TMI Blog2023 (8) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... e of this entity and has claimed that this entity to be only a paper entity that works to issue accommodation entries. The aforesaid documents prove to the contrary as not only details of the loan by Bhoomidevi Credit Corporation Ltd. to the assessee is recorded in the financial statements of the aforesaid entity, similar details are corroborated from the ledger account of Bhoomidevi Credit Corporation Ltd. in assessee s books. Since the assessee has proved the existence of Bhoomidevi Credit Corporation Ltd., we find no merits in the findings of AO which were upheld by the learned CIT(A). Accordingly, the addition made by the AO and upheld by the learned CIT(A) is deleted and grounds raised by the assessee on merits are allowed. - Shri B.R. Baskaran, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Yeshwant Gupta a/w Shri Piyush Chhajed For the Revenue : Shri Prashant Barate ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeals have been filed by the assessee challenging the separate impugned orders of even date 17/02/2023, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by the learned Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmodation entries of bogus advances from the concerns engaged in providing bogus entries, proceedings under section 147 were initiated and notice under section 148 of the Act was issued to the assessee on 31/03/2016. In response to the aforesaid notice, the assessee filed a letter stating that the return of income originally filed on 29/09/2009, be considered as a return filed in response to the notice issued under section 148 of the Act. As per the aforesaid information received from the ADIT (Investigation)-1, Rajkot, the assessee availed loan from Bhoomidevi Credit Corporation Ltd., which is engaged in providing accommodation/bogus entries. During the proceedings under section 147 of the Act, the assessee furnished the balance sheet, ITR, ledger account of Bhoomidevi Credit Corporation Ltd. for the financial year 2008-09 and bank statements with regard to the aforesaid transaction by cheque. The assessee also stated that it has paid interest on deposits to Bhoomidevi Credit Corporation Ltd. by account payee cheques for the assessment years 2009-10 and 2010-11. 4. The Assessing Officer ( AO ) vide order dated 27/12/2016, passed under section 143(3) read with section 147 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come at Rs 1,20,774/-. The same was processed under section 143(1) on 03.11.2010. In the instant case for AY 2009-10, information was received from DIT(Inv.) Rajkot vide letter No. Rjt/ADIT(Inv.)-1/Bhoomidev Beneficiaries/2015-16/4813 dated 22.03.2016 with subject Dissemination of information in respect of beneficiary companies who have allegedly taken entry of share application money/ premium/ advances from M/s Bhoomidex Credit Corporation Ltd. A thorough Investigation was done by DDIT, Ahmedabad wherein it was found that an entity by the name of M/s Bhoomidev Credit Corporation Ltd. (BCCL) has been giving accommodation entries to various persons. in view of this background an exercise was undertaken to identify beneficiaries of BCCL it was found that the assessee has obtained share application money / premium / advances as accommodation entries from this party in the FY 2008-09. Details of the same are given as follows: Sr. Name of the Party PAN Amount (Rs.) 1. M/s. Bhoomidev Credit Corporation Ltd. (BCCL) 14,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the 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. v. ITO [1991] 191 ITR 662, for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfilment 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 not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction ITO v. Selected Dalurband Coal Co. (P.) Ltd. [1996] 217 ITR 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the financial statements of the aforesaid entity, similar details are corroborated from the ledger account of Bhoomidevi Credit Corporation Ltd. in assessee s books. Since the assessee has proved the existence of Bhoomidevi Credit Corporation Ltd., we find no merits in the findings of AO which were upheld by the learned CIT(A). Accordingly, the addition made by the AO and upheld by the learned CIT(A) is deleted and grounds raised by the assessee on merits are allowed. 12. In the result, the appeal by the assessee is partly allowed. ITA no.1249/Mum./2023 Assessment Year 2010 11 13. In this appeal, the assessee has raised the following grounds: The Grounds of Appeal mentioned hereunder are without prejudice to one another: 1. On the facts and circumstances of the case, the learned Assessing Officer erred in issuing the Notice u/s. 148 on 31.03.2017 without bringing out any tangible material as to failure on the part of the Assessee to disclose truly and fully all material facts necessary for assessment and therefore the Reasons Recorded u/s. 147 are bad in law and consequently the assessment proceedings deserve to be annulled. 2. On the facts c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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