2018 (4) TMI 1558

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....ormation from the Investigation Wing , New Delhi that certain persons called 'beneficiaries' have resorted to money laundering by giving unaccounted cash to entry operators and in turn taking from them cheques/DDs in the garb of share application money or sale proceeds of non existent goods thereby ploughing back to undeclared cash into the accounts or business, learned AO rejected the reasons and issued notice u/s 148 of the Income-tax Act, 1961 ("the Act") proposing to re-open the proceedings stating that he has reason to believe that an income of Rs. 15 lacs plus commission @ 2% thereon amounting to Rs. 30,000/- totaling to Rs. 15,30,000/- has escaped assessment during the assessment year. Learned AO heard the assessee and disposed of th....

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....e sustained. 5. Ld. DR submitted that the information received from investigation wing is also valid information, constituting a valid source of information and it cannot be brushed aside simply because it is from a source other than the own knowledge of the Ld. AO. Further, so far as merits are concerned, He submitted that sufficiency of the material is not a consideration to quash the reopening proceedings. Since the identity of the parties was not established, genuineness of the transaction or the creditworthiness of the party could not be tested. He placed reliance on the order of the ld. CIT(A). 6. In reply, learned AR submitted that all the documents are submitted before the learned CIT(A) and such facts find a place in the impu....

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....0,000/- plus commission @ 2% thereon amounting to Rs. 30,000/- , totaling to Rs. 15,30,000/- has escaped assessment during the assessment year. O n t h e basis of this information, I have reason to believe that the incomes described above have escaped assessment and the case is fit for issuing notice u/s 148 of the Income Tax Act, 1961." 8. In the case of MRY Auto components Ltd. (supra) also the contents and language of the reasons are identical. A coordinate bench of this Tribunal referred to the above reasons held in MRY Auto Components Ltd. as follows: " T h e investigating wing of the income Tax Department had unearthed a huge money laundering mechanism wherein it was established that bogus accommodation entries were provid....

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....o the assessee to seek their legal remedies after rejection of the objections of the assessee. In view of the fact that the AO has disposed of the objections of the assessee on 22.11.11 and passed the assessment order on 19.12.2011, it is clear that no such time was granted to the assessee. Further, the reasons recorded at the time of assumption of jurisdiction by the AO that the assessee has received an accommodation entry of Rs. 15 lacs whereas at the time of framing of assessment, the assessee was assessed the share application money to the tune of Rs. 2.15 crores. We find reason in the submission of learned AR that in view of the decision in PCIT vs. RMG Polyvinyl (I) Ltd.386 ITR 5 (Bom), such an error indicates non application of mind ....