TaxTMI 
TaxTMI 
2025 (11) TMI 1664
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....rising out of the appeal before it against the order dated 30.03.2022 passed u/s 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the ITO, Ward-3(2)(4), Muzaffarnagar (hereinafter referred to as the Ld. AO). 2. On hearing both the sides, we find that the assessee has shown source of income as MLA pension from UP Government and, further, income from rent and income from legal consultancy as an Advocate and the assessee was not dealing in any business activity from AY 2016-17. The assessee has claimed that he was not associate/related with UP Bone Mills Pvt. Ltd. The ld. AR has placed on record a copy of record of ROC showing that the assessee had resigned from the said company five years before the releva....
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....f sale & purchase bills to various beneficiaries from many paper entities. All these entities were managed and controlled by Shri Yash Pal Gupta and his associates. These entities were involved in providing accommodation entries to the beneficiaries. Bank statements of various entities controlled by Yash Pal Gupta were obtained and it was found that there have been huge cash deposits since 01.04.12 in these accounts and it was also found that cash so deposited was immediately being transferred through layering to other entities controlled by Yash Pal Gupta and ultimately to the beneficiaries. During the course of survey statements of Shri Yash Pal Gupta and his associates were recorded on oath. In these statements they accepted that entitie....
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.... with partnership of Late Ashok. (i) On perusal of details of those beneficiaries which were identified to have taken accommodation entries in terms of credit taken in capital account or sales account by means of bank transfers, it is seen that the assessee has made the following transactions:- Sr. No. Name of beneficiary PAN 2015-16 Total 1. UP BONE MILLS PVT LTD ABTPR6568E 10,80,53,390 10,80,53,390 (ii) On perusal of details of those beneficiaries who have identified to have taken route of bogus billing on purchase accounts wherein cash has been withdrawn and returned bank, it is seen that the assessee has made the following transactions:- Sr. No. Name of beneficiary PAN 2015-16 Total ....
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....associated / related with U P Bone Mills Pvt. Ltd. and is not having any business transaction with U P Bone Mills Pvt. Ltd. during A.Y. 2016-17. Further the appellant stated his ignorance of any transactions within U P Bone Mills Pvt. Ltd. and Smt. Rani Sharma and Shri Yashpal Gupta entities. In view of the above, the AO-NFAC made further enquiry from the Jurisdictional Assessing Officer to verify the claim of the assessee. The Jurisdictional Assessing Officer is stated to have replied as under: "it is submitted that the case of Sh. Shah Nawaz Rana PAN ABTPR6568E for A.Y, 2016-17 was reopened on the basis of information flagged on system (pertains to PAN ABTPR6568E). On perusal of information/ case related information (copy attache....
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....e accordingly treated the amount of Rs. 11,21,91,653/- as unexplained cash credit u/s.68 of the Income Tax Act, 1961 and added it to the total income of the assessee. 7.4 In this context it is pertinent to note two important points regarding the information on the basis of which the appellant's case was reopened: 1. It was unearthed during survey in the case of a third party and was with regard to availing of accommodation entries in the form of credit taken in capital account or sales account by means of bank transfers bogus billing on purchase accounts wherein cash was withdrawn and returned bank; 2. As per the above information, though the PAN was identified as the appellant's PAN, the name was of a company, i.....
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....of which his case was reopened is the PAN, which in the absence of any other supporting material, in my opinion, does establish any substantive link between the two, much less lead to the conclusion that the appellant had such undisclosed income. The laudable intention of avoiding loss of Revenue cannot be a reason to bypass logical reasoning and rational assessment of the material facts. As there is no real or coherent material to establish or even reasonably indicate that the appellant had availed of such accommodation entries to the tune of Rs. 11,21,91,653/- during the year under consideration, the action of the A.O in treating the same as undisclosed income of the assessee u/s 68 is not justified and the addition is hereby del....