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2022 (3) TMI 828 - AT - Income TaxReopening of assessment u/s 147 - Addition u/s 68 - unexplained share premium - Whether assessee has established the identity and existence of the entities from whom huge share premium received by it? - HELD THAT:- There is no mention of any name of the entry provider and link of accommodation entry taken by the assessee. In fact, a perusal of the assessment order itself shows that there are 99 share applicants and there is no whisper of the name of the share applicants in the list of entry providers. This clearly shows that neither there was application of mind before issuing notice under section 148 of the Act nor at the time of recording reasons for reopening the assessment. Again in the reasons, modus operandi of the entry providers have been mentioned but nowhere the Assessing Officer has mentioned as to how the assessee company has actually managed the so called accommodation entry providers. Moreover, since the assessment of the assessee was completed under section 143(3) of the Act, the AO had complete material evidence on his assessment record from which he could have found out who are the accommodation entry providers to the assessee. Other than the report of the INV Wing, there is not even a reference to any document on the basis of which the AO was satisfied that the assessee company has taken accommodation entry. As mentioned elsewhere, the names of the 99 share applicants, as mentioned in the assessment order, do not find any place in the list of accommodation entry providers. While recording the reasons for reopening the assessment, the AO did not even care to look into the assessment records. Had the AO seen the assessment record, then he would have found that during the year under consideration, the assessee had issued share capital including share premium to various parties and has also received sufficient unsecured loans from various parties and details of share application money and unsecured loans were already submitted during the course of assessment proceedings. In our considered view, the case was reopened only on the directions of the DIT, INV – II, New Delhi and no reason to believe was formed for reopening of the assessment. We hold that assumption of jurisdiction by issuing notice under section 148 of the act is bad in law which makes the notice under section 148 liable to be quashed thereby annulling the assessment order framed under section 147 of the Act. Cross objections of the assessee are allowed.
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