TaxTMI 
TaxTMI 
2016 (7) TMI 1450
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....d that, there was any reason to believe with the learned Income Tax Officer that, income of the appellant company had escaped assessment and, in view thereof, the proceedings initiated were illegal, untenable and therefore, unsustainable. 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in sustaining an aggregate addition made by learned Assistant Commissioner of Income of Rs. 14,00,000/- representing the amount received from the following shareholders as share capital and has erroneously held credits as unexplained cash credit under section 68 of the Act: Sr. No. Name of the Shareholder Amount (In Rs.) 1. M/s Singhal Securities (P) Ltd. 9,00,000/- 2. M/s Singhal Securities (P) Ltd. 5,00,000/- Total 14,00,000/- 2.1 That while sustaining the aforesaid addition the learned Commissioner of Income Tax (Appeals) has completely overlooked that there was no adverse material brought on record by the learned Assessing Officer to assume that credits by way of share capital represents unexplained cash credit and, burden which lay upon the assessee in terms of section 68 of the Act had not bee....
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....(Appeals) has erred both in law and on facts in upholding an addition of Rs. 28,000/- on account of alleged commission paid to the entry provider in cash for obtaining accommodation entry and held as unexplained expenditure u/s 69C of the Act. 6. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the levy of interest of Rs. 35,007/- under section 234AB of the Act and interest of Rs. 21,441/- u/s 234B of the Act which are not leviable on the facts and circumstances of the case of the appellant company. It is therefore, prayed that, it be held that assessment made by the learned Income Tax Officer and sustained by the learned Commissioner of Income Tax (Appeals) be quashed and, further addition so upheld by the learned Commissioner of Income Tax (Appeals) alongwith interest levied be deleted and appeal of the appellant company be allowed." 4. The main grievance of the assessee vide Ground Nos. 1 to 1.1 relates to the confirmation of the initiation of the proceedings u/s 147 of the Income Tax Act, 1961 (hereinafter referred to as the Act). 5. The facts related to this issue in brief are that the assessee originally filed i....
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....ssessment proceedings was bad-inlaw. It was further submitted that the assessee filed the objection against the initiation of the assessment proceedings. However, the AO had not disposed off all the objections raised by the assessee and even the part of the disposal of objection was not in accordance with law. It was also submitted that the AO while recording the reasons for reopening the assessment had not described the date and contents of the report received from Investigation Wing and that the reasons recorded were vague as it had nowhere stated the clear form and nature of transactions of accommodation entries whether in the form of loan or gift or sale or purchase or share capital etc. It was further stated that the reasons recorded by the AO were totally silent with regard to the exact income of the bogus entry and transactions and that the AO did not mention that what were the facts mentioned in the communication which he had received from the Investigation Wing, Delhi except that from the information gathered by the Information Wing, Delhi, the assessee was involved in giving and taking accommodation entries only and represented unsecured money of the assessee company whic....
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.... of any proceeding u/s 147 of the Act and in the present case the AO received the information from Investigation Wing regarding the modus operandi adopted by certain companies including the assessee company who had circulated their own unaccounted income in the garb of share application money through fake companies and bank accounts operated by Sh. Surendra Kumar Jain Group. The ld. CIT(A) further observed that the AO while recording the reasons, mentioned that he had received comprehensive and specific details comprising inter alia the identity of the beneficiary, identity of the entry provider, date, amount taken, bank account and cheque numbers etc. and after recording of the reasons, a notice u/s 148 of the Act dated 28.03.2013 was issued by the AO. Therefore, there was neither any legal infirmity nor any deficiency in resorting to the procedure and provisions of Section 147 of the Act or in the disposal of the objections raised by the AO. The ld. CIT(A) further observed that in the present case, since no assessment was previously done and the correctness or otherwise facts and figures disclosed by the assessee in the return of income had not ever been subjected to scrutiny, th....
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....sh; G & G Pharma India Ltd. Vs ITO No. 3149/Del/2013, order dated 09.01.2015 Ø Jiten Gurnani Vs ITO in ITA No. 4908/Del/2012, order dated 31.03.2015 12. The reliance was also placed on the following orders of the Hon'ble Delhi High Court: Ø Pr. CIT Vs G & G Pharma India Ltd. in ITA No. 545/2015, order dated 08.10.2015 Ø Pr. CIT Vs Rakam Money Matters (P) Ltd. in ITA No. 7785/2015, order dated 13.10.2015 13. In his rival submissions the ld. DR supported the order of the authorities below and further submitted that the AO on the basis of some material recorded the reasons and had reasons to believe that the income of the assessee escaped the assessment. Therefore, there was a prima facie belief and notice u/s 148 of the Act was issued after proper application of mind. Therefore, reopening u/s 147 of the Act was rightly held to be valid by the ld. CIT(A). The reliance was placed on the following case laws: Ø Raymond Woollen Mills Ltd. Vs ITO & Ors. (1999) 236 ITR 34 (SC) Ø ACIT Vs Rajesh Jhaveri Stock Brokers (P.) Ltd. 291 ITR 500 (SC) Ø ITO vs. Lakhmani Mewal Das (1976) 103 ITR 437 (SC) Ø Shyam Bansal Vs ACIT....
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.... Principal Commissioner of Income-tax vs. G. & G. Pharma India Ltd. (supra) observed in para 12 & 13 of the order dated 8th October, 2015 as under : "12. In the present case, after setting off four entries, stated to have been received by the Assessee on a single date i.e. 10th February, 2003 from four entities which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the AO stated: " I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company has introduced its own unaccounted money in its bank account by way of above accommodation entries."The above conclusion is unhelpful in understanding whether the AO applied his mind to the materials that he talks about particularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the AO, if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the Assessee, which must have been tendered along with the ret....