TaxTMI 
TaxTMI 
TaxTMI 
2016 (6) TMI 1301
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.... account of unexplained cash credits in the form of share capital issued by the assessee. 2. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in holding that assessee has discharged its onus of establishing the identity, creditworthiness and genuineness as regards the transactions concerning the allotment of shares ignoring the facts that contrary evidences in the form of cash paid and cheques received were found and seized during the course of search proceedings in the SKJ Group. 3. Whether on the facts and in the circumstances of the case and in law the ld.CIT(A) has erred in holding that the assessee was not confronted with the evidences collected and ignoring the fact that necessary evidences and details in the form of statements records during the course of search operation as well as copies of bank accounts and related documents were provided to the assessee." Common Grounds of Assessee's C.O. No. 15 & 16/JP/2015 "1. The ld CIT(A) has erred on facts and in law in upholding the validity of the order passed U/s 148". Grounds of ITA No. 179/JP/2015 Revenue's appeal "On the facts and in the circumstances of the cases and in....
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....nducted in the case of Shri Suresh Kumar Jain Group of cases by the Investigation Wing, New Delhi. The assessee had taken accommodation entries of Rs. 30 lacs from the said racket in the case of M/s Ganga Projects Pvt. Ltd.. Thereafter the ld Assessing Officer recorded the reasons U/s 147 of the Income Tax Act, 1961 (in short the Act) and issued notice U/s 148 of the Act on 28/3/2012 for A.Y. 2005-06. Similarly in the case of M/s Ganga Projects Pvt. Ltd. for A.Y. 2006-07, the ld Assessing Officer reopened the case on the basis of same reasoning but amount was Rs. 41.00 lacs and notice was dated 25/3/2013 U/s 148 of the Act. In the case of M/s B.S. Traders Pvt. Ltd., the accommodation entries were Rs. 15.00 lacs for A.Y. 2005-06 and notice U/s 148 was issued on 28/3/2012. The assessee raised objections against the reopening which has been disposed of by the ld Assessing Officer. The ld Assessing Officer, further observed that on the basis of information received from Investigation Wing, New Delhi wherein it was found that the assessee was one of the beneficiaries of accommodation entry provided by Shri Suresh Kumar Jain Group who operated racket of accepting cash from the beneficiar....
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....etors of various firms. He also observed that from the seized hand written cash book and other documents revealed that Shri S.K Jain and Shri V.K Jain received cash from various parties for providing accommodation entries and then deposited in the accounts of various dummy firms / companies in the disguise of the cash received against bogus sales. From these accounts, the cash was transferred to the different paper companies floated by them through a complex trail of transactions so as to hide the actual sources of funds of the recipient company of these brothers. In this way the capital account, reserve & surplus funds of a specific set of companies are enhanced with the help of unexplained cash received by them which was routed to these companies through their dummy firm / companies. Once the funds of these companies have been enhanced sufficiently, accommodation entries through RTGS/ Cheuqe in the shape of share capital , capital gains or loans as per the specific requirement of the recipients were provided them in lieu of cash received from them. The ld Assessing Officer further observed that during the course of survey u/s 133A conducted by the department in Delhi at the offic....
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....group cases and on corelating the information / details obtained from the Inv. Wing, New Delhi during the course of assessment proceeds revealed that apart from M/s Avail Finance Pvt. Ltd, M/s Smartest Portfolio Pvt. Ltd & Lehra Investment Pvt. Ltd, the assessee group has also taken accommodation entries from the below mentioned bogus companies. Name of the company floated by S.K. Jain group for providing accommodation entry Name of the beneficiary company of assessee group. M/s Lehra Investment Pvt. Ltd. M/s Chirag Fiscal Services Pvt. Ltd. M/s Ganga Projects Pvt. Ltd. M/s Alok Fintrade Pvt. Ltd. M/s Lovely Securities Pvt. Ltd. M/s Anchal Fintrade Pvt. Ltd. M/s B.S. Traders Pvt. Ltd. M/s Sam Portfolio Pvt. Ltd. M/s Ganga Projects Pvt. Ltd. M/s Alok Fintrade Pvt. Ltd. M/s Avail Financial Services Pvt. Ltd. M/s Ganga Projects Pvt. Ltd. M/s Smartest corporate Services P. Ltd. M/s Ganga Projects Pvt. Ltd. M/s Alok Fintrade Pvt. Ltd. M/s Fine Finance & Leasing P. Ltd. M/s Alok Fintrade Pvt. Ltd. M/s Creative Capital Services P. Ltd. M/s Alok Fintrade Pvt. Ltd. M/s Ravnet Solution Pvt. Ltd. M/s Ganga Projects Pvt. Ltd. M/s Alok Fintrade Pvt. Ltd. M/s Suma ....
