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2024 (2) TMI 530
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....acts of the case and bad at law as the said re-opening was merely based on change of opinion which is not permissible as per law. 3. Under the facts and circumstances of the case, the re-assessment proceedings u/s 147 of the Act by the Id. Assessing Authority is bad at law as the said proceedings has been initiated without any independent application of mind. 4. Under the facts and circumstances of the case, the re-assessment order passed u/s 147 of the Act by the Id. Assessing Authority is bad at law as the order is passed without providing an opportunity to cross examine the statements on which Id. A.O. has relied upon. 5. Under the facts and circumstances of the case, the orders passed under section 147 by the Id. Assessing Authority is arbitrary, injudicious and bad at law as the orders has been passed by the Id. Assessing Authority without appreciating the facts of the case . 6. Under the facts and circumstances of the case, the Id. Assessing Authority has erred in making additions to the returned income amounting to Rs. 2,34,60,000/- u/s 68 of the act as unexplained cash credits which is arbitrary, injudicious and against the facts of the c....
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....e genuine business activities as disclosed in the search. S. No Name of the Company Name of Bank Amount DD/Cheque No./Dt. 1 M/s Attractive Finlease Pvt. Ltd Axis Bank 40,00,000/- P.O. No. 031278 dated 22/12/2009 2. M/s Shalini Holdings Ltd Axis Bank 40,00,000/- P.O. No. 031279 dated 22/12/2009 3. M/s Victory Software Pvt Ltd. Axis Bank 50,00,000/- P.O.No. 031741 dated 19/01/2010 4. M/s Aasheesh Capital Services Pvt. Ltd Axis Bank 50,00,000/- P.O.No. 031739 dated 19/01/2010 5. M/s Zenith Automotive Pvt Ltd. Axis Bank 50,00,000/- P.O.No. 031742 dated 19/01/2010 I have therefore, reason to believe that the taxable income of Rs. 2,30,00,000/- represented by Share Application Money/ Loans/ Advance/ Share Capital from the companies as aforesaid escaped assessment due to failure of the assessee company to disclose facts truly & fully necessary to make assessment for A.Y. 2010-11. In view of the findings of the investigation report, the case of the assessee company needs scrutiny, in view of the fact the above entries have been obtained through the entry operator, investigated and re....
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.... the SIT on Black Money appointed by Hon'ble Supreme Court of India, RBI, Enforcement Directorate (ED), SEBI, Income tax Department, ICAI, ICSI, Bar Council of India and other agencies. 2. Detailed report of the SFIO was received from the SFIO, Ministry of Corporate Affairs, Govt. of India dated 31.3.2016. The report has been examined carefully and its contents, annexures, statements and other documents have been perused. These have also examined with reference to the return filed by the assessee and earlier proceedings u/s 147/148 of the Income tax Act, 1961. The information received from investigation wing was not considered while finalizing the assessment and the assessment was completed at returned income. 2.1 Report and extracts of important documents including hand written cash books, names of intermediaries, amounts of cash received from intermediaries and the amounts of accommodation entries given to the beneficiaries including cheque nos., names of entry providing entities controlled by Jain brothers, etc., seized from the residence and offices of Shri Surender Kumar Jain and his family members and office premises of related persons/entities, was also....
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....dresses which were mentioned in the statutory records of these companies. The above facts and result of post search enquiries have revealed Shri Surendra Kumar Jain and Shri Virendra Kumar Jain companies are controlled by through dummy directors / Principal officers of these companies. (ii) The seized records include blank unsigned as well as blank signed cheque book, acknowledgement of filing of return of these companies, user ID and password of all companies of e-filing of their return, bank account opening and closing letters, authorization letters for attending assessment proceedings, book of account in tally format as well as format for filing the return, proof of use of mobile numbers of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain in bank account opening forms where option of mobile banking was required. The companies were used in business of providing accommodation entries: (iii) The investigation wing has listed 99 companies which were controlled by S.K. Jain Group. 2.4 The investigation wing has sent relevant details of accommodation entries to the Assessing Officers having jurisdiction over beneficiaries which had obtained accommodation ....
