TaxTMI 
TaxTMI 
2023 (10) TMI 1272
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....hed the same. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making aggregate addition of Rs. 1,29,77,000/- on account of share capital and share premium received by treating it as alleged unexplained credit u/s 68 and that too by recording incorrect facts and findings and without providing opportunity of cross examination and without providing entire adverse material and without observing the principles of natural justice. 4. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making aggregate addition of Rs. 1,29,77,000/- on account of share capital and share premium u/s 68, is bad in law and against the facts and circumstances of the case. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 2,33,586/- (i.e. 1.8% of Rs. 1,29,77,000/- on account of alleged commission paid u/s 69C of Income Tax Act, 1961. 6. That having regard to the facts and circumstances of the case Ld.CIT(A) has erred in law and on facts i....
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.... for the belief that income has escaped assessment must be evident from the reading of the reasons. Further, the AR also submitted that nothing has been mentioned about the nature of accommodation entries whether it is share capital or loans or expense bills etc. even the names and addresses of the companies from whom the assessee company has taken alleged accommodation entries of Rs. 45,00,000/- has not been mentioned. He also pointed out that there is also no reference of cheque number, date and the amount received from the alleged paper company of Shri S.K. Jain. The ld. AR thus, submits that from the above it can be inferred that there is no independent application of mind by the Ld AO and the reasons have been recorded only on borrowed satisfaction from the documentary evidence received from the A.O. of Jain Brothers without having own reason believe as per mandate of section 147 of the Act. Furthermore, the ld. AR submitted that the reasons which were recorded by the Ld AO for reopening an assessment was the only reasons which were to be considered to decide the validity of the reopening of the assessment. The AR finally submitted that nothing can be added later on. The ld. A....
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....the Assessing Officer before forming reason to believe that income has escaped assessment therefore in view of judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. Insecticides (India) Ltd. (supra) when the reasons recorded by the Assessing Officer are totally silent with regard to the details of transaction, segregation of alleged amount and nature of bogus entries & transactions and the person or entity or company with whom transactions have taken place then the initiation of proceedings u/s. 147 of the Act has to be held as not valid and justified in the eyes of law. The ld. counsel has also placed reliance on the judgments of Hon'ble jurisdictional High Court of Delhi in the case of CIT vs. Atul Jain 299 ITR 383 (Delhi) and Signature Hotels P. Ltd. (supra). 7. On careful consideration of above rival submissions, reasons recorded by the Assessing Officer for initiation of reassessment proceedings and other material available on record, at the very outset, we find it appropriate to reproduced the reasons recorded by the Assessing Officer for initiation of reassessment proceedings for AY 2009-10 on 05.08.2014 as follows:- During the course of search/survey actio....
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.... regarding entries provided to the beneficiary companies/entities/persons by said Jain Brothers. Therefore it is clearly discernable that in the first paragraph of reasons the Assessing Officer has only mentioned facts pertaining to the search/survey operation and seizure of certain documentary evidences and modus operendi adopted by the said entry providers. 9. From the second para of the reasons we further observed that the Assessing Officer has noted that on verification of document seized a list of 195 companies was found and name of assessee was listed at serial no. 139 and thus it was found that the assessee has obtained accommodation entry of Rs. 45 lakh during FY 2008-09 relevant to AY 2009-10. But we are unable to see any verification, examination or any other endeavour by the Assessing Officer to gather and extract some relevant facts that on which date from which company the assessee took accommodation entry of which amount and what was the mode of transaction/entry as to whether the same was unsecured loans or share application money or any other kind of bogus transaction which shows non application of mind by the Assessing Officer to the material received by him from ....
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....mpany. The information on the basis of which the AO has initiated proceedings u/s 147 of the Act are undoubtedly vague and uncertain and cannot be construed to be sufficient and relevant material on the basis of which a reasonable person after application of his mind to said material could have formed a belief that income had escaped assessment. 12. The reasons recorded by the AO do not disclose the AO's mind as to what was the nature and amount of transaction or entries, which kind of bogus entry had been given or taken by the assessee in the relevant year. The reasons recorded by the AO also do not disclose his mind as to when and in what mode or way the bogus entries or transactions were given or taken by the assessee. From the reasons recorded, nobody can know what was the date, amount and nature of bogus entries or transactions given and taken by the assessee in the relevant year and with whom the transaction had taken place. As already noted above, it is well settled legal position that only the reasons recorded by the AO for initiating proceedings u/s 147 of the Act are to be looked at or examined for sustaining or setting aside a notice issued u/s 148 of the Act. The r....