TMI Blog2022 (4) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... ven to the assessee company. AO has also not stated as to what action was taken in the case of Director of the company. There is no dispute with regard to the fact that the impugned transaction was executed between two parties i.e. assessee company and its Director. Director is the giver of the amount in the transaction and the assessee company is the recipient of the amount. Hence, the Assessing Officer ought to have investigated from both the parties for verifying the veracity of the transaction. The assessee has discharged its primary burden by furnishing the source of the investment. Under these facts it was open to Assessing Authority to make further investigation. In the absence of bringing any adverse material regarding creditworthiness of the Director and genuineness of the transaction addition made and sustained by the learned CIT(Appeals) is not justified - Decided partly in favour of assessee. - ITA No. 1723/DEL/2020 - - - Dated:- 12-4-2022 - Shri Kul Bharat, Judicial Member For the Appellant : Sh. Arun Kishore, CA And Sh. Alok Suri, CA For the Respondent : Sh. Sanjay Kumar, Sr. DR ORDER PER KUL BHARAT, JM: This appeal, by the assessee, is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved upon the appellant up to 31st March 2017. 7. That on the facts and circumstances of the case and in law, the deeming addition of ₹ 16,00,000/- on the basis of issue of notice to the investee company at a wrong address at Raipur, Chattisgarh, when the AO was in possession of information that the assessment of the investee was made by JCIT Indore. 8. That on the facts and circumstances of the case and in law, the deemed addition of ₹ 16,00,000/- is uncalled for when the identity, source of deposit received from Director with her PAN and ITR copy and confirmations of the depositor and depositee filed for transaction through bank, enquiring source of source is not within the ambit of section 69. 9. That the addition of ₹ 16,00,000/- be deleted. 2. Facts, in brief, are that in this case the Assessing Officer received information regarding investment made by the assessee company in another company i.e. Brahaspati Iron Steel Co. Pvt. Ltd. of ₹ 16,00,000/-. It was noticed by the Assessing Officer that the assessee company had not filed its return of income. Therefore, the investment made in this company was not disclosed. The Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorities below have given sufficient opportunity to the assessee. It is not the case where the assessee was not provided the opportunity. 7. I have heard the rival submissions, perused the material on record and gone through the orders of the authorities below. I find that the learned CIT(Appeals) has decided similar grounds taken before him by observing as under: 7.3. Ground Nos. 3 to 6 : Through these grounds and the written submissions, the appellant has challenged the reopening of the case u/s 147/148. I have considered the grounds and submissions of the appellant made through AR as well as the satisfaction note recorded by the assessing officer. In this case, AO received an information from JCIT, Range-3, Indore vide letter F.No. JCIT/R-3/Ind./Misc./2012-13/2 dated 04.04.2013 intimating that M/s Astral Properties Construction Pvt. Ltd. has invested ₹ 16,00,000/- in share application money/share capital in M/s Brahaspati Iron Steel Co. Pvt. Ltd. (PAN-AACCB3640Q) in the F.Y. 2009-10 relevant to A.Y. 2010-11, source of which investment was not disclosed as assessee had not filed its ITR for A.Y. 2010-11. On the basis of information received, AO reopened th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reassessment proceedings, even when intimation under section 143(1) has been issued. ADANI EXPORTS v. DCIT[1999J 240 ITR 224 (Guj) was distinguished . 7.3.4 Thus, in view of the decisions of Hon ble Supreme Court cited supra and the facts of the case, I am of the view that the AO has rightly taken the re-course of section 147/148 to re-open the case. 7.3.5 As regards the claim of the appellant that the assessing officer had wrongly invoked clause (b) of the explanation (2) of the section 147 is concerned, I do not find any merits in the arguments of the AR. In the reasons for the reopening of the case, the assessing officer has considered all the facts of the appellant company. He has duly applied his mind to the facts of the case and observed that the appellant company has not filed any income tax return for the assessment year 2010-11 and the investment by the company was ? 16 lakhs, which had escaped assessment. The facts of the case were sufficient for recording the satisfaction under section 147/148 towards escapement of income. Without prejudice to this, the case of the appellant company is duly covered by clause (a) of the explanation (2) of the section 147. