TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 26
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....in law and on facts in not passing a separate speaking order rejecting the objections filed by the assessee to initiation of proceedings u/s. 147 before proceeding to pass assessment order and the Ld. CIT(A) erred in law and on facts in confirming the action of the AO. The Ld. AO had passed a composite assessment order including the rejection of objections. 4. The Ld. AO erred in law and on facts in making an addition of Rs. 1000000/- to the returned income u/s. 68 of the I.T. Act and the Ld. CIT(A) erred in law and on facts in confirming the addition in the facts and circumstances of the case. 5. The Ld. AO erred in law and on facts in not appreciating that the assessee had discharged its initial onus u/s.68 of the Act by producing evidence to substantiate, identity, genuineness and creditworthiness of the share applicant and the onus shifted to the AO was not properly discharged and the Ld. CIT(A) erred in law and on facts in confirming the action of the AO in the facts and circumstances of the case. 6. The Ld. AO erred in law and on facts in passing the assessment order without following the principles of natural justice and the Ld. CIT(A) erred in law and on facts in conf....
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....s Pvt. Ltd. holding the same to be accommodation entry in nature. Before the Ld. Commissioner of Income Tax (Appeals) [CIT(A)], the assessee challenged the order of the Ld. AO on merits as well as legality of reopening. One of the main contentions raised by the assessee was that the assessment was framed without issuing statutory notice under Section 143(2). It was also contended that the reasons recorded were without due application of mind on the part of the Ld. AO. No issue of notice under Section 143(2) It can be seen from Paper Book filed by the assessee that there is no notice under Section 143(2) and there is no reference of notice under Section 143(2) in the assessment order also. The assessee made elaborate submissions before Ld. CIT(A) on account of absence of notice under Section 143(2). After considering the same and also calling for the assessment record, the Ld. CIT(A) dismissed the ground of the assessee. Relevant findings are at Page 6, Para 5.1 to 5.4 of the Ld. CIT(A) order. The Ld. CIT(A), after referring to the assessment record, gave a finding in Para 5.1 that the assessee had filed return in pursuance of notice under Section 142 as on 08.09.2014 whil....
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.... * Pro CIT v. Silver Line, [2016] 383 ITR 455, Delhi High Court * Alpine Electronics Asia PTE Ltd. v. Director General of Income Tax & Others, [2012] 341 ITR 247, Delhi High Court * Pro CIT v. Paramount Biotech Industries Ltd., ITA No. 887/2017 & 888/2017 dt. 24.10.2017, Delhi High Court * Asst. CIT v. M/s. Hotel Blue Moon, [2010] 321 ITR 362 (SC) * Rajender Kumar Sehgal v. ITO, W.P.(c) 11255/2017, CM No. 46017/2017, dt. 19.11.2018 * Pro CIT V. Gravity Systems Pvt. Ltd., ITA No. 896/2017 & 899/2017 dt. 27.10.2017, Delhi High Court * CIT V. CPR Capital Services Ltd., [2011] 330 ITR 43, Delhi High Court * M/S. Supersonic Technologies Pvt. Ltd., M/S. SPJ Hotels Private Limited, M/S. Shiv Sai Infrastructure (P) Ltd. M/S. Superior Buildwell Private Limited V. PCIT ITA. No. 2269/Del/2017, 2857/Del/2017, 2527/Del/2017, 3301/Del/2017, dt. 10.12.2018, ITAT Delhi * A.C.I.T. v. M/s. Dimension Promoters Pvt. Ltd., ITA No. 1105/Del/2011, C.O. 326/Del/2011 dt. 02.01.2018, ITAT Delhi * UKT Software Technologies Pvt. Ltd. v. ITO, ITA No. 4719 & 4720/Del/2011 dt. 16.01.2013, ITAT Delhi The next reason given by the Ld. CIT(A) to dismiss this ground of appeal raised by the assesse....
