TaxTMI 
TaxTMI 
2023 (12) TMI 330
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....is bad in law." 3. The contention of the ld. Counsel for the assessee before us was that the belief of escapement of income of the assessee was not that of the Assessing Officer but was a borrowed belief of the DCIT, Central Circle-1, Rajkot on the basis of whose information, to the effect that the assessee had taken accommodation entries during the year, the AO had formed belief of escapement of income of the assessee. His contention was that the Assessing Officer, without verifying the information and merely on the basis of the information supplied to him, formed a belief of escapement of income. That this borrowed belief was not sufficient for the Assessing Officer to assume jurisdiction to reopen the case of the assessee and frame assessment under Section 147 of the Act. In this regard, he pointed out that there were various decisions of the Hon'ble Courts, including the jurisdictional High Court, holding that for valid reopening of the assessment, the belief of escapement of income has to be that of the Assessing Officer and it cannot be based on borrowed belief. 4. Our attention was drawn to the reasons for reopening placed before us at page nos. 1 & 2 of the paper-book....
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....onsideration but no assessment has stipulated u/s 2(40) of the act was made and the ROI only processed u/s 143(1) of the Act. In view of the above facts, this is a fit case for issue of notice u/s 148 of the IT Act, 1961. Necessary sanction to issue notice u/s 148 has been obtained separately from Principal Commissioner of Income Tax, Rajkot-3, Rajkot as per the provisions of section 151 of the Act." 5. Referring to the above reasons he pointed out that the Assessing Officer had received information from the DCIT, Central Circle-1, Rajkot that M/s. National Shroff & Co. had entered into transactions with the assessee giving him cheque/DD of Rs. 20,75,100/- during the year and this National Shroff & Co. was found to be engaged in the business of Shroff/angadiya which was revealed during search action conducted on him under Section 132 of the Act. That, based on this information, the Assessing Officer formed a belief that the amounts received from the National Shroff & Co. represented unaccounted sales of the assessee and accordingly he recorded his reasons for reopening the case of the assessee. 6. The ld. Counsel for the assessee pointed out that nowhere in the reaso....
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....inj J Solanki. On verification of the information it was found on various dates assessee firm has obtained cheques/DD in lieu of cash amounting to Rs. 26,71,300/- from National Shroff which is tabularize below. Copy of this information is provided to the AR of the assessee Shri I.K. Desai vide note sheet entry dated 05.12.2018. Sr. No. Date of transaction Amount 1 12.06.2010 100000 2 02.08.2010 98000 3 03.08.2010 90000 4 09.08.2010 47000 5 09.08.2010 45000 6 14.08.2010 49000 7 18.08.2010 49000 8 26.08.2010 49000 9 30.08.2010 49000 10 16.09.2010 135000 11 27.09.2010 45000 12 28.09.2010 48000 13 23.10.2010 48000 14 25.10.2010 49000 15 27.10.2010 25000 16 27.10.2010 25000 17 03.11.2010 140000 18 08.11.2010 49000 19 10.11.2010 49000 20 23.11.2010 213000 21 27.11.2010 40000 22 02.12.2010 40000 23 09.12.2012 45000 24 09.12.2012 40000 25 09.12.2012 21000 26 13.12.2010 65000 27 14.12.2010 40000 28 16.12.2010 45000 29 21.12.2010....
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.... of reasons by the Assessing Officer of the income of the assessee having escaped assessment, the only information with the Assessing Officer was that obtained from the DCIT, Central Circle-1, Rajkot, that the assessee had obtained accommodation entry from an alleged angadiya/Shroff M/s. National Shroff & Co., amounting in all to Rs. 20,75,100/-. That except for this, there was no other information with the Assessing Officer and based on this information, he formed a belief that this amount represented unaccounted sales of the assessee and income to this extent had been escaped assessment. It has been demonstrated before us that even the details of the amount received by the assessee from M/s. National Shroff & Co. was obtained by the Assessing Officer post the recording of the reasons from M/s. National Shroff & Co. and even after obtaining the same, the Assessing Officer had made no attempt to verify whether these amounts had actually been received by the assessee and in what manner. 11. In view of the same, we completely agree with the ld. Counsel for the assessee that the Assessing Officer's belief of escapement of income was not his own belief but a borrowed belief. The Ass....