INCOME TAX ACT, 1961

Section 147 Section 153C

Reassessment - Validity - No incriminating material seized - Jurisdiction under section 147 vis-a-vis under section 153C

The Investigation Report detailing the modus operandi adopted by the entry operators had been reproduced by the AO in the assessment order which gives complete details showing receipt of accommodation entry by the assessee from entry providing companies, amount of entries, bank account and cheque details and money of middle men instrumental in managing the entries for the beneficiaries, i.e., the assessee. As per information provided by investigation wing, the AO noted that the assessee had obtained accommodation entries from S. K. Jain group of companies. The AO was not satisfied with the arguments advanced by the assessee. Relying on various decisions the AO made addition under section 68. Before CIT(A) the assessee, apart from challenging the addition on merit challenged the validity of reassessemnt proceedings. It was argued that the AO, instead of issuing the notice under section 153C, had initiated the proceedings under section 147 which was legally not correct. So far as the validity of the reassessment proceedings were concerned, the CIT(A) rejected the arguments advanced by the assessee. Held: It was an admitted fact that in the instant case the information was passed on by the DDIT (Investigation) and not by the AO of S. K. Jain Group, i.e., the AO of the searched person. No documents belonging to the asesssee was found and S. K. Jain Group had never stated that the documents so seized from their premises do not belong to them. Further, in the instant case it can be seen that no material belonging to the assessee was found from the residence of S. K. Jain and only evidence of accommodation entries given by S. K. Jain Group of cases. Therefore, the AO in the instant case had rightly invoked jurisdiction under section 147, and not under section 153C.

Followed:Surya Financial Services Limited v. Pr. CIT ITA No. 28915/Del/2017 Order, dt. 8-1-2018.

REFERRED :

FAVOUR : Against thed assessee.

A.Y. : 2009-10

INCOME TAX ACT, 1961

Section 68

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