TaxTMI 
TaxTMI 
2025 (6) TMI 984
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....l/2024, for the assessment year 2013-14. 2. The revenue has raised the following substantial questions of law for consideration : "i) WHETHER in facts and in the circumstances of the case the Ld. Income Tax Appellate Tribunal was not justified in law by deleting the addition of Rs. 75,00,000/- made U/s. 68 of the Income Tax Act, 1961 despite the fact that neither creditworthiness of lender and/or genuineness of transaction was proved by Assessee? (ii) WHETHER in facts and in the circumstances of the case the Ld. Income Tax Appellate Tribunal was not justified in law by not restoring the matter to the file of Assessing Officer with a direction to afford opportunity to the assessee for cross examination, though the addition as made on t....
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....ducted in the case of M/s. D.P. Trading, a proprietorship concern of one Mahesh Sharma and that he was in the business of providing accommodation entries to various persons, such as, cheque in lieu of cash and vice-versa and cash loans. The reasons are also referred in the investigation report in which it appears to have been stated that Mahesh Sharma provided accommodation entries to persons and helped them route their money without paying taxes on the same. Further, it is stated that the assessee is one of such beneficiaries and there is information in insight module of the department database that the assessee has transacted Rs. 75,00,000/- through the concerns of the said individual. 5. The above is the reason for reopening the assessm....
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....The name of the assessee figures in layer 5 and the type of transaction is by bank transfer whereas the type of transaction in layers 1 and 2 is by cash. The name of D.P. Trading, the proprietorship concern of Mahesh Sharma, figures in layer 2. Therefore, the Department to reopen the assessment has to have sufficient material to link the assessee with Mahesh Sharma/D.P. Trading and trace the money trailed so as to justify the monies have flown into the hands of the assessee by way of an accommodation entry. This aspect is completely missing in the assessment order. Therefore, the learned Tribunal took note of this fact and also Sections 147 and 148 of the Act and what are the conditions precedent to be followed by the Assessing Officer befo....
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....on can now be taken for reopening assessment even if the information is wholly vague, indefinite, farfetched and remote. It was held that the reason for formation of the belief must be held in good faith and should not be a mere pretence. The decision of the Supreme Court would squarely apply to the assessee's case. 8. The Department has taken a stand that it did not act on the statement of Mahesh Sharma and that it was only one of the circumstantial evidence and citing such reason the Assessing Officer declined to provide the statement of Mahesh Sharma nor to provide an opportunity to the assessee to cross-examine Mahesh Sharma. Thus, in the absence of any tangible material or a live link between Mahesh Sharma and the assessee, the reopen....