TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 52
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.... u/s 148 of the Income-tax Act, 1961 (the Act), which is a illegal and bad in law. 03. The facts in brief are that the assessee filed the return of income on 13.10.2018, declaring total income at Rs.27,720/-. Later on the notice u/s 148 of the Act dated 06.04.2022 was issued and duly served upon the assessee. The said notice were complied with by the assessee by filing the return of income on 10.04.2022, declaring the same income as in the original return of income. Thereafter, the statutory notices including the questionnaire were issued, which were served upon the assessee. The case of the assessee was reopened on the ground that the assessee has received Rs.17,00,000/- from M/s Eclcat Constructions Pvt. Ltd during the financial year whi....
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....opportunity of being heard as per the provisions of Section 148A(b) of the Act with prior approval of the competent authority, wherein the assessee was given a show cause notice as to why the amount received it bank account from M/s Eclcat Constructions Pvt. Ltd. to the tune of Rs.17 lacs should not be treated as income chargeable to tax, which is escaped assessment within the meaning of 147 of the Income-tax Act, 1961 (the Act). Thereafter, the ld. AO simply recorded that the money received from the shell company is liable to be treated u/s 68 of the Act and recorded the reasons that the assessee has failed to include the same in the return of income and thus, it has escaped assessment and accordingly, notice issued u/s 148 of the Act. Dur....
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....hat an opportunity of being heard was granted to the appellant by issue of notice u/s 148A(b) dated 17.03.2022, as per which a Show Cause Notice was issued to the appellant after prior approval from the Competent Authority and the appellant was issued a show cause as to why notice why notice u/s 148 should not be issued based on the information available with the Ld. AO. The Show Cause Notice was served on the appellant and the appellant was asked to submit the reply on or before 30.03.2022. The appellant submitted reply as per which it admitted on receiving the amount of Rs. 17,00,000/- from M/s Eclat Construction Pvt. Ltd. It was noted by the Ld. AO that as this amount was received from Shell Company, it is liable to be treated as income ....
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....n from the investigation wing that the assessee company has received various amounts in the bank account from the shell company which are non-existent and have no creditworthiness. Thereafter it was noted that the assessee has received Rs.17 lacs from M/s Eclcat Constructions Pvt. Ltd. which is a shell company and lac ks genuineness and creditworthiness. We note that thereafter, the assessee replied the said notices vide written submission dated 04.04.2022, wherein it was submitted that the assessee received Rs.17 lacs from M/s Eclcat Constructions Pvt. Ltd. on account of sale of equity shares and the payments were received through banking channels. The assessee filed all the necessary documents qua the payments received and also in respect....
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....deration of Rs.17.00 lacs. The assessee has filed all the evidences in respect of the said transactions comprising sale bill, ledger account, bank statement, share certificate and audited accounts of M/s Eclcat Constructions Pvt. Ltd. as well as valuation report, mentioning the fair market value of the shares. However, the ld. AO simply doubted that M/s Eclcat Constructions Pvt. Ltd. is a shell company with poor financials and treated the transactions as unexplained cash credit. We note that the ld. AO has not taken any steps to verify these transactions on his own and also not commented on the evidences filed by the assessee. The AO has not issued any notice u/s 133(6) of the Act or 131 of the Act and simply jumped to the conclusion that m....
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....ed to the income. 012. In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO by observing and holding as under: - "6.3.2. It was noticed by the Ld. AO that the appellant has received interest income of Rs. 83,31,165/- from 19 Parties/Entities. Against this, the appellant has claimed salaries of Rs. 80,70,000/-. The appellant filed list of 34 persons to whom salary was paid at an average rate of Rs. 2,20,000 to 2,40,000/-. The Ld. AO was of the view that when the appellant was just receiving interest from 19 Parties/Entities then why does the Company need 34 persons for such a work. The Ld. AO asked for details such as: a. Details of work assigned to each employee. b. Performance of duty done by each employee....