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2023 (12) TMI 210 - AT - Income TaxValidity of Revision u/s 263 - two parallel proceedings for the same assessment year - validity of proceedings initiated by notice u/s. 148 and the consequential order u/s. 147 is bad in law notice issued u/s. 148 during the pendency of set aside assessment proceeding - as per CIT AO has not examined the source of share capital and share premium properly and has failed to note that the share capital is introduced by rotating the money to dummy companies which have been created solely for this purpose - HELD THAT:- Second revision order passed u/s. 263 dated 12.03.2019 has been quashed by the Coordinate Bench making the second effect giving assessment order dated 06.12.2019 as non-est. Reference made by the Ld. AO in the impugned assessment order of this proceeding and basing it to arrive at the assessed total income is not justified. From the perusal of the reasons to believe recorded by the Ld. AO and as contended by the Ld. Counsel in respect of the contents mentioned therein, we are in agreement with the facts narrated by AO never disclosed the details of layers through which alleged money has been routed into the bank account of the assessee. AO has also never shared the information in respect of documentary evidence for the alleged transactions of accommodation entry. We also do not find conduct of any examination of the allegd layering of the transaction to unearth sequencing of the flow of money alleged by the Ld. AO escaping assessment. We also find ourselves in agreement with the contention of the Ld. Counsel that there is nothing specific stated in the reasons to believe as to the nature of the transaction of accommodation entry as alleged by the Ld. AO as to whether it is an income or an expense or an allowance or share capital or loan etc. Before the Ld. AO, assessee has evidently demonstrated by furnishing its books of account and bank statement that there is no such transaction or such amount of money which has routed into the books of the assessee or into the bank account from the alleged accommodation entry provider Mr. Sandeep Roy, proprietor of M/s. Sarika Trding Co. AO has merely on a wrong belief made such an addition without conducting any verification of any sort of any material or examining the persons involved. We also take note of the approach adopted by the incumbent Ld. AO, who was already seized with an assessment proceeding pursuant to the second revisionary order even though it has been subsequently quashed by the Coordinate Bench. Until the outcome of the appeal before the Coordinate Bench, the Ld. AO had an assessment proceeding pending before him to give effect to the set aside revisionary order. However, with this pendency in hand, he initiated another proceeding by taking note of information received from the Investigation Wing to record the reasons to believe and issue notice u/s. 148. It is important to note that within a period of ten days, the same incumbent AO has passed two assessment orders, first on 06.12.2019 pursuant to revisionary order u/s. 263 and the second one which is the impugned reassessment order u/s. 147/143(3) dated 16.12.2019. Certainly such an act by the Ld. AO of having two parallel proceedings for the same assessment year is contrary to the decision taken in the cases of S. M. Overseas Pvt. Ltd. [2022 (12) TMI 702 - SC ORDER] and Trustees of HEH Nizam Supplemental Family Trust [2000 (2) TMI 4 - SUPREME COURT] - Accordingly, notice issued u/s. 148 during the pendency of set aside assessment proceeding and subsequent reassessment order passed is bad in law. On the merits as undisputed fact that there is no change in short term borrowings and the revenue from operations is a small/meagre amount of Rs. 1,23,960/-. Thus, the alleged amount of accommodation entry received by the assessee cannot in any way pertain to loan or revenue received by the assessee during the year. As far as share capital and share premium is concerned which has been raised during the year, elaborate detailed examination and verification exercise has already been conducted by the Ld. AO and has been accepted vide first effect giving assessment order u/s. 263/143(3). The Coordinate Bench has already taken note of factual findings given in this assessment order and remains uncontroverted. Thus, on the merits of the case also, we do not find any reason to sustain the addition made by the Ld. AO. Accordingly, the grounds taken by the assessee are allowed.
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