TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 639
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.... / disallowances of Rs. 1,13,74,623/- owing to unexplained cash credits by invoking Section 68 of the Act. The reassessment order was thus framed determining re-assessed income at Rs. 1,13,74,623/-. 3. The assessee challenged the re-assessment proceedings before the CIT(A) on both counts, namely, validity of jurisdiction assumed under Section 148 of the Act as well as merits of additions made in the reassessment proceedings. The CIT(A) however upheld the action of the AO on both counts. 4. Aggrieved by the aforesaid order of the CIT(A), the assessee has filed appeal before the Tribunal. 5. The grounds of appeal raised by the assessee in ITA No.149/Del/2021 (Assessment Year 2009-10) are reproduced as under: "1. On the facts and circumstances of the case and in law, the notice under section 148 of the Income Tax Act, 1961 issued in the case is badin-law, void and without jurisdiction and, therefore, the said notice along with the assessment order passed by the assessing officer on the foundation of such notice are liable to be quashed and CIT (A) erred in not holding so. 2. On the facts and circumstances of the case and in law, the notice u/s 148 issued in this case is contrar....
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....13,74,623/- to Netwest Tradelink Pvt. Ltd. It was also explained to the AO that all the transactions were High Sea Sales. In evidence, the assessee submitted the documents before the Assessing Officer viz; copy of sale invoice, copy of purchase invoice, bill of entries, High Sea Sale Agreement, copy of account, bank statement etc. The factual position in this regard is not in dispute. 7.2 In this backdrop, the reasons recorded by the AO are without any factual basis for alleged escapement. The re-assessment proceedings initiated without foundation is thus not sustainable in law. 7.3 The ld. counsel next submitted that the notice under Section 148 has to stand or fall based on reasons recorded under Section 148(2) of the Act. The AO cannot thereafter travel beyond the reasons so recorded and keep improving the reasons for alleged escapement as held in Xerox Modicorp Ltd. vs. DCIT (2013) 29 taxmann.com 417 (Del). The reasons must be based on some objective material which is relevant and reliable in character. The belief thereon although is subjective in nature but must have rational connection or live link with the material/information in possession of the AO. In the instant case, ....
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....boratories vs. CIT (2011) 336 ITR 136 (Del). 8. Per contra, the ld. DR for the Revenue submitted that the AO has rightly assumed jurisdiction to make re-assessment by issuing notice under Section 148 of the Act on the basis of tangible material / information received from Deputy Director of Income Tax (Inv.-I), Faridabad based on outcome of inquiries in the matter of assessee, based on STR report in the case of Netwest Tradelink Pvt. Ltd. and R.K. Trading Company Faridabad. It was submitted that AO acted upon such prima facie information received from other wing of the Department and hence such action was within the authority of law. It was thus submitted that as long as the information received are relevant as in the present case, such information need not be pinpoint accurate or complete in all respect at the stage of issuance of notice. It was thus submitted that CIT(A) has rightly upheld the action of the assessee on all counts. The ld. DR essentially relied upon the findings of the CIT(A) and the process of reasoning adopted by him while approving the assumption of jurisdiction under Section 147 of the Act as well as upholding the addition on merits. 9. The legal issue of va....
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..... All the parties which have either received of paid funds from the accounts of entities controlled and managed by Sh. Ram Kishan and Sh. Tek Chand Sharma have been benefited. Therefore information of these beneficiaries needs to be shared with their jurisdictional AOs. Thus the transaction patter of bank account statements of all firms of Sh. Tek Chand Sharma & Sh. Ram Kishan, it has been considered that they were involved in the business of bogus billing during the financial year 2008-09 to 2011-12 and the assessee company namely M/s H. S. Impex Pvt. Ltd. (PAN-AABCH8227N) has been found to be one of the beneficiary of the bogus bills provided by M/s R. K. Trading Company & Net West Trade Links during the year under consideration. Sr. No. Name of the Assessee/Bank A/C. No. Debit (Approx.) Credit (approx.) Name of the beneficiary 1. R.K. Trading Company A/C. No. 286209003994 With Kotak Mahindra Bank Proprietor: Ram Kishan F.Y. 2008-09 5163804 H.S. Impex Pvt. Ltd. 2. New West Trade links A/c. No. 01792000000940 With Kotak Mahindra Bank Ltd. Proprietor Tek Chand Sharma F.Y. 2008-09 7525000 H.S. Impex Pvt. Ltd. ....
