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2017 (8) TMI 922 - AT - Income TaxReopening of assessment - reasons to believe - accommodation entry operations - non-independent application of mind by AO - Held that:- Nothing was recovered in the search and seizure establishing the identity of the assessee or any link between the record showing the accommodation entry operations by Jain Brothers through their chain of companies and the investment in the assessee company. Paragraph 5 says that it is only as a result of post search investigation, it appeared to the investigation wing that the assessee had also obtained accommodation entries. A long distance has to be travelled by the Department to bridge the gap between the assessee obtaining the accommodation entries and appears to have obtaining the accommodation entries. Further it is clear from paragraph no. 7 that on obtaining such post search investigation material AO was advised that the amounts appeared to have been obtained by the assessee by way of accommodation entries to be brought to tax by initiating the action u/s 147/148 read with section 143(3) of the Act. Record does not reveal that after this advice, AO had done anything in verification of such information to form the basis for his satisfaction that the income of the assessee had escaped assessment. Assessing Officer has arrived at the satisfaction in a mechanical manner without due application of mind and since there is no rational connection between the formation of the belief and the seized material. Assessing Officer has not discharged his obligation after such allegations, and, therefore, reasons recorded by the Assessing Officer in the instance case, in our opinion, are vague and/or no reasons at all. We, therefore, quash the re-assessment proceedings initiated by the Assessing Officer as void. - Decided in favour of assessee.
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