The Tax Publishers2019 TaxPub(DT) 1662 (Bom-HC)

INCOME TAX ACT, 1961

Section 148

Where assessee had produced with this petition, correspondence entered into by assessee with AO during the assessment, in which assessee had supplied full details of said receipts from the said entity and assessee had built up a strong case to establish that receipts in question never related to the present assessment year, when the very foundation of reassessment was missing, it would be impermissible for AO to carry on reassessment based on such notice.

Reassessment - Bogus accommodation entries - Non-disposal of assessee's objections -

As per information received from the DDIT(Inv), assessee was one of beneficiaries of bogus entities which were controlled and operated by Mr. V. In the statement Mr. V had accepted that he was an entry operator and all entities were bogus companies, which were used by him for providing accommodation entries to various beneficiaries for commission and also accepted that he was a Director in these companies and all other directors are dummy directors. Assessee had entered into suspicious and prima facie bogus financial transactions, which was done to suppress its profit. Assessee failed to disclose fully and truly all material facts necessary for its assessment. Therefore, there was reason to believe that income chargeable to tax under the provisions had escaped assessment. Held: Assessee had produced with this petition, correspondence entered into by assessee with AO during the assessment, in which assessee had supplied full details of said receipts from the said entity. Clearly, assessee had built up a strong case to establish that receipts in question never related to the present assessment year. AO simply could not take shelter under the ground that all these aspects can be examined under reassessment proceedings. When the very foundation of reassessment was missing, it would be impermissible for AO to carry on reassessment based on such notice.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :



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