TaxTMI 
TaxTMI 
2021 (8) TMI 1023
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....e facts of the case are that original return of Income for this year was filed on 25.10.2007 at NIL income. The notice under section 148 of the Income Tax Act was issued on 25.03.2014 after recording the 'reasons' and taking prior approval from the competent authorities. The case was reopened on the basis of information received from the office of CIT, New Delhi vide letter dated 28.03.2013 wherein it was stated that during the course of search conducted in the premises of Shri Surinder Kumar Jain it was found that assessee has obtained an entry of Rs. 25 lac during the relevant year. The assessee in response to the statutory notice vide letter dated 01.04.2014 submitted that the original return filed may be treated as a return filed in response to the notice under section 148 of the I.T. Act; and also vide letter dated 15.04.2014 requested to provide reasons recorded, which were duly provided. The assessee filled its objections which were disposed off. The A.O. the issued notices to prove the source of credits which were duly complied by the assessee and filed all the evidences and details as called for Assessing Officer. The assessee had furnished the details of the parties from ....
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....been recorded were seized. On perusal of the re-assessment order, it is noticed that while passing the said order, the A.O. has failed to consider the relevant seized material pertaining to the assessee-company which is mentioned in the Order. It is noted in the notice under section 263 that the amounts received by assessee-company were accommodation entry in lieu of cash given by the assessee-company through Shri Satish Goel. The relevant copies of the seized material relating to the assessee-company were given along with show cause notice or during the proceedings under section 263 of the I.T. Act. Reply of the assessee was called for in which the assessee explained that the A.O. after examining the entire details and documentary evidences on record and making direct/independent enquiry from both the Investors under sections 133(6) of the I.T. Act, completed the assessment proceedings. The assessee filed all the documentary evidences before A.O. i.e., confirmation letter from Investors, copy of their bank accounts, copy of ITR, copy of PAN, copy of audited balance sheet, copy of Master Data taken from Official website of MCA. It was also stated that the seized papers are only rou....
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....abundant caution, the same were raised again. 9. Considering the facts of the case, we are of the view that additional grounds raised are purely legal in nature and goes to the root of the matter, which does not require any investigation facts and is borne out from the orders and material on record. Therefore, the same are admitted for the purpose of disposal of the appeal. We, accordingly, admit the additional grounds of appeal. 10. The Ld. Counsel for the Assessee contended that the reopening of assessment is itself invalid; as such the Ld. Pr. CIT does not have any jurisdiction to upset the re-assessment order, in proceedings under section 263 of the I.T. Act. He submitted that it is well settled principle of law that validity of the original assessment order can be challenged in the collateral proceedings. Thus, in view of the same, appellant agitates the very validity of the reassessment order u/s 147 of the Act, which was sought to be revised by the impugned order u/s 263 of the Act. He placed reliance upon the following judicial decisions: - Supersonic Technologies (P) Ltd. vs. PCIT in ITA No. 2269/D/2017 dated 10.12.2018 (ITAT, Delhi Bench) "6.1.........
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....II, New delhi vide letter F.No. CITIII/ Confidential/2012-13 dated 28.03.2013 that the above assessee, M/s Suraj Pulses Private Limited has received and is a beneficiary of accommodation entries provided by the group of Shri Surendra Kumar Jain, Sh. Rakesh Gupta & Sh. Vishesh Gupta and sh. Navneet Jain &Vaibhav Jain and hundreds of bogus companies of his group and many other related entry providers. These search and seizure operations unearthed the modus operandi of these entry operators. The various companies which do not have any business were being used for providing accommodation entries to various assessees who were rerouting their unaccounted cash through these accommodation entries. The assessees would pay cash to the entry providers. This cash would then be deposited in the accounts of various bogus companies and the transactions would be routed through many bank accounts to cover the trail. Then the assessee would be given cheque from one of the many account which would be given the colour of share application money or share capital or share premium or loans or advance etc. In the process, the entry operator would earn certain commission. The searches by the Investigation ....