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.... discussed in the report. (b) In the second paragraph a table has been made where there is a reference of some accommodation entry received by the assessee from M/s. S.R. Cables Pvt. Ltd. (c) In the third paragraph only the facts of filing of return by the assessee has been stated and on the basis of that a conclusion has been derived that income to the extent of Rs. 10,00,000/- has escaped assessment. On perusal of the above reasons shows that the Ld. AO straightaway concluded that the assessee has taken accommodation entry. The Ld. AO is not itself aware of the fact as to the nature of the entry taken by the assessee. The name of the lender is wrong therein. Further the Ld. AO has not mentioned in which manner the amount has come to the assessee, whether it is by way of loan, share capital or gift. It was only from the assessment proceedings the assessee made the Ld. AO aware of the fact that this amount was received from M/s. S.R. Cables Pvt. Ltd. in the form of share application money. The Ld. AO has not brought any record or material on the basis of which any nexus could have been established to prove the escapement of income. 1. This issue is squarely covered by the....
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....tional, coherent and not ex-facie incorrect and contrary to what is on record". A rubberstamp reason can never take the character of 'reasons to believe', as explained by the Supreme Court in Union of India v. Mohan Lal Kapoor: (1973) 2 SCC 836. In Dilip N Shroff v. CIT (2007) 6 SCC 329, the Supreme Court decried the practice of issuing notices in a standard pro forma manner "without material particulars and without deleting inappropriate words or paragraphs". 4. Therefore, in view of the above circumstances and further considering the settled position of law in this regard, the reassessment proceedings initiated by the AO are without due application of mind, and thus, the reassessment proceedings should be quashed as such. On merits The assessee has received an amount of Rs. 10,00,000/- from M/s. S.R. Cables Pvt. Ltd. on account of share application money. To prove the source of the funds the assessee has filed the following documents before the lower authority:- (1) Bank account of the assessee Pg. 28 (2) Share application filed by M/s. S.R. Cables Pvt. Ltd. Pg. 29 (3) Confirmation from M/s. S.R. Cables Pvt. Ltd. Pg. 30-31 (4) Bank statement of M/s. S.R. Cable....
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....y be considered by the Hon'ble Bench. Copy of this decision is enclosed Factual Matrix & Background: There was a search conducted at the premises of Mr. S K Jain resulting in the seizure of large number of incriminating documents. Inquires during the post search investigations established that Shri S K Jain was in the business of proving accommodation entries. He had floated and operated large number entities for the purpose of providing accommodation entries to various beneficiaries in the form share capital, share application money and loans etc. routing the cash received from them through non descript paper companies. He used to charge commission from beneficiaries for such accommodation entries. In the instant case entries of accommodation in the guise of share application money Rs. 10 lac was provided to the assessee company from S R Cables P Ltd. of his non descript entities, as described at Page 1 of AO. Accordingly, the AO after analyzing the facts, circumstances and evidences in details and relying on various case laws, concluded the assessment u/s. 148/143[3] holding the credit of Rs. 10,00,000/- as unexplained credit u/s. 68. The AO has also discussed the modus o....
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....dings and evidences gathered as a result of Search and Seizure operation in S K Jain case. Hon ITAT Delhi in ITA Nos. 6991 to 6997/Del/2014 in the case of Virender Kumar Jain and ITA No. 6998/to 7004/Del/2014 in the case of Surender Kumar Jain held them as entry providers and that substantive amounts of accommodation entries provided by them are to be taxed in the hands of the beneficiaries. The present case is has a very different situation where live and pulsating evidence seized from Jain Brothers is linked to the credit entries recorded in the books of account, showing that credit entries could not stand the test of genuineness within the meaning of section 68. Not only that they also strongly support a conclusion of culpable mind attempting to bring black money into regular channels. On the validity of reassessment proceedings, I am further relying on the decision of Raymond Woollen Mills Ltd. Vs ITO 236 ITR 236 ITR 4 (SC) wherein it was held that the AO is not to conclusively prove the escapement of income to assume jurisdiction u/s. 147 of the Act. In the case of ITO Vs Purshottam Das Bangur 224 ITR 362 the Hon'ble Apex Court, on the issue of application of mind by....
