TaxTMI 
TaxTMI 
2016 (6) TMI 449
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.... 147 by the Assessing Officer and in making the assessments in pursuance thereof. 3. That on the facts and circumstances of the case and in law, the Commissioner of Income Tax(Appeals)-XXXIII, New Delhi erred in confirming the addition of Rs. 15lacs made by Assessing Officer u/s 68 of the Income Tax Act,1961. 3.1 That on the facts and circumstances of the case and in law, the Commissioner of Income Tax(Appeals)-XXXIII, New Delhi erred in confirming the addition of amount of Rs. 15 lacs received by the appellant towards Sale of Investment in share as income u/s 68 of the Income Tax Act, 1961 despite several judicial pronouncements to the effect that section 68 was not applicable in such a situation. 4. The appellant craves permission to add, amend, alter or vary all or any grounds of appeal on or before the date of hearing of the appeal." 2. Briefly stated that facts of this case are : assessment of the assessee was completed for the year 2004-05 declaring total income at Rs. 41,940/- on 25.10.2014 but subsequently on receipt of information from ACIT, Central Circle 19, New Delhi in March 2011 that the assessee has received accommodation entries to the ....
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....ad in law and relied upon the decision rendered by Hon'ble jurisdictional High Court in Pr. Commissioner of Income Tax- 4 vs. G & G Pharma Limited in ITA 545/2015 order dated 08.10.2015 and ITAT, Delhi Bench 'H', New Delhi in case of USG Buildwell Pvt. Ltd. vs. ACIT, Central Circle 23, New Delhi order dated 15.02.2016. However, on the other hand, the ld. DR for the revenue relied upon the order passed by the AO as well as the ld. CIT (A). 6. Undisputedly, it is settled principle of law that the AO is required to reach at an independent conclusion by applying his own mind that he has reason to believe that the income of the assessee has escaped assessment to assume the jurisdiction for reopening of the assessment u/s 147 / 148 of the Act. 7. Now before proceeding further, we would like to peruse the decision rendered by the AO for reopening of the assessment u/s 147 of the Act which are reproduced for ready reference as under :- "2. As per the information received from the ACIT, Central Circle-19, New Delhi, a survey operation was conducted in the S K Gupta group of cases on 20.11.2007 at 308. Arunachal Building, 19, Barakhamba Road, New Delhi- 110001 and 1007-1008, A....
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....ng survey proceedings; that as per the information received by the AO, assessee reported to have received Rs. 10,00,000/- vide cheque no. 778929 dated 15.10.2003 and an amount of Rs. 5,00,000/- vide cheque no.778945 dated 18.11.2003 from the Federal Bank account of M/s Chanderprabhu Financial Services/ Chanderprabhu Finance & Securities limited, a shell company/concern floated/controlled by Sh. S.K. Gupta. 9. Now, the sole question arises for determination in this case is "as to whether the AO can initiate proceedings u/s 147/148 of the Act on the basis of certain communication received from his superior revenue authorities showing that the assessee has been provided with accommodation entry to the tune of Rs. 15,00,000/- by a shell company/concern floated by S.K. Gupta?. 10. Identical issue has come up before the Hon'ble Supreme Court in judgment cited as Chhugamal Rajpal vs. S.P. Chaliha - (1971) 79 ITR 603, wherein it is held as under :- "The Supreme Court was dealing with a case where the AO had received certain communications from the Commissioner of Income Tax showing that the alleged creditors of the Assessee were "name-lenders and the transactions are bogus."....
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....cularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the AO, if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the Assessee, which must have been tendered along with the return, which was filed on 14th November 2004 and was processed under Section 143(3) of the Act. Without forming a prima facie opinion, on the basis of such material, it was not possible for the AO to have simply concluded: "it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries". In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the Assessee escaped assessment is missing in the present case." 12. Furthermore, similar issue has cropped up before the ITAT, Delhi Bench 'H' in M/s. USG Buildwell Pvt. Ltd. (sup....