TMI Blog2016 (8) TMI 1406X X X X Extracts X X X X X X X X Extracts X X X X ..... nd deserves to be quashed. See Pr. CIT vs. G&G Pharma India Ltd. [2015 (10) TMI 754 - DELHI HIGH COURT]. - Decided in favour of assessee. - ITA No. 6558/Del/2014 - - - Dated:- 31-8-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER For the Appellant : Sh. BL GUPTA, ITP For the Respondent : Sh. FR Meena, Sr. DR ORDER PER H.S. SIDHU, J.M. The Assessee has filed the Appeal against the Order dated 1.9.2014 of the Ld. CIT(A)-XVIII, New Delhi pertaining to assessment year 2006-07 and raised the following grounds:- On the facts and in the circumstances of the case and in law, the CIT(A) was incorrect and unjustified in:- a) Holding that action u/s. 147/148 has been rightly taken by the AO. b) Holding that addition of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any filed its return of income on 27.10.2006 declaring income of ₹ 2612/-. The return of income was processed u/s. 143(1) of the I.T. Act, 1961. The case was reopened u/s. 147/148 of the I.T. Act and notice u/s. 148 was issued to the assessee on 13.3.2013, with the prior approval of the Addl. CIT, Range-15, New Delhi, after recording the reasons. In response to the notice issued u/s. 148 of the I.T. Act assessee vide its letter dated 17.6.2013 stated that return of income for AY 2006-07 as on 27.10.2006 has already filed with the Ward 15(1) may be treated as the return filed. Statutory notices were sent u/s. 143(2) and 142(1) was issued on 19.9.2013 alongwith questionnaire to the assessee and in response thereto assessee s representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the belief formed for escapement of income; no application of mind; no proper satisfaction was recorded before issue of notice u/s. 148; no independent conclusion that there was escapement of income. It was further stated that the case was reopened only on the basis of Investigation Wing information which suffers with serious debility and lacks definiteness, without describing the basic aspects of alleged transaction and in the absence of the same, whole action of the AO gets vitiated. To support his contention he submitted that the issue in dispute is squarely covered in favour of the assessee by the ITAT decision dated 09.1.2015 in the case of G G Pharma India Limited vs. ITO passed in ITA No. 3149/Del/2013 (AY 2003-04) in which the Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese employees. A number of Bank Accounts in various banks were opened in the names of these companies and his employees, in which huge cash deposits were made. Later cheques were issued to various beneficiaries, disguising the whole transaction as genuine. During the course of investigation it was established that Sh. Tarun Goyal has floated about 90 companies for the purpose of providing accommodation entries. The companies floated by Sh. Tarun Goyal are not carrying out any genuine activity and are merely being used to provide accommodation entries. During the course of investigations by the DIT(Inv) it was also discovered that the network' of companies run by Sh. Tarun Goyal is only doing the business of providing accommodation entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the AO, as aforesaid, I am of the view that AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that income has escaped during the year. In my view the reasons are vague and are not based on any tangible material as well as are not acceptable in the eyes of law. The AO has mechanically issued notice u/s. 148 of the Act, on the basis of information allegedly received by him from the Directorate of Income Tax (Investigation), New Delhi. Keeping in view of the facts and circumstances of the present case and the case law applicable in the case of the assessee, I am of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries . In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the Assessee escaped assessment is missing in the present case. 13. Mr. Sawhney took the Court through the order of the CIT(A) to show how the CIT (A) discussed the materials produced during the hearing of the appeal. The Court would like to observe that this is in the nature of a post mortem exercise after the event of reopening of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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