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....be examined subsequently in the reassessment proceedings. It is noted that the AO has applied his mind to the information available independently to arrive at the belief on the basis of material which was available with him. Hence, the AO had validly assumed jurisdiction u/s. 148 of the Act by recording the reasons to believe in accordance with the provisions of the Act u/s. 147 of the Act and, therefore, the ground of appeal on this is deserve to be dismissed. ON GRANTING SANCTION u/s. 151 So far as the contention of the appellant assessee, raised as additional ground that the approval of the competent authority granted u/s. 151[1] was in a mechanical manner without application of mind is concerned, the following submission may kindly be considered: 1. That there is no infirmity in the approval/sanction granted by the competent authority u/s. 151[1] of the I.T. Act, 1961. 2. That the statute does not lay down any manner or format in which the approval is to be granted. 3. That the remarks of the competent authority may kindly be read with the first part of the column No. 12 which reads" Whether the proe1T,(sic) Hisar is satisfied on the reason recorded by the ITO tha....
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.....2007 may be treated as filed u/s. 148. As such there was no valid return having being filed u/s. 148 and no need to issue notice u/s. 143[2]. The Hon'ble Friday Bench of ITAT Delhi in the case of Rakesh Aggarwal Vs ITO (ITAT Delhi), while disposing the MA No. 249 of 2020 vide order dated 15.12.2020, in respect of the Hon'ble Tribunal Order in ITA No. 2462 of 2019 passed on 15.05.2020, rejecting the MA of the assessee laid down the following propositions: In the present case, the assessee did not file the original return of income as well as also not filed return of income in response to the notice u/s 147 of the Act within the time allowed by the Assessing Officer of 30 days. Thus the issue is whether in case the return filed by the assessee as late as in the month of September, 2017 can be treated as valid return or not. The answer is clearly 'No' as even after 30 days any return of income filed by the assessee would not have been taken cognizance by the Assessing Officer. There is no requirement of the law that if the return is filed any time before Assessing Officer u/s. 148 read with 143 (3) of the Act, the Assessing Officer should have been issued noti....
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....igh Court * Asst. CIT v. M/s. Hotel Blue Moon, [2010] 321 ITR 362 (SC) * Rajender Kumar Sehgal v. ITO, W.P.(c) 11255/2017, CM No. 46017/2017, dt. 19.11.2018 * Pro CIT V. Gravity Systems Pvt. Ltd., ITA No. 896/2017 & 899/2017 dt. 27.10.2017, Delhi High Court * CIT V. CPR Capital Services Ltd., [2011] 330 ITR 43, Delhi High Court * M/S. Supersonic Technologies Pvt. Ltd., M/S. SPJ Hotels Private Limited, M/S. Shiv Sai Infrastructure (P) Ltd. M/S. Superior Buildwell Private Limited V. PCIT ITA. No. 2269/Del/2017, 2857/Del/2017, 2527/Del/2017, 3301/Del/2017, dt. 10.12.2018, ITAT Delhi * A.C.I.T. v. M/s. Dimension Promoters Pvt. Ltd., ITA No. 1105/Del/2011, C.O. 326/Del/2011 dt. 02.01.2018, ITAT Delhi * UKT Software Technologies Pvt. Ltd. v. ITO, ITA No. 4719 & 4720/Del/2011 dt. 16.01.2013, ITAT Delhi * Hon'ble Jurisdictional High Court in the case of Pro CIT V. Meenakshi Overseas Pvt. Ltd. [2017] 395 ITR 677 * Hon'ble Jurisdictional High Court in the case of Pro CIT V. RMG Polyvinyl (I) Ltd. [2017] 396 ITR 5 * Hon'ble Jurisdictional High Court in the case of Sabh Infrastructure Ltd. V. ACIT in WP No. 1357/2016 dated 25.09.2017 * Hon'ble Apex Court i....