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Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
This appeal by the assessee is directed against order dated 19.06.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2010-11, raising following grounds:
1. On the facts and circumstances of the case and in law, the Ld. CIT(A), National Faceless Appeal Centre ("NFAC"), Delhi has erred in upholding the reassessment proceedings initiated u/s 147 of the IT Act without serving the notice u/s 148 of the Act within the period of six years from the end of the Assessment year 2010-11 as required u/s 148 of the Act. Hence the entire reassessment order passed u/s 147 r.w. sec. 143(3) of the Act is liable to be quashed on the lack of jurisdiction.
M/s Coral Ventures Pvt. Ltd. 2 ITA No. 2483/Mum/2023
On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. CIT(A),NFAC, Delhi erred in upholding the reassessment order CIT(A),NFAC, Delhi erred in upholding the reassessment order CIT(A),NFAC, Delhi erred in upholding the reassessment order passed u/s passed u/s 147 r.w. sec. 143(3) of the Act., pursuant to notice u/s 147 r.w. sec. 143(3) of the Act., pursuant to notice u/s 148 issued without obtaining the requisite approval u/s 151 of the 148 issued without obtaining the requisite approval u/s 151 of the 148 issued without obtaining the requisite approval u/s 151 of the Act. Hence the entire reassessment order passed u/s 147 r.w. sec. Act. Hence the entire reassessment order passed u/s 147 r.w. sec. Act. Hence the entire reassessment order passed u/s 147 r.w. sec. 143(3) of the Act is liable to be quashed for the foundational error 143(3) of the Act is liable to be quashed for the foundational er 143(3) of the Act is liable to be quashed for the foundational er of jurisdiction. of jurisdiction.
3. On the facts and circumstances of the case and in law, the Ld. CIT On the facts and circumstances of the case and in law, the Ld. CIT On the facts and circumstances of the case and in law, the Ld. CIT (A) NFAC, Delhi has erred in upholding the reassessment (A) NFAC, Delhi has erred in upholding the reassessment (A) NFAC, Delhi has erred in upholding the reassessment proceedings initiated u/s 147 of the IT Act ignoring the contention proceedings initiated u/s 147 of the IT Act ignoring the contention proceedings initiated u/s 147 of the IT Act ignoring the contention of appellant that the proceedings have been of appellant that the proceedings have been initiated by the AO initiated by the AO without application of independent mind on the material, if any, without application of independent mind on the material, if any, without application of independent mind on the material, if any, provided by the Inv. Wing of the department. In view of the above provided by the Inv. Wing of the department. In view of the above provided by the Inv. Wing of the department. In view of the above defects in the compliances the resultant reassessment proceedings defects in the compliances the resultant reassessment proceedings defects in the compliances the resultant reassessment proceedings are required to be set aside. are required to be set aside. 4. The impugned assessment is invalid and without jurisdiction as gned assessment is invalid and without jurisdiction as gned assessment is invalid and without jurisdiction as the said assessment is completed without complying with legal the said assessment is completed without complying with legal the said assessment is completed without complying with legal requirements of the provisions of section 147/148 of the Income requirements of the provisions of section 147/148 of the Income requirements of the provisions of section 147/148 of the Income Tax Act therefore such assessment is void ab initio and liable to be Tax Act therefore such assessment is void ab initio and liable to be Tax Act therefore such assessment is void ab initio and liable to be quashed. 5. On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. CIT(A),NFAC, Delhi erred in upholding the reassessment order CIT(A),NFAC, Delhi erred in upholding the reassessment order CIT(A),NFAC, Delhi erred in upholding the reassessment order passed u/s 147 r.w. sec. 143(3) of the Act based on the incorrect passed u/s 147 r.w. sec. 143(3) of the Act based on the incorrect passed u/s 147 r.w. sec. 143(3) of the Act based on the incorrect facts and reasons to believe the escapement of income within the facts and reasons to believe the escapement of income within th facts and reasons to believe the escapement of income within th meaning of section 147 of the Act. Hence the entire Reassessment meaning of section 147 of the Act. Hence the entire Reassessment meaning of section 147 of the Act. Hence the entire Reassessment proceedings are liable to be annulled and quashed. proceedings are liable to be annulled and quashed. 