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2019 (1) TMI 1073 - HC - Income TaxReopening of assessment - unexplained investments - Held that:- No information was received by the Assessing Officer from the Investigation Wing that the assessee had received accommodation entry (see paragraph 25(i) of the impugned order). The aforesaid rationale is incorrect, for whether or not any accommodation entry was received has to be inferred and concluded from the facts by the Assessing Officer, and not by a third person. It is the subjective opinion formed by the Assessing Officer that has to be tested on the principle of an honest and reasonable person. In this case, the stockbrokers had elucidated on the sham and bogus nature of the share transaction i.e., investment and sale of worthless shares which was done through unknown persons who were the respondent-assessee’s representatives, and other facts accepted and admitted in the statements which were recorded by the Investigation Wing. Similarly, paragraph 25(ii) of the impugned order proceeds on wrong premise that when the block assessment order in the case of Ms. Mohinder Kaur was quashed on the technical ground that addition of ₹ 2.5 crores could not have been made in the block assessment proceedings, re-opening under Section 147 read with Section 148 would not be justified, for the entire money of Taranjit Singh was routed through the respondent-assessee or the Revenue could not take a ‘somersault’ for the purpose of reopening assessment or make addition on substantive basis later on. This reasoning is wrong and fallacious being contrary to law, for appellate orders in the case of Ms. Mohinder Kaur had not been passed when the ‘reason to believe’ in the case of respondent-assessee were recorded. The ‘reason to believe’ recorded cannot be set aside on the basis of the appellate order in the case respondent-assessee making substantive addition instead of protective additions made in the assessment order. Question of ‘somersault’ does not arise when protective addition made into substantive addition. - Decided against assessee Addition u/s 68 - addition on protective basis on the ground that three brokers have given accommodation entries to the appellant Company - Held that:- The assessee had not raised a specific ground that they were not furnished statements on oath or were denied opportunity to cross-examine the brokers. The Assessment Order specifically refers to the failure of the stock brokers to produce relevant documents/papers. Assessing Officer had not only relied upon the statements recorded by Deputy Director (Inv.) but had also himself recorded the statement of Shagun Garg on 11th March, 2005. The Commissioner of Income Tax (Appeals) had similarly recorded the statement of Hari Krishan Punni on 27th February, 2008 during the pendency of the appeal. Relevant facts noticed in the assessment order, statement an oath etc. have been passed over and overlooked - answer the substantial question of law No. (2) in favour of the appellant-Revenue and against the assessee
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