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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
This appeal by the assessee is directed against revision order dated 16/03/2022 passed by the Ld. Principal Commissioner of Income-Tax (PCIT)-1, Mumbai ( in short ‘ the PCIT’) under section 263 of the Income-tax Act, 1961 ( in short the Act), wherein he has revised the assessment order dated 09/12/2019 passed by the Asst Commissioner of Income-tax-Circle 9(3)(2), Mumbai (in short ‘the
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 2 ITA NO. 871/M/2022 Ld. Assessing Officer or AO Assessing Officer or AO’) under section 143(3) read with section under section 143(3) read with section 147 of the Act.
2. The grounds raised by the assessee are reproduced as under: The grounds raised by the assessee are reproduced as under: The grounds raised by the assessee are reproduced as under:
1. On the fact and circumstances of the case as well as in On the fact and circumstances of the case as well as in On the fact and circumstances of the case as well as in Law, the Learned Principal Commissioner of Income Tax (PCIT) Learned Principal Commissioner of Income Tax (PCIT) Learned Principal Commissioner of Income Tax (PCIT) has erred in initiating proceedings U/s 263 of the Income Tax has erred in initiating proceedings U/s 263 of the Income Tax has erred in initiating proceedings U/s 263 of the Income Tax Act, 1961 (the Act) vide show Act, 1961 (the Act) vide show-cause notice dated 27.01.2022 cause notice dated 27.01.2022 and passing an order U/s 263 of the Act, without considering and passing an order U/s 263 of the Act, without considering and passing an order U/s 263 of the Act, without considering the facts & Circumsta the facts & Circumstances of the case.
2. On the fact and circumstances of the case as well as in 2. On the fact and circumstances of the case as well as in 2. On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in passing Revision Law, the Learned Principal CIT has erred in passing Revision Law, the Learned Principal CIT has erred in passing Revision Order u/s.263 of the Income Tax Act, 1961 for the assessment Order u/s.263 of the Income Tax Act, 1961 for the assessment Order u/s.263 of the Income Tax Act, 1961 for the assessment order u/s. 143(3) r.w.s 147 of the Act passed by the Lear order u/s. 143(3) r.w.s 147 of the Act passed by the Lear order u/s. 143(3) r.w.s 147 of the Act passed by the Learned Assessing Officer after making adequate enquiries and Assessing Officer after making adequate enquiries and Assessing Officer after making adequate enquiries and application of mind, without considering the facts and application of mind, without considering the facts and application of mind, without considering the facts and circumstances of the case. circumstances of the case.
3. On the fact and circumstances of the case as well as 3. On the fact and circumstances of the case as well as 3. On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in considering Law, the Learned Principal CIT has erred in considering Law, the Learned Principal CIT has erred in considering the order passed u/s. 143(3) r.w.s 147 of the Income Tax Act, order passed u/s. 143(3) r.w.s 147 of the Income Tax Act, order passed u/s. 143(3) r.w.s 147 of the Income Tax Act, 1961 by the Learned Assessing officer is erroneous and 1961 by the Learned Assessing officer is erroneous and 1961 by the Learned Assessing officer is erroneous and prejudicial to the interest of the revenue, without appreciating prejudicial to the interest of the revenue, without appreciating prejudicial to the interest of the revenue, without appreciating the facts and circumstances of the case. the facts and circumstances of the case.
4. On the fact and circumstances 4. On the fact and circumstances of the case as well as in of the case as well as in Law, the Learned Principal CIT has erred in setting aside Law, the Learned Principal CIT has erred in setting aside Law, the Learned Principal CIT has erred in setting aside Assessment order passed by the Learned Assessing Officer Assessment order passed by the Learned Assessing Officer Assessment order passed by the Learned Assessing Officer and directing him to reframe the assessment order denovo and directing him to reframe the assessment order denovo and directing him to reframe the assessment order denovo
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 3 ITA NO. 871/M/2022 after after after conducting conducting conducting all all all the the the necessary necessary necessary enquiries, enquiries, enquiries, without without without considering the facts and circumstances of the case. idering the facts and circumstances of the case. idering the facts and circumstances of the case.
