TaxTMI 
TaxTMI 
2025 (10) TMI 1390
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....ted at Rs. 1,83,77,290/-. The assessee's Return of Income as per ITR filed u/s 148 was Rs. 93,04,130/-. An Addition of Rs. 87,20,000/- was made on account of (1) unexplained money u/s 68 of the Act (2) on account of undisclosed income of Rs. 3,53,160/- aggregating to Rs. 90,73,160/-. 2.2 That the assessee is a partnership firm. Return of Income for the Assessment Year 2014-15 was filed on 30.03.2016 declaring income of Rs. NIL. 2.3 That the Income Tax Department was in the possession of certain credible information as per which the assessee had received unexplained credits amounting to Rs. 87,00,000/- in the form of accommodation entry from M/s Jyoti India Pvt Ltd. during the financial year 2013-14. A report has been complied by investigation wing after conducting investigation on the bank accounts of Shri Sharad Darak, Indore about abnormal financial transactions. As per the information received, it was found that the assessee had received accommodation entry from Shri Sharad Darak. It was noticed from the statement of Shri Krishan Murari Naita wherein he had made the categorical admission that he has given accommodation entries of share capital to the 3 companies of Shri Sh....
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....try of Rs. 87,20,000/- from M/s. Jay Jyoti India Pvt. Ltd. The assessee in its objection has raised that date stamping has not been made by the AO. However, it is brought to the notice of the assessee that notice u/s. 148 of the Income Tax Act was issued through system (Income Tax Business Application) which required "recording of reason for escapement of Income" as prior step and due time and date stamping in made on the third party server which cannot be changed. The procedure u/s. 151 of the Act is also followed in the instant case. The assessee has received as accommodation entry of Rs.87,20,000/- in its books of accounts from M/s. Jay Jyoti India Pvt. Ltd. which was a paper concern floated by the Shri Sharad Darak. The reason for escapement of Income mentioned name of main person i.e. Shri Shrad Darak, who is the main person behind this entire façade, hence assessee firm objections that AO has not applied mind while reopening the assessment is not factually correct. The reason for reopening in para 4 under (enquiries made by the AO as sequel to information collected/received and finding of the AO) has the finding that Shri Sharad Darak's Controlled entity has provid....
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....AT are worth mentioning here:- "It is essential on the part of revenue authority, to look into the real nature of transaction and what happens in the real word and contextualize the same to such transaction in the real market situation. It is pertinent to state here, the judicial wisdom of Hon'ble Supreme Court in CIT vs. Arvinds Raju (TN) 120 ITR 46 (SC) wherein it was held that "one day in our welfare state geared to social justice, this clever concept of avoidance as against evasion may have to be exposed. In the present case, there is an obvious and plain transaction of tax evasion which has been clothed with the smoke screen of subterfuges, by the assessee appellants". The Relevant observations and findings of Hon'ble Supreme Court, in the matter of discharge of onus of proof and the relevance of surrounding circumstances of the case are that though an appellant's statement must be considered real until it was shown that there were reasons to believe that the apparent was not the real, in a case where the party relied on self-serving recitals, the taxing authorities were entitled to look into the surrounding circumstances to find out the reality of such recitals. I....
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.... particulars is not enough, mere payment by account payee by cheque is not sacrosanct as held in Hindustan Tea Trading Co. Ltd. vs CIT 2003 [263 ITR 289, 297 (Cal)]. Where there is unexplained credit, it is open to the Assessing Officer to hold that it is income of the assessee and no further burden lies on the Assessing Officer to show that the income is from any particular source as held in CIT vs. Devi Prasad Viswanath Prasad 1969 72 ITR 194 (SC). In the present case the genuineness of the transaction has not been established because on investigation, the existence of the company M/s. Presha Metallurgical Ltd. has not been established and it was revealed that the company was not carrying out any business activities and nobody knew about the existence of the company at the given address. From the facts, it is clear that the assessee has infact re-introduced its unaccounted income in the shape of Long Term Capital Gain by routing it through paper companies who have no real business or activities and are created on papers for such type of sham transactions. The persons operating such paper companies complete the paper formalities but no real business/ activities are carried out by ....
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.... expenditure and added it to the total income of the assessee (supra). 2.11 That it is recorded in the aforesaid assessment order that the final show cause notice along with draft assessment order was sent to the assessee on 28.03.2022 and the assessee responded (Para 9 of A.O order). The assessee was given video conferencing for 30.03.2022 at 18.35 hours however the assessee did not attend. 2.12 That the aforesaid assessment order is hereinafter referred to as the "impugned assessment order". 2.13 That the assessee being aggrieved by the "impugned assessment order" prefers first appeal u/s 246A of the Act before Ld. CIT(A) who by the "impugned order" has dismissed the appeal of the assessee on grounds/reasons stated therein. 2.14 That the assessee being aggrieved by the "impugned order" has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal in Form No.36 against the "impugned order" which are as under:- "1. On the facts and circumstances of the case and in law the Id. A.O, erred in issuing notice u/s 148 as the reasons recorded are undated, erroneous and factually incorrect and there is no direct nexus or live l....
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.... be deleted. 6. On the facts and circumstances of the case and in law the Id. A.O. erred in disallowing interest paid/credited on above loan amounting to Rs.3,53,160 after deducting/paying TDS from this amount, alleging it being non-genuine expenditure. Accordingly, the Appellant prays that the said addition be deleted. 7. The Appellant craves leave to add, alter, amend, modify or withdraw any of the foregoing grounds of appeal either before or at the time of hearing of the appeal". 3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 06.10.2025 when the Ld. AR for and on behalf of the assessee appeared before us and interalia brought to our notice that the instant appeal is a covered matter and that there are numbers of orders of this tribunal wherein it has been held that broad issue with regard to M/s Jay-Jyoti (India) Pvt. Ltd being paper company has not been accepted. In the paper book filed reliance was placed on the following decisions of this Tribunal:- (i) Sanjay Shukla vs ACIT, Central-2 ITA No. 333/Ind/2020 (ii) ITO 2(1) vs. Hi Link City Homes P. Ltd ITA No. 2/Ind/2021 (iii) ACIT Central-....