TaxTMI 
TaxTMI 
2019 (2) TMI 786
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.... the income of the assessee has escaped and there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment and our objections as filed before the Assessing Officer have not been considered properly. 4. Notwithstanding the above said facts, it is submitted that the Ld. CIT(A) has erred in confirming the addition as made by the Assessing Officer on account of so called bogus unsecured loan in the name of M/s Nazar Impex Pvt. Ltd., specially, when the confirmation from the said party had been furnished. 5. That the Ld. CIT (A) has erred in not considering that the reliance by the Assessing Officer on the statement of Sh. Sanjay Chaudhary at the back of assessee was not proper without giving any opportunity for cross examination and which is against the principles of natural justice. 6. That the Ld.CIT(A) has erred in not considering and confirming the contention of the Assessing Officer in not acceding the assessee's request to summon Sh. Sanjay Chaudhary u/s 131 and, as such, no addition could be made without acceding to the request of the assessee. 7. That the Worthy CIT (A) in para 16 hav....
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....ed the matter to the ld. CIT(A) and challenged the jurisdiction of the AO in reopening the assessment by stating that there was no reason to believe that the income of the assessee had escaped assessment and that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. It was also stated that the objections were filed before the AO which had not been considered properly and that the addition made by the AO on account of loan in the name of M/s Nazar Impex Pvt. Ltd. was not called for especially when the confirmation from the said party had been furnished and that the statement of Sh. Sanjay Choudhary was recorded at the back of assessee by the AO without giving any opportunity of cross examination. Therefore, the addition made was against the principles of natural justice. It was further submitted as under: "(i) The Ld. AO has applied his mind while framing the original assessment order u/s 153C and no discrepancy with regard to the unsecured loan was noticed. (ii) Reasons recorded by the Ld. AO is merely based on the information received from the investigation wing of the department without any ind....
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....he investigation wing or the income tax department itself. Moreover, the concerned person has never pointed out the name of the assessee while being investigated by the department, thus, it is merely a rough assumption to state that if the name of the assessee is appearing in the books of NIPL then, the entry provided by the NIPL is bogus when no claim has been made by the concerned person in his statement. It is also submitted that in the course of the re-assessment proceedings the assessee has even requested the copy of the statement of Sanjay Chaudhary recorded by the Investigation wing vide letter dated 05.05.2015 which is received by the assessee and the copy of the same is enclosed in the Paper book. However, it is to be noted here that the said copy is incomplete and incoherent as it lacks some of the important pages of the statement, thus, from the same it is very much clear that the Ld. AO himself never had the full statement in his possession which again goes on to prove that it was impossible for the Ld, AO to process the relevant data as the data available with himself is misplaced. 1.7 The impetuous nature of service of notice u/s 148 and order u/s 147 is also....
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....of the material before him that income had escaped assessment - Proceedings under s. 147/148 rightly quashed by Tribunal - No substantial question of law arises for consideration. * ITO Vs Narnaudia Financial Services Pvt. Ltd. in ITA No. 4094/Del/2009, ITAT Delhi- The reopening was done merely on the basis of information received from investigation wing. As per ratio emanating from above said Jurisdictional High Court decision, on the facts and circumstances o the case reopening is not valid. Hence we hold that the reopening was not valid. * Shri Chunnilal Prajapati Vs Income-tax Officer-II, ITA Nos. 290 to 293/Luc/2010, ITAT Lucknow." 6. It was also stated that the assessment framed beyond four years was barred by limitation. On merit, it was stated that the assessee during the course of assessment proceedings proved the identity and creditworthiness of the creditor alongwith genuineness of the transaction. Therefore, the addition made was not justified. The reliance was placed on the following case laws: • CIT Vs Precision Finance Pvt. Ltd. (1994) 208 ITR 465 (Cal.) • ITO Vs Suresh Kalmadi (1988) 32 TTJ (Pune) TM 300 â€....
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....amount was reflected in the balance sheet under the head "sundries" alongwith other figures which clearly proved that it was part and partial of the record of the department. It was further submitted that there was no search in the case of the assessee rather there was a survey operation and the statement of Sh. Sanjay Chaudhary recorded at the back of the assessee was never confronted to the assessee. Therefore, the reopening done by the AO only on the basis of information received from the Directorate of Income Tax without making an inquiry was not justified. The reliance was placed on the following case laws: • Sheo Nath Singh Vs ACIT 82 ITR 0147 (SC) • CIT Vs SFIL Stock Broking Ltd. (2010) 325 ITR 285 (Del.) • Pr. CIT Vs G. G. Pharma India Ltd. 384 ITR 147 (Del .) • Signature Hotels Pvt. Ltd. Vs ITO 338 ITR 51 (Del.) • ITO Vs Narnaudia Financial Services Pvt. Ltd. in ITA No. 4094/Del/2009 • Sh. Chunnilal Prajapati Vs ITO-II in ITA Nos.290 to 295/Luc/2010 • G. N. Shaw (Wine) (P) Ltd. Vs ITO 260 ITR 513 (Cal.) • Sun Pharmaceutical Industries Ltd. Vs DCIT 381 ITR 387 (Del.) ....
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....at his concern M/s Nazar Impex Pvt . Ltd., bearing PAN AACCN3603R is providing accommodation entries in the nature of bogus loans. 4. M/s. Nazar Impex Pvt. Ltd., bearing PAN AACCN3603R has provided accommodation entry to M/s. Holy Faith International Pvt. Ltd. (the assessee) bearing PAN AAACH6111J of Rs. 31,50,000/- under the nature of loan during the financial year 2007-08 relevant to the assessment year 2008-09. This has been established in the course of the post search investigation of the seized books of accounts of the Sanjay Choudhary Group, in which M/s Nazar Impex Pvt. Ltd. is one of the concern. 5. In view of this information in my possession, I have reasons to believe that the assessee M/s Holy Faith International Pvt. Ltd. has concealed the fact regarding the amount of Rs. 31,50,000/- received from M/s Nazar Irnpex Pvt. Ltd. and has thereby not disclosed fully and truly all material facts necessary for the assessment of the relevant assessment year. The assessment folder has been examined and this entry has not been reflected. In view of the discussion above, I have reasons to believe that income of Rs. 31,50,000/- has escaped assessment with t....
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....e Hon'ble Delhi High Court in the case of Signature Hotels Pvt. Ltd. Vs ITO and Anr. (2011) 338 ITR 51 (supra) held as under: "Section 147 of the Income-tax Act, 1961, is wide but not plenary. The Assessing Officer must have "reason to believe" that an income chargeable to tax has escaped assessment. This is mandatory and the "reasons to believe" are required to be recorded in writing by the Assessing Officer. Sufficiency of reasons is not a matter, which is to be decided by the writ court, but existence on belief is the subject-matter of the scrutiny. A notice under section 148 can be quashed if the "belief" is not bonafide, or one based on vague, irrelevant and nonspecific information. The basis of the belief should be discernible from the material on record, which was available with the Assessing Officer, when he recorded the reason. There should be a link between the reasons and the evidence/material available with the Assessing Officer. The "reasons to believe" would mean cause or justification of the Assessing Officer to believe that the income has escaped assessment and not that the Assessing Officer should have finally ascertained the fact by legal evidence or reac....