Point of Law: Information furnished at the time of original assessment, when by subsequent information received from the Principal Director (Investigation), itself found to be controverted, the objection to the notice of reassessment under section 147 must fail

JUDGMENT :

ASHOKKUMAR C. JOSHI, J.

1. This petition, under Article 226 of the Constitution of India, is filed by the petitioner – Anderson Biomed Private Limited – assessee seeking to quash and set aside the Notice dated 30.03.2019 issued by the respondent authority under section 148 of the Income Tax Act, 1967 (herein after referred to as “the IT Act”) for the Assessment Year 2012-13, as it has reason to believe that the income chargeable to tax for the assessment year under consideration has escaped assessment within the meaning of section 147 of the IT Act.

2. The facts, as emerge from the record, are that the petitioner is a Company incorporated under the Companies Act, 1956. During the Financial Year 2010-11, relevant to Assessment Year 2011-12, the petitioner entered into certain commodities transactions through broker namely “AA Plus Shares Brokers Pvt. Ltd.” (herein after referred to as “the broker company”) in which, the petitioner incurred loss and eventually, an amount of Rs.2,07,92,029/- became payable to the broker company, which remained outstanding even on 31.03.2011 and was reflected in Schedule-9: Sundry Creditors forming part of the Audited Annual Accounts. Such amount was repaid by the petitioner company during the Financial Year 2011-12, relevant to the Assessment Year 2012-13 i.e. the year under consideration, in various installments through banking channel, as is evident from the ledger of the broker company. Thereafter, the petitioner filed its Return of Income (RoI) for the year under consideration on 24.09.2012, declaring total income of Rs.1,18,22,690/-. However, the respondent authority issued notice dated 30.03.2019 under section 148 of the IT Act seeking to reopen the case of the petitioner for the year under consideration. In response to the said notice, the petitioner company filed its RoI on 21.08.2019 and also requested to supply the reasons for reopening, which were supplied vide letter dated 12.09.2019. A perusal of the same revealed that the respondent authority is of the view that the petitioner had transactions aggregating to Rs.2,07,92,029/- with the broker company during the year under consideration and hence, the petitioner has taken accommodation entries to the tune of Rs.2,07,92,029/- and the respondent authority has reason to believe that the petitioner has escaped assessment. Against the reasons accorded, the petitioner, vide letter dated 02.10.2019, raised objections against reopening on factual as well as the legal grounds, however, the respondent authority disposed of the said objections raised by the petitioner holding that the reopening is justified. Being aggrieved, the petitioner is before this Court by way of this petition.

3. We have heard, learned senior advocate Mr. Tushar Hemani for learned advocate Ms. Vaibhavi Parikh for the petitioner and learned advocate Mr. Nikunt Raval for learned advocate Mrs. Kalpana Raval for the respondent.

3.1 The learned senior advocate for the petitioner, inviting attention to the reasons recorded, submitted that as is emerging from the reasons recorded, an inquiry was carried by the Deputy Director of Income Tax (Inv.), Unit-1(3), Ahmedabad in the case of various bogus concerns of Shri Jignesh Sudhirbhai Shah, who is engaged in the business of providing the accommodation entries. That, search under section 132 of the IT Act conducted on 11.09.2018, resulted into seizure of unaccounted cash of Rs.19.3 crores (related to accommodation entries and commission earned thereon) from the residential premises of Shri Jignesh Shah along with incriminating digital as well as documentary evidence. It was found that Shri Jignesh Shah is managing and controlling multiple companies and concerns, which are not carrying out any genuine business activity. These concerns are involved in activity of providing accommodation entries of various kinds such as unsecured loans, share premiums, bogus gains, contrived losses etc. The concerns were found to be non-existent