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2015 (1) TMI 1440

..... ed 16.12.2005. The said assessment was framed after proper verification and scrutiny and no new material was brought on record to justify the action for issuing the notice u/s 148 again on 27.03.2009. AO issued the notice only on the basis of information received from the DIT(Investigation), however, he did not consider this vital fact that the amount mentioned by him in the reasons recorded for reopening, in fact was the closing debit balance in the account of M/s R. K. Investments and was pertaining to the preceding assessment year 2001-02 and not the year under consideration - It is not clear as to how and in what manner the debit balance in the name of M/s R. K. Investments was treated as the escaped income of the assessee particularly .....

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..... of statutorily required reasons to believe . 3. That on the facts and in the circumstances of the case and in law, learned CIT(A) erred in not quashing the instant reopening made by the ld. Assessing Officer (AO) u/s 147/148 of the Act, being made for change of opinion and review held impressible by SC in Kelvinator 320 ITR 561. 4. That on the facts and in the circumstances of the case and in law, learned CIT(A) erred in not quashing the instant reopening made by the ld. Assessing Officer (AO) u/s 147/148 of the Act for non communication of reasons as per Jurisdictional DHC order in case of Haryana Acrylic 308 ITR 38. 5. That on the facts and in the circumstances of the case and in law, learned CIT(A) erred in not deleting the addition mad .....

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..... 1.10.2002 showing a total income of ₹ 27,150/-. The AO framed the assessment u/s 143(3)/148 of the Act on 16.12.2005 assessing the total income at ₹ 58,450/-. Thereafter the AO again issued a notice u/s 148 of the Act on 27.03.2009 by recording the following reasons: In this case return was filed on 31.10.2002 declaring income of ₹ 27,146/-. Return was assessed u/s 143(3) on 16.12.2005. The Directorate of Investigation-I, New Delhi had sent a list containing the name of beneficiaries and operators of accommodation entries in Delhi. A perusal of the list shows that M/s Bhageria Finance & Investment Pvt. Ltd. whose jurisdiction lies with the undersigned, has been a beneficiary of entry to various entries provided by pers .....

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..... issuing notice u/s 148 of the Act and after proper verification framed the assessment u/s 143(3)/148 of the Act by passing the re-assessment order dated 16.12.2005. The AO again reopened the same assessment on the basis of flimsy ground by issuing the notice u/s 148 of the Act on 27.03.2009, so the reopening of the assessment was not valid. Reliance was placed on the following case laws: Sarthak Securities Co. P. Ltd. Vs ITO (2010) 329 ITR 110 (Del) Signature Hotels P. Ltd. Vs ITO and Another (2011) 338 ITR 51 Narmadha Chemicals (P.) Ltd. Vs ACIT (2013) 357 ITR 45 (Mad) CIT Vs Gangeshwari Metal P. Ltd. (2014) 361 ITR 10 (Del) 8. In his rival submissions the ld. DR supported the orders of the authorities below and further submitted that the .....

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..... rmation, the amount received from a company, S, was nothing but an accommodation entry and the assessee was the beneficiary. The reasons did not satisfy the requirements of section 147 of the Act. There was no reference to any document or statement, except the annexure. The annexure could not be regarded as a material or evidence that prima facie showed or established nexus or link which disclosed escapement of income. The annexure was not a pointer and did not indicate escapement of income. Further, the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. There was no dispute that the company, S, had a paid-up capital of ₹ 90 lakhs and was incorporated on January 4, 19 .....

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..... u/s 148 of the Act was not valid. We, therefore, considering the totality of the facts of the present case and by keeping in view the ratio laid down by the Hon ble Jurisdictional High Court in the case of M/s Signature Hotels Pvt. Ltd. Vs ITO (supra), set aside the impugned order by holding that the reopening u/s 147 of the Act by issuing the notice u/s 148 of the Act on 27.03.2009 was not valid and the assessment framed subsequently on the basis of the said notice was vide ab initio. Since we have decided the issue in favour of the assessee on the legal ground, the other grounds raised on merit do not require adjudication. 12. In the result, the appeal of the assessee is allowed. (Order Pronounced in the Court on 16/01/2015) - Income Tax .....

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