TaxTMI 
TaxTMI 
2022 (8) TMI 1588
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....sessee to disclose all material facts at the time of filing of the return of income and also there is no reason to believe that the income of the assessee has escaped assessment and as such the re-opening of the assessment is bad in law. 3. Notwithstanding the above said grounds of appeals, the Ld. CIT(A) has erred in confirming the addition of the genuine purchases of wheat to the tune of Rs. 58,74,080/- as bogus purchases, ignoring the fact that the purchases of wheat are duly supported by the relevant bills of the parties and the payment having been made through proper banking channel. 4. That the CIT(A) has failed to appreciate that there is a documentary evidence of the goods so purchased had crossed the excise and taxation barrier at 'Shambhu' and necessary evidence of the actual transportation of the wheat having not been doubted, the finding of the CIT(A) is arbitrary and without any basis. 5. That the CIT(A) has erred in relying upon the statement recorded at the back of the Assessee of one, Shri Rajesh Mittal and Shri Bhagwan Jain, by the Investigation Wing and no cross-examination have been allowed to the Assessee and, thus, the confirmation of....
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.... reported in 259 ITR 19. 4. The AO has supplied the copy of reasons (APB, Pg. 52 & 53); that in the reasons, the AO has mentioned that the information was received from the Investigation Wing, Karnal; that M/s. Kamna Overseas Enterprises, Delhi had received an amount of Rs. 58,74,080/- through RTGS/NEFT transferred from M/s. Bhai Industries Ltd. through RTGS/NEFT from the regular bank account of the assessee and that during enquiry proceedings by the Investigation Wing, Karnal, it had come to the notice that one Sh. Rajesh Kumar Mittal and Sh. Bhagwan Jain had been shown as proprietor of M/s. Kamna Overseas Enterprises and one Sh. Sanjeev Mittal had deposed in their statements that, the said concern was actually controlled and managed by Sh. Rajesh Kumar Mittal and further, they had stated that, they were paid a very small amount to sign documents including bank cheques etc. It was further deposed by them that, they had not made any sales/purchases from M/s. Kamna Overseas Enterprises to the assessee through whom, following amounts have been received in the bank account of M/s. Kamna Overseas Enterprises and the details of the payments received into the bank account of M/s. Kamn....
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....ehicle No. GR No. Transport Name VAT XXXVI No. 1. 1444 09/10/2010 395463.00 10/10/10 HR46 5794 3602 Delhi UP Transport Company 029373 2. 1447 09/10/2010 384788.00 10/10/10 NL02G 9117 3605 Delhi UP Transport Company 029372 3. 1453 10/10/2010 365957.00 11/10/10 HR59 4278 3613 Delhi UP Transport Company 0293389 4. 1456 10/10/2010 369710.40 11/10/10 HR21F 2913 3610 Delhi UP Transport Company 029389 5. 1482 25/10/2010 370263.25 28/10/10 HR46 5794 3536 Delhi UP Transport Company 0277686 6. 1483 25/10/2010 375583.00 28/10/10 HR61 4041 3537 Delhi UP Transport Company 0134552 7. 1638 22/12/2010 403987.50 24/12/10 HR46 5794 1271 Shankar Road Carriers 0208953 8. 1639 22/12/2010 392323.50 24/12/10 HR39B 5761 1272 Shankar Road Carriers 0208952 9. 1643 22/12/2010 405162.00 26/12/10 HR46A 4349 1274 Shankar Road Carriers 0266675 10. 1644 22/12/2010 409554.00 26/12/10 HR39A 5585 1275 Shankar Road Carriers 0161287 11. 1....
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....he proceedings which were ever been initiated against M/s Kamna Overseas, Delhi. Here reliance can also be placed of latest judgment of ITAT Delhi in case Smt. Tarun Verma, Delhi Vs ITO, New Delhi reported on 19/09/2017, ITA No. 2833/Del/2016, wherein proceedings initiated u/s 148 was quashed by the Hon'ble ITAT on the same issue. So your goodself can clearly make out that proper opportunity was not provided to us and that all the transactions with M/s Kamna Overseas is genuine with actual movement of goods. So your goodself is humbly requested to kindly drop all the proceedings initiated u/s 148 and issue directions accordingly." 7. In nutshell, the assessee has contended that, the total purchases from 'M/s. Kamna Overseas' were to the tune of Rs. 73,90,374.90 and not Rs. 58,74,080/- as per the reasons recorded by the Ld. AO and the assessee gave the details of the purchases made from 'M/s. Kamna Overseas Enterprises', along with bill number, date, amount, vehicle number, GR number, copy of bilties, transportation details, copy of declaration of VAT on form XXXVI submitted before the Excise & Taxation Department, Punjab with each & every bill and also requested for....
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....ment of Hon'ble Apex Court in the case of PCIT vs. Tejua Rohit Kumar Kapadia in SLP No. 12670/2018 reported in 94 taxmann.com 325 (SC) copy placed at pages 303 of judgment set. II. Judgment of Piyush Developers Pvt. Ltd. vs. ACIT in ITA No. 5599/Del/2010 copy placed at pages 304 to 306 of judgment set. III. Judgment of Hon'ble Chandigarh Bench in the case of Rajesh Gupta vs. JCIT in ITA No. 264/Chd/2010 copy placed at pages 307 to 308 of judgment set. IV. Judgment of Hon'ble Chandigarh Bench in the case of Northern India Steel Rolling Mills vs. DCIT in ITA No. 591/Chd/2014 copy placed at pages 339 to 349 of judgment set. V. Judgment of Commissioner of Income Tax vs. Leader Valves Ltd. as reported in 285 ITR 435. VI. Judgment of Hon'ble ITAT Chandigarh Bench in the case of Samrat Plywood Inds in ITA No. 595/Chd/2017 copy placed at pages 354 to 358 of judgment set. 10. It was vehemently argued by the Ld. Counsel that out of the total purchases made amounting to Rs. 73,89,998/-, for which the necessary copy of account has been placed in the paper book at page 77, along with all the supporting invoices and other relevant documents, which ....
