TaxTMI 
TaxTMI 
2018 (5) TMI 133
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....ment by issue of notice u/s 148 after recording the following reasons :- "Reasons recorded under section 148 of the I.T. Act, 1961. Name and address of the assessee Keane India Limited PAN AABCK 7777 j Status Company AY 2002-03 Date of original/revised return 31.10.2002 Returned Income 27879/- Date of regular assessment n.a. Assessed Income n.a. As per information received from ITO Ward 12(1), New Delhi dated 13.03.2009, during the course of assessment proceedings in the case of M/s G.A. Buildcon Pvt. ltd. for A.Y. 2001-2002, statement of Sh. Gajanand Aggarwal, Director was recorded on oath under section 131 of the I.T. Act, 1961. Sh. Gajanand Aggarwal has categorically stated that he is providing accommodation entries in the guise of bogus expenses to various companies including M/s Keane India Limited. Statement of Sh. Gajanand Aggarwal contained in the assessment order of M/s G.A. Buildcon Pvt. Ltd. for A.Y. 2001-2002 is enclosed. During A.Y. 2002-03 also Sh. Gajanand Aggarwal has provided such accommodation entries through M/s G.A. Buildcon Pvt. Ltd. During A.Y. 2002-2003 (F.Y. 2001-2002) M/s G.A. Buildcon Pvt....
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.... 5. Aggrieved with such order of the Assessing Officer/TPO/DRP, the assessee is in appeal before the Tribunal by raising the following grounds :- "That on the facts and circumstances of the case and in law, the Learned Deputy Commissioner of Income Tax, Circle 5(1), New Delhi (hereinafter referred to as Ld Assessing Officer 'AO') grossly erred in enhancing the returned income by Rs. 5,93,39,236. Corporate Tax Matters 1. That the Ld AO acted without jurisdiction in initiating re-assessment proceedings u/s 147/148 of the Act which renders the re-assessment proceedings invalid and bad in law. 2. That the Ld AO erred in making an addition of Rs. 8,15,000, paid to M/s GA Buildcon for Repair & Maintenance of office building, as unexplained expenditure. 3. That the Ld AO erred in disallowing an amount of Rs. 226,286 u/s 14A of the Act. The said disallowance was based on a mere surmise, without any actual finding, that expenditure was actually incurred in earning of tax-free dividends. Transfer Pricing Matters 4. The Ld AO, on the facts and circumstances of the case and in law, erred in making a transfer pricing adjustmen....
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....Subject: - Application under Rule 11 of ITAT Rules for Additional Ground of appeal. The appellant seeks admission of additional ground of appeal by modifying the original ground no 4.5 filed earlier, which reads as under.- 'The Ld AO erred in selecting functionally different companies (namely, infosys Technologies Ltd.) as comparable to the Appellant Company." The said ground does not bring out the dispute correctly. It appears to seek exclusion of only one of the comparable, namely, Infosys Technologies Ltd (Infosys). This is an inadvertent mistake. What was intended was to cite Infosys Technologies Ltd. as an example only. In fact the appellant in addition to Infosys seeks exclusion of several companies selected by TPO despite material differences for which no reasonably accurate adjustment can be made. Hence, the additional ground as per Annexure-I, which may kindly be admitted. It is submitted that the modified ground of appeal no. 4.5 brings out the basic grievance of the appellant company. The modified ground can be decided on the basis of information, which is in public domain and on record. No further evidence is needed for a....
