TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 1167
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....ved from the DIT (Inv.)-"II", New Delhi vide letter dated 12.03.2013 intimating that the search conducted on Sh. Surineder Kumar Jain and Sh. Virender Jain had shown that they were engaged in providing accommodation entries in lieu of cash through paper/ dummy companies floated by them. The assessee has taken accommodation entry of Rs. 40 lacs from M/s. Sri Amarnath Finance Pvt. Ltd. in A.Y.2009-10. He further noted that the AO at the time of disposing off the objection raised by the assessee in para-2 of his order has observed that the assessee company has received accommodation entry from companies floated by the Jain brothers but did not summon the directors of M/s. Sri Amarnath Finance Pvt. Ltd. u/s. 131 of the IT Act in order to verify the genuineness of the transactions and their creditworthiness. He, therefore, issued notice u/s.263 asking the assessee to explain as to why the assessment order dated 29.09.2016 should not be revised u/s. 263 of the IT Act since the order passed by the AO is erroneous as well as prejudicial to the interest of the revenue. 4. The assessee explained that the AO had issued notice u/s. 142 (1)/143 (2) calling for details necessary for finalizat....
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.... that the appellant had taken accommodation entry of Rs. 40,00,000/- from S. K. Jain's dummy/ paper company. 2. Without prejudice to the above, with respect to the issue raised by the CIT in the impugned order, the AO examined the said issue of accommodation entry by raising specific questions at assessment stage and the same had been duly replied by the appellant. 3. That having regard to the facts and circumstances of the case, Ld. Pr. CIT was unjustified in holding that the assessment order passed u/s. 148 / 143 (3) to be erroneous and prejudicial to the interest of the revenue and therefore, the order of the Pr. CIT passed u/s. 263 be cancelled. 4. That the jurisdiction under Section 263 cannot be assumed by Pr. CIT for making roving enquiries on the issue that was already enquired by the AO, however, not expressly discussed in the assessment order passed by the AO without prejudiced to each other. 5. That the learned Pr. CIT has erred in concluding that the appellant had taken accommodation entry to the extent of Rs. 40,00,000/- on the ground that AO without making proper inquiry/ investigation had passed the order u/s. 148 /143 (3) of the Act without appreciating the ....
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....t in the said decision has held that if no addition is made in respect of issues recorded by the AO for reopening assessment, AO cannot make addition on any other issue in reassessment proceedings. Referring to the decision of Hon'ble Delhi High Court in the case of Oriental Bank of Commerce Vs. Addl. CIT reported in 272 CTR 56 he submitted that the Hon'ble High Court in the said decision has held that where no additions were made in respect of reasons given for reopening of assessment, it was not open to the AO to independently assessee some other income. Relying on various other decisions he submitted that if the evidence are examined and appreciated by the AO no revision is possible. For the above proposition, he relied on the decision of the Hon'ble Delhi High Court in the case of CIT Vs. DLF Limited reported in 350 ITR 555. Referring to the decision of Hon'ble Delhi High Court in the case of Sunbeam Auto Limited he submitted that provisions of section 263 cannot be invoked for inadequate enquiry. It can be undertaken only if there is a complete lack of enquiry. He submitted that the assessment in the instant case was reopened on the ground that assessee is a beneficiary of s....
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....igation Wing regarding the amount of Rs. 40 lacs taken by the assessee as accommodation entry. We find the Ld. Pr. CIT invoked jurisdiction u/s. 263 of the IT Act on the ground that the AO while completing the assessment has not applied his mind and passed the order without making required enquiries / Investigation and necessary verification for which the order has become erroneous and prejudicial to the interest of the revenue. 11. It is the submission of the Ld. Counsel for the assessee that the AO while completing the assessment had conducted necessary enquiries by calling for information from the assessee as well as from the lender company by issuing notice u/s. 133 (6). After being satisfied with such information the AO completed the assessment accepting the returned loss. According to the Ld. Counsel for the assessee it is not a case of no enquiry and, therefore, the proceedings and order passed u/s. 263 of the Act are invalid. It is also the submission of the Ld. Counsel for the assessee that merely because the Ld. Pr. CIT does not agree with the conclusion arrived at by the AO, he cannot substitute his own reasons by invoking the power u/s. 263 of the IT Act. 12. We fin....
