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TMI Blog2017 (11) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the absence of any material, the Assessing Officer could not to be said to have a "reason to believe" within the meaning of section 147 of the Act. 3. That the learned CIT (Appeals) has erred in upholding the assumption of jurisdiction u/s 147 of the Income Tax Act in the absence of existence of tangible material for the reason to believe that the income of the assessee had escaped assessment, as he had no material other than the mere general information. 4. That the learned CIT (Appeals) has failed to appreciate that the learned Assessing Officer recorded reason for the believed on 30/31.03.2010 and had no material with him. other than just mere alleged information, unsupported by any material that any income of the assessee had escaped assessment and thus in the absence of any such a material, (As is required for valid initiation of proceedings), the proceedings initiated could not have been held to have been validly initiated, since he could not be said to have a reason to believe. 5. That the learned C1T (Appeals) has failed to comprehend that, the Assessing Officer could not have proceeded to frame assessment, without disposing off the objections raised by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were duly explained and the addition made by the Assessing Officer was unsustainable in law 9.1 That the learned CIT (Appeals) has erred in observing and concluding that "since the appellant has not been able to satisfactorily explain the source of the cash of Rs. 15,00,000/- and has failed to discharge the onus of proving the identity and credit worthiness of the creditors and establishing the genuineness of the transactions as cast upon it by section 68 of the Act'. 9.2 That the learned C1T (Appeals) has also erred while ignoring the details, confirmations and evidences given by the assessee in respect of outstanding share application of Rs. 15,25,000/- which was received from M/s Rotographics (India) Limited and same could not have been from M/s. Aggregate Finance & Investment Pvt. Ltd. and M/s. Garner Finance & Securities Pvt. Ltd.. as these amounts were duly returned within one month only i.e. in August, 2003 itself. 10. That the learned CIT (Appeals) has further erred in upholding the addition of Rs. 30,000/- on account of purported commission, which were based on surmises and conjecture and based on no material. It is well settled rule of law that the suspicio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) Signature Hotels (P.) Ltd. vs. Income-tax Officer reported in 338 ITR 51 (v) Sarthak Securities Co.P.Ltd. Vs. ITO reported in [2010] 329 ITR 110 (Delhi) (vi) CIT vs. Kamadhenu Steel & Alloys Ltd. [2012] 206 Taxman 254 (DELHI) (vii) CIT vs. Atul Jain, 299 ITR 383 (Del); (viii) CIT vs. SFIL Stock Broking Ltd., 325 ITR 285 (Del) 2. Proceedings under section 147 of the Act cannot be initiated on the basis of the stale information (Rasalika Trading and Investment Co. Pvt. Ltd versus Deputy Commissioner Of Income Tax (W.P.(C) 1608/2013 & CM Appl. 3024/2013 dated 14.02.2014). 3. Unless there is fresh material, as distinguished from mere allegation in the form of information, recourse under section 147 of the Act cannot be resorted: i) Commissioner of Income-tax vs. M/s Orient Craft Limited reported in 354 ITR 536 (SLP filed by the revenue has been dismissed by the Apex Court) ii) COMMISSIONER OF INCOME TAX Vs. SHRI ATUL KUMAR SWAMI (ITA No. 112/2014 dated 18.03.2014); iii. MOHAN GUPTA (HUF) vs. CIT (W.P.(C) 7660/2012 dated 28.01.2014) HC (Delhi) following Orient Craft. iv. Bapalal & Co. Exports vs. JCIT 289 ITR 37 (Mad) v. CIT vs Trimurti Builders 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) :- i. CIT vs. Lovely Export 216 CTR 195 ii. CIT vs. Kamdhenu Steel and Alloys Ltd. reported in 248 CTR 33 iii. CIT vs. vs. Nipuan Auto Pvt. Ltd. in ITA 225/2013 dated 30.04.2013 iv. Commissioner of Income-tax Vs. Supertech Diamond Tools (P.) Ltd [2014] 44 taxmann.com 460 (Rajasthan) v. Commissioner of Income-tax (Central) Vs. Vacmet Packaging (India) (P.) Ltd [2014] 45 taxmann.com 204 (Allahabad) vi. Commissioner of Income-tax Vs. Peoples General Hospital Ltd. [2013] 35 taxmann.com 444 vii. ITA 298/2012 Dated: 16.05.2012 in the case of Dalmia Bros Pvt. Ltd. viii. ITA 212/2012 Dated: 11.04.2012 in the case of CIT Vs. Goel Sons Golden Estate (P) Ltd. ix. ITA 284/2012 Dated: 27.04.2012 in the case of CIT vs. Ceylon Biscuits India (P) Ltd. x. ITA 232/2012 dated 22.11.2012 (Del. HC) in the case of CIT vs. Fair Finvest Ltd. xi. I.T.A .NO. 871/Del/2012 dated 25.05.2012 ITAT Delhi ITO Vs. M/s. Excellance Town Planner P. Ltd. xii. ITA No.2563/Del/2011 dated 25.05.2012). ITAT Delhi Income Tax Officer Vs. M/s Champa Commercials Pvt. Ltd xiii. ITA No. 4210/Del/2010) ITAT Delhi DCIT Vs. M/s Global Buildwell (India) Ltd. The share application money rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer to proceed for initiation of reopening proceedings. Since the proceedings were initiated after expiry of four years, approval was taken from the competent authority. Summons issued to the parties were not responded, hence the Assessing Officer was justified in making the addition in question. He submitted further that original return was processed under section 143(1) of the Act, hence, there was no question of change of opinion on the part of the Assessing Officer while initiating the reopening proceedings. 3.3 When we go through the reasons to believe recorded by the Assessing Officer, reproduced hereunder, we concur with the contention of the ld. AR that it is vague as the reasons to belief has been formed solely on the basis of information received from the Investigating Wing of the Department :- " Reasons for the belief that income has escaped assessment : In this case, information has been received from the Director of Income Tax, (Investigation) New Delhi that the assessee has received an amount of Rs. 15,00,000/- as follows :- BENEFICI- ARY'S NAME BENEFICI Y BANK NAME AR BENEFICIAR Y BANK BRANCH VALUE OF ENTRY TAKEN. . INSTRUMEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the Assessing Officer, who has based on his reasons to initiate reopening proceedings without examining the veracity of the said information. The alleged information of the Investigation Wing can alone at the best be a reason to suspect, however, in the absence of any other material, same cannot be a tangible material for the formation of belief. Undisputedly, in the present case, there was no material other than the purported information before the Assessing Officer to form his reasons to believe that there was an escapement of assessable income. We thus in view of the ratio laid down in the above cited decisions by the ld. AR, hold that the initiation of reopening proceedings and framing of assessment under section 147 / 143(3) of the Act in the present case are not valid and are accordingly quashed as void ab initio. The ground Nos. 1 to 8 involving the issue are thus allowed. In view of this finding holding the very assessment order in question as void, the remaining grounds questioning the validity of additions do not survive as having become academic only. These grounds are accordingly disposed off. 4. In result, the appeal is allowed. 5. The order is pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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