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Anant Concrete Products Pvt. Ltd. Versus The Income Tax Officer Ward-1 (1) , Meerut

2017 (11) TMI 517 - ITAT DELHI

Reopening of assessment - addition us 68 - jurisdiction of ITO over the assessee - Held that:- Considering the facts of the case in the light of decision in the case of Shri S.N. Bhargava [2013 (10) TMI 512 - ITAT AGRA] it is clear that ITO at Ghaziabad was not having jurisdiction over the assessee. Therefore, he should not have recorded the reasons for reopening of the assessment and further he did not examine any information supplied by Investigation Wing and that he was having no reasons to b .....

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ted:- 8-11-2017 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER For The Assessee : 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 t .....

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ion 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, 2015. The assessment was completed by ITO, Ward-1(1), Meerut. 2. The assessee challenged the addition on merit before Ld. CIT(A). However, the appeal of assessee has been dismissed on merit. The also raised additional ground of appeal before Ld. CIT(A) chal .....

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f the I.T. Act, 1961. 4. I have heard the learned Representatives of both the parties and perused the material on record. The Ld. D.R. also produced assessment record and filed the correspondence between the A.O. and the assessee on record. 5. It is well settled law that validity of re-assessment is to be determined with reference to the reasons recorded for reopening of the assessment under section 147/148 of the I.T. Act. The assessee filed copy of the reasons recorded for issuing of notice un .....

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ain group in lieu of cash during the period relevant to assessment year : 2009-10. I have perused the information contained in the report and evidences gathered. The report provides detail of modus operandi and explains how the unaccounted money of the beneficiaries are ploughed back in its books of accounts in the form of bogus share capital/premium/loan after routine the same through bank account(s) of the entry operators floated by Shri Surendra Kumar Jain group. Entry operators were identifi .....

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ed 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 establi .....

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have been recorded by ITO, Ward-1(1), Ghaziabad when re-assessment order have been passed by ITO, Ward-1(1), Meerut. The A.O. in the re- assessment order dated 31st March, 2015, specifically recorded that the case of the assessee-company transferred to ITO, Ward-1(1), Meerut being jurisdiction lies with this Ward. 5.2. The Ld. D.R. filed copy of the letter dated 20th May, 2014 written by the assessee-company to ITO, Ward-1(1), Ghaziabad on receipt of notice under section 142(1) and notice under .....

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e dropped in the interest of justice. The A.O. in pursuance of this request of the assessee and material on record, did not proceed with the re-assessment proceedings at Ghaziabad and vide letter dated 31st July, 2014 transferred the case record to ITO, Ward-1(1), Meerut who was having jurisdiction for the case of the assessee. The Ld. D.R. submitted that as per record ITO, Ward-1(1), Meerut did not record any fresh reasons under section 148 of the I.T. Act so as to proceed with the matter. The .....

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1), Meerut, that he has already filed return at Meerut on 16th September, 2009, the said return may be considered in compliance to the notice under 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 .....

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.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 providing entries to the beneficiaries by showing them transactions made by them in purchase / sale of shares of certain companies, which in fact never took place. The assesse .....

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transaction of purchase and sales of the shares has been found to be bogus and therefore, entire amount of sale proceeds of shares claimed to have been received by the assessee by Bank Draft, is the income of assessee from undisclosed sources, which has escaped assessment within the meaning of section 147 of the IT Act, 1961. Since, no regular assessment has been made in the assessee's case for A.Y. 98-99, approval u/s. 151(2) of the IT Act is considered necessary to assess the above said i .....

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produced before us to counter the submissions of the ld. counsel for the assessee. The details noted in the assessment order and the appellate order would also clarify that initially the re-assessment proceedings were initiated at Agra and the Revenue department finding no jurisdiction over the assessee transferred the case to the ITO, Mathura and the ITO Mathura also without recording fresh reasons proceeded u/s. 148 against the assessee on the basis of same reasons recorded by the ITO, at Agr .....

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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 r .....

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re reason to believe that any income chargeable to tax has escaped assessment. The Assessing Officers at Mathura and Agra did not examine any of the information received from DDIT (Inv.) Gurgaon before proceeding with the matter. The AO at Mathura merely followed the reasons recorded at Agra and proceeded with the matter. Hon'ble Delhi High Court in the case of Signature Hotels P. Ltd. vs. ITO, 338 ITR 51 held as under : Held, allowing the petition, that the reassessment proceedings were ini .....

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e annexure. The annexure could not be regarded as a material or evidence that prima facie showed or established nexus or link which disclosed escapement of income. The annexure was not a pointer and did not indicate escapement of income. Further, the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. There was no dispute that the company, S, had a paid-up capital of ₹ 90 lakhs and was incorporated on January 4, 1989, and w .....

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he assessee on the capital assets leased out to the lessee under section 32 of the Income-tax Act, 1961 for the assessment years 1996-97, 1997-98 and 1998-99 was allowed by the Assessing Officer. The lessee had claimed revenue expenditure for the lease rent paid to the assessee but the Assessing 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 .....

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e 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 proceedings against t .....

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ve that income chargeable to tax has escaped assessment and such facts are also not mentioned in the reasons recorded for reopening of assessment. The AO at Mathura did not do anything in the matter and merely followed the reasons recorded by ITO at Agra and that he has initiated the proceedings u/s. 148 against the assessee on borrowed satisfaction of ITO, Agra. He has also not examined any record of the case or the information received from DDIT(Inv.). The reasons which are not in accordance w .....

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ate the re-assessment proceedings because he has merely followed the reasons recorded by ITO at Agra, who was having no jurisdiction over the assessee. We accordingly set aside the orders of the authorities below and quash the reassessment proceedings u/s. 147 of the IT Act. In the result, all the additions would stand deleted. Therefore, there is no need to decide the additions on merits, which is wholly academic in nature. 10. In the result, the appeal of the assessee is allowed . 6. Consideri .....

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