RAHUL PREMIER INDIA AGENCY PVT. LTD.,KOLKATA vs. D.C.I.T., CIRCLE - 4(), KOLKATA, KOLKATA

ORDER / आदेश Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 07.06.2024 for the AY 2013-14. 2. Issue raised in ground no. 1 is not pressed and there is dismissed as not pressed.

Assessment Year: 2013-14 Rahul Premier India Agency Pvt. Ltd. 3. Issue raised in ground no. 2 is against the confirmation of reopening of assessment by the Ld. CIT(A) even when the pre-conditions as laid down u/s 147 of the Act were not satisfied.

4.1 Considered the material evidence and the records as well as the satisfaction recorded in the PCIT’s Approval u/s 151, the above judicial decisions. From the above discussion it is evident that the information available with the AO was sufficient and specific in its nature and the same was duly analyzed by the AO with the statement of accounts of the appellant and records available with the Assessing Officer. Vide Para 5 of the Annexure to the Approval u/s 151 and in the light of transaction details of the appellant with M/s Nikhil Holdings Pvt. Ltd. (NHPL, in short), it has been validly established that M/s NHPL is a bogus/shell company which is carries on transaction only on paper for the purpose of providing accommodation entries in various forms in lieu of commission. The same has also been corroborated from statement given by Shri Murari Dhar Lahoti, Director in NHPL in his reply to various query including question no. 9,11,15 & 19 in course of statement u/s 132(4) dated 17.08.2017. The contention of the appellant that the case was reopened on vague and intangible material is therefore devoid of merits and unsustainable. Thus, ground no. 1 of the appellant is disposed and accordingly dismissed.

Assessment Year: 2013-14 Rahul Premier India Agency Pvt. Ltd. 6. After hearing the rival contentions and perusing the material on record, we note that the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 20.03.2020 after recording a reasons to believe and after obtaining approval from the competent authority. The reasons as recorded u/s 148(2) of the Act for reopening of assessment are extracted below for the sake of ready reference:

6.1. A perusal of the above reasons reveal that the AO had received information from DCIT, Central Circle-2, Kolkata that the assessee company has received Rs. 50,00,000/- from M/s Nikhil Holding Pvt. Ltd. during FY 2012-13 relevant to AY 2013-14. It was also noted that the assessment proceedings u/s 153A for AY 2012-13 to 2018-19 in the case of M/s Nikhil Holding Pvt. Ltd., which belonged to East India Group, were initiated and conducted after search action u/s 132(1) of the Act and director of M/s Nikhil Holding Pvt. Ltd. Mr. Murali Dhar Lahoti in his reply to question no. 11 of the Assessment Year: 2013-14 Rahul Premier India Agency Pvt. Ltd. statement recorded on 17.08.2017 u/s 132(4) of the Act accepted that M/s Nikhil Holding Pvt. Ltd. was a shell bogus company which was engaged in providing accommodation entries. The AO has also referred to the list of beneficiaries to whom the accommodation entries were provided in which the name of the assessee appeared. The AO noted that upon perusal of the said list it was observed that the assessee company had received Rs. 50,00,000/- in the form of loan and advances which was nothing but accommodation entry. Then in para 6 of the reasons recorded , the AO affirmed his belief wherein he stated that the lender company M/s Nikhil Holding Pvt. Ltd. was not having real estate business at all and therefore identity, genuineness and creditworthiness of the parties were not genuine. Therefore, there was prima facie reasons to believe that the source of Rs. 50,00,000/- remained unexplained and in view of the above he had reasons to believe that Rs. 50,00,000/- has escaped assessment. We also note that the assessments in the case of M/s Nikhil Holding Pvt. Ltd. were framed u/s 143(3) read with Section 153A of the Act in all the assessment years consequent to search and it was accepted that the said company was genuine. Further even the loan confirmation was filed by the assessee. We even observe that the AO straightaway re- opened the assessment which is clear from the fact that the loan received was of Rs. 40.00 lacs and not Rs. 50.00 as noted by the AO in the reasons recorded and therefore there was no independent application of mind by the AO. In our opinion the AO is duty bound to first enquire into the issue after receiving information otherwise the re-opening can not be sustained. The case of the assessee is squarely covered by a series of decisions namely SFIL Stock Broking 325 ITR 285 ( Del), and Signature Hotel Pvt Ltd VS ITO 338 ITR 51 ( Del) . In both the above decisions , the Hon’ble court has held that the AO has to apply his mind to the information received and independently arrive at a belief that income has escaped. In the case of CIT Vs Insecticide India Ltd. 357 ITR 330(Del) the Hon’ble Court has held that the re-opening can not be made on the reasons which did not mention the details of transaction which have escaped assessment and is vague and uncertain . We therefore respectfully following the above decisions , quash the re-opening of assessment as well as the consequent order. Accordingly, ground raised by the assessee is allowed.

Assessment Year: 2013-14 Rahul Premier India Agency Pvt. Ltd. In the result, the appeal of the assessee is allowed.