TMI Blog2016 (10) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Per H. S. Sidhu, J. M. The Assessee has filed these two Appeals against the separate Orders both dated 30.1.2013 of the Ld. CIT(A)-XI, New Delhi pertaining to assessment years 2003-04 2004-05. Since the issues involved in these appeals are common, therefore, the same are being consolidated by this common order for the sake of convenience, by dealing with ITA No. 1945/Del/2013 (AY 2003-04). 2. The following grounds raised in ITA No. 1945/Del/2013:- 1. That the Id. CIT(A) had erred on facts and under the law in not admitting the additional evidence as filed before her. 2. That the provisions of section 147/148 of the I.T. Act were not applicable to the facts of Assessee's case and therefore, the issue of notice u/s 147/148 was illegal and consequently, the impugned assessment order as passed u/s 147/143(3) is unlawful and unjust and therefore the same deserved to be annulled/cancelled. 3. That without prejudice to ground No.2 above, no justification subsisted on the part of the Ld. AO in making an additions aggregating at ₹ 83,15,000/- u/s 68 of the I.T. Act on account of alleged unexplained cash credits and the same ought to have been d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to M/s Shruti Fastners Ltd on 22.3.2010 after recording reasons for issue of notice, as required by Section 143(2) of the Act. The necessary approval as required by Section 151 of the Act was obtained before issue of the notice. The assessee filed a letter stating that the original return of income filed at a total income of ₹ 14,10,933/- be treated as returned filed in compliance with notice issued u/s. 148 of the Act. In response to the notice u/s. 142(1) of the Act, the Assesee s Director attended the hearing from time to time. In this case information was received from the Directorate of Investigation (Inv.-I), New Delhi that the assessee has received an accommodation entry of ₹ 5.82 crores into its bank account from different companies/ concerns during the financial year 2002-03 relevant to assessment year 2003-04 so as to introduce its unaccounted money into its account. Thereafter, considering the reply of the assessee, AO passed an order u/s. 147/143(3) of the I.T. Act, 1961 on 30.11.2010 assessing the total income of ₹ 97,25,933/-. 5. Against the Order of the Ld. AO, assessee appealed before the Ld. CIT(A), who vide impugned order dated 30.1.2013 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of G G Pharma India Ltd vs. ITO (Supra). In this regard, he filed the copies of the aforesaid decisions before the Tribunal. In view of the above, he requested that by following the aforesaid precedents the reassessment proceedings of the AO may be quashed by accepting the Appeal filed by the Assessee. 8. On the contrary, Ld. DR relied upon the orders passed by the authorities below and stated that the AO has properly recorded the reasons for reopening by due application of mind, hence, the appeal of the Assessee may be dismissed. 9. We have heard both the parties and perused the relevant records available with us, especially the orders of the revenue authorities and the case laws cited by the assessee s counsel. For the sake of clarity, we would like to reproduce the reasons recorded for reopening the case as under:- Information from the office of the DIT(Inv.)-I, New Delhi has been received that the assessee M/s Shruti Fastners Ltd. has received an accommodation entry of ₹ 5.82 crores. Into its bank account from different companies / concerns during the financial year 2002-03 relevant to assessment year 2003-04 so as to introduce its unaccounted money into its ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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 through the order of the CIT(A) 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 AO has to, applying h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or evidence that prima facie showed or established nexus or link which disclosed escapement of income. The annexure was not a pointer and did not indicate escapement of income. (iv) Further, the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. There was no dispute that the company, S, had a paid up capital of ₹ 90 lakhs and was incorporated on January 4, 1989, and was also allotted a permanent account number in September 2001. Thus, it could not be held to be a fictitious person. The reassessment proceedings were not valid and were liable to the quashed. 10. In view of above, we are of the considered view that the aforesaid issue in dispute is exactly the similar and identical to the issue involved in the present appeal and is squarely covered by the aforesaid decisions of the Hon ble High Court of Delhi in the case of G G Pharma (supra) Signatures Hotels (P) Ltd. (Supra). Hence, respectfully following the above precedents in the case of Pr. CIT-4 vs. G G Pharma India Ltd. (Supra) and Signature Hotels (P) Ltd. vs. ITO, we decide the legal issue in dispute in favor of the Assessee and against t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
