TaxTMI 
TaxTMI 
2026 (1) TMI 1633
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....ew Delhi in the proceedings under Section 143(3)/147of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), for Assessment Year 2007-08. 2. The assessee, engaged in the business of trading of shares and financing related activities, alleged to have taken accommodation entries from certain parties amounting to Rs. 3,34,31,000/- as per seized annexures of search and seizure action conducted by the Unit-VI(2) at the residence and office of Shri Surender Kumar Jain and Shri Virender Jain on 14.09.2010. The case of the assessee was reopened under Section 147/148 of the Act. A notice under Section 148 of the Act was issued on 20.03.2014 with prior approval of the CIT, Delhi-IV, New Delhi. Initially, against the returned income decl....
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....ion 133(6) dated 4.8.2014 was issued to certain companies from whom the assessee claimed to have received share capital and loans. Some of them complied by filing confirmation, copy of bank statement, copy of ITR. The Principal Officer/ Directors of those companies were directed to be produced for examination in order to prove the genuineness of the transactions entered into, the creditworthiness of the persons and the identity of the persons. The documents furnished by the assessee in support of the claim were found to be a paper work to give the transactions a white face and reassessment was finalized upon making addition of Rs. 3,34,31,000/- as unexplained investment of the assessee out of undisclosed source of income being routed throug....
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....s, wherein the information received from the O/o the DIT(Inv.)-II, New Delhi, recorded by the Assessing Officer has been reproduced but without any application of mind to the fact mentioned in the report; without verification of the fact, the reasons recorded by the Learned Assessing officer is found to be vague, particularly in the absence of specification of accommodation entry accepted by the assessee which was treated has escaped assessment, has not been properly recorded by the Ld. Assessing Officer which was treated has escaped income. On this aspect he has further referred to page 257 of the paper book filed before us wherein the Assessing Officer has identified the nature of accommodation entries such as in the shape of share capita....
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....e tabulated statement though the Ld. AO referred the annexures and relevant pages in the last column, we find that the data mentioned has been reproduced from the Investigation Wing information and as such no discussion is forthcoming in the reasons recorded as to what was actually revealed from the seized annexures and referred pages. Had there been independent verification based on the contended information of the Investigation Wing, there had been proper discussion between the finding of examination of those annexures referred in page 258 being part of the reasons recorded by the Ld. AO. In the absence of examination of any such seized material, the Assessing Officer was not justified in reaching to the belief of income chargeable to tax....
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....g is vitiated. 13. We also find that the Ld. AO has failed to identify the nature of accommodation entry such as in the shape of share capital or capital gains or loans rather was relying upon on the mode of accommodation entries which shows nonexamination of the documents seized during search and complete reliance on the documents mentioned in the Investigation Wing Report, that too without examination of the same, are found to be a product of rubber stamp on the report by the Investigation Wing which is sufficient enough to prove non-application of mind on the part of the Ld. AO. On this count it is a clear fact of reasons having been recorded on presumptive basis completely vague in nature and thus not sustainable in the eyes of law. ....