Income Tax Appellate Tribunal - Mumbai
Balaji Buillion & Commodities (India) ... vs Dcit - Cc- 7(1), Mumbai on 3 April, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "B" MUMBAI
BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER)
AND
SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER)
ITA No. 3599/MUM/2018
Assessment Years: 2009-10
M/s Balaji Bullion & DCIT Central Circle-7(1),
Commodities (India) Pvt. Ltd., Mumbai.
118/120, 3rd floor, Ashoka Vs.
House Zaveri Baazar,
Mumbai-400 002.
PAN NO. AADCB 0236 F
Appellant Respondent
Assessee by : Mr. N.M. Porwal
Revenue by : Mr. S. Srinivasu, CIT-DR
Date of He aring : 27/03/2024
Date of pronouncement : 03/04/2024
ORDER
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 28.03.2018 passed by the Ld. Commissioner of Income-tax (Appeals) - 49, Mumbai [in short 'the Ld. CIT(A)'], raising following grounds:
1. The order of the assessing officer is erroneous on the facts and in the law. On the facts and in the circumstances of the case he ought to have accepted the returned income.
M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 2 ITA No. 3599/M/2018
2. On the facts and in the circumstances of the case and in law, the Ld. A. O. erred in assessing the income of your appellant at Rs. 4,95,83,91,414/ as against returned income of Rs. 55,95,863/ 4,95,83,91,414/- 55,95,863/-. Your appellant disputes wrongful variations and submits that his returned income to be accepted as correct.
3. On the facts and in the circumstances of the case and in law, the Ld. 17,40,00,147) on account of A. O. erred in making an addition of R$. 17,40,00,147)- unexplained sale credit to one of its customers named M/s. Bafna Exim 1961 as taxable income.
Pvt. Ltd. under section 68 of the IT Act, 1961 Looking to the facts and in the circumstances of your Appellant's case the said addition made by the Ld. A.O. is incorrect and invalid and ought to be deleted as the provisions of section 68 has been complied with.
4. On the facts and in the circumstances of the case and in law, the Ld. A. O. erred in making an addition of RS.4,02,39,597/- on account of advance received from the abovementioned party M/s Bafna Exim Pvt. Ltd. under section 68 of the IT Act, 1961 as taxable income.
Looking to the facts and in the circumstances of your Appellant's case the said addition made by the Ld. A.O. is incorrect and invalid and ought to be deleted.
5. In reaching to the conclusion and making the aforesaid additions / omitted to consider relevant factors, disallowances, the Ld. A.O. omitted considerations, principles and evidences while he was overwhelmed, influenced and prejudiced by irrelevant considerations and factors.
6. The Ld. A.O. erred in imposing Interest under section 234B and 234C of the Income Tax Act, 1961.
7. The Ld. A.O. erred in initiating penalty proceedings u/s. 271(1)(c) of the Income Tax Act, 1961.
2. The assessee filed additional grounds on 04.12.2019 however finally revised its additional ground vide letter dated 16.03.2023 which are reproduced oduced as under:
1. Validity of re-assessment re proceedings:
1.1 The Assessing Officer has erred in making multiple assessment orders for the same assessment year.
1.2 The Appellant submits that the considering the facts and circumstances of its case and in law prevailing on the subject the M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 3 ITA No. 3599/M/2018 reassessment proceedings were not in accordance with the law and the provisions of the Income Tax Act, 1961.
1.3 The appellant submits that the reassessment proceedings be held to be bad in law and struck down.
2. Because, in any view, the reassessment proceedings u/s.147 r.w.s.
143(3) of the Income-tax Income Act, 1961 could not be initiated merely because of change of opinion on the same facts and circumstances which were already in A.O's knowledge even during the original assessment asses proceedings.
3. Because, in any view, A.O. while making assessment u/s. 153A r.w.s. 143(3) having made specific enquiries with regard to M/s. Bafna Exim Pvt. Ltd by way of show cause notice and in response to which, show-cause assessee company furnished all the relevant documents and after considering this material, A.O. having completed the assessment, it cannot be said that income has escaped assessment on account of failure on the part of assessee company to disclose fully and truly all necessary for assessment and reopening of the material facts necessary assessment after expiry of four years from the end of the relevant assessment was invalid.
4. Because, in any view, specific mention by the A.O. in the reasons recorded for reopening the completed assessment of the fa failure of the assessee to disclose fully and truly all material facts necessary for the assessment, is the sine qua for assuming jurisdiction u/s.147 of the Act in a case falling under the proviso thereto and in the absence thereof makes the action taken by the A.O. wholly without jurisdiction.
5. The Assessment Order u/s. 143(3) r.w.s. 153A of the Income-tax Income Act was quashed for want of jurisdiction by the Hon'ble Tribunal, vide their Order dated 29th April, 2022. Can such an assessment u/s.153A r.w.s. 143(3)) be reopened and if reopened, can the additions made in reassessment proceedings will survive?
