TaxTMI 
TaxTMI 
2016 (11) TMI 589
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....sment u/s 147 and that too without recoding valid reasons and without obtaining valid approval as per law and without complying with mandatory condition of section 147 to 151 as envisaged under the law. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 20,00,000/- on account of share application money received u/s 68 of Income Tax Act, 1961 and that too without considering the submissions/evidences of the assessee. 3. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs. 20,00,000/- on account of share application money received, against which ....
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....tion, it was established that Shri Tarun Goyal has floated about. 90 companies for the purpose of providing accommodation entries. The Directors of these companies are none but former and present employees of Shri Tarun Goyal. Shri Tarun Goyal has been using them for merely signing all the documents, bank cheques and also for transporting and exchanging cash and cheques in order to provide accommodation entries. During the search operation, as per his statement Shri Tarun Goyal has accepted that he provides accommodation entries and his varies companies use for this purpose. It has also been reported the statements of the auditors of various companies of Shri Tarun Goyal were recorded on oath after summons were issued to them, The auditors ....
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....r the said assessment year, the reasons recorded above for the purpose of reopening of assessment is put up kind satisfaction of Addl. Commissioner of Income-tax Central range-6, New Delhi in terms of the proviso of Section 151(2) of the I.T. Act, 1961." 3. In this case, I have to necessarily conclude that the reasons were recorded without application of mind. Therefore, on this ground itself, the reopening of assessment has to be held bad in law by following the judgements of the jurisdictional High Court in the case Signature Hotels Pvt. Ltd. vs. ITO 328 ITR 51 (Del) wherein it was held that notice issued based on a report from Investigation Wing is invalid where the AO does not examine the evidence. The Hon'ble jurisdictional High Cou....
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....ply 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. 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 reo....