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2015 (7) TMI 1305
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....- Sh.Vipan Kumar Rs.5,01,250.00 Sh.Ashok Kumar Rs.5,01,250.00 3. Vide ground Nos.1 and 2 of the appeal, the assessee has challenged the validity of reopening of the assessment under section 147/148 r.w.s. 143(3) of the Income Tax Act, 1961 (in short 'the Act'). 4. Briefly stated, the facts of the case are that for the assessment year 2002-03, the assessee submitted his return of income on 20.5.2002 declaring the total income at Rs. 1,74,390/-. The said return was processed under section 143(1) of the Act. Subsequently, on the basis of information received from Director of Investigation-1, New Delhi, proceedings under section 147 were initiated and notice under section 148 of the Act was issued on 30.3.2009, which was served upon the assessee on same day. In response to the notice under section 148 of the Act, the assessee submitted his return of income declaring the total income at Rs. 1,74,390/- on 29.4.2009. During the course of assessment proceedings, the Assessing Officer issued notices under sections 142(1) and 143(2) of the Act alongwith questionnaire. The Assessing Officer vide questionnaire dated 20.11.2009 required the assessee to show cause as to why the....
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....eturn receipts data available on computer, it is seen that the assessee has filed his return of income for the A/Y 2002-03 declaring income at Rs. 1,74,390/-. It is therefore, evident that the assessee has invested a sum. of Rs.l0,02,500/- from his undisclosed income in obtaining these bogus accommodation entries. I have therefore, reasons to believe that income of Rs. 10,02,500/- as above, has escaped investment within meaning 148 of l.T. Act, 1961. Hence it is a fit case for initiation of proceedings u/s 147 of the I.T. Act, 1961. " The contention of the appellant the reopening was done, without examining the return of income of the appellant, is therefore not correct. 4.4 Copy of the reasons was duly provided to the appellant. Perusal of the reasons shows that AO had applied his mind to the information received from the O/o the Director of Income Tax (Inv.), New Delhi. He had compared the formation received with the information available in the return of income and thereafter had reasons to believe that income of Rs. 10,25,500/- had escaped Assessment. In these circumstances the contention of the appellant that the notice Was served without application of mind ....
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....s placed on the following decisions:- i) CGT Vs. Susheela Shanmugasundaram (Mad) 242 ITR 176 ii) ITO Vs. Gurinder Kuar (ITAT, Del) 102 ITD 189 iii) Sterlite Industries (India) Ltd. Vs. ACIT (Mad) 302 ITR 275 4.5 After initiation of proceedings, the A.O. could conclude on the basis of other information and explanation of the appellant that no income had escaped assessment, yet for acquiring the jurisdiction, the A.O. could still have valid basis on the basis of information available at the time of initiating action u/s 147/148 of the Act to have prima-facie reason to believe that such income escaped assessment. The information received by the A.O., as mentioned above, could very well make him prima-facie have such reason to believe that income escaped assessment. Further, as the AO has initiated the proceedings on the basis of above mentioned specific information it could not be said that the action of the A.O. was on the basis of certain surmises or conjectures only. It could also not be said that the material in possession of the A.O, could just make him have reason to suspect and not reason to believe that income escaped assessment. Moreover ad....
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....he judgments in Swaran Kanta v. Commissioner of Income Tax, (1989) 176 ITR 291 (Pb. & Hr.) and Deoria Oxygen Company v. Commissioner of Income Taxi, (2007) 210 CTR Reports 509. Reliance in this regard is also placed on the decision of the Hon'ble Punjab and Haryana High Court dated 6.12.2010 in Income Tax Reference Nos. 15 of 2000, in the case of The Commissioner of Income Tax, Amritsar, Versus Rajbir Singh Karta of Ch. Kesho Dass (HUF), Pathankot. In view of the above facts and the case laws discussed above, this ground of appeal is dismissed." 6. I have heard the rival submissions and have also perused the materials available on record. Admittedly, in this case the return filed by the assessee on 20.5.2002 was processed under section 143(1) of the Act. Subsequently, information was received from the office of Director of Investigation-I, New Delhi to the effect that the assessee has received bogus accommodation entries for a total sum of Rs. 10,02,500/- from S/Shri Vipin Kumar and Ashok Kumar Vindal from bank account No.8378 and 11282 respectively in Jai Laxmi Cooperative Bank, Fatehpuri, New Delhi as under : Sr.No. Name of the persons having bank acco....