Briefly stated facts of the case that that the assessee company stated facts of the case that that the assessee company stated facts of the case that that the assessee company filed return of income for the year under consideration on filed return of income for the year under consideration on filed return of income for the year under consideration on 29/09/2012 declaring total income of 29/09/2012 declaring total income of ₹ 51, 23, 180/ 51, 23, 180/-, which was further revised on 13/02/2013 at total income of n 13/02/2013 at total income of ₹ ₹ 50, 99, 480/-. The return of income filed by the assessee was processed under The return of income filed by the assessee was processed under The return of income filed by the assessee was processed under section 143(1) of the section 143(1) of the Act. Subsequently, on receipt of information . Subsequently, on receipt of information from the investigation wing, Mumbai that the assessee was from the investigation wing, Mumbai that the assessee was from the investigation wing, Mumbai that the assessee was indulged in high number mber of interconnected fund transfer without an of interconnected fund transfer without an economic rationale, the assessment was reopened under section economic rationale, the assessment was reopened under section economic rationale, the assessment was reopened under section 147 of the Act by way of issuing notice under section 148 of the by way of issuing notice under section 148 of the by way of issuing notice under section 148 of the Act on 30/03/2019. In response to the notice under section 148 of the on 30/03/2019. In response to the notice under section 148 of the on 30/03/2019. In response to the notice under section 148 of the Act, the assessee filed return of income on 19/04/2019 reiterating , the assessee filed return of income on 19/04/2019 reiterating , the assessee filed return of income on 19/04/2019 reiterating the total income of ₹ 50, 99, 480/-. A copy of reasons recorded was . A copy of reasons recorded was provided to the assessee. The objections raised by the assessee provided to the assessee. The objections raised by the assessee provided to the assessee. The objections raised by the assessee against the reopening of the a against the reopening of the assessment were also disposed o ssessment were also disposed off by the Assessing Officer on 20/08/2019. In para 4.1 of the reasons the Assessing Officer on 20/08/2019. In para 4.1 of the reasons the Assessing Officer on 20/08/2019. In para 4.1 of the reasons recorded, there is mention of 10 parties of M/s Suntech Group, recorded, there is mention of 10 parties of M/s Suntech Group, recorded, there is mention of 10 parties of M/s Suntech Group, with whom the assessee allegedly made interconnected fund with whom the assessee allegedly made intercon with whom the assessee allegedly made intercon transfer. Out of those 10 parties , detailed transactions in resp se 10 parties , detailed transactions in resp se 10 parties , detailed transactions in respect of two parties namely M/s MoonScape services Private Limited and two parties namely M/s MoonScape services Private Limited and two parties namely M/s MoonScape services Private Limited and M/s Nifty realty Private Limited were mentioned in para 4.2 and 4.3 M/s Nifty realty Private Limited were mentioned in para 4.2 and 4.3 M/s Nifty realty Private Limited were mentioned in para 4.2 and 4.3 of the reasons recorded. The Assessing Officer in the reassessment of the reasons recorded. The Assessing Officer in the reassessment of the reasons recorded. The Assessing Officer in the reassessment 15 lakh from Moonscape order 09/12/2019 held the receipt of order 09/12/2019 held the receipt of ₹ 15 lakh from M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 4 ITA NO. 871/M/2022 Services Private Limited and ₹ 4.92 Crores from Services Private Limited 4.92 Crores from Nifty Realty Private Limited totalling to totalling to ₹5,07,50,000/-as unexplained cash as unexplained cash credit under section 68 of the credit under section 68 of the Act.
3.1 Subsequently, the Subsequently, the Ld. PCIT called for the assessment record PCIT called for the assessment record and after examination and after examination of the records, he opined that the assessment order passed by the Assessing Officer was erroneous in so far as order passed by the Assessing Officer was erroneous order passed by the Assessing Officer was erroneous prejudicial to the interest of the prejudicial to the interest of the Revenue in view of the fact that the in view of the fact that the Assessing Officer failed to verify Assessing Officer failed to verify or examine all the transactions of all the transactions of interconnected fund transfer through the relevant bank account of interconnected fund transfer through the relevant bank account of interconnected fund transfer through the relevant bank account of the assessee maintained with Kotak Mahindra the assessee maintained with Kotak Mahindra, Andheri East, , Andheri East, Mumbai having value to the extent of having value to the extent of ₹51,25,02, 25,02,000/-, though same were transactions of nature similar to transactions in respect same were transactions of nature similar to transactions in respect same were transactions of nature similar to transactions in respect of two parties, for which he had made additions. Accordingly, the two parties, for which he had made additions. Accordingly, the two parties, for which he had made additions. Accordingly, the Ld. PCIT, issued show cause notice to the assessee proposing to PCIT, issued show cause notice to the assessee proposing to PCIT, issued show cause notice to the assessee proposing to revise the assessment order under reference. After considering the revise the assessment order under reference. After considering the revise the assessment order under reference. After considering the submission of the assessee and submission of the assessee and perusal of the assessment reco the assessment record, the Ld. CIT(A) recorded factual observations, which are extracted as the Ld. CIT(A) recorded factual observations, which are extracted as the Ld. CIT(A) recorded factual observations, which are extracted as under:
7.1. On perusal of the records it is noticed that the AO has not 7.1. On perusal of the records it is noticed that the AO has not 7.1. On perusal of the records it is noticed that the AO has not carried out proper verification of ledger accounts submitted by carried out proper verification of ledger accounts submitted by carried out proper verification of ledger accounts submitted by the assessee. On perusal of ledger account of N the assessee. On perusal of ledger account of Nifty Realty Pvt. ifty Realty Pvt. Ltd. in the books of the assessee, it is seen that the assessee Ltd. in the books of the assessee, it is seen that the assessee Ltd. in the books of the assessee, it is seen that the assessee has received total credit of Rs. 4.97.50,000/ has received total credit of Rs. 4.97.50,000/- from Nifty Realty from Nifty Realty Pvt. Ltd. While the AO has added only Rs. 4,92,50,000/ Pvt. Ltd. While the AO has added only Rs. 4,92,50,000/ Pvt. Ltd. While the AO has added only Rs. 4,92,50,000/- to the total income of the assessee under section 68. total income of the assessee under section 68. total income of the assessee under section 68. No reason or M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 5 ITA NO. 871/M/2022 record is available as to why the AO chose not to add the record is available as to why the AO chose not to add the record is available as to