TaxTMI 
TaxTMI 
2023 (8) TMI 1467
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....ions (Ground 3); (iii) Addition with respect to interest paid on loan (Ground 4); (iv) Addition made towards commission expenses with respect to the aforesaid loan (Ground 5). ITA No.23/Mum/2022 - A.Y. 2011-12 3. The assessee filed a return of income for A.Y. 2011-12 on 29/09/2011 declaring total income at Nil. Subsequently, the case was reopened and the assessment was completed under section 143(3) read with section 147 on 23/12/2017 where the returned income has been accepted. The Assessing Officer received certain information from Investigation Wing regarding acceptance of alleged bogus unsecured loans by the assessee and for that reasons, the assessment was once again reopened by issue of notice under section 148 on 27/03/2018. The Assessing Officer completed the assessment by making addition towards the loan taken by the assessee from one M/s Mangalmurti Impex Pvt Ltd and treated the same as unexplained cash credit under section 68 of the Act. The Assessing Officer further made the disallowance towards interest paid on the loan and the commission expenses as unexplained expenses under section 69C of the Act. Aggrieved, the assessee filed appeal before the CIT(A), who....
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...., the inspectors of investigation wing were directed to visit the premises of these parties. The inspectors visited the premises of these parties and have reported that all the parties were found non-existent at the locations and no traces could be found of their actual existence. These finding clearly prove that these parties including M/s. Mangal Murti Impex Pvt Ltd have provided bogus unsecured loans to the JPV Group of companies. For verifying the facts, assessee's case record for A.Y. 2011-12 is perused. During the year, the assessee had taken loan of Rs.1.25 crores and paid interest of Rs.5,63,227/- to M/s. Mangal Murti Impex Pvt Ltd. To examine the financial credentials of the M/s. Mangal Murti Impex Pvt Ltd balance sheet of said company was downloaded from the website of MCA. The concerns which are involved in providing the accommodation entries have some attributes wiz. there are huge sundry creditors, sundry debtor and loans and advances In relation to purchase and sale shown in their respective books of accounts. Therefore, money is routed through the accounts of any of these name lending concerns - all transactions are done through banking channels. Since above s....
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....sue. Accordingly, the Assessing Officer held that there is no question of any different or change of view / opinion. With regard to the contention of the assessee that the prerequisite of reopening beyond 4 years has not been complied with, the Assessing Officer held that Explanation 1 to section 147 makes it clear that mere production of voluminous papers before the Assessing Officer by the assessee will not tantamount to disclosure within the meaning of section 147. 7. The CIT(A), with regard to the legal contentions of the assessee held that the Assessing Officer had tangible materials in his possession in the form of specific information received from Investigation Wing and the Assessing Officer had duly recorded the reasons for reopening based on the said materials. The CIT(A) further held that the Assessing Officer at the time of issue of notice under section 148 had a reason to believe that the income has escaped assessment and it is not the requirement that at the time of issue of notice the Assessing Officer should have finally ascertained the facts by examining the evidence or conclusion. The CIT(A) relied on various judicial pronouncements in this regard. Accordingly, t....
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.... [2008] 301 ITR 407 (Bombay) iv. Hitech Corporation Ltd vs. ACIT WP(L) NO.6861 of 2022 (Bombay HC) v. JM Financial Asset Management Limited vs. DCIT - ITA No. 1774/Mum/2022 vi. Maharashtra Oil Extraction (P.) Ltd. vs. DCIT [2022] 139 taxmann.com 341 (Bombay) vii. Aroni Commercials Ltd. vs. DCIT [2014] 362 ITR 403 (Bombay) viii. CIT vs. Multiplex Trading & Industrial Co. Ltd [2015] 378 ITR 351 (Delhi) 10. The Ld.DR, on the other hand, argued that the assessee first time raising the issue that the pre-requisite under the First Proviso to section 147 are not satisfied before the Tribunal. The Ld.DR further argued that the party from whom the assessee had obtained loan has not responded to the notice issued under section 133(6) and, therefore, the Assessing Officer had a reason to believe that the loan transaction is not genuine. Accordingly, the Ld.DR placed reliance on the orders of the lower authorities. 11. We heard the parties and perused the materials on record. Before proceeding further we will look at the relevant provisions of section 147 - [Income escaping assessment. 72 147. If the 73[Assessing] Officer 74[has reason to believe 75] that any income char....
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....four years has lapsed from the end of the relevant year, the Assessing Officer has to mention what was the tangible material to come to the conclusion that there is an escapement of income from assessment and that there has been a failure to fully and truly disclose material fact. 13. In the background of this settled legal position, we will now examine the assessee's case in hand. In the given case the assessment is sought to be reopened after a period of four years, and therefore it is an undisputed fact that the proviso to Section 147 is applicable. The reasons recorded for reopening is extracted in the earlier part of this order and the gist of the is that - (i) from the enquiries conducted during the survey proceedings of JPV group the identity, creditworthiness and the genuineness of the transactions with one M/s. Mangal Murti Impex Pvt Ltd came to be examined; (ii) the Assessing Officer noticed that the assessee has taken a loan of Rs.1.25 crores from the said party and to examine the financial credentials of the company the Assessing Officer downloaded the balance sheet from MCA site; (iii) based on the analysis of the balance sheet, the Assessing Officer concluded tha....
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....ened. Though the Assessing Officer has recorded certain findings with regard to the movement of assets and liabilities from the analysis of the balance sheet of M/s. Mangal Murti Impex Pvt Ltd, there is no specific finding with regard to what is the failure on part of the assessee to disclose material facts. From the perusal of records we notice that the assessee has recorded the loan transactions with M/s. Mangal Murti Impex Pvt Ltd including interest and commission and in the first round of proceedings has also furnished the confirmations etc. In our considered view, a mere recording that "I have reason to believe that the income chargeable to tax above Rs.l Lakh has escaped assessment for the A.Y. 2011-12 in the case of the said assessee within the meaning of section 147 of the Income Tax Act, 1961" does not mean that the restriction imposed by the proviso to Section 147 of the Act is fulfilled by the Assessing Officer. In view of these discussions and considering the facts of the present case in the absence of any allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment in the notice for reassessment issued af....
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....tatement etc., of the loan creditors M/s Mangalmurti Impex Pvt Ltd and Om Sai Stone Ltd (page 34 to 37 of paper book for AY 2012-13). It is also noticed that the Assessing Officer in the notice under section 148 has not mentioned about any new material that has been brought on record with regard to the loan transaction basis which assessee's case is reopened. Accordingly our decision for AY 2011-12 as held in the earlier part of the order is mutatis mutandis applicable for AY 2012-13 also. Therefore we quash the order of assessment passed under section 147 for AY 2012-13 and the additions made therein stand deleted. ITA 63/Mum/2022 (A.Y. 2013-14) 17. For A.Y. 2013-14 the return of income declaring total income at NIL was filed on 29/09/2013. Subsequently, the assessment was completed under section 143(3) on 16.03.2016. The Assessing Officer subsequently issued notice under section 148 recording the reasons similar that in AY 2011-12 wherein it is stated that the Assessing Officer has reason to believe that the assessee has shown bogus loan and interest payment totaling to Rs.2,62,40,407 from M/.Madan Impex Pvt Ltd., Om Sai Stone Ltd, M/s.Rajat Diamond Exim Pvt Ltd., M/s. Nik....