GOLDSTAR METAL SOLUTIONS PRIVATE LIMITED,MUMBAI V. ASST. COMMISSIONER OF INCOME TAX CIRCLE-9(3)(2),MUMBAI, MUMBAI

ITA 2084/MUM/2024

AI Insights

The case involves two separate appeals by Vidarbha Mining Private Limited and Goldstar Metal Solutions Private Limited against the orders of the National Faceless Appeal Centre (NFAC), Delhi, which had reopened their assessments for the assessment year 2012-13. The reopening was based on information suggesting involvement in a network of shell companies used for routing funds without any economic rationale. The Tribunal examined the reasons for reopening the assessments and found that the information did not directly implicate the assessees nor establish any transactions that would warrant a reassessment under section 68 of the Income Tax Act. Consequently, the Tribunal quashed the reassessment orders.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633395 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITA P. KAUSHIK; DR
• Assessee Lawyers: GAURAV KABRA; AR
• Keywords: Accommodation entries
• Section: 148; 143(3); 68

Judgement Text

" | आयकर अपीलीय अिधकरण ा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 1266/Mum/2024 Assessment Year: 2012-13 Vidarbha Mining Private Limited 703, Samarpan Complex Near Mirador Hotel New Link Road Chakala Andheri (East) Mumbai - 400099 [PAN: AACCV2506M] Vs Deputy Commissioner of Income Tax, Circle - 1(3)(2), Mumbai अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) I.T.A. No. 2084/Mum/2024 Assessment Year: 2012-13 M/s. Goldstar Metal Solutions Private Limited B-701, 702, 703 Citipoint Premises CHS J.B. Nagar, Andheri Kurla Road Andheri East Maharashtra - 400059 [PAN: AACCG5917H] Vs Asst. Commissioner of Income Tax, Circle – 9(3)(2), Mumbai अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Gaurav Kabra, A/R Revenue by : Ms. Kavita P. Kaushik, Sr. D/R सुनवाई की तारीख/Date of Hearing : 10/06/2025 घोषणा की तारीख /Date of Pronouncement: 13/06/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: I.T.A. No. 1266/Mum/2024 & I.T.A. No. 2084/Mum/2024 are two separate appeals by two different assessees preferred against two separate orders by NFAC, Delhi [hereinafter “the ld. CIT(A)”] dated 22/01/2024 and 29/02/2024 respectively. I.T.A. No. 1266/Mum/2024 I.T.A. No. 2084/Mum/2024 2 2. Since both the appeals have identical set of facts, they are disposed off by this common order for the sake of convenience and brevity. 3. Since the facts are identical, we heard the representatives on the facts of ITA No. 1266/Mum/2024. Briefly stated the facts of the case are that the assessee filed its return of income on 29/09/2012 declaring total income at Rs. 2,19,09,030/-. The return was selected for scrutiny assessment and, therefore, assessment was framed u/s 143(3) of the Act by accepting the returned income of the assessee. 3.1. Subsequently, vide notice dated 30/03/2019 u/s 148 of the Act, the AO sought to reopen the assessment. The reasons for reopening the assessment read as under:- “In this case, information was received from the office of DDIT (Inv.), Unit-2(3), Kolkata vide letter dated 07.03.2019 which is as under: 2.1. Credible information received stating that the following accounts were opened during the month of May & August in the year 2011 and used for routing of funds in multiple of lacs in a single day regularly through TRGS/transfer leaving minimum opening balance. The funds appear and disappear in the branch mainly through RTGS on the same day, leaving no residual effect. No economic rationale or bonafide purpose found in those transactions. Sr. No. Name of the Account Holder Account No. with UCO Bank Date of opening Ultimate Share Broking Pvt. Ltd. 01900210007112 16.05.2011 Signature Business Advisors Pvt. Ltd. 01900210007105 16.05.2011 Subhrashi Vayapaar Pvt. Ltd. 01900210007150 17.05.2011 Parag Securities Pvt. Ltd. 01900210008034 03.08.2011 Jagriti Business Solutions Pvt. Ltd. 01900210007009 14.05.2011 Maximum Share Broking Pvt. Ltd. 01900210007136 16.05.2011 Hamsafar Securities Pvt. Ltd. 01900210008041 03.08.2011 I.T.A. No. 1266/Mum/2024 I.T.A. No. 2084/Mum/2024 3 2.2. Summons was issued to the concerned bank for relevant bank statements. On analysis of the bank statements it is observed that the funds so received in the accounts were immediately disappeared to other account through RTGS/transfer. Number of summons and queries were made with the concerned bank as the narration i.e. incoming and outgoing entries were not being maintained properly that resulted many hindrance to make the trail to find out the ultimate beneficiaries. About hundreds of accounts are linked to one another. The following bank accounts are found to be involved which were used as a conduit either to transfer the fund to the beneficiaries in the guise of loan/advance/share capital or to provide accommodation entry or otherwise. 