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TMI Blog2019 (10) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... reopening of the assessment, all relevant facts leading to belief are justified. Sufficiency of those material is not necessary. On making further enquiry into the matter, it is specifically found that cash were deposited in the Bank accounts of entry providers from where the amounts in question have been transferred to the account of the assessee. Therefore, there is escapement of income chargeable to tax on account of assessee s failure to furnish full and true particulars. Since in this case return was only processed under section 143(1), therefore, A.O. was justified in reopening of the assessment on bringing the material on record that there was an escapement of income from assessment in the matter. No infirmity have been pointed-out in the Orders of the authorities below for initiation of re-assessment proceedings in the matter. No justification to interfere with the Order of the Ld. CIT(A) in upholding the initiation of re-assessment proceedings in the matter. - Decided against assessee Addition u/s 68 - several entries provided by the entry providers which were not explained by the assessee, which were entered into the Bank account of the assessee - HELD THAT: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment stage. However, the A.O. noted that for initiation of action under section 148 have been conveyed to the assessee and hence, the allegation of the assessee are incorrect. The assessee was asked to produce the principal officer of the following company from whom the accommodation entries were taken :- 1. Arun Finvest Pvt. Ltd., ₹ 15 lakhs on 17.03.2001. 2. Polo Leasing Finance P. Ltd., ₹ 10 lakhs on 17.03.2001. 2.1. The assessee did not file any reply on the date fixed. Bank statements of above said companies were called for under section 133(6) of the I.T. Act, 1961 for the financial year under appeal, which were placed on record. The Bank statements of the assessee was also received in response to notice u/s 133(6). On going through the Bank statement of the assessee with Bank of America DLF Centre Sansad Marg New Delhi, it was noticed that the assessee received following entries from entry providers. 17.10.2000 5,00,000/- 30.10.2000 38,50,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation received from the DIT (Inv.), it was noticed that the Directors of the above accommodation entry provider Companies had admitted before Investigation Wing that the said companies were utilised for providing accommodation entries. The A.O. in view of the above facts and looking to the non-cooperation of the assessee, added the amount under section 68 of the I.T. Act, 1961. As per the balancesheet of the assessee, the share application money at ₹ 58,97,200/- was pending for allotment on 31.03.2000. During the year under assessment the assessee allotted shares for ₹ 20 lakhs and ₹ 30,72,200/- was still pending as share application money. It means the balance amount of ₹ 8,25,000/- was refunded to the investors during the relevant A.Y. 2001 -2002. From the Bank Account of the assessee, no such entry of ₹ 8,25,000/- is appeared. It was, therefore, noted that the assessee has refunded the amount in cash, the source of which is not explained. The A.O, therefore, made further addition of ₹ 8,25,000/- on account of unexplained refund of share application money. The assessee challenged the reopening of the assessment as well as addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Karol Bagh 598 The above mentioned amount of ₹ 25,00,000/- were credited in the said account of the assessee. The report received from the DIT (Inv.) revealed that the enquiries were initiated to probe into some Bank account which were used to issue cheques to entry seekers or beneficiaries against cash paid by them to the entry operators. The assessee company has received entry from Ms Arun Finvest Pvt. Ltd. and M/s Polo Leasing and Finance Pvt. Ltd. and these companies were utilizing for providing accommodation entry by Sh. Ashok Kumar Gupta. Sh. Baldev RajK Mukesh Gupta, Sunder Pal Singh and Rajan Jaiswal has operated number of Bank accounts. The Balance Sheet filed along with the return of income shows that there is increase in authorized capital of ₹ 10,00,000/- as compared to immediate preceding year. During the year under consideration, assessee has also made the investment in a new property of ₹ 46,95,000/-. The information sent by the Investigation Wing suggest that there is transaction of ₹ 25,00,000/- as mentioned above, is accommodation entry only. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under section 148 was also issued after 04 years. The Ld. CIT(A) also noted that in the case of assessee sufficient material is available on record which are adequate enough to form the belief that income chargeable to tax has escaped assessment on account of assessee s failure to furnish full and true particulars in the return of income filed by assessee. The Ld. CIT(A) also relied upon Judgment of Hon ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers Pvt. Ltd., 291 ITR 500 in which similarly reopening was held to be valid where return was only processed under section 143(1)(a) of the I.T. Act. The Ld. CIT(A) also relied upon Judgment of Hon ble Supreme Court in the case of Purushottam Das Bangur 224 ITR 362 (SC) wherein it was held that based on information received from investigation wing, the Assessing Officer can without any further investigation form the belief that income chargeable to tax had escaped assessment. In the present case, the information received by the Assessing Officer from investigation wing was specific that accommodation entries were received by the assessee and the information mentioned the Bank Account no, instrument no. etc of the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of Hon ble Supreme Court in the case of ACIT vs., Rajesh Jhaveri Stock Brokers (P.) Ltd., [2007] 291 ITR 500 [SC] in which it was held as under : Where Hon ble Supreme Court held that so long as the conditions of section 147 are fulfilled, the Assessing Officer is free to initiate proceedings 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) has been issued. ADANI EXPORTS v. DCIT [1999] 240 ITR 224 (Guj) was distinguished. 5.3. Judgment of Hon ble Delhi High Court in the case of A.G. Holdings Pvt. Ltd., vs. ITO 21 taxmann.com 34 [Del.] [HC] in which it was held as under : Where held that there is no requirement of law that reasons recorded for initiating reassessment procedure, should also accompany notice issued under section 148. 6. We have considered the rival submissions. In this case the A.O. has received specific information from Investigation Wing that assessee has received accommodation entries from two parties, the details of the same are mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 3, assessee challenged the addition of ₹ 50 lakhs under section 68 of the I.T. Act, 1961. 8. The A.O. made addition of ₹ 1,31,30,000/- under section 68 of the I.T. Act in respect of several entries provided by the entry providers which were not explained by the assessee, which were entered into the Bank account of the assessee. 9. The assessee submitted additional evidences before Ld. CIT(A) explaining various credits appearing in their Bank account with Bank of America, details of same are noted at page-19 of the impugned order. The Ld. CIT(A) noted from these details that documentary evidences submitted regarding the sale of shares of BLS Polymers Ltd., to M/s. Suma Finance Investment Ltd., Arun Finvest (P) Ltd. and Polo Leasing Finance (P) Ltd. are letters issued in assessee s letter head to the Directors of the above 03 companies requesting them to accept share certificates and requesting them to issue acknowledgment of receiving share certificates to the assessee. The Ld. CIT(A) also noted that there is no PANs, Bank statements or Income-tax particulars of the above three accommodation providers, namely Suma Finance Inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has shown inability to produce any of the Directors or responsible person of these 03 companies for production and examination before A.O. as well as before Ld. CIT(A). The Ld. CIT(A), therefore, noted that despite there was no additional evidences, assessee did not furnish adequate evidence in respect of these 03 parties and has failed to get the transactions verified. The Ld. CIT(A) relied upon decision of Hon ble Delhi High Court in the case of M/s. Titan Securities 215 Taxman 164 (Del.) in which on the similar circumstances, addition have been confirmed. The Ld. CIT(A) in the absence of any reliable evidence in respect of these 03 accommodation entry providers namely Suma Finance Investment Ltd., Arun Finvest (P) Ltd. and Polo Leasing Finance (P) Ltd., confirmed the addition of ₹ 50 lakhs. 10. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that assessee filed confirmations and amounts have been received through Banking channel, therefore, addition should not have been confirmed. He has further submitted that assessee has sold the shares at face value [PB-24] and referred to PB-20 on the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese are good in number and ultimately, addition was made on 03 accommodation entry providers. The Ld. CIT(A) in his findings has specifically noted that despite entertaining the additional evidences, assessee did not furnish any adequate/evidence while filing additional evidences in respect of these 03 parties. The assessee failed to produce necessary details of these 03 accommodation entry providers and also shown inability to produce any of the Directors or responsible person of these 03 accommodation entry providers for examination before A.O. Therefore, in the absence of any adequate evidence and that assessee did not produce any of the responsible person or Directors of these 03 accommodation entry providers, the authorities below were justified in taking an adverse inference against these parties, particularly, when similar amount of cash was found deposited in their Bank accounts prior to giving cheque to the assessee. Therefore, even if some statements have been recorded by Investigation Wing and copies thereof have not been provided to assessee, but, there was sufficient material available on record to show that these were bogus transactions because assessee received accom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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