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2018 (5) TMI 1951
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....tion entries. The Assessing Officer issued notice U/s 148 of the Act by recording the reasons and finalized the assessment proceedings U/s 148/143(3) of the Act and assessed total income of Rs. 75,16,250/-. The ld. CIT(A) has confirmed the action of the Assessing Officer. 3. Now the assessee is in appeal before the ITAT by taking following rounds of appeal: "1. The ld. CIT(A) has erred on facts and in law in upholding the validity of the order passed by A.O. U/s 147 of the IT Act, 1961. 2. The ld. CIT(A) has erred on facts and in law in confirming an addition of Rs. 75 lakhs U/s 68 by treating the share capital money received from the following parties as unexplained: S. No. Name of the company Amount 1. Alka Diamond Industries Ltd. Rs. 15 lacs 2. Javda India Impex Ltd. Rs. 15 lacs 3. Kush Hindustan Entertainment Ltd. Rs. 15 lacs 4. Vanguard Jewels Ltd. Rs. 15 lacs 5. Yash-V Jewels Ltd. Rs. 15 lacs Total Rs. 75 lacs 2.1. The ld. CIT(A) has erred on facts and in law in confirming the above addition ignoring that Sh. Praveen Jain whose statement is made the basis for making addition ha....
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....TR 0110 (Del.) (HC) decision dt.18.10.2010 Facts of the case In this case, the return filed by the assessee was processed and intimation u/s 143(1)was issued accepting the return. Notice u/s 148 was issued for the following reason:- "Information was received from the office of the Addl. Director of IT (Inv.) Unit V that M/s Sarthak Securities (P) Ltd. had received bogus accommodation entries during the financial year 2002-03 relevant to the asst. yr. 2003-04 as per details placed contra. ........................ According to the information received from the Director of IT (Inv.), the accommodation entries are received as share application money or as unsecured loan. The assessee's balance sheet as on 31st March, 2003 showed that there is introduction of share capital of Rs. 2,84,800 and share premium of Rs. 8,65,000. In this case return of income for the asst. yr. 2003-04 was filed on declaring income of Rs. 15,360 and as per records assessment has not been completed under s. 143(3) of the IT Act. As the assessee had received bogus accommodation entry of Rs. 10,50,000 during the asst. yr. 2003-04, I have reason to believe that income ch....
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....tigation Wing of the Department that the above named assessee is a beneficiary of accommodation entries received from the private limited companies floated by Shri Tarun Goyal during the period relevant to AY 2006-07. In the report it has further been stated that all the entry giving companies are operating from the office of Shri Tarun Goyal addressed at 13/34, WEA Arya Sarns Road, Karol Bagh, New Delhi and his earlier office at 203- Dhaka Chambers, 2069/39, Naiwala, Karol Sa'gn, New Delhi. It has also been stated that the directors of these companies are former and present employees of Shri Tarun Goyal who were used merely for signing the documents, bank cheques etc. I have perused the information contained in the report and the evidences gathered. The report provides details of the modus operandi and explain show the unaccounted money of the beneficiaries are ploughed back in its books of account in the form of bogus share capital/capital gains, unsecured loans etc. after routing the same through the bank account (s) of the entry operators floated by Shri Tarun Goyal. Entry operators were identified after thorough investigation on the basis of definitive analysis of their id....
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....e Act, on the basis of information allegedly received by him from the Directorate of Income Tax (Investigation), New Delhi. The reopening is thus bad in law and deserves to be quashed. This view is supported by the following judgments/decisions:- Pr. CIT vs. G&G Pharma India Ltd. in ITA No. 545/2015 dated 8.10.2015 of Delhi High Court ITO vs. M/s NC Cables Ltd. in ITA No. 4122/Del/2009 dated 22.10.2014 Amarlal Bajaj vs. ACIT reported in (2013) 37 taxmann.com 7 (Mum.) (Trib.) CIT vs. S. Goyanka Lime & Chemicals Ltd. reported in (2015) 56 taxmann.com 390(MP) (HC) CIT vs. S. Goyanka Lime & Chemical Ltd. reported in (2015) 64 taxmann.com 313(SC) V.S. Capital Services Pvt. Ltd. Vs. ITO 46 CCH 0224 (Del.) (Trib.) decision dt.03.03.2016 Facts of the case The assessee filed return of income on 31.10.2002 declaring income of Rs. 3,811/-.The return was processed u/s 143(1) of the Income-tax Act, 1961 on 27.1.2003. The case was reopened u/s. 147 of the Income Tax Act after recording the following reasons:- "The Information has been received by the Directors of income tax (Inv)-I New Delhi vide letter no DIT (Inv)....
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....d out by the Investigation wing for identification of entry operators engaged in the business of money laundering for the beneficiaries and on the basis of investigation carried out and evidences collected, a report has been forwarded. I have perused the information contained in the report and the evidences gathered. The report provides details of the modus operandi of the 'money laundering scam' and explains how the unaccounted money of the beneficiaries are ploughed back in its books of account in various forms including the form of bogus share capital/capital gains etc after routing the same through the bank account (s) of the entry operators. Entry operators were identified after thorough investigation on the basis of definite analysis of their identity, creditworthiness and the source of the money ultimately received by beneficiaries. These entry operators are found to be mostly absconding/ non-complying after the unearthing of the 'Money Laundering Scam' leaving the said money at the disposal of the beneficiaries without any associated cost or liability. In the instant case, the assessee is found to be the beneficiary of accommodation entry from such entry ope....
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....e, the AO acted on the information supplied by the Directorate of the Income Tax (Inv.),Udaipur and Mumbai but he has not applied his independent mind and there assessment proceedings were initiated only on the basis of information received from the investigation wing of the department. It was therefore held that the satisfaction regarding the escapement of income was not of the AO, therefore, without applying his mind, the AO was not justified in invoking the provision of section 147 of the Act by issuing notice u/s 148 of the Act. Similar view was taken by Jodhpur Tribunal Bench in case of Vinayak Shyam Enterprises Pvt. Ltd. Vs. ITO vide its order dt. 21.05.2014 in ITA No.104/Jodh/2014 wherein it was held that on receipt of information from DDIT (Inv) the AO has issued notice u/s 148 of the Act. The investigation done in a third party's case was never confronted to the assessee. The ld. DDIT has even given direction to the AO to issue a notice u/s 148, which the AO has treated as a valid reason for initiating action u/s 147/148. Therefore, the AO has not applied his mind to this information to independently arrive at a belief that on the basis of material before him inco....
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.....)(HC) It is held that mere confessional statement by a third party (who is lender of assessee)that he was a mere name lender and that all his transactions of loan were bogus, without naming the assessee as one who had obtained bogus loans, would not sufficient to hold that the assessee's income has escaped assessment. Thus, there opening of assessment in this case is not justified as same was reopened at the instance of other authority. 2. The decision of Rajat Export Import India Pvt. Ltd. relied by the CIT(A) is not applicable in as much as in that case the AO in the notice issued u/s 148 has given all the details like instrument number, date, name of the bank and the branch as well as account number of entry provider. The High Court at Para 11 of the order held that the material present before the AO at the time of recording reasons for reopening the assessment also disclosed the date on which the entry was taken, the cheque or DD number, the name of the bank and branch & the account number and with such precise material before the AO, the existence of which is beyond challenge, it can hardly be said that the AO could not have a prima facie belief that income ....