TaxTMI 
TaxTMI 
2026 (5) TMI 322
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....g another opportunity of personal hearing through video conferencing after the same could not be held due to technical glitches. Thus, the AO having not followed the fundamental aspect of the assessment process, ensuring a fair and reasoned conclusion contrary to the provisions of Section 144B(9) of the Act, the learned CIT(A) ought to have quashed the impugned order as held by various courts of law including the Hon'ble Gujarat High Court. 2. The learned CIT(A) further erred in not appreciating the fact that the AO had also grievously erred in not furnishing the copy of statements of Sanjay Shah/Jignesh Shah along with an opportunity of their cross examination as asked for as well as by not furnishing the material/evidences found/seized from their possession relevant to the appellant firm before making the alleged addition. The Impugned order thus deserves to be quashed as void-ab-initio. II. Assessment u/s 147 of the Act. 1. The learned CIT(A) has grievously erred in law and on facts in not adjudicating the grounds raised by the appellant firm challenging the assessment u/s 147 of the Act vide notice issued u/s 148 of the Act. 2. The learne....
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....s of the case. 2. The learned CIT(A) has grievously erred in law and on facts in confirming the addition of Rs. 89,28,079/- However, in view of the facts and explanations and evidences filed during the course of assessment and appellate proceedings, the impugned addition of Rs. 89,28,079/- made by AO and confirmed by the learned CIT(A) is wholly unjustified and bad in law and thus requires to be deleted. 3. The learned CIT(A) has grievously erred in law and on facts in confirming the addition on the observations that the submission of the appellant is only in the nature of narration and no supporting documents and corroborative evidences have been filed. The said observation is grossly contradictory to the material/evidences placed on record by the appellant firm in the form of Annual Accounts, Bank Book, Bank statements, Demat A/c and other documents etc. which cannot be termed as submission in the nature of narration as alleged but are in the nature of supporting documents and termed as cogent material/evidences which clearly shows that no such accommodation entry has been taken by the appellant firm. Thus, the learned CIT(A) has grievously erred in law and on f....
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....w.s. 144B on 30.03.2022 determining total income at Rs. 91,38,929/- by making addition of Rs. 89,28,079/- u/s 68 of the Act. 4. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Ld. CIT(A) who dismissed the appeal of the assessee and confirmed the addition, holding that the assessee failed to discharge the onus and did not furnish corroborative evidence. The relevant observations of the Ld. CIT(A) are as under :- "...5.1 I have considered the facts of the case and material on record. The issue is being examined on merit. All the grounds are being dealt together. 5.2 Various notices u/s 143(2) and 142(1) were issued d 142(1) were issued by the AO during the course of assessment. The assessee has made its submission on 9.10.2021, assessment. The assessee has made its submission d 07.02.2022 and 08.02.2022 which has been considered and examined by this office. The summation of the of the replies of the assessee is that the assessee is in denial mode with respect to bogus accommodation entries taken by it to the tune of Rs. 89,28,079/- from Jignesh Shah and Sanjay Shah of Ahmedabad. Therefore, the AO issued show-cause....
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....o admitted of being involved in providing accommodation entries of LTCG, Loss, Unsecured Loans etc. Data analysis coupled with circumstantial evidences led to discovery that 15 BSE listed scrips have been used for generating bogus LTCG and contrived losses. During investigation, sample trail of funds was also established wherein the infrastructure of shroffs and angadiyas was used by the duo for routing unaccounted funds of beneficiaries. The duo also admitted being involved in providing accommodation entries including bogus LTCG and contrived losses. Beneficiaries have been identified by analysis of data found during investigation. Perusal of such data revealed that the instant assessee i.e. CARE STOCK BROKING SERVICES is one such beneficiary of accommodation entry. The total Income escaping assessment in the instant case is Rs. 89,28,079/-, 6. I have considered the submission of the appellant made during the course of appellate proceeding and find no evidentiary value in the submission. Firstly, the submission made by the appellant are only in the nature of narration and no supporting documents has been filed. Even if the appellant's contention is to be accepted, the....