3. We have heard rival submission of the parties on the issue of admissibility of the additional ground. As the additional ground raised are purely legal in nature and no evidence of the fresh facts nature required and therefore, same are admitted for adjudication. In view of the decision of the Hon'ble Supreme Court in the case of NTPC Ltd. 229 ITR 283 (SC) (SC).
M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 4 ITA No. 3599/M/2018 3.1 Briefly stated facts of the case are that the assessee filed return of income on 21.09.2009 declaring total income at Rs.55,95,863/-.. Subsequently, on account of search action carried out at the premises of Shri Manoj B. Punamiya and others by the ation Wing, Mumbai on 31.10.2009 assessment in the cases Investigation Income of the assessee was completed u/s 153 r.w.s. 143(3) of the Income- tax Act, 1961 (in short 'the Act') on 07.08.2012 determining total income at Rs.474,41,51,670/ Rs.474,41,51,670/-.. Subsequent to the above assessment, the Assessing Officer received information from the Director General of Income tax (Investigation) that the assessee had Income-tax taken accommodation entries in the garb of the bogus transactions from the parties which were operated or controlled by Shri Anil Kumar Jain and Shri Pravin Kumar Jain who were engaged in provided accommodation entries of unsecured loan share application money sales etc. On the basis of the information received, the Assessing Officer reopened the assessment u/s 147 of the Act after record ing reasons to believe that income escaped recording assessment and accordingly issued notice u/s 148 of the Act on 30.03.2016. In response the assessee filed a letter to treat the original return of income filed on 21.09.2009 as return filed. In response to the notice notice u/s 148 of the Act thereafter statutory notices were issued by the Assessing Officer and assessment was completed wherein the Assessing Officer made addition for amount of Rs.17,40,00,147/ Rs.17,40,00,147/- from M/s Bafna Exim Pvt. Ltd. as 68 of the Act. The Assessing Officer unexplained cash credit u/s 68 M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 5 ITA No. 3599/M/2018 also treated the amount of Rs.4,02,39,597/-
Rs.4,02,39,597/ as returned back of advance from M/s Bafna Exim Pvt. Ltd. invoking section 68 of the Act.
3.2 On further appeal, the Ld. CIT(A) after considering the additional evidence filed by the assessee upheld the addition made by the AO for the reason that assessee failed to establish identity and creditworthiness of M/s Bafna Exim Pvt. Ltd. The Ld. CIT(A) observed that the party M/s Bafna Exim Pvt. Ltd. was not available at the address provided and despite given ample opportunity and time the assessee could not produce any director from the said company either during the remand proceedings. The Ld. CIT(A) has further observed that share capital and reserve and surplus of the said company were not sufficient to unsecured loan to the assessee. The Ld. CIT(A) further observed that there were no fixed asset to the company. The Ld. CIT(A) referred to the decision of the Hon'ble Supreme Court in the case of Sumati Dayal v. CIT (1995) 214 ITR 801 1 and held that applying the test of human probabilities the documentary filed by the assessee cannot be accepted. The Ld. CIT(A) has also sustained the addition of Rs.4,02,39,597/-.
Rs.4,02,39,597/ The Ld. CIT(A) held the addition observing as under:
8.2 The submissions of the Learned Counsel have been carefully "8.2 considered. The Learned Counsel contended that the AO has wrongly Rs.4,98,01,152/ and the onus is on the AO to added an amount of Rs.4,98,01,152/-
prove the genuineness of the addition. Firstly, the AO has not added an amount of Rs.4,98,01,152/-.. AO's information was that the 2,42,80,817/ whereas it is the assessee has paid an amount of Rs. 2,42,80,817/- assessee himself who had submitted to the AO that the amount paid Rs.4,02,39,597/ . Не had enclosed ledger copy and bank back was Rs.4,02,39,597/-.
M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 6 ITA No. 3599/M/2018 statement of the same. On the bais of this the AO had made addition of Rs.4,02,39,597/-.
Rs.4,02,39,597/ . Therefore, it is not correct on the part of the 4,98,01,152/- has been assessee to now say that addition of Rs. 4,98,01,152/- made and that the onus is on the AO to prove the genuineness of the t addition. The ledger copy submitted now shows an amount of Rs.2,25,80,816/ which has been repaid. Irrespective of the amount, Rs.2,25,80,816/-
the assessee was asked as to what is the transaction which took place for which the amount has been repaid. It was submitted that t these are advances for sales which have been received but subsequently repaid, as the assessee could not procure the specified diamonds requisitioned by M/s Bafna Exim Pvt. Ltd. If these are advances for sales, this amount would have found place in the ledger of the sales account which reflected the figure of Rs.17,40,00,147/-.
