2016 (9) TMI 293

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....duced the order of the Commissioner of Income Tax (Appeals) and upheld the deletion of the addition. In fact, they substantially relied upon and quoted the decision of its coordinate bench in the case of MAF Academy P. Ltd., a decision which has been overturned by the Delhi High Court vide its judgment in C.I.T vs. MAF Academy P. Ltd [ (2014) 206 DLT 277). In the impugned order it is accepted that the assessee was unable to produce directors and principal officers of the six shareholder companies and also the fact that as per the information and details collected by the Assessing Officer from the concerned bank, the Assessing Officer has observed that there were genuine concerns about identity, creditworthiness of shareholders as well as genuineness of the transactions. 21. In view of the aforesaid discussion, we feel that the matter requires an order of remit to the tribunal for fresh adjudication keeping in view the aforesaid case law. The question of law is, therefore, answered in favour of the Revenue and against the respondent-assessee, but with an order of remit to the tribunal to decide the whole issue afresh. One of the reasons, why we have remitted the matter is t....

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....bed under section 147 to 153 of the Income Tax Act, 1961. 2. That in any case and in any view of the matter action of Ld. CTT (A) in not quashing the assessment order is bad in law and against the facts and circumstances of the case. 3. That the cross objector craves the leave to add, amend, modify, delete any of the ground(s) of cross objection before or at the time of hearing." 5. Briefly stated the facts of this case are : assessee company filed return of income declaring loss of Rs. 1,58,035/- on 20.10.2002 which was processed under section 143 (1) of the Income-tax Act, 1961 (for short 'the Act'). Subsequently, it was noticed by the revenue authorities that during the year under assessment, the assessee received accommodation entry under the garb of share application money/share capital/share premium from the following entry operators :- Beneficiary Beneficiary Value of Entry taken Instrument No. by which Entry taken Date on which entry taken Name of a/c Account Holder of Entry of giving A/c Bank from which entry given Branch of entry giving bank A/c No. of entry giving account HDFC Bank Rajender Nagar Mkt., ND 70000 ....

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....ismissed the cross objection filed by the assessee as infructuous. Then revenue challenged the order passed by the appellate Tribunal dated 31.10.2011 before Hon'ble jurisdictional High Court which has remitted the case back to the Tribunal to decide afresh along with cross objection. 9. Now, the revenue as well as assessee are again before the Tribunal by way of filing appeal as well as cross objection in the second round of litigation. 10. 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. 11. Now before proceeding further, we would like to peruse the reasons rendered by the AO for reopening of the assessment u/s 147 of the Act which are reproduced for ready reference as under :- "Information has been received from the Investigation Wing of the Income Tax Department that the above named assessee is a beneficiary of accommodation entries received from certain established entry operators identified by the Wing during the pe....

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....   14- Mar-02 Dinanath Luhariwal Spinning Mills Ltd. SBP DG 50103 HDFC Old Rajender Nagar 850000 33834 16- Mar-02 Technocom Associates P.Ltd. Innova tive Wazirpur 220 HDFC Old Rajender Nagar 850000 33834 16- Mar-02 Technocom Associates P.Ltd. Innova tive Wazirpur 220 HDFC Old Rajender Nagar 1000000   18- Mar-02 Chintpuri Credits SBP DG 50058 HDFC Old Rajender Nagar 1000000   18- Mar-02 Chintpuri Credits SBP DG 50058 The assessee has received unexplained sums from the entry operators as per the above details as per information available with the undersigned. As explained above, the identity, creditworthiness and genuineness of transactions with the persons found to be entry operators cannot be established. The Assessing Officer therefore have reasons to believe that on account of failure on the part of the assessee or disclose truly and fully all material facts necessary for assessment for above assessment year, the income chargeable to tax to extent of accommodation entry mentioned above, has escaped assessment within the meaning of Section 14....

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....judgment cited as G & G Pharma India Ltd. (supra) wherein Hon'ble High Court, by following the judgment delivered by Hon'ble Supreme Court, entitled Chhugamal Rajpal vs. S.P. Chaliha (supra) held 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, from four entities which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the AO 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 AO applied his mind to the materials that he talks about particularly 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....