TaxTMI 
TaxTMI 
2021 (2) TMI 709
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.... are that assessee company filed its return of income for the A.Y. 2009-2010 on 25.09.2009 declaring Rs.(-)5,90,668/- and on 28.09.2010 for the A.Y. 2010-2011 declaring income of Rs. (-)24,235/-. The A.O. received information from Investigation Wing vide letter Dated 12.03.2013 mentioning that search was carried-out in the case of Shri S.K. Jain Group of cases and it is transpired that assessee has received accommodation entry of Rs. 10 lakhs each in both the assessment years under appeal from M/s. VIP Leasing and Finance P. Ltd., and M/s. Mega Top Promoters P. Ltd., in a sum of Rs. 10 lakhs each. The A.O. after giving an opportunity of being heard to the assessee, made additions of Rs. 10 lakhs in both the assessment years under appeals and have also added Rs. 18,000/- on account of unexplained expenditure to obtain accommodation entry. The assessee challenged the re-assessment proceedings as well as additions before the Ld. CIT(A), however, both the appeals of the assessee have been dismissed. 5. Learned Counsel for the Assessee referred to the copies of the reasons recorded for reopening of the assessment in which the A.O. has mentioned that Section 147(b) is applicable in th....
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....i.e., 147(b) of the I.T. Act came to the conclusion that there is escapement of income under section 147(b) of the I.T. Act which no longer exist in the statute. The Learned Addl. CIT instead of pointing-out such glaring mistake in the reasons and even finding two Columns 'Blank' in the reasons granted approval, even without mentioning how he was satisfied with the reasons for reopening of the assessment in the matter. Such issue have been examined by the Hon'ble Bombay High Court in the case of Kalpana Shantilal Haria vs., ACIT (supra) in which in Paras 5 to 8 it was held as under : 5. Our attention is invited to the sanction given by the Joint Commissioner of Income Tax on the application by the Assessing Officer seeking his approval in the prescribed form. The prescribed form filled by the Assessing Officer indicated that the notice has been issued under Section 143(b) of the Act. The Joint Commissioner of Income Tax has while granting the sanction has recorded the word "satisfied". 6. The grievance of the petitioner is that there is no proper sanction in view of non application of mind by the Joint Commissioner of Income Tax. The Assessing Officer has....
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....ased on wrong facts and approval was given in a mechanical manner, therefore, reopening of the assessment is held to be invalid. The findings of the Tribunal in paras 23 to 28 is reproduced as under : "23. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find, the AO, in the instant case, based on the report of the Investigation Wing that the assessee has received accommodation entries from Shri Surendra Kumar Jain and Virendra Kumar Jain controlled/managed companies, reopened the assessment by recording the following reasons:- "ANNEXURE- 'A' M/s Shri Balkishan Agarwal Glass Industries Ltd. J-4-126-B, D.D.A. Flats Kalka Ji, New Delhi-110019 Assessment Year; 2005-06 Reasons for belief that income has escaped assessment; Enquiries were conducted by the Investigation Wing of the Dept in the case of Shri Surendra Kumar Jain Group. During the course of post search investigation and preparation of appraisal report it has been evidently established that SH. S.K, ....
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.... The escapement of income has been clearly on account of failure on the part of the assessee to truly and fully disclose all the material fact necessary for assessment. Thus it is a fit case for initiation of proceedings u/s 148 of I.T.Act, 1961. Therefore, I have reason to believe that an income of Rs,55,00,0QQ/- lias escaped assessment within the meaning of section 147 of the Income Tax Act 1961. No assessment u/s 143(3) has been done earlier. The assessment record is being submitted for kind perusal and approval of the Addl. Commissioner of Income-tax, Range-8, New Delhi according to section 151(1) of the IT Act, 1961 for issuance of notice u/s 148 of the IT Act. Sd/- (Nishtha Tiwari) Dy. Commissioner of Income Tax Circle-8(1), New Delhi" 24. We find, in the performa for recording reasons for initiating proceedings under section 148 and for obtaining approval of the Addl. CIT, the AO at para 7 of the performa has mentioned that the assessee has not filed the return voluntarily. The form for recording reasons for initiating the proceedings is reproduced hereunder for the sake of clarity:- 25. A perusal of the a....