Rs.17,40,00,147/ Therefore, it is clear that it is not sale transaction. Further the Learned Counsel has been asked to provide copies of the purchase orders, wherein the orders were placed by M/s Bafna Exim Pvt. Ltd. and which could not be procured by the assessee and subsequently returned. The Learned Counsel produced copies of some purchase orders. There is not a single purchase order where there is an advance received from M/s Bafna Exim Pvt. Ltd. Ltd. All the purchase orders have a total, invoice total, amount paid in advance and balance figure of sub-total, due. In all the orders the amount paid in advance is zero. The balance due is the invoice total. There is not an iota of doubt that the assessee ot received any advance towards sale from M/s Bafna Exim Pvt. has not Ltd. The ledger account for sale also clearly shows that the assessee has supplied the goods first and received the payment later. This is the practice followed by the assessee or any other personperson in business. The argument of the Learned Counsel that these are the advance given for sale which have been subsequently returned back has no substance and is a figment of imagination of the Learned Counsel. As already discussed, the whereabouts of M/s Bafna Bafna Exim Pvt. Ltd. are not known and it had already been heid that it is merely a paper entity providing accommodation entries. As the amount of Rs. 4,02,39,597/- is found credited in the books of the assessee and the assessee could not offer a satisfactory ry explanation for the same. The AO has rightly added this amount u/s 68 of the IT Act. The same is confirmed. This ground of appeal is DISMISSED."
3.3 Aggrieved with the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by way of rais raising ing grounds and additional ground as reproduced above.
3.4 Before us, the assessee has filed a Paper book containing pages 1 to 486.
M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 7 ITA No. 3599/M/2018 3.5 Regarding the additional ground No.1 the Ld. counsel for the assessee submitted that the Assessing Officer had already passed assessment order u/s 153A r.w.s. 143(3) on 07.08.2012 Rs.4,74,41,51,670/ which has been determining total income at Rs.4,74,41,51,670/- quashed by the Tribunal vide order dated 29.04.2022 in ITA No. 1291/M/2018. The Ld. counsel submitted that the Assessing Officer is not justified in passing the subsequent assessment order u/s 147 of the Act. Before us, the Ld. counsel for the assessee relied on the decision of the Co ordinate Bench of the Tribunal in Co-ordinate the case of State Bank of India v. DCIT in ITA No. 7039/M/2011 for assessment year 2003 2003-04.
04. The relevant part of the said decision is reproduced as under:
3. At the outset, it has been pointed out that ITAT in the assessee own "3.
case in ITA Nos. 5420 & 5421/Mum/2011 for the Assessment Years 2001-02 02 & 2002 2002-03 has quashed the e assessment order passed u/s 143 r.w.s. 147 of the Act as illegal, arbitrary & wholly without jurisdiction. The relevant findings of the Tribunal are extracted hereunder:
"20. Applying the ratio of the above decisions to the facts of the present case, we find that there is no dispute that the original 2001 02 was completed u/s 143(3) on assessment for the A. Y. 2001-02 13.02.2004 determining the total income at Rs.26,35, 49, 42,360/ Thereafter, a search and seizure action was initiated 42,360/-
Department on 02.07.2005 on which in assessee's case by the Department date the assessment for the A.Y. 2001 02 was not pending.
2001-02 obstinate clause with which sub Therefore, in view of the non-obstinate section (1) of section 153A opens, the AO has no jurisdiction to issue notice u/s 148 of the Act in respect respect of those six assessment years which falls within the exclusive jurisdiction of section 153A of the Act and accordingly the AO was not justified in issuing notice u/s 148 on 28.08.2006 and in completing the impugned assessment u/s 143(3) r.w.s. 147 of the Act on 31.10.2006. The AO instead of complying with the requirement of section 153A proceeded with the provisions of section 147/148 which are not applicable in the assessment u/s 153A of the Act, therefore, the impugned assessment completed u/s 143(3) r.w.s. 147 of the Act is a nullity and as such the M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 8 ITA No. 3599/M/2018 assessment order dated 31.10.2006 passed u/s 143(3) r.w.s. 147 of the Act is illegal, arbitrary, wholly without jurisdiction and, hence, the same is quashed."
It is observed that in the instant case also, the assessment order has been passed in the light of the identical facts on the basis of the same reopening made u/s 147 of the Act. When the facts are being so, we are of the considered opinion that the the additional grounds raised by the the present case are squarely covered in favour of the assessee in the assessee by the aforementioned decision of the ITAT. Therefore we, by following the said decision of the ITAT quash the assessment order passed u/s 143(3) r.w.s. 147 in this case also in the same line accordingly."
3.6 On perusal of the above decision, we find that in said case issue was whether the six years which were covered in search period for invoking proceedings u/s 153A of the Act and Assessing Officer reopen the assessment invoking section 147 of the Act rather than initiating proceedings u/s 153A of the Act. The facts of the present case are totally different in the instant case. The Assessing Officer has issued reassessment proceedings after four years from the completion of the assessment proceedings proceedings u/s 153A of the Act therefore, the grounds raised by the assessee are dismissed.
