“investigation wing”

ReassessmentSection 147Section 14712,584 judgments

The decision most relied on for investigation wing is Sarthak Securities Co. Pvt. Ltd. v. ITO (329 ITR 110), cited in 217 judgments on BharatTax.

Leading authorities on investigation wing

Sarthak Securities Co. Pvt. Ltd. v. ITO

329 ITR 110 · 2010 · High Court

217

citing judgments

Reassessment proceedings under Section 147 are invalid if the Assessing Officer records satisfaction based on borrowed satisfaction or information without independently applying their mind and forming their own 'reason to believe' that income has escaped assessment. The AO must arrive at an independent conclusion, not merely act on a report from an investigation wing without due diligence.

ITO, 19(3) (4) Mumbai v. Shamim M Bharwani

69 Taxmann.com 65 · 2016 · Reported

142

citing judgments

Long Term Capital Gains (LTCG) from penny stock transactions are liable to be treated as bogus and added back under Section 68 as unexplained cash credits, especially when evidence suggests the involvement of entry operators providing accommodation entries.

1. Harikishan S. Virmani v. DCIT

394 ITR 146 · 2017 · High Court

citing judgments

Reassessment proceedings under section 147 cannot be initiated by the Assessing Officer based on borrowed satisfaction, vague information from the Investigation Wing, or incorrect jurisdictional facts without independent application of mind. Reopening beyond four years from the end of the relevant assessment year, especially where an original assessment was completed under section 143(3), requires specific conditions relating to the assessee's failure to disclose material facts.

PCIT v. M/s. Kesoram Industries 57

417 ITR 334 · 2019 · High Court

citing judgments

An assessment completed under Section 143(3) cannot be reopened after four years solely based on third-party information or opinions, such as from an Investigation Wing, without the Assessing Officer applying their own independent mind to the material and having new, independent material on record.

ITO v. Purushottam Das Bangur

224 ITR 362 · 1997 · Supreme Court

citing judgments

Information received from the investigation wing constitutes valid 'reason to believe' for initiating reassessment proceedings under Sections 147/148, provided the Assessing Officer applies their mind to the material and does not act mechanically. Prompt issuance of a notice based on such information does not automatically imply a lack of due diligence or borrowed satisfaction.

AGR Investment v. Additional Commissioner

197 Taxmann 177 · 2011 · High Court

citing judgments

A reassessment under Section 147/148 is valid if initiated based on specific, non-vague information, even from an investigation wing, provided the Assessing Officer applies independent mind to form a 'reason to believe' that income has escaped assessment.

56 (Guj.) (para 6) v. Aaspas Multimedia Ltd. v. Dy. CIT

83 Taxmann.com 82 · 2017 · High Court

citing judgments

Information received from the Investigation Wing, identifying the assessee as a beneficiary of accommodation entries through share application from a third party, constitutes valid tangible material and 'reasons to believe' for initiating reassessment proceedings under Section 147 of the Income Tax Act.

Aradhna Estate Pvt. Ltd. v. DCIT

91 Taxmann.com 119 · 2018 · High Court

citing judgments

The Assessing Officer is justified in reopening assessment proceedings based on information received from the Investigation Wing, even when recording findings also rely on documents already on record, provided all procedural requirements for reassessment are met.

Judgments citing investigation wing

Pkss Infrastructure Pvt. Ltd., Mumbai vs. DCIT - CC - 4 (1), Mumbai

In the result, the appeals of assessee are allowed and that of the Revenue are dismissed

