TMI Blog2016 (3) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... t is evident in the reasons recorded, reproduced hereinabove, the Assessing Officer has simply recorded the information received from her colleague and without making any exercise of her mind on those information to form her own reasons to believe for the escaped assessment has issued notice under sec. 148 of the Act. Hence, the initiation of the proceedings was not valid and nor the assessment made in furtherance to the said initiation of the proceedings - Decided in favour of assessee - ITA No. 4514/Del/2013 - - - Dated:- 11-3-2016 - SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER Appellant by : Shri M.P. Rastogi, Adv. Respondent by : Smt. Anima Banwal, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER This appeal has been filed by the assessee against the order dated 27.05.2013 of Ld. CIT(A)-XXXIII, New Delhi for Assessment Year 2004-05 on the following grounds of appeal:- 1. That on thefacts 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 ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ec. 147 of the Act is bad in law. 4.1 The Learned AR contended further that there was no application of her own mind by the Assessing Officer for formation of belief herself that income had escaped assessment as it is very much evident from the reasons recorded that her action was solely based upon the information received from her colleague. 4.2 In support, the Learned AR referred the contents of the reasons recorded and reproduced at page No.2 of the assessment order. 4.3 The Learned AR submitted that there was no application of mind by the Assessing Officer is evident from the telltale evidence on record. While the reasons were recorded on the belief that Chanderprabhu Finance Services (P) Ltd./Chanderprabhu Financial Security Ltd. deposited ₹ 25 lacs which was construed/conceived to be in the nature of income by labelling it as an accommodation entry, the facts are altogether different in as much as the sum of ₹ 25 lacs was the sale proceeds of 2,50,000 shares of KKP Construction Ltd. @ ₹ 10 per share. The transaction was not a deposit by Chanderprabhu Financial Services Pvt. Ltd. but was the sale proceeds in respect of the sale of shares. He also r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence to the manner in which those very entries were provided in the accounts of the assessee, which must have been tendered along with the return, which was filed on 14th November 2004 and was processed under sec. 143(3) of the Act. Without forming a prima facie opinion, on the basis of such material, it was not possible for the A.O. 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 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 through the order of the Learned CIT(Appeals) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineness 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 Services/Chanderprabhu Finance securities Ltd., a shell company/concern floated/controlled by Shri S.K. Gupta. 4. In view of the above, I have reason to believe that amount/income of ₹ 25,00,000 has escaped assessment for the A.Y. 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 section 147 of the Income-tax Act, 1961. 5. Issue notice u/s. 148 of the Income-tax Act, 1961. 8. The very perusal 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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