TMI Blog2018 (12) TMI 1910X X X X Extracts X X X X X X X X Extracts X X X X ..... indicating that the assessee was beneficiary of accommodation entry from entry operators. In our opinion, this is a general statement instead of considering exact nature of issue contested by the assessee. The assessee has contended that reopening was made on account of availing unsecured/unexplained loans, whereas the addition was made on account of bogus purchases. There is a vast difference in-between both these aspects. CIT(A) has not dealt with this aspect. Therefore, we are of the view meaning of expression and also employed in section 147 of the Act, reopening of the assessment in the present case is not sustainable. We allow this ground of appeal and quash the reassessment order - Decided in favour of assessee. - ITA No.1504/Ahd/2017, ITA No.1381/Ahd/2017 - - - Dated:- 10-12-2018 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER For the Appellant : Shri Suresh Anchaliya, AR For the Resondent : Smt.Smitha V. Nair, Sr.DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Present cross appeals are directed against order of the ld.CIT(A)-3, Surat dated 20.3.2017 passed for the Asstt.Year 2007-08. 2. Assessee in its appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggregating to ₹ 10,13,41,508/- from the following parties, -which are accommodation entries only and no real transaction has taken place. Sr. No. Name of the concern PAN no. Amount 1 M/s. Daksh Diamonds AURPS3696K 42934153/- 2 M/s Jewel Diam ABUPV3494J 24929147/- 3 M/s Kothari Co. ABQPK7967H 33381111/- 4 M/s Little Diam AABFL1469R 970971- Total 101341508/-. A search and seizure operation u/s 132 of the Act was carried out in the case of Bhanwarlal Jain group, which is leading entry provider of Mumbai, The group is involved in providing accommodation entry of bogus unsecured loans and advances through benami concerns. The assesseee M/s Sanket Exports is one of the beneficiary and had received accommodation entries pertaining to bogus unsecured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bogus purchases. In other words, live-link between information alleged to be available with the AO vis- -vis formation of belief that income has escaped assessment under a particular head is not available. He pointed out that under similar circumstances, reopening was quashed by the Hon ble Gujarat High Court in the case of Varshaben Sanatbhai Patel Vs. ITO, 64 taxmann.com 179. He has placed on record copies of Hon ble High Court decisions. 6. The ld.DR on the other hand relied upon the order of the ld.CIT(A) and contended that no doubt the AO has sought to reopen the assessment for assessing unexplained loans, but ultimately after reopening of the assessment, he came to know that these were bogus purchases and not of unsecured loans. The ld.AO has to form a prima facie opinion at the time reopening which can be changed subsequently. 7. We have duly considered rival contentions and gone through record carefully. A perusal of the reasons extracted (supra) would reveal that assessment was reopened on account of availment of unsecured loans from these concerns. The expression and also employed in section 147 of the Act has been considered by the three Hon ble High Courts inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases. It is evident that the Assessing Officer for the purpose of reopening the assessment has placed reliance upon the material from an external source which does not form part of the record. However, the said aspect is not reflected in the reasons recorded. On behalf of the Assessing Officer, the learned counsel is not in a position to point out any material on the record on the basis of which the Assessing Officer could have formed such belief. What is now sought to be stated by way of the order rejecting the objections as well as the affidavit-in-reply filed in response to the averments made in the petitions is that the formation of belief is based upon the information which is received from the DGIT (Inv.), Mumbai. It is settled legal position as held by a catena of decisions that the substratum for formation of belief that income liable to tax has escaped assessment has to form part of the reasons recorded. In the present case, the substratum for formation of belief, as indicated in the order rejecting the objections as well as the affidavit-in-reply, is the information given by the DGIT (Inv.), Mumbai, which got no relation with the reasons recorded, which are stated to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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