9911796707
TMI Blog2021 (3) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Wing that assessee has received accommodation entry but all the annexure seized during the course of search from S.K. Jain group of cases as discussed above did not implicate the assessee of receiving any accommodation entry. No material was found during the course of search as to how Sh. S.K. Jain group was controlling the investor companies or the companies provided loan to the assessee. Such fact is also not corroborated by any evidence or material, if found during the course of search. Thus, the AO recorded incorrect and wrong facts in the reasons recorded for reopening of the assessment. AO independently did not apply his mind to the information received from Investigation Wing and merely believed the same to be correct for the purpose of reopening of the assessment despite no specific material was found during the course of search against the assessee company. Whatever material was recovered during the course of search or any statement recorded during search in the case of S.K. Jain group of cases, such material was never supplied to assessee or confronted or given any right of cross examination to the assessee. Such material cannot be used against the assessee. AO has m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponse to notice u/s 148 of the Act. The AO noted that the return of income filed by the assessee shows that assessee has received share capital of ₹ 50 lakhs and unsecured loans of ₹ 2,10,84,386/- in assessment year under appeal. The AO referred to Annexure B in the assessment order which was recovered from Jain Brothers to show that on 04.05.2009 assessee company has received share capital of ₹ 25 lakhs each from two companies namely Euro Asia Mercantile Pvt. Ltd. and AD Fin Capital Services P. Ltd. through account payee cheques. The AO noted that on the basis of the seized document it was noticed that Jain Brothers have received ₹ 50 lakhs in cash from intermediary Sh. Vimal Bhageria for getting the said entry. The AO also referred to Annexure D which was also found from Jain Brothers which is extract from cash book forming part of seized material to show that cash receipt by the accommodation intermediary (Sh. Vimal Bhageria) of ₹ 50 lakhs from 01.05.2009 to 30.05.2009. The AO referred to modus operandi of Jain Brothers to provide accommodation entry in the assessment order and referred to order of the Ld. CIT(A) in their case the AO issued show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )-II (letter flagged as Annexure A) on the basis of search in the case of Sh. Surendra Kr. Jain group of cases (entry operator) New Delhi that during the FY 2009-10. It is informed that the aforementioned assessee has introduced its own money by way of taking bogus accommodation entries provided by Sh. S.K. Jain group of cases (entry operator) the details of accommodation entry amount received as beneficiary is given as under as provided by investigation wing: S.No. Beneficiaries Name of the Entry Provider Amount Total Amount 1. M/s Savita Holding P. Ltd. Sh. Surendra Kumar Jain Group 50,00,000/- 50,00,000/- I have perused the balance sheet of the assessee for the year ending 31.03.2010 and 31.03.2009 it is revealed therein that issued subscribed and paid up capital has increased by ₹ 50 lacs. In this regard I have also tallied the above with information details of the cheques/PO received by the above company, the amount the issuing company, the receipt company, middleman bank etc. as tabulated/reproduced below which are found totally with fresh share capital received as detailed below to. S.No. From company name To Company name Name of the issuin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in absence of any specific discussion on the material on the basis of which independent prima facie belief is reached that income has escaped assessment". Ld. Counsel for the assessee in support of the proposition of law regarding non-application of the mind by the AO on the reasons recorded relied upon the judgment of Delhi High Court in the cases of M/s RMG Polyvinyl (I) Ltd. (2017) 396 ITR 5 (Del.), M/s G & G Pharma India Ltd., 384 ITR 147 (Del.), M/s Signature Hotels P. Ltd., 338 ITR 0051 (Del.) and M/s SFIL Stock Broking Ltd., 325 ITR 285. 6.1 Ld. Counsel for assessee submitted that it is settled position of law that the reasons for reopening of the assessment must be complete and a self explanatory demonstration the application of mind by the AO of the relevant material in his possession. In support of his contention, he has relied upon the judgment of Delhi High Court in the case of Sabh Infrastructure vs. ACIT 398 ITR 198 (Del.). Lack of independent application of mind at the stage of recording reasons is also evidence from the fact that AO himself has tried during reassessment proceedings to support the conclusion of accommodation entries by relying upon various addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mshad Khan 395 ITR 265 (Del.), judgment of (P&H) in the case of Atlas Cycle Industries 180 ITR 319 and judgment of Bombay High Court in the case of Siemens Information System Ltd. 293 ITR 548. None of the annexure referred by the AO in the assessment order have any reference in the reasons for reopening of the assessment. The AO in the show-cause notice dated 23.02.2016 (PB 55) has stated that as per annexure A seized from S.K. Jain group shows that name of the assessee appears on this document having taken accommodation entry amounting to ₹ 17.05 crores from searched group. If such amount is correct, there were no reasons for the AO to mention only ₹ 50 lakhs in the reasons. Thus, the AO did not apply his independent mind to the information received from the Investigation Wing which has resulted into that sanction u/s 151 is also invalid. The AO did not take any action on the information received from Investigation Wing for about 2 years and did not verify the same and just repeated the same for the purpose of reopening of the assessment. He has relied upon the judgment of Hon'ble Delhi High Court in the case of Shri Rajiv Agarwal vs. ACIT 395 ITR 255 in which it was h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO later on received information from Investigation Wing that search was carried out in the case of S.K. Jain group of cases, wherein after detailed enquiry and examination of document seized during the course of search, it was found that the said persons have given accommodation entries to the assessee as per the list in which assessee is shown as one of the beneficiaries. The AO referred to annexure B and D and other material in the assessment order for justifying reopening of the assessment in the matter. The AO as per seized material noted that assessee has received accommodation entry of ₹ 50 lakhs from two parties in which intermediary was Sh. Vimal Bhageria. The AO recorded incorrect fact that Sh. Vimal Bhageria was intermediary because at the first page of the assessment order AO has mentioned that Sh. Vimal Bhageria is one of the Director of the assessee company. The AO also on the basis of the seized document found that Jain Brothers had received ₹ 50 lakhs in cash from Sh. Vimal Bhageria and referred to annexure D in the reassessment order, copy of which is also filed at page 69 and 70 of the Paper Book. Annexure D would reveal that cash is received by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share capital of ₹ 50 lakhs and unsecured loans of ₹ 2.10 crores in assessment year under appeal. Thus, there was no reason for the AO to mention in the reasons recorded for reopening of the assessment that there is an escapement of income on account of failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment. The above facts on record clearly show that during the course of search no specific material or evidence was found against the assessee for receiving any accommodation entry from S.K. Jain group of cases. The AO did not refer to any material found during the course of search against the assessee in the reasons recorded for reopening of the assessment. The AO believed the information received from Investigation Wing that assessee has received accommodation entry but all the annexure seized during the course of search from S.K. Jain group of cases as discussed above did not implicate the assessee of receiving any accommodation entry. No material was found during the course of search as to how Sh. S.K. Jain group was controlling the investor companies or the companies provided loan to the assessee. Such fact is also ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
