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2017 (5) TMI 475
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...., New Delhi by the Investigation Wing of the Department on 15.09.2008. During the course of post search investigation, it had emerged that Shri Tarun Goyal was engaged in the business of providing accommodation entries in lieu of cash to a large number of beneficiaries through numerous dummy companies floated and controlled by him. He pointed out that it was unearthed that Shri Tarun Goyal was providing accommodation entries through more than 90 companies/proprietary concerns/ partnership firms. 3. The A.O had recorded the following reasons for initiating the proceedings u/s 148 of the Act: "It has been reported by the Addl. Director of income tax (Inv.), Unit-iy, New Delhi that a search u/s 132 of I.T. Act was conducted at the premises no 13/34, WEA Arya Samaj Road, Karolbagh, New Delhi in the case of Shri Tarun Goyal CA on 15.09.2008. During the course of search proceedings/ post search investigations, it is revealed that Shri Tarun Goyal created a number of private limited companies and firms for providing accommodation entries. The directors of these companies were his employees who worked in his office as peon, receptionist etc. All the documents were got signed from the....
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....ying on the decision of the Hon'ble Allahabad High Court in the case of Brij Mohan Agarwal Vs. ACIT reported in 268 ITR 400 held that the report of the Investigation Wing was sufficient material on the basis of which notice under section 148 could be issued. He, accordingly, held that the proceedings had validly been initiated. 5. Before the ld. CIT(A), the assessee had requested for admission of the following additional grounds of appeal: "1. Under the facts and circumstances of the case, the A.O has grossly erred in assuming the jurisdiction of reopening the concluded assessment after the expiry of four years from the end of the relevant A.Y which is grossly injudicious, unwarranted, against the facts of the case and bad in law. 2. Under the facts and circumstances of the case, the A.O has grossly erred in opening the assessment merely on the basis of change of opinion which is not permissible as per law." 6. The ld. CIT(A) admitted both the additional grounds of appeal and upheld the reassessment proceedings, inter alia, by observing as under: "The notice u/s 148 of the Act was issued on 27.03.2014 which is well within the time limit of six years from the end ....
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.... assessee to furnish complete list of share holders with their respective share holding as on 31.03.2007. The ld. counsel for the assessee referred to page 58 of the paper book wherein notice u/s 143(2) of the Act dated 17.07.2009 is contained wherein again the A.O, inter alia, had required the assessee to furnish complete list of share holders with their respective share holding as on 31.03.2007. 9. The ld. counsel for the assessee referred to pages 60 to 64 of the paper book wherein the reply of the assessee for A.Y 2007-08 is contained in response to notice issued u/s 142(1) of the Act and pointed out that the assessee had furnished complete details of share holders with their respective share holding as on 31.03.2007 which is reproduced hereunder: Sr. No. Name Number of Equity shares held % of total 1. Sukesh Kumar Gupta 50000 01.90 2. Shobha Gupta 30000 01.14 3. Sukesh Kumar Gupta HUF 1320000 50.20 4. Ashok Kumar Gupta 10000 00.38 5 Rubai chemicals (P) Ltd. 50000 01.90 6 K.B. Lai & Co. (P.) Ltd. 50000 01.90 7 Thar Steel (P) Ltd. 2 50000 09.52 8 Jai Baba Traders (P.) ....
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....aper book wherein the required informations were furnished before the A.O. The said informations contains the copy of the Income-tax return of Sadguru Finman [P] for A.Y 2007-08; confirmation from Sadguru Finman [P] regarding subscribed 10000 equity shares of Rs. 1 each at a premium of Rs. 9/ each of M/s Commitment Commodities Pvt. Ltd vide cheque No. 51278 dated 08.09.2006 alongwith PAN. Copy of bank statement of Sadguru Finman [P] is also contained at page 33 of the paper book depicting withdrawal of Rs. 10 lakhs from their account. The ld. counsel for the assessee further referred to the Annual Report of Sadguru Finman [P] contained from page 40 onwards and pointed out at page 51 where the details of share holding of Sadguru Finman [P] is contained, the name of the assessee appears. The ld. counsel for the assessee submitted that after considering all these details, the information furnished by the assessee, the A.O completed assessment u/s 143(3) of the Act without making any additions on this count. 13. The ld. Counsel relied on the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Multiplex Treading and Industrial Co. Ltd reported in [2015] 63 Taxmann.Com....
