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Judgment
PER SATBEER SINGH GODARA, JM
Both these assessees M/s Classic Transportation Private Limited and M/s Dependable Transport Private Limited; have filed their instant as many appeals ITA Nos. 7128 & 7257/Del/2025 against CIT(A)-29, New Delhi’s & CIT(A)/NFAC, Delhi’s twin orders 17th & 23rd September, 2025 in case no. 10849/2019-20 & DIN/order No. ITBA/NFAC/S/250/2025-26/1081037574(1) for assessment years A.Y. 2012-13 & 2011-12, involving proceedings u/s 143(3) r.w.s 147 of the Income Tax Act, 1961; hereinafter referred to as ‘the Act’, respectively.
Heard both the parties. Case files perused.
We notice at the outset during the course of hearing that the learned departmental authorities had initiated the impugned twin reopenings in the assessee’s respective cases regarding the share application money(ies) mounting to Rs. 12,00,00,000/- and 1,10,00,000/-; respectively coming from M/s Concise Exim Private Limited, which are sought to be treated as unexplained cash credits in the corresponding reassessments as upheld in the lower appellate discussion(s).
It is in this factual backdrop that the learned counsel first of all invites our attention to the Assessing Officer’s reopening reasons recorded in the former assessee’s appeal ITA No. 7128/Del/2025 reading as under:
Annexure A
Name of the Assessee:M/s Classic Transportation Private Limited Address of the assessee:211, Somdutt Chambers – II, Bhikaji Cama Place, New Delhi – 110006 Email: [email protected] PAN of the Assessee:AAACC4816B Assessment Year:2012-13 Details of the Assessing Officer having jurisdiction over the Assessee:Ward 6(2), New Delhi
Reasons for reopening of the assessment in case of M/s Classic Transportation Private Limited PAN – AAACC4816B for AY 2012-13 u/s 147 of the I. T. Act, 1961
1.The assessee company was in service sector related to transportation as per the ITR of A.Y. 2012-13. The assessee had filed its return of income for the A.Y. 2012-13.
2.Brief details of information collected/received by the AO:- The assessee had filed its ITR for A.Y. 2012-13. Information was received through post from the office of DDIT(Inv.), Unit 1(1), Mumbai vide letter dated 16.03.2018 that non-current investment/investment amounting to Rs. 12,00,00,000/- in equity instrument has been made in M/s Classic Transportation Private Limited by M/s Concise Exim Private Limited (PAN - AADCC5668A). Further, the details of the bank transactions between M/s Concise Exim Private Limited and M/s Classic Transportation Private Limited is as under:
S.No. Date Amount Received in Concise Account Amount transferred from Concise Account 1. 27.03.2012 - 12,00,00,000 2. 28.03.2012 20,00,00,000 - Total 20,00,00,000 12,00,00,000 It appears that rotation of huge amount of funds have been taken place without any economic rationale and CLASSIC is one of the company in network of companies which is engaged in rotation of huge amounts of funds without any genuine economic rationale.
3.Analysis of information collected received:- The assessee had filed its return for A.Y. 2012- The return of income for the A.Y. 2012-13 was perused on e-filing portal, wherein it was noticed that in the Balance Sheet as on 31.03.2012, the assessee company has shown Authorised Share Capital at Rs. 15,50,00,000/- and Issued, Subscribed and Paid up at Rs. 14,20,40,000/-. The Securities Premium Account is Rs. 38,10,00,000/-. The above shows that during the F.Y. 2011-12, the assessee company has issued shares including premium. Further, the company has no fixed assets and no current assets. Further the investment of the company is at Rs. 52,44,68,395/-. The cash at bank is Rs. 7,30,544/- and cash in hand is Rs. 27,669/-. The assessee company is showing Sales/Receipts at Rs. 22,000/- only and total income declared is Rs. 4981/-. Further, the assessee company has claimed NIL expenses. Considering the above fact as per the ITR and the information received, it can only be ascertained that the company is a paper entity company who is engaged in rotating the unaccounted money in the guise of Share Capital/Premium.