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....g facts is without jurisdiction and has to be quashed. The above decision of the Hon'ble High Court was challenged by the Revenue before the apex court and the apex court dismissed the SLP vide SLP No.42379/2007, order dated 9th February 2018. Since, in the instant case, although the assessee has filed return of income which was processed u/section 143(1), however, the AO proceeded to reopen the assessment by mentioning that no voluntary return has been filed by the assessee and, thus, proceeded to reopen the assessment on wrong appreciation of facts on record. 26. We further find the Hon'ble Delhi High Court in the case of BPTP vs PCIT, vide Writ Petition No.13803/2018, order dated 11th January 2020, has held that if the AO has failed to perform its statutory duty, he cannot review his decision and reopen on a change of opinion. The reopening is not an empty formality. There has to be relevant tangible material for the AO to come to the conclusion that there is escapement of income and there must be a live link with such material for the formation of the belief. Mearly using the expression 'failure on the part of the assessee to disclose fully and truly all material facts....
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....ion 133(6) and non-production of the Directors of the Investor Companies made the addition against the assessee. The A.O. in the reasons has mentioned that information was forwarded by Serious Fraud Investigation Office, Delhi which were received through Pr. CIT vide Letter Dated 05.01.2017. The A.O. has also referred to such report based on search and seizure in the case of third parties. The assessee made a request to the A.O. to supply complete copy of the reasons along with Annexures and Report of SFIO Dated 05.01.2017 and approval granted by Pr. CIT. The A.O, however intimated that since SFIO report is confidential, therefore, same cannot be provided to the assessee. Thus, the complete Annexures to the reasons were not provided to the assessee and A.O. has also failed to provide copy of the report dated 05.01.2017 to the assessee which is the basis for reopening of the assessment. Assessee cannot be given surprise to file objections without providing all the relevant material. The report Dated 05.01.2017 is the basis for reopening of the assessment and since it is not confronted and provided to assessee, the assessee may not be able to file proper objections to the reopening o....
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....ew Delhi, vide letter Dated 14.02.2014 mentioning therein that a search/survey operation under section 132/133A of the Income Tax Act, 1961 was conducted by the Investigation Wing at the business and residential premises of Shri Himanshu Verma and his Group on 29.03.2012 wherein after intensive and extensive inquiry and examination of documents seized during the course of search, it has been gathered that the said persons are involved in providing accommodation entries to the persons who were named in the report. During the course of inquiry made by the Investigation Wing, it also came to the notice that Shri Himanshu Verma was engaged in the business of providing accommodation entries through cheques/PO/DD in lieu of cash to large number of beneficiary companies through various paper and dummy companies floated and controlled by him. The cash received from the parties for providing accommodation entries was first deposited in the account of these dummy firms/companies in the guise of cash received against the bogus sales duly shown in the books of account. On the basis of the material available on record, the A.O. after recording reasons for reopening of the assessment, issued not....
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....f the investment. The A.O. also noted that 26 parties filed copy of the ITR, balance sheet, P & L A/c and bank statement, but, it shows that their income shown is very meagre in the return of income. The assessee was asked to produce the persons/Principal Officers of these entities for verification. However, assessee did not produce the same. The A.O. also analysed the statement of Shri Himanshu Verma through whom amount have been received and the A.O. ultimately rejected the explanation of assessee on genuine share application money received from 38 parties and made addition of Rs. 11.05 crores. The A.O. further noted that assessee has paid commission in cash for arranging these entries, on which, addition was made of Rs. 22,10,000/- i.e., @ 2% of the amount in question which was also added to the returned income. 3. The assessee challenged the reopening of the assessment as well as additions on merit before the Ld. CIT(A). It was contended that assessment framed on the basis of material / documents / information received from third party and without application of mind by the A.O, therefore, whole assessment is invalid and bad in law. It was further submitted th....
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.... "Form for recording the reasons for initiating proceedings u/s 147 and for obtaining the approval of the Ad CIT/CIT/CBDT 1. Name and address of the assessee M/s. Ganesh Ganga Investment P. Ltd., A-52, Top Floor Street No.l, Guru Nanak Pura, Laxmi Nagar, Delhi 110092 2. PAN AAACG2710J 3. Status Company 4. Ward/Circle Ward-10(1) 5. Asstt. Year in respect of which it is proposed to issue notice u/s 148 2010-11. 6. The quantum of income which has escaped assessment Rs. 2,45,00,000/- 7. Whether the provisions of section 147(a) or 147(b) are applicable or both the sections are applicable. 147(b) 8. Whether the assessment is proposed to be made for the first time. If the reply is affirmative, please state Yes (a) Whether any voluntary return has already been filed. Yes (b) If so, the date of filing of return 04.02.2011 9. If answer to item 8 is negative, please state (a) Income originally assessed NA (b) Whether it is a case of under assessment, at lower rate, assessment which has been made the subject of excessive relief or allowing excess loss/depre....