ITA 5681/MUM/2018[2010-11]Status: DisposedITAT Mumbai29 Nov 2019AY 2010-11

Bench: Sri Mahavir Singh, Jm & Sri Waseem Ahmed, Am आयकर अपील सुं./ Ita No. 5680/Mum/2018 (यिर्ाारण वर्ा / Assessment Year 2009-10) आयकर अपील सुं./ Ita No. 5681/Mum/2018 (यिर्ाारण वर्ा / Assessment Year 2010-11) Pkss Infrastructure Pvt. Ltd. The Dy. Commissioner Of 142, Garuda House, Upper Income Tax, Cc-4(1), 19 Th बनाम/ Govind Nagar Malad (East), Floor, Air India Bldg., Vs. Mumbai-400 097 Mumbai-400 021 (अपीलार्थी / Appellant) (प्रत्यर्थी/ Respondent) स्र्थायी लेखा सुं./Pan No. Aaecp6450A आयकर अपील सुं./ Ita No. 5803/Mum/2018 (यिर्ाारण वर्ा / Assessment Year 2009-10) आयकर अपील सुं./ Ita No. 5802/Mum/2018 (यिर्ाारण वर्ा / Assessment Year 2010-11) The Dy. Commissioner Of Pkss Infrastructure Pvt. Ltd. Income Tax, Cc-4(1), 19 Th 142, Garuda House, Upper बनाम/ Floor, Air India Bldg., Govind Nagar Malad (East), Vs. Mumbai-400 021 Mumbai-400 097 (अपीलार्थी / Appellant) (प्रत्यर्थी/ Respondent) अपीलार्थी की ओर े / Appellant By : Shri Dharmesh Shah, Ms. Mitali Gopani, Ars प्रत्यर्थी की ओर े / Respondent By : Shri Awungshi Gimson, Dr ुिवाई की तारीख / Date Of Hearing: 14.11.2019 घोर्णा की तारीख / Date Of Pronouncement : 29.11.2019

For Appellant: Shri Dharmesh ShahFor Respondent: Shri Awungshi Gimson, DR

Section 132Section 132(4)Section 143(3)Section 153ASection 154

Department was conducted under section 132 of the Act on the assessee on 27.02.2014. This search was a result of search conducted by Investigation Wing on Shri Pravin Kumar Jain on 01.10.2013. The said search action on Pravin Kumar Jain of cases revealed that these concerns controlled directly or indirectly ... share capital. The learned Counsel for the assessee before us filed paper book wherein he has filed copy of reply to the DDIT investigation, wing 1(1) dated 15.05.2014 stating that the relevant share certificates were produced before the DDIT investigation Wing by the assessee and the relevant reply read

Pkss Infrastructure Pvt. Ltd., Mumbai vs. DCIT - CC - 4 (1), Mumbai

In the result, the appeals of assessee are allowed and that of the Revenue are dismissed

ITA 5680/MUM/2018[2009-10]Status: DisposedITAT Mumbai29 Nov 2019AY 2009-10

For Appellant: Shri Dharmesh ShahFor Respondent: Shri Awungshi Gimson, DR

Section 132Section 132(4)Section 143(3)Section 153ASection 154

ITO 17 (1)(1), Mumbai vs. Acme Tools Centre, Mumbai

In the result, the appeal filed by the revenue is dismissed

ITA 5520/MUM/2018[2010-11]Status: DisposedITAT Mumbai29 Nov 2019AY 2010-11

Bench: Shri S. Rifaur Rahman & Shri Ram Lal Negi

Section 143(3)Section 147Section 148

also failed to take the investigation to a logical conclusion by carry out necessary enquires, but he solely relied upon information received from investigation wing, which was further supported by information received from Maharashtra Sales Tax Department. Under these circumstances, it is difficult to accept arguments of both the sides

Sanghavi Diamonds Private Limited, Mumbai vs. DCIT 5(1)(3), Mumbai

ITA 5214/MUM/2018[2009-10]Status: DisposedITAT Mumbai29 Nov 2019AY 2009-10

Bench: Shri S.Rifaur Rehman () & Shri Ravish Sood ()