4. The additional ground No. 2 and 3 of the appeal of the assessee relates to challenge of reassessment proceedings on the basis of the change of opinion.
4.1 ve heard rival submission of the parties on the issue in We have dispute and perused the relevant material on record. Before us, the Ld. counsel for the assessee referred to the Paper Book page 241 to Co ordinate Bench of the 306 which is copy of the order of the Co-ordinate M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 9 ITA No. 3599/M/2018 Tribunal quashing the proceedings u/s 153A of the Act. The Ld. counsel further referred to Paper Book page 73 to 82 and submitted that during proceedings u/s 153A, the Assessing Officer duly inquired about the credit from M/s Bafna Exim Pvt. Ltd. and the ssessee duly responded and file all the evidence in support of assessee discharging onus u/s 68 of the Act and therefore, now the reopening of the assessment for enquiring the very same credit from M/s Bafna Exim Pvt. Ltd. amounts to change of opinion, the Ld. sel relied on the decision of the Hon'ble Supreme Court in the counsel case of Asian Paints Ltd. and Parle Products (P.) Ltd.
4.2 On the contrary, the Ld. Departmental Representative (DR) submitted that assessment has been reopened on the basis of the nformation which is a tangible material and therefore, subsequent information this is not the case of change of opinion same material available before the Assessing Officer. The Ld. DR relied on the decision of the Hon'ble High Court of Bombay in the case of Bright Star Syntex (P.) P.) Ltd. v. ITO [2016] 71 taxmann.com 64 (Bombay), Nickunaj Eximp Enterprises (P.) Ltd. v. Asstt. CIT [2014] 48 taxmann.com 20 (Bombay), CIT v. India Terminal Connectors Systems Ltd. [2012] 21 taxmann.com 69 (Delhi) and Ambuj Foods (P.) Ltd. v. PCIT [2022] 139 taxmann.com 404 (Allahabad).
4.3 We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. In the case evidently, the reassessment has been reopened on the basis of the M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 10 ITA No. 3599/M/2018 information received that assessee obtain accommodation entry from Mr. Pravin Kumar Jain and Mr. Anil Kumar Jain in as this information was received was search of their premises by the Income tax Department which being a Investigation Wing of the Income-tax credible and reliable source of information. The Assessing Officer information.
has reopened the assessment and which cannot be termed mere change of opinion by the Assessing Officer on the same set of facts available before him and therefore, the decisions relied upon by the DR in the case of Asian Paints Ltd. (supra). The assessment was Paints reopened on the same set of information which are available during the course of regular assessment proceedings and therefore, the Hon'ble Supreme Court quashed the reassessment proceedings on the ground of change of o opinion.
pinion. Similarly, in the case of Parle Products (P.) Ltd. (supra) also there was no additional or new information with the Assessing Officer and it was a fresh application of mind by the different Assessing Officer on the same set of facts and therefore, the reassessment proceedings were quashed. Whereas in the instant case before us, there is an additional tangible information in the form of finding of the Investigation Wing during the course of search carried out of the premises of Mr. Anil Kumar Jain an and Jain In the d Mr. Pravin Kumar Jain.
case of Bright Star Syntex (P.) Ltd. (supra) the Hon'ble Bombay High Court information received in the case of search on Mr. Pravin Kumar Jain upheld the reassessment proceedings observing as under:
M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 11 ITA No. 3599/M/2018
7. We find that the reasons in support of the impugned notice indicates "7.
that the Assessing Officer has received definite information that one Mr. Praveen Kumar Jain and the companies controlled by him was the business of providing accommodation entries. On receipt of the aforesaid afor information; the Assessing Officer called for the necessary information in regard to the accommodation entries made in respect of the assessees in his jurisdiction. Consequent thereto, the Assessing Officer found that the indicated that the eight companies mentioned in the information received indicated reasons belonged to Mr. Praveen Kumar Jain group and formed the basis of his reasonable belief. At this stage the Assessing Officer has merely to establish that there is justification for him to form a reasonable reasonabl belief that income chargeable to tax had escaped assessment and not conclusively prove the same. The reliance by the petitioner on the decision of the Apex Court in S.P. Chaliha case (supra) rendered in a completely different fact application. In that case the reasons recorded situation can have no application.
