TaxTMI 
TaxTMI 
2025 (7) TMI 883
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....certain issues are common therefore, these are decided separately by a common order for the sake of convenience and brevity. First, we take up ITA No. 4099/Del/2024 for AY 2012-13. ITA No.4099/Del/2024 [Assessment Year : 2012-13] 3. Brief facts of the case are that the assessee has filed its return of income on 28.09.2012 u/s 139(1) of the Act, declaring income at INR 396/-. Based on the information received from Investigation Wing proceedings u/s 147 of the Act were initiated and notice u/s 148 of the Act was issued on 20.06.2019. In response, the assessee filed return of income, declaring total income at INR 396/- as was declared u/s 139(1) of the Act. The assessee during the course of reassessment proceedings, had filed objections to the reasons recorded for re-opening of the assessment in terms of letter dated 10.07.2019 which were rejected by the AO vide order dated 16.08.2019 and finally the reassessment order was passed u/s 143(3) r.w.s. 147 of the Act at a total income of INR 2,58,87,210/- by alleging that the assessee was indulged in providing accommodation entries and thus entire credits in the bank account were unexplained credits related to the business of accommo....
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....nd after getting approval, the assessment was re-opened. As per ld. AR, from the perusal of the assessment order, it could be evident that as against the income of INR 1.84 crores alleged as escaped assessment, the addition was made of INR 2,58,86,811/- being 2% commission by providing accommodation entries of INR 1,29,43,40,550/- i.e. the gross amount of credit entries appearing in the bank account of the assessee No.0490102000268 with Axis Bank. Ld.AR thus submits that no addition has been made on account of the reasons recorded and therefore, AO has no jurisdiction to make any other addition. For this, he placed reliance on the judgement of Hon'ble jurisdictional High Court in the case of Ranbaxy Laboratories Ltd. vs CIT [2011] reported in 336 ITR 136 (Delhi) and in the case of CIT-II vs Jet Airways (I) Ltd. reported in [2011] 331 ITR 236 (Bom.). Ld. AR thus requested that the re-assessment order making additions of INR 2,58,87,207/- on the issues which are not the subject matter of reopening and without making additions on the issue for which reasons for reopening the assessment were recorded, is without jurisdiction and, therefore, the reassessment order deserves to be quashed....
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....mpany is rotating it undisclosed money by way of making transfer in/transfer out with M/s Concise Exim Pvt. Ltd. Therefore, an amount of Rs. 1,84,00,000/- received from M/s Concise Exim Pvt. Ltd. is not genuine and is accommodation entry. 4. I have perused the above information. Having perused and considered the above information, I have reason to believe that income of the assessee at least to the extent of Rs. 1,84,00,000/-- has escaped assessment as defined by Section 147 of the IT Act 1961 and the case is fit for issuing notice u/s 148 of the Act. Reason for formation to belief 5. In view of the forgoing facts, it is clear that the assessee company is rotating it own funds with M/s Concise Exim Pvt. Ltd. which is not a real independent entity but merely a paper / shell company with no real capital / investment. Thus I have no hesitation in reaching to the conclusion that the transaction of Rs. 1,84,00,000/- is not genuine. Having perused and considered the above information, I have reason to believe that income of the assessee at least to the extent of Rs. 1,84,00,000/-- has escaped assessment as defined by Section 147 of the I.T. Act 1961 and the cas....
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....e debit and credit transactions were taken to the tune of INR 1.90 crores thus, the AO was of the opinion that the assessee was involved in providing accommodation entries by means of funds by rotation amongst various entities. Accordingly, he made total addition of INR 2,58,86,811/- being 2% as commission earned on gross credits in bank account amounting to INR 1,29,43,40,550/- by providing accommodation entries. However, no addition is made for which the reassessment proceedings were initiated by recording the reasons i.e. the receipt of INR 1.84 crores from M/s Concise Exim Pvt. Ltd. In the context, the Hon'ble Jurisdictional High Court in the case of Ranbaxy Laboratories Ltd. (supra) has held as under:- 18. "We are in complete agreement with the reasoning of the Division Bench of Bombay High Court in the case of V. Jaganmohan Rao (supra). We may also note that the heading of section 147 is "income escaping assessment" and that of section 148 "issue of notice where income escaped assessment". Section 148 is supplementary and complimentary to section 147. Sub-section (2) of section 148 mandates reasons for issuance of notice by the Assessing Officer and sub-section (1) t....
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.... 29. In our considered opinion, and bearing in mind the import of Explanation 3 as well as the language in which Section 147 of the Act stands couched, we find no justification to differ from the legal position which had been enunciated in Ranbaxy Laboratories Ltd. We also bear in consideration the said decision having been affirmed and approved subsequently in CIT (Exemption) v. Monarch Educational Society 2016 SCC OnLine Del 6636/[2017] 79 taxmann.com 43/387 ITR 416 (Delhi) and CIT v. Software Consultants 2012 SCC OnLine Del 316/[2012] 21 taxmann.com 155/211 Taxman 120/341 ITR 240 (Delhi). 30. We thus, come to the conclusion that the enunciation with respect to the indelible connection between Section 148A(b) and Section 148 A(d) of the Act are clearly not impacted by Explanation 3. As we read Sections 147 and 148 of the Act, we come to the firm conclusion that the subject of validity of initiation of reassessment would have to be independently evaluated and cannot be confused with the power that could ultimately be available in the hands of the AO and which could be invoked once an assessment has been validly reopened. 31. Explanation 3, or for that mat....
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....challenge by assessee - Held, yes Words and phrases: The words 'and also' as occurring in section 147 of the Income-tax Act, 1961." 10. In view of the facts of the case as discussed above and by respectfully following the judgement of Hon'ble Delhi High Court and Hon'ble Bombay High Court, we are of the considered view that the AO in the instant case has exceeded its jurisdiction by making additions on the issue which is not forming part of the reasons recorded for re-opening the assessment when no addition was made on the issue covered in the reasons recorded. Therefore, no additions could be made dehorse the reasons recorded before issue of notice u/s 148 of the Act. Accordingly, reassessment order passed u/s 147 of the Act by making addition of INR 2,58,86,811/- as 2% profit by alleging the entire bank deposits as accommodation entries is hereby cancelled. Ground No.1 of the assessee is accordingly, allowed. 11. Since we have already allowed the legal issue taken by the assessee, the other grounds taken by the assessee on merit become academic on this issue and thus not adjudicated. 12. In the result, appeal of the assessee is allowed. ITA No.4100/Del/2024 [A....
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....Act" by the Ld Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi is against law and facts on the file in as much as he was not justified to uphold the action of the Ld. Assessing Officer in disallowing all the expenses amounting to Rs. 64,887/- incurred by the Appellant Company on account of its basic expenses for running the business of the Company during the year on the ground that it does not appear to have done any business during the year by ignoring the submissions made on behalf of the Appellant Company. 3. That the order dated 22.07.2024 passed u/s 250 of the "Act" by the Ld Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi is against law and facts on the file in as much as he was not justified to uphold the action of the Ld.AO in denying the claim of carry forward of losses as claimed by the Appellant Company. 4. That the Appellant craves to add, amend, alter, modify or delete any or all of the grounds of appeal before or at the time of hearing." 17. Before us, the Ld.AR for the assessee submits that the assessee is having share capital and share premium which were invested in various ....