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....ner of Income Tax, Jabalpur vs., S. Goyanka Lime & Chemical Ltd., [2015] 56 taxmann.com 390 (M.P.) in which the Departmental SLP has been dismissed on the same reason because the Joint Commissioner of Income Tax recorded satisfaction in a mechanical manner and without application of mind. The assessee also relied upon Judgment of Hon'ble Madhya Pradesh High Court in the case of Arjun Singh vs., ADIT [2000] 246 ITR 363 (M.P.) in which also similarly worded sanction under section 148 was not found valid. The assessee also relied upon Judgment of Hon'ble Delhi High Court in the case of Pr. Commissioner of Income Tax vs., N.C. Cables Ltd., [2017] 88 taxmann.com 649 (Del.) in which also on similarly worded sanction, it was held that reassessment was not valid. The assessee also submitted that since no right of cross-examination have been allowed to the statement of Shri Himanshu Verma, therefore, such statement cannot be read in evidence against the assessee. He has relied upon Judgment of Hon'ble Supreme Court in the case of M/s. Andaman Timber Industries vs., Commissioner of Central Excise, Kolkata-II reported in 281 CTR 241. 4. The Ld. CIT(A), however, did not accep....
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....drawn against the assessee. The assessee did not receive any notice for production of the parties before A.O. There is no evidence on record of any payment of commission paid by assessee for arranging share capital. Learned Counsel for the Assessee relied upon Order of the ITAT, Delhi Bench in the case of Pioneer Town Planners Pvt. Ltd., vs. DCIT ITA.No.132/Del./2018 Dated 06.08.2018 in which in similar circumstances the re-assessment have been quashed which case also relates to entry provided by Shri Himanshu Verma. Learned Counsel for the Assessee submitted that the A.O. issued notices to all the parties under section 133(6) of the I.T. Act. In response to the same, 26 parties filed reply supported by documentary evidences to prove genuine share application money have been received. The A.O. did not take help of any handwriting export before forming any opinion. If replies were not in order, assessee should have been confronted with the material so that assessee could rebut the same. Therefore, such fact could not be taken adversely against the assessee. The assessee never received notice Dated 11.12.2017 for production of the parties for examination. In reasons....
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..... The companies are having meagre income only. Apart from statement of Shri Himanshu Verma, there is enough material to justify the addition on merit. The assessee also did not prove identity and creditworthiness of the Investors even if no cross-examination to the statement of Shri Himanshu Verma have been allowed. The Ld. D.R. relied upon Judgment of Hon'ble Supreme Court in the case of Raymond Woollen Mills 236 ITR 34 (SC). He has submitted that information is prima facie relevant and there is sufficient material on record to justify the initiation of re-assessment proceedings. The assessee failed to prove that no notice Dated 11.12.2017 have been received. The Ld. D.R. relied upon the following decisions. 1. PCIT vs., Paramount Communication (P.) Ltd., 2017- TIOL-253-SC-IT. 2. PCIT vs., Paramount Communication (P.) Ltd., [2017] 392 ITR 444 (Del.) (HC) 3. Aradhna Estate (P.) Ltd., vs. DCIT [2018] 91 taxmann.com 119 (Gujarat) (HC). 4. Pushpak Bullion (P.) Ltd., vs. DCIT [2017] 85 taxmann.com 84 (Gujarat) (HC). 5. Ankit Financial Services Ltd., vs. DCIT [2017] 78 taxmann.com 58 (Gujarat) (HC). 6. Aaspas Multimedia Ltd., vs. DCI....
