TaxTMI 
TaxTMI 
2018 (5) TMI 1548
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.... 2. A search operation u/s 132 of the IT Act was carried out in the case of Madhav Group of cases, Vadodara at the business premises of Madhav Infra Projects Limited at Madhav House, Subhanpura, Vadodara on 09.11.2016 to 11.11.2016. During the search proceedings, some incriminating documents were found and seized. 3.1 A laptop of Shri Amish Bhagwat was found. The hard disc of the laptop was removed and seized and inventorised as Annexure A-26. Further a master image of the laptop hard disk was made and seized alongwith a working copy and inventorised as Annexure A-25. While analyzing the working copy of the same, a PDF file was found. The name of the file was "List of Allottee.pdf" dated 22.10.2011. 3.2 This file contains allotment details of 100000 share of the company-MSK Real Estates Pvt. Ltd., the assessee. 4. On further verification, it was found out that the assessee company alloted 100000 shares on 30.04.2009. The face value of shares was Rs. 10 and they were alloted at a premium of Rs. 90 per share. Thus, total share capital raised through this issue was Rs. 1 crores. These shares were allotted to following Kolkata based companies. The pdf file....
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....m of share capital, share premium, unsecured loans etc. as admitted in their statement by the main controller/dummy directors of these companies. The directors in these companies are the persons of no means and are working as paid employees of one master controller. In the case of above companies, the main controller was Shri Beni Prasad Lahoti and Shri Hari Prasad Rathi. The statement of Shri Beni Prasad Lahoti has been recorded by the Investigating Wing of Kolkata taken in which he has accepted that the companies are not doing any genuine business and only provide accommodation entries. Further Sh Jay Prakash Roy, director of Echolac Vinimay P Ltd and Galore Suppliers P Ltd and Sh Jogendra Pradhan, director of MSV Fiscal Services P Ltd Oleander Manufactures Credit P Ltd and Slow & Sound Electronics P Ltd have accepted in their letters addressed to the DDIT (Inv) Unit II(3) Kolkata that they are dummy directors of the companies and receiving remuneration of Rs. 1000/- to Rs. 2000/- p m for this purpose. The Dy. Director or Income Tax (Inv) Unit 4(2) Kolkata's has furnished the inquiry report dated 10.11.2016 in this regard. 5.1 During the course of search at the resid....
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....of the assessment year 2010-2011 was impermissible. This is the sole ground on which, the petition is argued. 4. The Assessing Officer, while disposing of the objections by an order dated 20.11.2017, met with this objection of the assessee and rejected by making following observations: "3.1.2 Department's view. The contention of the assessee is not acceptable because actually, the assessee company had alloted shares on 30.04.2009 i.e. during F.Y. 2009-10 relevant to A.Y. 2010-11 to the bogus Kolkata based companies mentioned at para 2 above. The allotment of share is prima facie the matter of concern not the receipt of share application money. The issue is very crystal clear that the assessee has alloted the share to bogus companies. Moreover, the subscribers of shares become the real owner of the share after the shares are alloted to them and not at the time when they make the payment. In general principle an entity when applies to subscribe the share, has to pay for the price of the share in advance i.e. prior to allotment of share. In case, the person is not alloted with the share, in advance i.e. prior to allotment of share. In case, the person is not a....
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....ch the amount is credited to the assesse's account is considered as the date of receipt. In case of dishounour of cheque the credit would have not taken place. It is seen from the bank statement that the balance of the assessee's account on 31.03.2009 was Rs. 28,01,548/-. The balance has increased to Rs. 55,01,548/- after credit of Rs. 25,00,000/- on 02.04.2017. Therefore, the assessee has erroneously claimed Rs. 25,00,000/- in its books of account during F.Y. 2008-09 even though the same has been credited to its bank account during F.Y. 2009-10. Therefore, without prejudice to the facts mentioned at 3.1.2 above the assessee had wrongly reflected in its balance sheet that it had received the share application money of Rs. 1,00,00,000/- during F.Y. 2008-09 relevant to A.Y. 2009-10." 5. From the record, it emerges that the assessee had not filed return for the relevant assessment year. Further, the reasons cited by the Assessing Officer for issuing the notice of reopening are quite serious. In such reasons, he had pointed out that the material collected by the department during search operation in case of Madhav Group of cases which led to further information that the asse....
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....ITR 529 and of this Court in case of Kangold (India) Ltd vs. Commissioner of Income Tax reported in 239 ITR 842 to contend that once a cheque is presented before the bank and not dishonoured, the payment would relate to the date of presentation and not the date of realization of the cheque. 8. Learned counsel for the department however, contended that the Assessing Officer has cited some reasons for rejecting the objections of the assessee. At the stage of examining validity of the notice of reopening, these issues need not be finally decided. 9. As recorded, two facts are undisputable (1) that the assessee had not filed any return for the said assessment year and; (2) as per the reasons recorded by the Assessing Officer, there is every case for permitting assessment of the assessee for the said year. As per the reasons recorded, the assessee had received bogus share premium money from shell companies who were indulging in providing bogus accommodation of the entries. There were series of transactions of this nature. The question that, when precisely the taxing event occurred would have to be kept open to be decided at the first instance by the Assessing Officer during the co....