AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (4) TMI 820
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....risprudence. 5. That the appellant craves leave to add/ alter any / all grounds of appeal before or at the time of hearing of the appeal. 2. Assessee has also filed an Application for admission of additional grounds of Appeal vide its Application in which the assessee has stated that in view of the settled decision in the case of NTPC 229 ITR 383 (SC), (legal ground can be raised for first time in collateral and second round also). He further stated that the following additional grounds are purely legal and do not require fresh investigation of facts and therefore, the same may be admitted. "1. That the Ld. AO has wrongly made the assessment by invoking the provisions of Section 147 when the same are not applicable on the facts of the case. 2. That the assessment could not have been re-opened u/s. 147/148 as reasons have been recorded by AO only on borrowed satisfaction. There are no material on record to establish any satisfaction on part of the AO that any income belonging to the appellant has escaped assessment." 3. Ld. Counsel of the Assessee requested that keeping in view of the decision of the Hon'ble Supreme Court of India in the case of NTPC 229 ITR 383 (SC) (Supra),....
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....ment could not have been re-opened u/s. 147/148 as reasons have been recorded by AO only on borrowed satisfaction. He further stated that there are no material on record to establish any satisfaction on the part of the AO that any income belonging to the assessee has escaped assessment. He draw our attention towards the copy of reasons for reopening the case u/s. 148 and stated that no proper reasons were recorded; no nexus between the materials relied upon and the belief formed for escapement of income; no application of mind; no proper satisfaction was recorded before issue of notice u/s. 148; no independent conclusion that there was escapement of income and no proper satisfaction. It was further stated that the case was reopened only on the basis of investigation wing information which suffers with serious debility and lacks definiteness, without describing the basic aspects of alleged transaction (viz. date, mode, bank through which transacted, instrument, its nature, return filing details etc.) and in the absence of the same, whole action of the AO gets vitiated. To support his contention he submitted that the issue in dispute is squarely covered in favour of the assessee by t....
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....s by giving cheques/PO/DD in lieu of cash with/without the help of some agents/mediators. They have also being charging certain commission for providing these entries which usually varied from 1.5% to 3.5%. A perusal/ examination of report/ related documents/ related records show that M/s Paltech Cooling Water & Equipment Pvt. Ltd. being assessed with the undersigned has also received a sum of Rs. 10,00,000/- from the above said Sh. Tarun Goyal C.A. and Group through M/s Mahanivesh India Ld. which does not represent actual transactions but are only accommodation entries. In fact perusal/examination of report/documents/records show that the entire transaction lacks ingredients of genuineness and seems totally fishy. It can therefore be safely inferred that this amount is unaccounted money of my assessee introduced in its accounts after routing through these groups/entry providers to avoid taxing of such amounts. In view of the above, I have reason to believe that the assessee company has taken bogus/ accommodation entries only as discussed above to the tune of Rs. 10,00,000/- in the period relevant to A. Y. 2005-06 resulting into escapement of income to this extent plus the amount....
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....ing in view of the facts and circumstances of the present case and the 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. We draw our support from the judgments of the Hon'ble High Court of Delhi in the following cases:- (i) Signature Hotels (P)_ Ltd. vs. ITO and another reported in 338 ITR 51 (Del) has under similar circumstances as follows:- "For the A.Y. 2003-04, the return of income of the assessee company was accepted u/s.143(1) of the Income-tax Act, 1961 and was not selected for scrutiny. Subsequently, the Assessing Officer issued notice u/s.148 which was objected by the assessee. The Assessing Officer rejected the objections. The assessee company filed writ petition and challenged the notice and the order on objections. The Delhi High Court allowed the writ petition and held as under: "(i) Section 147 of the Income-tax Act, 1961, is wide but not plenary. The Assessing Officer must have 'reason to believe' that income chargeable to tax has escaped assessment. This is mandatory and the 'reason to believe' are required to be re....
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....e information for issuing a notice u/s 148. What had been recorded by the AO as his "reasons to believe"was nothing more than a report given by him to the Commissioner. The submission of the report was not the same as recording of reasons to believe for issuing a notice. The AO had clearly substituted form for substance and therefore the action of the AO was not sustainable." 9. In view of above, we are of the considered view that above issue is exactly the similar to the issue involved in the present appeal and is squarely covered by the aforesaid decisions of the Hon'ble High Court of Delhi. Hence, respectfully following the above precedent, we decide the legal issue in dispute in favor of the Assessee and against the Revenue and accordingly quash the reassessment proceedings. The other issues are not dealt with as the same have become academic in nature. 10. In the result, the Appeal filed by the Assessee stands allowed." (B). 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 ....