4.Enquiries made by the AO as sequel to information collected/received:- Credible information was also received in this office from the office of DDIT(Inv.), Unit 1(1), Mumbai vide letter dated 16.03.2018, which is also an investigating wing of the department and the information has been shared after due verification and enquiries. The same has been duly analysed and accordingly the reason to believe has formed that the income has escaped assessment.
5.Findings of the AO:- The assessee had filed its return for A.Y. 2012-13. In the Balance-Sheet, the assessee company has shown Authorised Share Capital at Rs. 15,50,00,000/- and Issued, Subscribed and Paid up at Rs. 14,20,40,000/-. The Securities Premium Account is Rs. 38,10,00,000/-. The above shows that during the F.Y. 2011-12, the assessee company has issued shares including premium. Further, the company has no fixed assets and no current assets. Further the investment of the company is at Rs. 52,44,68,395/-. The cash at bank is Rs. 7,30,544/- and cash in hand is Rs. 27,669/-. The assessee company is showing Sales/Receipts at Rs. 22,000/- only and total income declared is Rs. 4981/-. Further, the assessee company has claimed NIL expenses. Considering the above fact as per the ITR and the information received, it can only be ascertained that the company is a paper entity company who is engaged in rotating the unaccounted money in the guise of Share Capital/Premium. Thus, I am satisfied and have reason to believe, that the amount of Rs. 12,00,00,000/- has escaped assessment pertaining to F.Y. 2011-12.
6.Basis of forming reason to believe and details of escapement of income :- The assessee had filed its return for A.Y. 2012-13. In the Balance-Sheet, the assessee company has shown Authorised Share Capital at Rs. 15,50,00,000/- and Issued, Subscribed and Paid up at Rs. 14,20,40,000/-. The Securities Premium Account is Rs. 38,10,00,000/-. The above shows that during the F.Y. 2011-12, the assessee company has issued shares including premium. Further, the company has no fixed assets and no current assets. Further the investment of the company is at Rs. 52,44,68,395/-. The cash at bank is Rs. 7,30,544/- and cash in hand is Rs. 27,669/-. The assessee company is showing Sales/Receipts at Rs. 22,000/- only and total income declared is Rs. 4981/-. Further, the assessee company has claimed NIL expenses. Considering the above fact as per the ITR and the information received, it can only be ascertained that the company is a paper entity company who is engaged in rotating the unaccounted money in the guise of Share Capital/Premium. Thus, I am satisfied and have reason to believe, that the amount of Rs. 12,00,00,000/- has escaped assessment pertaining to F.Y. 2011-12. In terms of Section 139, a company is mandatorily required to file its return of income. Failure to file a return is deemed to be a case in which income has escaped assessment in terms of provisions of Explanation 2 to section 147 of the Act, which reads as under:
Explanation 2.—For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :—
(c)(i) where a return of income has been furnished by the assessee and assessment has been made but income chargeable to tax has been underassessed;
We next find that the learned assessing authority in the latter assessee’s appeal ITA 7257/Del/2025 had recorded almost identical reopening reasons as follows:
Reasons for issuing Notice u/s 148 in the case of M/s Dependable Transport Pvt. Ltd. A.Y. 2011-12
1.The return of income has been filed on 29.9.9.2011 declaring total income of Rs. 11,73,924/-. The assessee company is in the business of Service Sector-Others during the year. The return has been processed u/s 143(3) of I. T. Act.
2.Information received from DDIT(Inv.) Unit-1 Mumbai-
An information has been received from O/o the Deputy Director of Income-tax(Inv.) Unit-1(1) address-439 No. Scindia House, Ballard Estate, Mumbai-400038 vide letter No.DDIT/Unit1(1)/information /DTPL/17-18 dated 16.3.2018 that during the course of investigation M/s Concise Exim Private Limited could not be found at the registered address and address reported in ITRs. On perusal of financials statement reported by Concise Exim Pvt. Ltd., it is observed that company is not having fixed assets and reported meager income since its formation and carried out huge amount of banking transactions with many concerns. It is further gathered that monies were transferred from Concise to Dependable has been shown as non-current investments/equity instruments. It is also observed that share capital on huge amount of premium has been received by Concise from many concerns.