6. On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. CIT(A),NFAC, Delhi erred in upholding the reassessment order CIT(A),NFAC, Delhi erred in upholding the reassessment order CIT(A),NFAC, Delhi erred in upholding the reassessment order passed u/s 147 passed u/s 147 r.w. sec. 143(3) of the Act without disposing off r.w. sec. 143(3) of the Act without disposing off the objections raised by the Appellant to the reopening of the the objections raised by the Appellant to the reopening of the the objections raised by the Appellant to the reopening of the Assessment by a reasoned order in accordance with the judgment Assessment by a reasoned order in accordance with the judgment Assessment by a reasoned order in accordance with the judgment of Hon. Supreme Court in the case of GN Driveshafts 259 ITR Supreme Court in the case of GN Driveshafts 259 ITR Supreme Court in the case of GN Driveshafts 259 ITR 19(SC). 7. On the fact On the facts and circumstances of the case and in law, the Ld. s and circumstances of the case and in law, the Ld. CIT(A),NFAC,Delhi erred in upholding the addition of Rs. CIT(A),NFAC,Delhi erred in upholding the addition of Rs. CIT(A),NFAC,Delhi erred in upholding the addition of Rs. 47,00,000/ 47,00,000/- u/s 68 of the IT Act being the proceeds received on u/s 68 of the IT Act being the proceeds received on sale of 4700 shares of J M D Sounds Ltd. From jai Ambe Cassetts sale of 4700 shares of J M D Sounds Ltd. From jai Ambe Cassetts sale of 4700 shares of J M D Sounds Ltd. From jai Ambe Cassetts Private Limited @ R Private Limited @ Rs. 1000/- each, as unexplained cash credit each, as unexplained cash credit ignoring the fact that the assessee has discharged its primary ignoring the fact that the assessee has discharged its primary ignoring the fact that the assessee has discharged its primary onus u/s 68 of the IT Act explaining nature, source, identity, onus u/s 68 of the IT Act explaining nature, source, identity, onus u/s 68 of the IT Act explaining nature, source, identity, creditworthiness and genuineness of credit by filing requisite creditworthiness and genuineness of credit by filing requisite creditworthiness and genuineness of credit by filing requisite documents during assessm documents during assessment proceedings. 8. On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. CIT(A),NFAC, Delhi failed to appreciate that the appellant was not CIT(A),NFAC, Delhi failed to appreciate that the appellant was not CIT(A),NFAC, Delhi failed to appreciate that the appellant was not provided the opportunity to cross examine the statement of the provided the opportunity to cross examine the statement of the provided the opportunity to cross examine the statement of the witness relied upon by Ld. witness relied upon by Ld. AO and other relied upon documents upon documents and evidences for their rebuttal/defense under the principals of and evidences for their rebuttal/defense under the principals of and evidences for their rebuttal/defense under the principals of natural iustice while making the impugned addition of Rs. natural iustice while making the impugned addition of Rs. natural iustice while making the impugned addition of Rs. 47,00,000/ 47,00,000/- u/s 68 of the Act. Hence the addition based on such u/s 68 of the Act. Hence the addition based on such un-confronted statement and documents cannot be held confronted statement and documents cannot be held as validly confronted statement and documents cannot be held sustainable therefore the same may kindly be deleted. sustainable therefore the same may kindly be deleted.
M/s Coral Ventures Pvt. Ltd. 3 ITA No. 2483/Mum/2023
On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. CIT(A),NFAC, Delhi failed to appreciate that there is no cash trail CIT(A),NFAC, Delhi failed to appreciate that there is no cash trail CIT(A),NFAC, Delhi failed to appreciate that there is no cash trail against the consideration of Rs. 47,00,000/ against the consideration of Rs. 47,00,000/-received against received against the sale of 4700 shares of J M D Sounds Ltd as per the bank sale of 4700 shares of J M D Sounds Ltd as per the bank sale of 4700 shares of J M D Sounds Ltd as per the bank statement submitted by the Appellant during the Assessment statement submitted by the Appellant during the Assessment statement submitted by the Appellant during the Assessment proceedings. proceedings.