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....orm of share capital, therefore, he made addition of Rs. 55.00 lacs in A.Y. 2005-06 and Rs. 51.00 lacs in A.Y. 2006-07. In the case of B.S. Traders, addition of Rs. 60.00 lacs was made by the ld Assessing Officer. 4. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had allowed the appeal by observing as under:- "3.2.2.4 In the present case, share applications are received from six different concerns accompanied with share application money, no presumption can be drawn that same belong to assessed; these application moneys cannot be assessed in. his hands as his undisclosed income unless some nexus is established that share application money for augmenting investment in business has flown from assessee's own money. In the reason recorded for re-opening of assessment, AO has made general reference with regard to information received from Investigation Wing Delhi but he has not referred any of the six concerns. On perusal of case record, it is noted that during reassessment proceeding, no adverse evidence was found in course of reassessment proceedings whereas during original assessment, assessee had filed the ....
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....e reopening U/s 148 of the Act in all the cases. Similar findings has been given by the ld CIT(A) in the case of M/s Ganga Projects Pvt. Ltd. for A.Y. 2006-07. In the case M/s B.S. Traders Pvt. Ltd., the ld CIT(A) also deleted the addition on similar findings given in the case of M/s Ganga Projects Pvt. Ltd. for A.Y. 2005-06. 5. Now the revenue is in appeals and the assessee is in C.Os. before us. The revenue in appeals has challenged the deletion of additions whereas the assessee in C.O. has challenged the reopening U/s 148 of the Act in all the years. The ld DR has vehemently supported the order of the Assessing Officer and argued that it is clear from the material gathered during the course of survey/search in the case of S.K. Jain Group, Delhi that he had provided accommodation entries to various persons. The assessee was one of the persons who got the accommodation entries from the said group, therefore, addition deleted by the ld CIT(A) may please be reversed. It is further argued that the ld Assessing Officer had recorded the reasons for reopening on the basis of information received and he fully supported the order of the ld CIT(A). The ld CIT(A) had followed the Hon....
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.... information was the reason to believe for reopening the case in all the years. The ld Assessing Officer in scrutiny assessment has specified himself by raising the query against the shareholders and specified himself and returned income has been accepted by the ld Assessing Officer. The ld Assessing Officer had not examined the information received from the Investigation Wing, Delhi with reference to return and financial statement to verify whether any such amount is reflected in the accounts of the assessee or not and if reflected in which account i.e. as a loan or share capital or otherwise, therefore, the reopening was bad in law. He relied on the various case laws as under:- (1) Allied Strips Ltd. Vs ACIT 96 CCH 0004 (Del)/(HC) decisions dated 12/5/2016. (2) Shri Parasram Industries Pvt. Ltd. Vs ITO 94 CCH 0152 (Del.)(HC) decision dated 11/12/2015. (3) Pr. CIT Vs G&G Pharma India Ltd. 94 CCH 0039 (Del)(HC) decision dated 08/10/2015. (4) Chhugamal Rajpal Vs. SP Chaliha (1971) 79 ITR 603 and ACIT Vs Dhariya Construction Co. (2010) 328 ITR 515. (5) Pankaj Gas Cylinders Ltd. Vs ACIT 47 CCH 0011 (Del) (Trib) decision dated 03/5/2016. (6) Sarthak Securities Co. (P) Ltd. ....
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.... also furnished by the ld Assessing Officer during the scrutiny. He has also drawn our attention on page No. 25 to 30 of the paper book, thus it is evident that the ld Assessing Officer had applied his mind and passed order and no adverse inference has been drawn by the ld Assessing Officer. It is also a fact that in all the years the cases were reopened U/s 148 after four years from the end of the relevant assessment year. As provided that where an assessment under Subsection (3) of Section 143(3) or this Section has been made for the relevant assessment year, no action shall be taken under this Section after expiry of 4 years from the end of the relevant assessment year. Unless any income chargeable to tax as escaped assessment for such assessment year by reasons of the failure on the part of the assessee to make a return U/s 139 of the Act or in response to a notice issued under sub-section (1) of Section 142 or Section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. Accordingly, after expiry of four years, no action can be taken against the assessee as there is no lapse on the part of the assessee to disclose all mat....
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....holders are assessed to tax, they have their PAN number. The transactions were made through banking channel, shares has been allotted to them. Therefore, it is incorrect on the part of the ld Assessing Officer that in all the cases, money had been routed through these companies. Thus, on merit also, the ld CIT(A) has rightly deleted the addition. 7. We have heard the rival contentions of both the parties and perused the material available on the record. In all the cases scrutiny assessment U/s 143(3) of the Act had been made by the ld Assessing Officer and he had raised specific query on share capital, which has been complied by the assessee vide various letters referred in the argument of the assessee. We have examined paper book and found that the ld Assessing Officer had raised query and considered the information submitted by the assessee during the original assessment proceedings U/s 143(3) of the Act. Thereafter, he has not made any addition on account of share capital. It is a fact that the department had conducted search in the case of SKG Group cases, New Delhi and came to a conclusion that this group has provided accommodation entries to various persons on which the ld A....