9911796707
TMI Blog2019 (11) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... ing therein that original return of income filed may be treated as return filed in response to notice under section 148 of the I.T. Act. The assessee filed objections to the same which were disposed of by the A.O. The A.O. noted that assessee company was asked to file the details of loans and advances, increase in share capital during the year and bank statement as required in the questionnaire Dated 13.07.2010. This information was provided by assessee on various dates and vide letter Dated 09.12.2010 has stated that details of accounts has reflected in the statement provided showing transaction in bank account of Rs. 10,24,42,961/- as under: Credit Amounts : * On account of sales * On account share application received * Income (Profit on sale of shares) * Amounts received back from parties i.e., paid for purchases. Debit Amounts : * On account of purchases * On account of shares application received, amounts returned on non-allotment. * Sales advance returned. 3.1. The assessee has further submitted the details of investments/shares, loan advances and paid up capital and share premium. The gist of the same is reproduced in the assessment order. The assessee co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 and 5 of the order which were included by Investigation Wing in a mechanical manner. There were no basis for reopening of the assessment. The assessee relied upon several decisions in support of the contention that assumption of jurisdiction under section 147 is invalid and bad in law. The Ld. CIT(A), however, did not accept the contention of assessee and noted that information have been received from Investigation Wing and return is only processed under section 143(1), therefore, reopening is justified. 4.1. The assessee as regards the addition on merit submitted that assessee has explained source and credit of Rs. 80,50,000/- which was not included in information received from Investigation Wing which pertain to allotment of shares by assessee. The assessee filed complete details to show that assessee entered into genuine transaction. Since Investors did not appear before A.O. is no ground to make the addition. The assessee filed complete details and share applications. Therefore, on mere non-appearance of the Investors, no addition could be made against the assessee because A.O. did not make further enquiry into the matter on the documentary evidences filed by assessee. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT(A), therefore, noted that addition did not deserve to survive. The Ld. CIT(A) in view of the material on record and examination of remand proceedings accepted the explanation of assessee that assessee received genuine share application money and accordingly, both the additions have been deleted. The Ld. CIT(A) also noted that amount of Rs. 29 lakhs pertain to earlier year which fact have not been examined by the A.O. The appeal of assessee was, therefore, partly allowed. 6. The Revenue is in appeal challenging the deletion of addition on merits. The assessee in the Cross Objections challenged the reopening of the assessment under section 147/148 of the I.T. Act and addition of Rs. 5 lakhs in respect of M/s. Kuldeep Textiles (P) Ltd., under section 68 of the I.T. Act, 1961. 7. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and referred to PB-16 which is reasons for reopening of the assessment. He has submitted that perusal of the reasons recorded by the A.O. clearly show that A.O. has simply acted upon the information received from Investigation Wing and did not apply his own mind to the said information. The contents of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from Investigation Wing, therefore, reopening of the assessment is invalid and bad in law and is liable to be quashed. In support of this contention, he has relied upon Judgments of Hon'ble Delhi High Court in the case of Pr. CIT vs., G and G Pharma India Ltd., [2016] 384 ITR 147 (Del.), Pr. CIT vs., Meenakshi Overseas Pvt. Ltd., [2017] 395 ITR 677 (Del.) and Pr. CIT vs., RMG Polyvinyl (I) Ltd., [2017] 396 ITR 5 (Del.). 8. The Ld. D.R, however, relied upon Order of the A.O. and produced the assessment record. The Ld. D.R. also placed on record copy of the order sheet recorded by the A.O. and Annexure-A attached to the reasons recorded for reopening of the assessment. The Ld. D.R. after going through the record have stated that the letter dated 13.03.2006 referred to in the reasons is not available on record. The Ld. D.R. placed on record copies of statements recorded by A.O. at remand proceedings as well as filed copy of statement of Shri Govind Ram Saini referred to in the reasons Dated 13.05.2005. The Ld. D.R. submitted that specific information was received that income chargeable to tax has escaped assessment. In this case return is only processed under section 143(1), ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of opening bank account. In most of these bank accounts the introducer was the main entry operator and the cash deposit slips and other instruments, were filled by him. The other persons (in whose name the A/c is opened)'only used to sign the blank cheque book and hand over the same to the main entry operator. The entry operator then used to issue cheques/DDs/Pos in the name of the beneficiary from the same account (in which the cash is deposited) or another account in which funds were transferred through clearing in two or more stages. The beneficiary in turn deposited these instruments in his bank accounts and the money came to his regular books of account in the form of gift, share application money, loan etc through banking channels. 2.3. The operators gave the account holders amounts ranging from Rs. 1000 to 2000 per month. These account holders were masons, plumbers, electricians, peons, drivers etc, whose earnings are not sufficient for a living. They earned normally Rs. 3 to 5 thousand per month in their normal work and by working for the entry operators earned extra income of Rs. 2 to 4 thousand per month. Their signatures were taken on blank gift deeds, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ward-5(3), New Delhi". 9.1. The Ld. D.R. also filed copies of statements recorded by A.O. at remand proceedings as well as filed copy of the statement of Shri Govind Ram Saini recorded by Investigation Wing. Dated 13.05.2005 on record. The Ld. D.R. stated that the letter Dated 13.03.2006 which is the basis of recording reasons for reopening of the assessment is not available in assessment record. In the letter Dated 13.03.2006 referred to in the reasons, the Investigation Wing. Referred to the statement of Shri Govind Ram Saini which is the basis for reopening of the assessment. However, in his statement there is no reference to the assessee for providing any accommodation entry. The A.O. in the re-assessment order also mentioned that information provided by the assessee at re-assessment proceedings stated that details of accounts as reflected in the statement provided showing transaction in bank account of Rs. 10,24,42,961/-. Therefore, contention of Learned Counsel for the Assessee is correct that this is the amount which has appeared at credit side of the bank account of the assessee. The A.O. has taken the entire amount deposited in the Bank account of the assessee as acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons which is credit side of the bank account of the assessee which ultimately found to be correct that the entire bank deposits are not accommodation entries. There were no proceeding pending before the A.O. at the time of recording of reasons, thus, there was no reason for assessee to establish the creditworthiness of the Investors as is noted in the reasons. The A.O. merely on doubts or suspicion recorded the reasons that amount of Rs. 10,24,42,961/- represents income of assessee chargeable to tax which has escaped assessment. The issue is, therefore, covered by Judgment of Hon'ble Delhi High Court in the case of G and G Pharma India Ltd., Meenakshi Overseas Pvt. Ltd., and RMG Polyvinyle (I) Ltd., (supra). Considering the totality of the facts and circumstances of the case, we are of the view that assumption of jurisdiction under section 147/148 by the A.O. is invalid and bad in law and is liable to be quashed. In view of the above discussion, we set aside the Orders of the authorities below and quash the reopening of the assessment in the matter which resulted into deletion of all the additions. The Cross Objection of assessee is accordingly allowed. Since Ld. CIT(A) has alread ..... X X X X Extracts X X X X X X X X Extracts X X X X
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