TMI Blog2020 (12) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... finally made u/s 40A(3) of the Act by impliedly accepting the genuineness of the transactions. That being the position, we are of the considered opinion that the reassessment cannot be held to have been validly initiated. Hon‟ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd [ 2010 (4) TMI 431 - HIGH COURT OF BOMBAY] has held that the AO cannot proceed with re-assessment if the grounds mentioned in re-assessment are non- existent i.e., if no addition is made on that score. When we examine the factual scenario obtaining in the instant case on the touchstone the inescapable conclusion which can be drawn is that the only addition made in the re-assessment on a ground different from the one for which notice u/s 148 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed the addition. 4. We have heard rival submissions through Virtual Court and gone through the relevant material on record. The reasons recorded by the AO have been placed at pages 2 to 4 of paper book, which read as under:- 19.06.2013 Reasons for iniating proceedings under section 147 of the I.T. Act, 1961 and issue of notice u/s 148 of the I.T. Act, 1961 1. As per the information received in respect of assessee involved in Bogus Hawala Transactions from the O/o the DGIT (Inv), Mumbai forwarded by the DGIT (Inv.), Pune vide letter No.PN/DGIT/Sales Tax Hawala/2012-13/1885 dtd. 08.01.2013 addressed to the Chief CIT-II, Pune and in turn, the Chief CIT-II, Pune s confidential letter No.PN/CC-II/Saes Tax Hawala/2012-13/969, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s located all across Maharashtra and unearthed racket involving more than 1935 Hawala Dealers and more than 37,000 beneficiaries. In this racket, Hawala operator posing as the seller existed only on paper and had issued Fake Bills to a concern and got a cut-money in return for such fake bills. The beneficiaries, in turn, had got the input tax credit on the material which they had never purchased in reality. Such input tax credit was identified as the main target of investigation by the Sales Tax Department wherein such beneficiaries had used fake invoices to fraudulently claim tax deduction on goods purchased. These beneficiaries used to inflate their expenses to the extent of bills issued by the Hawala Dealers. Though the beneficiaries had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ya Hi Tech Bio Remedies who is the beneficiary from such bogus Hawala Transaction, is assessed to tax m this Ward. The details regarding the Return of income filed by the assessee for the AY 2009-10 are as under: Sr. No. A.Y. Returned Income Ack. No. Date of filing of Return 1 2009-10 ₹ 6,31,870/- e-filing 02.08.2009 2.2 As per the information received in C.Ds from DGIT (Inv), Mumbai, it is found that the Hawala parties reflected at para 2 above, it is noticed as under: (i) In this respect Shri Dushyant Singh prop. of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from the said party to the extent of ₹ 8,34,600. In other words, the purchases were inflated by the assesses to claim bogus expenditure which resulted into decrease in profit to the extent of the aforesaid amount. Accordingly, the return and accounts filed by the assesses for the AY 2009-10, there was under assessment of income to the extent of the aforesaid amount of ₹ 8,34,600/- having escaped assessment within the provisions of section 147 of the Income Tax Act, 1961. It is, therefore, a fit case for issue of Notice u/s 148 of the I.T. Act, 1961. 3. I have, therefore, reason to believe that by not disclosing the true and correct income by the assessee in the Return of income filed for the AY 2009-10, the income ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases to the tune of ₹ 8,33,600. However, the addition was finally made u/s 40A(3) of the Act by impliedly accepting the genuineness of the transactions. That being the position, we are of the considered opinion that the reassessment cannot be held to have been validly initiated. 7. It is further worthwhile to note that the Hon‟ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. (2011) 331 ITR 236 (Bom) has held that the AO cannot proceed with re-assessment if the grounds mentioned in re-assessment are non- existent i.e., if no addition is made on that score. When we examine the factual scenario obtaining in the instant case on the touchstone of the ratio laid down by the Hon‟ble jurisdictional High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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