why the AO chose not to add the remaining Rs. 5,00,000/ remaining Rs. 5,00,000/- received from Nifty Realty Pvt. Ltd. received from Nifty Realty Pvt. Ltd. The action of the AO is not as per law and is erroneous and The action of the AO is not as per law and is erroneous and The action of the AO is not as per law and is erroneous and also prejudicial to the interest of revenue. The relevant ledge also prejudicial to the interest of revenue. The relevant ledge also prejudicial to the interest of revenue. The relevant ledger account is reproduced below for reference account is reproduced below for reference- 7.2. Similarly, the AO has added Rs. 15 lakh to the total income 7.2. Similarly, the AO has added Rs. 15 lakh to the total income 7.2. Similarly, the AO has added Rs. 15 lakh to the total income of the assessee which is sum received from Moonscape Facility of the assessee which is sum received from Moonscape Facility of the assessee which is sum received from Moonscape Facility Management Pvt. Ltd. on the ground that Moonscape Facility Management Pvt. Ltd. on the ground that Moonscape Facility Management Pvt. Ltd. on the ground that Moonscape Facility Management Pvt. Ltd. do Management Pvt. Ltd. does not have the creditworthiness to es not have the creditworthiness to lend the said sum to the assessee. However, on perusal of lend the said sum to the assessee. However, on perusal of lend the said sum to the assessee. However, on perusal of ledger account of Moonscape Facility Management Pvt. Ltd. in ledger account of Moonscape Facility Management Pvt. Ltd. in ledger account of Moonscape Facility Management Pvt. Ltd. in the books of the assessee, it is seen that transactions of Rs. the books of the assessee, it is seen that transactions of Rs. the books of the assessee, it is seen that transactions of Rs. 16,02,50,000/ 16,02,50,000/- have been undertaken between the assessee between the assessee and Moonscape Facility Management Put. Ltd. out of which and Moonscape Facility Management Put. Ltd. out of which and Moonscape Facility Management Put. Ltd. out of which only Rs. 15 lakh only Rs. 15 lakh- being the sum added by AO for lack of being the sum added by AO for lack of M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 6 ITA NO. 871/M/2022 creditworthiness creditworthiness-is only one of the many transactions. The AO is only one of the many transactions. The AO has given no clarification or justification in the assessmen has given no clarification or justification in the assessmen has given no clarification or justification in the assessment order as to why the remaining sum has not been added to the order as to why the remaining sum has not been added to the order as to why the remaining sum has not been added to the total income of the assessee even after recording the finding of total income of the assessee even after recording the finding of total income of the assessee even after recording the finding of lack of creditworthiness of the lender. The action of the AO in lack of creditworthiness of the lender. The action of the AO in lack of creditworthiness of the lender. The action of the AO in not making proper verification of the facts and thereby failing t not making proper verification of the facts and thereby failing t not making proper verification of the facts and thereby failing to make the correct assessment of the total income for the year make the correct assessment of the total income for the year make the correct assessment of the total income for the year under consideration, is not only erroneous but also prejudicial under consideration, is not only erroneous but also prejudicial under consideration, is not only erroneous but also prejudicial to the interests of Revenue. The relevant ledger account is to the interests of Revenue. The relevant ledger account is to the interests of Revenue. The relevant ledger account is reproduced below for reference reproduced below for reference- 7.3 There are similar transactions There are similar transactions with other parties which with other parties which the AO failed to verify during the course of assessment the AO failed to verify during the course of assessment the AO failed to verify during the course of assessment proceedings which are tabulated below: proceedings which are tabulated below:
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 7 ITA NO. 871/M/2022
4. The Ld. PCIT, further distinguish PCIT, further distinguished the decisions relied upon the decisions relied upon by the Ld. Authorized Representative ed Representative of the assessee in the case of of the assessee in the case of CIT Vs Sunbeam auto Ltd (2011) 332 ITR 167 (Delhi), observing as CIT Vs Sunbeam auto Ltd (2011) 332 ITR 167 (Delhi), observing as CIT Vs Sunbeam auto Ltd (2011) 332 ITR 167 (Delhi), observing as under:
“8. The assessee's representative has relied on the ruling in the 8. The assessee's representative has relied on the ruling in the 8. The assessee's representative has relied on the ruling in the case of CIT vs. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Delhi). case of CIT vs. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Delhi). case of CIT vs. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Delhi). However, reliance on this case law is not correct because in However, reliance on this case law is not correct because in However, reliance on this case law is not correct because in that case sufficient material was available on record. In this that case sufficient material was available on record. In this that case sufficient material was available on record. In this case, the AO had made addition u/s.68 for the transactions of the AO had made addition u/s.68 for the transactions of the AO had made addition u/s.68 for the transactions of Rs.5,07,50,000/ Rs.5,07,50,000/- being loans received which were not genuine being loans received which were not genuine and represented income of the assessee from undisclosed and represented income of the assessee from undisclosed and represented income of the assessee from undisclosed sources brought under the garb of loans. The assessee had sources brought under the garb of loans. The assessee had sources brought under the garb of loans. The assessee had carried carried out out similar similar tran transactions sactions of of high high number number of of interconnected fund transfers through its same bank account to interconnected fund transfers through its same bank account to interconnected fund transfers through its same bank account to the extent of Rs.51.25,02,000/ the extent of Rs.51.25,02,000/- and therefore, the facts of the and therefore, the facts of the instant case and facts of that case relied upon are totally instant case and facts of that case relied upon are totally instant case and facts of that case relied upon are totally different. The Assessment Order is silent different. The Assessment Order is silent regarding part regarding part
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 8 ITA NO. 871/M/2022 addition of loans from Nifty Realty Pvt Ltd of Rs. 4,92,50,000/ addition of loans from Nifty Realty Pvt Ltd of Rs. 4,92,50,000/ addition of loans from Nifty Realty Pvt Ltd of Rs. 4,92,50,000/- and from Moonscape Facility Management Pt Ltd of Rs. and from Moonscape Facility Management Pt Ltd of Rs. and from Moonscape Facility Management Pt Ltd of Rs. 15,00,000/- whereas full addition of Rs. 4,97,00,000/ whereas full addition of Rs. 4,97,00,000/- and Rs. 16,02 50-00Q/ 00Q/- respectively from these two creditors is respectively from these two creditors is required.”