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....He, therefore, submitted that the present case is fully covered by the decision of the Hon'ble Delhi High Court on all four corners. 15. The ld. DR, on the other hand, referring to para 3.1.2 of the ld. CIT(A)'s order pointed out that since the income escaped was more than Rs. 1 lakhs, therefore, in view of the provisions of section 149(1)(b) of the Act, the reassessment proceedings were rightly initiated within six years. The ld. Sr. DR referred to page 20 of the paper book wherein the assessment order passed u/s 143(3) of the Act dated 13.11.2009 in the case of the assessee is contained wherein the A.O had, inter alia, observed as under: "Necessary details and information as called for have been filed and placed on record. Bank details have been called for and examined. Books of accounts consisting of cashbook, bank book, ledger and journal were called for and examined on test check basis." 16. With reference to the above observations of the A.O, the ld. DR submitted that there was no opinion formed by the A.O in respect of findings of the INV Wing. He pointed out that the investigation in the case of Shri Tarun Goyal clearly established the fact that he was running ....
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....7 lakhs constituted fresh information in respect of the assessee as a beneficiary of bogus accommodation entries provided to it and represented undisclosed income. There was specific information received from the office of the Directorate of Investigation as regards the transactions entered into by the assessee with a number of concerns which had made accommodation entries and they were not genuine transactions. It was neither a change of opinion nor did it convey a particular interpretation of a specific provision which was done in a particular manner in the original assessment and sought to be done in a different manner in the proceedings under section 147 of the Act. The reason to believe had been appropriately understood by the Assessing Officer and there was material on the basis of which the notice was issued. In exercise of the jurisdiction under article 226 of the Constitution, the sufficiency of reasons for formation of the belief could not be considered. It was open to the assessee to participate in the reassessment proceedings and put forth its stand in detail to satisfy the Assessing Officer that there was no escapement of taxable income." 20. In this case, the asses....
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....s as under:- "B.1 For share capital, loans other than banks and inter corporate deposits, introduced/taken during the year and also in the period after passing of last order U/s' 1 43(3) give list, source genuineness, identity of the same. Please note you are to give confirmed copy of ledger A/c. from the credit or/party including confirmation of mode, date, address and acknowledgement of return etc' from the said party along with source and relevant bank entries. Same information may please be given in respect of squared up loans if any during the year. Please give a detailed note with regard to advance from customer vis-a-vis the policy of company with regards to recognition of income and treatment in accounts. Complete detail of fresh security deposits made by you during the year. File copy of ledger account and purpose of making deposit and of interest earned thereon, if any." In response to the said query raised in the questionnaire, the assessee vide its response dated 07.08.2009 furnished the details of the share capital raised during the year. Alongwith with the response complete details of the shareholders, their addresses, PAN numbers and number....
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....p;Kirti Ltd. Nagar, New Delhi-110015 AABCP8345D 23400 M/s Shashi Sales & Mktg. Pvt.Ltd. RZ-41A, Mohan Nagar, Pankha Road New Delhi AAFCS8352R 83400 M/s Rajkar Electri & Elect (P) Ltd.New Delhi-110018 5012, Ashok Vihar, New Delhi-110018 AABCR4897G 70000 M/s Shattarchi Finance & Leasing Ltd. 726, Pocket IIIrd Sector-19, Dwarka, New Delhi-110045. AAFCS8159Q 15900 1000000 5. The confirmation letters issued by the shareholders are similar and one such letter is extracted herein below. The same reads as under: "TO WHOM SO IT MAY CONCERN This is confirm that we have made investment in shares, the particulars of which are given hereunder, our own declared sources. Name of Company Allied Strips Ltd. No. of Shares No. of Shares 26700 Equity Shares of Rs. 10/- each At a premium of Rs. 20/- per share Amount invested in Rupees 8,01,000/- Particulars of Remittance Cheque /DD/Pay Order No. 453976, 453977 Dated 29/01/2007 Amount 4,00,000/- each and 1,000/- each ....
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.... make addition or reject the stand of the assessee. He forms an opinion. The re-assessment will be invalid because the Assessing Officer had formed an opinion in the original assessment, though he had not recorded his reasons." 24. The facts being identical, it is held that the present case is one of change of opinion. Further, as regards the requirement of true and correct disclosure by the assessee, I find that in the reasons recorded, reproduced above, the A.O has nowhere made any allegation on this count. 25. In the case of Allied Strips [supra] the Hon'ble Delhi High Court has held as under: "12. Another reason why the impugned notice under Section 148 and the proceedings consequent thereto have to be set aside is that the pre-condition of there being a failure on part of the assessee to fully and truly disclose all the material particulars necessary for assessment has not been made out. 13. Perusal of the reasons for initiating re-assessment shows that there is not even an allegation that there has been failure on the part of the petitioner/assessee to fully and truly disclose all the material particulars necessary for re-assessment. 14. In Haryana Acrylic ....