TaxTMI 
TaxTMI 
2016 (6) TMI 747
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....ithin a period of four years from the end of relevant assessment year. In all cases such notices were issued within four years, in some cases, the original assessments were framed after scrutiny and in some, returns accepted under section 143(1) of the Act. 4. The Assessing Officer in the case on hand, had recorded detailed reasons for issuing the notice for reopening. It would be useful to record such reasons: "A search and survey action was carried out at the residence and offices of Shri Shirish Chandrakant Shah (hereinafter referred to SCS) and at the residence of his key employees and associates on 09.04.2013 and subsequent days. During the course of search, it was found that SCS is engaged in providing accommodation entries of share capital, share premium, share application money, unsecured loans, Long Term Capital Gains, Short term capital gain wherein cash is received by him from various clients and against this cash he provides accommodation entries. The records of providing accommodation entries are maintained by SCS in various excel sheets maintained in the name of intermediaries who have introduced clients to SCS. Perusal of these sheets and the statements of S....
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....S since year 2008. PIL along with another 211 companies are managed and controlled and managed by SCS, which also include 16 listed companies, which got substantiated by the inquiries in the form of statements of Directors, information and declarations filed by the directors. Further, evidence with regard to the fact that SCS has indulged in synchronized trading so as to jack up the price of the shares of the listed companies controlled by him including PIL was also found and seized/impounded. As stated above, evidence with regard to the fact that the payout received on sale of shares of PIL has been received against payment of unaccounted cash has also been found and impounded during the course of search and survey conducted in the case of SCS. A search in the case of Prraneta Industries Limited (now known as Aadhar Ventures India Limited) was also conducted on 09.04.2013. Shri Radheshyam Sharma, manager of the company, in his stated dated 09.04.2013, has stated that there is no business activity in the company and the entire affairs of the company including the preparation and maintenance of the books of accounts of the company is being done by Shirish Chandrakant Shah. Shri O....
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....as resorted to so as to jack up the prices of shares and buy the shares from the clients and provide them payout against the receipt of cash from them. He categorically admitted that shares of Prraneta Industries Limited were used to provide accommodation entries and synchronized trading was resorted to for buying and selling of shares of PIL. In light of above facts, the transactions recorded in the "rajesh Jhaveri" sheet represent buying and selling of shares through synchronized trading. The entries as recorded in this sheet have been corroborated with the trade data of PIL as obtained from BSE. On correlation, it has been found that these transactions relate to actual trades executed on BSE. As per the entries recorded in the said sheet, the payout made in the shares of PIL has been made against receipt of cash by SCS. From the entries recorded in 'n navkar bips 30.10.12.xls' with regard to shares of Prraneta Industries Limited, it is seen that the assessee has received payout of Rs. 4,03,34,595/- on sale of 955644 shares of Prraneta Industries Ltd. As recorded in the seized/impounded documents, the payout has been received against payment of cash. Thus, the en....
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.... any commission was actually paid to the assessee during the relevant period, the Court quashed the notice of reopening on the ground that the Assessing Officer had no valid reason to believe the income had escaped assessment. The counsel also relied on the judgment in case of Sagar Enterprises v. Assistant Commissioner of Incometax, reported in 257 ITR 335 where the Assessing Officer was not clear in which year the income could be taxed, the Court quashed the notice for reopening. 9. On the other hand, learned counsel for the Revenue opposed the petitions contending that there was voluminous material on record to permit the Assessing Officer to form a belief that income chargeable to tax has escaped assessment. He submitted that after detailed exercise undertaken by the Assessing Officer of reconciliation of various entries in n navkar bips, found during search and the data maintained by Bombay Stock Exchange, it was found that large number of shares said to have been sold by the assessee were tainted. He explained in detail the modusoperandi adopted by various persons involved in scam of providing bogus accommodation entries. He contended that the petitioner was also beneficia....
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....ded his reasons that with respect to shares of Prraneta Industries Limited, the assessee had received pay out of Rs. 4.03 crores for sale of Rs. 9,55,644/- shares. 12. The Revenue has produced a full compilation of such entries at page No.178 to 209 of the paper book. We had a glance at such entries and found primafacie justification enabling the Assessing Officer to come to the said conclusion. We do not find that the reasons lack validity or that there was no live link between the material on record and formation of the belief that the income chargeable had escaped assessment. 13. It is true that in the compilation produced before us, the total of payout during the period under consideration is some what lesser than what is recorded with the Assessing Officer in terms of volume of shares and the value of receipt. However, when such large entries are being examined and corelated, minor discrepancy would not shake the very foundation of reason to believe, particularly when substantial portion of such alleged payout is demonstrated through the entries, matching with the BSE record of buying and selling data of Prraneta Industries Limited. In the reasons recorded, the Assessing....