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....06 has also not been mentioned. In other words, the contents of the letter dated 16.06.2006 of the Director of Income-tax (Inv.), New Delhi have not been given. The AO has vaguely referred to certain communications that he had received from the DIT (Inv.), New Delhi; the AO did not mention the facts mentioned in the said communication except that from the information gathered by the DIT (Inv.), New Delhi that the assessee was involved in giving and taking accommodation entries only and represented unsecured money of the assessee company is actually unexplained income of the assessee company or that it has been informed by the Director of Income-tax (Inv.), New Delhi vide letter dated 16.06.2006 that the assessee company was involved in giving and taking bogus entries/transactions during the relevant financial year. The AO did not mention the details of transactions that represented unexplained income of the assessee company. The information on the basis of which the AO has initiated proceedings u/s 147 of the Act are undoubtedly vague and uncertain and cannot be construed to be sufficient and relevant material on the basis of which a reasonable person could have formed a belief tha....
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....P.) Ltd. (supra) also supports the view we have taken above." - ShankerTradex (P) Ltd. vs. ITO in ITA No. 2200/D/2019 dated 10.11.2020 (ITAT, Delhi) "11......... On perusal of the reason it is apparent that in the first paragraph the learned assessing officer has mentioned that details about the entry operators. In the second paragraph the learned assessing officer has noted that from the verification of the documents seized it is clearly appears to him that accommodation entries from various paper companies were obtained by the assessee. However in the table reproduced in paragraph number two there is no reference to the nature of the accommodation entry, the parties from whom accommodation entries have been provided/obtained by the assessee, the various dates of the accommodation entries, the amount involved with respect to each of the parties from whom accommodation entries have been obtained. Instead of that the learned assessing officer in paragraph number [2] has mentioned name of the assessee itself and against the name of the assessee mentioned sum of Rs. 20 lakhs. In paragraph number [3] of the reasons it was further stated by him that he has reason to be....
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....plication of mind on the part of the A.O. to reopen the assessment in the matter. These facts are sufficient to hold that reopening of the assessment was bad in law, illegal and non-est, therefore, such order could not be revised in the proceedings under section 263 of the I.T. Act. We, accordingly set aside the Order of the Ld. Pr. CIT passed under section 263 of the I.T. Act and quash the same. In this view of the matter, there is no need to decide the issue on merit. However, we may note briefly that documentary evidences were filed before A.O. at original assessment stage as well as at the stage of re-assessment to prove genuine credit in the matter which have accepted by the A.O. after considering and examining the material on record and calling explanation from the Investors under section 133(6) of the I.T. Act. In this view of the matter, we allow the appeal of assessee." 13.1 Further reliance was placed upon the following judgments: - G & G Pharma 384 ITR 0147 (High Court of Delhi) - Meenakshi Overseas 395 ITR 677 (High Court of Delhi) - Sabh Infrastructure reported in 398 ITR 198 (High Court of Delhi) - DCIT vs KLA Foods (India) Ltd. ....
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....7 has been found from the search conducted at the premises of third party and if material found from the premises of the searched person is being utilized, then in such a situation the law provides that proceedings should have been initiated under section 153C, which has not been done and, therefore, the entire proceedings under section 147 gets vitiated and is bad in law. In support of this proposition Ld. Counsel, has relied upon certain decisions, firstly on the point that validity of reassessment or assessment order can be challenged in the revisionary proceeding under section 263; and secondly, if any material has been found pertaining to the assessee in the case of person searched or covered u/s 153A, then only recourse was to initiate proceedings under section 153C and not under section 147. At the outset, we do not find any quarrel to the proposition that the validity of assessment or reassessment cannot be challenged in the revisionary proceedings u/s 263, however, on the facts of the present case, the ratio laid down in such judgments would not be applicable at all, because here in this case no document or material belonging to the assessee was found in the course of sear....
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....IT Vs Paramount Communication (P.) Ltd. (supra) is squarely applicable, as in that case also the information regarding bogus purchase by the assessee was received vide DRI from CCE which was passed on to Revenue authorities and was held to be tangible material outside record to initiate valid re-assessment proceedings. Here in this case, as reiterated several times there was a definite information and material found qua the assessee which at least needed verification and examination and hence, in our opinion such a material and information does constitute a tangible and relevant material sufficient enough to form 'reason to believe' that income chargeable to tax has escaped assessment. Apart from that, it is seen from the records that the assessee had raised similar objections after the receipt of "reasons recorded" before the Assessing Officer during the course of re- assessment proceedings, which have been amply dealt with and discussed by the Assessing Officer inn detail vide his separate order, copy of which has been placed in the paper book. Against the said order, assessee has not sought for any remedy nor has it challenged this issue in appeal after the passing of the assess....
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....o constitute document or asset seized or requisitioned in the case of person searched in terms of scope of section 153C of the Act. If certain documents or asset or books of account belonging to the assessee would have been found during the course of search proceedings of S.K. Jain and his group concerns, then perhaps it would have been held that the provisions of section 153C of the Act would have been invoked. But here in this case what has been found, is the regular entries in the books of account of the concerns of S.K. Jain group, in which name of the assessee is appearing. Such entries in the cash books depicting the details of cheques issued in favour of the assessee as well as cash deposit through intermediates on various dates cannot be reckoned as document or books of account of the assessee. This fact has been noted by the Pr. CIT in the impugned order, wherein the entries pertains to the assessee for a sum of Rs. 25 lacs. Thus, the contention raised by the ld. counsel on this point is out rightly rejected that the proceedings under section 153C of the Act should have been initiated instead of under section147 of the Act. 6.3 As regards the contention that mater....
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..... We have heard both the parties and perused all the records. We have taken congnizance of all the contentions of the Ld. AR. When we asked the specific query about whether the present directors of those companies were called for and given a statement, the Ld. AR submitted that most of the companies whom shares have been given the current directors were not given statements but the past directors have given statements. The case laws cited by the Ld. AR will not be applicable in the present case as the facts in the present case are different. In fact the decision of the Hon'ble Supreme Court in Malabar Industrial Company Ltd. vs. CIT (243 ITR 83)(SC) wherein it is held that the Commissioner has to satisfy himself of both the conditions, order being erroneous and prejudicial to the interest of revenue. Both these test have been seen by the Principal Commissioner of Income Tax in the present case and aptly applies in the present case. It is also held by the Hon'ble Apex Court that the provisions cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is only when an order is erroneous that the section will be attracted. Thus, the Pri....
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....irection to the AO to examine the seized material and confront the same to the assessee. The AO would also examine the reason for transferring such shares, if any, at a nominal rate to the directors or their relatives or the concerns in which the assessee company is interested and pass a speaking order after affording on opportunity of being heard to the assessee. If after verification of the seized martial an the explanation regarding t he transfer of shares in the name of the directors or their relatives or the concerns in which the directors are interested, it is found by the AO that there is nexus between the cash deposits and the cheques issued by the group companies of SK Jain or no valid explanation is given for the transfer of shares at lower price in the name of directors, relatives and the concerns in which the assessee company is interested, then the same may be considered as an accommodation entry and taxed accordingly as per the provisions of the Income Tax Act." Thus, it can be seen that the Pr. CIT has properly invoked the provisions of Section 263 and there is no procedural lapse on the part of the Pr. CIT. In fact, the Assessing Officer though reopened the....
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.... in 70 taxmann.com 124 (Calcutta) - Rajmandir Estate P Ltd vs PCIT reported in 77 taxmann.com 285 (SC) - Deniel Merchant (P) Ltd. vs ITO in SLP (C) No. 23976/2017 dated 29.11.2017 (SC) - Malabar Industrial Co. Ltd. vs CIT reported in 109 Taxman 66 (SC) 16. In rebuttal, the Ld. Counsel for the assessee has filed another written synopsis in rebuttal to the case laws filed by the Ld. DR and submitted that the case laws relied upon by the Ld. DR are on different facts and issues. He further submitted that such case laws relates to the issue whether the Ld. Pr. CIT has rightly initiated the proceedings under section 263 of the Act on account of no inquiry by the Ld. AO, but the issues raised by the Assessee vide Additional Grounds of Appeal are that whether the reopening u/s 147 of the Act is valid in the eyes of law and if the same are invalid then whether the Ld. Pr. CIT has a right to upset such invalid assessment order. Further, he also submitted that the case of Surya Jyoti Software (P) Ltd. and Surya Financial Services (Supra) does not deal with the issue whether the Ld. AO has independently applied his mind or not in the reasons recorded to the infor....
