M/S. WAMIL SUPPLIERS PVT. LTD. ,KOLKATA vs. ITO-5(1), KOL, KOLKATA

order : October 18, 2023 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 17.05.2023 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The assessee in this appeal has taken the following grounds of appeal: “1. That the reopening made by the Assessing officer u/s 147 of the Act, on the order passed u/s 148 of the Act, is without jurisdiction and therefore, the action of the Ld. CIT(A) and confirming the order of the AO is erroneous and bad in law.

Assessment Year: 2013-14 M/s Wamil Suppliers Pvt. Ltd 3. That on the facts and in the circumstances of the case, the action of the Ld. CIT(A) to confirm the action of the AO in making addition of Rs. 1,00,00,000/- on account of unexplained money u/s 69A of the Act is contrary to the material evidences on record and the addition is arbitrary, excessive and illegal.

4. That the order of the Ld. CIT(A) confirming the action of the A.O. is arbitrary, excessive and illegal.

will be argued in details at the time of hearing and the appellant craves leaves to submit additional grounds of appeal if any and or alter, vary, modify or rectify the statement of facts and grounds of appeal at or before the time of hearing.”

3. The perusal of the above grounds of appeal would reveal that the assessee, inter alia, has contested the validity of the assessment order passed by the Assessing Officer u/s 147 of the Act.

“In this case, the assessee submitted return of incone for the AY 2013-14 on 03/10/2013 declaring nil income. Processing u/s 143(1) was done on 12/11/2014 accepting the returned income. On the basis of enquiry and information in the possession of the undersigned it was come to light that on investigation of the bank statement account number 32105014323 of Standard Charted Bank in respect of Rottex Mercantile Ltd, it is found that accounts mentioned above from which the funds transferred to M/s. Rottex Mercantile Ltd through transfer mode or RTGS. From the data base of this department it is found that funds are transferred in the account through M/s. Vision Niketan Pvt Ltd, M/s.Calcutta Vyapaar Pvt Ltd, M/s. Finlink Tracon Pvt Ltd., M/s. Hytone Impex Pvt Ltd, M/s. Chirag Trexim Pyt Ltd, M/s. Kingfisher Exim Pvt Ltd and M/s. Uplink Securities Pvt Ltd. On analysis of the above mentioned concerns it is Assessment Year: 2013-14 M/s Wamil Suppliers Pvt. Ltd found that all the concerns are either "NIL" income or very low income. All these concerns are mere paper/shell concerns having dubious financial nature which are controlled and managed by Kolkata based entry operators Sri Manohar Lal Nangalia, Arun Nangalia and Dinesh Dhandania. They have already given their statement before the department. In their statements on oath, they admitted that they are engaged in the business of providing accommodation entry in the form of bogus share capital, share premium, bogus commodity profit, pre- arranged bogus LTCG/STCL, unsecured loan etc through jama- kharchi'/shell companies/concerns controlled & managed by them to various beneficiaries/parties in lieu of commission in cash.. On examination of bank statements the fund has been frequently comes in the bank accounts of the above concerns which was immediately transfer to the interlink accounts and then ultimately to the beneficiary's account. In this way the following beneficiary companies have brought back their unaccounted income into their regular books of accounts in the guise of bogus share/share premium, pre-arranged bogus LTCG/STCL, unsecured loans etc. There was no other financial rationale behind such transactions. Movement of fund of Rs.11.31 crores (approx.) through the above bank accounts has been prepared in fund trail and 6ultimate beneficiaries have been identified. The beneficiaries have been identified on the basis of identity, genuineness and creditworthiness as ascertain from ITD data, MCA details and Directors Profile of the company. From the analysis of the above mentioned bank accounts and interlinked bank accounts, beneficiaries have been identified where it is seen that M/s. WAMIL SUPPLIERS PRIVATE LIMITED PAN: AAACW4149D] is a real beneficiary of unaccounted money of Rs.1,00,00,000/- during the F.Y. 2012-13 corresponding to the A.Y. 2013-14. Hence, on the basis of the information collated and the analysis done l am of the view that the assessee company has not disclosed his true and full income for the financial year 2012-13. Hence in view of the comprehensive enquiries and verification of data possessed by the Department and after applying mind, the undersigned has reasons to believe that the assessee Ms. WAMIL SUPPLIERS PRIVATE LIMITED (PAN: AAACWA149D) is the beneficiary of Rs.1,00,00,000/- by taking unaccounted money transfer during the F.Y. 2012-13 relevant to the Assessment Year 2013-14. Under the circumstances, in terms of the Proviso to Section 147 of the Act, as income chargeable to tax has escaped assessment by reason of the Assessment Year: 2013-14 M/s Wamil Suppliers Pvt. Ltd failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment and in the light of the clarificatory provisions of Explanation 1 of the said Proviso, the above income is required to be re-assessed as per the provisions of Section 147 of the Income Tax Act, 1961. Since four years has been elapsed from the end of the relevant assessment year and the escaped income is more than 1 Lakh, the approval of Ld. Pr. CIT-2, Kolkata is to be obtained as per section 151 of the Income Tax Act, 1961 in this case. Questionnaires along with reasons for reopening the case 1. Copy of accounts and bank statements for the relevant assessment year.

Pointing to the above reasons recorded by the Assessing Officer, the ld. counsel has submitted that in this case the allegation of the Assessing Officer is that he had information that the assessee was beneficiary of unaccounted money of Rs.1 crore during F.Y 2012-13 corresponding to A.Y 2013-14. It has been alleged that the funds have routed through M/s Rottex Mercantile Ltd. and further transferred through certain paper/shell companies. The ld. counsel has submitted that in fact during the year under consideration, no such funds have been received by the assessee as alleged by the Assessing Officer in the reasons recorded. The ld. counsel has invited our attention to page 42 of the paper-book to submit that during the year, the assessee company rather had purchased 38000 shares of Energy Development Co. Ltd. from Rottex Mercantile Pvt. Ltd. @Rs.15.50/- per share for Rs.5,89,000/-. That except the aforesaid transaction of purchase of shares from Rottex Mercantile Pvt. Ltd., the assessee did not enter into any other transaction with the said concern. Therefore, the reasons recorded by the Assessing Officer were factually incorrect.

Assessment Year: 2013-14 M/s Wamil Suppliers Pvt. Ltd 5. The ld. counsel has further invited our attention to the assessment order to submit that the return of income for the year under consideration was filed by the assessee on 02.09.2020 and that the notices u/s 142(1) and 143(2) were issued on 09.09.2021 which was during the peak period of Covid pandemic. That even the assessee did not receive any of the alleged notices. The ld. counsel has further submitted that the assessment order was passed on 29.09.2021, that was also during the Covid pandemic period. That owing to the Covid pandemic since the offices were closed and the assessee did not receive any notices of hearing and the Assessing Officer passed the assessment order ex parte of the assessee in hurried manner on 29.09.2021 i.e. within the 20 days of the issuance of notices, the case of the assessee, under the circumstances, remained unrepresented before the Assessing Officer. However, the assessee during the appellate proceedings before the CIT(A) furnished the required documents including the ledger account of M/s Calcutta Vyapaar Pvt. Ltd. from whom the assessee has received a sum of Rs.50,00,000/- on account of refund of loan advanced in earlier years and further the ledger account of M/s Rottex Mercantile Pvt. Ltd. to whom the assessee has paid a sum of Rs.5,89,000/- on account of purchase of shares, no other financial transactions were carried out by the assessee during the year. However, the ld. CIT(A) totally ignored the above submissions of the assessee and confirmed the additions so made by the Assessing Officer in a mechanical manner.