Pinkal Rajeshbhai Patel Vs ITO (ITAT Ahmedabad)
In this case, the assessee challenged the validity of reassessment proceedings initiated under Section 147 of the Income-tax Act for Assessment Year 2015-16.
The assessee filed return of income on 30.09.2015 declaring total income of Rs.8,33,240 after claiming deduction under Chapter VI-A of Rs.2,18,438. The assessee also declared exempt agricultural income of Rs.1,10,051 and exempt Long Term Capital Gain (LTCG) of Rs.54,52,613. Subsequently, the Assessing Officer issued notice under Section 148 dated 31.03.2021 reopening the assessment. In response, the assessee filed return of income on 28.05.2021 declaring the same income.
The reassessment proceedings were initiated on the basis of information received from the Investigation Wing regarding a search conducted under Section 132 on 11.09.2018 in the case of Sanjay Shah and Jignesh Shah. The search allegedly revealed accommodation entries, bogus LTCG transactions, incriminating digital data, MS Excel sheets, WhatsApp chats, and records relating to unaccounted cash and synchronized trading in penny stocks.
According to the reasons recorded for reopening, the assessee had allegedly entered into accommodation entries in the nature of fictitious loans amounting to Rs.49,74,275 from concerns managed and controlled by Sanjay Shah and Jignesh Shah. The reasons specifically stated that the assessee was a beneficiary of accommodation entries through entities such as M/s Apar Bizz, M/s Venus Trade, M/s Aa Plus Broking Pvt Ltd, and M/s Bhavsar Enterprises. The Assessing Officer concluded in the recorded reasons that income chargeable to tax had escaped assessment because of fictitious loan transactions.