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....ion is - whether the assessee can challenge the jurisdictional validity of order passed u/s 143(3) in the appellate proceedings taken up for challenging the order passed u/s 263? If we analyse the nature of both of these proceedings, which are under consideration before us, we find that the original assessment proceedings can be classified in a way as 'primary proceedings'. These are, in effect, basic/foundational proceedings and akin to a platform upon which any subsequent proceedings connected therewith can rest upon. The proceedings initiated u/s 263 seeking to revise the original assessment order is off shoot of the primary proceedings and therefore, these may be termed as 'collateral proceedings' in the legal framework. The issue that arises here is whether any illegality/invalidity in the order passed in the 'primary proceedings' can be set up in the 'collateral proceedings' and if yes, then of what nature? 8.1. We have analysed this issue carefully. There is no doubt that after passing of the original assessment order, the primary (i.e. original proceedings) had come to an end and attained finality and, therefore, outcome of the same cannot be di....
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....y hold that as per law, the assessee should be permitted to challenge the validity of order passed u/s.263 on the ground that the impugned assessment order was non est and we hold accordingly. [Emphasis supplied]. 19. Otherwise also, it is a well established jurisprudence laid down by the various Courts, including Hon'ble Apex Court, reiterating the fundamental principle that the decree or order passed by a Court without jurisdiction is a nullity and its validity could be challenged whenever it is sought to be enforced or relied upon, even at the stage of execution and in collateral proceedings. This principle has been laid down by the Hon'ble Apex Court in the following judgments:- i) AIR 1954 SC 340 Kiran Singh and Others v. Chaman Pawan and Others. The facts were that the appellant in that case had undervalued the suit at Rs. 2,950 and laid it in the court of the Subordinate Judge, Monghyr for recovery of possession of the suit lands and mesne profits. The suit was dismissed and on appeal it was confirmed. In the second appeal in the High Court the Registry raised the objection as to valuation under Section 11. The value of the appeal was fixed at Rs. 9,980.....
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....thout jurisdiction is a nullity and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction strikes at the very authority of the Court to pass any decree and such a defect cannot be cured even by consent of parties. 11 The said principle was reiterated by this Court in Seth Hiralal Patni v. Sri Kali Nath. The Court said: (SCR pp. 751-52) "Competence of a court to try a case goes to the very root of the jurisdiction, and where it is lacking, it is case of inherent lack of jurisdiction." 12 In Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman & Ors., [1871] 1 SCR 66, a decree for possession was passed by the Court of Small Causes which was confirmed in appeal as well as in revision. In execution proceedings, it was contented that the Small Causes Court had no jurisdiction to pass the decree and, hence, it was a nullity." 13 Rejecting the contention, this Court stated: (SCC p. 672, para 6) "a Court executing a decree cannot go behind the decree : between the parties or their representatives it must take th....
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....ree passed by a court having no jurisdiction and consequently being a nullity and not executable and a decree of the court which is merely illegal or not passed in accordance with the procedure laid down by law. A decree suffering from illegality or irregularity of procedure, cannot be termed inexecutable by the executing court; the remedy of a person aggrieved by such a decree is to have it set aside in a duly constituted legal proceedings or by a superior court failing which he must obey the common of the decree. A decree passed by a court of competent jurisdiction cannot be denuded of its efficacy by any collateral attack or in incidental proceedings." From the above decisions, it is amply clear that all irregular or wrong decrees or orders are not necessarily null and void. An erroneous or illegal decision, which is not void, cannot be objected in execution or collateral proceedings. 15 From the above decisions, it is amply clear that all irregular or wrong decrees or orders are not necessarily null and void. An erroneous or illegal decision, which is not void, cannot be objected in execution or collateral proceedings. ........ 20 In our cons....
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....Assessing Officer should be erroneous and prejudicial to the interest of the Revenue. In the present case, the Assessing Officer did not make any addition for the reasons recorded at the time of issue of notice under Section 148 of the Act. This position is not disputed and disturbed by the Commissioner of Income Tax in his order under Section 263 of the Act. Sequitur is that the Assessing Officer could not have made an addition on account of share application money in the assessment proceedings under Section 147/148. Accordingly, the assessment order is not erroneous. Thus, the Commissioner of Income Tax could not have exercised jurisdiction under Section 263 of the Act. 22. Ergo, it is incontrovertible that proceedings u/s. 263 are collateral proceedings of the assessment, because ld. CIT/PCIT exercise revisionary jurisdiction u/s.263 seeking to revise the assessment order on the ground that it is erroneous in so far as it is prejudicial to the interest of revenue. The edifice of the proceedings u/s 263 is the assessment order which is the original proceedings which has come to an end. However, if the original assessment order itself was invalid or illegal in terms of jurisdic....
