TMI Blog2017 (5) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... on 15.11.2007. The case was reopened by issuing notice u/s 148 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] on 27.03.2014 because of the information received from INV Wing of the department in Delhi to the effect that the assessee had taken accommodation entries from the entry operators. The A.O has observed in the assessment order that search and seizure operation u/s 132 of the Act was conducted on the office premises of Shri Tarun Goyal, Chartered Accountant, 13/34, W.E.A, Arya Samaj Road, Karol Bagh, New Delhi by the Investigation Wing of the Department on 15.09.2008. During the course of post search investigation, it had emerged that Shri Tarun Goyal was engaged in the business of providing accommodation entries in lieu of cash to a large number of beneficiaries through numerous dummy companies floated and controlled by him. He pointed out that it was unearthed that Shri Tarun Goyal was providing accommodation entries through more than 90 companies/proprietary concerns/ partnership firms. 3. The A.O had recorded the following reasons for initiating the proceedings u/s 148 of the Act: It has been reported by the Addl. Director of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an has escaped taxation. Hence, I have a reason to believe that income of ₹ 10 lacs as per table in preceding paragraphs has escaped assessment in the case of assessee relevant to A.Y. 2007-08. As per records of this ward, scrutiny assessment u/s 143(3) was completed 13.11.2009 for the A.Y. 2007-08 in this case, hence if approved, in terms of provisions of sec. 151(1) sanction may kindly be accorded for issue of notice under section 148 for A.Y 2007-08 in the case of assessee company. 4. The A.O, after considering the assessee s objections and relying on the decision of the Hon'ble Allahabad High Court in the case of Brij Mohan Agarwal Vs. ACIT reported in 268 ITR 400 held that the report of the Investigation Wing was sufficient material on the basis of which notice under section 148 could be issued. He, accordingly, held that the proceedings had validly been initiated. 5. Before the ld. CIT(A), the assessee had requested for admission of the following additional grounds of appeal: 1. Under the facts and circumstances of the case, the A.O has grossly erred in assuming the jurisdiction of reopening the concluded assessment after the expiry of four years from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d bad at law. 2. Under the facts and circumstances of the case, Id. First Appellate Authority has grossly erred in confirming the action of Id. A.O. re-opening the concluded assessment and making addition amounting to ₹ 10,00,000/- u/s 68 of the Act, which was merely change of opinion which is not permissible as per law. 8. The ld. counsel for the assessee referred to page 56 of the paper book wherein notice u/s 142(1) of the Act dated 15.01.2009 issued during the course of original assessment proceedings is contained wherein the A.O, inter alia, had required the assessee to furnish complete list of share holders with their respective share holding as on 31.03.2007. The ld. counsel for the assessee referred to page 58 of the paper book wherein notice u/s 143(2) of the Act dated 17.07.2009 is contained wherein again the A.O, inter alia, had required the assessee to furnish complete list of share holders with their respective share holding as on 31.03.2007. 9. The ld. counsel for the assessee referred to pages 60 to 64 of the paper book wherein the reply of the assessee for A.Y 2007-08 is contained in response to notice issued u/s 142(1) of the Act and pointed ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act dated 11.09.2009 contained at pages 65 to 69 of the paper book wherein again the assessee had furnished details of shareholders and their respective share holding as on 31.03.2007. The ld. counsel for the assessee referred to page 70 of the paper book wherein the details of addition in paid share capital was furnished before the A.O giving the following details in respect of Sadguru Finman [P] Ltd: Name : Sadguru Finman [P] Ltd Address : 13/34, W.E.A, Arya Samaj Road, Karol Bagh, New Delhi Paid up share capital : 100000 Cheque No. : 512789 PAN : AABCS 4800 J 11. The ld. counsel for the assessee further referred to page 34 of the paper book wherein the A.O in the course of assessment proceedings had sought information u/s 133(6) of the Act vide letter dated 12.10.2009 from Sadguru Finman [P] Ltd as under: In connection with certain proceedings under the I.T. Act, 1961 in the case of M/s Commitment Commodities (P) Ltd for the A. Y 2007-08 relatable to the F.Y 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Delhi High Court in the said case held that the present case is one of change of opinion by observing as under: 10. It is clear from the above, that the present case is one of change of opinion. The questionnaire and particularly question B.1 specifically raise the issue with regard to share capital. It requires the petitioner to give a list, source, genuineness, identity of the share holders along with confirmation copies of the ledger account of the party including confirmation of the mode, date, address and acknowledgement of return, etc. from the said party along with source and relevant bank entries. The said information was provided by the assessee. After receipt of the said information, Assessing Officer did not think it fit to make an addition and, under these circumstances, no addition itself amounts to forming an opinion as has been held in Usha International Ltd. (supra). 