For Appellant: Shri. Suchek AnchaliyaFor Respondent: Shri. V. Vinod Kumar

Section 115JSection 143(3)Section 147Section 263

assessee was assessed at Rs. 28,83,110/- under the normal provisions. 3. Subsequently, on the basis of information received from the Investigation wing of the department, that the assessee as a beneficiary had obtained bogus purchase bills from certain hawala dealers, its case was reopened under Sec.147

Sanghavi Exports International Pvt. Ltd., Mumbai vs. DCIT 5 (3)(1), Mumbai

ITA 5211/MUM/2018[2009-10]Status: DisposedITAT Mumbai29 Nov 2019AY 2009-10

Bench: Shri S.Rifaur Rehman () & Shri Ravish Sood () Ita Nos.5211 To 5213/Mum/2018 (Assessment Years: 2009-10, 2010-11 & 2012-13)

For Appellant: Shri. Suchek AnchaliyaFor Respondent: Shri. V. Vinod Kumar

Section 115JSection 143(3)Section 147Section 263

book profit‟ under Sec. 115JB was worked out at Rs.7,31,15,250/-. 3. Subsequently, on the basis of information received from the Investigation wing of the department, that the assessee as a beneficiary had obtained bogus purchase bills from certain hawala dealers, its case was reopened under Sec.147

Naren Gems Private Limited, Mumbai vs. Income Tax Officer 14(2)(3), Mumbai

Appeal stands partly allowed in terms of our order

ITA 4424/MUM/2018[2007-08]Status: DisposedITAT Mumbai29 Nov 2019AY 2007-08

Bench: Hon’Ble Shri Mahavir Singh, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri Anuj Kumar Dwivedi-Ld. ARFor Respondent: Ms. Kavita P. Kaushik-Ld. DR

Section 132Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

done by the Assessing officer merely on basis of the information received from the report of the office of the Investigation wing of the department; without carrying out any independent inquiry or investigation of his own to come to be satisfied that there was an Income escaping assessment ... Rs.2.77 Lacs e-filed by the assessee on 06/10/2007 which was processed u/s.143(1). 3.2 Pursuant to receipt of certain information received from investigation wing of the Department, Mumbai in the course of search action u/s 132 in the case of Shri Rajendra Sohanlal Jain etc., it transpired that

M/S. Kiran Chand Kundalia, Bangalore vs. Income Tax Officer, Circle- 7(2)(2), Bengaluru

In the result, the appeal filed by the assessee is partly allowed

ITA 1950/BANG/2019[2011-12]Status: DisposedITAT Bangalore29 Nov 2019AY 2011-12

Bench: Shri B.R Baskaranassessment Year : 2011-12

For Appellant: Shri Sarwan Kumar, C.AFor Respondent: Shri Ganesh R Ghale, Advocate Standing Counsel to Dept

Section 10(38)Section 68

have been rigged in order to generate capital gains in the hands of investors. Accordingly the AO reopened the assessment of the assessee. The investigation wing of the assessee had analyzed the modalities adopted in penny stock cases. After reproducing the observations of the investigation wing, the AO took

M/S. Sunitha Darla, Mysore vs. The Income Tax Officer, Ward - 1(1), Mysore

In the result assessee’s appeal stands allowed for statistical purposes

ITA 1163/BANG/2019[2015-16]Status: DisposedITAT Bangalore29 Nov 2019AY 2015-16

Bench: Shri A.K.Garodia & Smt.Beena Pillai, Judical Member

For Appellant: Smt. Suman Lunkar, CAFor Respondent: Shri Kumar Ajeet, Addl. CIT

Section 10(38)

equity shares. The case was selected for scrutiny to verify the suspicions long term capital gains on shares in pursuance to the inputs from investigation wing. 2.1 Ld.AO observed that, during the year assessee sold 47,500 shares of M/s Lifeline Drugs and Pharma Ltd. for consideration of Rs.1

ITO 27 (2)(5), Mumbai vs. Piyush D. Gada, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 6825/MUM/2018[2007-08]Status: DisposedITAT Mumbai28 Nov 2019AY 2007-08

Bench: Shri C.N. Prasad, Hon'Ble & Shri G. Manjunatha, Hon'Ble

For Appellant: NoneFor Respondent: Kumar Padmapani Bora

Section 133(6)Section 143(1)Section 147

consideration was filed by the appellant on 23.09.2007 declaring a total income of Rs. NIL. Subsequently, on the basis of information received from the Investigation Wing, Mumbai, that one M/s. Arun Papers and Iron Traders had issued accommodation entries of bogus purchases and the assessee, Shri Piyush G. Gada ... under: “2. Effective Ground of appeal is about addition made to her income with regard to purchases. The AO received an information from the investigation wing that the sales tax department, Govt. of Maharashtra had made enquiries about bogus purchases/hawala transactions. The sales tax authorities had forwarded the list

ITO 33 (2)(5), Mumbai vs. Pranav Madhusudan Shah, Mumbai

In the result, appeal stands dismissed

ITA 5891/MUM/2018[2010-11]Status: DisposedITAT Mumbai28 Nov 2019AY 2010-11

Bench: Shri Saktijit Dey & Shri N.K. Pradhan

For Appellant: NoneFor Respondent: Shri Bhera Ram

Section 133(6)Section 143(1)Section 145(3)Section 147

assessee was initially processed under section 143(1) of the Act. Subsequently, on the basis of information received from the Sales Tax Department and Investigation Wing of the Income Tax Department, the Assessing Officer found that the purchases worth ` 12,07,153, claimed to have been made by the assessee

Shri Nimesh Jabarmal Chandani, Mumbai vs. Income Tax Officer 19(2)(4), Mumbai

In the result, appeal of the assessee is allowed for statistical purposes

ITA 4261/MUM/2018[2011-12]Status: DisposedITAT Mumbai28 Nov 2019AY 2011-12

Bench: Shri R.C.Sharma, Am Shri Nimesh Jabarmal Chandani Vs. Income Tax Officer Ground Floor, Shop No.91-95 19(2)(4) Kika Street, Gulalwadi Room No.210, Matru Mumbai – 400 004 Mandir, Tardeo Mumbai – 400 007 Pan/Gir No.Adcpj2850Q (Appellant) .. (Respondent) Assessee By Shri Praful L Vora Revenue By Shri Akthar H Ansari Date Of Hearing 07/11/2019 Date Of Pronouncement 28/11/2019 आदेश / O R D E R Per: R.C. Sharma, A.M. This Is An Appeal Filed By The Assessee Against The Order Of Cit(A)- 53, Mumbai Dated 16/04/2018 For A.Y.2011-12 In The Matter Of Order Passed U/S.143(3) R.W.S. 147 Of The Income Tax Act, 1961. 2. In This Appeal Assessee Is Aggrieved For Reopening Of Assessment.

Section 133(6)Section 143(3)

aggrieved for reopening of assessment. 3. Rival contentions have been heard and record perused. Facts in brief are that the AO received information from investigation wing about vital information received from Sales Tax Department regarding parties indulging in issuing bogus bills without supply of any material. The assessee was beneficiary

Asst CIT Cen Cir 3, Thane vs. Credential Equities P. Ltd, Bhayander

In the result, the appeal of Revenue dismissed

ITA 3808/MUM/2017[2009-10]Status: DisposedITAT Mumbai28 Nov 2019AY 2009-10

Bench: Shri R.C. Sharma & Shri Pawan Singh: A.Y : 2009-10

For Appellant: Shri Rakesh JoshiFor Respondent: Shri Awungshi Gimson

Section 131Section 132Section 133(6)Section 139(1)Section 143(3)Section 68

incriminating finding. Apart from these facts no other enquiry is done by the AO. The asst order does not mention any enquiry by the investigation wing done in the case of the four investor companies relevant to this asst year. In the asst order for the asst year ... enquiry. The assessing 16 M/s. Credential Equities Pvt. Ltd., officer has also not mentioned in the asst order any enquiry conducted by the investigation wing or any other agency regarding the four investor companies relevant in the present case. If the AO had any such information or material with

