Maheshwari Roller Flour Mills Pvt Ltd vs ITO
Assessee is a company which was incorporated on 20.06.1988 under the Company Act, 1956. Assessee has challenged the initiation of re-assessment proceedings under section 147/148, addition of Rs.25 lakhs under section 68, received from M/s. KDG Properties and Con (P) Ltd., and addition of Rs.45,000/- under section 69C on account of unexplained expenditure.
Learned Counsel for the Assessee submitted that initiation under section 147 have been done by mentioning the wrong Section 147(b) which is deleted from the Income Tax Act w.e.f. 01.04.1989, therefore, reopening is done under non-existent Section in a mechanical manner without application of mind. The Ld. D.R. on the other hand submitted that reassessment have been done on the basis of information received from Investigation Wing.
In the reasons also it is mentioned that assessee has received share capital/loan which fact is also incorrect. It was found that assessee just after receipt of the amount in question has returned the amount in question because no shares have been issued in assessment year under appeal itself. Thus, assessee was not a beneficiary of any amount. Thus, the A.O. has mentioned wrong section, wrong facts in the reasons for reopening of the assessment and has acted in a mechanical manner without application of mind.