BEHAT HOLDINGS LTD.,NEW DELHI vs. ITO WARD-4(3), NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “A”: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA.No.8066/Del./2019 Assessment Year 2010-2011 M/s. Behat Holdings Ltd., The Income Tax Officer, 14, 4380/4B Murari Lal vs., Ward-4(3), Room No.385A, Street, Ansari Road, Daryaganj, Central Delhi C.R. Building, PIN - 110 002. New Delhi. PAN AADCB7691L (Appellant) (Respondent) Shri Ashwani Kumar, C.A. Shri Rohit Jain, Advocate, For Assessee : Shri Deepesh Jain, C.A. And Shri Arpit Goel, C.A. For Revenue : Shri Ved Prakash Mishra, Sr. DR Date of Hearing : 08.01.2020 Date of Pronouncement : 15.01.2020 ORDER PER BHAVNESH SAINI, J.M.

This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-2, New Delhi, Dated 13.09.2019, for the A.Y. 2010-2011.

2 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi.

2. Briefly the facts of the case are that return of income for the A.Y. 2010-2011 was filed by the assessee. Notice under section 148 was issued on 27.03.2017 and served upon the assessee. In response to the notice under section 148, assessee filed copy of the return of income declaring loss of Rs.(-)95,916/- already filed on 15.10.2010. The A.O. issued statutory notices for completion of the assessment. Though the assessee attended the proceedings and furnished relevant requisite details which have been examined by the A.O. A.O. in the re-assessment order from paras 1 to 8 reproduced the copy of the reasons recorded under section 148 of the I.T. Act. Thereafter, A.O. noted that assessee was provided copy of the reasons and objections raised have been disposed of. The assessee has filed submissions giving confirmation copy of the account and copy of the ITR in respect of the parties from whom share capital/share premium were raised during the year under consideration. The A.O. issued notices under section 133(6) of the I.T. Act for verification. Only one party responded. The assessee has not produced the Directors of the concerned

3 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. parties. Therefore, the A.O. made addition of Rs.7 crores under section 68 of the I.T. Act and also made addition of Rs.14 lakhs on account of Commission paid @ 2%. The assessment order was passed under section 147/143(3) of the I.T. Act. The assessee challenged the reopening of the assessment as well as additions on merit before the Ld. CIT(A). The detailed submissions of the assessee are reproduced by the Ld. CIT(A), however, the Ld. CIT(A) dismissed the appeal of assessee.

4 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. will be able to file objections against the reopening of the assessment. PB-41 is letter of the A.O. whereby approval of the Pr. CIT have been conveyed to the assessee. PB-42 is proforma for recording reasons and approval to be granted dated 09.10.2019. PB-28 is letter of the A.O. dated 27.09.2017 in which it is intimated to the assessee that all the facts on the basis of the report of SFIO (Inv.) Wing of the Department have been incorporated in the reasons which have been provided to him. Further, copy of the report of SFIO (Inv.) Wing of the Income Tax Department is confidential in nature, therefore, same cannot be provided or part with as requested by assessee. Learned Counsel for the Assessee, therefore, submitted that A.O. has refused to supply all the Annexures referred to in the reasons, therefore, assessee was not able to file detailed objections to the reopening of the assessment. PB-13 is notice under section 148 in which A.O. has mentioned that notice have been issued after obtaining necessary satisfaction of Addl. CIT/Pr. CIT/Pr. CCIT. He has submitted that it is not clear from the notice as to which Authority has granted approval

5 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. under section 151 of the I.T. Act. He has referred to PB-43 in which the approval of Addl. Commissioner of Income Tax is blank and that Pr. Commissioner of Income Tax while granting approval has mentioned “Yes, I am satisfied”. He has submitted that there is no application of mind before granting approval and such approval is not find valid by various Courts. The A.O. has not applied his mind to the facts and circumstances of the case, therefore, the re- assessment order is invalid and bad in law. Since complete copy of the reasons along with Annexures have not been supplied to the assessee, therefore, there is no basis to initiate proceedings under section 148 of the I.T. Act. Learned Counsel for the Assessee relied upon Judgment of Hon’ble Delhi High Court in the case of SABH Infrastructure Ltd., vs. ACIT [2017] 398 ITR 198 (Del.) (HC) in which the Hon’ble Delhi High Court has directed the Revenue Department to adhere to the following guidelines in the matter of reopening of the assessment.

