ITAT upholds Reassessment Proceedings initiated on information of Investigation Wings with respect to Accommodation Entry [Read Order]

The Pune bench of Income Tax Appellate Tribunal ( ITAT ) upheld the reassessment proceedings initiated on information wings with respect to accommodation entry.

The assessee Vilson Roofing Products Pvt. Ltd filed its return of income declaring NIL total income. Upon information from the investigating wing that assessee is the ultimate beneficiary of cash transaction arising to it in the form of share subscription. AO after recording reasons & obtaining prior approval from jurisdictional authority has reopened assessee’s case.

It was observed that Assessee’s failure to establish creditworthiness of the subscriber company and genuineness of issue of 2000 shares. Therefore the AO culminated the proceedings by bringing to tax full amount of share subscription of ₹3.00Crores in the hands of assessee as its unexplained cash credit u/s 68 of the Act and accordingly framed the assessment under Section 143(3) r.w.s 147 of the Income Tax Act.

Aggrieved, the assessee filed an appeal before the CIT(A), who dismissed the appeal. Thereafter the assesse filed another appeal before the tribunal.

Assesee representative, Sharad Vaze argued that AO has not conclusively proved the receipt of share application money as not genuine or bogus or sham for initiating the reopening the proceedings

M G Jasnani, the Department representative,argued that the case was reopened on the basis of fresh and specific information which was received by the Assessing Officer on 29/03/2016 and therefore, the requirement as provided under Section 147 of the Income Tax Act is getting fulfilled in the present case because as discussed earlier in this order in the present case the only requirement is that there should be a fresh information with the Assessing Officer indicating that some income has escaped.

It was observed by the tribunal that in this case credible information was received by the Assessing Officer which was examined by him. After examination, a reasonable belief was formed by the Assessing Officer that the income for A.Y. 2009-10 escaped assessment

Thus, the Assessing Officer has followed the due procedure for reopening the assessment

The single-member bench of G. D. Padmahshali, ( Accountant member ) held that notice u/s 148 of the Act was validly issued. Therefore the bench dismissed the ground of appeal filed by the assessee.

To Read the full text of the Order CLICK HERE

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