TMI Blog2022 (2) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... ome. The reasons fail to demonstrate the link between the alleged tangible material and formation of the reason to believe that income has escaped assessment. There is a total non-application of mind on the part of the A.O. while recording the reasons for reopening of the assessment. The conclusion was merely based on observations and information received from DGIT (Inv.), Mumbai, which is not brought on record. Since, there is a total lack of mind while recording the reasons for reopening of the assessment; therefore, assumption of jurisdiction under section 147/148 of the I.T. Act, 1961, is bad in law. Addition u/s 68 - Assessee has taken unsecured loans from the various parties mentioned above through bank and the same was settled by the assessee within the same assessment year or subsequent assessment year again through the bank only. Assessee has filed before tax authorities, the confirmation of all the parties, ledger copy in the books of parties and bank statement of assessee as well as lender parties. These documents indicate that assessee has received loans from the lenders and settled the same before end of the year or subsequent year. AO has only considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra Business Pvt Ltd 30,00,000 1,25,00,000 4. The AO observed that the abovementioned parties are the concerns controlled by Shri Praveen Kumar Jain. In this regard, Assessee has submitted the relevant documents relating to these transactions, which were submitted before Assessing Officer and submitted that these transactions were genuine and the loan was also repaid in the same assessment year as well as in subsequent assessment year. As far as balance outstanding is concerned, assessee has already cleared the unsecured loans in subsequent years and balance outstanding are NIL and all the transactions were made through the bank only. Since these transactions were transacted with concerns in which Shri Praveen Kumar Jain is involved, Assessing Officer has not convinced with the submission of the assessee and accordingly, he proceeded to make the addition u/s.68 of the Act. 5. Aggrieved with the above order, assessee preferred an appeal before Ld. CIT(A) and Ld. CIT(A) also sustained the addition based on the reasons given by Assessing Officer and the findings of DGIT (Inv) in the case of Shri Praveen Kumar J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t must be quashed. VI. On the facts and in the circumstances of the case, The learned Commissioner of Income Tax (Appeal) has erred in an addition of ₹ 6,68,988/on account of interest paid on borrowed fund / Short Term Loans considered now as unexplained cash credit u/s. 68 taken from loaner i.e. Atharv Business pvt. Ltd, Duke Business Pvt. Ltd and Nakshtra Business Pvt. Ltd based on information received from investigation. VII. The appellant craves to add, amend or alter the grounds of appeal at the time of or before the hearing of appeal. 7. At the time of hearing, the Learned Counsel for the Assessee submitted that reasons are based on information and findings of the Investigation Wing. The A.O. did not apply his mind to the same. The A.O. merely concluded without verifying the facts that it is a case of reopening of the assessment. The A.O. without verifying anything concluded that assessee has taken accommodation entry. The A.O. has not brought any material on record on the basis of which any nexus could have been established between material and the escapement of income. The reasons do not show any application of mind or any belief independently arrived a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rriving at his satisfaction. The reasons to believe contain no reason, but, conclusion of the A.O. without any basis. Thus, there is no independent application of mind by the A.O. to the report of the Investigation Wing which formed the basis for reasons to believe that income chargeable to tax has escaped assessment. The conclusion of the A.O. in the reasons is at the best reproduction of conclusion of the Investigation Report. The A.O. has not brought anything on record on the basis of which any nexus could have been established between the material and the escapement of income. The reasons fail to demonstrate the link between the alleged tangible material and formation of the reason to believe that income has escaped assessment. 11. Considering the above discussion, it is clear that there is a total non-application of mind on the part of the A.O. while recording the reasons for reopening of the assessment. The conclusion was merely based on observations and information received from DGIT (Inv.), Mumbai, which is not brought on record. Since, there is a total lack of mind while recording the reasons for reopening of the assessment; therefore, assumption of jurisdiction under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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