4.1 The Ld. PCIT concluded that assessment was made without PCIT concluded that assessment was made without PCIT concluded that assessment was made without conducting requisites inquiries and verification by the Assessing conducting requisites inquiries and verification by the Assessing conducting requisites inquiries and verification by the Assessing Officer and held the assessment order a and held the assessment order as erroneous insofar as s erroneous insofar as prejudicial to the interest of the prejudicial to the interest of the Revenue in view of the ame in view of the amended law particularly Explanation Explanation-2, clause (a) below section 263 of the 2, clause (a) below section 263 of the Act. The Ld. PCIT also referred to the decision of the Hon’ble PCIT also referred to the decision of the Hon’ble PCIT also referred to the decision of the Hon’ble Supreme Court in the case of Supreme Court in the case of Smt TaradeviAgrwal (supra) and TaradeviAgrwal (supra) and Rampyari Devi Sarogi (supra) to support that assessment completed Rampyari Devi Sarogi (supra) to support that assessment Rampyari Devi Sarogi (supra) to support that assessment without necessary enquiry is warr without necessary enquiry is warranted on the facts of the case a anted on the facts of the case as erroneous insofar as it is prejudicial to the interest of the Revenue. erroneous insofar as it is prejudicial to the interest of the erroneous insofar as it is prejudicial to the interest of the
All the ground raised by the assessee are with respect to the All the ground raised by the assessee are with respect to the All the ground raised by the assessee are with respect to the sole issue of revision of the assessment or sole issue of revision of the assessment order by the PCIT. Before us der by the PCIT. Before us the Ld. counsel of the assessee filed paperbook he assessee filed paperbook-I (pages 1 to 37) and pages 1 to 37) and paper book-II ( Pages 38 to 113). II ( Pages 38 to 113).
Before us, the Ld. counsel Ld. counsel of the assessee submitted that the of the assessee submitted that the Assessing Officer had carried out all the necessary enquiry Assessing Officer had carried out all the necessary enquiry Assessing Officer had carried out all the necessary enquiry regarding the 10 parties including the two parties in respect of regarding the 10 parties including the two parties in respect of regarding the 10 parties including the two parties in respect of which he has made addition. The which he has made addition. The Ld. counsel referred to page 1 referred to page 19 of the paperbook, which is annexure of the notice under section 142(1) the paperbook, which is annexure of the notice under section 142(1) the paperbook, which is annexure of the notice under section 142(1)
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 9 ITA NO. 871/M/2022 dated 11/11/2019 issued by the dated 11/11/2019 issued by the Ld. Assessing Officer du Assessing Officer during assessment proceeding. According to him, the assessment proceeding. According to him, the Ld. Assessing Officer Assessing Officer asked all the information in respect of those parties including asked all the information in respect of those parties including asked all the information in respect of those parties including nature of transactions, copy of ledger account, copy of bank nature of transactions, copy of ledger account, copy of bank nature of transactions, copy of ledger account, copy of bank account account account statement, statement, statement, documents documents documents in in in support support support of of of identity, identity, identity, creditworthiness and genuineness of the transaction in respect of worthiness and genuineness of the transaction in respect of worthiness and genuineness of the transaction in respect of the sum found credited from above entities. the sum found credited from above entities. The Ld. counsel Ld. counsel further referred to reply of the above question asked by the Assessing referred to reply of the above question asked by the Assessing referred to reply of the above question asked by the Assessing Officer, available on PB 38 to 113. He submitted that all the details Officer, available on PB 38 to 113. He submitted that all the det Officer, available on PB 38 to 113. He submitted that all the det in respect of those 10 parties as was asked by the Assessing Officer, in respect of those 10 parties as was asked by the Assessing Officer, in respect of those 10 parties as was asked by the Assessing Officer, was duly filed before the was duly filed before the Ld. Assessing Officer. According to the Assessing Officer. According to the Ld. counsel, the Assessing Officer after due application of mind has , the Assessing Officer after due application of mind has , the Assessing Officer after due application of mind has accepted the explanation of the assessee and c accepted the explanation of the assessee and considered not to onsidered not to make any addition. Thus the allegation of the make any addition. Thus the allegation of the Ld. Ld. PCIT, that no enquiry or verification was made in respect of the sum credited in enquiry or verification was made in respect of the sum credited in enquiry or verification was made in respect of the sum credited in respect of parties, other than two parties in respect of which the other than two parties in respect of which the other than two parties in respect of which the Assessing Officer has made addition Assessing Officer has made addition are baseless.
6.1 The Ld. counsel Ld. counsel also questioned that impugned order passed also questioned that impugned order passed by the PCIT is barred by the limitation by the PCIT is barred by the limitation because in the notice under because in the notice under section 263 of the Act Act issues have been raised, which issues have been raised, which were not subject matter of the reassessment proceeding and therefore two subject matter of the reassessment proceeding and therefore two subject matter of the reassessment proceeding and therefore two years period contemplated under subsection 2 of section 263, would years period contemplated under subsection 2 of section 263 years period contemplated under subsection 2 of section 263 begin to run from the date of original assessment i.e. 143(1) and not begin to run from the date of original assessment i.e begin to run from the date of original assessment i.e from the date of reassessment. from the date of reassessment.
