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M/s. Remarkable Estates Pvt. Ltd. Versus Asstt. Commissioner of Income Tax, Circle -23, New Delhi

Validity of reopening of assessment - Held that:- Assessing Officer has not applied his mind while recording the reasons to believe that the income escaped the assessment and he has acted only in a mechanical manner. Thus, the reassessment proceedings completed under Section 147 r.w.s. 143 of the Act in the present case in question are thus, held as void-ab-initio. - Decided in favour of assessee - ITA No. 4515/Del/2013 - Dated:- 16-8-2016 - SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. O.P. KANT, ACC .....

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y Assessing Officer was bad in law and void ab-initio. 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 Officer and in making the assessments in pursuance thereof. 3. That on the facts and circumstances of the case and in law, the Commissioner of Income Tax(Appeals)-XXXIII, New Delhi erred in confirming the addition of ₹ 20lac .....

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add, amend, alter or vary all or any grounds of appeal on or before the date of hearing of the appeal. 2. The facts in brief are that the assessee filed its return of income at ₹ 90,250/- on 26.10.2004. Subsequently, on the basis of information received from the ACIT, Central Circle -19, New Delhi in March, 2011, the Assessing Officer initiated proceedings under Section 147 of the Income-tax Act, 1961 (for short the Act ) and being not satisfied with the explanation of the assessee regardi .....

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he present appeal before the ITAT. 3. At the outset of hearing, learned Authorized Representative of the assessee submitted that in the case, reassessment proceedings were initiated under Section 147 of the Act by way of issuing notice under 148 of the Act on 30th March, 2011 after recording reasons for reopening of the assessment. The reassessment proceeding was challenged before the learned Commissioner of Income Tax (Appeals), however, could not succeed, and thus, the assessee has challenged .....

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Section 147 was held invalid, as under: i. M/s. Sunaina Towers Pvt. Ltd., ITA No. 4514/Del/2013, dated 11.03.2016 for AY : 2004-05 ii. M/s. Anupam Towers Pvt. Ltd., ITA No. 4516/Del/2013, dated 17.05.2016 for AY: 2004-06 iii. M/s. Vasundra Promoters Pvt. Ltd., ITA No. 4014/Del/2014, dated 28.04.2016 for AY : 2004-05 iv. M/s. Westland Developers Pvt. Ltd., ITA No. 4984/Del/2013, dated 28.06.2016 for AY: 2004-05 5. Accordingly, he requested that the reassessment proceedings in the instant case al .....

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ribunal cited by the assessee in the case of sister concerns of the assessee company. We find that in the case of M/s. Sunaina Towers Pvt. Ltd. (supra), reasons recorded have been reproduced in para 7 of the order, which are as under: 7. Now, we have to examine the reasons recorded in the present case before us in view of the ratios laid down in the above cited decision of the Hon'ble jurisdictional High Court recently pronounced on 08.10.2015 to verify the contention of the Learned AR that .....

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01 and 1007-1008, Arunachal Building, 19- Barakhamba Road, New Delhi-110001. 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 & assessment proceedings. Sh. S.K. Gupta admitted that he had been providing accommodation entries to various persons/beneficiaries through a large no. of shell companies/concerns floated by & effectively controlled by .....

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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 escape .....

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parent 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 under sec. 148 of the Act ha .....

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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 way of accommodation entri .....

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ing any exercise of her mind on those information to form her own reasons to believe for the escaped assessment of ₹ 25 lacs, has issued notice under sec. 148 of the Act. We, respectfully following the ratios laid down by the Hon ble jurisdictional High Court of Delhi in the case of CIT vs. G&G Pharma India Ltd. (supra), hold 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 .....

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case, we find that the copy of the reasons recorded has been reproduced by the learned Commissioner of Income Tax (Appeals) in para 3.3 of the impugned order, which we are reproducing for the purpose of clarity as under: 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, Ne .....

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or in different branches, in the names of these shell companies/concerns. After receiving cash from the beneficiaries, Sh. S.K. Gupta used to deposit the same in the bank account of one of the these shell companies/concerns. Then he used to route the entries through two to four accounts of these shell companies/concerns before ultimately transferring same to the bank accounts of tire beneficiaries to give the color of genuineness to these transactions. 3. Further, as per the information receive .....

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