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TMI Blog2019 (10) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... iciaries which were deposited in the bank accounts of various entities as cash received against sales and were immediately transferred to various dummy companies of Jain brothers. The money is then routed through a maze of transactions through a web of dummy concerns managed by Jain brothers. Subsequently, cheques were given to the beneficiaries in lieu of cash given initially from the account of the concerns which is at the last step of money trail and in this process, Jain brothers used to earn a certain percentage of commission. He also referred to the assessment order in case of S.K. Jain wherein the Assessing Officer had applied the commission @ 1.8% on account of accommodation entries provided by them. The order of the Assessing Officer was confirmed by the CIT(A) and the Tribunal had also approved the fact that Shri S.K. Jain and Shri V.K. Jain are involved in providing accommodation entries. In view of the above, the Assessing Officer reopened the case of the assessee u/s 147/148 of the Act after recording satisfaction and prior approval u/s 151(1) of the Act by the PCIT, Delhi-1. In response to notice u/s 148, the assessee filed its return of income on 30th March, 2017 dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Utsav securities (P) ltd. by holding the same as received from alleged entry operator is illegal and unsustainable in law as well as on merits. 4.2 That the findings of A.O. are unsustainable for addition of Rs. 20,00,000 in the absence of providing the copies of all materials used against the assessee and by not providing cross-examination of persons whose statements have been relied upon, thus no proper and reasonable opportunity of hearing has been allowed and principles of natural justice is grossly violated which makes the impugned asstt. unsustainable in law. 5. That the Ld. A.O. erred in making addition of Rs. 36,000 as unexplained expenditure under section 69C for alleged commission expenses @1.8 percent of Rs. 20,00,000, the amt. of total sale consideration received of both the shares, although there is no material and evidence for the same." 5. The ld. counsel for the assessee submitted that the initiation of reassessment proceedings was made in a mechanical manner, on borrowed satisfaction and without application of mind. Referring to the copy of the reasons supplied by the Assessing Officer, copy of which is placed at page 225 of the paper book, he submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 290 (Del); & iv) Goa State Copr. Bank Ltd. vs. ACIT 7 Ors., (2017) 295 CTR (Bom) 369. 7. The ld. counsel for the assessee submitted that the approval u/s 151 is in a mechanical manner and without application of mind. Therefore, it is fatally defective. He submitted that the PCIT while giving approval has simply mentioned: 'I am satisfied that it is a fit case for issue of notice u/s 148 of the IT Act.' Referring to the decisions of the Hon'ble Delhi High Court in the case of PCIT vs. NC Cables Ltd., 391 ITR 11 (Del) and United Electrical Company Pvt. Ltd. vs. CIT & ors, 258 ITR 317 and the decision of the Hon'ble M.P. High Court in the case of CIT vs. S. Goyanka Lime & Chemical Ltd. (2015) 56 taxmann.com 390, he submitted that the courts have unequivocally held that where the satisfaction has been given in a mechanical manner and without application of mind for issuing notice u/s 148, such reopening of assessment is invalid. He submitted that the Hon'ble Supreme Court has dismissed the SLP filed by the Revenue against the decision of the Hon'ble MP High Court in the case of Goyanka Lime & Chemical Ltd. (supra). 8. So far as the merit of the case is concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and reopened the assessment. The ld. Addl. CIT had perused the note and had recorded his satisfaction that income pertaining to assessment year 2010-11 has escaped assessment and, hence, the case is required to be reopened u/s 147. The Pr. CIT had given his satisfaction u/s 151 separately as mentioned at page 5 of the paper book filed by the ld. counsel for the assessee. The Assessing Officer, in the instant case, has disposed of the objections by passing a speaking order, therefore, it is wrong to say that the assessment was reopened in a mechanical manner and the approving authorities have given the approval in a mechanical manner without due application of mind. He submitted that the reassessment proceedings were not initiated in a mechanical manner or on borrowed satisfaction and without application of mind since the perusal of the reasons recorded clearly show that there is a thorough application of mind by the Assessing Officer and the approving authorities have also given valid reasons for reopening of the case. So far as the merit of the case is concerned, the ld. DR submitted that S.K. Jain group of cases are known to be accommodation entry providers and the assessee, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal on merits holding that AO did not conduct appropriate enquiry to conclude that share inclusion and advances received were from bogus entities-Tribunal allowed assessee's appeal on merits-Revenue appealed against appellate order on merits- Assessee's cross appeal was on correctness of reopening of assessment- Tribunal upheld assessee's cross-objections and dismissed Revenue's appeal holding that there was no proper application of mind by concerned sanctioning authority u/s Section 151 as a pre- condition for issuing notice u/s 147/148-Held, Section 151 stipulates that CIT (A), who was competent authority to authorize reassessment notice, had to apply his mind and form opinion- Mere appending of expression 'approved' says nothing-It was not as if CIT (A) had to record elaborate reasons for agreeing with noting put up-At same time, satisfaction had to be recorded of given case which could be reflected in briefest possible manner- In present case, exercise appears to have been ritualistic and formal rather than meaningful, which was rationale for safeguard of approval by higher ranking officer-Revenue's appeal dismissed." 11. Similar view has been tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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