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 10 ITA NO. 871/M/2022
7. The Ld. DR on t DR on the other hand, relied on the order of the Ld relied on the order of the Ld PCIT and submitted that the facts of creditworthiness and PCIT and submitted that the facts of creditworthiness and PCIT and submitted that the facts of creditworthiness and genuineness of the 10 (ten) 10 (ten) parties listed in the reasons recorded parties listed in the reasons recorded are identical therefore, when are identical therefore, when the Ld. AO had made addition in had made addition in respect of two parties, respect of two parties, it was not logical for him to not to make it was not logical for him to not to make addition in respect of remaining eight parties having identical facts addition in respect of remaining eight parties having identical facts addition in respect of remaining eight parties having identical facts of creditworthiness and genuineness of the transaction. According of creditworthiness and genuineness of the transaction. According of creditworthiness and genuineness of the transaction. According to the Ld. DR, the Assessing Officer has not verified the DR, the Assessing Officer has not verified the DR, the Assessing Officer has not verified the submissions of the a submissions of the assessee and did not carry out the enquiry ssessee and did not carry out the enquiry which he ought to have carried out in the facts and circumstances which he ought to have carried out in the facts and circumstances which he ought to have carried out in the facts and circumstances of the case. Therefore according to him, the Ld of the case. Therefore according to him, the Ld. PCIT is justified in PCIT is justified in holding that no enquiry or verification which should have been done holding that no enquiry or verification which should have been done holding that no enquiry or verification which should have been done in the case, has been carried out. Regarding the issue of the e, has been carried out. Regarding the issue of the e, has been carried out. Regarding the issue of the limitation, he submitted that the issues which have been raised are limitation, he submitted that the issues which have been raised are limitation, he submitted that the issues which have been raised are arising from the reasons recorded and therefore those are very arising from the reasons recorded and therefore those are very arising from the reasons recorded and therefore those are very much subject matter of the reassessment proceeding and therefore much subject matter of the reassessment proceeding and therefore much subject matter of the reassessment proceeding and therefore the period of the two years contemplated under section 263(2) of the od of the two years contemplated under section 263(2) of the od of the two years contemplated under section 263(2) of the Act, run from the date of the reassessment order and not from the , run from the date of the reassessment order and not from the , run from the date of the reassessment order and not from the intimation under section 143(1) of the intimation under section 143(1) of the Act in the case. in the case.
We have heard rival submission of the party on the issue in We have heard rival submission of the party on the issue in We have heard rival submission of the party on the issue in dispute and perused the relevant nd perused the relevant material on record. material on record. The reasons recorded being relevant for adjudication of recorded being relevant for adjudication of controversy controversy, same are reproduced for ready reference as under: reproduced for ready reference as under:
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 11 ITA NO. 871/M/2022 “3. The relevant portion of the reason for reopening is 3. The relevant portion of the reason for reopening is 3. The relevant portion of the reason for reopening is reproduced as under: reproduced as under:
"2. During the cour "2. During the course of discreet enquiries conducted by this se of discreet enquiries conducted by this office, it has been observed that M/s.Glint Infraprojects Put. office, it has been observed that M/s.Glint Infraprojects Put. office, it has been observed that M/s.Glint Infraprojects Put. Lid, is having bank Account No.06372010000610 with Kotak Lid, is having bank Account No.06372010000610 with Kotak Lid, is having bank Account No.06372010000610 with Kotak Mahindra Bank, Andheri (East) Branch wherein there are high Mahindra Bank, Andheri (East) Branch wherein there are high Mahindra Bank, Andheri (East) Branch wherein there are high number of interconnected fund tra number of interconnected fund transfers carried out. nsfers carried out.
3. From the perusal of ITs of Ms. Glint Infraprojects Pvt. Ltd., it From the perusal of ITs of Ms. Glint Infraprojects Pvt. Ltd., it From the perusal of ITs of Ms. Glint Infraprojects Pvt. Ltd., it is seen that the assessee is filing its returns of income regularly is seen that the assessee is filing its returns of income regularly is seen that the assessee is filing its returns of income regularly and the latest return of income filed is for A.Y.2018 and the latest return of income filed is for A.Y.2018 and the latest return of income filed is for A.Y.2018-19. The year-wise details of income as per the wise details of income as per the returns of income filed returns of income filed by the assessee for various assessment years are as under:- by the assessee for various assessment years are as under: by the assessee for various assessment years are as under:
4.1 From From From the the the perusal perusal perusal of of of bank bank statement bank statement statement of of of Account Account Account No.06372010000610 with Kotak Mahindra Bank, Andheri No.06372010000610 with Kotak Mahindra Bank, Andheri No.06372010000610 with Kotak Mahindra Bank, Andheri (East) Branch pertaining to M/s. Glint Infraprojects Pvt. Lid. (East) Branch pertaining to M/s. Glint Infraprojects Pvt. Lid. (East) Branch pertaining to M/s. Glint Infraprojects Pvt. Lid. submitted by the assessee, it is noticed that there are loans & itted by the assessee, it is noticed that there are loans & itted by the assessee, it is noticed that there are loans & advances / investments from several entities and the same are advances / investments from several entities and the same are advances / investments from several entities and the same are immediately transferred as loans & advances / investments to immediately transferred as loans & advances / investments to immediately transferred as loans & advances / investments to M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 12 ITA NO. 871/M/2022 / other entities. It is noticed that the following companies / other entities. It is noticed that the following companies / other entities. It is noticed that the following companies related to Suntech Group are appearing in the bank statement untech Group are appearing in the bank statement untech Group are appearing in the bank statement wherein interconnected transfers taken place with transactions wherein interconnected transfers taken place with transactions wherein interconnected transfers taken place with transactions more than Rs.2 lakhs. more than Rs.2 lakhs. Sr. No. Name of the Company/entity 1. Vishwas Finvest Pvt. Ltd. Vishwas Finvest Pvt. Ltd.
