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2020 (11) TMI 766 - AT - Income TaxValidity of reopening of assessment u/s 147 - borrowed satisfaction - no material for forming belief that income of the assessee had escaped assessment - as argued action was initiated on the basis of mere suspicion and vague information and there was no independent satisfaction of the A.O. - as per assessee no satisfaction of the A.O. of escapement of income, which is a necessary pre requisite for initiating the reassessment proceedings was not as per law - HELD THAT:- AO has merely relied on the information passed on to him by the Investigation department regarding accommodation entry taken by the assessee, without even applying his mind to it and verifying the same. The entire reasons, we find, talks about some information with the Department regarding the assessee having availed accommodation entries of ₹ 20 lacs from M/s Virgin Capital Services Pvt.Ltd. a paper company of M/s Surinder Kumar Jain Group, which is engaged in providing such entries, through cheque in lieu of cash. There is nothing in the reasons revealing application of mind by the AO to the information in his possession, as to whether he had verified that any such amount was actually received during the year and if so in what mode or manner i.e as share capital or unsecured loan etc. A.O. has formed his belief solely on this information without even verifying and cross checking the same with the facts on record available with him. The belief of escapement of income as recorded in the reasons, is clearly not that of the A.O. but, as rightly pointed out by the Ld. Counsel for the Assessee, it is a borrowed belief. Since the satisfaction regarding escapement of income as recorded in the reasons, was not that of the AO but was borrowed satisfaction, the jurisdiction therefore assumed to reopen the case u/s 147 of the Act was bad in law. - Decided in favour of assessee.
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