TMI Blog2016 (5) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee : Sh. Satyen Sethi, Adv For the Department : Sh. R.S. Negi, Sr. DR ORDER Per H. S. Sidhu, JM The Assessee has filed the Appeal against the impugned Order dated 16.7.2013 passed by the Ld. CIT(A)-XVII, New Delhi relevant to assessment year 2002-03. 2. The grounds raised by the Assessee reads as under:- 1. That on the facts and in the circumstances of the case and in law, whether there was any material before the assessing authority to form an opinion that income had escaped assessment in the hands of the appellant, in view of the decision of the Hon'ble Supreme Court in the case of M/s. Lovely Exports Pvt. Ltd. where the court has held that if the share application money is received by the assessee company from alleged bogus shareholders, whose name was given to the AO, then the department is free to proceed to reopen their individual assessments in accordance with law. 2. That on the facts and I the circumstances of the case and in law, whether the assessing officer had any material before him to hold that the appellant's income has escaped assessment even though he had no knowledge as to what has been stated and who had made the alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he extent of ₹ 15,00,000/-. Accordingly, proceedings u/s. 147 of the Act was initiated by the AO and to this effect a notice u/s. 148 of the Act was issued to the assessee on 30.3.2009. The assessee vide its reply dated 16.4.2009 submitted that return filed by it earlier may be treated as return filed in compliance to notice u/s. 148 of the Act. Statutory notice u/s. 143(2) was issued and served and in response thereto assessee s authorized representative attended the assessment proceedings and during the assessment proceedings AO noticed that the accommodation entries in the garb of share application money. Thus, the assesse has introduced its own undisclosed income in its books of accounts routing it through the entry providers. Hence, an amount of ₹ 15 lacs shown by the assessee as share application money received from various parties was treated as assessee s undisclosed income an accordingly the same was added u/s. 68 of the Act and completed the assessment at ₹ 88,88,130/- u/s. 147/143(3) of the Act vide order dated 24.12.2009. 4. Against the Order of the Ld. AO, assessee appealed before the Ld. CIT(A), challenging the validity of reassessment as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter No. Nil dated 16th April, 2009, on the above mentioned subject. As requested, the reasons for issuing the notice u/s. 148 is furnished as under:- In this case, assessment u/s. 143(3) of the Income Tax Act, 1961 was completed on 30.12.2004 at an income of ₹ 73,88,130/-. Subsequently, Information was received from the Directorate of Investigation Wing that certain persons were indulged in providing accommodation entries/ bogus share application money / bogus capital gain. In the course of enquiries before the Investigation Wing these persons had provided the details various persons to whom such accommodation / bogus entries were provided. Based on the enquired made, the Directorate of Investigation has provided the details of persons who were beneficiaries / entry operators of such accommodation / bogus entries in Delhi in the last 5-6 years. The investigation wing on the basis of enquiries conducted / information collected has sent the name and address and bank account of the beneficiary and the value of entry taken from different persons giving the accommodation entry. The names of entry giver and bank accounts through which the entry was given has also b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng whether the AO applied his mind to the materials that he talks about particularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the AO, if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the Assessee, which must have been tendered along with the return, which was filed on 14th November 2004 and was processed under Section 143(3) of the Act. Without forming a prima facie opinion, on the basis of such material, it was not possible for the AO 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 . In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the Assessee escaped assessment is missing in the present case. 13. Mr. Sawhney took the Court throu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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