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Touch Wood Projects Pvt. Ltd. Versus ITO, Ward-16 (3) , New Delhi

Reopening of assessment - accommodation entry receipt - Held that:- It is admitted fact that in Para 3 of the reasons recorded the A.O alleged that the entries has to ₹ 85.5. lakhs have been taken during Assessment Year 2003-04 and he is intending to initiate re-assessment proceedings for Assessment Year 2003-04 which is clear non application of mind. In Para 4 also the A.O alleged that the assessee has back unaccounted money of 85.50 lakhs in its business through he accommodation entry an .....

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s and acquisition, we Assessment Year of the considered view that the A.O initiated re-assessment proceedings u/s 147 of the Act and issue notice u/s 148 of the Act in a mechanical and casual manner and by considering the irrelevant and incorrect facts and thus assumption of jurisdiction for initiation of re-assessment proceedings and issuance of notice u/s 147 and 148 of the Act cannot be held as valid and thus we are inclined to quash the same. - Decided in favour of assessee - I.T.A .No. 6319 .....

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nts of both the sides on the application of the assessee dated 16/9/2114 filed under Rule 11 of the Income Tax Appellate Tribunal Rules 1963 for admission of additional grounds. 4. The Ld. Counsel submitted that the ground raised along with the original appeal have not been properly wordings in as much as the grievance of the assessee cannot reopening of assessment, though referred to in the grounds is not coming out clearly. The Ld. Counsel further pointed out that in this situation the appella .....

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hat income has escaped assessment nor there was any application of mind before assumption of jurisdiction. 3. That in the facts and circumstances of the case, the CIT(A) erred in upholding the addition of ₹ 50,89,210/- made u/s 68 & 69C of the Act. 5. The Ld. Counsel pointed out that in view of decision of Hon'ble Supreme Court in the case of NTPC Ltd. Vs. CIT 229 ITR 383 (Hon'ble Supreme Court) the Tribunal has vide powers in appearing the additional ground and if it is found .....

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s. However, on specific query from the fact, the Ld. Dr clearly accepted that the assessee challenged the initiation of reassessment proceeding and notice u/s 147 &148 of the Income Tax Act 1961(for short the Act) by way of raising Ground No. 1 before the CIT(A). 7. On careful consideration of above submissions decided from outside, we observe that in the grounds of appeal filed before the Tribunal at the time of filing of appeal the issue of challenging the noticed of initiation of re-asses .....

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espectfully following the same we are of the considered view that the additional grounds raised by the assessee deserve to be admitted and hence we admit the same accordingly application of the assessee for admission of additional ground is allowed. 8. We have heard argument of both the sides on the additional grounds as mentioned hereinabove and carefully perused the relevant material placed on record inter-alia assessment order impugned of the CIT(A) and papers submitted along with appeal incl .....

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in the case of CIT Vs. Suren International Pvt. Ltd 257 ITR 24(Del), the initiation of re-assessment proceedings and notice u/s 147 & 148 of the Act being void ab initio should be quashed. 10. The Ld. Counsel also pointed out that in the reasons recorded except for generation modus operandi of the alleged entry operator, there is nothing which can be said to create or provide nexus to believe that the appellant had introduced its own unaccounted income in the form of share capital. The Ld. .....

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of Signature Hotels Pvt. Ltd Vs. ITO 338 ITR 51(Delhi) and CIT Vs. G. G. Pharma India Ltd. order dated 8/10/2015 in ITA No. 545/2015 submitted that the re-opening has to be quashed for the reason that such reasons cannot be based on any tangible material and while the reasons has been recorded without application of mind in mechanical manner then re-opening of assessment and initiation of proceedings u/s 147/148 of the Act deserves to be quashed. The Ld. Counsel again pointed out that in the re .....

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al period was 50.33 lakhs and thus it is amply clear that the Assessing Officer recorded reasons without application of mind in a mechanical manner which cannot be sustained and held valid for issuance of notice and initiation of re-assessment proceedings u/s 147 & 148 of the Act. 12. The Ld. Counsel again took us through the decision of Hon'ble High Court in the case of Signature Hotels (Supra) and submitted that reason to believe did not refer to any statement of alleged entry operator .....

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g to the above the Ld. Dr strongly supported the action of the A.O. However, she fairly admitted that there are factual arising in the reasons recorded and present case is pertaining to Assessment Year 2003-04 whereas the Assessing Officer in Para 3 of the reasons recorded the alleged that the entries amounting to ₹ 85.50 lakhs have been taken during the Financial Year 2003-04 from group of operators which is relevant to Assessment Year 2004- 05. 14. On careful consideration of above submi .....

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ry racket being operated by various groups of operators. The investigation wing has compiled a report <£L data of the beneficiaries of such entries. I have gone through the report and data sent by the investigation wing. The report clearly indicates that accommodation entries have been taken to plough back unaccounted black money for the purpose of business or for personal needs such as purchase of assets etc., in the form of gifts, share application money, loans etc and even describes .....

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ntry giving account This list contains the name of M/s Touchwood Projects P. Ltd. which has taken entries in its accounts in Corporation Bank. Pitampura. The entries amounting to TC85.50 lacs have been taken during the financial year 2003-04 from Group of Operators who were operating from SBP Darya ganj and SBBJ NRR and belong to group of MUKESH GUPTA ALONG WITH HIS CLOSE CONFIDANTES RAJAN JASSAL AND SURINDER PAL SINGH. Investigation Wing has made comprehensive enquiry into bank accounts of thes .....

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ed to tax are being ploughed back to business without paying due tax on it. In view of the above facts, I have reasons to believe that income to the tune of ₹ 85.50Lacs, of the assessee company for AY 2003-04, has escaped assessment. Since the assessment for the year has been completed u/s. 143(3) of Act therefore in accordance with the provisions of section 151 of I T Act, sanction for issue of Notice u/s 14S of the Act is being sought from the CIT, Delhi-VI, New Delhi. 15. From careful r .....

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