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10-01-2019, Diwali Capital & Finance, Section 147, 148, 133(6), Tribunal Mumbai

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5 months 1 week ago #8347 by amit
Section - 147, 148, 133(6), 68
Order Date - 10-01-2019
Favouring - Assessee
Court - Tribunal Mumbai
Appellant - Diwali Capital & Finance Private Ltd.
Respondent - DCIT
Justice - MAHAVIR SINGH, JM & MANOJ KUMAR AGGARWAL, AM
Citation - 119Taxpundit143
Appeal No. - ITA No. 2091/Mum/2018
Asstt. Year - 2008-09

Order

PER : MAHAVIR SINGH, JM

In these appeals, one appeal filed by Revenue and one by assessee, are arising out of the orders of Commissioner of Income Tax (Appeals)-48 &4, Mumbai [in short CIT(A)], in appeals No. CIT(A)-48/I.T52/DCCC-2(3)/2016-17, CIT(A)-4/IT-13/ITO-2(1)(2)/2015-16 vide orders dated 15.01.2018, 15.03.2017. The Assessments were framed by the Dy. Commissioner of Income Tax, Central Circle 2(3), Income Tax Officer2(1)(2), Mumbai (in short ‘DCIT’ ‘ITO’/ AO’) for the A.Ys. 2008-09 & 2007- 08 vide order dated 23.03.2016, 05.03.2015 under section 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter ‘the Act’).

2. The first issue in ITA No. 3986/Mum/2017 of Revenue’s appeal is against the order of CIT(A) quashing the reassessment by quashing notice under section 148 of the Act. For this Revenue has raised the following ground No. 1: -

“1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in quashing the proceedings u/s 148 of the Incometax Act, 1961 without appreciating that the information that (1) M/s Alka Diamond Industries P. Ltd. (2) M/s Artillegence Rio-Innovations Ltd. (3) M/s Microsoft Technology Put. Ltd. (4) M/s Nicco Securities Put. Ltd. and (5) M/s Navlakha Agrex Put. Ltd. were providing accommodation entries: was revealed during the course of search in the case of Praveen Kumar Jain and this particular information was not disclosed by the assessee either in the return of income or during the course of assessment proceedings under section 143(3) of the Income-tax Act, 1961 and the CIT(A) did not appreciate the ratio of the decision of Hon'ble Supreme Court in the case of Yogendra Kumar Gupta 57 taxmann.com 383 (SC).”

3. The Revenue has also raised the ground on merits challenging the deletion by CIT(A) raising ground No. 2 as under:

“2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of ₹ 4 Cr. Being unexplained share application money without appreciating that the assessee as well as (1) M/s Alka Diamond Industries P. Ltd (2) M/s Artillegence BioInnovations Ltd. (3) M/s Microsoft Technology Pvt Ltd. (4) M/s Nicco Securities Pvt. Ltd and (5) M/s Navlakha Agrex Pvt. Ltd. failed to establish the genuineness of the transaction and the Ld. CIT(A) further failed to appreciate that the circumstantial facts revealed in the search conducted at the various premises of Praveen Kumar Jain wherein this systematic racket of converting unaccounted income into purported share capital was deleted which caused loss to the Nation by depriving the revenue on itsunaccounted income.

4. Briefly stated facts are that the assessee is a Private Limited Company engaged in the business of Investments, Loans & Advances. Assessee-company invested in shares and securities for a long term perspective and gives loans and advances. It is the main investment company of the Vardhman Group engaged in the business of Builders and Developers for more than 35 years and has substantial stake in the flagship company of the Group. The valuation of the company is derived from the underlying assets being equity of its flagship company. It was claimed by the assessee that it is neither a shell company nor a
beneficiary of the accommodation entries. The Original return of income was filed by the assessee on 22.10.2007 for the AY 2007-08. This return wasprocessed under section 143(1) of the Act. Subsequently, the AO issued notice under section 148 of the Act, dated 26.03.2014. The AO for issuing notice under section 148 of the Act recorded the following reasons: -

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