The details of bank transactions between M/s Concise Exim Pvt. Ltd. and M/s Dependable Transport Private Limited is as under:
SL. NO. Date Amount Received in Concise Account (Amount in Rs.) Amount transferred from Concise account (Amount in Rs.) 1 08.03.2011. - 11000000 2. 17.12.2012 1000000 - 3. 11.02.2015 10000000 - Total 1,10,00,00 1,10,00,000/- 2
On perusal of the above transaction pattern it appears that rotation of huge amount of funds have been taken place without any economic rationale and M/s Dependable Transport Pvt. Ltd. is one of the company in network of companies which is engaged in rotation of huge amounts of funds without any genuine economic rationale.
3. Income chargeable to tax escaping assessment
3.1The above facts clearly establish that the company has no ostensible source of income and having no fixed assets with very meagre income. The transaction conducted in bank account are dubious in nature not confirming to the business activities of the assessee company. These transactions are nothing but accommodation entries in nature.
3.2.Keeping in view all the above, I have reason to believe that an amount at least of Rs.1,10,00,000/- has escaped assessment in case of M/s Dependable Transport Pvt. Ltd. for the A.Y. 2011-12 within the meaning of Section 147/148 of Income Tax Act, 1961.
4.The assessment/re-assessment proceedings in this case for A.Y. 2011-12 pertain to period beyond four years but before the expiry of six years from the date of issue of notice. In view of the same, as no assessment has been made in this case for A.Y. 2011-12 u/s 143(3) or u/s 147, the first proviso to section 147 is not applicable to the case.
5.Moreover, as the case pertains to a period beyond four years from the end of relevant assessment years at the time of issue of notice, necessary sanction has to be obtained from Pr. Chief Commissioner of Income Tax or Pr. Commissioner of Income Tax or Commissioner of Income Tax, in view of the amended provisions of section 151 w.e.f. 01.06.2015. The necessary sanction in this regard is being obtained separately from Pr. Commissioner of Income Tax-03, Delhi before the issue of notice u/s 148.
(Seema Bharti)
I.T.O. Ward-7(1), New Delhi.
It is in this factual backdrop that both these assessees raise their first and foremost identical substantive ground/argument challenging validity of the impugned reopening(s) itself. This is for the precise reason that the learned Assessing Officer; be it in the former or latter assessee’s case, had framed his “regular” assessments on 31.03.2015 (page 80) and 31.03.2013 (page 54 ) in their respective cases u/s 143(3) of the Act. There is further no quarrel that the learned assessing authority had thereafter recorded the impugned reopening reasons and issued section 148 notices to both these assesses beyond this specified period of four years form the end of the relevant assessment year(s). That being the clinching factual position, it is crystal clear the he has nowhere attributed the assessee’s failure in filing the relevant particulars “fully” and “truly” in formal records which has been held as mandatory in Hindustan Lever Ltd vs. R. B. Wadkar, AC IT (2004) 268 ITR 332 (B om). Their lordship have settled the issue in assessee’s favour and against the department that such a failure indeed vitiates the entire reopening itself since there is no scope of any addition, substitution or deletion in the reopening reasons recorded at a later stage which ought to be read on standalone basis. We thus reject the learned CIT(DR) vehement contention supporting both these re-openings to quash the same in very terms.
Mr. Ashwini Kumar next draws our attention to pages 103 to 106 in the latter assessee’s appeal ITA No. 7257/Del/2025 that the learned departmental authorities had framed even a regular assessment in M/s Concise Exim Private Limited cases on 07.03.2024 for the very assessment year A.Y. 2011-12; and, therefore, once the same is considered in light of the supportive evidences, it is very much a genuine entity which could not have been treated as that engaged in providing accommodation entries. We are of the considered view that once we shall quashed the impugned twin reopenings itself, there is hardly much a need for us anymore to delve with the relevant factual matrix at length. All other issues are hereby rendered academic in very terms.
These twin assessee’s as many appeals ITA No. 7128 & 7257/Del/2025 are allowed in above terms. A copy of this common order be placed in the respective case files.