TaxTMI 
TaxTMI 
2016 (2) TMI 1242
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....leting addition. a) Of Rs. 5,00,000/- made by the AO u/s. 68 of the Act on account of addition to share application money as unexplained cash credits and Rs. 5000/- on account of commission paid from undisclosed sources. b) Rs. 27,00,000/- on account of unexplained share premium. Ignoring the fact that i) The assessment order passed by the AO is based on information received from the Investigation Wing of the Department that the Assessee Company has received bogus entry of Rs. 5 lacs from M/s IG Properties (P) Ltd. a company engaged in providing bogus entries. ii) The assessee failed to explain as to how the value of the share premium of Rs. 27 lacs was arrived at iii) The assessee failed to prod....
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....009 has partly allowed the appeal of the assessee thereby deleting the addition in dispute and upholding the reopening in the case of Assessee. 4. Aggrieved with the aforesaid order of the Ld. CIT(A), Revenue is in appeal before us the Tribunal. 5. Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal. Ld. DR relied upon the order of the Ld. CIT(A) on the legal issue and stated that AO has rightly reopened the assessment proceedings on the basis of material which AO has mentioned in the assessment order and Ld. CIT(A) has rightly upheld the same. He requested that on legal issue, the order of the Ld. CIT(A) may be upheld. 6. On the contrary, Ld. Counsel of the assessee stated that the....
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....to pay taxes on such gifts, The accounts from which such gifts were received were in the Oriental Bank of Commerce, Minto Road, and the State Bank of Patiala, Darya Ganj. Since the AO was not having jurisdiction over the Donors cases, the case was, the case was handed over to this Directorate to investigate and find out the other donors from those accounts. In two years time the number of accounts which were only eight in number have swollen in hundreds. It is however felt that the accounts identified by the Directorate ace not complete and the amount as well as the number of accounts involved will be much more, Further it may be safely presumed that such entry operators are operating in other parts of the country as well, causing ....
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....is deposited) or another account in which funds are transferred through clearing in two or more stages, The beneficiary in turn deposits these instruments in his bank accounts and the money comes to his regular books of account in the form of gift, share application money, loan etc through banking channels. Since the funds have come through banking channel in the books of beneficiary these apparently look genuine. At the time of assessment the beneficiary provides the PAN, assessment particulars and confirmation from the entry operators to show the genuineness of these receipts and the Assessing Officer does not investigate any further.......... .............. ............Enquiries by the Investigation Wing, has revealed t....
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.... Kind approval for issue of notice u/s. 148(i) is sought as per the procedure laid down under the provisions of section 151, read with subsection (2) of the Income Tax Act, 1961. Sd/- 2/11/06 (Vinothan Subramaniam) Income Tax Officer, Ward 2(3), New Delhi " 7.1 On going through the above reasons recorded by the AO, we are of the view that AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that income has escaped during the year. In our view the reasons are vague and are not based on any tangible material as well as are not acceptable in the eyes of law. The AO has mechanically issued notice u/s. 148 of the Act, on the basis of information allegedly rece....
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....anner in which those very entries were provided in the accounts of the Assessee, which must have been tendered along with the return, which was filed on 14th November 2004 and was processed under Section 143(3) of the Act. Without forming a prima facie opinion, on the basis of such material, it was not possible for the AO to have simply concluded: "it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries". In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the inc....