TMI Blog2016 (7) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... 07-2008, the petitioner filed return of income on 15.11.2007. Such return was accepted without scrutiny in terms of section 143(1) of the Income Tax Act, 1961 ( the Act for short). To re-open such reassessment, the Assessing Officer issued the impugned notice. He has recorded following reasons for issuing notice for re-opening. Assessee has filed return of income on 15.11.2007 at total income of ₹ 13,22,04,630/-. The return was processed under section 143(1) of the I.T. Act. Further information has been received from from DDIT(Inv)-III(2), Mumbai that that a search and seizure action was carried out in the case of Shri Praveen Kumar Jain group on 1.10.2013. In the statement recorded during the course of search Shri Pravin Kumar admitted that the only activity carried out by all concerns cotnrolled by him is providing accommodatin entries in the nature of bogus unsecured loan, share application money, bogus sales and LTCG etc. Further from the statements of dummy directions/proprietors, it was revealed that they were used to sign different papers for nominal consideration given by Shri Pravin Kumar Jain, Pravin Kumar Jain himself is a direction in few concerns only. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,13,90,000 21.02.2007 Bogus investment/s hare applications 3 Mohit International 3,13,80,000 10/01/07 Bogus investment/s hare applications Total 12,61,70,000 From the above facts, it is clear that the assessee had failed to disclose fully and truly all material facts for the A.Y.2007- 2008. In view of the above facts, I have reason to believe that income to the extent of ₹ 12,61,70,000/- chargeable to tax has escape assessment by the reason of failure on the part of the assessee to disclose fully and truly all material facts within the meaning of section 147 of the I.T.Act, 1961. In order to bring to tax above mentioned escaped income as well as any other income which might have escaped assessment, found during the course of proceedings, notice under section 148 is issued. 2. Upon supplying reasons for re-opening, the petitioner raised objections under communication dated 19.2.2015. Such objections were however rejected by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us and therefore the notice issued under section 148 on the basis of such information is also erroneous and ill- conceived. In fact, there is no escapement of income so far as the assessee is concerned. You are therefore, requested to drop the proceedings and this may pleased be treated as objections to the reopening of the assessment. 4. Counsel also drew our attention to the relevant portion of the objections of the petitioner and the manner in which this objection was rejected by the Assessing Officer. 5. We have perused materials on record. We may recall that the original assessment was not framed after scrutiny. The return filed by the assessee was accepted under section 143(1) of the Act. In this context, we may refer the decision of the Supreme Court in the case of Assistant Commissioner of Income- Tax v. Rajesh Jhaveri Stock Brokers P.Ltd. reported in 291 ITR 500 in which it was held and observed as under: 13........In the scheme of things, as noted above, the intimation under section 143(1) (a) cannot be treated to be an order of assessment. The distinction is also well brought out by the statutory provisions as they stood at different points of time. Under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date Nature of transaction 1 Kunal Gems 6,34,00,000 20.9.200 6 Bogus Investments/Sha re application 2 Natasha Enterprises 3,13,90,000 21.2.200 7 Bogus investments/Sha re application 3 Mohit International 3,13,80,000 10/01/07 Bogus investments/Sha re application Total 12,61,70,000 However, as per assessee,it has in fact received share application money of ₹ 90,00,000/- from following two parties as on 31.3.2007 relevant to AY 2007-08. Sr.No Name Amount 1 Ken Securities Ltd., Ahmedabad 7500000 2 Winter fresh Food Pvt.Ltd. Ahmedabad 1500000 3 Total 9000000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee company has benefitted from accommodation entry which was prima facie the case of share application/bogus investment as mentioned in reason for reopening. This fact is not vitiated by the fact that the assessee has treated the accommodation entry credits as sales in its books, which is an afterthought arrangement and fudging of books of accounts. 7. Upon perusal of the above quoted portions of the objections of the petitioner and the Assessing Officer disposing them of, it can be seen that the Assessing Officer had nowhere abandoned reasons which were the foundation for issuance of the notice for re-opening. He had considered the objections of the petitioner and disposed them of on the basis of material on record. The sole ground of the petitioner therefore, must fail. 8. In the present case, notice for re-opening having been issued in the case of assessment which was not framed after scrutiny. The Assessing Officer would have considerable latitude in issuing notice for re- opening if it is found that he had tangible material to form a belief that income chargeable to tax had escaped assessment, it would not be appropriate on our part to strike down the notice. F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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