TMI Blog2018 (3) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... ade available to him and his belief about escapement of income. Therefore, the initiation of reassessment proceedings u/s 147/148 of the Act in the present case is without application of appropriate mind and, thus, untenable in law. - Decided in favour of assessee. - ITA No.2801/Mum/2014, ITA No.2798/Mum/2014 - - - Dated:- 9-3-2018 - SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER For The Appellants : Shri Ajay Singh For The Respondent : Shri Rajesh Kumar Yadav ORDER PER G.S.PANNU, A.M: The captioned appeals are filed by two different assessees belong to the same group and they pertains to assessment year 2005-06. Since common issues are involved, they have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. 2. ITA No.2801/Mum/2014, in the case of Smt. Leela Bhanji Gada is taken as the lead appeal, which is directed against the order of CIT(A)-27, Mumbai dated 27/01/2014, which in turn, arises out of order passed by the Assessing Officer under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short the Act ) dated 25/03/2013. In this appeal, the Groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entered into by the Appellant were only of ₹ 76,664/- and were duly supported by all supporting evidence, shown in balance sheet, hence addition of ₹ 43,43,282/- may be deleted. 3.2 The Learned CIT(A) erred in treating ₹ 43,43,282/- as the unexplained investment of the Appellant without bringing any evidence to support of the same and the provisions of Section 69 cannot be applied to the facts of the appellant, based on the statement of third party. 3.3 Without prejudice to above, the Learned CIT(A) failed to appreciate that the appellant has .shown speculation profit of ₹ 1,87,125/- and paid tax thereon hence addition of ₹ 43,43,282/- may be deleted. 3. At the time of hearing, the rival counsels have been heard only with respect to Ground of Appeal No.2 above, wherein the action of the Assessing Officer to initiate proceedings under section 147/148 of the Act has been challenged. In this background, the rival counsels have been heard and the relevant material perused. 4. The appellant before us is an individual, who filed a return of income for assessment year 2005-06 originally on 21/12/2005 declaring a total income of ₹ 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant annexure attached to the balance sheet, which also depicts the purchase of shares amounting to ₹ 1,44,405/-. The Ld. Representative for the assessee pointed out that in the assessment order no additions have been made based on the reasons recorded, inasmuch as, in the assessment order the addition is with respect to the transaction with M/s. Mahasagar Securities Pvt. Ltd., whereas in the reasons recorded it is stated that assessee had undertaken accommodation entries with M/s. Gold Stan Finvest Pvt. Ltd. In this manner, the Ld. Representative for the assessee has set up a case that the reasons has been recorded by the Assessing Officer without proper application of mind and as they are factually incorrect, the reopening is bad in law. According to the Ld. Representative for the assessee the facts stated in the reasons recorded being factually incorrect and, therefore, the same would not constitute appropriate nexus with formation of belief about escapement of income, and, hence the proceedings initiated under section 147/148 of the Act are invalid. The Ld. Representative for the assessee has also relied upon the decision of the Tribunal in the case of another group asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share broker M/s. Mahasagar Securities Pvt. Ltd. and its group concerns, whose main person was one Shri Mukesh Choksi. The reasons recorded for reopening have already been reproduced by us in the earlier part of this order. The aforesaid reasons were made available to the assessee by the Assessing Officer vide a communication dated 04/10/2012, a copy of which is placed at page 5 of the Paper Book. The reasons brings out a charge against the assessee, which is to the effect that assessee has obtained accommodation entries amounting to ₹ 46,12,826/- in the instant assessment year from M/s. Gold Star Finvest Securities Pvt. Ltd. Ostensibly, on a perusal of the reasons recorded and the consequent assessment order, it clearly transpires that there is a variation in the facts noted by the Assessing Officer. Whereas in the reasons recorded, assessee is stated to have undertaken transactions with M/s. Gold Star Finvest Securities Pvt. Ltd. while in the assessment order, it is stated that the transactions have been carried out through M/s. Mahasagar Securities Pvt. Ltd. Notably, in the reasons recorded as well as in the assessment order, the Assessing Officer has not tabulated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, in our view, the initiation of reassessment proceedings under section 147/148 of the Act in the present case is without application of appropriate mind and, thus, untenable in law. In coming to such conclusion, we have also perused the decision of the Co-ordinate Benches in the case of Shri Harakchand K. Gada(HUF)(supra) and Smt. Rasila N. Gada(supra), wherein also on similar discrepancies/infirmities, the initiation of proceedings under section 147/148 have been found to be invalid. The ratio laid down in the aforesaid two decisions is3 clearly applicable in the present case and, therefore, in view of the aforesaid discussion and having regard to the decision of the Co-ordinate Benches as referred above, we hold that the reopening of assessment under section 147/148 of the Act is invalid in the eyes of law. As a consequence, the impugned assessment order is liable to be quashed. We hold so. In the result, Ground of appeal No.2 raised by the assessee is allowed. 7.1 As we have decided the issue of reopening of assessment in favour of the assessee and assessment order has been quashed, the necessity to deal with other Grounds raised in the appeal are obviated since they are re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
