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2015 (10) TMI 2166 - ITAT DELHI

2015 (10) TMI 2166 - ITAT DELHI - TMI - Reopening of assessment - receipt of accommodation entries - unexplained cash credit u/s 68 - Held that:- As decided in Signature Hotels (P) Ltd. Versus Income Tax Officer and Anr. [2011 (7) TMI 361 - Delhi High Court] the reassessment proceeding were initiated on the basis of information received from the Director of Income Tax (Investigation) that the petitioner had introduced money during the financial year 2002-03 as stated in the Annexure. According t .....

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come. Further, the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. There was no dispute that the company, S, had a paid-up capital of ₹ 90 lakhs and was incorporated on January 4, 1989, and was also allotted a permanent account number in September, 2001. Thus, it could not be held to be a fictitious person. The reassessment proceedings were not valid and were liable to be quashed. - Decided in favour of assessee. - I.T. .....

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nsolidated by this common order for the sake of convenience, by dealing with ITA No. 4444/Del/2014 (AY 2004-05). 2. The following grounds have been raised in the Assessee s Appeal No. 4444/Del/2014 (AY 2004-05). 1. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the notice uls 148 is illegal, bad in law and without jurisdiction and as such the assessment order passed uls 148 is illegal and bad in law. 2. That on the facts .....

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ailed to appreciate that the impugned assessment order passed by the Ld. AO is against the principles of natural justice and has been passed without affording reasonable opportunity of being heard. 5. That on the facts and, on the circumstances of the case and the provision of law the Ld CIT Appeal has erred in sustaining an addition of ₹ 5,00,000/- as unexplained cash credit uls 68 of the Income Tax Act, 1961. 6. That the Appellant craves the right to amend, append, delete any or all grou .....

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,74,526/-. Thereafter, assessment in this case was completed u/s. 143(3)/153A of the I.T. Act, 1961 vide order dated 24.12.2009 at an income of ₹ 3,74,526/-. Subsequently, a letter dated 25.3.2011 was received from the CIT(A), Delhi (Central)- III, New Delhi forwarding therewith copy of letter of the ACIT, CC-19, New Delhi containing therewith list of beneficiaries of accommodation entries provided by Sh. Suresh Kumar Gupta for AY 2004-05. After perusing the list enclosed with the letter o .....

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1 which was sent through speed post. A copy of the notice was also served upon the assessee by hand on 31.3.2011. In response to the notice u/s. 148 r.w. Section 147 of the I.T. Act, 1961, the assessee vide letter dated NIL has submitted on 2.5.2011 a copy of return of income and also requested for the copy of the reasons recorded before initiating the reassessment proceedings. A notice u/s. 143(2) of the I.T. Act, 1961 was issued on 17.10.2011 and served upon the assessee through speed post, fi .....

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e on 8.12.2011 and assessee submitted vide his letter dated 13.12.2011 his reply. AO observed that the assessee has not submitted any documentary evidence i.e. any bank statement etc., in support of its contention. Hence, in the absence of any documentary evidence, the cash credits received by the assessee remained unverifiable. Thereafter, the assessment was made u/s. 147 by order dated 20.12.2011 assessing the income at ₹ 8,74,530/- passed u/s. 143(3)/148 of the Income Tax Act, 1961. 4. .....

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T Central-3. There is no live link in the reasons recorded between the information obtained and the belief formed by the AO. Only the value of entry taken is mentioned but the nature of entry whether it is, bogus gift, loan or share capital money is not mentioned. Moreover, on what basis the above presumption is drawn that the assesssee has taken any accommodation entry is also not mentioned. No reference is made to any tangible material statement or annexure in support of the information receiv .....

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chanically recorded the reasons and issued the notice without applying his own mind. Therefore, on these facts, the decisions of Hon'ble Jurisdictional High Court in the case Signature Hotels Pvt. Ltd. (supra), 338 ITR 51, Insectici (India) Ltd. (supra), 357 ITR 330 and ClT vs. Atul Jain and Vin Jain, 299 ITR 383 would be squarely applicable because the information on the basis of which the AO had initiated proceedings under section 147 was vague and uncertain as may be evidenced from the re .....

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him Vihar, New Delhi (A.Y. 2004-05) A search & seizure action u/s 132 was carried out in Wings Group of cases on 14.02.2008. The case was centralized with Central Circle-2 vide order uls 127 by CIT-IX, New Delhi on 24.10.2008. 2. The assessrnept in the case of M/s R.K. Arora/& Sons (HUF) was completed vide order u/s 143(3)/153A of the Act. 1961 dated 24.12.2009 at the returned income of ₹ 3,74,526/-. 3. A letter F.No. CIT(C)-1I1/2010-11/2334,. dated 25.03.2011 has been received fro .....

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given below: Mediatory Actual Beneficiary Date Ch. No. PO No. Amount Deepak Jain R.K. Arora & sons (HUF) 11.3.2004 060927 ₹ 5,00,000 5. In view of this. I am satisfied that the income to the tune of ₹ 5,00,OOOI- has escaped assessment by reason of the failure on the part of the assessee and to disclose fully and truly all material facts necessary for his assessment for that assessment year 6. In view of above facts and circumstances of the case, I have reason to believe that the .....

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f any such undisclosed income or not. After hearing both the parties on the issue in dispute as well as after going through the orders passed by the Revenue Authorities alongwith order dated 21.7.2011 passed by the Hon ble Jurisdictional High Court in the case of Signature Hotels P. Ltd. vs. Income Tax Officer [2011] 338 ITR 0051 wherein the Hon ble High Court has held as under:- Held, allowing the petition, that the reassessment proceeding were initiated on the basis of information received fro .....

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