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TMI Blog2015 (11) TMI 1535X X X X Extracts X X X X X X X X Extracts X X X X ..... at the above named assessee is a beneficiary of accommodation entries received from certain established entry operator identified by the Wing during the period relevant to A.Y. 2004-05. A comprehensive investigation was carried out by the Investigation wing for identification of entry operators engaged in the business of money laundering for the beneficiaries and on the basis of investigation carried out and evidences collected, a report has been forwarded. I have perused the information contained in the report and the evidences gathered. The report provides details of the modus operandi of the 'money laundering scam' and explains how the unaccounted money of the beneficiaries are ploughed back in its books of account in various forms including the form of bogus share capital/ capital gains etc after routing the same through the bank account (s) of the entry operators. Entry operators were identified after thorough investigation on the basis of definite analysis of their identity, creditworthiness and the source of the money ultimately received by beneficiaries. These entry operators are found to be mostly absconding/ non-complying after the unearthing of the 'Money Lau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, the identity, creditworthiness and genuineness of transactions with the persons found to be entry operators cannot be established. I therefore have reasons to believe that the income chargeable to tax amounting to Rs. 22,00,000/-, which is the assessee's own income, has escaped assessment within the meaning of Section 147 of the Act. Since four years have since expired from the end of the relevant assessment year, and no scrutiny assessment was completed in the case of the assessee for the said assessment year, the reasons recorded above for the purpose of reopening of assessment are put up for kind satisfaction of Addl. CIT, Range -15, New Delhi in terms of Section 151 of the Act." 3. As per the AO, the reasons as reproduced above were provided to the assessee along with the notice u/s 148. However, the assessee made no compliance to the notice. It however furnished the copy of ITR acknowledgement which was treated as return filed in compliance to the notice u/s 148. As per the AO, the assessee had also furnished copies of share application forms, certified copies of confirmations containing details of amounts invested, copies of PAN card etc. in support of its claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to proceed u/s 147 and 148 of the Income Tax Act, 1961. Ld. Counsel vehemently contended that the copy of the reasons recorded given to the assessee clearly shows that the AO simply proceeded in a mechanical manner and that there was a clear lack of application of independent mind by the AO prior to the issuance of notice u/s 148 of the Act, 1961. Ld. Counsel for the assessee has placed his reliance on the following decisions:- 1. ACIT, Faridabad vs. Shri Devesh Kumar in ITA No. 2068/Del/2010 of the ITAT Delhi Bench B. 2. G&G Pharma India Limited vs. ITO, Ward 12(1), New Delhi in ITA No. 3149/Del/2013 of ITAT Delhi Bench "C". 3. ITA No. 545/2015 in the case of Pr. Commissioner of Income Tax-4 vs. G&G Pharma India Ltd. of the Hon'ble Delhi High Court which has affirmed the judgment of the ITAT Delhi "C" Bench in ITA No. 3149/Del/2013. 7. Ld. DR on the other hand supported the order of the Ld. CIT(A) and stated that the AO had reopened the case on the basis of various documentary evidences relating to the assessee and submitted that the AO has rightly reopened the case of the assessee on the basis of such documentary evidences. Ld. DR also submitted that the decisions r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year or alternatively notwithstanding that there has been no omission or failure as mentioned above on the part of the assessee, the ITO has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year. Unless the requirements of cl. (a) or cl. (b) of S. 147 are satisfied, the ITO has no jurisdiction to issue a notice under S. 148." The Supreme Court concluded that it was not satisfied that the ITO had any material before him which could satisfy the requirements under Section 147 and therefore could not have issued notice under Section 148. 10. In ACIT v. Dhariya Construction Co.(2010)328 ITR 515 the Supreme Court in a short order held as under: "Having examined the record, we find that in this case, the Department sought reopening of the assessment based on the opinion given by the DVO. Opinion of the DVO per se is not an information for the purposes of reopening assessment under s. 147 of the IT Act, 1961. The AO has to apply his mind to the information, if any, collected and must form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained that the ratio of the decision in Phool Chand Bajrang Lai (supra) may not be entirely applicable since the same was in respect of Section 147(a) as it existed prior to the amendment." 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, from four entities which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the AO stated : "I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company has introduced its own unaccounted money it its bank account by way of above accommodation entries." The above conclusion is unhelpful in understanding 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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