TMI Blog2017 (11) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee : Shri Premjit S. Kashyap, C.A. For The Revenue : Shri Kaushlendra Tiwari, Sr. D.R. ORDER This appeal by assessee has been directed against the order of the Ld. CIT(A), Aligarh, dated 11th January, 2017 for A.Y. 2009-2010. 2. Briefly the facts of the case are that assessee filed its original return of income on 16th September, 2009 at ₹ 1,66,990 at Meerut. Later on, information was received from DIT (Inv.), New Delhi that search under section 132 of the Act had been conducted by the Investigation Wing, New Delhi, in the case of Shri S.K. Jain group of cases, who have provided accommodation entry at ₹ 9 lakhs to the assessee company. On the basis of this information, action under section 147 was taken. Notice under section 148 of the I.T. Act was issued on 3rd July, 2013 by Income Tax officer, Ward-1(1), Ghaziabad. The case of the assessee-company was transferred to ITO, Ward-1(1), Meerut being jurisdiction lies with this Ward. The A.O. after completing the re-assessment proceedings on merit, made addition of ₹ 9 lakhs under section 68 of the I.T. Act vide re- assessment order under section 147/143(3) of the I.T. Act, dated 31st March, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, creditworthiness and. the source of the money ultimately received by the beneficiaries. In the instant ease, the assessee is found to be the beneficiary of accommodation entry of ₹ 9,00,000/- from such entry operators controlled by Shri Surendra Kumar Jain group during the F.Y. 2008-09 relevant to assessment year 2009-10 as per the specific detail of transaction. The transactions made by the above referred concerns are without-any security and this company is not much known in the market, therefore, any transaction made by the above referred company is without any credence and is beyond human probability. The assessee has received unexplained sums from the entry operators as -per the above detail as per information available with the undersigned. As explained above, the identity, creditworthiness and genuine-ness of the transactions with the persons found to be entry operators cannot be established. I, therefore, have reason to believe that on account of failure on the part of the assessee to disclose fully and truly-all. material facts necessary for the above assessment year, the income chargeable to tax to the extent of entry mentioned above for A.Y. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 148. The identical issue have been considered by Division Bench of ITAT, Agra Bench in the case of S.N. Bhargava vs. ITO reported in (2014) 147 ITD 306 in which in paras 8 and 9 it was held as under : 8. We have considered the rival submissions and the material available on record. The assessee in the paper book filed letter issued by ITO 3(4), Mathura dated 08.12.2003 at page 8 of the paper book, in which same facts have been recorded regarding reopening of assessment by AO at Agra and thereafter transferred the case to him at Mathura. Copy of reasons are filed at page 9 of the paper book, which tally with the reasons supplied by the ld. DR from the record. Copy of the reasons supplied by the ld. DR are reproduced as under : An information has been received from the DDIT(Inv.), Gurgaon vide letter F.No.DDIT(Inv.)/GGN/02-03 dated 12.03.2003 regarding transaction of shares resulting into Long Term Capital Gains that has been found bogus as a result of inquiries made by the said Wing. On inquiries it has been found that the bank a/c from which money has been transferred to various beneficiaries have been operated by certain stock brokers, who have been prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 13.01.2004 with the approval of Addl. CIT, Range-3, Mathura and the same was served upon the assessee. The Assessing Officer has nowhere recorded in the assessment order if any fresh reasons have been recorded at Mathura before issuing notice u/s. 148 on dated 13.01.2004. The AO merely recorded in the assessment order that fresh notice u/s. 148 was issued on 13.01.2004 with the approval of additional CIT, Range-3, Mathura, but there is no whisper of recording any fresh reasons at Mathura by the present AO in the assessment order. Even the ld. DR during the course of arguments, when produced assessment records before us, accepted that there is no other reasons recorded by the AO at Mathura. It was, therefore, clearly proved that the AO at Mathura merely acted upon the reasons recorded at Agra, copy of which is placed on record and was also supplied to the assessee (PB- 9). In the aforesaid reasons, it is clear that the AO has nowhere recorded the necessary ingredients of section 147 of the IT Act that the AO has reason to believe that any income chargeable to tax has escaped assessment for the assessment year under appeal. Further, the reasons have not been recorded by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer had allowed depreciation on the capital value of the plant and machinery. On noticing this fact, the Assessing Officer of the assessee initiated proceedings under section 147 of the Act and made an addition to the income of the assessee. The Commissioner (Appeals) upheld the addition made by the Assessing Officer for the assessment years 1996- 97 and 1997-98 but deleted the addition made by the Assessing Officer for the assessment years 1998-99 and 2001-02. On the finding that that the reassessment proceedings had been initiated on borrowed satisfaction and that the lease agreements being operating leases the assessee was the owner of the leased assets which were leased out to the lessee company for a rent and thereby the assessee was also a user of the assets, the Tribunal held that the assessee was entitled to depreciation under section 32 of the Act. On appeals : Held, (i) that the reassessment proceedings had been initiated only on account of the opinion of the Assessing Officer of the lessee and the Tribunal was right in fixing that it was borrowed satisfaction which was not sufficient to confer power on the Assessing Officer to initiate reassessment pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons to believe that income chargeable to tax has escaped assessment in his jurisdiction and such facts are also not mentioned in the reasons recorded for reopening of assessment. The ITO, Ward-1(1), Meerut, did not do anything in the matter and merely followed the reasons recorded by ITO at Ghaziabad and that he has initiated the proceedings under section 148 against the assessee on borrowed satisfaction of ITO, Ghaziabad. He has also not examined any record of the case or information received from Investigation Wing. The A.O, Meerut did not record any reason for reopening of the assessment under section 148 of the I.T. Act. The reasons which are not in accordance with law, have been recorded at Ghaziabad by the ITO who was not authorised to do so and was having no jurisdiction over the assessee and the ITO having jurisdiction over the assessee at Meerut did not do so and merely acted on the above borrowed satisfaction of ITO, Ghaziabad. In my view, the initiation of re- assessment proceedings under section 147 of the I.T. Act is clearly bad in law and against the provisions of Law. The ITO at Meerut has, therefore, not validly assume the jurisdiction to initiate the re- assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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