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TMI Blog2014 (10) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that the A.O. was justified in initiating the proceeding u/s.147 of the I.T. Act, 1961 by issuing notice under section 148 of the I.T. Act for the present assessment year and making addition u/s.68 & 69 of the I.T. Act, 1961. 2. That on the facts and in the circumstances of the case, the learned CIT(A) erred in holding that the Appellant should have complied with the requisition issued by the A.O. completely ignoring the fact that the appellant was disputing the validity of the notice issued under section 147 of the Act itself as issued by the Ld. A.O. 3. That on the facts and in the circumstances of the case, the learned CIT(A) erred in holding that the proceeding was not reopened only on the basis of the statement of Shri Suresh Kejriwal and was reopened on further material available with the A.O. 4. That on the facts and in the circumstances of the case, the learned CIT(A) erred in holding that the case laws relied on by the appellant were not applicable with the case of the appellant. 5. That on the facts and in the circumstances of the case, the learned CIT(A) erred in confirming the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Kejriwal had identified 13 parties to whom he had allegedly provided the financial managements. It was a submission that the assessee's name was nowhere in the said list. A copy of the statement of Shri Suresh Kejriwal, as referred to by the ld. A.R. is extracted below. Statement of Shri Suresh Kejriwal, Director of Saket Vinimay Pvt. Ltd. at 12, Sir Hariram Goenka Street, Kolkata-700 007 aged about 46 years residing at 261, Chittaranjan Avenue, Kolkata-700069 recorded u/s.131 of the Income Tax Act, 1961 at Aayakar Bhawan Annexe, P-13, Chowringhee Square, 5th Floor, Kolkata*700069 on 26.02.2010. I, Suresh Kejriwal, s/o Late Hari Prasad Kejriwal Aged 47 years Do Swear in the Name of God that I shall speak the truth, the whole fact and noting But trust. (Oath Administered by) Sd/- (Oath Taken from) 26-2-2010 Q.1. Please identify yourself? Ans. I, Shri Suresh Kejriwal son of Late H.P. Kejriwal, aged about 46 years residing at 261, Chittaranjan Ayenue, Kolkata- 700 069. I am also the Director of Saket Vinimay Pvt. Ltd. at 12. Hariram Goenka Stree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plete sheet of Saket Hisab maintained in impounded CPUANSPL/4 impounded from Yuthika Vyapaar Pvt. Ltd. at P- 41, Princep Street, 6th Floor, Room No.611&612, Kolkata - 700 072 during the course of survey on 05.11.2009 which contains name of various parties to whom accommodation entries have been provided. Out of those parties the main parties who have taken accommodation entries from Saket Vinjmay and other two companies Subham Fan (India) Pvt. Ltd, and Oliver Moulds and Plastics Pvt. Ltd. and one firm Ayush Enterprises after paying 30 paise jama Kharchi to the said concerns run by you from the F.Y. 2003- 04 to 2007-08 1. DR Plastics 2. Mani Shankar Properties 3. Mani Vills Properties Pvt.Ltd. 4. Mani Enclave Pvt. Ltd. 5. Mani Hirise Pvt. Ltd. 6. Mani Kunj Pvt. Ltd. , 7. Mani Matrix Villa (P) Ltd. 8. Manidipa Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derstood to the Shri Suresh Kejriwal in Hindi also. Sd/- A.O. 4.1 It was a submission that the assessee had objected to the reopening by specifically mentioning that the reopening could not be done on the basis of the statement of Shri Suresh Kejriwal. It was a submission that this objection of the assessee in respect of reopening was refuted by the AO vide letter dated 16.12.2013 wherein in para 10 of the said letter, the AO had further improved on the reasons recorded by stating that the reopening was not only based on the statement of Shri Suresh Kejriwal but was supported by an electronic storage device impounded in the course of survey. It was thus the submission that at the outset, the reopening was not valid in so far as no cross-examination of Shri Suresh Kejriwal had been provided to the assessee. It was a further submission that the so-called statement of Shri Suresh Kejriwal did not contain the name of the assessee much less there being any reference to the assessee. It was a further submission that the statement having no reference to the assessee had also been brought to the notice of the AO and the AO had done nothing further. