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2018 (5) TMI 1375 - ITAT JAIPURValidity of the order passed U/s 147 - accommodation entries taken by the assessee company - receipt of specific information from Investigation Wing, Delhi regarding accommodation entries taken by the assessee company - Held that:- The belief formed by the AO after due examination of the material on record that the income of the assessee chargeable to tax during the relevant assessment year has escaped assessment cannot be said to be arbitrary or irrational. Therefore, it is not a case of borrowed satisfaction as contended by the ld AR. There is no bar that the information received from the Investigation wing cannot be used as a basis for formation of belief and satisfaction by the AO that the income has escaped assessment. In view of the above discussions and in the entirety of facts and circumstances of the case, we are of the considered view that there is no illegality in action of the AO in assuming jurisdiction and passing the order under section 147 - Decided against assessee Addition u/s 68 - Held that:- As being the reassessment proceedings, where the AO is ceased of certain information and documents, it is incumbent upon him to confront the same to the assessee and allow the latter to file its objections and rebuttal. The additions made, merely relying on these information and documentation, without confronting the assessee cannot be accepted. Besides furnishing the reasons for reopening the assessment to the assessee company, there is nothing on record that such information/documentation was confronted to the assessee. Further, the AO has relied upon the statement of third parties namely, shri S.K. Jain, shri V.K. Jain, shri Assem Kumar Gupta and shri Rajesh Agarwal, the assessee again deserves an opportunity to cross examine such persons which was not provided. No nexus has been established by the Revenue and the suspicion however strong cannot be basis for making the addition. Therefore, no presumption can be drawn without establishing the necessary nexus that share application money received is assessee’s own undisclosed money. We don't find any basis for making addition under section 68 of the Act and the findings of the CIT(A) are hereby confirmed. - Decided in favour of assessee.
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