On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. On the facts and circumstances of the case and in law, the Ld. CIT(A),NFAC, Delhi ought to have appreciated that the entire CIT(A),NFAC, Delhi ought to have appreciated that the entire CIT(A),NFAC, Delhi ought to have appreciated that the entire transactions of sale of 4700 shares of J M D Sounds Ltd for Rs. transactions of sale of 4700 shares of J M D Sounds Ltd for Rs. transactions of sale of 4700 shares of J M D Sounds Ltd for Rs. 47,00,000/ 47,00,000/- has been confirmed by the buyer of shares jai Ambe has been confirmed by the buyer of shares jai Ambe Cassetts Private Limited responding to the notice issued u/s Cassetts Private Limited responding to the notice issued u/s Cassetts Private Limited responding to the notice issued u/s 133(6) of the act seeking the relevant information. 133(6) of the act seeking the relevant information. 11. On the facts an On the facts and circumstances of the case and in law, the Ld. d circumstances of the case and in law, the Ld. CIT(A),NFAC, Delhi erred in not dwelling upon and CIT(A),NFAC, Delhi erred in not dwelling upon and distinguishing distinguishing the judicial rulings relied upon by the Appellant on facts and law the judicial rulings relied upon by the Appellant on facts and law the judicial rulings relied upon by the Appellant on facts and law in support of their arguments and defense to contest the reopening in support of their arguments and defense to contest the reopening in support of their arguments and defense to contest the reopening of the Assessment u/s 147/148 and the addition made u/s 68 of sessment u/s 147/148 and the addition made u/s 68 of sessment u/s 147/148 and the addition made u/s 68 of the Act. 12. The Ld. CIT(A),NFAC, Delhi erred in not providing the appropriate The Ld. CIT(A),NFAC, Delhi erred in not providing the appropriate The Ld. CIT(A),NFAC, Delhi erred in not providing the appropriate opportunity of being heard by not granting the personal hearing by opportunity of being heard by not granting the personal hearing by opportunity of being heard by not granting the personal hearing by Video Conferencing (VC) in faceless regime in spite of specific Video Conferencing (VC) in faceless regime in spite of specif Video Conferencing (VC) in faceless regime in spite of specif request by the request by the Appellant vide their written submissions uploaded Appellant vide their written submissions uploaded on the portal. Hence the Assessment order passed in complete on the portal. Hence the Assessment order passed in complete on the portal. Hence the Assessment order passed in complete contravention of cardinal principals of natural justice is liable to be contravention of cardinal principals of natural justice is liable to be contravention of cardinal principals of natural justice is liable to be quashed and annulled quashed and annulled 2. Briefly stated facts of the case are that on receipt of e are that on receipt of information from the Investigation Wing of Income information from the Investigation Wing of Income-tax Department, tax Department, Kolkata, the Assessing Officer recorded reasons to believe that Kolkata, the Assessing Officer recorded reasons to believe that Kolkata, the Assessing Officer recorded reasons to believe that income escaped assessment and reopened the assessment u/s 147 income escaped assessment and reopened the assessment u/s 147 income escaped assessment and reopened the assessment u/s 147 of the Income-tax Act, 1961 (in short ‘ tax Act, 1961 (in short ‘the Act’) by way of issuing the Act’) by way of issuing notice u/s 148 of the Act on 29.03.2016. The assessment notice u/s 148 of the Act on 29.03.2016. The assessment notice u/s 148 of the Act on 29.03.2016. The assessment proceedings were completed on 19.12.2017 after making addition completed on 19.12.2017 after making addition completed on 19.12.2017 after making addition u/s 68 of the Act amounting to Rs.47 lakhs. u/s 68 of the Act amounting to Rs.47 lakhs.
On further appeal, the Ld. CIT(A) also upheld the addition as On further appeal, the Ld. CIT(A) also upheld the addition as On further appeal, the Ld. CIT(A) also upheld the addition as well as rejected the well as rejected the challenge to validity of reassessment validity of reassessment proceedings u/s 147 of the Act. proceedings u/s 147 of the Act.
M/s Coral Ventures Pvt. Ltd. 4 ITA No. 2483/Mum/2023
Aggrieved, the assessee is in appeal before the Tribunal by way the assessee is in appeal before the Tribunal by way the assessee is in appeal before the Tribunal by way of raising grounds as reproduced above. of raising grounds as reproduced above.