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of accommodation entries and commission paid thereof. (ii) The Ld. AR submitted that Sri Sanjay Jhunjhunwala, in his statement recorded during search proceedings, had categorically submitted that they have never entered into any jama khanchi transaction with the so-called Suresh Kejriwal. The A.R. further stated that the search has revealed that the applicant company has been borrowing heavily from the market through the finance brokers both in cheque and in cash. As such, there was no question of indulging into entry transactions, which was resorted by persons having surplus, and more spare black money, whereas in case of the applicant company there was shortage of funds. He further stated that it may have been possible that loans might have been provided by third parties in name of the lending parties in connivance with Mr Kejriwal. Neither the applicant company was aware of any such thing nor was it aware of the details of lending parties since the loans were received through the brokers. Moreover, most of the loans were repaid back when in case of jama kharchi transactions, such entries of loans are carried from year to year. Mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown to support the reasons for reopening that the assessee had received any accommodation entries in the form of loan from Shri Suresh Kejriwal. It was a submission that in fact, Shri Suresh Kejriwal had referred to many of the concerns in the Mani Square Ltd. group but the assessee's name was conspicuous by its absence. It was the submission that the nexus and the live link between the reasons recorded and the so-called information which gave the ground for reopening, being not there in the case of the assessee, the reopening was liable to be annulled. 4.3 In regard to the merits, it was a submission that though the ld. CIT(A) has mentioned that the assessee had not raised any argument on merits, the written submission filed by the assessee before the ld. CIT(A) clearly referred to the merits and the remand report of the AO on the written submission filed by the assessee did not controvert any of the submissions of the assessee in regard to merits. It was a submission that the loan had been taken from M/s.Saket Vinimay Pvt. Ltd. The loan carried an interest rate of 9 percentage. TDS was deducted and deposited with the Central Government. The loan was taken between October, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Pvt. Ltd., Saket Vinimay Pvt. Ltd. and Oliver Moulds and Plastics Pvt. Ltd. were found, in which some financial arrangements have been made. For this financia1 arrangements some commission/brokerage were earned which are unaccounted. I, Suresh Kejriwal, being a director of saket Vinimay Pvt Ltd., used to operate these three companies and one Firm from the said survey premise. I am also maintaining and managing the affairs of Oliver Moulds and Plastic Pvt. Ltd. and Subham & India Pvt. Ltd and one firm Ayush Enterprises. However, I am neither the Director of the above two companies nor the proprietor of the said enterprises. During the survey, computer print outs have been taken out wherein the statement of financial transaction entered between different companies, firms are mentioned belongs to me and my companies, The income arising based on such impounded document has been earned in the ordinary course of business which are not accounted in our books.. Out of the total income earned so, the three companies and one firm have received only Rs. 1.25 crore remaining income is due. It is further stated that this type of business does not e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, assessee's name must be the main person that Shri Suresh Kejriwal would have remembered, as the assessee is the person to whom such a huge loan had been extended. But the assessee's name is conspicuous by its absence in that list. Thus, the reference to the statement recorded from Shri Kejriwal for the purposes of reopening in the case of the assessee again fails without a foundation, as the assessee's name is nowhere referred to in the statement recorded on the confessional disclosure. Similarly, even if an attempt to protect the reopening is made by reference to the disclosure made by Shri Kejriwal even there, there is no reference to the assessee. Thus, prima facie, there is no live link nor direct nexus to the statement of Shri Kejriwal of having provided any accommodation entry to the assessee before us. On this ground itself, the reopening is liable to be held to be bad in law and we do so. 6.1 Coming to the improvement to the reasons recorded, as has been alleged by the ld. AR by referring to the letter of the AO dated 06.12.2013, we are unable to give any support to the reopening in so far as such computer extract is not found in the assessment records nor has it been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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