9911796707
TMI Blog2021 (10) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the assessee are directed against the separate orders dated 28.12.2018 & 14.11.2018 passed by the Ld. CIT(A)-2 & 9, Ahmedabad arising out of the separate orders dated 22.12.2017 & 07.11.2017 passed by the ITO, Ward-2(1)(2) & 3(1)(3), Ahmedabad under Section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred as to "the Act") for the Assessment Year (A.Y.) 2010-11 & 2012-13. ITA No. 112/Ahd/2019(A.Y. 2010-11):- 2. On the basis of certain information received from DGIT (Investigation), Mumbai that search under Section 132 of the Act was conducted in the case of one Praveen Kumar Jain on 01.10.2013 incriminating material whereof were seized and on the basis of the statement recorded during search of Shri Praveen Kumar Jain where he has accepted that he has engaged in providing accommodation entries of bogus unsecured loans bogus share application/capital etc. wherein the assessee was also found to be one of these beneficiaries who has taken accommodation entries by way of share application money to the tune of ₹ 20 lakh during F.Y. 2009-10 relevant to A.Y. 2010-11 from the bogus companies operated by Shri Praveen Kumar Jain reopening of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he introducers of the share application money are found to be bogus by investigation wing. It is also seen (as tabulated below) from the returns of income (ROI) of assessee company that in preceding and following assessment years, the assessee does not have profits to warrant such large amount of share application money. A.Y. Date of ROI filed ROI (In Rs.) 2007-08 26.10.2007 0 2008-09 26.09.2008 0 2009-10 27.09.2009 1225/- 2011-12 07.09.2011 12597/- 2012-13 25.09.2012 26S92/- In view of the above facts, I have reason to believe that there is failure on the part of the assessee company to disclose fully and truly all material facts for the assessment year under consideration. The above amount of ₹ 20 Lakhs stated to have been received from above entities is merely accommodation entries and hence, income to the tune of ₹ 20 lakhs has escaped assessment for the A.Y. 2010-11. Therefore, it is a fit case for reopening of this assessment by invoking the provisions of section 147 of the Income tax Act, 1961. Accordingly, notice u/s. 148 of this Act is issued." 3. It appears that the assessee company received the share application money from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged if any given by him vide his affidavit dated 15th day of May, 2014 for the reasons stated in the said affidavit, the assessee company made efforts to obtain the said affidavit and submitted to you by our letter dated 17 J 1.2017, therefore the statement of Praveen Kumar Jain, if any given by him but copy has not been provided to us, is Null and Void and does not have any value in the eyes of law and no addition can be made only on the basis of any such vague statements or finding thereon, if any. n) That the assessee company most respectfully submitted that it rebut all the allegation made by you in your reasons recorded on 20/03/2017 for reopening of the completed assessment on the basis of facts mentioned above. It has also requested your good self to provide the report and statements of Praveen Kumar Jain if any as stated in your above referred letter for further rebuttal once the report/statement of the Praveen Kumar Jain is provided but you did not provide either any such report or any such statement of Praveen Kumar Jain. The assessee company has also requested your good self to provide an opportunity to cross examine the said Praveen Kumar Jain in person to rebut fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;reasons to believe' were not in fact reasons but only conclusions, one after other-Expression 'accommodation entry' was used to describe information set out without explaining basis for arriving at such conclusion-Statement that said entry was given to Assessee on his paying "unaccounted cash" was another conclusion basis for which was not disclosed-Thus, crucial link between information made available to AO and formation of belief was absent-Court was not inclined to interfere in above circumstances in exercise of its writ jurisdiction to quash proceedings- Careful perusal of reasons revealed that AO did not merely reproduce information but takes effort of revealing what was contained in investigation report specific to Assessee-AO made no effort to set out portion of investigation report which contained information specific to Assessee, he did not also examine return already filed to ascertain if entry had been disclosed therein-AO was not merely reproducing information received from investigation but took effort of referring to deposition made during survey by Chartered Accountant that Assessee company was involved in giving and taking of bogus entries-AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer/CIT(A). The Hon'ble Supreme Court in the case of Andaman Timber Industries in Civil Appeal No. 4228 of 2006 was seized with the following action of the Tribunal:- "6. The plea of no cross examination granted to the various dealers would not help the appellant case since the examination of the dealers would not bring out any material which would not be in the possession of the appellant themselves to explain as to why their ex factory prices remain static. Since we are not upholding and applying the ex factory prices, as we find them contravened and not normal price as envisaged under section 4(1), we find no reason to disturb the Commissioners orders." 15. The Hon'ble Apex Court held as under:- "According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of tire Commissioner was based upon the statements given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus, set aside the impugned order as passed In the Tribunal and allow this appeal." 9. Since statement of Shri P.K. Jain was not supplied to the assessee on the basis of addition was made and in the absence of said statement assessee could not cross examine to Shri P.K. Jain and same is amount to miscarriage of justice despite of the fact that assessee made a formal request to the lower authorities. In our considered opinion and after considering the aforesaid judgment, no addition can be made on the basis of which violate principle of natural justice." 6. We find that the fact in the above matter is identical to that of the case before us and the issue therein as well. Thus, in the absence of any changed circumstances respectfully relying upon the same we find no merit in making addition in the reassessment proceeding under Section 68 of the Act particularly for non-supply of the report of the enquiry to the assessee and not affording opportunity to the assessee to cross-examine the searched person which goes to the root of the matter. We do not find any basis in such proceeding and hence the same is hereby quashed. Consequently, the addition made therein is hereby ..... X X X X Extracts X X X X X X X X Extracts X X X X
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