clearly reveal that investigation into allegation is to be done where name lenders and the reasons in support of certain persons appear to be name-lenders the impugned notice clearly states that investigation with regard to the loans is necessary. Thus, the Court held that there was no prima facie View reflected in the reasons as the same was subject to investigation of the transaction to find its genuineness. Similarly the decision in Lakhmani Mewal Das (supra) was a case of of a notice beyond four years from the end of the relevant assessment year. In that case one of the persons had confessed to the Revenue that he was dealing in providing name lending. Amongst the various reasons accommodation entries i.e. name-lending. the Supreme Court pointed out that there was no indication in the reasons as to when the confession was made by the name name-lender and also to which assessment year the confession relates. Therefore, the material before the Assessing Officer was vague or indefinite and it could coul not be the basis for having the reason to believe that income chargeable to tax had escaped assessment for that year. Reliance was also placed upon the decision of this Court in Rushab Enterprises (supra). We find the decision of this Court was rendered in the context of the assessment being reopened beyond a period of 4 years from the end of the relevant assessment year. In the facts of that case and on the basis of reasons recorded therein, the Court held that there was no basis for having lief that income chargeable to tax has escaped assessment. reasonable belief Albeit, the Court does record that an Assessing Officer does have power to reopen an assessment, provided there was tangible material to form a reasonable belief that income chargeable to tax has e scaped assessment.
escaped In the present case we are of the view that the statement of Mr. Praveen Kumar Jain is relevant tangible material with the Assessing Officer to form a reasonable belief that income chargeable to tax has escaped assessment."
4.4 Similarly,, Hon'ble Allahabad High Court in the case of Ambuj Foods Pvt. Ltd. (supra) rejected the contention of the assessee of M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 12 ITA No. 3599/M/2018 change of opinion. The relevant finding of the Hon'ble Allahabad High Court is reproduced as under:
"24.
24. Now we consider the next submiss submissionion made on behalf of the petitioner, that the initiation of the proceedings under Sections 147/148 of the Act is based on a review of the existing material, which is not permissible in law. From the discussion made above, it is clear that the fact that thee petitioner had routed its undisclosed funds amounting to Rs. 95,00,000/- through entry providers and absorbed it in its books of accounts by way of accommodation entries of prearranged share application money and share premium with the help of a syndicat syndicate of operators and thus an unaccounted money of the petitioner amounting to 95,00,000/ was routed to its books of accounts, had not been Rs. 95,00,000/-
examined by the AO during the original assessment for want of a full and true disclosure of facts by the petitione r. Therefore, the A.O. did not petitioner.
examine the aforesaid issues and he did not form an opinion regarding the same during the original assessment.
25. 25. The mearing of the expression "change of opinion" has been four explained by the Hon'ble Supreme Court in ITO v. Techspan (P.) Ltd. [2018] 92 taxmann.com 361/255 Taxman 152/404 ITR 10 India in the following words :-
'16. To check whether it is a case of change of opinion or not one has to see its meaning in literal as well as legal terms. The words "change o of opinion" imply formulation of opinion then a change thereof. Terms assessment, proceedings, it means formulation of belief by an assessing officer resulting from what he thinks on a particular question It is a result of understanding, experience and reflection.
ection.
17. It is well settled and held by this Court in a catena of judgments and it would be sufficient to refer to CIT v. Kelvinator of India Ltd. wherein this Court has held as under:
(SCC p. 725, para 5-7) 5
"5. ... where the assessing officer has reason to believe that atiV income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1-4-1989, post 1989, power to reopen is much wider. However, one needs to give schematic interpretation to the words "reason to believe" section 147 would give arbitrary powers to the assessing officer to reopen assessments on the basis of "mere change of opinion", which cannot be per se reason to reopen.
6. We must also keep in mind the conceptual difference between power to review and power to reassess. The assessing officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of certain precondition and if the concept of "change of opinion". is removed, as contended M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 13 ITA No. 3599/M/2018 on hehalf of the Department, then, in the garb of reopening the assessment, review would take place.
7. One must treat the concept of "change of opinion" as an inbuilt power by the assessing officer. Hence, after test to check abuse of power 1989, assessing officer has power to reopen, provided there 1-4-1989, conclusion that is "tangible material" to come to the there is escapement of income from assessment. Reasons must have a live link with the formation of o the belief."
18. Before interfering with the proposed reopening of the assessment on the ground that the same is based only on a change in opinion, the court ought to verify whether the assessment earlier made has either expressly or by necessary implic ation expressed implication an opinion on a matter which is the basis of the alleged escapement of income that was taxable. If the assessment order is speaking, cryptic or perfunctory in nature, it may be difficult to non-speaking, attribute to the assessing officer any opinion on the questions that are raised in the proposed reassessment proceedings. Every attempt to bring to tax, income that has escaped assessment, cannot be absorbed by judicial intervention on an assumed change assessment does not of opinion even in cases where the order of assessment address itself to a given aspect sought to be examined in the reassessment proceedings.' (Emphasis Supplied)
26. In the present case, during the original assessment the A.O. had not routing of funds in the formed any opinion in respect of the facts regarding routing garb of share premium, which surfaced from the information received from the ADIT (Inv.), Unit - 6, Kolkata, the ACIT, Circle - 3 (2), New Delhi and the ITO (Inv.), Unit - 4, Kolkata. It was after receipt of this information, that the O. examined the records and found that the petitioner had received A.O. 95,00,000/- by way of routing. funds materialized funds to the tune of Rs. 95,00,000/ by M/s Radha Fincom Pvt. Ltd. & others, which were found to be merely business. In this way, the paper concerns having no existent and real business. unaccounted money of the petitioner amounting to Rs. 95,00,000/-was 95,00,000/ routed to its books of* accounts.