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....ntries has been taken from various paper companies which were obtained by the assessee. However in the reasons recorded there is no reference to which are the paper companies and what is the nature of the accommodation entry, and the parties from whom accommodation entries have been provided/obtained by the assessee. No various dates have been mentioned of the accommodation entries and the amount involved from whom accommodation entries have been obtained. In fact there is no whisper about how much credit or entry has been received and what is the income which escaped assessment. No reasons to believe has been formed by the Ld. AO that there is an income which has escaped assessment. Assessee even vide its letter dated 23.06.2014 to the Ld. AO specifically mentioned that the name of persons from whom the credit entry of Rs. 25,00,000/-, has been received has not been given to the assessee. Assessing Officer has just vaguely referred to information/documents that he had received from the CIT-III, New Delhi. But what is the information and what is the material has not been mentioned at all. The information which has been mentioned in the reasons on the basis of which the AO has initi....
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....y Hon'ble High Court of Delhi in the case of Insecticides (India) Ltd. reported in 357 ITR 330 and this Tribunal in the case of Shanker Tradex (P) Ltd. in ITA No. 2200/D/2019 dated 10.11.2020. 24.1 In view of these facts and circumstances, since the reassessment order itself is bad in law, therefore, the same cannot be revised under section 263 of the I.T. Act. Only valid re-assessment order can be revised under section 263 of the I.T. Act. We, accordingly, set aside the Order of Ld. Pr. CIT passed under section 263 of the I.T. Act and quash the same. In view of the above, the remaining pleas of the assessee are not required to be adjudicated. Accordingly, appeal of the assessee is allowed. Assessment Year 2008-09 in ITA No.3010/Del/2017 25. Here in this case also exactly similar facts and circumstances are involved. For this year, original return of Income in this case was filed on 25.10.2007 declaring income of Rs. 3,55,310/-. The notice under section 148 of the Income Tax Act, was issued on 25.03.2014 after recording the reasons and taking prior approval from the competent authorities which wass by and large on the same grounds as was taken in ASSESSMENT YEAR 2007-08. T....
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....Leasing & Finance India Ltd, M/s Brite Industrial Resources Ltd, M/s Sunny Cast & Forge Ltd and M/s Singhal Securities Pvt Ltd, concerns of S.K. Jain group of cases. However, on perusal of records and annexures of cash book and cheque book seized in the case of SK Jain group, it has been observed that the total accommodation entry of Rs. 90 lakhs has been taken by your company from the above mentioned concerns instead of Rs. 70 Lakhs as per reasons recorded for reopening of assessment. Search and seizure operation was carried out on 14.09.2010 at the premises of Shri Surender Jain and Shri Virender Jain. During the course of search, cash book and bank books of the concerns managed by Shri S.K. Jain group wherein detailed of day-today receipts in cash and cheque from/to different persons/firms/companies have been recorded, were seized. On perusal of the re-assessment order, it is noticed that while passing the said order, the Ld. AO has failed to consider the relevant seized material pertaining to the assessee-company which is mentioned in the Order. It is noted in the notice under section 263 that the amounts received by assessee-company were accommodation entry in lieu of cash giv....
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.... purpose of disposal of the appeal. We, accordingly, admit the additional grounds of appeal. 29. The Ld. Counsel for the Assessee contended that the submissions with respect to the present case is same as in the case of Suraj Pulses Pvt. Ltd. in ITA No.3009/Del/2017 (supra), as the reasons recorded are identical. The reasons recorded which are placed at Pg. 3 of the paper book reads as under: "Information/ documents in the form of CD, appraisal report alongwith relevant details has been received from the office of the CIT-III, New delhi vide letter F.No. CITIII/ Confidential/2012-13 dated 28.03.2013 that the above assessee, M/s Suraj Pulses Private Limited has received and is a beneficiary of accommodation entries provided by the group of Shri Surendra Kumar Jain, Sh. Rakesh Gupta & Sh. Vishesh Gupta and sh. Navneet Jain &Vaibhav Jain and hundreds of bogus companies of his group and many other related entry providers. These search and seizure operations unearthed the modus operandi of these entry operators. The various companies which do not have any business were being used for providing accommodation entries to various assessees who were rerouting their unaccounted ca....
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....ealt with by us in appeal in the case of Suraj Pulses (P) Ltd. for AY 2007-08 in ITA No. 3009/D/2017 (Supra). The above finding given therein will apply mutatis mutandis for this year also. 33. Further, in the from the perusal of the reasons recorded for initiating proceedings u/s 148 and obtaining the approval of the Addl. Commissioner of Income Tax , Range-9, New Delhi, it is mentioned that assessee company received share capital on account of accommodation entries of Rs. 70 lakhs. However, Ld. Pr. CIT in order u/s 263 has admitted that the total accommodation entry of Rs. 90 lakhs has been taken by the assessee company from the various concerns instead of Rs. 70 Lakhs as per reasons recorded for reopening of assessment. The same is also clarified from the order dated 06.12.2017 passed by Ld. AO u/s 263/147/143(3) of the Act wherein the addition is also made of Rs. 90,00,000/-. Thus, the facts mentioned in the proforma for reasons for reopening of the assessment are incorrect and non-existent. The Hon'ble High Court of Delhi in the case of PCIT vs. RMG Polyvinyl reported in 396 ITR 5 (Delhi) has held as under : "9. However, in neither of the above cases are the facts ....
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....t. Further also, following the reasons for decision in the case of Suraj Pulses (P) Ltd. for AY 2007-08 in ITA No. 3009/D/2017 (supra), we set aside the order passed by the Ld. Pr. CIT under section 263 of the I.T. Act and quash the same. Accordingly, appeal of the assessee is allowed. 35. In the result, ITA. No. 3010/Del./2017 of the Assessee is allowed. Suraj Buildmart India Pvt Ltd. Appeal No. 3011/D/2017 AY 2007-08 36. Here again facts are exactly same. In this year also the original return of Income was filed on 25.10.2007 declaring income of Rs. 2,05,085. The notice under section 148 of the Income Tax Act, was issued on 25.03.2014 after recording the reasons and taking prior approval from the competent authorities on by and large same reasons and information as dealt in the earlier part of the order. The assessee in response to the statutory notice vide letter dated 01.04.2014 submitting therein that the original return filed may please be treated as return filed in response to the notice under section 148 of the I.T. Act and vide letter dated 15.04.2014 requested to provide reasons recorded, which were duly provided to it. The assessee also filled its objections whi....
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....eque book seized in the case of SK Jain group, it has been observed that the total accommodation entry of Rs. 2.15 Crore (as against Rs. 2.60 as per reasons recorded for reopening of assessment) has been taken by your company from the above mentioned concerns. Search and seizure operation was carried out on 14.09.2010 at the premises of Shri Surender Jain and Shri Virender Jain. During the course of search, cash book and bank books of the concerns managed by Shri S.K. Jain group wherein detailed of day-to-day receipts in cash and cheque from/to different persons/firms/companies have been recorded, were seized. On perusal of the re-assessment order, it is noticed that while passing the said order, the Ld. AO has failed to consider the relevant seized material pertaining to the assessee-company which is mentioned in the Order. It is noted in the notice under section 263 that the amounts received by assessee-company were accommodation entry in lieu of cash given by the assessee-company through Shri Satish Goel. The relevant copies of the seized material relating to the assessee-company were given along with show cause notice or during the proceedings under section 263 of the I.T. Act.....
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.... case is same as in the case of Suraj Pulses Pvt. Ltd. in ITA No.3009/Del/2017 (supra) and Suraj Pulses Pvt Ltd. in ITA No. 3010/D/2017 (Supra), as the reasons recorded are identical. The reasons recorded which are placed at Pg. 6 of the paper book reads as under: "Information/ documents in the form of CD, appraisal report alongwith relevant details has been received from the office of the CIT-III, New delhi vide letter F.No. CITIII/ Confidential/2012-13 dated 28.03.2013 that the above assessee, M/s SurajBuildmart Pvt. Ltd. has received and is a beneficiary of accommodation entries provided by the group of Shri Surendra Kumar Jain, Sh. Rakesh Gupta & Sh. Vishesh Gupta and sh. Navneet Jain &Vaibhav Jain and hundreds of bogus companies of his group and many other related entry providers. These search and seizure operations unearthed the modus operandi of these entry operators. The various companies which do not have any business were being used for providing accommodation entries to various assessees who were rerouting their unaccounted cash through these accommodation entries. The assessees would pay cash to the entry providers. This cash would then be deposited in the acco....
