Raheja Developers Limited Vs ACIT (ITAT Delhi)
Sale of Shops to Shell Company Held Bogus, Own Funds Routed back through Accommodation Entry- ITAT confirms Addition of ₹19.06 Cr & ₹17.53 Cr
Assessee claimed sale of 22 shops in Raheja Mall, Gurugram to M/s Sagar Trade Links Pvt. Ltd. (STPL) for ₹36.56 crore, receiving ₹19.06 crore in AY 2011-12 & ₹17.53 crore in AY 2012-13. AO treated the transaction as bogus & added the amounts u/s 68, along with commission @ 2%, alleging accommodation entries. CIT(A) upheld the additions. Assessee appealed before ITAT.
1. Reopening of assessment upheld
- Reopening was beyond 4 years, but ITAT held that fresh information from Investigation Wing, Kolkata about shell company STPL was tangible material.
- STPL was controlled by entry operator Jagdish Purohit, who admitted u/s 132(4) that STPL was only giving bogus entries.
- Raheja failed to truly & fully disclose these facts earlier.
- Hence, reopening u/s 147/148 valid.
2. Objections to reopening filed very late
- Reasons were provided on 12.07.2018, but Assessee filed objections after 124 days, at the fag end of assessment.
- AO discussed objections in final order.
- Held: No violation of GKN Driveshaft.
3. Substance of the transaction – a complete sham
- STPL had negligible profits, no real business, huge share application money – classic shell traits.
- Funds credited & immediately transferred to Raheja on same day (layering).
- Managing Director of Raheja, Mr. Navin Raheja, became director & major shareholder of STPL before transaction.
- No sale deed registered, no physical possession till 2015.
- Purchaser never insisted on registration or possession for years – highly improbable in genuine sale.
- Many shops were returned to Raheja or sold to third parties without STPL’s name ever being registered.
- STPL did not earn any rent, only deemed rent was assessed.
- Mutation in municipal records does not prove ownership.
4. ITAT’s powerful observation
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