SAFE INFRACON PVT. LTD.,JAIPUR vs. INCOME TAX OFFICER, WARD-6(2), JAIPUR, JAIPUR
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर
IN THE INCOME TAX APPELLATE TRIBUNAL,
JAIPUR BENCHES,”B” JAIPUR
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BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No.1334 & 1335/JPR/2024
fu/kZkj.k o"kZ@Assessment Years : 2010-11 & 2011-12
M/s.Safe Infracon Pvt Ltd.
92, Everest Vihar, Kings Road,
Ward -6(2),
Jaipur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAMCS 6346 J vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Dilip Shivpuri, Advocate and Shri Utkarsh Shara, Advocate jktLo dh vksj ls@ Revenue by : Shri Anoop Singh, Addl. CIT-DR lquokbZ dh rkjh[k@ Date of Hearing : 26/03/2025
mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 23/06/2025
vkns'k@ ORDER
PER: DR. S. SEETHALAKSHMI, J.M.
Both these appeals have been filed by the assessee against two different orders of the ld. CIT(A), Jaipur-4 dated 11-09-2024 for the assessment years
2010-11 and 2011-12 raising therein following grounds of appeal.
ITA No.1334/JPR/2024 – A.Y. 2010-11
‘’1. That the Ld. CIT(A) has erred in both facts and in law in passing the impugned Appellate Order dated 11.09.2024
2. That the Ld. CIT(A) has erred on facts and in law in holding that the assessee did not respond to notices of hearing and did not file any details/written submissions
That the Ld. CIT(A) has erred on facts and in law in upholding the issue of notice u/s 147, and reopening of the assessment without appreciating the fact that: a)the information received was general and had no link with the assessee in question, b) there was no verification or enquiry to verify the reasons given for reopening of the assessment, c) Shri Praveen Kumar Jain has already owned up all the entries related to him and paid tax thereon, The reopening of the assessment was bad in law for these and other reasons,
The Ld. CIT(A) has erred on facts and in law in upholding the addition of Rs. 1,10,00,000/-on account of unexplained credit entries, and dismissing the appeal on this issue
The Ld. CIT(A) has grossly erred on facts and in law in upholding the addition of Rs. 55000/-on account of unexplained expenses under section 6C of the IT. Act, thus dismissing the appeal on this issue.
The ld. CIT(A) has erred on facts and in law in upholding the charging of interest w/s 245B of Rs. 34,80,153/- by the ITO, thus dismissing the Appeal on this issue.’’
ITA No.1335/JPR/2024 – A.Y. 2011-12
‘’1. That the Ld. CIT(A) has erred in both facts and in law in passing the impugned Appellate Order dated 11.09.2024,
That the Ld. CIT(A) has erred on facts and in law in holding that the assessee did not respond to notices of hearing and did not file any details written submissions, 3. That the Ld. CIT(A) has erred on facts and in law in upholding the issue of notice u/s 147, and reopening of the assessment without appreciating the fact that a) the information received was general and had no link with the assessee in question, b) there was no verification or enquiry to verify the reasons given for reopening of the assessment: c) Shri Praveen Kamar Jain has already owned up all the entries related to him and paid tax thereon, The reopening of the assessment was bad in law for these and other reasons,
The Ld. CTT(A) has erred on facts and in law in upholding the addition of Rs. 39,50,000/-on account of unexplained credit entries, and dismissing the appeal on this issue,
The Ld. CIT(A) has grossly erred on facts and in law in upholding the addition of Rs. 19,750/-on account of unexplained expenses under section 69C of the IT. Act, thus dismissing the appeal on this issue,
The Ld. CIT(A) has erred on facts and in law in upholding the 6 charging of interest u/s 245B of Rs. 11,40,831/- by the ITO, thus dismissing the Appeal on this issue.’’
1 First of all, we take up the appeal of the assesee relating to Assessment year 2010-11 in ITA No. 1334/JPR/2024 for adjudication. 3.1 The brief facts as observed in the assessment order are that information available on record, it was gathered that the assessee had taken accommodation entry in the nature of bogus share application money/bogus unsecured loan/bogus SAFE INFRACON PVT LTD VS ITO, WARD 6(2), JAIPUR sale and purchase. Therefore, proceedings u/s 147 was initiated after prior approval from Pr.CIT-2, Jaipur. Notice u/s 148 of the Act was issued on 03-03-2017. In response to the notice, the assessee filed its return of income for the A.Y. 2010-11 declaring total loss at Rs.45,532/-. Notice u/s 143(2) of the Act was issued to the assessee. Finally, the AO completed the assessment vide order dated 15-12-2017 at a total income of Rs.1,10,09,470/- holding following observation as under:- ‘’E. In view of abovementioned discussion it is clearly established that transaction made by the assessee with M/s. Olive Overseas Pvt. Ltd. not genuine one and is only bogus accommodation entry which was obtained in lieu of cash. During the year under consideration, the assessee has shown loan of Rs.30,00,000/- and share capital & share premium of Rs.80,00,000/- from the concern M/s. Olive Overseas P. Ltd. , the same are added to the total income of the assessee as unexplained cash credits within the meaning of provisions of Section 68 of I.T. Act, 1961. The assessee has furnished inaccurate particulars of income and concealed the facts. Therefore, penalty u/s 271(1)© is separately initiated.