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....d income and thereby dropping the proceeding initiated u/s. 147 of the IT Act. We find the Ld. CIT held the order passed by Assessing Officer u/s 143 (3)/147 as erroneous and prejudicial to the interest of the revenue on the ground that the Assessing Officer simply accepted the case decision relied on by the assessee in the case of Lovely Exports (P) Ltd. (supra) and the AC decision of Hon'ble Delhi High Court in the case of Nova Promoters Finlease (P) Ltd. {supra). He was also of the opinion that the AO should have appreciated the evidence gathered by the investigation wing where in certain incriminating material were gathered and the Assessing Officer should have conducted further enquiry which were necessary to gather relevant material which the AO failed to do. According to the Ld. CIT there was complete non application of mind on the part of the AO in not appreciating the material available on record as well as in not following course of further enquiry to gather relevant material. Since there was failure on the part of the AO to apply the provision of law correctly, therefore, he held that the order passed by the AO is both erroneous as well as pre-judicial to the interes....
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....ries Crafts Pvt. Ltd. 13/34, WEA, Arya Samaj Road, Karol Bagh 5000000 3 Bhawani Portfolio Pvt. Ltd. 13/34, WEA, Arya Samaj Road, Karol Bagh 3000000 4 Campari Fiscal Services Pvt. Ltd. 13/34, WEA, 4th Floor, Main Arya Samaj Road, Karol Bagh 6000000 5 Corporate Finlease Pvt Ltd. 13/34, WEA, Arya Samaj Road, Karol Bagh 5500000 6 Deep Sea Driling Pvt. Ltd. 13/34, WEA, Arya Samaj Road, Karol Bagh 5500000 7 DU Securities Pvt. Ltd. 13/34, WEA, Arya Samaj Road, Karol Bagh 3000000 8 Ebony Investment Pvt. Ltd. 13/34, WEA, Arya Samaj Road, Karol Bagh 2500000 9 Karol Bagh, Trading Ltd. 203 Dhaka Chambers 2069/39, Naiwala, Karol Bagh, New Delhi 5000000 10 Merta Finance Ltd. 13/34, WEA, Arya Samaj Road, Karol Bagh 5000000 11 Sadguru Finmin Pvt. Ltd. 13/34, WEA, Arya Samaj Road, Karol Bagh 5000000 12 Sai Dwarka Finman Pvt. Ltd. 13/34, WEA, Arya Samaj Road, Karol Bagh 5000000 13 Taurus Iron & Steel Co. Pvt. Ltd. Gohana Distt. Sonepat 3000000 14 Tejasvi Investment Pvt. Ltd. Gohana Distt. Sonepat 5000000 15 Thar Steel Pvt. Ltd. 13/34, WEA, Arya Samaj Road, Karol Bagh 4500000 16 Volga Cresec Pvt. Ltd. 13/34, WEA, Arya Samaj Road, ....
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....iving the names, addresses, number of shares of nominal value and share premium amount of all the share holders alongwith their bank statements, copy of IT returns, PAN etc. were filed before the AO. Even if the share holders were bogus as per allegation of the revenue in view of the reasons recorded for reopening, however, as per prevailing law at that time in view of decision of Hon'ble Supreme Court in the case of Lovely Exports (P) Ltd. {surpa) addition could not have been made in the hands of the assessee and addition, if any, could have been made only in the hands of such bogus share holders. Since AO has taken a plausible view, therefore, it cannot be said that the order of the AO is erroneous. 25. We find the Hon'ble Delhi High Court in the case of Pr. CIT v. Delhi Airport Metro Express (P.) Ltd. [2018] 99 taxmann.com 382/[2017] 398 ITR 8 has held that for the purpose of exercising jurisdiction u./s 263 of the Act, the conclusion that the order of the AO is erroneous and prejudicial to the interest of the revenue has to be preceded by some minimal enquiry. If the PCIT is of the view that the AO did not undertake any enquiry, it becomes incumbent incumbent on the P....