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....ther Assessing Officer during the course of assessment proceedings of M/s G.A. Buildcon Pvt. Ltd. for assessment year 2001-02 and not recorded while completing the assessment for assessment year 2002-03. There is no admission by Mr. Aggarwal at any point of time that he has provided accommodation entries to the assessee during assessment year 2002-03. No opportunity of cross-examination was given by the Assessing Officer to examine Mr. Aggarwal. The Assessing Officer also did not examine Shri Aggarwal while disposing of the objections. He submitted that the Assessing Officer failed to record any valid reason for issuance of notice u/s 147 of the I.T. Act and no evidence was available in his position to record such reasons. Referring to para- 2 of the reasons recorded, he submitted that the source of information is not known. Referring to page 89 of the Paper Book, which is the letter addressed to the Assessing Officer on 06.08.2009, he submitted that the assessee company has categorically requested the Assessing Officer to provide the copy of the statement of Shri Gajanand Aggarwal, director of M/s G.A. Buildcon Pvt. Ltd. which was recorded on oath. Referring to Question No.5 put t....
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....sessment Year 2001-02. 13. The ld. counsel for the assessee submitted that it is now settled law that validity of notice U/S 148 is to be tested on the basis of reasons and reason alone. The impugned reasons rely on an untested statement and the conclusion of the Assessing Officer in M/s GA Buildcon Pvt. Ltd. for the A.Y. 2001-02 for issuing notice u/s 148. The impugned notice therefore lacks bonafide as it is not based on an iota of evidence or facts relating to F.Y. 2001-02 relevant to A.Y. 2002-03. There is nothing in the reasons to indicate that assessment, if any, was made on G Buildcon P. Ltd. for A.Y. 2002-03. Even later, the AO/DRP do not make reference to any such assessment order to or any statement of a director of GA BuiIdcon P. Ltd. recorded in connection with its receipts for A.Y. 2002-03. Second paragraph of 'Reasons' states that M/s GA Buildcon Pvt. Ltd. showed receipt Rs. 1,49,68,877 including Rs. 8,15,000 from the assessee during F.Y. 2002-03. Apart from the fact that it is factually incorrect, there is no reference to it in the statement of Shri Gajanai Agarwal, which was communicated to him. The source of this information is not known. In fact payment....
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....en given. He submitted that the statement was recorded during the financial year 2008-09 and not assessment year 2001-02. In-fact, Shri Gajanand Aggarwal has accepted the business of providing accommodations entries by accepting cheques and giving cash back is not for any specific year but for all the years. He submitted that considering the entire facts, the Assessing Officer has applied the contents of the statement of Shri Gajanand Aggarwal recorded during the assessment year 2001-02 and facts of booking expenses in the relevant assessment year 2002-03 by the assessee in the name of M/s G.A. Buildcon Pvt. Ltd.. Therefore, the action of the Assessing Officer cannot be said to be mechanical in nature for reopening the case. 18. So far as argument of the ld. counsel for the assessee that some more payment made by M/s G.A. Buildcon Pvt. Ltd. apart from 8,15,000/- has not been disallowed by the Assessing Officer is concerned, he submitted that the same does not make the reasons recoded as invalid as the additional payment or bills might have been submitted during the assessment proceedings. In any case disallowance of Rs. 8,15,000/- based on entries in the books of account conside....
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.... page 92-93 of the Paper Book, Volume- 1 does not bear any date. Therefore, we find merit in the submission of the ld. counsel for the assessee that the basis of reopening of the assessment on the basis of undated order passed u/s 143(3) r.w.s. 148 in the case of M/s G.A. Buildcon Pvt. Ltd. cannot be the basis for reopening of the assessment especially when there is no admission by Shri Gajanand Aggarwal that he has provided accommodation entries to M/s Keane India Pvt. Ltd. for assessment year 2002-03. It is also an admitted fact that the Assessing Officer of M/s G.A. Buildcon Pvt. Ltd. has never confronted M/s Keane India Pvt. Ltd. or any other so called beneficiary with the statement of the director or even examined them with reference to the said statement for assessment year 2001-02. Since the notice was issued by the Assessing Officer u/s 148 of the I.T. Act relying solely on the statement of Shri Gajanand Aggarwal recorded by another officer for different assessment year i.e. A.Y. 2001-02 without examining himself the said director in respect of assessment year 2002-03, therefore, we find merit in the submission of the ld. counsel for the assessee that in absence of any othe....