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TMI Blog2015 (7) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 2002-03. Also in agreement with this observation of the learned CIT (Appeals) that although the assessee has submitted certain documents (not relevant to assessment year 2002-03), he has not been able to establish the genuineness of the transactions and creditworthiness of the creditors. CIT (Appeals) has correctly observed that by merely claiming that the credits were unsecured loans and by submitting confirmations from so called creditors, the genuineness of the transactions cannot be proved. In the instant case, the assessee has miserably failed to prove the creditworthiness of the alleged creditors as well as the genuineness of the transactions. There is no evidence on record to prove the above ingredients of cash credits - decided against assessee. - ITA No. 977/Chd/2012 (Assessment Year: 2002-03) - - - Dated:- 6-7-2015 - Shri H.L.Karwa, J. Appellant by: S/Shri Sudhir Sehgal Ashok Goyal Respondent by: Shri S.K.Mittal, DR ORDER H.L. Karwa, VP : This appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals)-II, Ludhiana dated 25.7.2012 relating to assessment year 2002-03. 2. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orthiness of the creditors. The Assessing Officer has also observed that the assessee could not produce any bank account statements of S/Shri Vipin Kumar and Ashok Kumar Vindal. The assessee also failed to prove the identity of these persons. The assessee also failed to produce his bank account statement for assessment year 2002-03. The assessee failed to discharge the onus, which is cast on the assessee under section 68 of the Act. Consequently, the Assessing Officer made an addition of ₹ 10,02,500/- under section 68 of the Act. 5. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the learned CIT (Appeals). The assessee challenged the validity of reopening of the assessment before the learned CIT (Appeals), and the learned CIT (Appeals) held that the reopening was valid. The relevant findings given by the learned CIT (Appeals) are reproduced hereinbelow : 4.3 I have carefully considered the appellant s submissions. The AO while reopening the case had recorded the following reasons:- As per information received from Director of Investigation (1), New Delhi, vide No.4273 dated 09.03.2006 through CIT-I, Ludhiana it is fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to believe that income escaped assessment. Communication received by an Assessing Officer for discharge of his official duties is valid information for issue of notice u/s 148. Reliance in this regard is placed on the case of Money Growth Investment Consultants (P) Ltd. v. ITO (2012) 71 DTR 3l7 (Delhi)(High Court) wherein it was held that material and information provided by Investigation Wing to the AO, on the basis of which he recorded reasons and reopened the assessment, throw considerable doubt on the veracity, correctness, completeness and truth of particulars furnished by the assessee at the time of the original assessment and therefore notice issued by AO under Section 148 was valid. Reliance in this regard is also placed on the following case laws:- i) Srinivasa Khandasari Udyog Vs. ITO (ITAT, Bang) 56 ITD 146 ii) ITO Vs. Purushotam Das Bangur Anr. (SC) 224 ITR 362 iii) Elphinstone Picture Palace Vs. Union of India Anr (Pat) 74 ITR 115 iv) H.A. Nanji Co.Vs. ITO (Cal) 120 ITR 593 v) Sohan Singh Vs. CIT (Del) 158 ITR 174 vi) Rattan Gupta Vs. CIT (P H) 234 ITR 220 The Hon'ble Punjab and Haryana High Court in the case of Rattan Gupta Vs. CIT (Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Ld. Counsel would, therefore, not help the case of the appellant. 4.6 As regards the appellant's contention that the notice was issued with the approval of CIT instead of JCIT, and is therefore bad in law, I do not agree with the same. Approval of JCIT is included while taking the approval of CIT. It is not the appellant's case that approval of JCIT had not been taken. Any proposal for approval of CIT goes through JCIT and JCIT's approval is therefore obtained before the proposal goes through to CIT. No prejudice has been caused to the appellant by issuance of notice with the approval of Commissioner of Income Tax. Moreover, it was not a defect which could not be cured under Section 292B of the Act, and the reassessment proceedings had been validly initiated. The Section 292B was inserted whereby no return of income, assessment, notice, summons or other proceeding shall be rendered invalid merely on account of any mistake, defect or omission where the return, assessment, notice, summons or other proceeding in substance and effect are in conformity with or according to the intention and purpose of the Act. By incorporating this provision, it has been made clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11282 05.03.02 5,01,250/- Shri Ishwar Dass Garg, Ludhiana 7. In view of the nature of the above entries and the amount involved, it appeared to be an entry of accommodation nature. In that view of the matter, the Assessing Officer formed an opinion that the assessee s income to the extent of ₹ 10,02,500/- has escaped assessment in terms of provisions of section 147 of the Act, and notice under section 148 of the Act, was issued to the assessee after recording reasons mentioned in para 4.3 of the order of learned CIT (Appeals) reproduced hereinabove. 