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....surpluses and the capital account of a specific set of companies are enhanced with the help of the unexplained cash received by Himanshu Verma, which is routed to these companies through their dummy firm/companies. Once the funds of these companies have been enhanced sufficiently, accommodation entries through RTGS/ Cheque in the shape of the share capital, capital gains or loans as per the specific requirement of the recipient clients were provided to them in lieu of the cash received from them. In this way, the chain for providing an accommodation entry gets completed. It is noticed from the list of entries that the assessee M/s Ganesh Ganga Investment P. Ltd. has taken following accommodation entries during the financial year 2009-10 :- S.No. Amount Conduit companies through which cheque issued. 1. 4000000 Shubh Propbuild P Ltd., 2. 4000000 Jaguar Softech P. Ltd., 3. 4000000 Join Fashion P. Ltd., 4. 4500000 Management Services P. Ltd., 5. 4000000 Greenvision Construction P. Ltd., 6. 4000000 USK Exim P. Ltd., TOTAL 2,45,00,000/- On the basis of the reports received from the Investigat....
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....y (supra) in which the Addl. Commissioner of Income Tax similarly recorded the approval "Yes" I am satisfied that it is a fit case for issue of notice under section 148 of the I.T. Act." In this case the Hon'ble Delhi High Court held as under : "On a careful perusal of the statement made by V' it was found that facts mentioned in reasons were de hors the facts available on record. It was evident that the said statement was too general. It did not mention any name much less the name of the assessee. It was not the stand of the revenue that a list of the creditors, which included the name of the assessees, was furnished by V' subsequently and the same was forwarded to the Assessing Officer of the assessee. Applying the aforenoted settled principles governing an action under section 147, there could be no hesitation in holding that there was no information on record which could provide foundation for the Assessing Officer's belief that the assessee's transaction with 'V' Ltd. was not genuine and its income had escaped assessment on that account. Therefore, the impugned action of the Assessing Officer could not be sustained. Even the Addl Commissioner had accorded ....
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....nt u/s. 147/148 of the Act. The ld. AR submitted that the impugned order of assessment is invalid and unsustainable in law as the same has been passed by the AO without providing the reasonable time of four weeks for taking remedy against the order of disposal of preliminary objection against the incorrect assumption of jurisdiction by the AO u/s. 147 of the Act in violation of principles enunciated by Bombay High Court in the case of Asian Paints Ltd. 296 ITR 90. He further submitted that the Impugned orders of authorities below need be set aside as the reassessment proceedings have been initiated without obtaining a subjective satisfaction by the Pr. CIT Delhi-7, New Delhi as the approval u/s 151 is mechanical and without application of mind. 8. The ld. AR vehemently pointed out that the reassessment proceedings initiated by the Ld. AO is based on the information received from investigation wing and there was no material before him to substantiate the allegation contained in the information and therefore initiation of proceedings is bad in law. He also contended that the order under appeal is bad in law as the assessing officer has passed the order of assessment....
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....222 Taxman 129 (Bom.). 11. On the issue of validity of reopening and initiation reassessment proceedings u/s. 147 of the Act the ld. AR also pointed out that as per ratio of the decision of Hon'ble Bombay High Court in the case of Asian Paints Ltd. 296 ITR 90 (Bom), the AO to wait for four weeks to begin assessment after disposing of the objection and non-compliance of the same renders assessment proceedings void. He submitted that in the present case the objections of the assessee vide dated 29.11.2016 filed before the AO were disposed of/dismissed by the AO by the order dated 12.12.2016 and he passed impugned reassessment order u/s. 143(3) r/w s. 147 of the Act on 22.12.2016 which is clear violation of directions given by Hon'ble High Court in the case of Asian Paints (supra) and on this count also reassessment proceedings and consequent orders are void and thus, bad in law. This view was again approved by Hon'ble High Court of Bombay itself in the subsequent decision in the case of Aroni Commercials Ltd. vs. DCIT reported in 362 ITR 403 (Bom) and followed by ITAT, Bombay in the case of Shri Hirachand Kanuga vs. DCIT in ITA No.4261 & 4262/20....
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....e company taken bogus/ accommodation entries. The ld. AR vehemently pointed out that thereafter in last para 9 & 10, the AO, without applying mind to the information received from the Investigation Wing, recorded that he has reason to believe that the an income has escaped assessment which clearly shows that the AO proceeded to initiate initiatory assessment proceedings and reopening of assessment without having any valid satisfaction on the basis of borrowed satisfaction as there was no independent application of mind to the tangible material received from Investigation Wing, which could form the basis reason to believe that income has escaped assessment. 14. Further placing reliance on the decision of Hon'ble High Court of Delhi in the case of PCIT vs. G&G Pharma India Ltd. reported in 384 ITR 147 (Del), the ld. AR submitted that reopening of assessment by an AO based on the information received from the Director of Investigation without making any effort to discuss the materials on the basis on which he formed a prima facie opinion that income had escaped assessment. The Court held that the basic requirement of s. 147 of the Act that AO should apply independent mind....
