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TMI Blog2017 (4) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in confirming the action of the AO in framing the reassessment at an income of Rs. 1,01,71,582/- as against the loss returned by the appellant at Rs. 5,60,88,663/- which is arbitrary, illegal and against the provisions of law." 2. The brief facts of the case are that the assessee filed the return decalring loss of Rs. 5,60,88,663/- on 30.10.2004 and the same was processed on 15.3.2005. The case was assessed u/s. 143(3) of the I.T. Act, 1961 on 27.12.2006 at NIL income after adjustment of b/f losses amounting to Rs. 35,21,582/-. Subsequently, the AO after recording reasons in writing and taking approval from the competent authority issued notice u/s. 148 of the I.T. Act, 1961 on 25.3.2011. In response thereto, the assessee raised some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arely covered in favour of the assessee by the ITAT decision dated 09.01.2015 in the case of G&G Pharma India Limited vs. ITO passed in ITA No. 3149/Del/2013 (AY 2003-04) in which the Judicial Member is the Author. He further stated that the above decision of the ITAT dated 09.01.2015 has been upheld by the Hon'ble Jurisdictional High Court in its Decision dated 08.10.2015 in ITA No. 545/2015 in the case of Pr. CIT-4 vs. G&G Pharma India Ltd. 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. 6. On the contrary, Ld. DR relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk accounts through which the entry was given has also been informed by the investigation wing, M/s Premier Poly Film Ltd. The assessee has introduced his own undisclosed income in the garb of share application money through Division Trading Pvt. Ltd., Right Choice Construction Pvt. Ltd. Labh Tronices Overseas Pvt Ltd., Webnet System Pvt. Ltd., Mestro Mart and Pvt. Ltd., Tashi Contractors Pvt. Ltd. Fair N. Square Export Pvt. Ltd., Arun Finvest Pvt. Ltd., Ethnic Creation Pvt. Ltd. Rajkar Electricals Pvt. Ltd., Manu Agencies, Dignity Finvest Pvt. Ltd. and Ramesh Kumar. Therefore, the assessee has deliberately furnished wrong facts at the time of filing of return, the details of which are enclosed as per Annexure 'A'. In view of the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the case of the assessee, we are of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. Our view is fully supported by the following judgment/decision:- Pr. CIT vs. G&G Pharma India Ltd. in ITA No. 545/2015 dated 8.10.2015 of the Delhi High Court wherein the Hon'ble Court has adjudicated the issue as under:- "12. In the present case, after setting out four entries, stated to have been received by the Assessee on a single date i.e. 10th February 2003, from four entities which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the AO stated: "I have also perused various materials and report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als 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 his mind to the materials, conclude that he has reason to believe that income of the Assessee has escaped assessment. Unless that basic jurisdictional requirement is satisfied a post mortem exercise of analysing materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity . 14. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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