TaxTMI 
TaxTMI 
2016 (4) TMI 1141
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....at assessment order made by Assessing Officer was bad in law and void abinitio. 2. That without prejudice, on the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals)-XXXIII, New Delhi erred in upholding the assumption of Jurisdiction u/s 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. 9 Lacs made by Assessing Officer u/s 68 of the Income Tax Act, 1961. 4. That on the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals)-XXXIII, New Delhi erred in confi....
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....ed the matter to the ld. CIT(A) and challenged the validity of initiation of the proceedings u/s 147 to the Act. However, the Ld. CIT(A) did not find merit in the submissions of the assessee and upheld the proceedings u/s 147 of the Act. Now the assessee is in appeal. 5. Ld. Counsel for the assessee at the very outset stated that this issue is squarely covered in favour of the assessee vide order dated 11 March, 2016 of the Co-ordinate Bench i.e. ITAT Delhi G Bench, New Delhi in the case of Sunaina Towers Pvt. Ltd. vs. ACIT Central Circle-23, New Delhi in ITA no. 4514/Del/2013 for the assessment year 2004-05 copy of the said order was furnished. It was stated that the facts of the present case are identical to the facts involved in the a....
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....e being reproduced hereunder: "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, from four entries which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the A.O. stated: "I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company has introduced its own unaccounted money in its bank account by way of above accommodation entries." The above conclusion is unhelpful in understanding whether the A.O. applied his mind to the materials that he talks about particularly since he did not describe what those materials ....
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.... law that prior to the reopening of the assessment, the A.O. has to apply his mind to the materials, conclude that he has reason to believe that income of the assessee has escaped assessment. Unless that basic jurisdictional requirement is satisfied, a post mortem exercise of analyzing materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. 14. In the circumstances, the conclusion reached by the ITAT cannot be said to be erroneous. No substantial question of law arises." 7. Now, we have to examine the reasons recorded in the present case before us in view of the ratios laid down in the above cited decision of the Hon'ble jurisdictional High Court recently pronou....
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.... accounts of tire beneficiaries to give the color of genuineness to these transactions. 3. Further, as per the information received from the ACIT, Central Circle-19, New Delhi, M/s. Sunaina Towers Pvt. Ltd. has received amount of Rs. 25,00,000 vide cheque no. 778926 dated 10.10.2003, from the Federal Bank account of M/s. Chanderprabhu Financial Services/Chanderprabhu Finance & securities Ltd., a shell company/concern floated/controlled by Shri S.K. Gupta. 4. In view of the above, I have reason to believe that amount/income of Rs. 25,00,000 has escaped assessment for the A.Y. 2004-05 for failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment within the meaning of sect....
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.... 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. The basic requirement is that the Assessing Officer must apply his mind to the material in order to form reasons to believe that the income of the assessee has escaped assessment. Such basic requirement while recording the reasons for initiation of proceedings under sec. 147 of the Act is missing in the present case before us. As it is evident in the reasons recorded, reproduced hereinabove, the Assessing Officer has simply recorded the information received from her colleague and without making any exercise of her mind on those information to form her own reasons to believe for the escaped....