2. Satguru Capital Satguru Capital 3. Moonscape Facility Management Pvt. Ltd. Moonscape Facility Management Pvt. Ltd.
4. SW Capital Pvt. Ltd. SW Capital Pvt. Ltd.
5. Nivedita Mercantile & Financing Ltd. Nivedita Mercantile & Financing Ltd.
6. Nifty Realty Pvt. Ltd. Nifty Realty Pvt. Ltd.
7. Amish Infrastructure Pvt. Ltd. Amish Infrastructure Pvt. Ltd.
8. Sunteck Wealthmax Capital Pvt. Ltd. Sunteck Wealthmax Capital Pvt. Ltd.
9. Naksh IT solutions Pvt. Ltd. Naksh IT solutions Pvt. Ltd.
Brown Trading Pvt. Ltd. Brown Trading Pvt. Ltd. 4.2 For instance, in the bank Account For instance, in the bank Account No.06372010000610 of No.06372010000610 of M/s.Glint Infraprojects Pvt. Lid. with Kotak Mahindra Bank, M/s.Glint Infraprojects Pvt. Lid. with Kotak Mahindra Bank, M/s.Glint Infraprojects Pvt. Lid. with Kotak Mahindra Bank, Andheri(East) Branch, loan & advances of Rs.15 lakhs received Andheri(East) Branch, loan & advances of Rs.15 lakhs received Andheri(East) Branch, loan & advances of Rs.15 lakhs received on 87.04.2011 from Moonscape Facility Management Pvt. Ltd. on 87.04.2011 from Moonscape Facility Management Pvt. Ltd. on 87.04.2011 from Moonscape Facility Management Pvt. Ltd. are immediately transferred to Vishwas Finvest Pvt. Lt are immediately transferred to Vishwas Finvest Pvt. Lt are immediately transferred to Vishwas Finvest Pvt. Ltd. on the same day as loans & advances. The creditworthiness of the same day as loans & advances. The creditworthiness of the same day as loans & advances. The creditworthiness of the loans & advances of Moonscape Facility Management Pvt. Lid. loans & advances of Moonscape Facility Management Pvt. Lid. loans & advances of Moonscape Facility Management Pvt. Lid. is found to be doubtful after analyzing its financials which are is found to be doubtful after analyzing its financials which are is found to be doubtful after analyzing its financials which are tabulated as under: tabulated as under:
PAN: AAHCM0292 PAN: AAHCM0292]
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 13 ITA NO. 871/M/2022 4.3 Further, in the bank Account No. 06372010000610 of Further, in the bank Account No. 06372010000610 of Further, in the bank Account No. 06372010000610 of M/s.Glint Infraprojects Prt. Ltd. with Kotak Mahindra Bank, M/s.Glint Infraprojects Prt. Ltd. with Kotak Mahindra Bank, M/s.Glint Infraprojects Prt. Ltd. with Kotak Mahindra Bank, Andheri(East) Branch, loan & advances of Rs.4,92,50,000 Andheri(East) Branch, loan & advances of Rs.4,92,50,000 Andheri(East) Branch, loan & advances of Rs.4,92,50,000 received from Nifty Realty Pvt. Ltd on 13.09.2011 are received from Nifty Realty Pvt. Ltd on 13.09.2011 are received from Nifty Realty Pvt. Ltd on 13.09.2011 are immediately transferred to immediately transferred to Vishwas Finvest Pvt. Lid. on the Vishwas Finvest Pvt. Lid. on the same day as loans & advances. The creditworthiness of the same day as loans & advances. The creditworthiness of the same day as loans & advances. The creditworthiness of the loans & advances of Nifty Really Pvt. Lid. is found to be loans & advances of Nifty Really Pvt. Lid. is found to be loans & advances of Nifty Really Pvt. Lid. is found to be doubtful after analyzing its financials which are tabulated as doubtful after analyzing its financials which are tabulated as doubtful after analyzing its financials which are tabulated as under:-
PAN : AACCN82 PAN : AACCN8298C AO : ITO-10(3) (1), MUMBAI. 10(3) (1), MUMBAI.
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 14 ITA NO. 871/M/2022 8.1 As far as inquiries or verification not carried out by the As far as inquiries or verification not carried out by the As far as inquiries or verification not carried out by the Assessing Officer is concerned, the Assessing Officer is concerned, the Ld. PCIT has pointed out t PCIT has pointed out two additions. Firstly, the amount of additions made in respect of credit additions. Firstly, the amount of additions made in respect of additions. Firstly, the amount of additions made in respect of from two parties was was not as per the amount recorded in their ledger not as per the amount recorded in their ledger accounts. The Ld. PCIT has mentioned that in case of PCIT has mentioned that in case of M/s Moonscape facility Management Private Limited transactions of the scape facility Management Private Limited transactions of the scape facility Management Private Limited transactions of the ₹16,02,50,000/- is appearing in the books of accounts, whereas appearing in the books of accounts, whereas appearing in the books of accounts, whereas Assessing Officer has m Assessing Officer has made addition only of ₹ 15 lakh. Similarly in 15 lakh. Similarly in respect of NIFTY realty Private Limited, the Ld PCIT has pointed out respect of NIFTY realty Private Limited, the Ld PCIT has pointed o respect of NIFTY realty Private Limited, the Ld PCIT has pointed o that credit of ₹4,97,50,000/ 50,000/- is appearing in the books of account, is appearing in the books of account, whereas the Assessing Officer has added only whereas the Assessing Officer has added only ₹4,92,50,000/ 4,92,50,000/-. To the extent of these two discrepancies, there is no doubt that order of these two discrepancies, there is no doubt that order of these two discrepancies, there is no doubt that order of the Assessing Officer is erroneous insofar as prejudicial to the of the Assessing Officer is erroneous insofar as prejudicial to the of the Assessing Officer is erroneous insofar as prejudicial to the interest of revenue, because he did not verify the submission of the interest of revenue, because he did not verify the submission of the interest of revenue, because he did not verify the submission of the assessee, particularly, particularly, the ledger account of those two parti ledger account of those two parties in the books of accounts of the assessee. books of accounts of the assessee.
