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ICL Sales & Services (P) Ltd Versus ITO, Ward-11 (3) , New Delhi

2015 (8) TMI 885 - ITAT DELHI

Reopening of assessment - bogus accommodation entry - Held that:- A.O. has recorded the reasons which had very much linked with the material in possession of the A.O. and the assessee has not pointed out any infirmity in the reasons recorded by the A.O. before reopening of assessment u/s 147 of the Act. After perusing the orders passed by Revenue authorities, specific information from IT (Inv.) regarding bogus accommodation entry worth ₹ 20,.03,000/-, the notice was issued by the A.O. to t .....

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elaborately discussed and decided by passing speaking order by the A.O. In view of the facts and circumstances, of the case, we are of the considered view that the A.O. has issued valid notice u/s 148 on the basis of material available with him and after prescribed procedure under law, therefore the issue raised is decided against the assessee

Addition made u/s 143(3) for giving accommodation entries - Held that:- communication between the assessee and M/s Polo Leasing and Finance Pvt .....

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lacs by Polo Leasing and Finance Pvt. Ltd goes to prove that both the parties have entered into agreement to sell in question just to provide accommodation entry. So the agreement to sell in question is a sham transaction and ingenuine document. It is further noted that the assessee after issuing the notice dated 30.07.2004 asking M/s. Polo Leasing & Finance Pvt. Ltd. to get the sale deed executed before the date fixed, failing which earnest money of ₹ 20 lacs shall be forfeited, has neve .....

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ent of sale in question is proved to be a sham transaction having been prepared to provide accommodation entry and as such, the question of providing protection to the same u/s 51 of the Income Tax Act does not arise. - Decided against assessee. - ITA No.800/Del/2012 - Dated:- 14-8-2015 - SHRI R. S. SYAL AND SHRI H. S. SIDHU, JJ. For The Appellant by : Shri G. N. Gupta, ITP For The Respondent by : Shri T. Vasanthan, Sr. DR ORDER PER H. S. SIDHU, JM: The assessee has filed the present appeal agai .....

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dition of ₹ 20,03,000/- made by Assessing office u/s 143(3) of the Income Tax Act, 1961. 3. That the ld CIT(A) has erred in not disposing off ground No.4 regarding charging of interest u/s 234B of the Income Tax Act, 1961. 2. Briefly stated facts of the case are that the assessee has filed return of income on 02.12.2003 declaring a loss of ₹ 1,11,850/- and the A.O. processed the same u/s 143(1) of the I. T. Act, 1961. The case of the assessee was selected for scrutiny on the basis of .....

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de letter dated 10.08.2010 by the A.O. after rejection the objection raised by the assessee. The assessee vide letter dated 10.04.2010 submitted that the return of income u/s 139(1) was filed on 02.12.2003 and the same may be treated as having been filed in response to the notice u/s 148 of the I. T. Act, 1961. 3. Proceedings on behalf of the assessee have been attended by Shri Srun Kausal, AR of the assessee. The assessing officer disposed off the objection by holding that the assessee filed de .....

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ount received by the assessee company is a cash credit but on account of advance towards sale of property located at Simla which appears in the balance sheet under the head Current Liabilities as advance against the sale of property. The AO has however held that the assessee has channelized its own money in the shape of money received against the property with the help of the Polo Leasing and Financing Pvt. Ltd as mentioned above and to give colour accommodation entries in the name of this party .....

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ssee challenged the impugned order by contending inter alia that the information received by the AO from the DIT(I) was incorrect, the impugned order has been passed by the AO without applying his mind, the amount of ₹ 20 lakh was taken as advance by the assessee and that the AO had no reason to believe that the income has escaped assessment. 6. On the other hand the ld. DR replied the contention made by the ld AR by contending inter alia that objections raised by the appellant were duly r .....

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ground No.1 which is regarding validity of notice u/s 148 of the I. T. Act, 1961, issued by A.O., Ld. A.R. submitted that the notice was issued on the basis of communication received from DIT (Inv.) without application of mind by the A.O. as required by law. He further submitted that the action for reassessment u/s 148 can only be taken by the A.O. having jurisdiction over the assessee and not by anyone else with the reason to believe that income has escaped assessment, must be framed by the co .....

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same have wrongly been rejected in a routine manner which is contrary to the decision of Hon ble Jurisdictional High Court in the case of CIT Vs SFIL Stock Broking Ltd., 325 ITR 285. He requested that the notice u/s 148 of the Act may be held to be without jurisdiction, illegal and void ab-initio and may be quashed. 9. Ld. D.R. strongly opposed the arguments advanced by the Ld. counsel for the assessee and stated that he A.O. has decided the objections raised y the assessee by passing speaking .....

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sufficient evidence available on record. He requested hat the issue raised by the assessee in ground No.1 may be dismissed by upholding the order passed by A.O. 10. We have heard both the parties and perused the material available on record. We are of the considered view that the A.O. has recorded the reasons which had very much linked with the material in possession of the A.O. and the assessee has not pointed out any infirmity in the reasons recoded by the A.O. before reopening of assessment .....

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of evidence available with him and reopening of the assessment in the case of the assessee and he has also provided reasons recorded to the assessee against which the assessee has raised objection and the same was elaborately discussed and decided by passing speaking order by the A.O. In view of the facts and circumstances, of the case, we are of the considered view that the A.O. has issued valid notice u/s 148 of the I. T. Act, 1961 on the basis of material available with him and after prescri .....

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stances, the AO had reason to believe that the transaction of ₹ 20,03,000/- on the basis of agreement to sell is a sham transaction. In view of the above facts, Ld. CIT(A) upheld the addition made by A.O. After hearing both the parties and perusing the material on record and after perusing the orders of authorities below as well as the case law cited by the parties, we observed that the assessee has failed to show if he has made any effort to comply with the clause 4 of the agreement to se .....

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eived are noted as under: BENIFICIARY BANK NAME BENFICIARY BANK BRANCH VALUE OF ENTRY TAKEN INSTRUMENT NO. BY WHICH ENTRY TAKEN DATE ON WHICH ENTRY TAKEN NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT BANK FROM WHICH ENTRY GIVEN BRANCH OF ENTRY GIVING BANK A/C NO ENTRY GIVING ACCOUNT CBI GREATER KAILASH-11 2003000 16691 10-Jan-03 POLO LEASING & FINANCE P. LTD. PATNAKAR KAROL BAGH 169 2003000 12. Looking into the above facts, we observed that there is not an iota evidence brought on record by .....

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eipt of notice dated 30.07.2004 that since it has not complied with clause 4 of the agreement to sell in question. It (assessee) has no right to forfeit the earnest money of ₹ 20 lacs. Factum of non challenging the locus of the assessee to forfeit the earnest money of ₹ 20 lacs by Polo Leasing and Finance Pvt. Ltd goes to prove that both the parties have entered into agreement to sell in question just to provide accommodation entry. So the agreement to sell in question is a sham tran .....

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