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2017 (2) TMI 990

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....f assessment under the Act. 3 That the learned Commissioner of Income Tax (Appeals) has further erred in law and on facts in sustaining the initiation of proceedings u/s 147 of the Act on the basis of information received from OIT (investigation) mechanically and without independent application of mind. 3.1 That further, the reasons recorded were mere reasons to suspect and were just to make fishing and roving enquiries, as no independent enquiry was conducted by the assessing officer before issuing such notice under section 148 and as such the proceeding initiated under section 148 was a mere pretence. 4. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in making an addition Rs. 15,00, 000/- as alleged accommodation entry received from Sh. SK Gupta, and held to be unexplained cash credit u/s. 68 of the Act. 4.1 That in doing so, the Ld. CIT(A) has completely ignored and overlooked all the necessary documents which were filed before both AO and CIT(A), explaining the fact that the appellant company has sold its shareholding in M/s Alliance Buildcon India Ltd. to M/s Passion Chit Company Pvt. Ltd. which was duly reflected in th....

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....ble to be deleted as such. 8. That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in making additions in the hands of assessee company, without giving any fair and proper opportunity of being heard to the appellant company. Thereby, violating the principles of natural justice. 9. That the learned Commissioner of Income Tax (Appeals) has further erred by sustaining of levy of interest uls 234B of the Act, which is not leviable on the facts of the appellant company." 2. The brief facts of the case are that the assessee is engaged in the business of construction and development of properties. The assessee filed its return of income for AY 2005-06 on 30.11.2015 declaring a loss of Rs. 55,200/-. Subsequently, information was received from the DCIT, Central Circle-18, New Delhi vide letter dated 18.2.2011 that the assessee company is beneficiary of accommodation entry and has received accommodation entries of Rs. 15 lacs vide entry dated 09.7.2014. This fact was admitted by Sh. SK Gupta during the survey proceedings carried out in his case by the Investigation Wing on 20.11.2007 in which he had admitted that the was providing accommodation entries to....

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....the AO before issue of Notice to the Assessee u/s. 148 of the I.T. Act, 1961 which is reproduced hereunder:- "Information has been received from the Deputy Commissioner of Income tax (Central Circle-TS, New Delhi, vide letter F. No. DCIT/CC-18/2010-11/593 dated 18.02.2011, that the above named assessee company is the beneficiary of accommodation entries as per details given hereunder- Name of the assessee Amount of entry Date of entry Dynasty Housing & Land     Development Private Limited 15,00,000 09.07.2004   In the above context, statements have been recorded by the Directorate of Income Tax Investigation (Wing), New Delhi of the entry provider Sh. SK Gupta during the course of survey proceedings on 5.1.2009 who have confessed in his statements given before the Wing, that he is engaged in the business of providing accommodation entries to the needy persons against commission received from them. The entry provider have confessed that : i) They give loans and advances and share application capital through cheques after receiving of cash from them and take a premium as those cheques. ( answer to question no 7) ii) That Taneja Group of Companies is on....

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....are of the view that AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that income has escaped during the year. In our considered view the reasons are vague and are not based on any tangible material as well as are not acceptable in the eyes of law. The AO has mechanically issued notice u/s. 148 of the I.T. Act, 1961 on the basis of information allegedly received by him from the Directorate of Income Tax (Inv.), 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 fully 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, from four entities which were termed as accommodation entries, which informati....