M/S MODINAGAR ROLLS LTD.,,MODINAGAR vs. DCIT, GHAZIABAD

1. 1. That the L'd Commissioner of Income Tax (Appeals) has erred on facts and law in sustaining the reassessment proceedings U/S 147 initiated second time beyond four years. She has further failed to appreciate the Jurisdictional High Court's latest view and has bypassed the law on the subject very discreetly.

2. That the L'd Commissioner of Income Tax (Appeals) has misunderstood the ground of appeal challenging addition of Rs 2,30,00,000/- and has without a speaking order dismissed the ground as non-maintainable, thereby sustaining the aforesaid addition U/S 68 which too is illegal and against the facts and circumstances of the case.

3. The L'd Commissioner of Income Tax (Appeals) has failed to appreciate the underlying facts in respect of Sundry Creditor M/S Rahul Traders and has, therefore, illegally sustained the addition of Rs 21,04,058/- . She has however, dismissed the ground of appeal in this regard with a non-speaking order holding the ground to be not maintainable which course is apparently illegal.

4. That on the facts and circumstances of the case, the L'd Commissioner of Income Tax (Appeals) failed to appreciate that the appellant was not given sufficient opportunity by the AO to explain his case and still, without a speaking order, the said ground has been held to be not maintainable at her stage and has thus been dismissed, which is apparently illegal.

4. We advert to the assessee’s first and foremost legal ground challenging the validity of the impugned reopening. There is hardly any dispute between the parties that learned Assessing Officer had framed his regular section 143(3) assessment on 15.11.2010 in its case which followed his first and foremost section 148 notice issued

2 | P a g e on 25th March, 2013, inter alia, setting into motion section 148/147 reopening which culminated in the reassessment framed on 28th February, 2014 (at pages 6 to 13). And that the learned Assessing Officer thereafter initiated yet another reopening in assessee’s case on 12th February, 2015 after having recorded the corresponding reasons to believe that the assessee’s taxable income liable to be assessed as escaped assessment.

“REASONS FOR ISSUE OF NOTICE U/S 148 IN THE CASE OF M/S MODINAGAR ROLLS LIMITED, MAJOR ASHA-RAM TYAGI ROAD, MODINNAGAR, PAN AABCM0137C FOR ASSESSMENT YEAR 2009- 10- The asssessee is a limited company specializing in the line of manufacturing rolls for various industries. In this case, an information had received from DIT(Inv.)- 11. ARA Centre Jhandewalan Extn. New Delhi regarding accommodation entries provided by Shri Surendra Kumar Jain, Group of cases to beneficiary companies and thers. The assessee M/s Modinagar Rolls Ltd. had taken an entry of Rs. 2,30,00,000/- from VIP Leasing & Finance Pvt. Ltd. and Shalini Holdings Ltd. by cheque through Avis Bank. The case was selected for deep scrutiny after issuing notice u/s 148 of 1.T. Act. 1961. Accordingly, case was completed u/s 147/143(3) by making an addition of Rs. 2.30.00,000/-. The appeal filed before Ld. CIT(A), Ghaziabad is dismissed on 13.11.2014 and the addition of Rs. 2,30,00,000/- was confirmed by the Ld. CIT(A), Ghaziabad. Further, during the assessment proceedings for the assessment year 2010-11, it was found that opening balance of Rs. 11,23,133/- was 3 | P a g e shown in the confirmation of creditors M/s Rahul Traders, Prop. Rahul. Accordingly, an addition of Rs. 11,23,133/- was made in the assessment year 2010-11. During the course of appellate proceedings for the assessment year 2010-11, Ld. CIT(A), Ghaziabad vide its order dated 13.11.2014 held that the copy of account of M/s Rahul Traders shows the opening balance as on 01.04.2009 at Rs. 11,23,133/- and from the ledger account, it is also seen that assessee had purchased raw material at Rs. 21,04,058/- and a payment of Rs. 9,80,925/- was also made by the assessee to M/s Rahul Traders, thus the amount of Rs. 11,23,133/- pertains to A.Y. 2009-10.. On the basis of decision of Ld. CIT(A), Ghaziabad, I have reason to believe that the amount of Rs. 21,04,058/- for the assessment year 2009-10 has escaped income within the meaning of provisions of section 147 of 1.T.Act, 1961, which needs deep scrutiny. In order to assess the above escaped income, proceedings u/s 147 of the I.T.Act, 1961 are being initiated and notice u/s 148 is being issued.”