TaxTMI 
TaxTMI 
2019 (4) TMI 698
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....ing Officer from DIT (Inv.)- II, New Delhi, Dated 15th March, 2013 that the assessee has taken accommodation entries amounting to Rs. 1.50 crore in the shape of share capital from various companies, in order to verify the genuineness of the said investors, notice under section 148 was issued on 28th March, 2013. The Assessing Officer asked the assessee to explain the share capital received from 07 Investors. The Assessing Officer after considering the material on record, in the light of report of Investigation Wing, made the addition of Rs. 1.50 crores on account of unexplained credit. 3.1. The assessee challenged the addition before the the Ld. CIT(A). Ld. CIT(A) noted that all the investor companies are assessed to tax under section 153C/153A of the Income Tax Act, 1961 and nothing adverse was found against the assessee during the course of assessment. Therefore, addition was deleted. 3.2. The Revenue is in appeal challenging the deletion of addition of Rs. 1.50 crores and assessee in the cross-objection challenged initiation of re-assessment proceedings under section 147/148 of the Income Tax Act, 1961. 3.3. Before considering the issue on merit, we proceed to decide the leg....
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....cision of Delhi High Court in the case of Signature Hotels (P) Ltd., 338 ITR 51 (Del.) He has submitted that reassessment is initiated on mere suspicion only. He has referred to page-1 of the paper book filed by the Departmental Representative in which the ACIT of the Investigation Wing has directed to issue notice under section 147/148 of the Income Tax Act, 1961 after recording reasons. He has submitted that all the Investors are assessed to tax and no material found during the course of search have been supplied to the assessee. He has submitted that proceedings are initiated on mere suspicion which is not reason to believe and based on no tangible material. He has submitted that reopening of assessment may be quashed. 4. On the other hand, Learned Departmental Representative relied upon order of the Assessing Officer and referred to information received from Investigation Wing, copy of which, is filed at Page-1 of the paper book of the Department, which is supported by letter of the DIT (Inv.)-II, Wing, New Delhi, Dated 15th March, 2013, which is referred to in the reasons for reopening of the assessment. The Learned Departmental Representative referred to the report of the I....
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....50,00,000/- has escaped assessment. Issue Notice under section 148 of the Income-tax Act, 1961 for the assessment year 2007-2008. Dated : 25th March, 2013 Sd/- S. Dayal Assistant Commissioner of Income-tax, Rohtak Circle, Rohtak". 5.1. The relevant provision of Section 147 of the Income Tax Act provides as under : "147. If the [Assessing] Officer [has reason to believe] that any income chargeable to tax has escaped assessment for any assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or re-compute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): "Provided that where an assessment under subsection (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end....
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....der section 143(3) of the Income Tax Act. The Investigation Wing has required the Assessing Officer to reopen the assessment. It, therefore, appears that re-assessment proceedings are initiated on mere suspicion and that reason to suspect is not the same thing as "reason to believe". The A.O. recorded vague reasons based on no evidence at the dictate of Investigation Wing only. Thus, there is totally non-application of mind on the part of the Assessing Officer to record reasons for reopening of the assessment. The Assessing Officer did not mention any material facts in the reasons, therefore, reopening of assessment is clearly illegal and bad in law. In the case of Signature Hotels P. Ltd., vs., Income Tax Officer And Another (2011) 338 ITR 51 (Del.) the Hon'ble Delhi High Court held as under : "Held allowing the petition, that the re-assessment proceedings were initiated on the basis of information received from the Director of Income-tax (Investigation) that the petitioner had introduced money amounting to Rs. 5 lakhs during financial year 2002-03 as stated in the annexure. According to the information, the amount received from a company, S, was nothing but an accommodation e....
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....e part of the assessee to disclose fully and truly all material facts necessary for assessment under section 147 of the Income Tax Act, 1961. 5.7. In view of the above, it is clear that in the instant case the Assessing Officer reopened the assessment after 04 years from the end of the assessment year and Assessing Officer has failed to specify if there is any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment under section 147 of the Income Tax Act, therefore, conditions of Section 147 of the Income Tax Act are not satisfied in this case. Further, the reasons are vague and do not disclose any incriminating material against the assessee. The decisions relied upon by Learned Counsel for the Assessee squarely apply to facts of case. Therefore, reopening of the assessment is wholly unjustified in the matter. We are, therefore, of the view that assumption of jurisdiction under section 147/148 of the Income Tax Act is clearly illegal and bad in Law. We, accordingly, set aside the orders of the authorities below and quash the reopening of the assessment under section 147/148 of the Income Tax Act, 1961. Resultantly, all additions....
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....the companies. 2. After going through entries it is revealed that M/s. Param Exim Ltd., who is assessed with this Circle, has availed the following accommodation book entries :- Sr.No. Name of the Company PAN F.Y. 2007-08 Amount (Rs.) 1. M/s. Param Exim Ltd., AACCP9669B 3,20,00,000/- Therefore, I have reason to believe that income to the tune of Rs. 3,20,00,000/- has escaped assessment. Issue Notice under section 148 of the Income-tax Act, 1961 for the assessment year 2007-2008. Dated : 25th March, 2013 Sd/- S. Dayal Asst. Commissioner of Income-tax, Rohtak Circle, Rohtak". 9.1. Learned Counsel for the Assessee submitted that apart from the fact that the issue is same as have been considered in other case, but, in the present case the amount in question as mentioned in the reasons at Rs. 3.20 crores have been wrongly mentioned because the amount in question is Rs. 2.20 crores [PB-10]. He has also submitted that the Assessing Officer in the reasons has mentioned that income escaped for assessment for F.Y. 2007-2008 instead of F.Y. 2006-2007. He has, therefore, submitted that since wrong facts have been mentioned in the reasons for reopening of assessment, ....