2.3. Out of the above, as per database of entry operator, it is seen that the above mentioned companies have already been identified as shell companies during various search and survey operation conducted by the investigation wing from which funds are reaching to the accounts of beneficiaries directly or through other paper companies or have been used for providing accommodation entry. 2.4. On going through the above bank accounts statement, it is observed that the pattern of transaction is of same as layering of funds through multiple conduits having no genuine business activities, no other nature of transactions have been found other than just transferring the fund on the very same day or next day leaving very negligible balance in the account. Most of the companies are sharing same address with common directors. On scrutinising the bank statement fund trail has been prepared for the F.Y. 2011-12 that leads to the ultimate beneficiaries of around 39.00 crores are enclosed as per Annexure A and Annexure B. The entire fund trail showing ultimate fund transfer to all these beneficiaries is enclosed in a CD with this report. 3. In this case, information was also received from the office of DDIT (Inv.), Unit-4(3), Mumbai vide letter dated 15.03.2019 which is as under: 3.1. On verification of information received in the case of Shri Prem Sarodi, it was found that amount of Rs.100 lakhs was credited to the account of Plastica Industries (A/c No. 698705111904 in ICICI Bank Ltd.) from the account of Mr. Prem Sarogi (A/c No. 698701005033 in ICICI Bank Ltd.). Mr Prem Sarogi has got the RTGS from Goldstar Metal Solutions Pvt. Ltd. (A/c No.698705112277 in ICICI Bank Ltd.). On the same day, Rs. 100 lakhs were transferred from the account of M/c Vidarbha Minina Pvt. Ltd. (A/c No. 698705112857 in ICICI Bank Ltd.) to the account of Goldstar Metal Solutions Pvt. Ltd. (A/c No. 698701005033 in ICICI Bank Ltd.). From the account of Mis Vidarbha Mining Pvt. Ltd. (A/c No. 698705112857 in ICICI Bank Ltd.) transferred to the account of Mr. Prem Sarogi (A/c No. 698701005033 in ICIC/ Bank Ltd.). Again, on the same day Rs. 100 lakhs was transferred from Mr. Prem Sarogi (A/c No. 698701005033 in ICICI Bank Ltd.) to M/s Vidarbha Mining Pvt. Ltd. (A/c No. 698705112857 in ICICI Bank Ltd.).” I.T.A. No. 1266/Mum/2024 I.T.A. No. 2084/Mum/2024 4 4. The entire quarrel revolves around two pieces of information. First, received from the office of the DDIT(Inv.), Unit-2(3), Kolkata by which the AO came to know that the parties mentioned hereinabove are engaged in providing accommodation entries and the second information was that Mr. Prem Sarogi received Rs.100 Lakhs from Goldstar Metal Solutions Pvt. Ltd., and Goldstar Metal Solutions Pvt. Ltd. received from M/s. Vidarbha Mining Pvt. Ltd. and Mr. Prem Sarogi received from M/s. Vidarbha Mining Pvt. Ltd. and again Rs.100 Lakhs was transferred from Mr. Prem Sarogi to M/s. Vidarbha Mining Pvt. Ltd. 5. We have given a thoughtful consideration to the reasons for reopening the assessment mentioned hereinabove. Insofar as the first information from DDIT (Inv.), Unit-2(3), Kolkata is concerned, the seven parties mentioned therein have nothing to do with the assessee nor there is any mention of any transactions between the said parties and the assessee. The second information does not make any sense as the Officer himself is mentioning the transfer of money from one account to another thereby explaining himself the identity and the source of the creditor. We fail to understand how the AO can allege that income has escaped assessment on such information for making addition u/s 68 of the Act when the alleged second information is self-explanatory and none of the parties mentioned in the second information are accommodation entry provider. They are all related parties and the transactions are between the related parties. 6. On the given facts as discussed hereinabove, we do not find any merit in the reopening of the assessment. We accordingly set-aside the I.T.A. No. 1266/Mum/2024 I.T.A. No. 2084/Mum/2024 5 impugned notice u/s 148 of the Act thereby quashing the resultant re- assessment order. Since we have quashed the re-assessment order, we do not find it necessary to delve into the merits of the case. 7. In the result, both the appeals of the assessee are allowed. Order pronounced in the Court on 13th June, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 13/06/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0014ितिलिप अ\u0019ेिषत /Copy of the Order forwarded to : 1. अपीलाथ\u001b / The Appellant 2. \u0014 थ\u001b / The Respondent 3. संबंिधत आयकर आयु! / Concerned Pr. CIT 4. आयकर आयु! ) अपील ( / The CIT(A)- 5. िवभागीय \u0014ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड% फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "