TaxTMI 
TaxTMI 
2024 (8) TMI 626
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....Rs. 19,75,190/- which was processed u/s. 143(1) of the Act. On the basis of information received from the DDIT(Inv), Unit-6(4), Mumbai the case was reopened by issuing notice u/s. 148 of the Act, after recording the reasons for the same. 2.1. As per the recorded reasons in the assessment order, the inquiry was carried out in case of Shri Anil Kumar Jain and Shri Pravin Kumar Jain and other entities connected with them and observed that the high value transactions were credited through RTGS/Clearing/cash/transfer from various accounts and immediately withdrawn by way of cash/multiple transfers. Accordingly, the bank statements were called for and statements of Shri Anil Kumar Jain and Pravin Kumar Jain were recorded u/s. 131 of the Act, who admitted that they were carrying of business of cheque entries. It was found that one of the entities M/s.Vishnu Trading Co. handled by Shri Anil Kumar Jain and Shri Pravin Kumar Jain has undertaken some transactions with the assessee company. 2.2. By issuing notices u/sections 143(2) and 142(1) of the Act, the assessee was asked to submit the ledger account extract of M/s.Vishnu Trading Company for the Financial Year (FY) 2009-10. In reply the....
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....dependently forming belief that income chargeable to tax escaped assessment. 2. Ld. CIT (A) (NFAC) erred in law and on facts in confirming addition made by AO of Rs. 1, 92, 29, 000/- as unexplained cash credit u/s 68 of the Act by way of a cryptic order concurring with findings of AO without considering detailed submissions made by the assessee. 3. Ld. CIT (A) (NFAC) erred in law and on facts in confirming action of AO to treat sales realization as loan to make addition u/s 68 of the Act ignoring the fact that profit embedded in sales is already offered for tax by the assessee. 4. Ld. CIT (A) (NFAC) ought to have deleted addition made by AO neither supplying statement recorded u/s 131 & relied upon for making addition nor affording opportunity of cross examination to the assessee. 5. Ld. CIT (A) erred in law and on facts in confirming action of AO taxing income u/s 115BBE though income is not chargeable u/s 68 of the Act. 6. Levy of interest u/s 234A/ 234B, 234C & 234D of the Act is unjustified. 7. Initiation of penalty proceedings u/s 271 (1)(c) of the Act is unjustified." On Ground No. 1 5. During the course of hearing before us, the Ld. Sr.Counsel for the assessee,....
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....ound that the AO was having a reason to suspect and AO without making preliminary enquiries reopened the assessment. 6.1. In the case of Pushpak Bullion (P.) Ltd.(supra), relied upon by the Revenue, the Hon'ble Gujarat High Court upheld the reopening of the assessment where the AO had credible and specific information from the investigation indicating bogus transactions. The Hon'ble Court held that the AO had sufficient material to form a bona fide belief that income chargeable to tax had escaped assessment. 6.2. In the present case, it is important to note that the return of the assessee was proceeded u/s. 143(1) of the Act and there was no instance of original assessment u/s. 143(3) of the Act. The AO received specific information from the DDIT (Inv) indicating that there were transactions between the assessee and M/s. Vishnu Trading Co. During the preliminary enquiry AO observed that the name of M/s Vishnu Trading Co. appeared in the bank account statement of assessees and also the name of assessee was found in the bank statement of M/s Vishnu Trading Co. The AO recorded his reasons for satisfaction for reopening and had a reason to believe that income had escaped assessment. ....
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....l also explained that the assessee during the course of assessment has submitted copies of sales invoice showing same cheque numbers as appearing in the bank statement, sales register, item register showing quantitative details and the bank book. The Ld.Sr.Counsel also stated that the AO has not disputed the sales and also has not raised any question relating to quantitative details of the stock. Ld.Sr.Counsel also argued that AO has not rejected the books of accounts and has not commented on the incorrectness of books of accounts which means he has accepted the books of accounts and sales. The Ld.Sr.Counsel for the assessee also contended that the AO did not provide the opportunity to cross examine the parties based on whose statements recorded u/s. 131 of the Act the addition was made. 7.1. Regarding the mention of information relating to M/s.Edelweiss Commodities Ltd. in both assessment order and appellate order, the Ld.Sr.Counsel stated that both the AO and the Ld.CIT(A) have confused purchase from M/s.Edelweiss Commodities Ltd. as sale and have concluded that the assessee is deliberately misguiding. Ld. Sr.Counsel further explained with the help of purchase register, purchase....