THE ACT; 4. MAKING FOLLOWING ADDITIONS TO THE INCOME ASSESSED U /S 143(3) OF THE ACT: A) RS.5,08,15,000/- ON ACCOUNT OF SHARE APPLICATION MO NEY RECEIVED BY INVOKING PROVISIONS OF SECTION 68 OF THE ACT; B) RS.9,14,670/- ON ACCOUNT OF ALLEGED COMMISSION PAID ON CONJECTURES AND SURMISES WITHOUT THERE BEING ANY EVIDENCE WITH REGA RD TO SUCH EXPENDITURE. ALL THE ABOVE ACTS BEING ARBITRARY, MISCONCEIVED, F ALLACIOUS AND UNJUST MUST BE QUASHED WITH DIRECTIONS FOR RELIEF AND ALSO CONSEQU ENTIAL BENEFITS. THE ASSESSEE CRAVES LEAVE TO ADD, DELETE, MODIFY AL L OR ANY OF THE GROUNDS TAKEN ABOVE 7. THE LD. COUNSEL FOR THE ASSESSEE, AT THE TIME OF HEARING, DID NOT PRESS GROUND OF APPEAL NO.3 FOR WHICH THE LD. DR HAS NO OBJECTION. ACCORDINGLY, THE SAID GROUND IS DISMISSED. SO FAR AS GROUND OF APPEAL NO.1 IS CONCE RNED, THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE PRO VISO TO SECTION 147 OF THE IT ACT AND SUBMITTED THAT WHERE AN ASSESSMENT U/S 143(3) HAS B EEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THI S SECTION AFTER THE EXPIRY OF FOUR ITA NO.1452/DEL/2018 7 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN U/S 139 OR IN RESPONSE TO NOTICE ISSUED UNDER SUB- SECTION 1 OF SECTION 142 OR SECTION 148 OR TO DISCL OSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT FOR THAT ASSESSMENT YE AR. HE SUBMITTED THAT THE ASSESSEE IN THE INSTANT CASE, DURING THE ORIGINAL ASSESSMENT PROCEEDINGS HAD SUBMITTED THE VARIOUS DETAILS REQUIRED BY THE ASSESSING OFFICER F OR COMPLETING THE ASSESSMENT. REFERRING TO THE QUESTIONNAIRE ISSUED BY THE ASSESS ING OFFICER VIDE LETTER DATED 20 TH OCTOBER, 2010, HE SUBMITTED THAT VIDE QUESTION NO.8 THE ASSESSING OFFICER HAD ASKED THE DETAILS REGARDING THE SHARE CAPITAL, LOANS OTHE R THAN BANK LOANS AND INTER-CORPORATE DEPOSITS TAKEN DURING THE YEAR AND AFTER GOING THRO UGH THE VARIOUS DETAILS, THE ASSESSING OFFICER HAD ACCEPTED THE SHARE CAPITAL AN D SHARE PREMIUM RECEIVED BY THE ASSESSEE AS GENUINE AND THERE WAS NO ADDITION MADE IN THE ASSESSMENT ORDER. REFERRING TO PAGE 14 OF THE PAPER BOOK, HE SUBMITTE D THAT THE ASSESSING OFFICER HAD ISSUED NOTICE U/S 154/155 OF THE IT ACT VIDE LETTER DATED 19 TH OCTOBER, 2012 AND THERE WAS NO SUCH DOUBT RAISED BY THE ASSESSING OFFICER N OR ANY DEFECT OR DEFICIENCY WAS POINTED BY THE ASSESSING OFFICER. FURTHER, THE INF ORMATION RECEIVED BY THE ASSESSING OFFICER ON THE BASIS OF WHICH HE HAS REOPENED THE A SSESSMENT IS VERY VAGUE, UNSPECIFIC AND INCOMPLETE. RELYING ON VARIOUS DECISIONS , HE SUBMITTED THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER IS N OT JUSTIFIED. FOR THE ABOVE PROPOSITION, THE LD. COUNSEL FOR THE ASSESSEE RELIE D ON THE FOLLOWING DECISIONS:- I) AMAR JEWELLERS LTD. VS. DCIT (2018) 92 TAXMANN.COM 4 (GUJ); ITA NO.1452/DEL/2018 8 II) PR. CIT VS. LIGHT CARTS P. LTD. (2018) 404 ITR 574 (ALL); III) NTPC LTD. VS. DCIT (2014) 360 ITR 380 (DEL); IV) NTPC LTD. VS. DCIT (2013) 350 ITR 614 (DEL); V) DIT VS. MC DONALDS CORPORATION (2013) 213 TAXMAN 2 6 (DEL); VI) BLB LIMITED VS. ACIT (2012) 343 ITR 129 (DEL); VII) CIT VS. NOBLE RESOURCES (2011) 202 TAXMAN 223 (DEL) ; VIII) CIT VS. SIL INVESTMENTS LTD. (2011) 339 ITR 166 (DE L); IX) D.T. & T.D.C. LTD. ACIT (2010) 324 ITR 234 (DEL); X) JSRS UDYOG LTD. VS. ITO (2009) 313 ITR 321 (DEL); XI) WEL INTERTRADE P. LTD. VS. ITO (2009) 308 ITR 22 ( DEL); XII) CIT VS. INDIAN FARMERS FERT. (2008) 171 TAXMAN 379 (DEL); XIII) CIT VS. FORAMER FRANCE (2003) 264 ITR 566 (SC); XIV) ITO VS. MADNANI ENGINEERING WORKS LTD. (1979) 118 I TR 1 (SC). 