TaxTMI 
TaxTMI 
2016 (6) TMI 375
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....ly acted upon the direction of the Investigation Wing, New Delhi. 4. Notice under section 148 is illegal because the notice has been issued based upon a general statement of one person that he was doing only name lending. 5. Notice under section 148 is illegal because reopening is barred in view of first proviso to Section 147 as our case is governed by first proviso to section 147 and not by main section 147. In the original assessment made under section 143(3) vide assessment order dated 30/3/2006, the Assessing Officer had made detailed enquiry of the share application money received by the assessee-company. 6. Notice under section 148 is illegal because it has been issued merely upon change of opinion. 7. Notice is illegal because our case is governed by first proviso to section 147 and in the reason recorded to issue notice under section 148, the Assessing Officer has nowhere alleged that escapement of income has occurred by reason of either omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for assessment of that year. 8. Notice under section 148 is illegal in view of second prov....
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....necessary approval from CIT-II, New Delhi. In response to the said notice, assessee filed a letter dated 5.4.2010 stating therein that the return filed earlier and as already assessed u/s. 143(3) may be accepted as return filed under section 148. The assessee further requested to supply a copy of reasons which was duly supplied to him. The assessee was asked to substantiate the identity, genuineness, and creditworthiness of the share application money of Rs. 7 lacs received by it from M/s Garg Petroleum Private Limited. Subsequently notice u/s. 143(2) was issued to the assessee. Assessee filed objections to the reopening of the assessment and issuing of notice u/s. 148 by his letter filed on 10.12.2010 which were rejected vide order sheet entry dated 10.12.2010. Thereafter, AO observed that the assessee has shown receipt /credit of Rs. 7 lacs as share application money through transaction where no real transaction took place, hence, the same was treated as unexplained funds and added back to the income of the assessee and assessed the same at loss of Rs. 1,84,37,726/- passed u/s. 147/143(2) of the I.T. Act, 1961 vide his order dated 24.12.2010. 3. Against the order of the Ld. AO....
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....he question of quashing the reassessment does not arise. Accordingly, he requested that the Appeal filed by the Assessee may be dismissed. 7. We have heard both the parties and perused the records especially the orders of the Revenue authorities alongwith the Paper Book filed by the assessee having various documentary evidences. We have also perused the case laws cited by the Ld. Counsel of the Assessee. In this case the original return was filed on 28.11.2003 declaring loss of Rs. 1,21,87,176/-. The return was duly processed under section 143(1)(a) of the Act on 15.3.2004. The assessee company is engaged in the business of manufacturing of yarn. The assessment was completed under section 143(3) on 30.3.2006 at a loss of Rs. 96,87,176/- after making an addition of Rs. 25,00,000/- under section 68 of the Income Tax Act, 1961. The Ld. CIT(A) vide order dated 15.5.2007 deleted the addition of Rs. 25,00,000/- and the said deletion was subsequently confirmed by the ITAT vide order dated 17.10.2008 and the Hon'ble High Court vide order dated 8.7.2009. Accordingly, the AO by giving effect the order of the ITAT, passed order u/s. 254/143(3) on 7.12.2009 assessing total loss of RS. (-) 1....
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....at many persons were using services of accommodation entry operators to channelize their own unaccounted money in their regular books of accounts by routing the same through the accounts of Accommodation entry providers. 2. The modus operandi of these entry providers and beneficiaries of their services, was detected as under: 2.1 Entries were being broadly taken for two purposes: a) To plough back unaccounted black money for the purpose of business or for personal needs such as purchase of assets etc., in the form of gifts, share application money, loans etc. b) To inflate expenses in the trading and profit and loss account so as to reduce the real profits and thereby pay less taxes. 2.2 The assessees who had unaccounted money (called as entry takers or beneficiaries) and wanted to introduce the same in the books or accounts without paying tax, approached another person (called as entry operator) and handed over the cash (plus commission) and had taken cheques/DDs/Pos. The cash was being deposited by the entry operator in a bank account either in his own name or in the name of relative/friends or other person hired by him, for the purpos....
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....vide letter F.No. Addl. CIT/Range-5/2005-06/759 dated 13.3.2006. 4.1 Enquiries revealed that one Shri Mahesh Garg, was controlling a number of bank accounts In various names & was using various persons operate these accounts. In this regard, statements on oath u/s 131 of the I. T. Act, 1961 of Mahesh Garg was recorded by the Addl. DIT (Inv.), Unit-I, New Delhi. Following is the gist of the statements & letters containing admissions relevant to this case:- (vii) Statements were given on oath by Shri Mahesh Garg before Addl. DIT (Inv.), Unit, New DeIhi on 22.9.2003 in which he has admitted to have indulged in giving entries. He has also admitted that he is controlling various persons who sign on his behest to provide the accommodation entry and one of such firm is Garg Petroleum Pvt. Ltd. (viii) Sh. Mahesh Garg In his statement has elaborated the modus operandi adopted by them In giving accommodation entries In his answer to question 4, 5 and 6. 5. In the instant case of the assessee, Mls KC Fibres Ltd., information has been received that the assessee has taken the accommodation entries as noted below:- Bank & Branch Amount Instrume....
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.... disclose any material facts at the time of assessment, nor could it be readily inferred in view of the fact that a detailed enquiry had been conducted by the AO with regard to the identity and the creditworthiness of the share applicants and the genuineness of the transactions in relation to the share application money received by the Assessee. Further, the mere statement that the Department of Revenue Intelligence had seized certain goods of the assessee and levied a penalty also could not be stated to be reason for reopening of assessment of the assessee as the statement made was neither followed by the recording of a belief that the income escaped on that count or that the assessee had failed to disclose all relevant material, fully and truly, at the stage of the first assessment. The notice of reassessment was not valid and was liable to be quashed." - Haryana Acrylic Manufacturing Co. vs. CIT and Another. In this case it has been held that "allowing the petition, that the reasons recorded did not indicate the failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the assessment year 1998-99. While in the ....