TMI Blog2017 (3) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee regarding invalidity of assessment on the basis of non-service of notice u/s. 148 is rejected. AR of the assessee had filed the details of investments held as on 31.03.2002 with the submission that money in question was received as a result of sale proceeds of investment, which results that an asset held by the appellant has been converted into money at cost and hence, there will be no effect in the balance sheet and there cannot be any accommodation entry regarding sale of an asset which was already held by the assessee. It was also the contention of the assessee that once the prior investments are sold and payments realized by cheques, how such sale could be doubted without doubting the purchase of assets already held by the assessee. The ld. Authorities below have failed to examine this aspect of the case nor have given any finding on the same, particularly when the assessee had submitted the details of prior investments held by it and documentary evidences relating to their sale before the authorities below. In presence of these facts, we deem it expedient in the interest of justice to restore the matter to the file of Assessing Officer for passing the assessment de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion found that the assessee has received an amount of ₹ 21,25,000/- towards accommodation entries, the details of which are as under : S. no. Amount Instrument No. Date Concern from which received 1. 2,50,000 944722 04/04/2002 Raghubir Singh 2. 2,50,000 837796 11/04/2002 Rajan Jassal 3. 1,25,000 854728 11/04/2002 Parminder Singh 4. 2,50,000 946032 11/04/2002 Parminder Singh 5. 2,50,000 952887 11/04/2002 Sarbjeet Singh 6. 5,00,000 6459 28/08/2002 Jagat Enterprises 7. 5,00,000 6809 05/09/2002 Shyam Fabrics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, Income Tax Return was filed on 02.12.2003 declaring a loss of ₹ 535/- 2. That on the basis of some vague information received from Investigation Wing of the Department, the ld. A.O. issued notice u/s 148 to the appellant. However the same was never served upon the assessee at any time. 3. That the ld. A.O. completed assessment u/s 148 read with 344 on 30.11.2010 making an addition of ₹ 2135625/-. 4. Notice u/s 148 is bad in law, without jurisdiction and is void a. Non-service of notice u/s 148 1. The Id. A.O. has stated that he had issued notice u/s 148 of the Income Tax Act, which is not correct as the assessee never received such notice. Even the Id. AO in his order has stated that the notice was returned back and hence not served at all. 2. The notice must have been issued and served. The appellant filed his return from the address - C- 107, ABC Complex, 20 Veer Savarkar Block, shakarpur, Delhi 110092. Copy of the ITR Acknowledgement is enclosed to substantiate the same. 3. Even the controversial entries which the ld. AO stated in his reasons for reopening mentioned the bank a/c in which the said amounts were received i.e. Standard Char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AY. 2. As the issuance of the s. 148 notice and the communication and furnishing of reasons go hand in hand, the reasons have to be supplied to the assessee before the expiry of period of 6 years. If this is not done, the validity of the s. 148 notice cannot be upheld. In any proceeding, whether civil or criminal, a summons issued without a copy of the plaint or complaint has to be construed as if no valid service of notice has been effected upon the defendant or respondents. 3. The ITAT Delhi bench in Sh. Balwant Rai Wadhwa vs. ITO [2011-ITRV-ITAT-DEL- 024) ITA No. 4806/Del/10) pronounced on 14th January 2011 discussing Haryana Acrylic case has held that despite service of s. 148 Notice in time, non-supply of 'Reasons For Reopening' within time renders the reopening void. A notice u/s 148 without the communication of the reasons therefore is meaningless inasmuch as the AO is bound to furnish the reasons within a reasonable time. Where the notice has been issued within the said period of six years but the reasons have not been furnished within that period is hit by the bar of limitation because the issuance of the notice and the communication and furnishing of reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments for the AY in question, the Id. AO was casual and said that he would hear the same later. d. Further please note that order for AY 2008-09 was passed u/s 143(3) with NIL demand on 30.12.2010 (copy of order enclosed), whereas order for AY 2003-04 (order under appeal) was passed on 30.11.2010, without providing any opportunity. Also he did not hand over the assessment order to the appellant, like he did for AY 2008-09 and the appellant had to collect it on 12.01.2010 after stating that it did not receive the order. e. The ld AO never ever whispered about the assessment u/s 144 for AY 2003-04 though appellant was present before him several times for assessment for AY 2008- 09 for the same assessee and passed the order u/s 144 much before the case was time bar. f. As, the conduct of the Id. AO raises doubts beyond question in not providing ample opportunity in the instant case, it is humbly requested that documents now submitted be allowed as additional evidence u/r 46A. g. The detail of the payments received by the appellant along with appellant's remarks are as under: Amount Date Instrument No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments sold, were held in hand by the appellant. The investments were sold at cost, hence there was no capital gain on realization of the sale proceeds of the investments. k. It is pertinent to note that monies have been received as sale proceeds, the result of which is that an asset held by the appellant has been converted into money, hence there cannot be any accommodation entry. l. The Ld. A.O. forgot that the assessee is an artificial judicial person (Company) and it cannot of its own have any unaccounted cash. m. The Id. AO failed to note that all the payments were received through a/c payee crossed cheques through proper banking channels and are duly accounted for in the books, records and documents of the assessee, which is evident from the records. n. Sir, when purchased investments are sold and the payments realized for the same, how can there be any accommodation entry. o. When the purchase are genuine, how its sale can be held in doubt, when all documents prove the same. The basic requirement of s. 68 as held in CIT vs. Oasis Hospitalities P. Ltd. [201MTRV-HC-DEL-031] ITA No. 2093 of 2010 with ITA No. 2094 of 2010 were proved by the assessee: i. Identity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 69A is without any basis and needs to be quashed. 7. Addition of ₹ 21250/- The Ld. A.O. has also wrongly made the addition on account of estimating that a commission @ of 1% would have been paid on above transactions and charging ₹ 21250/- to tax'. This addition is based on the Ld. A.O. estimates, which is without any basis. This addition has been made purely on surmises and conjectures, hence should be deleted. From the foregoing submissions, it is concluded that: i. That the appellant is an artificial judicial person it cannot have unaccounted money of its own. ii. That the assessment u/s 147 is bad in law as the appellant never received any notice u/s 148. iii. That the Id. AO wrongly made addition u/s 69A, though all monies received were duly accounted in the books of accounts of the appellant. iv. That ₹ 2125000/- was received for sale of investments and is supported by sale bills, copy of a/c duly confirmed, confirmation for the purchaser, affidavit from the purchasers. v. All persons from whom payment was received against sale of investments are established. vi. PAN proof of subscribers, Copy of ITRs acknowledgement / Intimati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisers Pvt. Ltd. Gali No. 7, Balbir Nagar, Delhi. It is clear from the above that the Assessing Officer was justified to issue the notice at the given address, and hence, the notice shall be deemed to be served on the assessee. Therefore, the contention of assessee regarding invalidity of assessment on the basis of non-service of notice u/s. 148 is rejected. 6. The ld. AR of the assessee submitted before us that the impugned amounts were received by him as a result of sale proceeds of investments in shares of different companies made before 31.03.2002. The ld. AR of the assessee had filed the details of investments held as on 31.03.2002 with the submission that money in question was received as a result of sale proceeds of investment, which results that an asset held by the appellant has been converted into money at cost and hence, there will be no effect in the balance sheet and there cannot be any accommodation entry regarding sale of an asset which was already held by the assessee. It was also the contention of the assessee that once the prior investments are sold and payments realized by cheques, how such sale could be doubted without doubting the purchase of assets already ..... X X X X Extracts X X X X X X X X Extracts X X X X
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