11. Therefore, in our view, the present exercise of issuing the notice under Section 148 of the Act would amount to nothing but a change of opinion, which is not permissible. 14. The ld. counsel for the assessee further referred to reasons recorded by the A.O reproduced earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant to prove its identity and existence which requirement the assessee-appellant failed to comply with. 17. In rejoinder, the ld. counsel for the assessee submitted that the ld. CIT(A) ignored the proviso to section 147 of the Act. He submitted that neither the statement of Shri Tarun Goyal was confronted nor any the cross examination was made before recording satisfaction by the A.O. He, therefore, submitted that the main issue in the present appeal is regarding assumption of jurisdiction. 18. I have considered the submissions of both the parties and have perused the records of the case. The initiation of reassessment proceedings has been assailed on two counts, viz., firstly the initiation of reassessment proceedings was on account of change of opinion and secondly in view of proviso to section 147 of the Act the initiation of reassessment proceedings was bad in law because there was no allegation of the A.O in the reasons recorded that there was any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. The submission of the ld. counsel for the assessee is that on both the counts, the issue is squarely covered by the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Neither any loan was borrowed nor has any payment been repaid during the year. Reference was made to clause 23(a) of Tax Audit Report. (iv) It was explained that during the year, investment in shares held by the petitioner was sold. From the audited balance sheet, it is evident that the petitioner was having shares of three limited companies, namely, Lakshmi Float Glass Limited, Bawa Float Glass Limited and KPF Finances Limited of the face value of ₹ 1,40,00,000/-. It was these shares that were sold at the face value only. It is out of sale of these shares that sale to the extent of ₹ 27,00,000/- has been alleged in the reasons as accommodation entry. (v) Amount received on sale of investments was utilized to give loans and the same appear in the balance sheet under the head loans and advances. 21. In that backdrop, it was held that it was not a case of change of opinion. But unlike the present case, there were no detailed enquiries in original assessment. 22. Thus it is evident that in each case facts have to be examined in detail before arriving at any conclusion. 23. While considering the submissions of both the sides, I have in extenso rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Address PAN No. of Shares M/s Monisha Granit Ltd. 2A/65, Ground Floor, Ramesh Nagar, New Delhi-110 015 AABCM7083P 26700 M/s Monisha Impex Ltd. 2A/65, Ramesh Nagar, New Delhi-110 015 AAFCM0694J 66700 M/s Monisha Impex Ltd. 2A/65, Ramesh Nagar, New Delhi-110 015 AAFCM0694J 66700 M/s Bhalotia Agro Industries Ltd. New Delhi WZ-241/S,Ground Floor, Inderpuri, AABCB0388G 60000 M/s Elbee Portfolio Ltd. WZ-134, Plot No. 170, Vishnu Garden, New Delhi-110018. AABCH0899D 50000 M/s First Hi-Fin Ltd. 73, Triloki Apartment, Plot No. 85, I.P. Extn. New Delhi-110 092 AAACF2099M 56700 M/s Salwan Developers Promoters (P) Ltd. A-4/181, Sector-17, Rohini, Delhi-110085 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rka, New Delhi-110045. AAFCS8159Q 15900 1000000 5. The confirmation letters issued by the shareholders are similar and one such letter is extracted herein below. The same reads as under: TO WHOM SO IT MAY CONCERN This is confirm that we have made investment in shares, the particulars of which are given hereunder, our own declared sources. Name of Company Allied Strips Ltd. No. of Shares No. of Shares 26700 Equity Shares of ₹ 10/- each At a premium of ₹ 20/- per share Amount invested in Rupees 8,01,000/- Particulars of Remittance Cheque /DD/Pay Order No. 453976, 453977 Dated 29/01/2007 Amount 4,00,000/- each and 1,000/- each Bank Particulars PAN/GIR Share Certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer did not find any ground or reason to make addition or reject the stand of the assessee. He forms an opinion. The re-assessment will be invalid because the Assessing Officer had formed an opinion in the original assessment, though he had not recorded his reasons. 24. The facts being identical, it is held that the present case is one of change of opinion. Further, as regards the requirement of true and correct disclosure by the assessee, I find that in the reasons recorded, reproduced above, the A.O has nowhere made any allegation on this count. 25. In the case of Allied Strips [supra] the Hon'ble Delhi High Court has held as under: 12. Another reason why the impugned notice under Section 148 and the proceedings consequent thereto have to be set aside is that the pre-condition of there being a failure on part of the assessee to fully and truly disclose all the material particulars necessary for assessment has not been made out. 13. Perusal of the reasons for initiating re-assessment shows that there is not even an allegation that there has been failure on the part of the petitioner/assessee to fully and truly disclose all the material particulars necessar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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