TMI Blog2018 (4) TMI 1558X X X X Extracts X X X X X X X X Extracts X X X X ..... ge money laundering mechanism. All these things, according to us, do not inspire any confidence in our mind to hold that the learned AO has reached any conscious decision that any income of the assessee has escaped assessment and the modus operandi thereof. While respectfully following the decision of the coordinate bench of the Tribunal in MRY Auto Components Ltd. (2017 (9) TMI 966 - ITAT DELHI) hold that the satisfaction of the learned AO is not based on any sound reasoning and on that ground, we hold that the reopening of assessment is bad. Allow the appeal of the assessee. - I.T.A. No.5780/Del/2014 - - - Dated:- 6-4-2018 - SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER For the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. It is the argument on behalf of the assessee that in this matter there is no independent application of mind by the learned AO to the report of the Investigation wing to form the basis for reason to believe that income has escaped assessment inasmuch as the information per se does not amount to any tangible material incriminating the assessee. Nextly, it is contended that when the reason to believe speak only about ₹ 15 lacs, learned AO proceeded to make an addition of ₹ 2.15 crores which shows the non application of amount on the part of the ld AO. Lastly, it is submitted that while placing reliance on the decision reported in the case of Bharat Jayant Patel vs UOI (2015) 378 ITR 596 (Bom), it is submitted that the AO shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either side. The reasons recorded by the learned AO are as follows: T h e investigating wing of the income Tax Department had unearthed a huge money laundering mechanism wherein it was established that bogus accommodation entries were provided/taken these accommodation entries received in lieu of payment of cash of equivalent amount plus commission thereon to the entry operators. For obvious reasons, these cash transactions are not routed through the books of account of the assessee. in this case, information has been received from the Directorate of Income Tax, (Investigation), New Delhi that during the relevant assessment year, this assessee had received the following cheque amount(s) in nature of accommodation entry: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perators. For obvious reasons, these cash transactions are not routed through the books of account of the assessee. In this case, information has been received from the Directorate of Income Tax, (Investigation), New Delhi that during the relevant assessment year, this assessee had received the following cheque amount(s) in nature of accommodation entry: Value of entry taken Date on which entry taken Name of account holder of entry given account Bank from which entry given BRANCH OF ENTRY GIVEING BANK a`/c NO. OF ENTRY GIVING A/C 300375 13.3.2003 Rahul Finlease SB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion money to the tune of ₹ 2.15 crores. We find reason in the submission of learned AR that in view of the decision in PCIT vs. RMG Polyvinyl (I) Ltd.386 ITR 5 (Bom), such an error indicates non application of mind by the learned AO. 10. Above all as submitted by the learned AR, the reasons recorded by the learned AO do not suggest whether the assessee has received or provided the accommodation entries inasmuch as the reasons read that bogus accommodation entries were provided/taken . This assumes importance in view of the submission of the learned AO in the remand report, which is to be found at page 30 of the paper books, which reads as follows: Although in S.K. Jain and V.K. Jain group search and survey operations u/s 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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