×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
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This appeal filed by the assessee is directed against the order dated 23rd March, 2018 of the CIT(A)-35, New Delhi, relating to assessment year 2010-11.
2. Facts of the case, in brief, are that the assessee is a company and filed its return of income on 9th August, 2011 declaring a loss of Rs.8,06,064/-. The case of the assessee was reopened by issue of notice u/s 148 of the Act on 22nd March, 2016. However, there was no compliance to this notice till the date of passing of the order. In the reasons recorded, it is mentioned that information was received from the Investigation Wing that during the course of search and seizure operation in the case of Jain brothers (Shri Virendera Jain and Shri Surinder Kumar Jain) and their group concerns on 14th September, 2010, certain materials were found and seized which contain incriminating information such as giving accommodation entries by the group concerns to the various entities. The name of the assessee also appears in the list of beneficiaries who have taken accommodation entries. As per such information, the assessee had received accommodation entry of Rs.75,00,000/-. The Assessing Officer accordingly recorded the reasons and issued notice u/s 148 of the Act. Subsequently, notice u/s 142(1) of the Act was also issued. However, there was no compliance again. Subsequently, the Assessing Officer could telephonically contact the directors of the assessee company and asked them to attend the ongoing proceedings.
3. The counsel for the assessee appeared before the Assessing Officer and filed a letter dated 7th December, 2016 objecting to the validity of notice issued u/s 148 on the ground that the assessee company i.e., M/s IEC Sprinkler Industries (India) Pvt. Ltd. had amalgamated with M/s Buniyad Developers (P) Ltd. as per order of the Hon'ble High Court of Delhi and had ceased to exist on the date of issue of notice u/s 148 and, therefore, the notice should be treated as invalid. The copy of the order of the High Court was also furnished. According to the Assessing Officer, there was no effective date of amalgamation which is apparent in the order. The Assessing Officer, therefore, disposed of the objections filed by the assessee by mentioning as under:-
1. Till the date of issue of notice u/s 148, in question, no intimation/information was provided to this office regarding the amalgamation of M/s IEC Sprinkler Industries (India) Pvt. Ltd. with M/s Buniyad Developers (P) Ltd.
2. No application for surrender of PAN-AAACI6589D, M/s 1EC Sprinkler Industries (India) Pvt. Ltd. has been received by this office. Moreover, even as on date the PAN-AAACI6589D has allotted to M/s IEC Sprinkler Industries (India) Pvt. Ltd.
3. As per the Amalgamation order passed by the Hon'ble High Court (Delhi) no effective date of amalgamation has been provided.
4. The Assessing Officer during the course of assessment proceedings asked the assessee to substantiate the amount of Rs.75 lakhs received on account of accommodation entries. Since here was no proper compliance and the assessment was getting barred by limitation, the Assessing Officer, invoking the provisions of section 68 of the Act added an amount of Rs.75 lakhs to the total income of the assessee. The Assessing Officer further made addition of Rs.1,31,250/- being the commission @ 1.75% required for arranging the above entry of Rs.75 lakhs. Thus, in effect, the Assessing Officer made an addition of Rs.76,31,250/- and determined the total income at Rs.76,22,586/- after setting off the loss of Rs.8,664/- declared in the return of income filed.