TMI Blog2016 (1) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... n entries. As per the reasons recorded, it is evident that the AO did not corroborate or examine the information received from the investigation wing before recording his own satisfaction of escaped income and initiating the reassessment proceedings. In light of the aforesaid discussion, we are inclined to hold that in the instant case, the AO proceeded to initiate proceedings u/s 147 of the Act and to issue notice u/s 148 of the Act only on the basis of information received from the investigation wing of the Department. There is no material on record to show that the AO had applied an independent mind in forming a belief which may result in the required reason to believe as per the provisions of Section 147 and 148 of the Act - Decided in favour of assessee - ITA Nos. 187, 188/Del/2010 - - - Dated:- 29-10-2015 - J. Sudhakar Reddy, AM And Sudhanshu Srivastava, JM For the Appellant : Shri V K Sabharwal, Adv For the Respondent : Shri Sujit Kumar, Sr.DR ORDER Per Sudhanshu Srivastava, Judicial Member These appeals of the assessee have been filed against the common order passed by Ld. CIT (A) XI New Delhi for Assessment Years 1999-2000 and 2000-01. Since the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee and added to its income u/s 68 of the Income Tax Act for AY 2000-2001. 3. In the first appellate proceedings the Ld. CIT (A), while dismissing the appeals of the assessee for both the years through a common order, gave a categorical finding that from a perusal of the material produced, it was not possible to form an opinion with regard to the creditworthiness to the investors. Ld. CIT (A) further gave a finding that in spite of repeated opportunities the assessee failed to file the names, correct postal addresses, PAN numbers and copies of ledger account of all the investors. The addresses which were given were found to be incorrect in as much as the letters could not be served and were returned undelivered. The Ld. CIT(A) observed that the investors were not forthcoming to depose before the AO in support of claim by the assessee company regarding investments made and accordingly the additions made by the AO were confirmed. 4. Assessee has raised as many as 6 grounds of appeal for both the years including ground No. 1 of the appeal which has been amended and reads as under: 1. That on the facts and circumstances of the case and in law the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oughout, this was a non-issue as far as assumption of jurisdiction u/s 147 of the Act was concerned. We have heard the rival submissions and have considered the facts of the case. It is seen from page 1 of the Assessment Order that the assessee had responded to the notice issued u/s 148 of the Act through reply dated 14.01.2005. The assessee has thereafter submitted to all the proceedings connected with reassessment and therefore it is our considered opinion that the issuance of notice in the wrong name cannot be raised at this juncture. Hence this ground is dismissed. 7. As regards limb 2 of the additional ground, it was submitted by Ld. AR for the assessee that the reasons were recorded on borrowed satisfaction and that the AO had not applied his mind before issuing the notice u/s 148 of the Income Tax Act, 1961. He strongly pleaded that the reassessment proceedings should be quashed as the reasons recorded were based on information received from Additional DIT (Investigation) which was accepted by the AO in a mere mechanical manner. The Ld. AR relied on a plethora of decisions in support of his preposition viz. CIT vs Atul Jain 299 ITR 383 (Delhi), United Electrical Company ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estigation wing that it was revealed that the assessee was a beneficiary of some accommodation entries. As per the reasons recorded, it is evident that the AO did not corroborate or examine the information received from the investigation wing before recording his own satisfaction of escaped income and initiating the reassessment proceedings. In light of the aforesaid discussion, we are inclined to hold that in the instant case, the AO proceeded to initiate proceedings u/s 147 of the Act and to issue notice u/s 148 of the Act only on the basis of information received from the investigation wing of the Department. There is no material on record to show that the AO had applied an independent mind in forming a belief which may result in the required reason to believe as per the provisions of Section 147 and 148 of the Act. Reference may be made to the judgment rendered by the Hon'ble Apex Court in Chuggamal Rajpal vs. S.P. Chaliha 79 ITR 603 (SC) wherein the Hon'ble Apex Court was dealing with a case where the AO had received certain communications from the CIT showing that the alleged creditors of the assessee were name lenders and that the transactions were bogus. The AO came ..... X X X X Extracts X X X X X X X X Extracts X X X X
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