Rajeshbhai Mohanbhai Prajapati Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad restored the matter back to AO for fresh adjudication but imposed cost of Rs. 10,000 for lack of diligence during assessment and appellate proceedings on the part of the assessee.
Facts- The assessee, an individual engaged in the business of trading in chemicals. AO reopened the assessments u/s. 147 of the Act on the basis of specific information received from the Directorate of Income Tax (Investigation) and the Directorate of Intelligence & Criminal Investigation, which flagged substantial credits in the assessee’s bank accounts during the financial years under consideration. It was observed that the assessee had received/paid amounts from M/s Orange Tradex Pvt. Ltd. and M/s Krrish Enterprise during the years under consideration. These entities were identified as “paper companies” engaged in providing accommodation entries and not carrying on genuine business activities. Accordingly, the AO initiated proceedings u/s 147 of the Act by issuing notice u/s 148 of the Act on 31.03.2021. Despite being provided multiple opportunities, the assessee did not furnish the required details or explanations for the credits in the bank account, which were central to the reassessment proceedings. This lack of response led the AO to complete the assessments ex-parte u/s 144 of the Act for both years, treating the amounts of Rs.1,07,80,41,291/- (AY 2016-17) and Rs.74,49,42,182/- (AY 2017-18) as unexplained cash credits u/s. 68 of the Act.
