Aakash Films Private Limited Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, decided two connected appeals for Assessment Year 2013-14, taking the appeal of M/s. Aakash Ashish Realtors Limited as the lead case since identical issues arose in both matters. The assessee had originally filed its return declaring nil income, which was processed under Section 143(1). Subsequently, based on information received from the Investigation Wing that the assessee had received ₹1.71 crore from M/s Fastline Multitrade Pvt. Ltd. (FMPL), an entity allegedly managed by Shri Praveen Kumar Jain, the assessment was reopened under Section 147. The reasons for reopening also referred to a survey conducted in the case of M/s Aakash Universal Limited and alleged accommodation entries received from entities associated with Shri Praveen Kumar Jain.
During the reassessment proceedings, the assessee submitted a Memorandum of Understanding (MOU) dated 01.11.2012 under which it had agreed to transfer development and sale rights in specified property to FMPL for a total consideration of ₹42 crore. According to the assessee, FMPL paid only ₹1.71 crore, failed to pay the balance consideration, and the MOU was consequently cancelled. The assessee stated that the entire advance of ₹1.71 crore had been repaid without interest pursuant to a cancellation agreement dated 29.03.2013. The Assessing Officer issued notices under Section 133(6) and summons under Section 131 to FMPL, but these remained unserved or uncomplied with. The assessee also did not produce FMPL before the Assessing Officer. Treating the explanation as unsatisfactory, the Assessing Officer added ₹1.71 crore under Section 68 as unexplained cash credit.
