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TMI Blog2015 (11) TMI 1802X X X X Extracts X X X X X X X X Extracts X X X X ..... cording reasons for reopening. It was submitted that without forming a prima facie pinion, on the basis of such material, it is not correct on the part of the A.O. to record reasons and reopen the assessments. 3. After hearing rival contentions I hold as follows. 4. The reasons for reopening recorded by the A.O. are as follows. "A Report on enquiries made by the Directorate of Income Tax (Investigation), New Delhi into accommodation entries given by entry operators has been received. This report was received in the Office of Commissioner of Income Tax, Delhi-I, New Delhi and was subsequently forwarded vide F. No. C1T- 1/2005-06/2132 dated 13.03.2006. These enquiries were initiated to probe into some bank account which were used to iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sited by the entry operator in a bank account either in his own name or in the name of relative/friends or other person hired by him, for the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instant case of the assessee, M/s CL Aggarwal Yarn Industries P.Ltd., the following credits have been shown in the bank account of the assessee. BENIFICIARY BANK NAME VALUE OF ENTRY TAKEN INSTRUMENT NO. BY WHICH ENTRY TAKEN DATE ON WHICH ENTRY TAKEN NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT BANK FROM WHICH ENTRY GIVEN BRANCH OF ENTRY GIVING BANK HDFCBANK 500000 270912 24-Sep-03 PARIVARTAN CAPITAL & FINANCIAL SERVICES PVT LTD CORPN BANK KAMLA NAGAR HDFCBANK 200000 27091 6 8-Jan-04 PARIVARTAN CAPITAL & FINANCIAL SERVICES PVT LTD CORPN BANK KAMLA NAGAR 4.1 Enquiries revealed that one Shri Hari Om Bansal, S/o Shri K.C. Harijka, R/o M-1/l, Model Town-III, New Delhi was controlling a number of bank accounts of vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectorate of Investigation, the AO stated: "I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company has, introduced its own unaccounted money in its bank account by way of above accommodation entries." The above conclusion is unhelpful in understanding whether the AO applied his mind to the materials that he talks about particularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the AO, if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the Assessee, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing will not rescue an inherently defective reopening order from invalidity ." 4.2. Applying the propositions laid down in this case, to the facts of the case on hand, I hold that the reopening is bad in law as in this case the A.O. has not independently applied his mind to the information received so as to form an opinion that income chargeable to tax has escaped assessment in the case of the assessee. He has not stated as to how the material gathered by the Investigation Wing has nexus with the assessee. The report and the finding of the Investigations Wing have to be relied upon by the A.O. without any independent verification. Merely discussing the modus operandi will not lead the A.O. to form a reasonable belief that income chargeabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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