TaxTMI 
TaxTMI 
2016 (5) TMI 1161
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.... form an opinion that income had escaped assessment in the hands of the appellant, in view of the decision of the Hon'ble Supreme Court in the case of M/s. Lovely Exports Pvt. Ltd. where the court has held that if the share application money is received by the assessee company from alleged bogus shareholders, whose name was given to the AO, then the department is free to proceed to reopen their individual assessments in accordance with law. 2. That on the facts and I the circumstances of the case and in law, whether the assessing officer had any material before him to hold that the appellant's income has escaped assessment even though he had no knowledge as to what has been stated and who had made the alleged statement before Dir....
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....e Court in the case of M/s. Lovely Exports Pvt. Ltd. and Delhi High Court case in the case of Dwarkadhish Investment Pvt. Ltd. and Fair Finvest Ltd. on the facts of the appellant's case 7. That on the facts and in the circumstances of the case and in law, whether the Assessing Authority had acted on his own belief regarding the escapement of income or on the borrowed opinion of directorate of investigation about escapement 3. The brief facts of the case are that the assessee filed original return of income on 30.10.2002 declaring income of Rs. 72,97,625/-. Assessment in the case was made u/s. 143(3) of the I.T. Act on 30.12.2004 on total income of Rs. 73,88,130/-. Subsequently, on the basis of information received from the Director....
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....of hearing, Ld. Counsel of the assessee has only argued the legal ground challenging the validity of reopening u/s. 148 of the I.T. Act by stating that action of the Assessing Officer is illegal, because the same is lacking tangible material / reasonable cause and justification. The action of the Revenue Authorities is in absence of nexus between alleged information and tentative inference; non application of mind much less independent application of mind; total lack of clarity on nature of transaction in reasons recorded. He further submitted that the present case is squarely covered by the Hon'ble High Court Decision dated 8.10.2015 passed in ITA No. 545/2015 in the case of Pr. CIT-4 vs. G&G Pharma India Ltd., wherein the Tribunal's decis....
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....u/s. 148 is furnished as under:- "In this case, assessment u/s. 143(3) of the Income Tax Act, 1961 was completed on 30.12.2004 at an income of Rs. 73,88,130/-. Subsequently, Information was received from the Directorate of Investigation Wing that certain persons were indulged in providing accommodation entries/ bogus share application money / bogus capital gain. In the course of enquiries before the Investigation Wing these persons had provided the details various persons to whom such accommodation / bogus entries were provided. Based on the enquired made, the Directorate of Investigation has provided the details of persons who were beneficiaries / entry operators of such accommodation / bogus entries in Delhi in the last 5-6 years. T....
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....e basis of information allegedly received by him from the Directorate of Income Tax (Investigation), New Delhi. Keeping in view of the facts and circumstances of the present case and the case law applicable in the case of the assessee, we are of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. Our view is supported by the following judgment/decision:- Pr. CIT vs. G&G Pharma India Ltd. in ITA No. 545/2015 dated 8.10.2015 of the Delhi High Court wherein the Hon'ble Court has adjudicated the issue as under:- "12. In the present case, after setting out four entries, stated to have been received by the Assessee on a single date i.e. 10th February 2003,....
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....elieve that the income of the Assessee escaped assessment is missing in the present case. 13. Mr. Sawhney took the Court through the order of the CIT(A) to show how the CIT (A) discussed the materials produced during the hearing of the appeal. The Court would like to observe that this is in the nature of a post mortem exercise after the event of reopening of the assessment has taken place. While the CIT may have proceeded on the basis that the reopening of the assessment was valid, this does not satisfy the requirement of law that prior to the reopening of the assessment, the AO has to, applying his mind to the materials, conclude that he has reason to believe that income of the Assessee has escaped assessment. Unless that basic jurisdic....