Assessment Year: 2012-13
This appeal by the Revenue is against the order of CIT(A)-26, New Delhi which quashed the reopening of the case under section 148 of the Income Tax Act, 1961 and deleted additions of Rs. 17.95 crore made under section 68 pertaining to unexplained share capital and share premium.
The case was originally reopened on the grounds that there were deficiencies in the accounting of share capital entries. These were allegedly linked to known entry operators, raising concerns about the genuineness of the transactions.
The tribunal examined extensive submissions from both parties. It noted that the original return of income was accepted, and no discrepancies were observed initially. However, subsequent information led to the reopening under suspicion of accommodation entries. The tribunal scrutinized the chain of events, from the issue of share capital to the subsequent investigation by authorities.
Upon review, the tribunal concurred with CIT(A)’s findings that the notice under section 148 was indeed void ab initio due to the lack of substantial evidence at the outset that could justify the suspicion of undisclosed income. Furthermore, the tribunal endorsed the deletion of the Rs. 17.95 crore addition, emphasizing that the assessee provided sufficient evidence to prove the genuineness of the transactions and the creditworthiness of the contributors.
The tribunal upheld the CIT(A)’s order, providing relief to BDR Builders & Developers P. Ltd., and setting a significant precedent on the burden of proof and the process of reopening cases under section 148.
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