Navin Himmatlal Shah, Surat vs. The Income Tax Officer, Ward-1(3)(3), Surat

In the result, the appeal filed by the assessee is hereby ordered to be partly allowed

ITA 2272/AHD/2016[2007-08]Status: DisposedITAT Surat27 Nov 2019AY 2007-08

Bench: Shri Amarjit Singh, Jm & Shri O.P. Meena, Am Navin Himmatlal Shah, Vs. Income Tax Officer, Ward- 7, Swashray Society, Diwali Baug, 1(3)(3), Athwagate, Surat Aayakar Bhavan, Majura Gate, Surat. Pan/Gir No.Afsps3575H Appellant) .. Respondent) Assessee By Shri Sapnesh Sheth- Ca Revenue By Shri B. P. K. Panda (Sr. Dr)

Section 132(4)Section 148

name of the dummy partners/ Directors/ proprietors of the entities of this group were also found and seized. (v) The investigations made by the investigation wing revealed that actual importers of rough diamonds import part of their diamond requirement through benami entities operated by Shri Rajendra Jain & Others & their family ... appeal, assessee has come before us. 12. We have gone through the relevant record and impugned order. On the basis of information received from Investigation Wing, Mumbai, the A.O. found that the appellant had taken accommodation entry of bogus purchase bills from M/s AVI Exports

Kunjbala N. Parikh, Mumbai vs. ITO 27 (2)(1), Mumbai

The appeal of the assessee is allowed in terms of our aforesaid observations

ITA 6198/MUM/2018[2010-11]Status: DisposedITAT Mumbai27 Nov 2019AY 2010-11

Bench: Shri Ravish Sood & Shri N.K. Pradhansmt.Kunjbala N.Parikh Income Tax Officer-(27)(2)(1) A-9, Green Land, 3Rd Floor, Tower No.6, Vallabhaug Lane, Ghatkopar (East) Railway Station Commercial Vs. Mumbai – 400 075 Complex, Vashi, Navi Mumbai – 400 703 Pan – Acwpp8038K (Appellant) (Respondent)

For Appellant: Ms. Ruchi M. Rathod, A.RFor Respondent: Shri V. Vinod Kumar, D.R

Section 133(6)Section 143(3)Section 147Section 148

evidence, it would not be permissible for the revenue to disallow the purchases on the basis of a third party information gathered by the investigation wing of the department, specifically when the same was neither independently subjected to further verification by the A.O, nor the copy of the statement ... disproved or dislodged by the revenue till date, therefore, merely on the basis of an unsubstantiated third party information that was gathered by the Investigation Wing of the Department from the Sales tax authorities, which had not been independently subjected to any further verification by the A.O, no adverse inferences

Asst CIT 19(2), Mumbai vs. Pawankumar Nagraj Mehta (Proprietor: M/S.Rose Metals), Mumbai

In the result, appeals filed by the revenue as well as the assessee for Asst

ITA 4889/MUM/2017[2009-10]Status: DisposedITAT Mumbai27 Nov 2019AY 2009-10

Bench: Shri C. N. Prasad & Shri G. Manjunatha

Section 143(3)Section 147

also failed to take the investigation to a logical conclusion by carrying out necessary enquires, but he solely relied upon information received from investigation wing, which was further supported by information received from Maharashtra Sales Tax Department. Under these circumstances, it is difficult to accept the arguments of both

