TaxTMI 
TaxTMI 
2018 (6) TMI 693
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant had escaped assessment and in view thereof the proceedings initiated are illegal, untenable and therefore unsustainable. 1.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that reasons recorded mechanically without application of mind do not constitute valid reasons to believe for assumption of jurisdiction u/s 147 of the Act. 2 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in sustaining an addition made by learned Income Tax Officer of Rs. 15,00,000/- representing sum received from M/s Shalini Holdings Ltd. as share capital and erroneously held as unexplained cash credit under section 68 of the Act. 2.1 That while sustaining the aforesaid addition the learned Commissioner of Income Tax (Appeals) has completely overlooked that there was no adverse material brought on record by the learned Assessing Officer to assume that credits by way of share capital represents unexplained cash credit and. burden which lay upon the assessee in terms of section 68 of the Act had not been discharged. 2.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciat....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... erred both in law and on facts in upholding the levy of interest of Rs. 38,861/- u/s 234A of the Act and. interest of Rs. 4,51,791/- u/s 234B of the Act which are not leviable on the facts and circumstances of the case of the appellant company. It is therefore, prayed that, it be held that assessment made by the learned Assessing Officer and sustained by the learned Commissioner of Income Tax (Appeals) deserves to be quashed as such. It be further held that additions made and sustained by the learned Commissioner of Income Tax (Appeals) alongwith interest levied be deleted and appeal of the appellant company be allowed." 3. The main grievance of the assessee vide ground nos. 1 to 1.2 relates to the validity of the proceedings initiated by the AO u/s 147 of the Income Tax Act, 1961 (hereinafter referred to as the Act). 4. Facts of the case in brief are that the assessee filed the return of income on 27.09.2009 declaring an income of Rs. 42,156/- which was processed u/s 143(1) of the Act. Subsequently, the AO issued notice u/s 148 of the Act on 21.03.2016 after recording the reasons. The AO framed the assessment u/s 143(3) r.w.s. 147 of the Act by making an addition o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....€¢ Sabh Infrastructure Ltd. Vs ACIT 398 ITR 198 (Del.) • CIT Vs G&G Pharma India Ltd. 384 ITR 147 (Del.) • Unique Metal Industries Vs ITO in ITA No. 1372/Del/2015 order dated 28.10.2015 • Punjab Metal Store Vs ITO in ITA No. 512/Del/2015 order dated 02.12.2015 • Jiten Gurnani Vs ITO in ITA No. 4908/Del/2012 order dated 31.03.2015 • Banke Bihari Properties (P) Ltd. Vs ITO in ITA No. 5128/Del/2015 order dated 22.04.2016 • R.K. Garg Developers (P) Ltd. Vs ITO in ITA No. 6558/Del/2014 order dated 31.08.2016 • Amsa India (P) Ltd. Vs CIT 393 ITR 157 (Del.) • Pr. CIT Vs Meenakshi Overseas (P) Ltd. Vs ITO 395 ITR 677 (Del.) • CIT Vs RMG Plyvinyl (I) Ltd. 396 ITR 5 (Del.) • R.P. Foam Home (P) Ltd. Vs ITO in WP(C) 7601/2017 dated 29.08.2017 • Sabh Infrastructure Ltd. Vs ACIT 398 ITR 198 • CIT Vs M/s Jet Speed Audio (P) Ltd. 372 ITR 762 (Bom.) • M/s M. S. Software (P) Ltd. Vs ITO in ITA No. 2708/Del/2016 • Basesar Propert....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat it is a fit case for initiating proceedings u/s 148 of the IT Act, 1961. If approved, permission may be granted for initiating the proceedings." 10. It is noticed that on the aforesaid proposal, the Pr. CIT-4, New Delhi gave the approval on 21.03.2016 by writing the word "approved". He has not mentioned how and in what manner he was satisfied. In other words, it cannot be said that the Pr. CIT applied his mind while giving the approval for reopening the assessment or he was satisfied that it is a proper case where the proceedings u/s 147 may be initiated. 11. On a similar issue, the Hon'ble Delhi High Court in the case of Pr. CIT Vs N.C. Cables Ltd. (supra) held as under: "11. Section 151 of the Act clearly stipulates that the CIT(A), who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression 'approved' says nothing. It is not as if the CIT(A) has to record elaborate reasons for agreeing with the nothing put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... laundering scam' and explain how the unaccounted money of the beneficiaries are ploughed back in its books of account in the form of bogus share capital/capital gains etc. after routing the same through the bank account (s) of the entry operators. Entry operators were identified after thorough investigation on the basis of definitive analysis of their identity, creditworthiness and the source of the money ultimately received by the beneficiaries. These entry operators are found to be mostly absconding after the unearthing of the 'Money Laundering Scam' leaving the said money at the disposal of the beneficiaries without any associated cost or liability. In the instant case, the assessee is found to be the beneficiary of accommodation entry from such entry operators as per the following specific details of transaction:- Entry Operator Beneficiary's Bank Amount Rs. Instrument No. by which entry taken and date Entry giving bank Account no. from which entry was given Mahesh Garg - 800480 30.11.2000 SBP-DG 4507 Performance Trading & Inv. - 700420 13.11.2000 SBP-DG 4281 Chintpurni Credits - 900540 22.11.2000 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ness of the transaction. The Hon'ble Jurisdictional High Court in Sarthak Securities Pvt. Ltd. vs. ITO (2010) 195 Taxman 262 (Del), Signature Hotels Pvt. Ltd. vs. ITO 338 ITR 51 (Del), CIT vs. SFIL Stock Broking Ltd. (2010) 325 ITR 285 (Del), Pr. CIT vs. G&G Pharma India Ltd. (ITA No. 545/D/2015) (Delhi High Court), ITO vs. N.C. Cables Ltd. (Delhi ITAT) - Judgment dated 22.10.2014 and Pr. CIT vs. Meenakshi Overseas Pvt. Ltd. (2017) (S) TMI 1428 held that the reopening of the assessment without the AO independently undertaking the exercise of examination of facts is bad under law. 8. The Jurisdiction Delhi High Court in the case of Pr. CIT vs. Meenakshi Overseas Pvt. Ltd. (2017)(S) TMI 1428 has held that reopening u/s 147/148 was not justified where reasons were recorded merely on the basis of information received from investigation using and without independent application of mind by the AO. The Hon'ble Court held that it was indeed a "borrowed satisfaction" and reopening was not justified. 9. Now coming to the second limb of challenge made by the assessee to the effect that the reassessment proceedings initiated are bad in as much as the approval/sanction by Addl....