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....and framing of reassessment orders. The ld. DR submitted that the proforma of approval u/s. 151 of the Act is being followed all over India and the ACIT applied his mind to the all material placed before him by the AO prior to granting approval u/s. 151 of the Act in column 12 of the proforma. Therefore, allegations made by the ld. AR are not sustainable and tenable and the same may kindly be dismissed. 18. Placing rejoinder to the above, the ld. AR submitted that in the reasons para 6 the information of DDIT (Investigation) has been given and reference of various entry providers such as Shri Himanshu Verma, Shri Praveen Aggarwal etc. who are engaged in providing accommodation entries through dummy companies with dummy directors. The ld. AR submitted that in the table given in para 3 is taken along with para 6 of the reasons recorded then, it is clear that the names of companies are 13 and above named two persons at serial No. 11 & 12 have been noted and there is no name of entry provider in the other 11 columns and there is no link in the reasons recorded with regard to these 11 companies. The ld. AR submitted that these facts clearly show that the AO ha....
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....ur paras the AO has noted facts of the information received from DDIT (Investigation), Faridabad, further, in para 6 modus operandi of entry providers has been noted thereafter, in para 7 & 8, it has been arisen that either during survey or post survey proceedings the assessee company has not submitted satisfactory explanation to prove identity, genuineness and creditworthiness of share capital/premium introducers and thus, the same is from paper companies of entry operator and then, he recorded satisfaction that the assessee company taken bogus/accommodation entries. Thereafter, the AO in last para 9 & 10, without applying mind to the information received from the Investigation Wing states/writes that he has reason to believe that the income has escaped assessment. The text and words used by the AO in the reasons recorded for reopening of assessment clearly show that the AO proceeded to initiatory assessment proceedings and reopening of assessment without having any valid satisfaction and only on the basis of borrowed satisfaction as there was no independent application of mind by the AO to the tangible material received from Investigation Wing which could form the valid ....
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.... to establish any nexus, even prima facie, with the such information. Therefore, in our considered opinion the initiation of reassessment proceedings u/s. 147 of the Act, notice u/s. 148 of the Act, reassessment proceedings and all consequent proceeding and orders, including impugned reassessment and first appellate order, are bad in law and thus, not sustainable and we hold so. Accordingly, on the basis of foregoing discussion, grounds No.2, 3, 4 and additional ground of the assessee are allowed and impugned proceedings, notice u/s. 148 of the Act and all consequent orders are quashed." 8.5. The statement of Shri Himanshu Verma is also filed on record which did not find mention if M/s. Shubh Propbuild Pvt. Ltd., as mentioned in the reasons belong to Shri Himanshu Verma. There is no investor exist in the name of M/s. Management Services Pvt. Ltd., and no addition in respect of the same company have been made by the A.O. The A.O, therefore, recorded incorrect facts in the reasons for reopening of the assessment. Thus the same cannot be approved under the Law. It is well settled Law if wrong facts and wrong reasons are recorded for reopening of the assessment, reopening of t....
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.... form the basis for recording the reasons. The reasons recorded by the A.O. are also incorrect as noted above. The reasons failed to demonstrate the link between the alleged tangible material and the formation of reasons to believe that income chargeable to tax has escaped assessment. The decisions relied upon by the Learned Counsel for the Assessee in the cases of Pr. Commissioner of Income Tax vs., RMG Polyvinyl (I) Ltd., 396 ITR 5 (Del.), Pr. Commissioner of Income Tax vs., Meenakshi Overseas (P) Ltd., 395 ITR 677 (Del.), Pr. Commissioner of Income Tax vs., G and G Pharma India Ltd., 384 ITR 147 (Del.) and Sarthak Securities Co. (P) Ltd., 329 ITR 110 (Del.), clearly apply to the facts and circumstances of the case. Learned Counsel for the Assessee also relied upon Order of ITAT, Delhi Bench in the case of Pioneer Town Planners Pvt. Ltd., (supra) in which on identical facts reopening of the assessment have been quashed. The Ld. D.R. relied upon certain decisions in support of the contention that reopening of the assessment is justified, but, the same are distinguishable on facts of the present case. Considering the facts and circumstances of the case in the light of above discuss....
