TMI Blog2020 (5) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties responded on the notices sent came back unserved. When assessee was confronted with this fact and was asked to produce the Director/Principal Officer of the company who have given loan, the assessee could not comply with such a requisition by the Assessing Officer. Thus, genuineness of the transaction and the creditworthiness could not be established. As noted by the Ld. CIT(A) is that, before issuing the cheques in the form of loan to the assessee, exact amount of cash was found to be deposited in the bank account of these companies and these companies were managed and controlled by Shri S.K. Jain through dummy Directors which fact has emerged from the inquiry made by the Investigation Wing. In such a situation, the onus lies heavily upon the assessee to rebut and allay the doubts, which assessee has failed to do so. Therefore, the burden cast upon the assessee to prove the creditworthiness and genuineness of the transaction could not be proved. In absence of any contrary material, we do not find any reason to deviate from the finding recorded by the Ld. CIT(A) and same is confirmed. - Decided against assessee - I.T.A. No.3855/DEL/2017 - - - Dated:- 28-2-2020 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n wing. The report clearly indicates that accommodation entries have been taken to plough back uncounted black money for the purpose of business or for personal needs such as purchase of assets etc., in the form share application money loans etc. and even describes the modus operandi of this scam. The Investigation Wing s list of Beneficiaries (of such accommodation entries) gives comprehensive details of Beneficiaries Name, Entity from where entry received bank, cheque/RTGS, date and even the middleman through whom such entry is received. This list contains the name of M/s. Tulip Systems (P) Ltd., which has taken such accommodation entry/entries of ₹ 30,00,000/- 3. In response to the notice u/s.148, the assessee submitted that the return of income filed on 03.02.2011 should be treated as return filed in response to notice u/s.148. Accordingly, the Assessing Officer supplied the copy of reason recorded. Ld. Assessing Officer in the course of proceedings has issued show cause notice to furnish various documents, in response to which, assessee has filed copy of ITR, copy of bank account, copy of audited balance sheet, etc. of the creditors. As per the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated to the Assessing Officer through established channels? 1 1 . 1 . 1 This information is collected and analyzed by officers of the investigation wing of income tax department who fall within the definition of Assessing officer within the scope and meaning of section 2 (7A). These officers derive the power to exercise or perform the powers and functions conferred on or assigned to the Assessing Officer by virtue of subsection (4) of section 120. I am of the opinion that after going through the specific and authentic information (reproduced in Para 5 above), received from such authorities, a belief is bound to get formed in any reasonable mind about income having escaped assessment. 1 1 . 1 . 2 Further, in my view the recording of reasons for the purpose of taking necessary administrative approval from the higher authorities in respect of the information received as above involves adequate application of mind not only of the Assessing Officer but also of the higher authorities. This process of administrative approval and recording of the reasons cannot be completed without due application of mind. The same process also results in formation of a belief in the mind of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons recorded before passing of the order u/s 147, the reassessment is null and void. 11.4.1 The appellant has claimed that it had raised objections to reopening vide letters dated 23.01.15 5.12.14. 11.4.2 The letter dated 23.01.15 reads as under:- 1. This is in Continuation of my earlier submission made on 05/12/2014 in this matter. As requested in earlier submission, I again make my request to supply us copy of all the documents relied upon by the AO for making an opinion that income has escaped assessment. 2. The above clearly shows that Ld A.O. has merely acted on the report of investigation wing and has not applied his mind. Before issuing any notice U/s 148 the A.O must have reasons to believe that any income chargeable to tax has escaped assessment. Reason to believe can't be a reason to suspect merely. Mere surmise or suspicion can't be ground to reopen assessment. There must be direct nexus between the material coming to the notice of A.O and formation of the belief that there has been escapement of income of the assessee from assessment in a particular year. Since the documents relied upon in the reason for reopening of assessment has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further also we have sought copy of statement and other documents where the name of assessee has been specifically stated for the alleged transactions. 6. Further to this Hon'ble Supreme Court has laid down procedure in GKN Driveshafts (India) Ltd v/s. ITO (2003) 259 ITR 19 (SC) for reassessments. As per the said Judgment, the assessee hereby objects to the issuance of notice u/s 148 for assessment year 2010-11 on the grounds that the reopening proceedings are just based on the conjunctures, surmises and imagination of A.O. and is not supported by any documentary evidence and also this case was not in the jurisdiction of the A.O. at the time of reopening of assessment. You are requested to pass a speaking order and dispose of the objections giving reference of Judgment of Hon'ble Supreme court in GKN Driveshafts (India) Ltd Vs ITO (2003) 259ITR19(SC). 7. The perusal of above show that assessee has filed the documents necessary to prove the identity of lenders, and hence the proposed addition of ₹ 30,00,000/- as mentioned in show cause notice may not to be made. 11.4.3 The letter dated 5.12.14 referred above reads as under:- This is in response to not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I have not been able to find any objection to the reassessment proceedings raised by the appellant at the assessment stage. 11.4.8 It is further noted that on the same date viz 23.01.15 the appellant tiled the copies of ITR, copies of bank accounts of lenders, copies of the balance sheet profit and loss A/c etc. before the A.O. Clearly, the conduct of the Appellant in complying with the reassessment proceedings and asking for supply of photo copies etc. demonstrated Appellants acceptance of the reassessment proceedings. 11.4.9 Based on the above observations I find no legal infirmity in the reassessment proceedings and consequently, I have not an iota of doubt that both the issue of the notice as well as the Assessment Order are good in law. 5. On the issue of merits, after considering the entire facts and material placed on record by the assessee as well as on behalf of the Assessing Officer, Ld. CIT(A) has drawn various inference based on the facts and material, which are as under:- (a) The details of the transactions of the Appellant with the three companies were retrieved/came to knowledge of the department in the course of search on a third party. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant to cross examine either Shri Surender Kumar Jain or Shri Virender Kumar Jain (both entry operators) or Shri Rajesh Aggarwal whose statement was recorded during the search proceedings or Shri Goyal Sahab who was the middlemen between entry provider and the appellant. (m) The investigation wing only recorded that cash was deposited in the bank accounts mentioned above. Neither, the Assessing Officer nor the investigation wing has established that the cash deposited in those bank accounts emerged from the coffers of the appellant. (n) For this year regular assessment u/s. 143(3) was not done before. 13.9 Except items (e), (1) and (m) of Para 13.8, all other facts lead to the inevitable outcome that the above transactions cannot escape the provisions of section 68. 6. Thereafter, following the ratio and the decision of Hon ble Jurisdictional High Court in the case of CIT vs. MAF Academy (2014) 42 taxmann.com 377 , Ld. CIT(A) held that all the facts lead to inevitable conclusion that the transactions are not genuine and addition has rightly been made u/s.68, because all the documents lose credibility in the light of the fact that the entity which has given the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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