27. Regarding the submission of the learned Counsel for the petitioner, that assessment of the petitioner as well as that of M/s Arohul Foods Pvt. Ltd., which is a sister concern of the petitioner, was re-opened re under 2012 13 on similar issue, where re-opening Section 148 of the Act for A.Y. 2012-13 re of the case in the matter of M/s Arohul Foods Pvt. Ltd. was quashed by the ITAT, Lucknow Bench Be 2021, it has been stated in vide order dated 11-8-2021, the Counter affidavit that the department has not accepted the order of the ITAT and has challenged the order by filing an appeal under section 260A of the Act. Even otherwise, an order passed by the ITAT ITAT would not be relevant when the validity of the re-re assessment is being examined by this Court in a Writ Petition."
Petition.
M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 14 ITA No. 3599/M/2018 4.5 In the case of India Terminal Connector System Ltd. (supra) Hon'ble Delhi High Court distinguished the decision in the case of Signature re Hotels (P) Ltd. v. ITO [2011] 338 ITR 51 (Delhi) and rejected the contention of the change of opinion observing as under:
9. We may note here that the information provided by the Directorate of "9.
Income Tax Investigation was not available with the Assessing Assess Officer during the course of the first/original proceedings. The said information constitutes new and fresh evidence on which the Assessing Officer could have drawn inference and formed a prima facie opinion whether or not to initiate reassessment proceedings.
proc In the case of AGR Investment Limited (supra), the Division Bench in the penultimate paragraph has recorded as under:-
under:
"23. The present factual canvas has to be scrutinized on the touchstone of the aforesaid enunciation of law. It is worth noting that the learned counsel for the petitioner has submitted with immense vehemence that the petitioner had entered into correspondence to have the documents but the Assessing Officer objections and made a communication. However, treated them as objections on a scrutiny of the order, it is perceivable that the authority has passed the order dealing with the objections in a very careful and studied manner. He has taken note of the fact that the transactions involving Rs Rs.. 27 lakhs mentioned in the table in P 2 constitute fresh information in respect of the assessee annexure P-2 as a beneficiary of bogus accommodation entries provided to it and represents the undisclosed income. The Assessing Officer has subsequent information and adverted to the concept referred to the subsequent of true and full disclosure of facts. It is also noticeable that there was specific information received from the office of the Director of V) as regards the transactions entered into by the Income-- tax (Inv-V) assessee company with a number of concerns which had made essee-company accommodation entries and they were not genuine transactions. As we perceive, it is neither a change of opinion nor does it convey a particular interpretation of a specific provision which was done in a particular manner in the original assessment and sought to be done in a different manner in the proceeding under section 147 of the Act. The reason to believe has been appropriately understood Assessing Officer and there is material on the basis of which by the Assessing the notice was issued. As has been held in Phool Chand Bajrang Lal [1993] 203 ITR 456 (SC), Bombay Pharma Products [1999] 237 ITR 614 (MP) and Anant Kumar Saharia [1998] 232 ITR 533 (Gauhati), the court, in exercise of jurisdiction under article 226 of the Constitution of India pertaining to sufficiency of reasons for formation of the belief, cannot interfere. The same is not to be judged at that stage. In SFIL Stock Broking Ltd. [2010] 325 ITR 285 (Delhi), the Bench has interfered as it was not discernible whether the Assessing Officer had applied his mind to the information and M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 15 ITA No. 3599/M/2018 independently arrived at a belief on the basis of material which he had ad before him that the income had escaped assessment. In our considered opinion, the decision rendered therein is not applicable to the factual matrix in the case at hand. In the case of Sarthak Securities Co. Pvt. Ltd. [2010] 329 ITR 110 (Delhi), the Division Divi Bench had noted that certain companies were used as conduits but the assessee had, at the stage of original assessment, furnished the names of the companies with which it had entered into trans trans-
actions and the Assessing Officer was made aware of the situation and further the reason recorded does not indicate application of mind. That apart, the existence of the companies was not disputed and the companies had bank accounts and payments were made assessee company through the banking channel. Regard to the assessee-company Reg being had to the aforesaid fact situation, the court had interfered. Thus, the said decision is also distinguishable on the factual score."
