Sharda Lab Pvt. Ltd. Vs ITO (ITAT Mumbai)
The Mumbai Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal for Assessment Year 2012-13, holding that the reopening of assessment under Section 147 read with Section 148 of the Income-tax Act, 1961 was bad in law. The Tribunal found that the Assessing Officer had merely reproduced information received from the DGIT (Investigation), Mumbai concerning alleged accommodation entries and had failed to independently apply his mind before forming the belief that income had escaped assessment.
The assessee had originally filed its return on 27 July 2012 declaring a business loss of ₹6,09,269 for AY 2012-13. The assessment was subsequently reopened after the Assessing Officer received information regarding beneficiaries of accommodation entries allegedly provided through concerns controlled by Shri Praveen Kumar Jain. During reassessment proceedings, the AO noticed unsecured loans aggregating to ₹1.25 crore from Atharv Business Pvt. Ltd. (₹43.50 lakh), Duke Business Pvt. Ltd. (₹51.50 lakh) and Nakshatra Business Pvt. Ltd. (₹30 lakh).
The assessee furnished documents relating to the transactions and contended that the loans were genuine. It submitted that the loans had been received through banking channels and were repaid either during the relevant assessment year or in subsequent years. The assessee also stated that the outstanding balances had subsequently become nil.