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..../s 147 of the Act. 2. Brief details of Information collected / received by the AO In this case information received in category of High Risk Transaction CRIU/VRU Information on Insight Portal of the department. As per the information uploaded by the department it is noticed that the assessee has entered into significant financial transactions as mentioned hereunder in Para 5. 3. Analysis of information collected / received On perusal and analysis of information available on record, it is noticed that the assessee has entered into financial transactions exceeding the taxable limits. The assessee has undertaken transactions as per the details given in the following chart; however despite making these financial transactions the assessee has not truly and correctly disclosed the quantum of transactions done during the year under consideration 4. Enquiries made by the AO as sequel to information collected / received Necessary verification was made from the entire details available on records and database of ITBA and Insight portal thereby, I have sufficient form of 'Reason to believe to frame my opinion. The information available....
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.... of being involved in providing accommodation entries of LTCG, Loss, Unsecured Loans etc. Data analysis coupled with circumstantial evidences led to discovery that 15 BSE listed scrips have been used for generating bogus LTCG and contrived losses. During investigation, sample trail of funds was also established wherein the infrastructure of shroffs and angadiyas was used by the duo for routing unaccounted funds of beneficiaries. The duo also admitted being involved in providing accommodation entries including bogus LTCG and contrived losses. Beneficiaries have been identified by analysis of data found during investigation. Perusal of such data revealed that the instant assessee i.e. CARE STOCK BROKING SERVICES is one such beneficiary of accommodation entry. The total income escaping assessment Rs. 89,28,079/- Thus, on perusal of the details available on record, it is noticed that during the previous year relevant to the assessment year under consideration, the assessee has undertaken financial transactions much beyond the taxable limit. However, the source of entering such huge transactions is not conclusively proved from the details and data collected during the course of....
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....fully & materially all the facts during assessment proceedings under section 143(3) of the Act. The said assessment was under complete scrutiny, 3. To render legality to the assumption of jurisdiction by the Assessing Authority under section 148/147 of the act, the formation of reason to believe by the Assessing Authority that any income of the Assessee has escaped Assessment is a sine qua non. Further, it is also necessary that the Assessing Authority must himself form such reasons to believe and must himself satisfied about escapement of Income. It is well settled legal position that reopening solely based on some borrowed information and some borrowed satisfaction without conducting any independent enquiry by the Assessing officer himself, is a complete nullity in the eyes of the laws and is void ab initio. 4. It is not a case of escapement of income or utmost in any case there can be change of the opinion in respect of law or facts of the record and case or it may be on account of some audit issue or incorrect/misleading/unverifiable information from any agency or the department and accordingly there is no direct live link with. 5. That the basis/rele....
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....8 of the Act, is against the scheme of the Act and therefore the notice issued under section 148 is bad in law and requires to dropped. 9. That in view of the aforesaid facts and circumstances of the case of validity of the notice issued by your good office is bad in law and we have preliminary objection against the said notice and therefore we request your good office to drop the proceedings and intimate to us at the earliest and oblige. ....." Thereafter, the Assessing Officer issued notice u/s 142(1) of the Act on 31.12.2021, which reads as under:- "Notice under sub-section (1) of Section 142 of the Income Tax Act, 1961 Kindly refer to ongoing assessment proceedings in your case for AY. 2016- 17 under Faceless Assessment Scheme, 2019. 2. We appreciate the anxiety and uncertainty that is facing all of us in the times of Cowid-19. This one uncertainly, which is pending e-Assessment in your case for the communication is to assist you in ME Assessment Year 2016-17 ...... ANNEXURE In connection with the assessment proceedings for A.Y. 2016-17, You are requested to furnish the following details. 1. Giv....
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.... Assessing Officer to establish that the assessee had in fact obtained accommodation entries of Rs. 89,28,079/- during the year under consideration. The reasons recorded merely proceed on a general premise that the assessee is "one of the beneficiaries" without demonstrating how and what is the alleged accommodation entry was routed to the assessee. At the stage of reopening, there must exist at least some prima facie evidence between the material relied upon and the formation of belief of escapement of income. Mere reference to third-party search findings, without independent examination of its applicability to the assessee's specific transactions, does not satisfy the statutory requirement of "reason to believe" u/s 147 of the Act. 11. Thus, on going through the reasons recorded, we find no nowhere as to, i. What are the accommodation entries received by the assessee? ii. What is the information available with the Assessing Officer? iii. Whether it is payment or receipt by the assessee? iv. What are the entities through which the assessee received the amount or the accommodation entries? v. What is the bank statement from which the ....