10. Recently this Bench had an occasion to deal with this question in Rajat Export Import India Private Limited versus Income Tax Officer, W.P. (C) No. 8341/2011 decided on 18th January, 2012. This Court after aft referring to decisions in the field, elucidated and expressed the ratio in the following words:-
words:
"11. In the view we have taken as above, it is not considered necessary to examine the statement of Vishal Aggarwal to find out whether the assessee has beenbeen implicated therein in any manner as being a recipient of accommodation entries. Nor do we dispute the contention taken before us by the learned counsel for the assessee that the validity of the reopening of the assessment reference to the reasons recorded by should be judged only with reference the Assessing Officer under Section 148(2) at the time of issue of notice of reopening and any other material sought to be relied upon later, with a view to strengthening oorr improving the reasons, cannot be looked into by the Court. That contention is sound and is supported by ample authority but it does not apply to the present case. In the present case it cannot be disputed at all that the Assessing Officer at the time of material present before the Assessing recording reasons for reopening the assessment did show a link between M/s. Shivam Softech Ltd., described as an entry provider, with the petitioner herein. Not only was there a link between the two names, but the material also disclosed the date on which the entry was taken, the cheque or DD number, the name of the bank and branch and the account number. With such precise material before the Assessing Officer, the existence of which is beyond that the Assessing Officer could not challenge, it can hardly be said that have had even a prima facie belief that income chargeable to tax had escaped assessment in the hands of the assessee for f the assessment year 2004-05.
200411. In the said judgment, jud the decision in the case of Signature Hotels (P) Ltd. vs. Income Tax Officer (2011) 338 ITR 0051 decided on 21st July, 2011 by one of us (Sanjiv Khanna, J.) was distinguished and the factual M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 16 ITA No. 3599/M/2018 nces were pointed out. In view of the aforesaid position, we answer differences the question of law mentioned above in negative, i.e., in favour o f the Revenue and against the assessee. The appeal is accordingly allowed."
allowed.
4.6 reject the contention of the In view of the above discussion, we reject assessee for challenging the reassessment proceedings on the ground of change of opinion and the additional ground No. 2 and 3 of the appeal of the assessee are dismissed.
5. In additional ground No. 4 the assessee has return of income inc challenged that Assessing Officer in the reasons recorded there was a failure on the part of the assessee in not disclosing the facts fully and truly.
5.1 We have heard rival submission of the parties and perused the ssessee has relied on the decision relevant material on record. The assessee of the Hindustan Lever Ltd. v. R.B. Wadkar 268 ITR 0332 (Bom.) wherein it is held that the Assessing Officer in the reasons recorded nowhere stated that in the necessary in the assessment of that assessment year and the rreassessment eassessment proceedings were quashed and held invalid. Wherein in the instant case we find that the Assessing Officer in the reasons recorded as duly mentioned the fact the assessment was reopened after expiry of four years and he ed necessary permission from the appropriate accordingly obtained authority. The Assessing Officer has also duly mentioned that income escaped within the meaning of section 147 of the Act which includes the proviso to section 147. The relevant reasons recorded are reproduced as under:
M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 17 ITA No. 3599/M/2018 ANNEXURE REASONS FOR REOPENING THE ASSESSMENT U/S 148 OF THE I.T. ACT, 1961 Name of the Assessee M/s Balaji Bullion & Commodities India Pvt. Ltd.
Pan AADCN 0236 F
Assessment year 2009
2009-10
"Search &e seizure action /a 1321) of the IT. Act, 196) wan carted out at thy residential premises of Shri Manoj B Punamiya and Shri Arvind Vyas and others by the Investigation wing, Mumbai on 31.020 and subsequent assessee was one of the associates. The assessee dates in which the assesse assesse had 2009 10 on 24.08.2011 fled return of income u/s 153A for A.Y. 2009-10 24.08.2 declaring 55,95,863/-. Assesent 474,41,51,670/- total income at Rs. 55,95,863/ 474,41,51,670/ u/s 143(3) r.w.. 153A was completed on 07,08.2012 determining total income at 474,41,51670/ 474,41,51670/-.
2. Information was received inv.) Unit 6(4), Mumbai vide receive from the DDIT(inv.) 16 dated 23.03.2016 letter no. DDIT--6(4)/Information Dissemination/2015-16 that a survey action u/s. 133A was conducted on Shri Anil Kumar Jain and Shri Pravin Kumar Jain, who were engaged in high value transaction transactions credited through RTGS/Clearing/Cash/Transfer from various accounts, which was immediately withdrawn by cash/multiple transfers made to other accounts. Money was rotated within a certain group of accounts and oreign outward remittance.
the funds were moved out through clearing or fforeign
3. Shri Anil Kumar Jain and Shri Pravin Kumar Jain had opened various bank accounts for the fictitious transactions, one of which was M/s Bafna Exim Pvt. Ltd. From the credits and debits in bank statement of M/s Baina td., it was found that M/s Balaji Bullions & Commodities India Exim Pvt. Ltd., Pvt. Ltd. has undertaken certain transactions with it. An amount of Rs. 10,65,00,000/-- was received by M/s Balaji Bullions & Commodities India Pvt. Ltd. from the account of M/s Bafna Exim Pvt. Ltd. and Rs. 2,42,80,817/- was given by M/s Balaji Bullions & Commodities India Pvt. Ltd. to M/s Bafna Exim Pvt. Ltd.
