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GLB Finvest Private Limited Versus Deputy Commissioner of Income Tax Central Circle 20, Mumbai

2017 (6) TMI 493 - ITAT MUMBAI

Reopening of assessment - receipt of share application money - Held that:- Since original return was processed u/s 143(1), only one conditions viz. reasons to believe that the income has escaped assessment was required to be fulfilled by the AO and nothing more. However, it is also well settled principle that the AO must be in possession of some tangible material so as to justify the reopening and that material should lead to formation of belief on the part of the AO that certain income has esca .....

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tiating reassessment proceedings seems to be the statement made by G.V. who admitted to having advanced accommodation entries to the assessee in exchange for cash against commission. But, we find no nexus between the statements of the G.V. vis-à-vis assessee’s share applicants. Therefore, prima facie the primary condition of initiating reassessment proceedings in the instant case is not fulfilled. - Decided in favour of assessee. - I.T.A. No.4569/Mum/2013 - Dated:- 7-6-2017 - SHRI SAKTIJIT DEY, .....

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certificate of incorporation consequent upon change of name dated 16/07/2009 issued by Deputy Registrar of Companies, Maharashtra as placed by Ld. Counsel for assessee before us. The same is taken on record. Now, we deal with the issues raised in the appeal in succeeding paragraphs. 3. Briefly stated the assessee, being resident corporate assessee, was subjected to an assessment u/s 143(3) read with Section 147 of the Income Tax Act, 1961 vide Assessing Officer [AO] order dated 30/12/2011 at &# .....

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commodation entries in the form of gifts, loans and share application money from financial Year 1999-2000 to 2005-06 in exchange of cash against commission of 2-3.5%. It was seen that various concerns controlled by Vikas Berlia introduced unaccounted money in the form of shares allotted to Giriraj Vijayvargiya and his family members. Accordingly, AO had formed a belief that the share application money received by group concerns of Vikas Berlia were involved in introducing unaccounted money in th .....

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The assessee objected to reopening on the ground that no application money was ever received from the said persons / group during impugned AY. Further, the assessee explained that Share Application money of ₹ 23.00 Lacs was received from two applicants namely B.P.Choudhary and Saroj Choudhary and to confirm the same, notices u/s 133(6) were issued to the two applicants and certain details were called from the assessee also. After perusing the replies / submissions and factual matrix, the L .....

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has been done merely on the basis of the statement of a third party where the said party admitted to have entered into accommodation entries by way of share application money with the assessee in sharp contrast to the fact that the assessee never received any share application money from the said party / group in the impugned AY and therefore, the very basis of reopening stood vitiated and reflects non-application of mind on the part of the AO. Our attention is also drawn to the fact that on sim .....

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has been fulfilled and therefore, the reopening was perfectly valid. Our attention has been drawn to the fact that the third party categorically admitted to having provided accommodation entries in the form of Share Application money in exchange of cash, which in itself, was sufficient to reopen the assessment at that stage. 7. We have heard the rival contentions and perused relevant material on record. So far as the condition of reopening is concerned, we are in agreement with the Ld. DR that .....

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on of the belief, which in our opinion is missing in the instant case. From the material on record, it is clear that the assessee has not received any share application money from the said group rather it has received share application money from two persons namely B.P.Choudhary and Saroj Choudhary. The revenue could not bring on record any linkage of these two persons with G.V. and his group. The only basis of initiating reassessment proceedings seems to be the statement made by G.V. who admitt .....

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