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2014 (1) TMI 1629 - AT - Income TaxDisallowance u/s 68 - share application money - Held that:- There is a dazzling line drawn between the cases in which addition u/s 68 on account of share application money etc. can and cannot be made. Where the AO properly enquires into the matter and reaches the conclusion on appreciation of the evidence adduced by the assessee that the transactions were not genuine, the addition is called for. If on the other hand, the AO simply brushes aside the assessee’s explanation without any cogent reason and makes the addition in a mechanical manner, no addition is warranted. In our considered opinion, the extant case falls under the second category. Here also, the Assessing Officer did not make any effort to enquire into the matter. No summons u/s 131 were issued to the share applicants. No enquiry worth the name was conducted, but the addition was made in a routine manner. Respectfully following the judgment in Fair Finvest Ltd. (2012 (12) TMI 170 - DELHI HIGH COURT), we hold that the ld. CIT(A) was fully justified in deleting this addition. Initiation of the re-assessment proceedings - Assessing Officer received information from DI (Investigation) about the accommodation entries received by the assessee. Initially, it was argued by the ld. AR that all the necessary details in this regard were furnished to the Assessing Officer who examined the issue at length before passing the order u/s 143(3). On being called upon to invite our attention towards such original order passed u/s 143(3), the ld. AR expressed his inability by stating that he did not have a copy of such order. It can be seen from our file also that no copy of such assessment order has been filed. In such a situation, we are left with no option but to presume that either no assessment order u/s 143(3) was originally passed or if at all any such assessment order was passed, no enquiry about such share application money was conducted. This brings us to a position that the Assessing Officer initiated the present reassessment proceedings on the basis of specific information received from DI(Inv.) about the assessee receiving accommodation entries. In such circumstances, there can be no fetters on the power of the Assessing Officer to initiate re-assessment proceedings. - Decided partly in favour of Revenue.
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