8. In my opinion, the issue at hand is squarely covered against the assessee and in favour of the Revenue by the decision of this Bench of the Tribunal dated 15.6.2015 in the case of Ms.Sushila Singla Vs. ACIT, Circle-1, Ludhiana in ITA No.780/Chd/2012 relating to assessment year 2002-03. The facts of the present case are similar to the facts of the case of Ms.Sushila Singla (supra). In the case of Ms.Sushila Singla, the return was processed under section 143(1) of the Act. Subsequently, information was received from ACIT, CC-V, Ludhiana to the effect that his asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he validity of reopening of assessment as per the submissions noted herein above. As regards the scope of the expression reason in the phrase reason to believe and also the scope and effect of section 147 as substituted w.e.f. April 1, 1989, as also sections 148 to 150 has been considered by the Hon'ble Supreme Court in the case of ACIT v Rajesh Jhaveri (2007) 291 ITR 500 (SC) at page 511 512 and observed as under:- 16. Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase reason to believe would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 147. The case at hand is covered by the main provision and not the proviso. 18. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued. 10. In the instant case also the return was processed u/s 143(1) of the Act. In view of the above decision of the Hon'ble Supreme Court, if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment, it confers jurisdiction to reopen the assessment. In the case of ACIT v Rajesh Jhaveri the Hon'ble Supreme Court has observed that word reason in the phrase reason to believe would mean cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that income had escaped assessment. The Hon'ble Supreme Court further observed that expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. What ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to do at that stage is to form a prima facie opinion or belief that income has escaped assessment. The relevancy of the material before the Assessing Officer is to be judged only from that perspective and not from the perspective as to whether the material is sufficient or adequate to sustain the addition ultimately. That will be an aspect which the Assessing Officer will examine and decide in the course of the reassessment proceedings after hearing the assessee in the manner required by law. 11. In the above case, Investigation Wing provided the information along with cheque number and bank details that the assessee has taken cheque from entry provider and the Hon'ble Delhi High Court held that there is reason to believe prima-facie that income chargeable to tax had escaped assessment in the hands of the assessee. The Hon'ble High Court further held that material before the Assessing Officer was relevant and afforded a live link or nexus to the formation of the prima facie belief that income chargeable to tax had escaped assessment in the assessee s hands 12. In view of the above, I do not see any infirmity in the order of CIT(A) and hold that reopening of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the creditor to advance money; and iii) the genuineness of the transaction. 13. S/Shri Sudhir Sehgal and Ashok Goyal, learned counsel for the assessee submitted that during the course of assessment proceedings, the assessee had submitted the evidence to prove the identity, creditworthiness and genuineness of the cash credits. He further submitted that the authorities below have made the addition in the hands of the assessee merely on the basis that the assessee has not filed bank statement, which stand of the Revenue is not correct in law. He further submitted that the assessee has filed complete addresses, PAN Numbers of the parties and both the parties are assessed to tax. In my considered view, the assessee has not furnished the relevant evidence in order to prove the genuineness of the transactions and creditworthiness of the creditors. Copies of confirmations of the parties are available at pages 7 and 16 of the Paper Book. However, no date is mentioned on so-called confirmations. The assessee has submitted the copy of acknowledgement of wealth-tax return and copy of acknowledgement of income-tax return of Shri Ashok Kumar Vindal. These documents are available at pag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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