TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 143
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.... 1,42,145/-. Return was processed u/s 143(1) of the Act. Later on, on the basis of information received from the ACIT, Central Circle 10, Jhandelwalan Extension, New Delhi, which was forwarded through CIT, Central Circle 2, New Delhi and CCIT, New Delhi-1. A CD was provided wherein list of parties to whom the bogus purchases /accommodation entries provided by Shri Rakesh Gupta, Vishesh Gupta, Shri Navneet Jain and Shri Vaibhav Jain were appearing. 4. On the basis of information on the CD, the Assessing Officer formed a belief that income of Rs. 1093580/- has escaped assessment in the case of Priya Enterprises P/o Shri Rajender Prasad [assessee]. Notice u/s 148 of the Act for reopening assessment was issued and served upon the assessee. 5. Reasons for reopening assessment read as under; "A letter bearing F.No. Addl.CIT/(Hq)/(Coord.)/Accommodation entry/2012-13/15016 dated 26.03.2013 was received from the Office of the Chief Commissioner of I. Tax, Delhi-I, New Delhi therein forwarding letter bearing F.No. CIT(C)-II/2012-13/3898 dated 19.03.2013 received from the Commissioner of I. Tax, Central-ll, New Delhi along with a CD containing the details of accommodation entries provided....
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.... post search proceedings and in assessment proceedings u/s 153A of ( Tax Act admitted that they have given accommodation entries to the parties whose lists have been provided by them to the ACIT, Central Circle-10, New Delhi. Therefore, the assessment of the Firms/concerns/individuals for A.Y. 2006-07, whose names were appearing in the said list of accommodation entries provided by Sh. Rakesh Gupta & Sh. Vishesh Gupta, Sh. Navneet Jain & Sh. Vaibhav Jain and whose territorial jurisdiction was lying with this Ward, were reopened u/s 147 of I.Tax Act and notices u/s 148 of I.Tax Act were issued. After making necessary verification and disposing off the objections filed by most of the assessfees' against reopening of their cases u/s 147 of I.Tax Act and after considering the replies/det^ils/documents furnished by the assessees' in their respective cases, including the case of the assesses, it was held that no satisfactory explanation about the sources of bogus purchases made from Sh. Rakesh Gupta and Sh Vishesh Gupta could be furnished. Hence keeping In view the provisions of section 09C of I Tax Act read with section 4, 5 and 14 I.Tax Act, the amount of such bogus purchases ....
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....w Delhi" 6. A perusal of the above clearly shows that the Assessing Officer has borrowed the findings. Moreover, the entries pertain to assessment year 2006-07 as is clearly evident from the reasons recorded mentioned hereinabove. It can be further seen that there is a reference to some verification and disposing off the objections filed by most of the assessees against reopening of their cases u/s 147 of the Act. On the strength of the fate of the other assessees, the Assessing Officer formed a belief that the assessee has also made bogus purchases and the same has to be treated as income of the assessee for assessment year 2006-07. 7. In the penultimate para, the Assessing Officer has emphasised that the assessee did not file any return of income for the year under consideration whereas, as mentioned elsewhere, on page 2 of the assessment order, the Assessing Officer himself has admitted that return of income for the year under consideration was filed on 18.10.2007. Considering the reasons recorded by the Assessing Officer, which are undisputedly borrowed from somewhere else and considering the fact that he Assessing Officer has emphasised that the assessee did not file any ret....
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....ome of the assessee escaped assessment is missing in the present case." 10. On identical set of facts in the case of Sapra Metal company 2910/DEL/2016, the Bench had occasion to consider the reopening of the assessment on the basis of very same information which was considered in the case in hand and while quashing the reopening, the bench had considered the following judgment of the Hon'ble Jurisdictional High Court in the case of Sarthak Securities Pvt. Ltd 329 ITR 110. The Hon'ble High Court has held as under: " In the case at hand, as is evincible, the assessing officer was aware of the existence of four companies with whom the assessee had entered into transaction. Both the orders clearly exposit that the assessing officer was made aware of the situation by the investigation wing and there is no mention that these companies are fictitious companies. Neither the reasons in the initial notice nor the communication providing reasons remotely indicate independent application of mind. True it is, at that stage, it is not necessary to have the established fact of escapement of income but what is necessary is that there is relevant material on which a reasonable person cou....
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....id not apply his own mind to the information and examine the basis and material of the information. The Assessing Officer accepted the plea on the basis of vague information in a mechanical manner. The Commissioner also acted on the same basis by mechanically giving his approval. The reasons recorded reflect that the Assessing Officer did not independently apply his mind to the W.P. (C) NO. 8067/2010 Page 13 information received from the Director of Income-Tax (Investigation) and arrive at a belief whether or not any income had escaped assessment. The company was incorporated on 4th January, 1989 and was also allotted a permanent account number in September, 2001. The facts indicated above do not show that SS Ltd is a non existing and a fictitious entity/person. For the reasons stated above, writ of the certiorari is issued quashing the proceedings u/s 148 of the Act." 13. In the case of CIT Vs. SFIL Stockbroking Co. 325 ITR 285, it has been held as under" "The first sentence of the so-called reasons recorded by the Assessing Officer is mere information received from the Deputy Director of Income Tax (Investigation). The second sentence is a direction given by the very same Depu....