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....o the Addl. Commissioner of Income Tax, Range VII, Ludhiana for considering appropriate action in the hands of the donees. That the nature of this entry appears to be an accommodation entry. I have therefore, reasons to believe that the above said amount of gift received by the assessee requires through investigation by reopening the case u/s 148 of the Income-tax Act, 1961. In view of the gift received by the assessee notice u/s 148 is issued for the assessment year 2002-03." 9. In the case of Ms.Sushila Singla (supra), the learned CIT (Appeals) observed that the information received by the Assessing Officer constituted 'reason to believe', prima facie that the income chargeable to tax had escaped assessment in the hands of the assessee. He further observed that the Assessing Officer has initiated the proceedings on the basis of specific information and, therefore, it cannot be said that the action of the Assessing Officer was on the basis of surmises or conjectures only. When the matter came up in appeal before the Tribunal, this Bench of the Tribunal uphold the order of the learned CIT (Appeals), observing as under : "9. In the present case original....
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....effect from April 1, 1989, as also sections 148 to 152 are substantially different from the provisions as they stood prior to such substitution. Under the old provisions of section 147, separate clauses (a) and (b) laid down the circumstances under which income escaping assessment for the past assessment years could be assessed or reassessed. To confer jurisdiction under section 147(a) two conditions were required to be satisfied : firstly the Assessing Officer must have reason to believe that income, profits or gains chargeable to income tax have escaped assessment, and secondly he must also have reason to believe that such escapement has occurred by reason of either omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the Assessing Officer could have jurisdiction to issue notice under section 148 read with section 147(a). But under the substituted section 147 existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it con....
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....e person could have formed the requisite belief. The question whether the materials would conclusively prove the escapement is not the concern at this stage. In the instant case, Assessing Officer received an information from ACIT, CC-V, Ludhiana that assessee has received gift of Rs. 5 lakhs from Shri Jagdish Duggal, 38G, Sarabha Nagar, Ludhiana from bank account No. 16503 of Shri Jagdish Duggal maintained with Canara Bank, Bharat Nagar Chowk, Ludhiana. The Assessing Officer has also this information that the nature of this entry was an accommodation entry. In my opinion, the above information / material received by the Assessing Officer was relevant and afforded a live link or nexus to the formation of the prima facie belief that income chargeable to tax had escaped assessment in the assessee's hands. Therefore, there is no merit in the submissions made on behalf of the assessee that reopening of the assessment was invalid. While taking such a view I am fortified by the decision of Hon'ble Delhi High Court in the case of Rajat Export Import India Pvt. Ltd v ITO (2012) 341 ITR 135 (Delhi) wherein the Hon'ble Delhi High Court observed as under:- "At the stage when ....
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..... The information, so received by the Assessing Officer, was credible and not a mere gossip. Considering the entire facts and circumstances of the present case and also the order of the Tribunal (SMC Bench) passed in the case of Ms.Sushila Singla referred to above, I do not see any merit in ground Nos.1 and 2 of the appeal. Therefore, I have no hesitation in rejecting these grounds of appeal. 11. Vide ground No.3 of the appeal, the assessee has challenged the action of the learned CIT (Appeals) in confirming the addition of Rs. 10,02,500/- allegedly borrowed from S/Shri Vipin Kumar and Ashok Kumar Vindal. The learned CIT (Appeals) confirmed the addition of Rs. 10,02,500/- for the reasons stated in paragraphs 7.3 to 7.8 of his order. The learned CIT (Appeals) confirmed the addition on the ground that the assessee failed to establish the genuineness of the transactions and the creditworthiness of the creditors. He further observed that by merely claiming that the credits were unsecured loans and by submitting the confirmations of so-called creditors, the genuineness of the transactions has not been proved. 12. I have heard the learned representatives of both the parties at leng....