8. SO FAR AS THE ALLEGATION OF THE REVENUE THAT THE ASSESSEE HAS NOT FULLY AND TRULY DISCLOSED ALL MATERIAL FACTS NECESSARY FOR COMPLETI ON OF THE ASSESSMENT IS CONCERNED, HE SUBMITTED THAT THE SAME IS UNTENABLE IN VIEW OF THE FACT THAT THE ISSUE HAS BEEN THE SUBJECT MATTER OF DETAILED SCRUTINY IN TERMS OF MAT ERIAL ON RECORD AT THE TIME OF THE ORIGINAL ASSESSMENT ITSELF. HE ALSO SUBMITTED THAT THE SANCTION U/S 151 OF THE ACT WAS GRANTED BY THE HIGHER AUTHORITIES OVERLOOKING THE F UNDAMENTAL DEFECTS IN THE SATISFACTION NOTE AS RECORDED BY THE ASSESSING OFFI CER. HE ACCORDINGLY SUBMITTED THAT THE REOPENING OF THE ASSESSMENT BEING BAD IN LAW, H AS TO BE TREATED AS NULL AND VOID. ITA NO.1452/DEL/2018 9 9. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, HE SUBMITTED THAT ALL SUBSCRIBERS TO THE SHARE CAPITAL ARE EXISTING ENTITIES BELONGING T O THE ASSESSEES GROUP EXCEPT M/S FINAGE LEASING & FINANCE (INDIA) LTD. IN RESPECT O F ALL THESE COMPANIES, CONFIRMATIONS, BANK ACCOUNTS, COPIES OF INCOME-TAX RETURNS ALONG WITH ACKNOWLEDGEMENTS, COPIES OF ASSESSMENT ORDERS AND V ARIOUS OTHER DETAILS WERE FURNISHED TO SUBSTANTIATE THE IDENTITY AND CREDIT W ORTHINESS OF THE SHARE APPLICANTS AND THE GENUINENESS OF THE TRANSACTION. HOWEVER, THE A SSESSING OFFICER AS WELL AS THE CIT(A) HAVE IGNORED ALL SUCH EVIDENCES AND HAVE MAD E THE ADDITION. REFERRING TO PAGE 220 OF THE PAPER BOOK, THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE ORDER PASSED U/S 153C/153A OF THE INCO ME-TAX ACT, 1961 DATED 28 TH MARCH, 2013 IN THE CASE OF M/S FINAGE LEASING & FIN ANCE (INDIA) LTD. AND SUBMITTED THAT ALTHOUGH M/S FINAGE LEASING & FINANCE (INDIA ) LTD. HAS INVESTED AN AMOUNT OF RS.50 LAKHS IN THE SHARE CAPITAL OF THE ASSESSEE CO MPANY, NO SUCH ADDITION HAS BEEN MADE IN THE HANDS OF THE SAID COMPANY AND THE RETUR NED LOSS OF RS.33,245/- HAS BEEN ACCEPTED. SO FAR AS THE OTHER APPLICANTS ARE CONCE RNED, HE SUBMITTED THAT ALL THOSE COMPANIES ARE GROUP COMPANIES AND THEY HAVE SUFFICI ENT NET WORTH TO INVEST IN THE SHARES OF THE ASSESSEE COMPANY. HE, ACCORDINGLY, S UBMITTED THAT EVEN ON MERIT THE ADDITION CANNOT BE MADE AND THE ORDER OF THE CIT(A) DESERVES TO BE SET ASIDE. 10. THE LD. DR, ON THE OTHER HAND, STRONGLY SUPPORT ED THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ASSESSEE, DURING THE ORIGINAL AS SESSMENT PROCEEDINGS, HAS NOT FURNISHED THE FULL PARTICULARS REGARDING THE IDENTI TY AND CREDIT WORTHINESS OF THE LOAN ITA NO.1452/DEL/2018 10 CREDITORS AND THE GENUINENESS OF THE TRANSACTION. THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR THE COMPLETION OF THE ASSESSMENT. THEREFORE, THE INITIATION OF REASSE SSMENT PROCEEDINGS U/S 147 OF THE IT ACT IS FULLY JUSTIFIED. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, HE SUBMITTED THAT THE ASSESSEE IN THE INSTANT CASE HAS FAILED TO SUBSTANT IATE WITH EVIDENCE TO THE SATISFACTION OF THE ASSESSING OFFICER REGARDING THE IDENTITY AND CREDIT WORTHINESS OF THE SHARE APPLICANTS AND THE GENUINENESS OF THE TRANSACTION. THEREFORE, THE ORDER OF THE CIT(A) IS FULLY JUSTIFIED UNDER THE FACTS AND CIRCUMSTANCE S OF THE CASE. