TMI Blog2017 (8) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ther at para 2.1 of assessment order assessing officer himself mentions that purported transaction for purchase of PGSM Software module from M/s BT Technet Ltd., was provided vide bill dated 25.05.2004. In our considered opinion, this cannot be correct as actual invoice is dated 28.12.2003 a copy of which is placed in paper book. If we go by bill dated 25.05.2004 as observed by Ld.AO, alleged transaction would fall in the previous year relevant to assessment year 2005-06 and not in the year under consideration. Also assessing officer has proceeded with preconceived notion by blindly accepting statement of Sh. SK Gupta and entire finding is based on mere surmises and conjunctures without any application of mind. At this juncture it is pertinent to observe that reasons recorded are based on inferences of Ld. AO without there being any materials on record to support such inferences. In view of above discussions addition made by Ld.AO stands deleted. - Decided in favour of assessee. - ITA No. 6253/Del/2013 - - - Dated:- 24-3-2017 - SH. R. K. PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER For The Appellant : Dr. Rakesh Kupta, Sh. Somil Aggarwal, Advs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, 91, 990/-. In the meantime a search and seizure action took place at S.K. Gupta Group. Ld. AO records that during the course of search at 231, Gulmohar Enclave, one of the premises of Sh. SK Gupta, large number of incriminating documents were found. These documents included sale bills issued by M/s BT Technet Ltd., one of the companies of Sh. S.K. Gupta, to whom assessee had transaction for purchase of PGSM Software worth ₹ 52,50,000/- during year under consideration. It has been observed by Ld. AO that such bills of sales of PGSM Software to assessee were found pertaining to year under consideration from searched premises. Accordingly, jurisdiction over the case was transferred to circle. It has been recorded by Ld. AO that while concluding assessment proceedings of M/s BT Technet Ltd., it was proved on the basis of confessional statement of Sh. S.K. Gupta husband of Smt. Saroja Gupta, who was Director of M/s BT Technet Ltd., that no business activity other than accommodation entry business was being carried out by M/s BT Technet Ltd. Assessing Officer therefore, came to conclusion that there were reasons to believe that income, to that extent has escaped assessment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lars Invoice No/Bill No Dated Amount A-2I 74 BT Technet Ltd Schleicher India ltd PGSM Software Module 2003- 04/06/GL/08 4/7/03 1,83,600/- A-21 73 BT Technet Ltd Schleicher India ltd PGSM Software Module 2003- 04/06/GL/08 4/7703 1,83,600/- During the course of assessment proceedings of M/s BT Technet Ltd, statements of Shri S.K Gupta, Director and main person of the group were recorded. Based on these statements as well as other evidences brought on records, following inferences were drawn in said case i. It is proved beyond doubt on the basis of documentary evidences, confessional statement of Shri. S.K Gupta, the main person controlling the state of affairs of the assessee, husband of Smt. Saroj Gupta, director of the assessee company and results of the assessment that assessee is engaged in the accommodati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne business. So the income of the assessee from the accommodation entry business, is computed @ 2%, net rate on sale turnover and investment turnover in view of the assessee's statement coupled with prevalent market condition for such entries. No further to be allowed, as this is the net rate. In view of the above findings in the case of M/s BT Technet Ltd it is clear that the assessee is not made any genuine expense in the so called purchase of PGSM software module and rather took accommodation bills to the tune of ₹ 1,05,00,000/- .By doing so the assessee has inflated its expenses, so as to reduce its income. As such 1 have reasons to believe that this income of ₹ 1,05,00,000/- has escaped assessment, so in order to bring the same and also any other income chargeable to tax which has escaped assessment and which comes to the notice subsequently, proceedings are initiated under section 147/148 of IT Act 1961. 3. During the assessment proceedings, assessee was required to justify transaction with evidences like agreement for getting software from M/s BT Technet Ltd., need of software and details of applications of software for assessee s business. Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ials on record. He placed reliance upon the decision of Hon ble Delhi High Court in the case of DCIT vs Society of World Wide Inter Ban, Financial Telecommunication reported in 323 ITR 249 and decision of Hon ble Delhi High Court in the case of Pr.CIT vs. Sri Jai Shiv Shankar Traders Pvt.Ltd., reported in 383 ITR 448; ii) it has been submitted that the reasons for reopening is based on borrowed satisfaction as there is neither material in possession of assessing officer nor there is any independent application of mind. It has been submitted that assessment has been reopened merely on the statement of Sh. S.K. Gupta. Ld. Counsel placed his reliance upon decision of this Tribunal, Amritsar Bench, in the case of ITO vs. Arun Kumar Kapoor reported in 140 TTJ 249; iii) it is submitted by Ld. Counsel that reopening cannot be permitted on the basis of documents found during the course of search. He submitted that if the action under section 147 is permitted on the basis of material found in the course of search, then provisions of section 153 would be redundant. He placed reliance upon the decision of (Lucknow decision). He placed reliance on the decision of this Tribunal, Lucknow B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rns have been filed by assessee in response to notice under section 147 of the Act. 13. We have produced the submissions advanced by both sides in the light of records placed before us and judgments relied upon by Ld. Counsel. 14. Admittedly in the present case assessment has been reopened on the basis of search and seizure action at the premises of SK Gupta Group Companies. At this juncture, we agree with submissions made by Ld. Counsel that on receipt of information received on the basis of search and seizure operation, assessing officer should have followed procedure under section 153C, instead of reopening the assessment u/s 147. Further it is observed that the reopening has been done on the basis of reasons recorded on incorrect facts. That being so the reasons are in fact no reasons at all. This view find support from the decision of Hon ble Punjab and Haryana High Court in the case of CIT Versus Atlas Cycles Industries reported in 180 ITR 319. On these counts itself notice issued under section 147 of the Act initiating reassessment would not stand the test of law. 15. Further on merits, material based on which assessment has been reopened are two invoices, amounting ..... 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