TMI Blog2022 (5) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... me to provide the necessary details but had failed to do so despite repeated notices. The learned CIT(A) has also given the finding that assessee s denial that the transaction was not entered cannot be accepted as assessee has failed to submit full bank account and submitted only part of Bank account. We find learned CIT(A) is correct in holding that when the assessee has been found to be engaged in bogus accommodation entry by investigation wing and assessee simply denies the same without submitting complete details of bank statement assessee's plea has no legs to stand. In this view of the matter we do not find any infirmity in the orders of authorities below. - Decided against assessee. - I.T.A. No. 1407/Mum/2020 - - - Dated:- 11-4-2022 - Shri Shamim Yahya (AM) And Shri Amarjit Singh (JM) Assessee by : Shri S.C. Tiwari Department by : Shri Hoshang B. Irani ORDER Per Shamim Yahya (AM) : This appeal by the assessee is directed against the order of learned CIT(A) dated 28.1.2020 pertains to A.Y. 2010-11. 2. The grounds of appeal read a under :- 1. That on the facts and in the circumstances of the case of the appellant and in law learned CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above. 9. Each of the ground of appeal enumerated above are independent of and without prejudice to one another. 10. That the appellant craves leave to reserve to herself the right to add to, alter or amend any of the aforesaid grounds of appeal at or before the time of hearing and to produce such further evidence, documents and papers in support of its claim as may be necessary. 3. Brief facts of the case are that the Assessing Officer has noted that in this case information received from Inv. Wing of IT Deptt., Mumbai that during search action by Ahmedabad Directorate in Mumbai at the residence and office of Shri Shirish C Shah on 09.04.2013. It was found that Shri Shirish C. Shah was engaged in providing accommodation entries of share capital, share premium, share application money etc. M/s. Zodiac Developers is one of the beneficiaries who have taken accommodation entries from following entities by way of bogus share application/share premium: Sr. No. Name of bogus concern F.Y. Amount of transaction 1 Empower Industries India Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.03.2015 was received from ADIT(Inv) Unit5(2) wherein it was stated that further correspondence in the matter should be sought with office of the DDIT(Inv), Unit-1(3), Ahmedabad. Further telephonic conversation with DCIT Cent Cir-1(1) was done to provide further details of transactions. They suggested to enquire about bogus concern parties i.e. that Empower Industries India Ltd and Shri Ganesh Spinners Ltd. who has provided accommodation entries to the assessee company. Simultaneously notice u/s 133(6) was issued to Empower Industries Pvt. Ltd. In the absence of any details like PAN and address etc no notice u/s. 133(6) issued to Shree Ganesh Spinners Ltd. The ledger of Empower Industries India Limited reflect two entries of Rs. 60,00,000/- (dated 26.03.2010) and 50,00,000 (dated 29,03.2010) on the debit side, It means that some transaction have been entered into. Further on perusal of bank statement (Yes Bank) of Empower Industries India Limited, it is seen that there has been a said transaction via RTGS. 4.1 Further show cause dated 08.03.2016 was issued to the assessee to explain nature of these transactions and date of hearing was fixed on request of the assessee on 17.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The word reason in the phrase reason to believe would mean cause or justification. If the AO has cause or justification to know or suppose (hat income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the AO should have finally ascertained the fact by legal statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Manganese Ore Co. Ltd, vs. ITO(1991) 191 ITR 662, for initiation of action under section 147(a) (as the provision stood at the relevant time fulfillment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is reason to believe , but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief whether the materials would conclusively prove, the escapement is nut the concern at that stage. This is so because t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocument is doubtful. The balance sheet for the period 01.04.2009 to 31.03.2010 shows bank account balance on the asset side at Rs. 1,00,000/-. While share capital is also shown at Rs. l,00,000/-. This indicates that the appellant has bank account during the F.Y. 2009-10 relevant to A.Y. 2010- 11 under consideration. However, appellant has not submitted bank account statement for the period 01.04.2009 to 31.03.2010 and the Ld.AR of the appellant has chosen to produce and submit the bank account statement of Cosmos Cooperative Bank Ltd. only for the period from 20.04.2010 to 10.07.2010. It is pertinent to point out here that in the course of search action u/s.132 in the case of Shri Shirish C. Shah on 09.04.2013, it was found that the appellant company has taken accommodation entries from two entities, M/s. Empower Industries India Ltd. and M/s. Shri Ganesh Spinners Ltd. by way of bogus share application/share premium money amounting to Rs.3,10,00,000/- and this fact is confirmed by the Ledger Account collected by the Assessing Officer u/s. 133(6) from one of the parties, M/s. Empower Industries India Ltd. who applied for the shares of the appellant company. The crux of the matter is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details. Further he submitted that the assessee deliberately did not provide complete bank statement. He referred to the Assessing Officer s observation submitted as under : 2. In this connection, it is submitted that on perusal of para 4 of the assessment order and the case records, it is seen that the Assessing Officer had correctly mentioned the facts in para 4 of the assessment order. It is observed that the AO had made enquiries with M/s. Empower Industries India Ltd. by issue of notice u/s. 133(6) of the Act. In response, the said party had submitted ledger confirmation supported by bank statement. From the same, it is seen that the amounts of Rs.60 lakhs and 50 lakhs on 26.03.2010 and 29.03.2010 respectively were transferred to the assessee by way of debit entry of RTGS. Certified copies of reply of M/s. Empower Industries India Ltd. along with ledger confirmation and bank account highlighting the relevant entries are enclosed herewith for kind perusal. 3. During the course of the appellate proceedings, enquiries were made with various banks wherein the accounts have been maintained by the assessee during the year. Accordingly, the bank statements of the assessee from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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