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TMI Blog2015 (8) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... nd circumstances, of the case, we are of the considered view that the A.O. has issued valid notice u/s 148 on the basis of material available with him and after prescribed procedure under law, therefore the issue raised is decided against the assessee Addition made u/s 143(3) for giving accommodation entries - Held that:- communication between the assessee and M/s Polo Leasing and Finance Pvt. Ltd goes to prove that none of them had any intention to sell or purchase the property in question. It is further observed that the conduct of M/s Polo Leasing and Finance in not confronting the assessee after receipt of notice dated 30.07.2004 that since it has not complied with clause 4 of the agreement to sell in question. It (assessee) has no right to forfeit the earnest money of ₹ 20 lacs. Factum of non challenging the locus of the assessee to forfeit the earnest money of ₹ 20 lacs by Polo Leasing and Finance Pvt. Ltd goes to prove that both the parties have entered into agreement to sell in question just to provide accommodation entry. So the agreement to sell in question is a sham transaction and ingenuine document. It is further noted that the assessee after issuing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . amounting to ₹ 20,03,000/- on 10.01.2003. Accordingly, notice dated 17.03.2010 u/s 148 of the Act was issued by the A.O. after recording reasons thereof and communicating the same to the assessee. The assessee field letter dated 10.04.2010 and raised objection in respect of issuance of notice u/s 148 of the Act and the same was disposed of vide letter dated 10.08.2010 by the A.O. after rejection the objection raised by the assessee. The assessee vide letter dated 10.04.2010 submitted that the return of income u/s 139(1) was filed on 02.12.2003 and the same may be treated as having been filed in response to the notice u/s 148 of the I. T. Act, 1961. 3. Proceedings on behalf of the assessee have been attended by Shri Srun Kausal, AR of the assessee. The assessing officer disposed off the objection by holding that the assessee filed details vide letter dated 20.11.2010 stating therein that the assessee had entered into an agreement to sell property located at 8-Aira Apartment, Kusumpi, Simla vide agreement dated 10.01.2003 with Polo Leasing and Finance Ltd, E-24, Tagore Market, Kirti Nagar, New Delhi for ₹ 60 lakh after receiving earnest money of ₹ 20 lakh vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O. as required by law. He further submitted that the action for reassessment u/s 148 can only be taken by the A.O. having jurisdiction over the assessee and not by anyone else with the reason to believe that income has escaped assessment, must be framed by the concerned officer alone and not by anyone else. On satisfaction of A.O. and formation of belief by him must be bona fide and after proper and objective application of mind by him to the facts and circumstances of the case and material on record. If the A.O. does not apply his mind in forming belief in objective manner, then the action in issuance of notice mechanically, is void ab initio. Ld. counsel for the assessee further submitted that the assessee has raised objections before the A.O. but the same have wrongly been rejected in a routine manner which is contrary to the decision of Hon ble Jurisdictional High Court in the case of CIT Vs SFIL Stock Broking Ltd., 325 ITR 285. He requested that the notice u/s 148 of the Act may be held to be without jurisdiction, illegal and void ab-initio and may be quashed. 9. Ld. D.R. strongly opposed the arguments advanced by the Ld. counsel for the assessee and stated that he A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Leasing and Finance Pvt. Ltd. is into the business of giving accommodation entries and the said information has been co-related with that of the uncontroverted facts and circumstances, the AO had reason to believe that the transaction of ₹ 20,03,000/- on the basis of agreement to sell is a sham transaction. In view of the above facts, Ld. CIT(A) upheld the addition made by A.O. After hearing both the parties and perusing the material on record and after perusing the orders of authorities below as well as the case law cited by the parties, we observed that the assessee has failed to show if he has made any effort to comply with the clause 4 of the agreement to sell in question to take necessary permission from the Himachal Pradesh Government to sell property in question to Polo Leasing and Finance Pvt. Ltd. being a non Himachali or a corporate body. Without necessary permission a non-Himachali or a corporate body cannot purchase property in Himachal Pradesh. So this fact goes to prove that the entire transaction qua agreement to sell in question was a bogus and frivolous one to provide credit entry to the assessee. The details of accommodation entry received are noted as under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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