TMI Blog2016 (4) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... e - ITA No. 665/Del/2014 - - - Dated:- 15-3-2016 - SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Shri R.S. Ahuja, Adv. For The Respondent : Shri P. Damkanunja, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER This appeal has been filed by the assessee against the order dated 25.11.2013 of Ld. CIT(A)-XI, New Delhi for Assessment Year 2005-06 on the following grounds of appeal:- That on the facts and circumstances of the case, the learned ITO CIT(A) erred in: (a) Assuming jurisdiction u/s 148 of the IT Act 1961 in the absence of relevant information with him leading to formation of belief that the income had escaped assessment. (b) Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itiated proceedings under sec. 147 of the Income-tax Act, 1961 and being not satisfied with the explanation of the assessee regarding entries of ₹ 10,01,045/- from State Bank of Bikaner Jaipur, New Rohtak Road of M/s Tosha Chemicals and VR Traders Pvt. Ltd., added the said amount in the total income of the assessee. Before the Ld. CIT(A), the assessee had raised objection against the validity of initiation of reopening proceedings but could not succeed. Hence, the same has been questioned before the ITAT. 4. In support of the ground on the issue, the Learned AR submitted that the reasons recorded under sec. 148(2) of the Income-tax Act, 1961 in the present case are based on borrowed satisfaction of DIT (Inv), New Delhi, hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be considered at the stage of recording of reasons. 6. Having gone through the above cited decisions, especially the recent decisions of Hon ble jurisdictional High Court of Delhi in the case of CIT vs. G G Pharma India Ltd. (supra), we find that the Hon'ble High Court after detailed discussion on the issue and after discussing several decisions cited before the Hon ble Court has been pleased to come the following conclusion vide para Nos. 12 and 13 of the decision, which are relevant to adjudicate upon the issue raised before us in the present case, are being reproduced hereunder: 12. In the present case, after setting out four entries, stated to have been received by the assessee on a single date i.e. 10th February 2003, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have reasons to believe that the income of the assessee escaped assessment is missing in the present case. 13. Mr. Sawhney took the court through the order of the Learned CIT(Appeals) to show how the CIT(A) discussed the materials produced during the hearing of the appeal. The court would like to observe that this is in the nature of a post mortem exercise after the event of reopening of the assessment has taken place. While the CIT may have proceeded on the basis that the reopening of the assessment was valid, this does not satisfy the requirement of law that prior to the reopening of the assessment, the A.O. has to apply his mind to the materials, conclude that he has reason to believe that income of the assessee has escaped assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficiary bank branch Value of entry taken ₹ 10,01,045/- Instrument No. by which entry taken Transfer Chq. 00204342. Transfer Chq. 00761046, Transfer Chq. 00761077 Date on which entry taken 31.05.2004, 31.05.2004, 02.06.2004 Name of account holder of entry giving account Tosha Chemical, V R Traders Pvt. Ltd., V R Traders Pvt. Ltd. Name of entry given bank SBBJ, New Rohtak Road Account No. entry giving account 21782, 21781 I have, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the assessee. It was held that without forming a prima facie opinion, on the basis of such material, it was not possible for the Assessing Officer to have simply concluded, it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries. The basic requirement is that the Assessing Officer must apply his mind to the material in order to form reasons to believe that the income of the assessee has escaped assessment. Such basic requirement while recording the reasons for initiation of proceedings under sec. 147 of the Act is missing in the present case before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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