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....rly show that reopening have been done in the matter without application of mind based on wrong facts and as such the reopening of the assessment cannot be justified. It may also be noted here that the Learned Addl. CIT, Range-12, Delhi while granting sanction under section 151 of the I.T. Act has mentioned in the reasons that "Yes, I am satisfied that this is a fit case for reopening under section 147." Such a satisfaction was not found valid by ITAT, Delhi Benches in the cases of Shree Balkishan Agarwal Glass Industries Ltd., Delhi vs., DCIT (supra) and M/s. Behat Holdings Ltd., Delhi vs., ITO, Ward-4(3), New Delhi (supra), based on several decisions of the Hon'ble High Courts. Thus, the issue is covered against the Revenue by the above decisions of the Tribunal as well. The A.O. has thus no justification to assume jurisdiction under section 147 of the I.T. Act, 1961, in a Lawful manner and as such the same are liable to be quashed. In view of the above discussion, we set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stand deleted. Since we have quashed the reopening of the assessment, therefore, there is nothing t....
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....and (b)If so, the date of filing of return If the answer to item no 8 is in the negative, please state (a)The income originally assessed (b)Whether it is a case of under assessment, assessment at too low rate, assessment which has been made the subject of excessive relief or allowing of excessive loss or depreciation Rs 80 lacs 147(b) 10 Whether the provisions of section 150(1) are applicable. If No the reply is in affirmative, the relevant facts may be stated against item no 11 and it may also be brought out that provisions of section 150(2) would not stand in the way of initiating proceedings u/s 147 11 Reasons for the belief that the income has escaped As per Annexure 'A' assessment Dated: 21.03.2012 12. Dated: Whether the Addl. Commissioner is satisfied on the reasons recorded by the ITO that it is a fit case for the issue of notice u/s 148 y fit Å· दि (RAJINDER SINGH) ITO Ward 17(1), Delhi case satisfied that the opening. for 75 147 सà¥à¤¨à¥€à¤¤à¤¾ सिदà¥à¤§à¥‚ (SUNITA SINGH) 28/3/2012 Addl. CIT, Range-12, Del....
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....he reasons for initiating proceedings u/s 148 and for Obtaining the approval of the Addl. Commissioner of Income Tax, Delhi-III, New Delhi 1. Name and address of the assessee 2. PAN 3. Status 4. 5. 6. 7. Circle/Range Assessment year in respect of which it is Proposed to issue notice u/s 148 The quantum of income which has Escaped assessment. Whether the assessment is proposed to be made for the first time If the reply is in the affirmative, please state M/s Shri Balkishan Agarwal Glass Industries Ltd. J-4-126-B, D.D.A. Flats Kalka Ji, New Delhi-110019 AABCS2870C Company Circle-8(1) 2005-06 5500000/- Yes 8. 9. a) Whether any voluntary return had already been filed No b) If so, date of filing of the said return. If the answer to item 6 is in the negative Please state c) d) The income originally assessed. Whether it is a case of under N.A. assessment Assessment at low rate, assessment which has been made subject Reasons for the belief that income has escaped assessment Escapement of income As per annexure 'A' enclosed. 10.....
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....undering operation was conducted by Jain brothers with the help of 56 professionals who worked as mediators to bring the potential beneficiaries to Jain brothers for laundering their unaccounted cash. The SFIO has identified 559 beneficiaries during the Financial Year 2009-10 and the total quantum has been estimated at a minimum of Rs. 11,970/- crores. The modus operandi for laundering money during pre and post search period has been clearly brought out in the report. SFIO investigation focused on only some of the players associated with this organized crime to prove criminal conspiracy. However, this investigation needs to be expanded to cover all the beneficiaries and the professional mediators, most of them being chartered Accountants registered with the ICAI 4. Further. SFIO had forwarded soft copy containing the investigation report and the details of accommodation entries viz. amount received by beneficiary companies, the cheque/ PO number, and the name of company engaged in providing accommodation entries, the mediator/ middle man, bank etc. noted from scrutiny of the seized documents. The entries pertaining to the assessee company M/s ....