6 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. “(i) while communicating the reasons for reopening the assessment, the copy of the standard form used by the Assessing Officer for obtaining the approval of the Superior Officer should itself be provided to the assessee. This would contain the comment or endorsement of the Superior Officer with his name, designation and date. In other words, merely stating the reasons in a letter addressed by the Assessing Officer to the assessee is to be avoided.

(ii) the reasons to believe ought to spell out all the reasons and grounds available with the Assessing Officer for reopening the assessment – especially in those cases where the first proviso to section 147 is attracted. The reasons to believe ought to also paraphrase any investigation report which may form the basis of the reasons and any enquiry conducted by the Assessing Officer on the same and if so, the conclusions thereof;

7 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. (iii) where the reasons make a reference to another document, whether as a letter or report, such document and/or relevant portions of such report should be enclosed along with the reasons ; (iv) the exercise of considering the assessee's objections to the reopening of assessment is not a mechanical ritual. It is a quasi-judicial function. The order disposing of the objections should deal with each objection and give proper reasons for the conclusion. No attempt should be made to add to the reasons for reopening of the assessment beyond what has already been disclosed.

3.1. He has submitted that since satisfaction/ approval of Pr.CIT is without application of mind and granted in a mechanical manner, therefore, re-assessment order is invalid. In support of his contention, Learned

8 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. Counsel for the Assessee relied upon the following decisions:

3.2. He has also relied upon Judgment of Hon’ble Delhi High Court in the case of Haryana Acrylic Manufacturing Company vs., CIT [2009] 308 ITR 38 (Del.) (HC) in which the assessee challenged the validity of the re- assessment proceedings under section 147. The Hon’ble Delhi High court quashed the proceedings inter alia, held that “if reasons are not served within the limitation period of six years, the proceedings initiated will be illegal”. Learned

9 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. Counsel for the Assessee, therefore, submitted that initiation of re-assessment proceedings and approval is invalid, bad in Law and as such liable to be quashed.

10 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. 11 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. 12 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. 13 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. 14 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. 15 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. 16 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi.

17 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. 5.1. The reasons are un-dated. The A.O. in the assessment order has reproduced the same reasons without application of his mind to the relevant material and thereafter by referring to notice under section 133(6) and non-production of the Directors of the Investor Companies made the addition against the assessee. The A.O. in the reasons has mentioned that information was forwarded by Serious Fraud Investigation Office, Delhi which were received through Pr. CIT vide Letter Dated 05.01.2017. The A.O. has also referred to such report based on search and seizure in the case of third parties. The assessee made a request to the A.O. to supply complete copy of the reasons along with Annexures and Report of SFIO Dated 05.01.2017 and approval granted by Pr. CIT. The A.O, however intimated that since SFIO report is confidential, therefore, same cannot be provided to the assessee. Thus, the complete Annexures to the reasons were not provided to the assessee and A.O. has also failed to provide copy of the report dated 05.01.2017 to the assessee which is the basis for reopening of the assessment. Assessee cannot be given 18 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. surprise to file objections without providing all the relevant material. The report Dated 05.01.2017 is the basis for reopening of the assessment and since it is not confronted and provided to assessee, the assessee may not be able to file proper objections to the reopening of the assessment. Thus, the direction given in the case of SABH Infrastructure Ltd., vs., ACIT (supra), have not been applied because it is the duty of the A.O. to provide all the documents and reports which are part of the reasons to the assessee before taking steps into the matter. Further the Addl. CIT while granting or forwarding copy of the reasons to the Pr. CIT for his approval did not mention any fact in the proforma which is blank and no remarks have been mentioned by him despite his signature appeared thereon. The Pr. CIT while granting sanction/approval to reasons recorded for reopening of the assessment has simply mentioned “Yes, I am satisfied”. Such type of approval was not found valid in many cases. The ITAT Delhi C-Bench in the case of M/s. Ganesh Ganga Investments Pvt. Ltd., Delhi vs., ITO, Ward-10(1), New Delhi in ITA.No.1579/Del./2019 19 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. for the A.Y. 2010-2011 vide Order Dated 07.11.2019 quashed the reopening of the assessment in the similar circumstances. The entire order is reproduced as under :

“IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “C”: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA.No.1579/Del./2019 Assessment Year 2010-2011 M/s. Ganesh Ganga The Income Tax Officer, Investments Pvt. Ltd., Ward – 10 (1), Room A-52, Top Floor, Street vs., No.206A, C.R. Building, I.P. No.1, Gurunanakpura, Estate, New Delhi. Laxmi Nagar, Delhi–110 092. PIN – 110 002. PAN AAACG2710J (Appellant) (Respondent) Shri Raj Kumar, C.A. And For Assessee : Shri Rajeev Ahuja, Advocate Shri Sumit Goel, C.A. For Revenue : Ms. Parmit M. Biswas, CIT-DR Date of Hearing : 10.10.2019 Date of Pronouncement : 07.11.2019 ORDER PER BHAVNESH SAINI, J.M.

20 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-4, New Delhi, Dated 26.12.2018, for the A.Y. 2010-2011.

2.1. An information was received from the O/o. CIT, Central-2, New Delhi, vide letter Dated 14.02.2014 mentioning therein that a search/survey operation under section 132/133A of the Income Tax Act, 1961 was conducted by the Investigation Wing at the business and residential premises of Shri Himanshu Verma and his Group on 29.03.2012 wherein after intensive and extensive inquiry and examination of documents seized during the course of search, it has been gathered that the said persons are involved in providing accommodation entries to the persons who were named in the report. During the course of inquiry 21 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. made by the Investigation Wing, it also came to the notice that Shri Himanshu Verma was engaged in the business of providing accommodation entries through cheques/PO/DD in lieu of cash to large number of beneficiary companies through various paper and dummy companies floated and controlled by him. The cash received from the parties for providing accommodation entries was first deposited in the account of these dummy firms/companies in the guise of cash received against the bogus sales duly shown in the books of account. On the basis of the material available on record, the A.O. after recording reasons for reopening of the assessment, issued notice under section 148 to the assessee on 31.03.2017 which was served upon the assessee. The assessee objected to the reopening of the assessment and requested to provide copy of the approval of Competent Authority under section 151 of the I.T. Act, 1961. The Assessee also contended that whatever material was collected at the back of the assessee was not confronted and requested to supply statement of Shri Himanshu Verma, report and data complied / received from Investigation Wing, 22 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. report and data complied/received by ITO, Ward-10(1), New Delhi, diaries and registers considered as incriminating material seized from Shri Himanshu Verma and any other documents which Department wanted to rely. It was further submitted that proceedings under section 147/148 of the I.T. Act, cannot be invoked for making inquiry or verification purposes. The assessee denied receipt of any accommodation entry from any such person. The A.O, however, rejected the objections of the assessee and proceeded to make assessment in the matter. The A.O. noted that in assessment year under appeal, assessee has received Rs.11,05,00,000/- on account of share capital and share premium from 38 parties as noticed during the course of assessment proceedings. The summary of the same is reproduced in the assessment order. The assessee was asked to file complete postal address, PAN and other details of these 38 parties. The A.O. also issued notice under section 133(6) to all 38 share subscriber companies and asked for the details from them. The A.O. received replies from 26 companies. In 06 cases, although notice issued under section 133(6) of the I.T.