8.2 Regarding the, other eight parties arding the, other eight parties, the question , the questions asked by the Assessing Officer referred in PB Assessing Officer referred in PB-19 are reproduced as under: reproduced as under:
“As per information available on record, you have entered into As per information available on record, you have entered into As per information available on record, you have entered into transaction during transaction during F.Y. 2011-12 with the following entities: 12 with the following entities:
1. ViswasFinvest Pvt Ltd 1. ViswasFinvest Pvt Ltd
2. Satguru Capital 2. Satguru Capital
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 15 ITA NO. 871/M/2022
3. Moonscape Facility Management Pvt Ltd 3. Moonscape Facility Management Pvt Ltd
4. SW Capital Pvt Ltd 4. SW Capital Pvt Ltd
5. Nivedita Mercantile and Financing Ltd 5. Nivedita Mercantile and Financing Ltd
6. Nifty Reality Pvt Ltd 6. Nifty Reality Pvt Ltd V 7. Amish Infrastrucure Pr Lid V 7. Amish Infrastrucure Pr Lid
9. Naksh IT Solutions Pvt Ltd 9. Naksh IT Solutions
10. Brown Trading.Pt Ltd 10. Brown Trading.Pt Ltd In this regard these, entities you are requested to furnish In this regard these, entities you are requested to furnish In this regard these, entities you are requested to furnish following details/explanation: following details/explanation:
1. Nature of transaction with the said entity during F.Y. 2011 Nature of transaction with the said entity during F.Y. 2011- Nature of transaction with the said entity during F.Y. 2011 12 with all supporting 12 with all supporting documents.
2. Copy of ledger accounts of each entity for the F.Y. 2011 2. Copy of ledger accounts of each entity for the F.Y. 2011 2. Copy of ledger accounts of each entity for the F.Y. 2011-12.
3. Copy of all bank account statement highlighting the 3. Copy of all bank account statement highlighting the 3. Copy of all bank account statement highlighting the transactions with the above entities. transactions with the above entities.
4. You are requested to provide rational of transaction with 4. You are requested to provide rational of transaction with 4. You are requested to provide rational of transaction with relevant relevant supporting supporting documents docume nts and and prove prove identity, identity, creditworthiness and genuineness of transaction in respect of creditworthiness and genuineness of transaction in respect of creditworthiness and genuineness of transaction in respect of any sum found credited from above entities. any sum found credited from above entities.
2. Copy of cash book for the year under consideration. 2. Copy of cash book for the year under consideration. 2. Copy of cash book for the year under consideration.”
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 16 ITA NO. 871/M/2022 8.3 The relevant reply filed by the assessee, available on page 39 relevant reply filed by the assessee, available on page 39 relevant reply filed by the assessee, available on page 39 of the paperbook is reproduced as under: the paperbook is reproduced as under:
“Point No. 4: details of transactions entered by the assessee Point No. 4: details of transactions entered by the assessee Point No. 4: details of transactions entered by the assessee company with below mention entities is enclosed herewith for company with below mention entities is enclosed herewith for company with below mention entities is enclosed herewith for your ready reference and records. your ready reference and records.
1. Viswas Finvest Pvt Ltd. 1. Viswas Finvest Pvt Ltd.
2. Satguru Capital. 2. Satguru Capital.
3. Moonscape F 3. Moonscape Facility Management Pt Ltd.
4. SW Capital Pvt Ltd. 4. SW Capital Pvt Ltd.
5. Nivedita Merchantile and Financing Ltd. 5. Nivedita Merchantile and Financing Ltd.
6. Nifty Reality Pvt Ltd. 6. Nifty Reality Pvt Ltd.
Amish Infrastructure Pvt Ltd. 7. Amish Infrastructure Pvt Ltd.
8. Sunteck Wealthmax Pvt Ltd. 8. Sunteck Wealthmax Pvt Ltd.
9. Naksh IT Solutions Pvt Ltd. 9. Naksh IT Solutions Pvt Ltd.
10. Brown Trading Pvt Ltd. 10. Brown Trading Pvt Ltd. In this regard In this regard these entities following details/explanation: these entities following details/explanation:
Nature of the transactions is of the loans with the said entity. 1. Nature of the transactions is of the loans with the said entity. 1. Nature of the transactions is of the loans with the said entity.
Copy of ledger accounts of each entity are enclosed herewith 2. Copy of ledger accounts of each entity are enclosed herewith 2. Copy of ledger accounts of each entity are enclosed herewith for your ready reference and records. for your ready reference and records.
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 17 ITA NO. 871/M/2022
3. 3. 3. Copy Copy Copy of of of all all all bank bank bank account account account statements statements statements h highlighting h transactions with above entities are enclosed herewith for your transactions with above entities are enclosed herewith for your transactions with above entities are enclosed herewith for your ready reference and records ready reference and records
Copy of bank statements and IT to prove identity, 4. Copy of bank statements and IT to prove identity, 4. Copy of bank statements and IT to prove identity, creditworthiness and genuineness of transactions are enclosed creditworthiness and genuineness of transactions are enclosed creditworthiness and genuineness of transactions are enclosed herewith for your ready reference and herewith for your ready reference and records.
