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2016 (11) TMI 589 - ITAT DELHI

2016 (11) TMI 589 - ITAT DELHI - TMI - Validity of reopening of assessment - Held that:- We have to necessarily conclude that the reasons were recorded without application of mind. Therefore, on this ground itself, the reopening of assessment has to be held bad in law by following the judgements of the jurisdictional High Court in the case Signature Hotels Pvt. Ltd. vs. ITO (2011 (7) TMI 361 - Delhi High Court ) wherein it was held that notice issued based on a report from Investigation Wing is .....

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the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the reassessment u/s 147 and that too without recoding valid reasons and without obtaining valid approval as per law and without complying with mandatory condition of section 147 to 151 as envisaged under the law. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of ₹ 20,00,000/- on ac .....

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any case impugned addition is beyond the scope and jurisdiction of the impugned assessment order. 4. That impugned assessment order and addition made therein are not sustainable on various legal and factual grounds and impugned assessment order has been passed on incorrect facts and findings and without confronting adverse material and without providing opportunity of cross examination and the same has been passed in violation of principles of natural justice. 5. That having regard to the facts .....

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He has recorded the reasons for reopening the assessment as follows:- A search operation u/s 132 of the Income-tax Act, 1961 was conducted at the office premises of Shri Tarun Goyal, Charted Accountant at 13/34, WEA, Arya Samaj Road, Karol 8agh, New Delhi by the Investigation Wing of Delhi on 15.09.2008. During the course of search operation, it was established that Shri Tarun Goyal has floated about. 90 companies for the purpose of providing accommodation entries. The Directors of these compani .....

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f Shri Tarun Goyal were recorded on oath after summons were issued to them, The auditors of various companies run by Shri Tarun Goyal have confirmed that they had no knowledge about the directors of the companies and all the audits were done at the instructions of Shri Tarun Goyal A detailed report inclosing therewith the list of beneficiaries of accommodation entries sent from the Addl. Directors of Income Tax (lnv.) , Unit-IV, ARA Centre, E-2, Jhandewalen Extn., New Delhi. Vide letter bearing .....

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above, I have reason to believe that income at least to the tune of 20.00 lakh for above assessment year had escaped assessment. Further, l am also satisfied that on account of failure on the part of the assessee to disclose truly and fully all the material facts necessary for the above assessment year, the income to the tune of ₹ 20.00 Lakh has escaped assessment within the meaning the section 147 of the Income Tax Act, 1961. Since, four years has expired from the end of the relevant ass .....

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ment has to be held bad in law by following the judgements of the jurisdictional High Court in the case Signature Hotels Pvt. Ltd. vs. ITO 328 ITR 51 (Del) wherein it was held that notice issued based on a report from Investigation Wing is invalid where the AO does not examine the evidence. The Hon ble jurisdictional High Court in the case Principal Commissioner of Income Tax vs. G & G Pharma India Ltd. in ITA no. 545/2015 vide order dt. 8.10.2015 at para 12 and 13 held as follows. 12. In th .....

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ation 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 ITA No. 3602/Del/2010 C.O. No. 276/Del/2010 A.Y. 2000-2001 M/s Bawa Float Glass Limited 3 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 w .....

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