Gujarat High Court
Parth Knitex Pvt Ltd, Pravinkumar ... vs Deputy Commssioner Of Income Tax Circle ... on 27 February, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/SCA/21107/2017 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 21107 of 2017
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PARTH KNITEX PVT LTD, PRAVINKUMAR RAMKARAN AGARVAL
Versus
DEPUTY COMMSSIONER OF INCOME TAX CIRCLE 2(1)(1)
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Appearance:
DARSHAN R PATEL for the PETITIONER(s) No. 1
MRS KALPANAK RAVAL for the RESPONDENT(s) No. 1
NOTICE NOT RECD BACK for the RESPONDENT(s) No. 1
NOTICE SERVED for the RESPONDENT(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 27/02/2018
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. The petitioner has challenged a notice of reopening of the assessment for the assessment year 2011-12 issued by the respondent-Assessing Officer on 31.03.2017.
2. Facts are as under:
The petitioner is a company registered under the Companies Act. For the assessment year 2011-12, the petitioner has filed the return of income which was accepted without scrutiny under section 143(1) of the Act. To reopen such assessment, the Assessing Officer issued impugned notice. In order to do so, he had recorded following reasons:Page 1 of 5 C/SCA/21107/2017 ORDER
"The assessee filed its return of income for the A.Y. 2011-12 on 30.12.2011 declaring total income at Rs. Nil.
2. In this case, information has been received from the O/o the DDIT (Inv.) Unit-3(1), Kolkata, that a inquiry was conducted in the case of Shir Kripa Sankar Dubey by the Investigation Wing, Kolkata. These details were received from the DDIT (Inv) Unit 3(1), Kolkata vide his letter no. DDIT(Inv)Kol/X-181/Report/2016-17 dated 24.03.2017. During the course of inquiry, it was seen that Shir Kripa Sankar Dubey as a director/authorized signatory opened accounts in Ing Vyasa Bank. The total aggregate turnover in the accounts for the period from 01.04.2010 to 15.09.2010 was 294.79 crores. The average balance in all four accounts (518011047467, 518011047491, 518011048057 and 518011047315) during 2009-10 were Rs. 3.33 lacs in contrast the average balance in these received from clearing as well by transfer from other firms. During the course of inquiry, it is also noticed that the summons were issued to Sankar Dubey & Parimal Agarwal but returned back and also summons issued to the Principal Officers of Orchard Pvt. Ltd., Kalimata Suppliers Pvt. Ltd Dolphine Shoppers Pvt. Ltd and Suniyojit Agencies Pvt. Ltd. but no response has been received from the side of the companies.
Further, on verification from bank statements of the companies i.e. Orchard Pvt. Ltd Kalimata Suppliers Pvt. Ltd Dolphine Shoppers Pvt Ltd and Suniyojit Agencies Pvt. Ltd it is seen that the companies received fund by transfer/clearing from various entities and fund has been debited by transfer/clearing to various entities including Brightsun Travin Pvt. Ltd. After verification ITD data base,it is found that this concern i.e. Brightsun Travin Pvt. Ltd is only dummy/paper concern and its balance sheet & Profit/Loss accounts does not support fund rotation in its bank accounts. Further, after verification of bank account of the said concern, it is seen that the funds has been transfer to the real beneficiaries including the assessee company i.e. M/s. PARTH KNITEX PRIVATE LIMITED, Brightsun Train Pvt. Ltd company has made the transaction of Rs. 5,00,000/- by its acount of Standard C. Bank A/. No. Page 2 of 5 C/SCA/21107/2017 ORDER 32205469861 on 09.03.2011 with M/s. PARTH KNITEX PRIVATE LIMITED, which is unaccounted income of the assessee company shown in its regular books of accounts.
On perusal, from the information of and material on records, it is seen that the credit entry of transaction made with Brightsun Travin Pvt. Ltd is bogus credits which represent undisclosed income of the assessee company u/s. 68 of the IT Act.
3. As discussed in preceding para this amount represents income of the assessee for A.Y. 2011-12, company which escaped assessment because of non-disclosure of true and full materials facts necessary for its assessment for A.Y. 2011-12 by the assessee.
4. The assessee has obtained accommodation entry from the bogus concern Brightsun Travin Pvt. Ltd for the same and thereby introduced its unaccounted/undisclosed income liable to be taxed u/s. 68 of the IT Act.
5. In view of the discussion above, I have reason to believe that the income of Rs. 5,00,000/- chargeable to tax has escaped assessment for AY 2011-12 as per the provisions of section 147 due to failure on the part of the assessee to disclose fully and truly all materials facts necessary for its assessment for A.Y. 2011-12."
3. The petitioner raised objections to the notice of reopening under communication dated 05.07.2017. Such objections were rejected by an order dated 11.07.2017 by the Assessing Officer. Hence, this petition.
Page 3 of 5 C/SCA/21107/2017 ORDER4. Conscious of the fact that the original assessment was not scrutiny assessment, counsel for the petitioner raised a single contention in support of the petitioner's challenge viz. that the reasons lacked validity. He contended that there was no transaction of transfer of an amount of Rs. 5 lacs from one Brightsun Travin Private Limited in favour of the petitioner- assessee. Thus, the Assessing Officer has proceeded on wrong premise. Counsel for the petitioner pointed out that such ground was taken in objection. The Assessing Officer brushed aside such a contention.
5. At all stages the stand of the petitioner is that there was no transaction of Rs. 5 lacs from the said Brightsun Travin Private Limited in favour of the petitioner during the period under consideration. In fact, counsel for the petitioner pointed out that such transfer took place during the period relevant to the assessment year 2011-12. There is no answer from the Revenue on this contention of the petitioner. In the objections raised by the petitioner as well as in the present petition ,such a ground has been specifically taken. Revenue is unable to dislodge this factual contention. In other words, the Revenue is unable even prima facie to point out that there was actually a transaction of transfer of fund of Rs. 5 lacs from Brightsun Travin Private Limited to the petitioner during the year under consideration. Thus, it is clear that the petitioner is correct in contending that the Assessing Officer has proceeded completely on wrong premise. When the reason itself is found Page 4 of 5 C/SCA/21107/2017 ORDER to be erroneous and when this is the sole ground for reopening of the assessment, impugned notice must be quashed. The same is hereby quashed. Petition is disposed of.
(AKIL KURESHI, J.) (B.N. KARIA, J.) JYOTI V. JANI Page 5 of 5