5. Copy of cash book is enclosed herewith for your ready 5. Copy of cash book is enclosed herewith for your ready 5. Copy of cash book is enclosed herewith for your ready reference and records reference and records Please find the same in order. We shall be glad to furnish you Please find the same in order. We shall be glad to furnish you Please find the same in order. We shall be glad to furnish you with any further details that you may require regarding this with any further details that you may require regarding this with any further details that you may require regarding this matter. In case your goodself is not accept matter. In case your goodself is not accepting the above ing the above submission of the assessee and are inclined to take a view submission of the assessee and are inclined to take a view submission of the assessee and are inclined to take a view different from the above, we pray that appropriate show cause different from the above, we pray that appropriate show cause different from the above, we pray that appropriate show cause may kindly be issued to the assessee citing the same and an may kindly be issued to the assessee citing the same and an may kindly be issued to the assessee citing the same and an opportunity may kindly be granted to the assessee to rebut / opportunity may kindly be granted to the assessee to rebut / opportunity may kindly be granted to the assessee to rebut / respond to the same. respond to the same.”
8.4 The Ld. counsel Ld. counsel referred to page 81 of the paperbook and referred to page 81 of the paperbook and submitted that in the case of M/s Nivedita mercantile and financing submitted that in the case of M/s Nivedita mercantile and financing submitted that in the case of M/s Nivedita mercantile and financing Ltd there was opening debit balance of Ltd there was opening debit balance of ₹2,80,24,806/ 806/- in the books upon of the assessee. upon of the assessee.
8.5 We find that after filing of above submission by the assessee, after filing of above submission by the assessee, after filing of above submission by the assessee, no further enquiry either under section 133(6) for verification of the no further enquiry either under section 133(6) for verification of the no further enquiry either under section 133(6) for verification of the identity or their creditworthiness was carried out by the assessee, identity or their creditworthiness was carried out by the assessee, identity or their creditworthiness was carried out by the assessee, which he ought to have carried out in view of frequent fund transfer which he ought to have carried out in view of frequent fund transf which he ought to have carried out in view of frequent fund transf in the bank statement of the assessee. Once the assessee filed all in the bank statement of the assessee. Once the assessee filed all in the bank statement of the assessee. Once the assessee filed all
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 18 ITA NO. 871/M/2022 information information information with with with respect respect respect to to to identity identity identity creditworthiness creditworthiness creditworthiness and and and genuineness of the transaction, genuineness of the transaction, onus was shifted to the Assessing was shifted to the Assessing Officer and it was his turn to carry out inquiries or verification, but Officer and it was his turn to carry out inquiries or verification, but Officer and it was his turn to carry out inquiries or verification, but from the record, we find that no enquiry or verification has been , we find that no enquiry or verification has been , we find that no enquiry or verification has been carried out by the Assessing Officer. In view of above factual carried out by the Assessing Officer. In view of above factual carried out by the Assessing Officer. In view of above factual observations, we uphold t , we uphold the finding of the Ld. PCIT that no enquiry PCIT that no enquiry or verification which ought to have been carried out by the or verification which ought to have been carried out by the or verification which ought to have been carried out by the Assessing Officer in the facts and circumstances of the case, and Assessing Officer in the facts and circumstances of the case, and Assessing Officer in the facts and circumstances of the case, and due to failure on the part of the Assessing Officer in doing so, the due to failure on the part of the Assessing Officer in doing so, the due to failure on the part of the Assessing Officer in doing so, the assessment order passed is erroneous insofar as prejudicial to the assed is erroneous insofar as prejudicial to the assed is erroneous insofar as prejudicial to the interest of the revenue. Accordingly we uphold the finding of the Ld. interest of the revenue. Accordingly we uphold the finding of the interest of the revenue. Accordingly we uphold the finding of the PCIT on the issue in dispute. PCIT on the issue in dispute.
8.6 Regarding the issue of limitation of invoking proceeding under Regarding the issue of limitation of invoking proceeding under Regarding the issue of limitation of invoking proceeding under section 263 the Act is considered Hon’bl is considered Hon’ble Madars High Court in the e Madars High Court in the case of Indira Industries Industries Vs PCIT reported in (2018) 95 Vs PCIT reported in (2018) 95 taxmann.com 103 ( Madras) taxmann.com 103 ( Madras) it is held that when a notice under it is held that when a notice under section 263 raises new issues, which are not subject matter of section 263 raises new issues, which are not subject matter of section 263 raises new issues, which are not subject matter of reassessment proceeding, then two years, ment proceeding, then two years, contemp ontemplated under section 263(2) would begin to run from the date of original section 263(2) would begin to run from the date of original section 263(2) would begin to run from the date of original assessment and not from the date of the reassessment. But in the assessment and not from the date of the reassessment. But in the assessment and not from the date of the reassessment. But in the instant case we find that the issue of credit in respect of all the 10 instant case we find that the issue of credit in respect of all the 10 instant case we find that the issue of credit in respect of all the 10 parties was noted in the reasons recorded itself parties was noted in the reasons recorded itself and therefore it and therefore it cannot be said that credit from cannot be said that credit from said 10 parties was not subject 10 parties was not subject matter of reassessment proceeding. Accordingly, following the ratio matter of reassessment proceeding. Accordingly, following the ratio matter of reassessment proceeding. Accordingly, following the ratio
M/s Glint Infraprojects Pvt. Ltd. M/s Glint Infraprojects Pvt. Ltd. 19 ITA NO. 871/M/2022 of the above decision, we are of the view that limitation decision, we are of the view that limitation for invoking decision, we are of the view that limitation section 263 in the case runs from t section 263 in the case runs from the date of reassessment order he date of reassessment order and not from the intimation under section 143(1) of the Act i.e. and not from the intimation under section 143(1) of the and not from the intimation under section 143(1) of the assessment completed prior to reassessment. assessment completed prior to reassessment.
8.7 In view of above the ground In view of above the grounds raised by the assessee raised by the assessee are accordingly dismissed. accordingly dismissed.
In the result, the appeal filed In the result, the appeal filed by the assessee is dismissed. by the assessee is dismissed.