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....his is further reinforced by the fact that no transaction claimed to have been carried out by the assessee from R.K. Trading Company at all as appearing in the reasons recorded. No addition has been made by the AO on this score either. The transaction was carried out with Netwest Trade Link but such transaction is wholly different. The amount of Rs. 1,13,74,623/- is totally dissimilar to suspicious transaction of Rs. 75,25,000/- forming the basis for holding reason to believe. Thus, both the transactions forming part of the reasons have not been carried out by the assessee at all. The very basis for reopening the assessment is thus vitiated at the threshold. The AO has made an addition of Rs. 113,74,623/- qua high sea sale transactions executed with Netwest Tradelink Pvt. Ltd. supra) which has no similarity with the transaction alleging escapement in the reasons recorded. The Assessing Officer has not bothered to link these transactions with the existing transaction in the course of re-assessment proceedings. The re-assessment made is thus totally divorced from the basis for which the case was reopened. This course is not permissible in law. In the absence of any addition/disallowa....
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....7 to 151 of the Act and CIT(A) erred in not holding so. 3. On the facts and circumstances of the case and in law, the CIT (A) erred in confirming the addition of Rs 51,63,804 /- made by the assessing officer on the account of alleged bogus purchases. 4. On the facts and circumstances of the case and in law, the CIT (A) erred in confirming the addition of Rs. 1,25,26,687/- made by the assessing officer on the account of amount received against sales." 15. In the captioned appeal too, the assessee has raised legal question of correctness of usurpation of jurisdiction by the AO to reopen the concluded assessment as well as the merits of the additions. 16. The reasons recorded under Section 148(2) for AY 2010-11 while issuing notice under Section 148 dated 30.03.2016 read as under: "The assessee has filed its return of income on 14.10.2010 declaring income of Rs. 14,51,910/- which was processed u/s. 143(1) of the I.T. Act, 1961. The information has been received from DDIT, (Inv.)-I, Faridabad that as per information from FIU in the STR No. 1000014477 & 1000030164 in the case of M/s Globe Trade Corporation & M/s R. K. Trading Company, Faridabad, bank accounts of these firms were....
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.... Debit (Approx.) Credit (approx.) Name of the beneficiary 1. R.K. Trading Company A/C. No. 286209003994 Proprietor: Ram Kishan F.Y. 2009-10 51,63,804 H.S. Impex Pvt. Ltd. 2. Global Trade Corporation A/C. No.630305500180 with ICICI Bank Ltd. Proprietor Tek Chand Sharma F.Y. 2009-10 1,01,26,687 H.S. Impex Pvt. Ltd. 3. Global Trade Corporation A/C. No. 1025050000817 with ICICI Bank Ltd. Proprietor Tek Chand Sharma F.Y. 2009-10 24,00,000 H.S. Impex Pvt. Ltd. TOTAL 1,25,26,687 5163804 During the AY 2010-11 the assessee has made the transactions with M/s R. K. Trading Company & Global Trade Corporation for a consideration of Rs. 51,63,804/ - & 1,25,26,687/- approx. respectively as mentioned above which is for accommodation entry. I have also perused various materials and information along with bank statement available on record as received from the Investigation wing and on that basis it is observed that the assessee company has claimed the bogus billing amounting to Rs. 1,76,90,491 (51,63,804/ - + 1,25,26,687/ - approx. in the name of M/s R. K. Trading Company Lt....