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2016 (6) TMI 936 - ITAT DELHI

2016 (6) TMI 936 - ITAT DELHI - TMI - Reopening of assessment - receipt of accommodation entries - AO reopened the assessment on the basis of information of other persons - Held that:- AO in the reasons recorded mentioned that it had come to his knowledge that the persons from whom amount was received were entry operator and provided the entries to the assessee after receiving the amount in cash, however, nothing was brought on record that how and in what manner the persons from whom the assesse .....

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void-ab-initio and therefore the same is quashed - Decided in favour of assessee - ITA No. 6087/Del/2013 - Dated:- 3-6-2016 - Sh. N. K. Saini, AM And Smt. Beena Pillai, JM For the Assessee : Dr. Rakesh Gupta & Sh. Somil Agarwal, Advs For the Revenue : Sh. P. Dam Kanunjna, Sr. DR ORDER Per N. K. Saini, AM This is an appeal by the assessee against the order dated 19.08.2013 of ld. CIT(A)-XVI, Delhi. 2. Following grounds have been raised in this appeal: 1. That having regard to the facts and c .....

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and on facts in confirming the action of Ld. AO in making an aggregate addition of ₹ 7,50,000/- on account of share capital received from Sh. Vivek Aggarwal and M/s Globe Tech Solutions (P) Ltd. by treating it as unexplained cash credit u/s 68 of Income Tax Act, 1961. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of ₹ 15,000/- (2% of ₹ 7,50,000/-) on account of all .....

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CIT(A) has erred in law and on facts in confirming the action of Ld. AO in charging interest 234B, 234C and 234D of the Income Tax Act, 1961. 6. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 3. Ground No. 1 is legal ground vide which the assessee has challenged the validity of the reassessment proceedings u/s 147 of the Income Tax Act, 1971 (hereinafter referr .....

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have received accommodation entry in the garb of share application money/share capital. The AO initiated the reassessment proceedings u/s 147 of the Act and served the notice dated 30.03.2010 u/s 148 of the Act requiring the assessee to file the return of income within the time allowed in the said notice. The assessee vide a letter dated 08.06.2010 enclosing therewith copy of the acknowledgement of return filed u/s 139(1) of the Act alongwith photo copy of the Balance sheet, stated that the ret .....

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did not find merit in the submissions of the assessee on legal issue pertaining to the issuance of notice u/s 148 of the Act dated 30.03.2010 by observing in paras 4.3 & 4.4 of the impugned order as under: 4.3 The submission of the AR is that no addition can be made as the share capital has not emanated from the coffers of the assessee company, as there was no income to the assessee company before it came in to existence. That the amount received before the beginning of the previous year can .....

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ot require that Assessing Officer should have finally ascertained the fact of legal evidence or conclusion. The material required for conclusively proving the escapement of income is not concerned at the stage of reopening. Hon'ble Delhi High Court in the case of A.G. Holdings (P) Ltd. vs. ITO in W.P. (C) 8031/2011 and in the case of CIT vs. Nova Promoters & Finlease (P) Ltd (2012) 18 Taxmann.com 217 (Delhi) has held that at the time of issuing the notice to reopen the assessment, the As .....

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t and the Assessing Officer was justified in initiating the proceedings for reassessment by issuing notice u/s 148 after recording the reasons as required by law. 4.4 Further submission of the appellant is that proceedings have been initiated by the A.O blindly on the basis of information from investigation wing without his own satisfaction. The above contention of the appellant is without any merit. From the reasons recorded it is evident that information has been received from investigation wi .....

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p; Anr (Del) 333 ITR 146, Shalimar Buildcon (P) Ltd. Vs. ITO (ITAT, Jaipur) 136 TTJ 701. In view of the above, the submission of the appellant is not sustainable. 6. Now the assessee is in appeal. The ld. Counsel for the assessee submitted that the AO alleged in the reasons recorded that the persons from whom the amount was received were entry operator who provided the entry to the assessee after receiving the amount in cash. It was contended that the AO did not apply his own mind and acted on t .....

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order was furnished which is placed on the record. The reliance was also placed on the following case laws: M/s Banke Bihari Properties Pvt. Ltd. Vs ITO, Ward-4(1), ITA No. 5128/Del/2015 order dated 22.04.2016 Dhanuka Agritech Ltd. Vs ACIT, Circle-10(1), ITA No. 1003/Del/2014 order dated 11.05.2016 Vasundra Promoters Pvt. Ltd. Vs ACIT, CC-23, ITA No. 4014/Del/2014 order dated 28.04.2016 7. In his rival submissions the ld. DR strongly supported the orders of the authorities below and further sub .....

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t u/s 147 of the Act. The AO vide letter dated 02.07.2010 (copy of which is placed at page nos. 12 & 13 of the assessee s paper book) communicated to the assessee that the reasons recorded for issuing notice u/s 148 of the Act were as under: Information has been received from the Investigation Wing of the Income Tax Department that the above named assessee is a beneficiary of accommodation entries received from certain established entry operators identified by the Wing during the period rele .....

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the beneficiaries are ploughed back in its books of account in various forms including the form of bogus share capital/capital gains etc after routing the same through the bank accounts of the entry operators. Entry operators were identified after thorough investigation on the basis of definitive analysis of their identity, creditworthiness and the source of the money ultimately received by the beneficiaries. These entry operators are found to be mostly absconding/non-complying after the uneart .....

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ry giving Branch of entry giving bank A/C entry giving account SBI Neelam Bata Road, Faridabad 150,000 382034 25-Nov-02 Vivek Aggarwal Fed eral Bank Karolbagh 1468 SBI Neelam Bata Road, Faridabad 600,000 940690 25-Feb-03 Globe Tech Solutions Pvt . Ltd. KVB Karolbagh CA 332 The assessee has received unexplained sums from the entry operators as per the above details as per information available with the undersigned. As explained above, the identity, creditworthiness and genuineness of transactions .....

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rs, and no scrutiny assessment was completed in the case of the assessee for the said assessment year, the reasons recorded above for the purpose of reopening of assessment is put up for kind satisfaction of Addl. CIT, Range-13, New Delhi in terms of the provision to Section 151 of the Act. In view of the above, the Assessing Officer has the reasons to believe, that income of the assessee has escaped assessment during the year under consideration within the meaning of Section 147 of the Act and .....

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ng was brought on record that the assessee paid cash to the persons from whom the loans were taken and these were entry operator. 10. On a similar issue, their lordships of the Hon ble Jurisdictional High Court in the case of Principal Commissioner of Income-tax vs. G. & G. Pharma India Ltd. (supra) observed in paras 12 & 13 of the order dated 08.10.2015 as under: 12. In the present case, after setting off four entries, stated to have been received by the Assessee on a single date i.e. 1 .....

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that he talks about particularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the AO, if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the Assessee, which must have been tendered along with the return, which was filed on 14th November, 2004 and was processed under Section 143(3) of .....

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ave reasons to believe that the income of the Assessee escaped assessment is missing in the present case. 13. Mr. Sawhney took the Court through the order of the CIT(A) to show how the CIT(A) discussed the materials produced during the hearing of the appeal. The Court would like to observe that this is in the nature of a post mortem exercise after the event of reopening of the assessment has taken place. While the CIT may have proceeded on the basis that the reopening of the assessment was valid .....

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