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TMI Blog2018 (3) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in not giving any finding as regards ground Nos. 1 & 2 by observing that, grounds are of general in nature without appreciating that, the principle of Natural Justice was violated and evidences were used against the assessee without furnishing the copy, hence the order of the Assessing officer confirmed by CIT(A) is bad in law. 1.2 The Learned CIT(A) erred in confirming that the Assessing Officer, who failed to provide a copy of the statements of Mr. Mukesh Choksi on the basis of which assessment was reopened and further an opportunity of cross examination, in spite of a specific request made by the Appellant in this behalf. Therefore, the assessment order dt. 25/03/2013 is against the principles of natural justice, and hence, bad in law. 2. Reopening is bad in law: 2.1 The Learned CIT(A) erred in confirming the order of the Assessing Officer in reopening the assessment u/s.147 of the Act, without appreciating the facts that there was no escapement of assessment in the assessee's case as the original return was accepted u/s. 143(1) dtd. 26/10/2006. And there is no new material or facts brought on record, thus reopening is nothing but based on change of opinion and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that certain income chargeable to tax had escaped assessment. In the ensuring assessment finalized under section 143(3) r.w.s. 147 of the Act dated 25/03/2013, an addition of Rs. 46,12,826/- has been made to the returned income on account of profit on account of sale transactions with M/s. Mahasagar Securities Pvt. Ltd. treating it as accommodation entries. In such an assessment the claim of the Assessing Officer is that consequent to a search action in the case of share broker M/s. Mahasagar Securities Pvt. Ltd. and its group concerns, assessee was found to have obtained profit of Rs. 46,12,826/- on account of share transactions which were not carried out in actuality, but were mere accommodation entries. The said addition has also been sustained by the CIT(A), against which the assessee is in appeal before us. 5. Before us, the Ld. Representative for the assessee has referred to the reasons recorded for reopening by the Assessing Officer, which has been placed in the Paper Book at page -5, and which read as under:- "The assessee has obtained accommodated entries amounting to Rs,46,12,826/- for F.Y 2004-05 relevant to assessment year 2005-06 for M/s. Gold Star Finves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of another group assessee Smt. Rasila N. Gada in ITA No.2802/Mum/2014 dated 31/05/2016, wherein also incorrect facts were recorded in the reasons for reopening and the Tribunal held that the initiation of proceedings under section 147/148 of the Act to be bad in law. In fact, by referring to the relevant discussion in the order of the Tribunal in the case of Shri Harakchand K. Gada(HUF) (supra) it was pointed out that the reasons recorded therein are similarly worded as are in the present case. Apart there-from, the Ld. Representative for the assessee has also relied upon the judgment of the Hon'ble Delhi High Court in the case of PCIT vs. Meenakshi Overseas Pvt. Ltd., 395 ITR 677(Delhi) to point out that where there was an absence of link between tangible material and formation of belief of escapement of income, the initiation of proceedings under section 147/148 of the Act is untenable in law. 6. On the other hand, Ld. Departmental Representative has not contested the factual matrix brought out by the Ld. Representative for the assessee but relied upon the orders of the authorities below and contended that the reopening was based on the information received DDIT (Inv. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. For that matter, the details annexed to the balance sheet, which is placed at page-3 of the Paper Book, has been referred to, which only reflects purchase of shares of Maruti Infra Ltd. totalling to Rs. 1,44,405/-. At page - 47 of the Paper Book is placed the details of purchases effected by the assessee during the year through M/s. Mahasagar Securities Pvt. Ltd., which is to the tune of Rs. 1,44,405/-. Further, the Ld. Representative for the assessee pointed that during the year intraday speculation transactions were also undertaken by the assessee through a broker M/s. Naman Securities, which is not a part of M/s. Mahasagar Securities Pvt. Ltd. group of concerns, and, even if, the value of such transactions are added, yet it would not amount to Rs. 46,26,826/- as is sought to be made out by the Assessing Officer. All these factual aspects clearly brings out that the Assessing Officer while recording reasons has failed to apply his mind and has merely referred to the report of the Investigation Wing. The least that was required by the Assessing Officer was to establish a link between the information made available by the Investigation Wing and the formation of his belief on esc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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