AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 1591
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....bad in law. In the absence of valid material available on record for formation of reason to believe that ther has been an escapement of income by the ld. Assessing Officer the reopening is bad in law. 3. That there was no reason to believe as contemplated under section 147 of the Income Tax Act, 1961 that income chargeable to tax had escaped assessment and hence the assessment as framed by the ld. Assessing Officer is not valid in law and deserves to be quashed. 4. That the reasons alleged to have been recorded are not based on facts but on suspicion which cannot be the foundation for formation of reason to believe as contemplated under the provisions of section 147 of the Income Tax Act, 1961 and hence the reopening is bad in law and reassessment as framed deserves to be quashed. 5. That the addition sustained of Rs. 27 ,50,000 / - under section 68 of IT Act being Share application money and addition sustained of Rs. 68,750 as estimated commission is arbitrary, unjust and bad in law. 6. The share applicant being identifiable person duly assessed to income tax, genuine hence the addition of Rs. 27,50,000 / - being share application money, under Section 68 of IT Act and addi....
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....was a beneficiary of accommodation entries during the period of FY 2005- 06 relevant to the AY 2006-07. The entries were received from established entry operators identified by the Investigation Wing on the basis of search / survey conducted on Sh. SK Jain, CA. The case was reopened u/s. 148 of the I.T. Act, 1961 and notice was issued to the appellant on 18.3.2013 which was duly served upon the assessee and in response to the same, assessee's counsel attended the proceedings and filed the documents. Thereafter, the AO made the addition of Rs. 28,18,750/- and assessed the income of the assessee at the same amount i.e. Rs. 28,18,750/- vide his order dated 10.2.2014 passed u/s. 147/143(3) of the I.T. Act, 1961. 5. Against the Order of the Ld. AO, assessee appealed before the Ld. CIT(A), who vide impugned order dated 7.10.2014 has dismissed the appeal of the assesseee and affirmed the action of the AO on the legal issue i.e. reopening of the case u/s. 147/148 of the I.T. Act, 1961 as well as on merits. 6. Aggrieved with the aforesaid order of the Ld. CIT(A), Assessee is in appeal before the Tribunal. 7. Ld. Counsel of the assessee has filed the two Paper Books one is containing page....
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....TA No. 545/2015 in the case of Pr. CIT-4 vs. G&G Pharma India Ltd. In view of the above, she requested that by following the aforesaid precedents the reassessment proceedings of the AO may be quashed by accepting the Appeal filed by the Assessee. 8. On the contrary, Ld.DR relied upon the order passed by the authorities below and stated that the AO has properly recorded the reasons for reopening by due application of mind, hence, the appeal of the Assessee may be dismissed. 9. I have heard both the parties and perused the relevant records available with us, especially the orders of the revenue authorities and the case law cited by the assessee's counsel on the issue in dispute. In my view, it is very much necessary to reproduce the reasons recorded by the AO before issue of Notice to the Assessee u/s. 148 of the I.T. Act, 1961 which is reproduced hereunder:- "Reasons for Re-opening the case U/S 147/148 in the case of M/s P T Engineers Pvt. Ltd. (PAN: AADCP4222B) A. Y. 2006-07 In this case, the return income was on 30.112006 and showing total income of Rs. "Nil" which was processed/assessed uls 143(1) on 24.03.2008. Subsequently, information has been received from the Directora....
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....ntroduced in its account books through conduits after routing through the group companies of Sh. S.K. Jain. Further enquiries were conducted by this office uls 131 in many other cases during assessment proceeding for A Y. 2005-06, to examine genuineness of transaction, to verify identity of share subscribers and their creditworthiness in respect of entities/companies floated/controlled by Sh. S.K. Jain, CA It has been revealed that all these entities are paper entities and could not stand for verification under provisions Section 68 of the Income Tax Act. 1961 regarding a:edits in the books of assessee company. The entities named above have been found to be non-existent at the addresses as reported on independent enquiry conducted by this office. In view of the above recorded reasons, I have reason to believe that the assessee company has been benefited on account of bogus/accommodation entries to the tune of Rs. 27,50,000/- during the period 01-04-05 to 31-03-06 relevant to the A.Y. 2006-07. Therefore, income to the extent of Rs. 27,50,000/- has escaped assessment being unaccounted income of the assessee company. Apart from this, as mentioned above, commission paid outside the....
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....applied his mind to the materials that he talks about particularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the AO, if he had in fact undertaken the exercise, to make a reference to the manner 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 income of the Assessee escaped assessment is missing in the present case. 13. Mr. Sawhney took the Court through the order of the C....