AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1070
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....Herbals Ltd./Safal Herbs Ltd. (PAN: AAGCP1840A) does not exist at its address and, therefore, lacked its identity as well as genuineness. The evidence of exchange of cash against accommodation entries of bogus LTCG were found and impounded in the search case of JSSS where Jignesh Shah and Umang Shah had admitted that the scrip was used for providing accommodation entries of bogus LTCG against cash from beneficiaries. The modus-operandi of such cases was that the assessee did not claim any LTCG in ITR for the assessment year 2015-16. The assessee was one of the beneficiaries of the above mentioned Scheme to the tune of Rs. 6,71,600/- through selling the shares of Safal Herbs Ltd. during the year under consideration. Hence the case was reopened and notice u/s 148 was issued on 31.03.2021 by the Assistant Commissioner of Income Tax, Circle 60(1), Delhi with the prior approval of Ld. PCIT, Delhi-20. This notice was served upon the assessee through e-mail. The assessee filed his return of income on 31.05.2021 in response to notice under Section 148 of the Act. Notice under Section 142(1) dated 15.11.2021 along with relevant questionnaire was issued to the assessee. The assessee submitte....
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....vising an assessment which can be taken up only if there is an error in the order. 5.1 In the subject case, the Investigating Wing had reported the facts to the Ld. ACIT with regard to accommodation entries having been availed of by persons through shares of Safal Herbs Ltd. On the basis of such inputs received from the Investigation Wing that the Assessee's case was reopened for camying out a reassessment. In the course of the reassessment proceeding, the AU thoroughly examined the allegations made against the Assessee with regard to the transactions in the shares of Safal Herbs Ltd. (SHL). After a methodical and meticulous examination of the transactions the ACIT found that the reported share transactions of the present Assessee in SHL were beyond reproach. The allegation of accommodation entries was found to be wrong in the facts and circumstances of the case. No evidence to support such a belief was found by the AU. 5.2 With the comments as extracted above in para 3 above, AU specifically held that though LTCG to the tune of Rs. 6,71,600/- had been availed by the Assessee in the relevant AY, yet the sale consideration and exchanges were in the regular and normal cours....
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....dentify the error in the order proposed to be revised, the order of Revision has to be held to be deficient and unsustainable in law. On similar ground, the Delhi High Court quashed the Revision orders passed by the Commissioners in DIT vs. Jyoti Foundation (2013) 357 ITR 388 and CIT vs. New Delhi Television Ltd. (2014) 360 ITR 44. 6. Learned Authorized Representative for the Revenue submitted that regarding explanation to Section 263 of the Act, Hon'ble High Court of Delhi in the judgement in PCIT vs. Paramount Propbuild (P) Ltd. 161 taxmann.com 85 (Delhi) [2024] has held as under: ".......23. Therefore, in light of the findings which are unravelled from the DDIT investigation report and assessment proceedings of M/s. Upaj Leasing & Finance Pvt. Ltd. that the entities M/s. Sarvottam Securities Ltd. and M/s. Upaj Leasing & Finance Pvt. Ltd. are the shell companies of an entry operator, the relevance of ascertaining the genuineness and creditworthiness of the transactions cannot be undermined. Additionally, the genuineness and creditworthiness of the transactions may not be satisfactorily determined solely on the basis of the ledger accounts or the ITR of the entitie....
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....efore it. Furthermore, the ITAT also erred in holding that the PCIT has wrongly assumed the jurisdiction under Section 263 of the Act as the assessment order is not only prejudicial to the interests of the Revenue but also erroneous in nature. 27. In so far as question (b) is concerned, it is crystal clear that Explanation 2 to Section 263 of the Act will be applicable in the instant case as the said explanation was inserted vide Finance Act, 2015 with effect from 01 June 2015 and the case of the assessee belongs to AY 2016-17. 28. Thus, in the light of the foregoing discussion, we are of the view that the aforementioned questions of law need to be answered in favour of the Revenue and against the assessee. We accordingly do so. 29. In view of the aforesaid, we set aside the ITAT order dated 14 February 2022. 30. The appeal is accordingly allowed and disposed of, alongwith pending applications, if any....." 6.1 Various judgments relied upon by the Revenue are as under:- 1. Hon'ble Supreme Court in the case of Deniel Merchants Pvt. Ltd. vs. ITO (Appeal No. 2396/2017) dated 29.11.2017. 2. Hon'ble Supreme Court in the ca....
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....at the address and, therefore, lacked identity as well as genuineness. Evidence of exchange of cash against the accommodation entry of bogus long term capital gains (LTGC) were found and impounded in the search of one JSSS where the duo of Jignesh Shah and Umang Shah had admitted that the scrip was used for providing accommodation entries of bogus LTCG against cash from beneficiaries. The information further stated that the modus operandi of such cases was that the Assessee would not claim any LTCG in the ITR for AY 2015-16. This Assessee was stated to be one of the beneficiaries of the abovementioned scheme in a sum of Rs. 6,71,600/- through selling the shares of Safal Herbs Ltd. during the year under consideration. With the aforesaid information the case of the Assessee was reopened and notice u/s. 148 of the Act was issued on 31.03.2021 by the ACIT, Circle 60(1), Delhi after reportedly obtaining the approval of the Pr. CIT. In response to that notice Assessee filed return of income on 31.05.2021. Ld. AO/The AU completed the assessment after issuing notice under Section 142(1) of the Act dated 15.11.2021 etc. Assessee submitted replies to those notices. Ld. AO/the AU completed th....