TMI Blog2015 (9) TMI 1299X X X X Extracts X X X X X X X X Extracts X X X X ..... URT ) - CIT(A) has rightly deleted the addition - Decided in favour of assessee. Validity of reassessment proceedings u/s. 147 - Held that:- On the issue of validity of reassessment proceedings u/s. 147 of the Income Tax Act, 1961, we are of the view that on the specific information the case of the assessee has been reopened. We are of the view that the material in possession of the AO is a fresh material which has been examined by the AO, came to be valid reasonable believe that the income of the assessee has escaped assessment. After conducting the detailed investigation to prove that the income has escaped assessment in the hands of the assessee, the reassessment proceedings have been initiated by the AO. Therefore, in our considered opinion, there was existence of correct information which prompted to the AO to proceed to issue notice u/s. 148 of the I.T. Act and hence, this reassessment proceedings could not be declared as null and void.- Decided in favour of assessee. - I.T.A. No. 4597/DEL/2009, CROSS OBJECTION NO. 151/DEL/2010 - - - Dated:- 4-9-2015 - SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER For The Department : Shri J.P. CHANDRAKAR, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g accommodation entry in the garb of Share Application money during the year. AO recorded the reasons to believe that the amount received represents the undisclosed income of the assessee, which has not been offered to tax and he issued notice u/s. 148 of the Income Tax Act, 1961 dated 25.1.2007 which was served on the assessee. In response to the same, assessee filed its return declaring the same income as the assessee has earlier declared and stated that original return filed on 27.10.2004 may be treated as filed in response to notice u/s. 148. The assessee raised objection stating that the reopening of the case u/s. 148 is bad in law because the reasons recorded do not lead to any reasonable person to conclude that any income has escaped assessment. AO is of the view that the case of the assessee upon on specific information that the share application money received by the assessee from Teerath Impex Traders (P) Ltd. are accommodation entries as the information received from the Investigation Wing of the Department. He further held that these facts are also confirmed from the bank statement of Teerath Impex Traders (P) Ltd. which shows that the cash of high amount is deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961 vide order dated 28.12.2001. 5. Aggrieved with the aforesaid assessment order, assessee filed the appeal before the Ld. CIT(A), who vide impugned order dated 16.9.2009 partly allowed the appeal for statistical purposes and deleted the addition in dispute. 6. Now the Revenue is aggrieved with the deletion of addition of ₹ 13,70,000/- and assessee has also filed the Cross Objection for challenging the reassessment proceedings u/s. 147 of the I.T. Act, 1961. 7. At the time of hearing, Ld. DR relied upon the order passed by the AO and the assessee relied upon the order of the Ld. CIT(A). Ld. AR for the assessee stated that the addition deleted by the Ld. CIT(A) is as per law. But as regards, the reopening of the assessment, he stated that the assessee has filed the cross objection in which he reiterated his contention and referred the case laws alongwith the synopsis supporting the order of the Ld. CIT(A) on the deletion of the addition and stated that the Notice u/s. 148 has been issued by the AO without any basis and the same may be cancelled and the reassessment may be declared as null and void by accepting the Cross Objection filed by the assessee. 8. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced on record, it is fair to conclude that the share applicants were existing parties and the payments were made through banking channels. 4.7 It is also seen that the Assessing Officer could not point out any discrepancy in the evidences relied upon by the assessee. He has neither brought out any direct or inferential evidence to contradict the contention of the assessee. It is further observed that even though AO. has vast powers uls 131 and 133(6) of the Act, he has not used any of his powers to verify the genuineness of the claim of the assessee by verifying the documents furnished by it. If AO had doubted the impugned transaction after receiving the evidences which had been produced by the assessee in support of its claim it was very much open to the AO to do his independent enquiry and verification. This has not been done by the AO. Further, what is the desired documentary evidence required to support the claim of the assessee as required by the AO. is not coming out of the order of the A.O. Though, the share-applicants could not be examined by the AO, since they were existing on the file of the Income Tax Department and its income-tax details were made availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cords, we are of the view that the Ld. CIT(A) has decided the issue in dispute vide para no. 3.2 to 3.3 at pages 3 to 5 in his impugned order. For the sake of convenience, the said relevant paragraphs are reproduced as under:- 3.2 I have carefully considered the submissions made on behalf of the appellant findings of the Assessing Officer and facts on record. The perusal of the re-assessment order reveals that it was only after the Directorate of Incometax( Investigations),Delhi informed the A.O. as regards the accommodation entries provided to the assessee by certain parties. Before that date there was no information available with the A.O. which would have suggested that the appellant has obtained accommodation entries. Therefore, it is an admitted fact that the above facts were not before the A.O. before the receipt of such information from the Directorate of Income-tax(Investigations), Delhi. On facts and circumstances of the case, I am of the view that the appellant has no case to succeed on the ground relating to re-assessment proceedings. What is required for initiating re-assessment proceedings is the existence of a fresh prima-facie material. Consequent to the recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicial this judgment was not brought to the notice of the Supreme Court in the later judgment in the case of G.K.N. Driveshafts (P) Ltd.(supra). Therefore, non-communication of the reasons recorded and subsequent disposal of the objections raised by the assessee against the reopening of assessment is not fatal to the validly of reassessment proceedings. In S. Narayanppa V. CIT 63 ITR 219 (supra) the Apex Court considered the view taken by Madras High Court in Presidency Talkies Ltd. V. Addl. ITO (1954) 25 ITR 447, as correct one. Reliance is also placed on the decision in ITO Vs. Smt. Gurinder Kaur (2006) 102 ITD 189 (Delhi) wherein it has been held by the Hon'ble IT AT, Delhi that non- communication of the reasons, even according to the judgment of the Supreme Court in the case of G.K.N. Driveshafts (P) Ltd. (supra) is not considered to fatal to the validity of the reassessment proceedings. When the non-communication of the reasons has been held as not sufficient enough to invalidate the re-assessment proceedings, there is no reason and logic to agree with the contention of the appellant that the re-assessment proceedings were null and void by sheer dint of the fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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