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.... RTGS PK Aggarwal 1.000.000.00 Pvt. Ltd. Behat Holdings 23 7/23/2009 Apoorva Axis RTGS PK Aggarwal 1.000.000.00 Pvt. Ltd. Behat Holdings 7/23/2009 1,000,000.00 25 7/23/2009 Attractive Karishma Axis RTGS PK Aggarwal Axis RTGS .Pvt. Ltd. Behat Holdings PK Aggarwal 1,000,000.00 Pvt. Ltd. Behat Holdings 26 7/23/2009 Mega Top Axis RTGS PK Aggarwal 1,000,000.00 Pvt. Ltd. Behat Holdings 27 7/24/2009 Euro (M) Axis RTGS PK Aggarwal 28 7/24/2009 1,000,000.00 1,000,000.00 Pvt. Ltd. Hum Tum Axis RTGS Behat Holdings Pvt. Ltd. PK Aggarwal 29 7/24/2009 Shalini Axis RTGS Behat Holdings 1,000,000.00 Pvt. Ltd. PK Aggarwal Behat Holdings 30 7/24/2009 Victory Axis RTGS PK Aggarwal 1,000,000.00 Pvt. Ltd. Behat Holdings 31 7/24/2009 Zenith Axis RTGS PK Aggarwal 1,000,000.00 Pvt. Ltd. Behat Holdings 32 7/28/2009 Euro (M) Axis RTGS 1,000,000.00 PK Aggarwal Pvt. Ltd. Behat Holdings 33 7/28/2009 Hum Tum Axis RTGS 1,000,000.00 ....
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....vt. Ltd. 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 Victory Aasheesh Axis RTGS Behat Holdings PK Aggarwal Pvt. Ltd. Behat Holdings Axis RTGS PK Aggarwal Pvt. Ltd. Behat Holdings Zenith -Axis RTGS PK Aggarwal Pvt. Ltd. Behat Holdings Attractive. Axis RTGS PK Aggarwal Pvt. Ltd. Behat Holdings Victory Axis RTGS PK Aggarwal Pvt. Ltd. Zenith Behat Holdings Axis RTGS PK Aggarwal Pvt. Ltd. Aasheesh Axis RTGS Behat Holdings PK Aggarwal 1,000,000.00 Pvt. Ltd. Behat Holdings 62 11/17/2009 63 11/17/2009 64 11/17/2009 1,000,000.00 1,000,000.00 1,000,000.00 Apoorva Axis RTGS PK Aggarwal Pvt. Ltd. Behat Holdings Mega Top Axis RTGS PK Aggarwal Pvt. Ltd. Behat Holdings Victory Axis RTGS PK Aggarwal Pvt. Ltd. 70,000,000.00 Summary of evidences relating to the assessee: (a) Return of income: The return of income in this case was filed on 15-10-2010 for the assessment year 2010-11 declaring income/loss of Rs. 95,9164 Thereafter the return was processed under 143(1) of....
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.... a reason to believe that share application money loan received by the assessee company during the year under consideration are merely accommodation entries for which the assessee company has paid cash from its coffer and commission thereon. 6. Reason for formation of belief: I have carefully perused and considered the return of income of assessee, information received from Investigation Wing, copies of incriminating documents seized from custody and control of Jain Brothers. a. That S.K. Jain Group was engaged in the business of providing accommodation entries to beneficiaries in lieu by entities controlled by them in cash. b. During the course of search operation and S.K. Jain Group various incriminating documents were been seized which showed that all the companies/entities controlled by the group do not c. have any known business activities and lack of independent existence as a separate entity and were a part of group of companies engaged in providing accommodation entries. The above conclusion was corroborated with the following evidences found and seized during the course of search from their custody and control S.K. Jain Group: ....
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..... 7,00,00,000/- represents unexplained credit u/s 68 of the Act in books of A/c of the assessee. Income Chargeable to tax escaping assessment 8. Considering the above referred credible information, incriminating seized document u/s 132 of the Act and enquiries and investigation subsequent to the information, I have reason to believe that an amount of Rs.7,00,00,000/- has escaped assessment in case the of M/s Behat Holdings Pvt. Ltd. Ltd for the A.Y 2010-11 within the meaning of Section 147/148 of Income-tax Act, 1961. 9. Prior to 1989, section 147-provided for two grounds to reopen concluded assessments: (i) On basis of information received by the Assessing Officer assessment could be reopened. This had to be within four years. (ii) Where facts material for assessment are not disclosed in the course of assessment, whether within or beyond four years. Supervening these two requirements in the alternative, the initial condition is that the Assessing Officer has reason to believe that there is escapement of income. The first requirement regarding information is now dropped by 1989 amendment and therefore for reopening of assessment....