The grounds raised consist mainly The grounds raised consist mainly of two categories, of two categories, firstly, challenging the validity of the reassessment proceedings and, challenging the validity of the reassessment proceedings and challenging the validity of the reassessment proceedings and secondly, addition on merit. addition on merit.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. In the case, the Assessing Officer relevant material on record. In the case, the Assessing Officer relevant material on record. In the case, the Assessing Officer received received information information from from the the Dy. Dy. Director Director of of Income-tax Income Investigation, Kolkata that M/s Jaiambe Cassettes Pvt. Ltd. is a Investigation, Kolkata that M/s Jaiambe Cassettes Pvt. Ltd. is a Investigation, Kolkata that M/s Jaiambe Cassettes Pvt. Ltd. is a ‘Jamakharchi’ Company which Company which was indulged in providing bogus indulged in providing bogus entries to the beneficiaries beneficiaries through their bank accoun bank account No. 411010200002622. The said letter of the . The said letter of the investigation wing investigation wing mentioned that assessee company had enjoyed bogus entries to the mentioned that assessee company had enjoyed bogus entries to the mentioned that assessee company had enjoyed bogus entries to the tune of Rs.90,00,000/ tune of Rs.90,00,000/- in the assessment year under consideration. the assessment year under consideration. During assessment proceedings, the Assessing Officer issued notice During assessment proceedings, the Assessing Officer issued notice During assessment proceedings, the Assessing Officer issued notice u/s 133(6) of the Act to M/s Jaiambe C u/s 133(6) of the Act to M/s Jaiambe Cassettes Pvt. Ltd. asking to assettes Pvt. Ltd. asking to produce ledger copies of the assessee company nature of produce ledger copies of the assessee company nature of produce ledger copies of the assessee company nature of transaction etc. The said company confirmed the transaction of transaction etc. The said company confirmed the transaction of transaction etc. The said company confirmed the transaction of Rs.47 lakhs with assessee company Rs.47 lakhs with assessee company. The assessee further provided he assessee further provided detail of transaction of Rs.47 lakhs as und detail of transaction of Rs.47 lakhs as under:
Sr. No. Date of Receipt Amount Particulars Remakrs 1. 10.10.2009 12,00,000 Consideration for sales Consideration for sales Original Shares of 1200 shares of JMD of 1200 shares of JMD allotted by JMD Sounds Ltd. at Rs.1000 Sounds Ltd. at Rs.1000 Sounds Ltd. for each Rs.1000 each on 20.02.2008 to the assessee. 19.10.2009 35,00,000 Consideration for sale of Consideration for sale of Original shares
M/s Coral Ventures Pvt. Ltd. 5 ITA No. 2483/Mum/2023
3500 shares of JMD 3500 shares of JMD allotted by JMD shares Ltd. for Rs. 1000 shares Ltd. for Rs. 1000 Sounds Ltd. for each Rs.1000 each on 20.02.2008 to the assessee Total Rs.47,00,000 6.1 The Assessing Officer noticed that the The Assessing Officer noticed that the transaction w transaction with M/s Jaiambe Cassettes Pvt. w Jaiambe Cassettes Pvt. was of sale of 4700 shares of M/s JMD as of sale of 4700 shares of M/s JMD Sounds Ltd. However, the Assessing Officer held Sounds Ltd. However, the Assessing Officer held that that the amount of Rs.47 lakhs received from M/s Jaiambe Cassettes Pvt. Ltd. as Rs.47 lakhs received from M/s Jaiambe Cassettes Pvt. Ltd. Rs.47 lakhs received from M/s Jaiambe Cassettes Pvt. Ltd. unexplained cash credit u/s 68 of the Act due the following unexplained cash credit u/s 68 of the Act due unexplained cash credit u/s 68 of the Act due reasons:
(i) M/s Jaiambe Cassettes Pvt. Ltd. was a (i) M/s Jaiambe Cassettes Pvt. Ltd. was a (i) M/s Jaiambe Cassettes Pvt. Ltd. was a ‘Jamkharchi’ company as per the letter received from Kolkata Investigation company as per the letter received from Kolkata Investigation company as per the letter received from Kolkata Investigation Wing and it had had provided bogus entries to various beneficial entries to various beneficial entities including the assessee including the assessee.
