2022 (5) TMI 442

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.... 2. The learned Commissioner (Appeals) failed to appreciate the fact that the reassessment proceedings are not according to the laws, rules and regulations. The AO has relied on the alleged information claimed to have been received from DGIT (Investigation) without making any inquiry on his own and therefore the entire reassessment proceedings were bad in law. As regards addition of Rs 13,00,000 received as Share application as cash credit u/s 68: 3. The learned Commissioner (Appeals) erred in confirming the addition made by the AO amounting to Rs. 13,00,000 as unexplained cash credit u/s 68 in lieu of amount received as share application money. 4. The learned Commissioner (Appeals) and AO failed to follow the principles of natu....

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....has taken accommodation entries from the concerns run and operated by Praveen Kumar Jain. 8. In the instant case the assessee h«* taken Share application money from M/s. Olive Overseas Pvt. Ltd. formerly known as Real Gold Trading Co, Pvt. Ltd. to the tune of Rs.13.00,000/-. The alleged Company is stated to be run controlled under the supervision of Shri Pravin Jain and during the course of search proceedings also Mr. Pravin Jain ahs admitted in its statement that the concern is not conducting any business activity but is a concern created for providing entries and it is merely a paper concern controlled by the dummy directors viz. Niiesh Parmar and Ramesh Javda However, the statements of the said directors have also been recorded ....

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....e assessee facilitated to obtain the reply from the said party and filed on 25 03 2015. However the assessee failed to produce the party for verification , The assessee also failed to produce the details with regard to present position of holding of said shares and replied that its computer data in corrupted and the assessee is not in a position to produce the same. The modus operands of providing bogus share application money is explained by Pravin Jam in his statement (relevant extract reproduced above) the circle of transaction is completed when the companybuy back the shares as per the fair market value and the amount gets refunded back Hence in this case the assessee has not disclosed such details even after requiring the assessee to r....

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.... A O should only have to reason to believe to reopen a case. He need not establish beyond doubt that there is escapement before issuing the notice. This can be done at the time of assessment but not at the time of issue of notice Reliance is placed on. i) Rohilkhand Education Charitable Trust Vs CCIT Others 365 ITR 233 (AII.). It was held by Hon'ble High Court that AO should have relevant and credible material with him to form requisite reason to believe that income of assessee has escaped assessment. Material available on record has rational connection and relevant bearing on such formation of belief for issuing valid notices for re-assessment. Sufficiency or correctness of material was not to be considered at this stage ii) S....