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CONSIDERED THE VARIOUS DECI SIONS CITED BEFORE US. WE FIND THE ORIGINAL ASSESSMENT IN THE INSTANT CASE WAS COMPLET ED U/S 143(3) OF THE ACT ON 30 TH DECEMBER, 2010, A COPY OF WHICH HAS BEEN PLACED ON PAGES 55 AND 56 OF THE PAPER BOOK AND THE ASSESSMENT YEAR INVOLVED IS A.Y. 2008- 09. WE FIND THE ASSESSING OFFICER REOPENED THE ASSESSMENT BY ISSUE OF NOTICE U/S 148 OF THE ACT ON 31 ST MARCH, 2015, A COPY OF WHICH HAS BEEN PLACED ON PAGE 6 OF THE PAPER BOOK. THUS, THE NOTICE HAS BEEN ISSUED AFTER A PERIOD OF FOUR YEARS FROM T HE END OF THE RELEVANT ASSESSMENT YEAR IN WHICH ORIGINAL ASSESSMENT HAS BEEN FRAMED U /S 143(3). AS PER THE PROVISO TO SECTION 147, WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL B E TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH A SSESSMENT YEAR BY REASON OF THE ITA NO.1452/DEL/2018 11 FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETUR N U/S 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECT ION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. IN THE INSTANT CASE, THE ASSESSEE HAS FURNISHED A RETURN U/S 139(1 ) OF THE ACT. THE REASON FOR REOPENING OF THE ASSESSMENT WAS THAT THE ASSESSEE H AS ACCEPTED AN AMOUNT OF RS.50 LAKHS AS SHARE APPLICATION MONEY FROM M/S FINAGE L EASING & FINANCE (INDIA) LTD. WE FIND FROM PAGE 220 OF THE PAPER BOOK THAT THE AC IT, CENTRAL CIRCLE-23, NEW DELHI, VIDE ORDER DATED 28 TH MARCH, 2013, HAS COMPLETED THE ASSESSMENT U/S 153C/153A OF THE INCOME-TAX ACT, 1961 AND HAS ACCEP TED THE RETURNED LOSS OF RS.3,245/- AND HAS NOT MADE ANY ADDITION IN THE HAN DS OF M/S FINAGE LEASING & FINANCE (INDIA) LTD., WHO HAS INVESTED AN AMOUNT OF RS.50 LAKHS IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY. THEREFORE, THE SAID COMPANY ALSO CANNOT BE TREATED AS BOGUS. SINCE THE ASSESSEE, IN THE INSTANT CASE, HAS FURNIS HED ALL MATERIAL FACTS NECESSARY FOR COMPLETION OF THE ORIGINAL ASSESSMENT U/S 143(3) OF THE IT ACT AND THE ASSESSMENT HAS BEEN REOPENED AFTER THE PERIOD OF FOUR YEARS FROM T HE END OF THE RELEVANT ASSESSMENT YEAR, THEREFORE, IN VIEW OF THE PROVISO TO SECTION 147 OF THE IT ACT, WE ARE OF THE CONSIDERED OPINION THAT SUCH REASSESSMENT PROCEEDIN GS ARE BARRED BY LIMITATION AND, THEREFORE, HAVE TO BE QUASHED. WE, THEREFORE, QUAS H THE REASSESSMENT PROCEEDINGS INITIATED U/S 147 OF THE IT ACT, 1961. THE VARIOUS JUDGEMENTS RELIED ON BY THE LD. DR ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACT S OF THE PRESENT CASE. SINCE THE ASSESSEE SUCCEEDS ON THE LEGAL GROUND, THE VARIOUS OTHER GROUNDS CHALLENGING THE ITA NO.1452/DEL/2018 12 ADDITION ON MERIT ARE NOT BEING ADJUDICATED AS THEY HAVE BECOME ACADEMIC IN NATURE. THE GROUNDS RAISED BY THE ASSESSEE ARE, ACCORDINGLY , ALLOWED. 12. IN THE RESULT, THE APPEAL FILED BY THE AS SESSEE IS ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 0.11.2018. SD/- SD/- (SUCHITRA KAMBLE) (R.K. PA NDA) JUDICIAL MEMBER ACCOUNTANT MEMFBER DATED: 20 TH NOVEMBER, 2018 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI