TMI Blog2012 (4) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... STICE R.V.EASWAR, JJ. For Appellant: Mr. Amit Shrivastava, Advocate for Mr. Kamal Sawhney, Sr. Standing Counsel. For Respondent: Dr. Rakesh Gupta, Mr. Ashwani Taneja Ms. Rani Kiyala, Advocates. O R D E R This appeal by the Revenue under Section 260A of the Income Tax Act, 1961(Act, for short) in the case of India Terminal Connector System Limited pertains to assessment year 2001-02. Having heard learned counsel for the parties and having perused the impugned order dated 28th September, 2010 passed by the Income Tax Appellate Tribunal (tribunal, for short), we formulate the following substantial question of law: Whether the Income Tax Appellate Tribunal was right in setting aside reassessment proceedings under Section 147/1487 of the Income Tax Act, 1961 on the ground that the Assessing Officer has failed to prove and establish that the assessee had failed to disclose fully and truly material facts at the time of the original assessment? 2. Having heard learned counsel for the parties on merits, we proceed to pronounce our decision. 3. The assessee is a company and for the assessment year in question had filed return on 25th October, 2001 showing income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zirpur 14- Mar- 01 50075 -do- OBC M .V. Marketing Pvt. Ltd. 916209 567, Feedrer Karol Bagh 14- Mar- 01 50060 In view of the above information, it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries. Therefore, I have reasons to believe that the income amounting to Rs.42,03,250/- has escaped assessment, which is required to be assessed to tax under the provisions of section 147 of the IT Act, 1961. 5. By order dated 18th December, 2008, the Assessing Officer computed the income of the assessee at Rs.81,50,800/-. He made an addition of Rs.42,03,250/- on account of the said accommodation entries. In the first appeal, the assessee challenged the reopening on the ground that jurisdictional pre-conditions were not satisfied. The CIT(Appeals) did not agree with the said contention and upheld the reopening. However, he deleted the addition on merits and held that the Assessing Officer was free to take action against the share holders. 6. Revenue preferred second appeal before the tribunal in ITA No. 2338/Del/2010. The assessee preferred cross-objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs recorded by the tribunal that the Assessing Officer had failed to state/record that the assessee had not made true and full disclosure of the material facts and the said factum was not mentioned and cannot be elucidated from the reasons. Reasons recorded by the Assessing Officer have to be read as a whole in entirety and in a holistic manner. Mere reproduction of the language of the Section is not sufficient. We have to read and understand the reasons recorded and whether on the basis of said reasons the Assessing Officer had come to the conclusion or drawn an inference that the assessee had not made full and true disclosure of material facts. As per the reasons to believe mentioned above, the Assessing Officer had come to a prima facie or a tentative opinion that the assessee had introduced his unaccounted money in the form of accommodation entries. The name of the operator, who had given the accommodation entry and the amount thereof is mentioned. At this stage, a final finding or conclusion is not required to be recorded by the Assessing Officer. Recording of reasons is for initiation of the reassessment proceedings, which is the starting point. Referring to the said aspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dealing with the objections in a very careful and studied manner. He has taken note of the fact that the transactions involving Rs. 27 lakhs mentioned in the table in annexure P-2 constitute fresh information in respect of the assessee as a beneficiary of bogus accommodation entries provided to it and represents the undisclosed income. The Assessing Officer has referred to the subsequent information and adverted to the concept of true and full disclosure of facts. It is also noticeable that there was specific information received from the office of the Director of Income-tax (Inv-V) as regards the transactions entered into by the assessee-company with a number of concerns which had made accommodation entries and they were not genuine transactions. As we perceive, it is neither a change of opinion nor does it convey a particular interpretation of a specific provision which was done in a particular manner in the original assessment and sought to be done in a different manner in the proceeding under section 147 of the Act. The reason to believe has been appropriately understood by the Assessing Officer and there is material on the basis of which the notice was issued. As has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught to be relied upon later, with a view to strengthening or improving the reasons, cannot be looked into by the Court. That contention is sound and is supported by ample authority but it does not apply to the present case. In the present case it cannot be disputed at all that the material present before the Assessing Officer at the time of recording reasons for reopening the assessment did show a link between M/s. Shivam Softech Ltd., described as an entry provider, with the petitioner herein. Not only was there a link between the two names, but the material also disclosed the date on which the entry was taken, the cheque or DD number, the name of the bank and branch and the account number. With such precise material before the Assessing Officer, the existence of which is beyond challenge, it can hardly be said that the Assessing Officer could not have had even a prima facie belief that income chargeable to tax had escaped assessment in the hands of the assessee for the assessment year 2004-05. 11. In the said judgment, the decision in the case of Signature Hotels (P) Ltd. vs. Income Tax Officer (2011) 338 ITR 0051 decided on 21st July, 2011 by one of us (Sanjiv Khanna, J.) wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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