23 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. Act were issued as per new name as well as old name of the company, but, the same were returned back un-served by the Postal Authorities. In the remaining 06 cases, no replies have been received. The A.O. noted that replies received from 26 parties under section 133(6) have been analysed and these companies furnished copy of the acknowledgment of ITR, balance sheet as on 31.03.2010, P & L A/c, copy of the bank statement. The A.O. however, did not accept the replies filed by the 26 investor companies on the reasons that replies have been received in bunch for similar style of envelopes and posted from three post offices. The A.O. also noted that none of the parties explained as to why high premium was paid and parties have not explained source of the investment. The A.O. also noted that 26 parties filed copy of the ITR, balance sheet, P & L A/c and bank statement, but, it shows that their income shown is very meagre in the return of income. The assessee was asked to produce the persons/Principal Officers of these entities for verification. However, assessee did not produce the same. The A.O. also analysed the statement of Shri Himanshu Verma through 24 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. whom amount have been received and the A.O. ultimately rejected the explanation of assessee on genuine share application money received from 38 parties and made addition of Rs.11.05 crores. The A.O. further noted that assessee has paid commission in cash for arranging these entries, on which, addition was made of Rs.22,10,000/- i.e., @ 2% of the amount in question which was also added to the returned income.

3. The assessee challenged the reopening of the assessment as well as additions on merit before the Ld. CIT(A). It was contended that assessment framed on the basis of material / documents / information received from third party and without application of mind by the A.O, therefore, whole assessment is invalid and bad in law. It was further submitted that assessee has shown all the amounts in his books of account and return of income filed with the Department. The A.O. has reopened the assessment by mentioning in the reasons that assessee has received entries of Rs.2.45 crores which fact is incorrect. The initiation of re- assessment have been made merely on the basis of 25 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. Investigation Wing report without applying the mind. No right of cross-examination have been provided to the assessee to the statement of Shri Himanshu Verma and others. The assessee relied upon the following decisions.

3.1. In the case of Pr. CIT vs., RMG Polyvinyl (I) Ltd., 396 ITR 5 (Del.) the Hon’ble Delhi High Court held as under:

In the present case too, the information received from the Inv. Wing cannot be said to be tangible material per se without a further enquiry being undertaken by the learned assessing officer 3.2. In the case of Pr. CIT vs., Meenakshi Overseas (P) Ltd., 395 ITR 677 (Del.), the Hon’ble Delhi High Court held as under :

Reassessment notice condition precedent recording of reasons to believe that income has escaped assessment mere reproduction of investigation report in reasons recorded absence of 26 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. link between tangible material and formation of ceding illegal Income Tax Act, 1961, Sec.147, 148 3.3. In the case of Pr. CIT vs., G And G Pharma India Ltd., [2016] 384 ITR 147 (Del.), the Hon’ble Delhi High Court held as under :

Reassessment condition precedent application of mind by assessing officer to materials prior to forming reason to believe income has escaped assessment - No independent application of mind to information received from Directorate of Investigation and no prima facie opinion formed- reassessment order invalid 3.4. In the case of Sarthak Securities Co. (P) Ltd., 329 ITR 110 (Del.), the Hon’ble Delhi High Court held as under :

No independent application of mind by the Assessing officer but acting under information from Inv. Wing - Notice U/s. 147 to be quashed 3.5. The assessee also submitted that assessment is barred by time. The assessee further submitted that approval 27 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. under section 151 have been granted in a most mechanical manner without applying independent mind by the Pr. Commissioner of Income Tax. He has submitted that Pr. Commissioner of Income Tax has recorded in the approval as under :

“Form for recording the reasons for initiating proceedings u/s 147 and for obtaining the approval of the Ad CIT/CIT/CBDT

M/s. Ganesh Ganga Investment 1. Name and address of the P. Ltd., A-52, Top assessee Floor Street No.l, Guru Nanak Pura, Laxmi Nagar, Delhi 110092 2. PAN AAACG2710J 3. Status Company 4. Ward/Circle Ward-10(1) 5. Asstt. Year in respect of which it 2010-11. is proposed to issue notice u/s 148 6. The quantum of income which has Rs.2,45,00,000/- escaped assessment 7. Whether the provisions of section 147(b) 147(a) or 147(b) are applicable or both the sections are applicable.

28 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. 8. Whether the assessment is proposed to be made for the first Yes time. If the reply is affirmative, please state (a) Whether any voluntary Yes return has already been filed. (b) If so, the date of filing of 04.02.2011 return

29 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. income has escaped assessment.

Sd/- H.K. Sharma Dated: 29.03.2017. ITO, Ward-10(1), New Delhi. Whether the Addl. Commissioner of I. Tax is satisfied on the In view of the facts 12. reasons recorded by the ITO that notice u/s.148 to it is a fit case for the issue of be issued. notice u/s.148.