F.
Further Shri Praveen Kumar Jain admitted that he charged @ 0.55% for arranging of accommodation entries.
Therefore, the assesee has paid Rs.55,000/- (0.50%) of Rs.1,10,00,000/-) out of books which is unexplained expenses.
Thus Rs.55,000/- is added back to the total income of the assessee u/s 69C. The assessee has furnished inaccurate particulars of income and concealed the facts. Therefore, penalty u/s 271(1)© is separately initiated.’’
In first appeal, the ld.CIT(A) has passed an ex-parte order by dismissing the appeal of the assessee observing that no further response/ submission had been received from the assessee even after considerable time had elapsed.
3.2.1 It is pertinent to mention that as regards the issue of reopening of the assessment u/s 147, the Ld. CIT(A) has confirmed the action of the AO by observing as under:-
‘’(x) In the present case, it is to be noted that the AO had material before him for formation of reasonable belief of escapement which had live nexus with the material in his possession for assuming the valid juri iction for reopening u/s 147. In view of the above discussion ground Number 2 of appeal is hereby dismissed.’’
2.2 As regards the issue of addition of Rs.1,10,00,000/- on account of unexplained cash credit and addition of Rs.55,000/- on account of unexplained expenses u/s 69 of the Act, the ld. CIT(A) has dismissed both the grounds by observing as under:-
Page 47-48
…As there are several strong evidence is with the learned AO including the statements of the directors of the company itself from whom the loan was received by the appellant company and the fact that these companies were found to be non-existent at the given addresses and not having any genuine business and SAFE INFRACON PVT LTD VS ITO, WARD 6(2), JAIPUR were only doing bogus entries in the books of accounts and that the loans were given to the appellant without any security and the appellant has not justified the same with any correspondence and valuation reports and agreements etc. the onus is on the appellant to prove that the evidences with the learned AO on wrong and for the onus is on the appellant to prove the identity, genuineness and creditworthiness in terms of section 68. The turnover, profitability etc. of lending/investing company Olive Overseas Pvt Ltd is extremely low and bank statements show that funds are coming and going.
In the present case the appellant has merely produced the documents regarding the form of the transaction i.e. that the transaction was through banking channel and is recorded in the books of accounts of the loan given company and books of the appellant. These are only initial documents and do not prove the identity, genuineness and creditworthiness in terms of substance and reality. Appellant has not produced any evidence to prove the evidences with the learned AO as wrong. The appellant has also not produced the directors and shareholders of the company before the learned AO for examination or cross examination by the Id. AO from which the loans and share capital including huge share premium were received by the appellant company. The addition in the assessment order on account of commission is consequential in nature and the same has been from the statements made by various parties and as per the general business modus operandi of the accommodation entries.
The appellant has miserably failed in discharging the onus cast on it in view of the above facts and circumstances and the explanation of the appellant is only primitive and does not at all prove the three ingredients of section 68. Accordingly the addition made by the learned AO in the assessment order is hereby upheld and these grounds (3 and 4) of appeal of the appellant are hereby dismissed’’
3.2.3 As regards the issue of charging of interest of Rs.34,80,153/- u/s 234B of the Act, the ld.CIT(A) has disposed off this ground by stating that charging of interest is mandatory and consequential in nature and the AO is directed to give effect of the same on the income determined vide this appellate order.
3.3
During the course of hearing, the ld.AR of the assessee submitted that an opportunity to cross examine Shri Praveen Jain should have been provided to the assessee since his statement had been relied upon by the AO. He further submitted that M/s. Olive Overseas P. Ltd. had applied for equity shares in the company and the company had allotted 80,000 equity shares of Rs.10/- each @ premium of Rs.90/- to the aforesaid company. All the payments were received through banking channel whose details are as under:-
S.N.
Date
Amount
1. 26-06-2009
10,00,000/-
2. 26-06-2009
20,00,000/-
3. 26-06-2009
15,00,000/-
4. 10-07-2009
5,00,000/-
5. 01-08-2009
30,00,000/-
Total
80,00,000/-
The ld. AR of the assessee further submitted that besides the above amount of Rs.80,00, 000/-, the assessee company had taken a loan of Rs.30,00,000/- from the same company and thus the total amount came to the tune of Rs.1,10,00,000/-. He
SAFE INFRACON PVT LTD VS ITO, WARD 6(2), JAIPUR further submitted following details / evidence in support of his claim before the AO.
1. Copies of application of share capital
2. Relevant record of