TaxTMI 
TaxTMI 
2024 (12) TMI 903
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....n has been received from the office of the DGIT(Inv), Mumbai, providing a list of cases involving bogus transaction between Hawala entities and beneficiaries. On the basis of list provided by the DGIT(Inv), Mumbai and it is found that one of the beneficiary in the instant case M/s. Magnetic Properties Private Limited (PAN: AAGCM8999K). The following details were provided by the Investigation Wing in which the assessee company was termed as the beneficiary, in respect of bogus purchases made by the company through the following entities which are as under. S.No. Name of the Hawala Entity as per list PAN Amount (Rs.) 1 M/s. Casper Enterprises Pvt. Ltd. AAAC07955M 50,00,000 2 M/s. Casper Enterprises Pvt. Ltd. AAAC07955M 50,00,000 3 M/s. Duke Business Pvt Ltd. (JKP Trading) AABCJ6245N 1,05,00,000 TOTAL 2,05,00,000 In view of the above, I have reason to believe that an amount of Rs. 2,05,00,000/- chargeable to tax has escaped assessment for A.Y. 2011-12, by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the said assessment ....
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....ies. The fact remains that the assessee has taken loans from the entities providing accommodation entries. Accordingly, he submitted that the reopening is valid. 6. We heard rival contentions and perused the record. It is settled position of law that the reopening of an assessment can be made by the AO only after recording reasons for reopening of assessment. The reasons so recorded are sacrosanct and hence, it cannot be changed later. The legal position in this regard has been explained by the Hon'ble Bombay High Court in the case of Hindustan Lever Ltd (supra) as under:- "The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his....
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.... transaction as genuine unless and until that recipient of the payment confirms that the payments was towards the purpose for which it was made. This fact can be further understood from the examples - i. "A" claims to have made payment of Rs. 5 lacs to "B" towards donation whereas "B" treats the amount as share capital and allots shares also. In such case, though "A" claims payments was towards donation whereas "B" treats as share capital. Therefore the payment through cheque does not ipso facto prove the genuineness of the transaction unless and until both the parties confirms the transaction in full. ii. "A" makes payment of Rs. 5 lacs to "B" towards purchases whereas "B" treats the same as loans in books of accounts. Therefore the payment through cheque does not ipso facto prove the genuineness of the transaction unless and until both the parties confirms the transaction in full. c) A cheque payment only proves that a payment has been made to this party but in absence of any contractual agreement the where purpose vested does not prove. d) Further, the name of this party appears among the persons who have given bogus accommodation entry. ....
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....oning that the assessee has availed accommodation entries in the form of bogus purchases. However, while completing the assessment, the AO assessed the income u/s. 68 r.w.s 56 of the Act. Thus, the AO did not make any addition in respect of the issue for which the reopening was done. We noticed earlier that the Ld.AR contended that the AO shall be entitled to make addition on any other issues not mentioned in the reasons for reopening of assessment, only if he makes addition on any one of the issues mentioned in the reasons for reopening. We notice the above said contention of the assessee is supported by the decision rendered by the Hon'ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd (331 ITR 236)(Bom). In the above said case, the Hon'ble Bombay High Court held as under:- "11. The rival submissions which have been urged on behalf of the Revenue and the assessee can be dealt with, both as a matter of first principle, interpreting the. section as it stands and on the basis of preceder on the subject. Interpreting the provision as it stands and without adding (sic) deducting from the words used by Parliament, it is clear that upon (sic) formation of a reason....