4. Hence, based on the above information that there was a fictitious 13,07,80,817/- between the transaction involving an amount of Rs. 13,07,80,817/- essee and M/s Bafna Exim Pvt. Ltd., I have a reason to believe that assessee 13,07,80,817/ has escaped assessment within the meaning income of Rs: 13,07,80,817/-
of Section 147 of the I. T. Act. The same should be chargeable to tax for 10 therefore it is a fit case for reopening the assessment u/s. A.Y.2009-10 147 of the I. T. Act, 1961.
5. However, as per the amended Section 151(1) of the IT, Act (w.e.f..6.2015), no notice shall be issued u/s. 148 by an Assessing Officer, after the expiry of a period of four years from the end of the t relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice.
M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 18 ITA No. 3599/M/2018
6. In View Central 4, Mumbai may kindly peruse iew of the above, the Pr.CIT Central-4, the asons recorded for reopening the case and accord necessary approval for issuing notice W/s. 148 of the I. T. Act, if satisfied that, this is a fit case for issuing the said notice.
notice."
5.2 In n view of the above reasons recorded it is evident that the Assessing Officer has duly satisfied the proviso to section 147 of the Act and therefore, we do not find any reason for invalidating the reassessment and accordingly the additional ground No. 4 of the appeal is dismissed.
6. In the additional ground No. 5, the assessee has raised the issue that since the assessment passed u/s 153A r.w.s. 143(3) of the Act was quashed and therefore, he could not have passed the subsequent reassessment order, the as assessee sessee has further raised question whether the additions made u/s 153A r.w.s. 143(3) of the Act could be sustained in reassessment proceedings.
6.1 We have heard rival submission of the parties and perused the afterr filing return of income relevant material on record. In the case afte by the assessee assessment u/s 153A of the Act was completed by the Assessing Officer which has been quashed by the Tribunal vide order dated 29.04.2022 whereas the reassessment proceedings in the case were initiated on 31.03.2016 and therefore, the Assessing Officer has validly reopened the assessment on 31.03.2016 and subsequent quashing of the said assessment cannot be invalidates the reassessment proceedings. As the proceedings u/s 153A of the reassessment relied back to the file Act has been quashed then the reassessment M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 19 ITA No. 3599/M/2018 by the assessee. In response to u/s 148 of the Act. However, as far as the additions made u/s 153A r.w.s. 143(3) of the Act is concerned and same cannot be sustained and only additions which has been made in the reassessmentt proceedings could be reassessmen considered the additional ground No. 5 of the appeal is accordingly partly allowed.
7. Now we take up the regular grounds raised by the assessee.
7.1 We have heard rival submission of the parties and perused the n record. As far as regular grounds of appeal are relevant material on concerned the Ld. counsel for the assessee has taken only argument that Shri Pravin Kumar Jain has retracted his statement recorded by the Income-tax Income tax Authorities on the time of the search and the Assessing Officer has not examined Shri Pravin Kumar Jain after he is retracted his statement and therefore, the addition made by the Assessing Officer u/s 68 of the Act cannot be sustained. However, we find that the Assessing Officer has firstly not made the addition on merely on the basis of statement, the Assessing Officer asked the assessee to discharge its onus u/s 68 of the Act whereas he parties were not found at the assessee failed in doing so. The address provided and the assessee did not provide new address or produce those parties for examination before the Assessing Officer and therefore, the Ld. Assessing Officer is justified in making addition. Further, the retraction statement of Shri Pravin Kumar Jain were never produce before the Assessing Officer or the Ld. M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 20 ITA No. 3599/M/2018 CIT(A) before fore us also a photocopy has been filed that too without any application that to additional evidence. We are of the view that assessee can produce a retraction affidavit from Shri Pravin Kumar Jain and assessee could have produced the relevant director of the Bafna Exim Pvt. Ltd. for verification before the AO. But the assessee miserably failed in producing said party for verification by the Assessing Officer despite the facts that notice u/s 133(6) of the Act returned unserved at the address provided by the the assessee. Thus neither the identity of the said party was not establish the Ld. CIT(A) was creditworthiness of the said party was also not established having contrary has been filed before us to substantiate circumstances, we uphold the creditworthiness of the parties. In the circumstances, the finding of the Ld. CIT(A) on the issue in dispute and dismissed the regular grounds of appeal of the assessee.
8. In the result, the appeal of the assessee is dismissed.
Order pronounced /04/2024.
nounced in the open Court on 03/0
Sd/-
Sd/ S
Sd/-
(RAHUL CHAUDHARY)
CHAUDHARY (OM KANT
OM PRAKASH KANT)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai;
Dated: 03/04/2024
Rahul Sharma, Sr. P.S.
M/s Balaji Bullion & Commodities (India) Pvt. Ltd. 21 ITA No. 3599/M/2018 Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.
BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai