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TaxTMI 
TaxTMI 
TaxTMI 
2022 (8) TMI 1225
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....tion, a notice u/s. 133(6) was issued on 05.10.2018 to Rashtriya Samajwadi Party (RSP). There was no representation from RSP. Therefore another opportunity was granted vide letter dated 16.10.2018. Again there was no response from RSP. Therefore a summon u/s. 131(1) of the Act was issued to Shri S.N. Chaturvedi, National President, RSP to attend the office on 19.11.2018 to produce the requisite the donation details. No one attended the office of the said date of hearing. 2.1. RSP is a political party registered with Election Commission of India. The Assessing Officer called for the bank details of RSP with Oriental Bank of Commerce, New Naroda Branch. From the perusal of the bank statement, it was observed there was a credit entry of Rs. 52,00,000/- on 07.10.2015 which is donation given by the assessee and there was two debit entries amounting to Rs. 27,00,000/- and Rs. 25,00,000/- respectively on the same day. On further enquiry from the Oriental Bank of Commerce the amount of Rs. 27,00,000/- credited to Sterlite Inc and Rs. 25,00,000/- credited to Shah And Co. on 07.10.2015. 2.2. On examination of the RSP bank statement, it was found that it is a general practice of crediting h....
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....iated penalty proceedings u/s. 271(1)(c) of the Act for concealment of income. The assessing officer also made an addition of Rs. 16,17,478/- being the difference in market value and purchase consideration. Thus the assessing officer determined the assessed income of the assessee as Rs. 4,83,85,428/-. 3. Aggrieved against the same, the assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A) neither anyone attended on the appeal fixed up for hearing on 26.06.2019, 23.08.2019 and 12.09.2019 nor the assessee filed any written submission. Therefore the Ld. CIT(A) decided the case on merit based on the material available on record. The ld. CIT(A) confirmed the addition of bogus donation of Rs. 52,00,000/- as follows: 3.2. I have carefully considered the facts of the case and assessment order. The appellant has paid donation of Rs.52,00,000/- to the Rashtriya Samaj'wadi Party (Secular) and has claimed deduction u/s. 80GGC on donation paid to Rashtriya Samaj'wadi Party (Secular). The AO has issued notice u/s. 133(6) and summon u/s. 131 to Rashtriya Samajwadi Party (Secular) which remains non-complied. The AO has also got enquiry conducted through inspector and fou....
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....t any significant trading, manufacturing or service activity, or with high volume low margin transactions - to give it colour of a normal business entity used as a vehicle for various financial manoeuvers. A shell entity, by itself, it not an illegal entity but it is their act of abatement, of, and being part of, financial manoeuvring to legitimize illicit monies and evade taxes, that takes it actions beyond what is legally permissible. These entities have every semblance of a genuine business - its legal ownership by persons in existence, statutory documentation as necessary for a legitimate business and a documentation trail as a legitimate transaction would normally follow. The only thing which sets its apart from a genuine business entity is lack of genuineness in its actual operations. The operations carried out by these entities, are only to facilitate financial manoeuvring for the benefit of its clients, or, with that predominant underlying objective, to give the colour of genuineness to these entities. These shell entities, which are routinely used to launder unaccounted monies, are a fact of life, and as much a part of the underbelly of the financial world, as many other e....
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....ld. The ground of appeal is accordingly dismissed 4. Aggrieved against the same, the assessee is before us raising the following Grounds of Appeal: The Appellant being dissatisfied with the order passed by the Commissioner of Income Tax (Appeals) - I, Ahmedabad (learned CIT(A)), prefers an appeal against the same on the following amongst other grounds, which are without prejudice to each other. 1. Order passed by CIT(A) without providing opportunity to appellant (Tax effect - Nil) a. The order passed by the learned CIT(A) is erroneous and contrary to the provisions of law and facts of the case and therefore needs to be suitably modified. CIT(A) decided the appeal on ex-parte basis and did not provide a fair opportunity to the appellant to present its case. It is not the case of the CIT(A) that the assessee did not respond to his notices of hearing. On all the three occasions, the assessee filed applications seeking adjournment on account of non-availability of authorised representative of the appellant due to ill health of his father and personal reasons. 2. Disallowance of Rs. 52,00,000 under Section 80GGC of the Income-tax Act, 1961 (Tax effect - Rs. 17,99,616) a. The ....
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....O. made a detailed enquiry of RSP and its Bank accounts and transfer of funds to one Shri Mukesh Mehta proprietor of two firms and he transferred it to Waheguru Enterprise and Sapan Traders, which is clearly a systematic financial maneuver to legitimate illicit moneys and evade taxes. It is appropriate to follow the Hon'ble Supreme Court judgment, wherein SLP filed by the assessee is dismissed confirming the Tribunal's decision to come to the conclusion that the entire loan transaction was not genuine, in the case of Pavankumar M. Sanghvi vs. ITO [2018] 97 taxmann.com 398 (SC) which held as follows: Assessee received certain sum as loan from two companies - Assessing Officer having found that said lender companies were shell entities added loan amount to income of assessee under section 68 - Bank statement of lender companies revealed high transactions during day and a consistently minimal balance at end of working day -Further, day when assessee was given loan there were credit entries of almost similar amounts, and balance after these transactions was a small amount - Tribunal taking into account bank statements of lender companies and fact that assessee failed to produce these....