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the material on record and gone through the orders of the authorities below. I find that the learned CIT(Appeals) has decided the issue in para nos. 7.4.1 to 7.4.5, by observing as under: 7.4.1 During the course of assessment proceedings, assessee was asked to provide copy of Board resolution for investing in M/s Brahaspati Iron Steel Co. Pvt. Ltd. along with the reasons for investing. Assessee vide its letter dated 08.12/2017 submitted that they were enclosing the copy of Board Resolution for advancing of ₹ 16,00,000/- to M/s Brahaspati Iron 8s Steel Co. Pvt. Ltd., but no copy was found attached with the letter by the AO. Thereafter, detailed information was called for u/s 133(6) from M/s Brahaspati Iron 8s Steel Co. Pvt. Ltd. vide letter dated 30.10.2017. Further, as submitted by assessee before the AO that loans/advances amounting to ₹ 16,00,000/- had been received from its director Mrs. Surabhi Bishnoi, details were also called from Mrs Surabhi Bishnoi u/s 133(6) vide a detailed letter dated 01.12.2017. However, no reply/details had been received from M/s Brahaspati Iron 8s Steel Co. Pvt. Ltd. and Mrs Surabhi Bishnoi, Director. These non-compliances of noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f meeting of Board of Directors held on 19/03/2010. This extract is dated 08/12/2017 and is not supported with any documents and cannot be relied upon and also deserve to be rejected u/r 46A. The audited report dated 30/08/2010 and books of accounts of the appellant company cannot be relied upon because these have never been filed u/s 139(1). The appellant filed the ITR much after the due date in compliance to notice u/s 148 of the Act on 24/06/2017. Thus, the evidences being filed by the appellant as rightly held by the AO, are nothing but self serving documents. 7.4.4 I find that the AO has rightly held that the identity of the creditor as discussed by the assessee is meaningless in view of the above facts and also in view of the silence of the assessee to provide the latest or the current status of investment. These web of transactions have been created with a clear attempt to create a colorable device with attempt to evade taxes in the form of accommodation entry. The AO has relied upon the judgement of the Hon ble Supreme Court in the case of R Mallika Vs CIT, reported in [2017) 79 taxmann.com 117 (SC), wherein it was held that where assessee had not discharged burden as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. No. AY Total Income (in Rs.) Agricultural Income (In Rs.) 1 2010-11 2,25,696/- 8,75,000/- Mrs. Surbhi Bishnoi has not given any details regarding the above to substantiate its claims. 13.3 The assessee despite being given specific opportunity to lead by positive evidence has merely relied upon filing of return, PAN Card details, confirmation bank account details of the creditor to establish Identity: creditworthiness genuineness of transaction. Assessee has failed to utilize the opportunity provided to it to establish as to why the evidence discussed against it should not be used against it. In fact, the details filed by the assessee just confirm the fact that these are self serving documents created at the time of providing accommodation entry. They do not stand the test of truthfulness genuineness in view of the fact that information called for U/s 133(6) from both M/s Brahaspati Iron Steel Co. Pvt. Ltd. and Mrs. Surabhi Bishnoi have not been complied with and no information/details have been receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had stated before the authorities below that the amount in question was received from the Director of the assessee company, who is also income-tax assessee and has filed her return of income for the relevant period. The source of income was stated to be agricultural and other income. Therefore, it is not the case where the investment is made in vacuum. Considering the material placed before me, I am of the considered view that the assessee has brought on record certain evidence that goes to prove that the amount was received from one of its Director, who herself is an income-tax assessee and filed her return of income. The Assessing Officer should have very well verified from the return of the concerned Director regarding source of such amount given to the assessee company. The Assessing Officer has also not stated as to what action was taken in the case of Director of the company. There is no dispute with regard to the fact that the impugned transaction was executed between two parties i.e. assessee company and its Director. The Director is the giver of the amount in the transaction and the assessee company is the recipient of the amount. Hence, the Assessing Officer ought to hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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