(ii) M/s Jaiambe Casse (ii) M/s Jaiambe Cassettes Pvt. Ltd. had filed return of income ttes Pvt. Ltd. had filed return of income for assessment year 2010 for assessment year 2010-11 at Rs.11,450/- only only and no real business was carried out by business was carried out by said company except other company except other income of Rs.81,000/ income of Rs.81,000/-.
(iii) The assessee though being the Mumbai based company he assessee though being the Mumbai based company he assessee though being the Mumbai based company, it had purchased s had purchased shares of Kolkata based company JMD Sound hares of Kolkata based company JMD Sound Ltd. and after holding for holding for 20 month, it sold the said share to sold the said share to another Kolkata Based Company i.e. M/s M/s Jaiambe another Kolkata Based Company i.e. M/s M/s Jaiambe another Kolkata Based Company i.e. M/s M/s Jaiambe Cassettes Pvt. Ltd. at exactly same price. The Assessing Officer Cassettes Pvt. Ltd. at exactly same price. The Assessing Officer Cassettes Pvt. Ltd. at exactly same price. The Assessing Officer
M/s Coral Ventures Pvt. Ltd. 6 ITA No. 2483/Mum/2023 questioned the physical purchase of questioned the physical purchase of the shares of Kolkata the shares of Kolkata based company by the assessee company. based company by the assessee company.
(iv) In the bank statement of M/s Jaiambe Cassettes Pvt. Ltd. (iv) In the bank statement of M/s Jaiambe Cassettes Pvt. Ltd. (iv) In the bank statement of M/s Jaiambe Cassettes Pvt. Ltd., there was immediate entry of deposit from another concern there was immediate entry of deposit from another concern there was immediate entry of deposit from another concerns.
(v) No valuation certificate was submitted by the assessee (v) No valuation certificate was submitted by the assessee (v) No valuation certificate was submitted by the assessee company for the shares at the time of the purchase as well as the shares at the time of the purchase as well as the shares at the time of the purchase as well as sale.
(vi) Majority of shares of JMD Sounds Ltd. Majority of shares of JMD Sounds Ltd. were were also held by the M/s Jaiambe Cassettes Pvt. Ltd. the M/s Jaiambe Cassettes Pvt. Ltd. (vii) Shri Kailash Prasa (vii) Shri Kailash Prasad Purohit was a common directer d Purohit was a common directer in JMS Sound Ltd. and M/s Jaiambe Cassettes JMS Sound Ltd. and M/s Jaiambe Cassettes Pvt. Ltd. Pvt. Ltd. 6.2 On further appeal, the Ld. CIT(A) upheld the addition on merit On further appeal, the Ld. CIT(A) upheld the addition on merit On further appeal, the Ld. CIT(A) upheld the addition on merit observing as under:
“7.5 I have carefully considered the AO's viewpoint contained in the 7.5 I have carefully considered the AO's viewpoint contained in the 7.5 I have carefully considered the AO's viewpoint contained in the Assessment Order and the grounds of appeal and statement of facts Assessment Order and the grounds of appeal and statement of facts Assessment Order and the grounds of appeal and statement of facts made by the appellant made by the appellant in Form 35 including relevant judicial decisions in Form 35 including relevant judicial decisions in the matter. 7.6 During the year under consideration, it is seen that no further 7.6 During the year under consideration, it is seen that no further 7.6 During the year under consideration, it is seen that no further documentary evidence, whatsoever, has been produced to prove the documentary evidence, whatsoever, has been produced to prove the documentary evidence, whatsoever, has been produced to prove the genuineness of the transaction. Apart from written submiss genuineness of the transaction. Apart from written submiss genuineness of the transaction. Apart from written submission, the appellant has produced copies of documents produced before AO as appellant has produced copies of documents produced before AO as appellant has produced copies of documents produced before AO as mentioned above in appellant's submission. I have examined these mentioned above in appellant's submission. I have examined these mentioned above in appellant's submission. I have examined these documents. Instead of supporting the case of appellant, these documents. Instead of supporting the case of appellant, these documents. Instead of supporting the case of appellant, these documents only reinforces the findings of the AO which documents only reinforces the findings of the AO which are based on are based on his detailed analysis of the facts and circumstances of the case along his detailed analysis of the facts and circumstances of the case along his detailed analysis of the facts and circumstances of the case along with deep and wide Investigation carried out by the department as with deep and wide Investigation carried out by the department as with deep and wide Investigation carried out by the department as these documents are in tune with the modus these documents are in tune with the modus-operandi through which operandi through which accommodation entries have been provided accommodation entries have been provided by the company. by the company.
