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2016 (4) TMI 1141 - ITAT DELHI

2016 (4) TMI 1141 - ITAT DELHI - TMI - Validity of reopening u/s 147 - Held that:- The reasons to believe recorded by the Assessing Officer in the present case to initiate the proceedings under sec. 147 of the Act without application of her own mind on the information received were not as per the requirement of the provisions of the law laid down under sec. 147 of the Act, hence, the initiation of the proceedings was not valid and nor the assessment made in furtherance to the said initiation of .....

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s have been raised in this appeal : 1. That on the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals)-XXXIII, New Delhi erred in rejecting appellant s contention that assessment order made by Assessing Officer was bad in law and void abinitio. 2. That without prejudice, on the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals)-XXXIII, New Delhi erred in upholding the assumption of Jurisdiction u/s 147 by the Assessing Of .....

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t towards Sale of Investment in share as income u/s 68 of the Income Tax Act, 1961 despite several judicial pronouncements to the effect that section 68 was not applicable in such a situation. 2. From the above grounds it is gathered that main grievance of the assessee relates to the validity of reopening u/s 147 of the Income Tax Act, 1961 (hereinafter referred as the Act). 3. Facts of the case in brief are that the assessee filed the return of income on 26.10.2004 declaring an income of ₹ .....

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ce, the assessee filed the return of income on 25.4.2011 declaring the same income which was disclosed in the original return filed on 4.10.2004. The assessee also filed objection on 5.9.2011 against the initiation of proceedings u/s 147 of the Act but the same were rejected by the AO. Thereafter, the AO framed assessment by making addition of ₹ 9,00,000/-, at an income of ₹ 9,90,950/-. 4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and challenged the validity o .....

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ITA no. 4514/Del/2013 for the assessment year 2004-05 copy of the said order was furnished. It was stated that the facts of the present case are identical to the facts involved in the aforesaid case, the only difference is that in the said case the addition made was of ₹ 25,00,000/- while in the assessee s case the addition made in the similar circumstances was of ₹ 9,00,000/-. In his rival submissions, the Ld. DR strongly supported the orders of the authorities below and also state .....

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ated by the ITAT Delhi Bench G New Delhi vide order dated 11 March, 2016 and the relevant findings have been given in para 6 to 8 of the said order which read as under : 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 C .....

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. 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 in its bank account by way of above accommodation entries. The above conclusion is unhelpful in understanding whether the A.O. 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 provide .....

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e 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 Hon'ble Supreme Court in the decisions discussed hereinbefore, the basic requirement that the A.O. 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 throug .....

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he materials, conclude that he has reason to believe that income of the assessee has escaped assessment. Unless that basic jurisdictional requirement is satisfied, a post mortem exercise of analyzing materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. 14. In the circumstances, the conclusion reached by the ITAT cannot be said to be erroneous. No substantial question of law arises. 7. Now, we have to examine the reasons recorded .....

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2. As per the information received from the ACIT, Central Circle- 19, New Delhi, a survey operation was conducted in the S.K. Gupta group of cases on 20.11.2007, Arunachal Building, 19-Barakhamba Road, New Delhi-1100 01 and 1007-1008, Arunachal Building, 19- Barakhamba Road, New Delhi-1100 01. During the course of survey proceedings several ledger accounts maintained in Tally for the F.Y. 2003-04, besides various other documents/accounts were found. Further, during the course of survey & as .....

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rns. Then he used to route the entries through two to four accounts of these shell companies/concerns before ultimatelytransferring same to the bank accounts of tire beneficiaries to give the color of genuineness to these transactions. 3. Further, as per the information received from the ACIT, Central Circle-19, New Delhi, M/s. Sunaina Towers Pvt. Ltd. has received amount of ₹ 25,00,000 vide cheque no. 778926 dated 10.10.2003, from the Federal Bank account of M/s. Chanderprabhu Financial S .....

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l of the reasons, it is apparent that these were based on the information received from ACIT, Central Circle-19, New Delhi after narration of which, the Assessing Officer has simply recorded that she has reason to believe that amount/income of ₹ 25 lacs has escaped assessment for the assessment year 2004-05 for failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment within the meaning of sec. 147 of the Income-tax Act, 1961. Notice un .....

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entries were provided is known, it would not have been difficult for the Assessing Officer, 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. 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 .....

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