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TMI Blog2014 (2) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... l disclosure of facts in regard to either the credit worthiness of the companies which made the investments or the genuineness of the transaction - From the reply which was furnished by the assessee during the course of the assessment proceedings, it does not emerge that the assessee had discharged the onus of establishing the credit worthiness of the companies which had ostensibly invested the amount or in regard to the genuineness of the transaction - though the reopening of the assessment is beyond the period of four years but the Assessing Officer was satisfied that the condition stipulated in the first proviso to Section 147 was duly fulfilled – thus, there was no illegality in the order of the AO or in the Notice issued u/s 148 r.w s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... many as 90 bogus private limited companies and firms for providing accommodation entries to the beneficiaries. The Directors of these companies were his employees who had worked in his office as peons and receptionists. A number of bank accounts were opened in the name of these companies and its employees in which huge cash deposits were made. Cheques were then issued to certain beneficiaries, disguising the transactions as genuine. The ADIT (Investigation) prepared a list of beneficiaries of such accommodation entries for the Assessment Years 2004-05 upto 2009-10. In this context, the reasons which have been recorded under Section 148 state that the petitioner-M/s. Pankaj Hospital Ltd. is one of the beneficiaries which had taken the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en stated that in response thereto the assessee had by its letter (Annexure 3) made a disclosure including that in regard to the four companies which are now alleged to be bogus. Hence, it has been submitted that there was no failure on the part of the assessee to disclose fully and truly all the necessary facts relevant to the assessment and in view of the proviso to Section 147(1), the reopening of the assessment beyond the period of four years is contrary to law. Moreover, it has been urged that when a search had been conducted on the office of the Chartered Accountant in 2008, there was no justification for the department to wait for a period of more than four years before reopening the assessment. On the other hand, it has been subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court in Assistant CIT Vs. Rajesh Jhaveri Stock Broker Pvt. Ltd.2 has held, means a cause or justification. If the Assessing Officer has a cause or justification to know or suppose that income had escaped assessment, he can be said to have reason to believe that income had escaped assessment. The Supreme Court has held that the expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. At that stage what is required is 'reason to believe' and not the establishment of escapement of income. Whether the materials would conclusively prove an escapement of income is not the concern at that stage. Now, it is true that during the course of the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within his control and in which the Directors were his own employees only for the purpose of providing accommodation entries in favour of various beneficiaries. Among the beneficiaries is the petitioner to whom a payment of Rs.2.21 crores was made through the four companies which created a conduit. Whether it is actually so, is a matter of fact which would have to be determined in the course of the proceedings after the assessment is reopened. At this stage, the only issue before the Court is to whether there was reason to believe that any income chargeable to tax had escaped assessment. From the reply which was furnished by the assessee during the course of the assessment proceedings, it does not emerge that the assessee had discharged the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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