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.... been dealt with by us in appeal in the cases of Suraj Pulses (P) Ltd. for AY 2007-08 in ITA No. 3009/D/2017 &Suraj Pulses (P) Ltd. for AY 2008-09 in ITA No. 3010/D/2017. Further, on perusal of the form for recording the reasons for initiating proceedings u/s 148 and obtaining the approval of the Addl. Commissioner of Income Tax, Range-9, New Delhi, it is mentioned that assessee company received share capital on account of accommodation entries of Rs. 2,60,00,0000. However, Ld. Pr. CIT in order u/s 263 has observed that the total accommodation entry of while Pr. CIT has mentioned in his order at Pg. 27 that the amount received is Rs. 2,15,00,000/- by assessee as against Rs. 2,60,00,000/-. Further, the Ld. AO in the assessment order u/s 263/147/143(3) dated 08.12.2017 has confirmed the same by making an addition of Rs. 2,15,00,000/-. Thus, following the reasons for decision in the case of Suraj Pulses (P) Ltd. for AY 2007-08 in ITA No. 3009/D/2017 (supra) and Suraj Pulses (P) Ltd. for AY 2008-09 in ITA No. 3010/D/2017, we set aside the order passed by the Ld. Pr. CIT under section 263 of the I.T. Act and quash the same. Accordingly, the appeal of the assessee is allowed. 44. In t....
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....e notice under section 263 of the I.T. Act was issued to the assessee on 13.01.2017 which is reproduced in the impugned order. In the show cause notice it is stated that the case was reopened on the allegation of accommodation entry of Rs. 20.50 lakhs on account of share application/capital received from M/s Shalini Holdings Ltd, concern of S.K. Jain group of cases. Further, on perusal of records and annexures of cash book and cheque book seized in the case of SK Jain group, it has been observed that the total accommodation entry of Rs. 20.50 lakhs has been taken by your company from the above mentioned concerns. Search and seizure operation was carried out on 14.09.2010 at the premises of Shri Surender Jain and Shri Virender Jain. During the course of search, cash book and bank books of the concerns managed by Shri S.K. Jain group wherein detailed of day-today receipts in cash and cheque from/to different persons/firms/companies have been recorded, were seized. On perusal of the re-assessment order, it is noticed that while passing the said order, the Ld. AO has failed to consider the relevant seized material pertaining to the assessee-company which is mentioned in the Order. It i....
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....asons as given above we are admitting the additional grounds. 49. The Ld. Counsel for the Assessee contended that the submissions with respect to the present case are same as in the aforementioned three cases, as the reasons recorded are similar. The reasons recorded which are placed at Pg. 1-2 of the paper book (True Typed copy filed separately) reads as under : "Information has been received from the Directorate of Investigation wing of the Income Tax Department that the above named assessee is a beneficiary of accommodation entries received from an established entry operator identified by the wing during the period relevant to AY 2009-10. On the basis of search conducted in the premises of Shri Surendra Kumar Jain Group, further inquiries made, the investigation carried out and evidences collected, a report has been forwarded in which the assessee company is found to be the beneficiary of accommodation entries provided by the group of companies run by shri Surendra Kumar Jain Group as per the following specific details of transaction:- Name of the Beneficiary A.Y. Amount M/S SURAJ PULSES PROCESSORS PRIVATE LIMITED 2009-10 Rs. 20,50.000/- Th....
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....hat assessee was found to be beneficiary of amount of Rs. 20,50,000/- which is in the nature of bogus accommodation entry. The ld. DR has submitted that the very fact that assessee was beneficiary of accommodation entry of a particular amount that is sufficient enough to entertain reason to believe. However, the reasons recorded at least mention what is the nature of accommodation entry and which is the entity from which assessee has received the amount. Whether the entry has been received towards share application money or loan or gift, etc. These reasons are purely vague and show there is a non application of mind on the information which was received and the reason recorded by the Assessing Officer. The Assessing Officer has not even mentioned as to what was the nature of entry as given in the report and simply saying that assessee received entry to the tune of Rs. 20,50,000/- from entry operators during the period is not sufficient. Such a vague reasons cannot justify the reopening and as observed above, the Assessing Officer can validly acquire jurisdiction only when the reasons recorded itself points out or speaks of live link nexus with the material available on record and i....