TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 254
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.....03.2017. A perusal of the reason to believe recorded for issuance of the aforesaid notice brings out the fact that the Assessing Officer received certain information from the Additional Director of Income Tax (Investigation), Delhi regarding two accommodation entries having been obtained by the petitioner from M/s Fine Tradelink Pvt. Ltd. for Rs. 20,00,000/- and from M/s Grace Exim Pvt. Ltd. for Rs. 15,00,000/-, during the financial year 2009-10. According to that information these two entries were part of large number of accommodation entries provided by a group of companies known as Himanshu Verma group. The information appears to have surfaced in the course of the search proceedings conducted against certain entities described as Hima....
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....he instant case, the assessee is in receipt of substantial amounts of money from third parties. At this stage, insofar as those parties appear to have denied such investment the Assessing Officer had in his possession relevant material (in the shape of denial of such investment) to record his reason as to his belief that such entries represent escaped income. The Assessing Officer has recorded his reasons to believe, in the following terms:- "M/s Kanpur Sheetalaya Private Limited has taken accommodation entry from Himanshu Verma Group in F.Y. 2009-10 as follows: Name of the Beneficiary PAN Name of Himanshu Verma Group Company Amount (Rs.) Kanpur Sheetalaya Pvt. Ltd. AAACK5509K Fine Tradelink Pvt. Ltd. 20,00,000 Kanpur Sheetalaya ....
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....astly, it has been submitted by learned counsel for the petitioner that no reason to believe can arise that any income had escaped assessment at the hands of the petitioner by merely stating or alleging that the petitioner had obtained accommodation entries without explaining the basis for referring such conclusion. In this regard reliance has been placed on a judgement of the Delhi High court in the case of PCIT Vs. Meenakshi Overseas Pvt. Ltd., wherein it has been held as below: "22. As rightly pointed out by the ITAT, the 'reasons to believe' are not in fact reasons but only conclusions, one after the other. The expression 'accommodation entry' is used to describe the information set out without explaining the basis for....
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.... assessment: In this case, information has been received from the Director of Income Tax, (Investigation) New Delhi that the Assessee has received amount of Rs. 5,00,000/- as follows: Beneficiary's Name Meenakshi Overseas P. Ltd Beneficiary Bank Name State Bank of Hyderabad Beneficiary Bank Branch Koral Bagh Value of entre taken 500,000/- Instrument no. by which entry taken 8628 Date on which entry taken 31.03.2004 Name of A/c Holder of Shubham Electronic & Electic entry giving account Bank from which entry given SBH Branch of entry given bank KB A/c No. Entry giving account 50038" The Assessing Officer after examining such information recorded his reason as below: "Information so received has been gone throug....
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.... Officer the fact of that assessee having received Rs. 5,00,000/-. The details of the creditor and the mode of payment etc. had also been specified. However, neither the creditor had stated or was claimed to have stated that the said entry was an accommodation entry nor there was other material to suggest such fact. The Assessing Officer, of his own and without anything more entertained a belief that the aforesaid entry was an accommodation entry. In this context the Delhi High Court then concluded that the allegation of existing on accommodation entry was merely a conclusion recorded by the Assessing Officer in absence of any reason as to that belief or as to existence of such a conclusion. In the instant case, the facts are otherwise. T....