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2021 (12) TMI 822 - AT - Income TaxReopening of assessment u/s 147 - Eligibility of reason to believe - “Reason to believe” or ‘Reasons to suspect” - accommodation entry transaction - transaction of assessee with M/s. Bridge & Building Pvt. Ltd. to be accommodation entry availed by the assessee in the form of bogus billing - statement of Shri Ajit Kumar Jindal recorded by the Investigation Wing wherein he admitted to be an accommodation entry provider through his entities in lieu of commission And the AO notes that the bank account number of M/s. Bridge & Building Pvt. Ltd. wherein the assessee had transferred the amount - HELD THAT:- It has to be kept in mind the assessee’s scrutiny assessment u/s 143(3) was completed on 02.12.2016 and the information which the AO relies on is the statement of Shri Ajit Kumar Jindal was recorded as early as on 29.10.2014 (i.e. 2 years before). A reading of the reason recorded by the AO as discussed and analysed reveals that information from the Investigation Wing only says about the statement of Shri Ajit Kumar Jindal who on 29.10.2014 has admitted before them, that he is providing accommodation entry through his entities which includes M/s. Bridge & Building Pvt. Ltd. The Investigation Wing on the strength of his admission has taken out the transaction made by Shri Ajit Kumar Jindal’s entities viz. M/s. Bridge & Building Pvt. Ltd. and found that assessee had transaction with M/s. Bridge & Building Pvt. Ltd., so this information was passed on to the AO, who on receipt of it has jumped to the conclusion that since assessee had transacted with M/s. Bridge & Building Pvt. Ltd. and then assessee is a beneficiary who availed for the bogus bills which was paid through bank to it and later got it back as cash as per the modus-operandi admitted by Shri Ajit According to us, when the AO receives information of such nature from investigation wing it certainly raises suspicion. Then the AO cannot and should not straight away issue notice u/s 148 of the Act and assume jurisdiction to reopen the assessment. Why because, there is subtle difference between ‘reason to suspect’ and ‘reason to believe’. Information adverse may trigger “reason to suspect” then the AO to make reasonable enquiry and collect material, which would make him believe that there is in fact an escapement of income Simply because the assessee had transaction with M/s B & B Pvt. Ltd., cannot be the basis to believe escapement of income, unless there is any material there to suggest that so called assessee’s transaction was bogus & the cheque given by assessee had been returned as cash to assessee. Thus in the facts discussed and based on the analysis of the reason recorded by the AO according to us, the AO could not have formed a belief that income chargeable to tax has escaped assessment. The information from Investigation Wing is only that Shri Ajit has admitted to be providing accommodation entry to “Bathwal Group” and to beneficiaries. However, when we examine the jurisdiction of AO, we have to look at the ‘reasons recorded’ on a standalone basis. So in the absence of the list of beneficiaries attached to the reasons recorded on the statement of Shri Ajit, we do not find the name of assessee as beneficiary. Just because, the assessee had transaction with M/s B & B Pvt. Ltd., cannot be a ground to believe that assessee’s income has escaped assessment. - Decided in favour of assessee.
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