M/s Coral Ventures Pvt. Ltd. 7 ITA No. 2483/Mum/2023
7.7 In the present case, I find that the appellant has failed to In the present case, I find that the appellant has failed to In the present case, I find that the appellant has failed to discharge its burden of proof and the AO, on the other hand, even in discharge its burden of proof and the AO, on the other hand, even in discharge its burden of proof and the AO, on the other hand, even in the limited time available, analysed the available material and has the limited time available, analysed the available material and has the limited time available, analysed the available material and has proved that the claim of the appellan proved that the claim of the appellant was incorrect. As discussed t was incorrect. As discussed above, there is overwhelming evidence discussed in paras 4 to 4.5 of above, there is overwhelming evidence discussed in paras 4 to 4.5 of above, there is overwhelming evidence discussed in paras 4 to 4.5 of the assessment order that the transactions on which adverse views the assessment order that the transactions on which adverse views the assessment order that the transactions on which adverse views have been taken are pre have been taken are pre-arranged transactions under taken with the arranged transactions under taken with the sole motive to evade tax sole motive to evade tax. 7.8 In view of the facts and circumstances borne out of the In view of the facts and circumstances borne out of the In view of the facts and circumstances borne out of the assessment order and legal precedents as discussed above, I am of assessment order and legal precedents as discussed above, I am of assessment order and legal precedents as discussed above, I am of the view that documents submitted as evidences to prove the the view that documents submitted as evidences to prove the the view that documents submitted as evidences to prove the genuineness of transaction are themselves found to serve as smoke genuineness of transaction are themselves found to serve as smoke genuineness of transaction are themselves found to serve as smoke screen to cover up the true nature of the transactions in the facts and creen to cover up the true nature of the transactions in the facts and creen to cover up the true nature of the transactions in the facts and circumstances of the case as it is revealed that amount received by the circumstances of the case as it is revealed that amount received by the circumstances of the case as it is revealed that amount received by the appellant company as unexplained cash credit are arranged appellant company as unexplained cash credit are arranged appellant company as unexplained cash credit are arranged transactions to introduce its unaccounted income throug transactions to introduce its unaccounted income throug transactions to introduce its unaccounted income through entry providers with the sole motive to account for the undisclosed income. providers with the sole motive to account for the undisclosed income. providers with the sole motive to account for the undisclosed income. Accordingly, in view of the above discussion and judicial precedents, it Accordingly, in view of the above discussion and judicial precedents, it Accordingly, in view of the above discussion and judicial precedents, it is held that AO was justified in making addition of Rs 47,00,000/ is held that AO was justified in making addition of Rs 47,00,000/ is held that AO was justified in making addition of Rs 47,00,000/- u/s 68 of the IT Act as unexplained ca u/s 68 of the IT Act as unexplained cash credit of the appellant. sh credit of the appellant. Ground No. 2 is accordingly dismissed. Ground No. 2 is accordingly dismissed.” 6.3 On perusal of the order of the lower authorities and after On perusal of the order of the lower authorities and after On perusal of the order of the lower authorities and after considering the arguments of the parties, we are of the opinion that considering the arguments of the parties, we are of the op considering the arguments of the parties, we are of the op lower authorities have lower authorities have not given any documentary evidence to not given any documentary evidence to support that assessee support that assessee did not discharge burden of proof prescribed burden of proof prescribed u/s 68 of the Act. In the u/s 68 of the Act. In the case, the share purchase party case, the share purchase party has already confirmed the transaction in independent action carried out by the confirmed the transaction in independent action carried out by the confirmed the transaction in independent action carried out by the Assessing Officer u/s 133(6) of the Act. Further as far as cer u/s 133(6) of the Act. Further as far as cer u/s 133(6) of the Act. Further as far as creditworthiness of the party M/s M/s Jaiambe Cassettes Pvt. Ltd., creditworthiness of the party M/s M/s