Case Law Details
Bhagwab Mahavir Education Foundation Vs DCIT (ITAT Surat)
ITAT Surat held that mere deduction of TDS or mere payment by account payee cheque doesn’t make non-genuine transaction a genuine one.
Facts- The case of the assessee was re-opened u/s 147 of the Act for the reason that the assessee trust had received accommodation entries from Shri Arvind Kumar Jain and Shri Naresh Kumar Jain (Jain Brothers) who were found to be engaged in the business of providing accommodation entries and the assessee trust was one of the beneficiaries of the shell companies/entities floated by Jain brothers.
AO noted that the assessee had taken the accommodation entry of Rs.1,57,00,005/- from such shell companies floated by Jain Brothers. AO has accordingly re-opened the assessment u/s. 148 of the Act. The notice u/s.148 of the Act was issued on 31.03.2017 and also a reminder noticed was issued on 04.05.2017. In response to this notice, the assessee has filed the reply dated 15.05.2017 along with the copy of return of income filed in response to notice u/s 148 of the Act. The assessee raised its objections against the re-opening of the assessment vide its letter dated 28.08.2017 which were disposed of by passing an order dated 04.10.2017.
Further, AO observed that the assessee has obtained unsecured loans amounting to Rs.2,40,00,000/- from 9 different companies. All these nine companies were held to be shell/benami companies floated by Jain Brothers. Therefore, the assessing officer made addition.
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