TaxTMI 
TaxTMI 
2021 (7) TMI 884
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....i Dealers Pvt. Ltd. (vi) Somanath Vinimay Pvt. Ltd. indulged in multiple account transfer of large amounts with no rationale, The companies doing business in the same address having same line of activity coupled with same persons as common directors. During the course of investigation, Bank accounts of the above mentioned companies were obtained and the Bank statements were perused vis-à-vis the ITD profile of the same and it was concluded that the total bank credit and turnover of the said companies does not commensurate with their returned income. Further, Trail of Fund was prepared by the DDIT (Inv), Unit-3(4), Kolkata and Smt. Baljit Kaur received Rs. 41,50,000/- from M/s. Subhankar Dealcom Pvt. Ltd. during the FY 2010-11 relevant to the AY 2011-12. Smt. Baljit Kaur is assessed with the undersigned." 2.2. Accordingly, the AO reopened the case after obtaining prior approval of the Ld. CIT - 4, Hyderabad issued notice u/s. 148 of the Act to the assessee on 14/03/2018, in response to which, the assessee submitted a letter dated 23/01/2018 stating that the return filed on 29/09/2011 may be treated as compliance in response to the notice u/s. 148 of the Act. Further, the A....
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....gh banking channels, therefore, there is no violation of provisions of section 68 of the Act as alleged by the AO in this regard. 6. The ld. DR, on the other hand, relied on the orders of revenue authorities. 7. After hearing both the parties and perusing the material on record as well as gone through the orders of revenue authorities and the grounds taken by the assessee, we observe that the assessee has taken a legal ground in Ground No. 4 that the assessee's case has been reopened on the basis of information received from third party. The crux of the issue to be decided is whether the reopening of assessment by the AO is in accordance with law or not. As per the assessment order, it is clear that the assessee's case is reopened on the basis of the information received from the Director of Investigation and without applying his mind, the AO has reopened the case of the assessee. Similar issue has been decided by Hon'ble Courts in the following cases: "1. CIT v. Kamdhenu Steel & Alloys Ltd. (2012) 248 CTR 33 (Delhi)(High Court). 2. CIT v. Multiplex Trading & Industrial Co Ltd. (2015) 128 DTR 217 (Delhi)(HC). 3. Ld. CIT v G. Pharma India....
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....wing: Name of the assessee/Beneficiaries Name of the Bank Beneficiaries Name of the Operator Instrument No. Operator's A/c No. and Bank Date on which entry taken Amount (in Rs.) M/s Infomediary Indian Bank M/s. Suma 311108 2919, Corpn. 23- 10,46,568/- India Pvt. Ltd. Finance Investment Ltd. Bank, Karol Bagh, New Delhi Mar-01 -do- -do- -do- 311108 -do- 16- Feb-01 10,46,568/- -do- -do- -do- 302578 -do- 16- Feb-01 3,80,760/- -do- -do- -do- 302578 -do- 16- Feb-01 3,80,760/- -do- -do- -do- 302581 -do- 16- Feb-01 5,61,120/- -do- -do- -do- 302581 -do- 16- Feb-01 5,61,120/- -do- -do- M/s Ankur Marketing 450592 CA/11011938 Bank of Punjab, Cannaught Place, New Delhi 27- Mar-01 9,50,000/- 43. Furthermore, after extracting the aforesaid particulars, the AO recorded following reasons: "3. In view of the above information, it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries. Therefore, I....
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....had bank accounts and payments were made to the assessee company through banking channel. The identity of the companies was not disputed. Under these circumstances, it would not be appropriate to require the assessee to go through the entire gamut of proceedings. It is totally unwarranted." 45. Similar view is taken by another Division Bench of this Court in CIT v. SFIL Stock Broking Ltd. [2010] 325 ITR 285. In that case also, the AO had recorded the reasons to believe in similar manner, viz., more information received from the Deputy Director of Income Tax (Investigation) and the Court took the view that these were no reasons within the meaning of Section 148 of the Act. Following discussion in this behalf needs to be noted: "9. In the present case, we find that 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 Deputy Director of Income Tax (Investigation) to issue a notice under Section 148 and the third sentence again comprises of a direction given by the Additional Commissioner of Income Tax ....
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....xure, reproduced above, relates to a cheque received by the petitioner on 9th October, 2002 from Swetu Stone PV from the bank and the account number mentioned therein. The last sentence records that as per the information, the amount received was nothing but an accommodation entry and the assessee was the beneficiary. 15. The aforesaid reasons do not satisfy the requirements of Section 147 of the Act. The reasons and the information referred to is extremely scanty and vague. There is no reference to any document or statement, except Annexure, which has been quoted above. Annexure cannot be regarded as a material or evidence that prima facie shows or establishes nexus or link which discloses escapement of income. Annexure is not a pointer and does not indicate escapement of income. Further, it is apparent that the Assessing Officer did 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 in....
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.... circumstances, we feel the judgments of the Delhi High Court in Commissioner of Income Tax v. SFIL Stock Broking Limited, [2010] 325 ITR 285 (Delhi) and Sarthak Securities Company Private Limited v. Income Tax Officer, 2010 (329) ITR 110 (Delhi), in which CIT v. Lovely Exports (P) Limited, (2009) 216 CTR 195 (SC) has been applied and followed, are applicable. We may notice here that the respondent in their counter affidavit have stated that Swetu Stone Pvt. Ltd. is unidentifiable and, therefore, the aforesaid decisions should not be applied and the ratio of the decision dated 7th January, 2011 in Writ Petition (Civil) No. 7517/2010, AGR Investment Limited v. Additional Commissioner of Income Tax and Another should be applied. In the said decision, decisions in the case of Sarthak Securities Company Private Limited (supra) and SFIL Stock Broking Limited (supra) was distinguished by giving the following reasons: "22. ....In SFIL Stock Broking Ltd. (supra), the bench has interfered as it was not discernible whether the assessing officer had applied his mind to the information and independently arrived at a belief on the basis of material which he had before him that the inco....