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2020 (1) TMI 257 - HC - Income TaxReopening of assessment u/s 147 - Addition u/s 68 - transactions of providing accommodation entries - whether AO has not independently applied his mind, and he has proceeded on the borrowed conclusions contained in the Investigation Report? - HELD THAT:- The petitioner does not deny the fact that it, indeed, had financial transactions with Moral, whereunder it received substantial amounts of ₹ 90.32 crores in FY 2011-12. Moral has been found to be indulging in provision of accommodation entries, and it appears that it carried out only that business and nothing else. There is nothing to show that while passing the assessment order, the Assessing Officer had examined the aspect of genuineness of the transaction undertaken by the petitioner with Moral. A perusal of the original assessment order shows that the Assessing Officer had accepted the claim made by the petitioner/ assessee with regard to the genuineness of the transaction without any scrutiny, and by accepting the statement of the petitioner as truthful. At that stage, the material information, which the petitioner withheld, and did not disclose, was that it was dealing with an entity who was engaged in the business of providing accommodation entries. Assessing Officer had very good reasons to believe that the amounts received by the petitioner from Moral also partake of the same colour as the other transactions of Moral undertaken with other entities. The whole business model of Moral, as is evident from the Investigation Report, was merely to rotate funds by resort to a process of layering through other entities such as M/s Brilliant Metals Pvt. Ltd., M/s Progressive Alloys (India) Pvt. Ltd, M/s Unnati Alloys Pvt. Ltd., M/s Forward Minerals & Metals Private Limited etc., taken note of in the Investigation Report. It appears from the Investigation Report that Moral had nothing to show for, to establish the undertaking of any genuine sale and purchase, of much less of the products that the petitioner claims to have sold to Moral. Argument on behalf of the petitioner that since the petitioner had fully disclosed the transactions undertaken with Moral, there is no suppression on the part of the petitioner and that it could not be said that income chargeable to tax had escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment in relation to the assessment year 2012-13 has no merit in the light of the above discussion, and in the light of the decisions cited hereinabove in the case of RDS Project Limited [2020 (1) TMI 89 - DELHI HIGH COURT] Mere production before the Assessing Officer of the Account Books, or other evidence, from which material evidence could, with due diligence, have been discovered by the Assessing Officer, would not necessarily amount to disclosure within the meaning of the First Proviso to Section 147. The Assessing Officer, while framing the assessment for the assessment year 2012-13 took the assessee SIPL for its word – when it claimed that the transactions undertaken by it with Moral were genuine sale transactions. However, that fundamental premise is now shaken, since Moral has been found to be a completely tainted entity embroiled in very large scale dubious transactions of providing accommodation entries. If the transactions undertaken by SIPL with Moral are indeed not genuine, as now reasonably believed by the Assessing Officer, it would not be correct to say that SIPL had disclosed fully and truly all the material facts for its assessment for the relevant assessment year. Despite the aforesaid being a gross case and despite the decision of the Supreme Court in NRA Iron & Steel Pvt. Ltd. [2019 (3) TMI 323 - SUPREME COURT] and our earlier decision in RDS Project Limited [2020 (1) TMI 89 - DELHI HIGH COURT] being brought to the notice of learned counsel for the petitioner, learned counsel for the petitioner continued to press the matter at the expense of judicial time, which could have been better utilised to deal with other pending cases. We are, therefore, inclined to subject the petitioner to costs for unjustifiably pressing the petition beyond a point. We, accordingly, dismiss this petition with costs of ₹ 1 lakhs to be paid to The Delhi High Court Advocates Welfare Trust. The costs shall be paid within four weeks of the receipt of this decision.
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