Sd/-S.K. Mittal, Pr. Commissioner of I. Tax, New Delhi.”

3.6. This approval is not valid in Law because it would show that approval have been granted without application of mind. Learned Counsel for the Assessee relied upon Judgment of the Hon’ble Delhi High Court in the case of United Electrical Co. Pvt. Ltd., vs. Commissioner of Income Tax 258 ITR 317 in which approval by Addl. Commissioner of 30 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. Income Tax under section 151 was given in the following terms – “Yes” I am satisfied that it is a fit case for issue of notice under section 148 of the I.T. Act.” The Hon’ble Delhi High Court considering the similarly worded approval did not approve the same and held that “in the present case, there has been no application of mind by Addl. Commissioner of Income Tax before granting the approval.” The assessee also relied upon Judgment of Hon’ble Supreme Court in the case of Commissioner of Income Tax vs., S. Goyanka Lime & Chemical Ltd., [2015] 64 taxmann.com 313 (SC) approving the Judgment of Hon’ble Madhya Pradesh High Court in the case of Commissioner of Income Tax, Jabalpur vs., S. Goyanka Lime & Chemical Ltd., [2015] 56 taxmann.com 390 (M.P.) in which the Departmental SLP has been dismissed on the same reason because the Joint Commissioner of Income Tax recorded satisfaction in a mechanical manner and without application of mind. The assessee also relied upon Judgment of Hon’ble Madhya Pradesh High Court in the case of Arjun Singh vs., ADIT [2000] 246 ITR 363 (M.P.) in which also similarly worded sanction under section 148 was not 31 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. found valid. The assessee also relied upon Judgment of Hon’ble Delhi High Court in the case of Pr. Commissioner of Income Tax vs., N.C. Cables Ltd., [2017] 88 taxmann.com 649 (Del.) in which also on similarly worded sanction, it was held that re-assessment was not valid. The assessee also submitted that since no right of cross-examination have been allowed to the statement of Shri Himanshu Verma, therefore, such statement cannot be read in evidence against the assessee. He has relied upon Judgment of Hon’ble Supreme Court in the case of M/s. Andaman Timber Industries vs., Commissioner of Central Excise, Kolkata-II reported in 281 CTR 241.

4. The Ld. CIT(A), however, did not accept the contention of assessee and confirmed the reopening of the assessment. The assessee also made submissions on merit to show that addition is wholly unjustified. However, the Ld. CIT(A) did not accept the contention of assessee and upheld the addition on merit as well. The appeal of assessee was accordingly dismissed.

32 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi.

5. The assessee in the present appeal challenged the reopening of the assessment under section 147/148 of the I.T. Act, 1961, on several grounds, addition of Rs.11.05 crores under section 68 of the I.T. Act and addition of Rs.22,10,000/- on account of commission.

1. PCIT vs., Paramount Communication (P.) Ltd., 2017- TIOL-253-SC-IT.

2. PCIT vs., Paramount Communication (P.) Ltd., [2017] 392 ITR 444 (Del.) (HC) 3. Aradhna Estate (P.) Ltd., vs. DCIT [2018] 91 taxmann.com 119 (Gujarat) (HC). 4. Pushpak Bullion (P.) Ltd., vs. DCIT [2017] 85 taxmann.com 84 (Gujarat) (HC). 5. Ankit Financial Services Ltd., vs. DCIT [2017] 78 taxmann.com 58 (Gujarat) (HC).

38 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi.

6. Aaspas Multimedia Ltd., vs. DCIT [2017] 83 taxmann.com 82 (Gujarat) (HC).

7. Ankit Agrochem (P.) Ltd., vs. JCIT [2018] 89 taxmann.com 45 (Rajasthan) (HC). 8. Yogendrakumar Gupta vs., ITO [2014] 227 Taxman 374 (SC).

“M/s. Ganesh Ganga Investments Pvt. Ltd., PAN AAACG2710J A.Y. 2010-11 The assessee filed return of income for the A.Y. 2010-11 on 04.02.2011 declaring loss of Rs.(-) 14,162/-. The return was processed u/s 143(1).