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....assessee company. iv. That details of funds transferred through cheque/RTGS/pay order to various entities / persons through these dummy companies maintained by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain in excel sheets found and seized during the course of search on them. v. That maintenance of books of accounts in tally format as well as in the format required for preparing Income Tax Return of these companies in the computer Hard Discs found and seized from the residence of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain. vi. That daily cash books, balance sheet and cheque books found and seized from Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain wherein details of cash received from different beneficiary companies/ persons through various middleman/ agents in lieu of accommodation entries provided to them on different dates have been recorded. vii. That one of the mediators Sh. Rajesh Aggarwal admitted that he arranged accommodation entries for a group through a person named Sh. Ravinder Goel through various companies directly controlled by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain and also accopted the fact that he....
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.... also told that no books of account of companies registered on this address was available in the premises i.e. 106, Palco House, T-10, Main Patel road, Patel Nagar, Delhi. b. During the course of the survey at premise no. 3198-15, 4th Floor, Gali No. 1, Sangatrashan, Paharganj, New Delhi, it was found that this premise was a small room, which was incapable of accommodating so many companies and persons. Books of accounts and document of companies registered at this address was not found. c. At the third premises 209, Bhanot Plaza, 3, D.B. Gupta Road, Paharganj, New Delhi, there was single room office occupied by one Sh. Jaikishan Tikku S/o late Sh. Prem Nath Tikku, who was running his courier business from there in the name and style of M/s Linkers Couriers since Aug. 2006. Mr. Tikku had told the survey team that he was a tenant of Sh. Surendra Kumar Jain and was paying him monthly rent of Rs. 3,000/- in cash every month. d. It is evident from the findings of the survey that the companies controlled by Shri S.K. Jain having registered office at the above mentioned three addresses, did not exist at those addresses. Neither books of account, and document re....
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.... wing that incriminating documents in the form of hand written cash books were also seized from the residence of Shri S.K. Jain showing the receipts of cash by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain to provide accommodation entries. Finding in this regards may be summarized as under: a. Cash books seized during search operation were maintained on daily basis to keep a record of their daily transactions of receipts and payments of cash as well as to keep them updated in respect of accommodation entries provided as well as accommodation entries pending in lieu of the cash which they had received. However, the cash transactions which were being recorded by them in hand written cash books were not recorded in their regular books of accounts. To introduce and channelize this unexplained cash in their books, they have shown the sales of various items including Rice etc., made through the bogus proprietary /partnerships firms directly controlled by them. b. Thus, the cash received from the recipient parties for providing the accommodation entries was first deposited in the accounts of these: dummy firms/ companies in the disguise of the cash received against....
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....ce of Rs. 4133285/- recording new bofore it. Below these calculations three more amounts were recorded against three different dates which were apparently reccived by Sh. Surendra Kumar Jain and Sh. Virendra kumar Jain apart from the amount of Rs. 10159000/- shown as received till 31.03.2010. The date wise and amount wise breakup of the receipts of Rs 10159000/- is given in a printed table on page no. I of this seized annexure A-150. 8. It is further noted out that Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain kept a meticulous record of cheque/ RTGS(handwritten 'cheque books) issued from the bank accounts of these concerns to various beneficiary parties (in lieu of the cash) that had been regularly received by them over a period time and regularly entered in the cash books maintained by them in their own hand writing.- 9. Summary of evidences relating to the assessee: 9.1 Return of income 9.1.1 The return of income for the assessment year 2010-11 declaring income at Rs. NiL was filed. Thereafter the return was processed under 143(1) of the I.T. Act. Thereafter, the case was reopened u/s 147 of the I.T. act, 1961 but the information rec....
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....i) Rs. 40,00,000/- Vidc P.O.No. 031279 dated 22/12/2009. (ii) Rs. 50,00,000/ - Vide PO.No. 031741 dated 19/01/2010. (iv) Rs. 50,00,000/- Vide PO. No. 031739 dated 19/01/2010. (v) Rs. 50,00,000/ - Vide P.O.No 031742 dated 19/01/2010. were issued through intermediary Shri Y. Sharma through following companies. M/s Attractive Fin Lease Pvt. Ltd., M/s Shalini Holidays Ltd., M/s Victory Software Pvt. Ltd., M/s Aasheesh Capital Services Pvt. Ltd. and M/s Zenith Automotive Pvt. Ltd. through the Axis Bank to the assessee Company. The said information is corroborated with the income tax return of the assessee company and it is found that M/s Attractive Fin lease Pvt. Ltd., M/s Shalini Holidays Ltd., Ms Victory Software Pvt. Ltd., M/s Aasheesh Capital Services Pvt. Ltd. and M/s Zenith Automotive Pvt. Ltd. have made investment in the assessee company to the tune of Rs. 2,30,00,000/- Further, a part of cash was used to issue cheques to the assessee i.e. accommodation entries. The difference in the cash received from intermediary and cheques amounts" issued to the assessee company were on account of the intermediary acting on behalf of many beneficiaries incl....
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.... Yearly commission income of the average rate of commission i.e. @ 1.8% of cash receipt 1 2004-05 2005-06 697,521,969 12375395 2 2005-06 2006-07 43558725.58 43558725.58 3 2006-07 2007-08 92924977.73 92924977.73 4 2007-08 2008-09 872355.31 872355.31 5 2008-09 2009-10 156366375 156366375 6 2009-10 2010-11 223800570.6 223800570.6 7 2010-11 2011-12 67454026.2 67454026.2 Total 3798,78,42,911 68,37,81,172.40 To sum up, various documents pertaining to various concerns (Companies as well as Firms) were seized from the premises of Sh. Virendra Jain during the course of search. These seized documents include blank unsigned as well as blank signed cheque books, acknowledgement of filing of returns of these companies, User Ids and password of these companies for e-filing of their returns, Bank A/c Opening & Closing letters, Authorization letters for attending the assessment proceedings, books of account in tally format as well as in the format required for filing a return, etc. Further, in the preceding paras, it has also been elaborately discussed that how Sh. V....
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.... operation. Seized documents are in the hand writing of Sh. Surendra Kumar Jain. This has not been denied by Sh. Surendra Kumar Jain while recording the statement even after receiving the photocopy of seized documents. Sh. Surendra Kumar Jain is the authorized representative of various concerns used for the purpose of accommodation entries for income tax proceedings. Search warrant was issued in the name of both the brothers. Therefore, in my view, the entire entry operation and seized document belong to both the brothers. Accordingly, addition u/s. 68 and commission income pertains to both the Jain Brothers. Accordingly, addition u/s. 68 and commission income for all assessment years are equally divided between Sh. Surendra Kumar Jain and Sh. Virendra Jain for all assessment years as both the brothers are equally involved in the accommodation entry business and maintaining documents and records unitedly. Accordingly, all the grounds of appeal are here by dismissed in principle. Quantum of addition u/s. 68 and commission income is confirmed on substantive basis. On similar lines the appeal filed by Sh. Virendra Jain for all seven assessment years from A. Y. 2005-06 to A. Y. 2011-12....
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....mar Jain through entry provider companies. • That third party correspondence with entry provider companies were seized from the custody of Sh. Surendra Kumar Jain and through entry provider companies. • That third party correspondence with entry provider companies were seized from the custody of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain. • That S.K. Jain / Virendra Jain and there close associates were directors of these entry provider companies during relevant but different time period. • Seizure of documents had revealed that commission income were earned by Jain Brothers and mediator. iv. It was further proved that evidence relating to all the steps involved in providing accommodation entries by entry provider companies in lieu of cash payment to Jain Brothers on charging commission were seized from custody and control of Jain Brothers. v. A perusal of documents as seized from the premises of Shri S.K. Jain Group and enclosed along with this note as Annexure has revealed that accommodation cntry amounting to Rs. 45,00,000/- by the assessee from S.K. Jain Group Companies were noted on the seized docume....
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.... provisions of sections 148 to 153, assess or reassess & such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: [Provided further that the Assessing Officer may assess or reassess such income, other than t....