SUPER PLASTRONICS PVT. LTD.,NEW DELHI vs. ITO, NEW DELHI

PER R.K. PANDA, AM:

1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad both in the eye of law and on facts. 2(i) On the facts and circumstances of the case, the reopening the assessment under Section 147 of the Act is bad in law as the same has been done without complying with the statutory conditions and the procedure prescribed under the law is bad and liable to be quashed. (ii) On the facts and circumstances of the case, the reason recorded for reopening of the assessment in the absence of any live nexus, are bad in law and as such the reopening of the assessment is illegal and liable to be quashed so. 3(i) On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the addition of Rs.25,00,000/- made by the AO on account of the share application money received by the appellant company. That the addition has been confirmed despite the (ii) assessee binging on record all the explanation and evidences in respect of the same. Page | 3 That the learned CIT(A) has erred both on facts and in law (iii) in confirming the said addition without there being any adverse material against the assessee and without making any reference to any specific information or evidence against the assessee.

4. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in enhancing the income of the assessee by Rs.2,96,00,000/- without giving it a notice for such enhancement to the appellant company. 5(i) On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in making an addition of Rs.2,56,00,000/- on account of share application money received by the assessee. That the addition has been made despite the assessee (ii) bringing on record all the explanation and evidences in respect of the same. That the learned CIT(A) has erred both on facts and in law in making the said addition without there being any adverse material against the assessee and without making any reference to any specific information or evidence against the assessee. That the above said additions have been confirmed/ made by indulging into surmises and conjectures. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in applying the judgment of N.R. Portfolio Ltd. ignoring the fact that in the said case there was an allegation of accommodation entry admitted by the entry provider. On the facts and circumstances of the case, learned CIT(A; has erred both on facts and in law in ignoring the judgment of the Supreme Court in the case of CIT vs. Lovely Exports Ltd. which is squarely applicable to the facts of this case.

That the addition made/ confirmed by the CIT(A) under Section 68 without giving finding in respect of each of the shareholder individually is otherwise untenable in the eye of law. The Appellant craves leave to add, amend or alter any of the grounds of appeal.

6. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is the submission of the Ld. Counsel for the assessee that the Tribunal in the case of ITO Vs. Vivsun Properties Private Limited in order dated 01.03.2016 has held M/s. Mahanivesh India Limited and M/s. GeeFcee Finance Limited as identified and genuine. Further the assessee has filed all necessary documents such as the copy of the income tax returns, copy of bank statements, financial statements of all the parties, affidavit of the directors etc to prove the identity and capacity of the share applicants and genuineness of the transactions. It is also his submission that the Assessing Officer has reopened the assessment without independent application of mind but on the basis of report of the investigation wing which amounts to reopening on borrowed satisfaction. Referring to various decision of Hon’ble Delhi High court it is his submission that such reopening is bad in law.

7. It is the submission of the Ld. DR that in view of the decision of Hon’ble Delhi High court in the case of NDR Promoters vide ITA No.49/2018 order dated 17.01.2019 and the decision of Hon’ble Supreme court in the case of NRA Ispat vide ITA No.1731/Del/2016 order dated 30.04.2019, the addition made by the Assessing Officer in the exparte order which has been enhanced by the CIT(A) should be upheld. So far as the issue of reopening is concerned it is the submission of the Ld. DR that no such ground was taken by the assessee before the CIT(A) for which he has not adjudicated on this issue. Therefore, the issue of reopening cannot be agitated at this point. It is an admitted fact that neither the assessee nor the revenue had the benefit of the decision of Hon’ble Supreme Court in the case of NRA Ispat (supra) and the decision of Hon’ble Delhi High Court in the case of NDR Promoters (supra) when the assessment was made or the CIT(A) passed the order. It is an admitted fact that the assessee has not taken any ground before the CIT(A) challenging the validity of reassessment proceedings for which he has not adjudicated the validity of reassessment proceedings. Considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the Assessing Officer with a direction to decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. The Assessing Officer shall keep in mind the above decisions relied on by Ld. DR while deciding the issue. The grounds raised by the assessee are accordingly allowed for statistical purpose.

Order pronounced in the open court on 13.09.2019.