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2020 (1) TMI 719 - ITAT DELHIReopening of assessment u/s 147 - information received from investigation wing regarding alleged accommodation entries - Borrowed satisfaction - non independent application of mind by AO - HELD THAT:- It is a case where action has been taken mechanically on the basis of information received from investigation wing, and, not on an independent application of mind and therefore on this ground, the proceedings are without jurisdiction. It is apparent from the fact that according to the AO, Investigation Wing has informed that assessee company has received accommodation entry in the garb of share application money which is said to be as per inquiry made by the Directorate of Investigation (DI) on the persons said to be involved providing accommodation entries/ bogus share application. Based on inquiries made, DI is said to have provided details of persons who are beneficiaries of such accommodation entries and one such beneficiary is said to be the assessee. In this case notice u/s. 148 was issued merely on the basis of information from D.I. that the assessee has received accommodation entry of ₹ 38 laks. There is no mention of any application of mind or any independent inquiry or any link between any tangible material and formation of reasons to believe that income chargeable to tax has escaped assessment. AO was not having even the material before him, at the time of initiation of proceedings, on the basis of which the Investigation Wing sent his report. AO assumed and worked only on the satisfaction of only Investigation Wing. It is also noted that even the copies of statements recorded by the Investigation Wing in the case of Tarn Goyal on the basis of which impugned proceedings have been initiated were not available with the AO as admitted by the AO himself in his letter dated 10.12.2015 AO has not even specified as to what is the amount of alleged income escaping assessment, which shows that AO has merely recorded certain unsubstantiated allegations on the basis of some information received, which is against the principle laid down in the case of CIT vs SFIL Stock Broking Ltd [2010 (4) TMI 102 - DELHI HIGH COURT] wherein held that mere information received from DDIT(Inv) cannot constitute valid reasons for initiating reassessment proceedings in the absence of anything to show that A.O. had independently applied his mind to arrive at a belief that the income had escaped assessment. Thus, the AO has acted mechanically and without any independent application of mind. Proceedings initiated by invoking the provisions of section 147 by the AO and upheld by the Ld. CIT(A) are nonest in law and without jurisdiction, hence, the re-assessment is quashed - Decided in favour of assessee.
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