×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
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This appeal filed by the assessee is directed against the order dated 28.12.2017 of the CIT(A)-18, New Delhi relating to A. Y. 2009-10.
2. Facts of the case, in brief, are that the assessee is an individual and filed the return of income on 28.07.2009 showing total income of Rs. 2,59,100/-. The AO received an information that the assessee has invested a sum of Rs. 7,29,000/- in purchase of shares of M/s Blue Print Securities Ltd. The AO issued letter u/s 133(6) of the Act on 23.03.2016 asking the assessee as to whether she had purchased shares of M/s Blue Print Securities Ltd. during the FY 2008-09 or any other year along with other details. In response to the same, the assessee submitted vide letter dated 28.03.2016 that she has not purchased the said shares during the FY 2008-09 or any other year. The AO thereafter issued notice u/s 148 of the Act on 31.03.2016 after recording reasons. The assessee vide letter dated 15.04.2016 requested the AO to treat the return of income already filed as the return filed in response to notice u/s. 148 and also requested for a copy of the reasons recorded for reopening of the case. The AO vide letter dated 25.05.2016 supplied the copy of the reasons recorded. The assessee raised objections to the reopening of the case vide letter dated 09.06.2016 and the same were disposed off by the AO by letter dated 07.12.2016. The AO thereafter issued a show cause notice on 16.12.2016 proposing to make addition of Rs.7,29,000/- as unexplained investment in shares u/s 69B of the Act. The assessee submitted the reply vide letter dated 23.12.2016 in which it was stated that the assessee has sold the said shares during the year for a sum of Rs.7,26,038.55 and denied having purchased the shares during the year under consideration or any other year. The Assessing Officer noted that the assessee had denied the purchase of shares during the year under consideration or any other year vide letter dated 28.03.2016 also.
The AO observed that the assessee has failed to furnish the details regarding the purchase of these shares and has also not shown any income under the head capital gains in the return of income filed by her. The AO further noted that the sum of Rs.7,29,000/- has been received in the bank account of the assessee and since the assessee has denied the purchase of shares and no sale of shares is reflected in the return of income, therefore, the source of Rs.7,29,000/- reflected in the bank account remains unexplained. Accordingly, the Assessing Officer made the addition of Rs.7,29,000/- as unexplained cash credit u/s. 68 of the Act.
3. Before the CIT(A) the assessee apart from challenging the addition on merit challenged the validity of the reassessment proceedings. It was argued that the Assessing Officer has reopened the assessment on the basis of the report of the DDIT (Investigation Wing), Kolkata and there was no independent application of mind or reference to any material. It was argued that the reasons recorded are vague, indefinite and contradictory.
The assessee submitted that the Assessing Officer has made allegation that the assessee has invested a sum of Rs.7,29,000/- during the assessment year 2009-10 in scrips of Blue Print Securities Limited which is factually incorrect. The assessee in response to the notice u/s. 133 (6) had correctly stated that she had not invested a sum of Rs.7,29,000/- in the scrip of the company during the assessment year 2009-10 and no further querry was raised by the Assessing Officer. The assessee submitted that there was no failure on the part of the assessee to disclose fully and truly all material facts as alleged by the Assessing Officer and the reopening was based on incorrect and wrong facts. Relying on various decisions, it was argued that the reopening was not proper. So far as the merit of the case is concerned it was argued that the same is also not proper.
3. However, the Ld. CIT(A) was not satisfied with the arguments advanced by the assessee. So far as the issue relating tot eh reopening of the case is concerned, he noted that before reopening the case and issuing notice u/s 148, the AssessingOfficer had issued a letter u/s. 133(6) to the assessee on 23.03.2016, in which it was specifically asked whether the assessee has purchased the shares of Blue Print Securities Ltd. during FY 2008-09 or any other year. It was submitted by the assessee vide her letter dated 28.03.2016 that she has not purchased any such shares during FY 2008-09 or any other year. This according to the Ld. CIT(A) implies that the assessee had denied purchase of shares of Blue Print Securities Ltd., whereas the AO had received the information from the Investigation Wing that the assessee had entered into transaction related to purchase and sale of shares of this company which is nothing but a paper company to facilitate booking of bogus long-term capital gains in the form of an accommodation entry. The AO had analysed the information received with respect the return of income filed by the assessee and it was noticed by him that the assessee has not shown any such transaction or income from capital gains in the return filed. In view of this, the AO had sufficient material to form the reasons to believe that income had