39 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. Information was forwarded to this office through the Addl.CIT, Range-10, New Delhi that search & seizure action was conducted by Inv. Wing at the office of Sh. Himanshu Verma where various incriminating documents/materials were seized during the course of search. During the post search investigation and perusal of seized documents it was observed that Sh. Himanshu Verma was engaged in the business of providing accommodation-' entries by providing cheques/PO/DD in lieu of cash to a large number of beneficiary companies thorough various paper and dummy companies floated and controlled by them. It was also evidently established by the Investigation Wing that Sh Himanshu Verma is known entry providers and is the actual controller of more than 100 companies/proprietary firms/partnership firms. They control these entities through various persons by appointing them as directors/partners/proprietors apart from nominating them as authorized signatories for maintaining the bank accounts of these entities but 40 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. in fact all these persons act only as their stooges. The cash received from the recipient parties for providing the accommodation entries was first deposited in the accounts of these dummy firms/companies in the disguise of the cash received against the bogus sales, duly shown in the books of accounts. From there, this cash was transferred to the different paper companies floated by Sh. Himanshu Verma through a complex trail of transactions, so as to hide the actual sources of funds of the last set of recipient companies of Sh. Himanshu Verma In this way, the reserve & surpluses and the capital account of a specific set of companies are enhanced with the help of the unexplained cash received by Himanshu Verma, which is routed to these companies through their dummy firm/companies. Once the funds of these companies have been enhanced sufficiently, accommodation entries through RTGS/ Cheque in the shape of the share capital, capital gains or loans as per the specific requirement of the recipient 41 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. clients were provided to them in lieu of the cash received from them. In this way, the chain for providing an accommodation entry gets completed.

It is noticed from the list of entries that the assessee M/s Ganesh Ganga Investment P. Ltd. has taken following accommodation entries during the financial year 2009-10 :-

S.No. Amount Conduit companies through which cheque issued. 1. 4000000 Shubh Propbuild P Ltd., 2. 4000000 Jaguar Softech P. Ltd., 3. 4000000 Join Fashion P. Ltd., 4. 4500000 Management Services P. Ltd., 5. 4000000 Greenvision Construction P. Ltd., 6. 4000000 USK Exim P. Ltd., TOTAL 2,45,00,000/- On the basis of the reports received from the Investigation Wing, I have downloaded the return from the ITD portal and verified the records and it is clear that the assessee company has not disclosed fully and truly all material facts necessary for its assessment for the assessment year under consideration as it emerges that transactions shown in the return are not genuine. Apart from the above the assessee company is not 42 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. doing any real business and keeping in view the huge investments, disallowances u/s 14A read with rule 8D also applicable in the case. The statement given by Shri Himanshu Verma also establishes the link with the self-confessed "accommodation entry providers", whose business is to help assessees bring back their unaccounted money into their books of account. Thus, there is a direct link between the information/available with the department and the income escaping assessment.

I have, therefore, reasons to believe that income to the extent of Rs.2,45,00,000/- has escaped assessment relevant to A.Y.2010-11. Thus, the same is to be brought to tax under section 147/148 of the I.T. Act 1961.

Moreover, as the case pertains to a period beyond four years from the end of relevant assessment year, for issuing the notice u/s 148, necessary approval / sanction may kindly be accorded by the Pr.

43 ITA.No.8066/Del./2019 M/s. Behat Holdings Ltd., Daryaganj, Central Delhi. Commissioner of Income Tax, Delhi-4, New Delhi in view of the amended provision of section 151 w.e.f 01.06.2015.

Sd/- H.K. Sharma, Dated : 27.03.2017. ITO, Ward-10(1), New Delhi.”

8.1. PB-29 is the sanction granted by Pr. Commissioner of Income Tax for reopening of the assessment in which it is mentioned as under :

Whether the Pr. Commissioner of I. Yes I am satisfied Tax is satisfied on the reasons that it is a fit case 13. recorded by the ITO that it is a fit for issue of notice case for the issue of notice u/s.148 of the I.T. u/s.148. Act, 1961.