Nihita Financial Services Private Limited Vs ITO (ITAT Mumbai)
BORROWED INFORMATION CANNOT BECOME “REASON TO BELIEVE” WITHOUT AO APPLYING HIS OWN MIND—REASSESSMENT U/S 147 QUASHED
The assessee-company filed its return of income declaring a loss of ₹7,09,13,068. Subsequently, the AO received information from the office of the Principal Director of Income Tax (Investigation)-2, Mumbai, alleging that one Shri Satish C. Shah was a leading accommodation-entry provider operating from Ahmedabad.
According to the Investigation Wing, Shri Shah controlled several companies through which accommodation entries in the nature of share capital, share premium, share application money, unsecured loans, long-term capital gains & short-term capital gains were provided.
The information identified the assessee as one of the beneficiaries of such entries. It alleged that the assessee received an aggregate amount of ₹1.30 crore from Sanguine Media Ltd. & Shri Ganesh Spinners Ltd. through four RTGS transactions during FY 2010-11.
Based on this information, the AO recorded reasons, reopened the assessment u/s 147 by issuing notice u/s 148 & ultimately made an addition u/s 68. Curiously, though the information referred to alleged entries of ₹1.30 crore, the reassessment order treated ₹1.38 crore as unexplained cash credit.
The CIT(A) confirmed the addition & dismissed the assessee’s appeal.
