The Tax Publishers2020 TaxPub(DT) 4761 (Del-Trib)



RMP Holding (P) Ltd. v. ITO

I.T.A. No. 7243/Del/2019

31 July, 2020

In favour of assessee.

Appellant by: Suresh Gupta

Respondent by: M. Barnwal


R.K. Panda, A.M.

This appeal filed by the assessee is directed against the Order, dated 5-8-2019 of the Commissioner (Appeals)-7, New Delhi, relating to assessment year 2011-12.

2. Facts of the case, in brief, are that the assessee is a company and filed its return of income on 17-8-2011, declaring a loss of Rs. 20,53,019. The case was scrutinized under section 143(3) on 10-3-2014, determining the income at Rs. 20,06,714. Thereafter, on the basis of information received during the course of search and seizure operation in the case of entry provider Shri Anand Kumar Jain and Shri Naresh Kumar Jain and subsequent investigation that the assessee is a beneficiary of Rs. 39,00,055, the case of the assessee was reopened by recording reasons under section 147. Subsequently, notice under section 148 was issued on 26-3-2018 after obtaining prior approval of the PCIT-7, New Delhi. In response to the same, the assessee filed a letter stating that the return already filed under section 139 may be treated as the return filed in response to the notice under section 148 of the Act. However, another Letter, dated 7-8-2018 was issued to the assessee requesting him to file the return in response to notice under section 148 of the Act. The assessee ultimately filed its return on 13-8-2018 declaring a loss of Rs. 4,053. Subsequently, the assessing officer issued notice under section 143(2) and 142(1) of the Income Tax Act and copies of the reasons recorded were also handed over to the assessee.

3. During the course of assessment proceedings, the assessing officer noted that the information was received in the case that the assessee has received accommodation entries from M/s. Ambaranuj Finance and Investments Pvt. Ltd. of Rs. 25 lakhs and M/s. Zen Tradex Pvt. Ltd. of Rs. 14 lakhs. During the course of assessment proceedings, the assessee filed confirmations from the above two companies and it was submitted that it had taken loans from these two parties. In order to verify the genuineness of these two parties, summons under section 131 were sent to the above two parties on the address available at ROC website as well as on e-mail id. It was made clear in the summons that personal deposition of the principal officer is required. However, on the appointed date, i.e., on 18-12-2018, neither anybody attended nor any request for adjournment was received. In the meanwhile, on 16-12-2018, the assessee was also asked to produce these parties for personal appearance. Since the assessee showed his inability to produce these parties and in absence of personal deposition of these parties, the assessing officer rejected the confirmation so filed by the assessee holding that the same cannot be relied upon. The assessing officer analysed the amount of Rs. 39,00,055 received by the assessee as accommodation entry. He considered the documents and electronic data seized from various premises by the Investigation Wing according to which a number of bank statements and signed and unsigned cheque books pertained to the shell companies of the Jain brothers were found. He noted as to how these two entities were being run by Shri Naresh Kumar Jain and the modus operandi. Rejecting the various explanations given by the assessee, the assessing officer made addition of Rs. 39,00,055 under section 68 of the Income Tax Act.