Pawankumar Nagraj Mehta, Mumbai vs. Asst CIT 19(2), Mumbai

In the result, appeals filed by the revenue as well as the assessee for Asst

ITA 4043/MUM/2017[2009-10]Status: DisposedITAT Mumbai27 Nov 2019AY 2009-10

Bench: Shri C. N. Prasad & Shri G. Manjunatha

Section 143(3)Section 147

Mr. Virmabhai A Patel, Mumbai vs. Income Tax Officer-19(3)(5), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 5955/MUM/2018[2010-11]Status: DisposedITAT Mumbai26 Nov 2019AY 2010-11

Bench: Shri Shamim Yahya (Am) & Shri Pawan Singh (Jm) Shri Virmabhai A Patel Vs Ito-19(3)(5), Mumbai 159/6, Mistry Bldg 2Nd Kumbharwada Lane Mumbai 400 004 Pan : Akgpp3389B Appellant Respondednt

Section 143(1)Section 143(2)Section 147Section 148

material available on record. The ld. DR for the revenue supported the order of the lower authorities. The ld. DR submits that the investigation wing of department made full-fledged investigation and came to the conclusion that the hawala operators were indulging in providing mere entry without delivery of actual

Manvi Khandelwal, New Delhi vs. ITO, Ward- 46(4), New Delhi

In the result appeal of the assessee is dismissed

ITA 3212/DEL/2018[2014-15]Status: DisposedITAT Delhi26 Nov 2019AY 2014-15

Bench: Shri Prashant Maharishi & Shri K.Narasimha Chary

For Appellant: Shri K. Sampath, AdvocateFor Respondent: Smt. Rinku Singh, Sr.DR

Section 10(38)Section 68

case was picked up for scrutiny under CASS for the reason of “Suspicious Long Term Capital Gain (LTCG) on sale of shares (inputs from investigation wing)”. 3. During the course of assessment, learned Assessing Officer noticed that the assessee has claimed Long Term Capital Gain exempt under section ... assessee and the financials of M/s Kappac Pharma Ltd and also took into consideration the attendant circumstances like the report from the investigation wing, Kolkata, SEBI’s surveillance measures, the details of trade data of exit providers etc and reached a conclusion that the share price movement and the sale

ITO 17 (2)(1), Mumbai vs. Ishardas Aggarwal & Sons, Mumbai

In the result, appeal of the revenue is dismissed

ITA 5605/MUM/2018[2010-11]Status: DisposedITAT Mumbai25 Nov 2019AY 2010-11

Bench: Shri Shamim Yahya (Am) & Shri Pawan Singh (Jm) Ito 17(2)(1), 1St Floor, Vs M/S Ishardas Aggarwal & Sons Room No. 134, 390, Latif House, S.T. Road, Aayakar Bhavan, Mumbai-400 009 M.K.Road, Pan : Aabfi2423E Mumbai-400020 Appellant Respondednt

Section 142(1)Section 143(1)Section 147Section 148

list of hawala dealers, copy of which was forwarded to the AO. The ld. DR for the Revenue further submitted that the Investigation Wing of the Income-tax Department made full-fledged enquiry. The parties from whom the assessee has shown the purchases are bogus Hawala dealers. The hawala dealers

DCIT - 4(3)(1), Mumbai vs. Tribhovandas Bhimji Zaveri Bomby Ltd., Mumbai

In the result, appeal of the revenue is dismissed

ITA 5598/MUM/2018[2011-12]Status: DisposedITAT Mumbai25 Nov 2019AY 2011-12

Bench: Shri Shamim Yahya (Am) & Shri Pawan Singh (Jm) Dcit-4(3)(1), Mumbai Vs M/S Tribhovandas Bhimji Zaveri Bombay Ltd, 241-243, Zaveri Bazar, Mumbai-400 002 Pan : Aaact4893P Appellant Respondednt

Section 143(2)

information forwarded by Maharashtra Sales Tax Department and further enquiry." 2. "The information was generated by Maharashtra Sales Tax Department and received through the Investigation Wing of the Income Tax Department. As such, the case squarely falls under the exception 10(e) of circular No.3/2018 dt.11.07.2018 and amendment thereto dated