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....of reopening of the case is based upon the information received from Investigation Wing, Karnal, which is not sustainable in view of the following judgments: I. Judgment in the case of Holy Faith International Pvt. Ltd. in ITA No. 181/Asr/2017 of Hon'ble ITAT, Amritsar Bench, Amritsar. The copy of the judgment is placed in the judgment set pages 52 to 66. II. Judgment in the case of Principal Commissioner of Income Tax-4 vs. G & G Pharma Ltd. reported in 384 ITR 147 of Hon'ble Delhi High Court. The copy of the judgment is placed in the judgment set pages 46 to 51 III. Judgment in the case of Signature Hotels Pvt. Ltd. vs. ITO and Anr (2011) 338 ITR 51 of Hon'ble Delhi High Court, IV. Judgment in the case of Sh. Gopal Sharan vs. Ito in ITA no. 51/Asr/2012 dated 05.09.2012 (Amritsar ITAT). The copy of the judgment is placed in judgment set pages 125 to 132 V. Judgment in the case of Mohd. Yousuf Wani vs. Ito in ITA no. 372/Asr/2009 (Amritsar ITAT). The copy of the judgment is placed in judgment set pages 141 to 152 VI. Judgment in the case of Sh. Sanjeev Aggarwal vs. DCIT in ITA no. 547/Asr/2011 (Amritsar ITAT). The copy of the ju....
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....ve, the assessment proceedings deserve to be quashed. 16. It was further argued that, the assessee had given detailed submissions both on the issue of proceedings initiated u/s 148 and also on merits, before the Ld. CIT(A) and the Ld. CIT(A) has reproduced such submission in para 5.1 of the order in page 3 to 16 of the order and, though, such submissions were both, on legal and on merits, but strangely, the Ld. CIT(A) has totally ignored such submissions and has only relied upon in one of the order passed by her in the name of Golden Wheat & Allied Mills Pvt. Ltd., which was decided by her on 23.10.2018 and has reproduced the findings from page 17 to page 26 of her order and then in para 5.3, by relying upon that decision, has dismissed the appeal of the assessee. It has vehemently been argued that, the whole basis of the confirmation of addition by the Ld. CIT(A), is on surmises & conjectures and, therefore, such confirmation of addition was liable to be deleted and it was further clarified by the Ld. Counsel that the assessee has no link/connection with the said concern. 17. Per contra, the ld. Addl. CIT DR stands supported the impugned order. 18. We have heard the rival....
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.... payment was received through RTGS etc in the bank account of M/s Kamna Overseas, and reasons were recorded after due application of mind and notice u/s 148 was issued thereafter. 3. Further, you have stated that you had made a payments of Rs. 73,90,000/- for total purchase of Rs. 73,90,374/- during the F.Y 2010-11 instead of Rs. 58,74,080/-. During the course of proceedings u/s 131(1A) of the Income Tax Act, 1961, Sh. Rajesh Mittal, Prop M/s Kamna Overseas had admitted in his statement (Q. No: 14 of his statement) that he had not entered into any sale/purchase from M/s Bhai Industries Pvt Ltd. Further, M/s Kamna Overseas/Enterprises has admitted to provide accommodation entries to various parties. The expenditure booked by the assessee company amounting to Rs. 58,74,080/- is nothing but accommodation entry. Further, you have stated in your letter that any material collected by the Assessing Officer behind the back of the assessee cannot be used against him unless he has been allowed a chance to rebut the same. I have gone through the judgments which you mentioned in your letter and the same is different from your case. It is relevant to stated the decision render....
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....e of 'Principal Commissioner of Income Tax-4 vs. G & G Pharma Ltd.', reported in 384 ITR 147 of Hon'ble Delhi High Court (CLPB, Pgs. 46 to 51 it has been held that: "The basic requirement of law for reopening an assessment is application of mind by the Assessing Officer, to the materials produced prior to reopening the assessment, to conclude that he has reason to believe that income has escaped assessment. Unless that basic jurisdictional requirement is satisfied a post mortem exercise of analysing materials produced subsequent to the reopening will not make an inherently defective reassessment order valid." It has further been held as under: "Without forming a prima facie opinion, on the basis of such material, it was not possible for him to have simply concluded that it was evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries. The basic jurisdictional requirement was application of mind by the Assessing Officer to the material produced before issuing the notice for reassessment. Without analysing and forming a prima facie opinion on the basis of material produced, it was not possible for the A....
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....company, S, had a paid-up capital of Rs. 90 lakhs and was incorporated on January 4, 1989, and was also allotted a permanent account number in September, 2001. Thus, it could not be held to be a fictitious person. The reassessment proceedings were not valid and were liable to be quashed." 24. In the case of 'Mohd. Yousuf Wani vs. Ito', in ITA no. 372/Asr/2009(Supra) (CLPB, Pgs. 141 to 152), the coordinate Amritsar Bench held as under: "In our considered view, reliance placed by the A.O on the letter of Vigilance Department was not sufficient to make a belief that the income of the Assessee has escaped assessment. In the present case, the reason for formation of belief was only the information received from the vigilance Organization. In our opinion, the so-called reason recorded by the A.O could not be held the reason for proceedings under section 147/148 of the Act, since it was only an information and was not at all discernible as to whether the A.O has applied his mind to the information and independently arrived at a belief on the basis of material which he has before him the income of the assessee had escaped assessment". 25. Further, in the case of 'Sh. Sanjeev....