Jaiambe Cassettes Pvt. Ltd. creditworthiness of the party M/s M/s Jaiambe Cassettes Pvt. Ltd. the assessee submitted before the Assessing Officer net worth of the assessee submitted before the Assessing Officer net worth of the assessee submitted before the Assessing Officer net worth of Rs.12,12,95,355/- as on 31.03.2010. as on 31.03.2010., which has not been disputed , which has not been disputed either by the AO or the Ld CIT(A). AO or the Ld CIT(A). The Ld. counsel also referred to The Ld. counsel also referred to the balance sheet of the said company which is available on Paper the balance sheet of the said company which is available on Paper the balance sheet of the said company which is available on Paper Book Page 63 and 65. Book Page 63 and 65. The ld DR also did not controvert the net The ld DR also did not controvert the net worth of said company. worth of said company. Further, the Assessing Officer questioned Further, the Assessing Officer questioned
M/s Coral Ventures Pvt. Ltd. 8 ITA No. 2483/Mum/2023 genuineness of the transaction merely for the reason that ness of the transaction merely for the reason that ness of the transaction merely for the reason that assessee being Mumbai based company however purchased shares of being Mumbai based company however purchased shares of being Mumbai based company however purchased shares of Kolkata based company in physical transaction. In our opinion, Kolkata based company in physical transaction. In our opinion, Kolkata based company in physical transaction. In our opinion, Mumbai based persons are not bared from buying securities of Mumbai based persons are not bared from buying securities of Mumbai based persons are not bared from buying securities of Kolkatta based entities in physical transaction and this alone can’t tities in physical transaction and this alone can’t tities in physical transaction and this alone can’t basis for doubting genuineness of transaction. The Investigation basis for doubting genuineness of transaction. The basis for doubting genuineness of transaction. The wing of Kolkatta in their information referred the wing of Kolkatta in their information referred the M/s M/s Jaiambe M/s M/s Jaiambe Cassettes Pvt. Ltd. as Cassettes Pvt. Ltd. as ‘Jamakahrchi’ company but not a single but not a single evidence to hold said conclusion has been brought on record by the to hold said conclusion has been brought on record by the to hold said conclusion has been brought on record by the Assessing Officer. Similarly, the holding majority shares of JMD Similarly, the holding majority shares of JMD Similarly, the holding majority shares of JMD Sound Ltd. by the M/s Jaiambe Cassettes Pvt. Ltd. is no reason to Sound Ltd. by the M/s Jaiambe Cassettes Pvt. Ltd. is no reason to Sound Ltd. by the M/s Jaiambe Cassettes Pvt. Ltd. is no reason to doubt the genuineness of the transaction. doubt the genuineness of the transaction. Further, the Further, the Director of the both companies being same cannot be the ground for raising the both companies being same cannot be the ground for raising the both companies being same cannot be the ground for raising doubts on the genuineness of the transaction the genuineness of the transaction. The conclusion of the conclusion of the lower authorities is based merely on the speculation and without on the speculation and without any documentary evidence to support their contention. The liability any documentary evidence to support their contention. The any documentary evidence to support their contention. The cannot u/s 68 of the Act u/s 68 of the Act be fastened on the assessee merely on the on the assessee merely on the basis of allegation being supported with documentary evidence. In basis of allegation being supported with documentary evidence. In basis of allegation being supported with documentary evidence. In the circumstances, we set aside the order of the lower authorities the circumstances, we set aside the order of the lower authorities the circumstances, we set aside the order of the lower authorities and delete the addition on merit. The relevant and delete the addition on merit. The relevant ground grounds challenging the merit of the addition are accordingly allowed. Since, we have the merit of the addition are accordingly allowed. Since, we have the merit of the addition are accordingly allowed. Since, we have already allowed the ground of the appeal on merit and therefore, already allowed the ground of the appeal on merit and therefore, already allowed the ground of the appeal on merit and therefore, grounds challenging validity grounds challenging validity of reassessment are merely academic reassessment are merely academic and therefore, we are not adjudication and therefore, we are not adjudication upon the same. upon the same.
M/s Coral Ventures Pvt. Ltd. 9 ITA No. 2483/Mum/2023
In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed.