9911796707
TMI Blog2021 (2) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... 115JB of the Income Tax Act, 1961. The Book Profit was declared at Rs. 17,00,485/-. The assessment was completed under section 143(3) of the I.T. Act, 1961. Subsequently, certain information was received from Investigation Wing with regard to the financial transactions entered into by the assessee during the year under appeal. The A.O. recorded the reasons for reopening of the assessment and after getting approval from Pr. CIT, Delhi issued notice under section 148 of the I.T. Act to the assessee-company on 29.03.2016 proposing to assess the income of the assessee for the year under appeal. The A.O. noted certain non-compliance on the part of the assessee. The A.O. on the basis of the analysis of the seized documents and report of the Investigation Wing found that assessee-company has taken accommodation entry amounting to Rs. 20 lakhs in assessment year under appeal from Shri S.K. Jain Group of Companies i.e., Virgin Capital Services P. Ltd., Rs. 7 lakhs, VIP Leasing & Finance P. Ltd., Rs. 7 lakhs and Mani Mala Delhi Pro. P. Ltd., Rs. 6 lakhs. The A.O. noted that assessee has received these share capital through above broker which shall have to be added as unexplained in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing the details and also furnished bank statements and ITRs of the remaining share applicant companies [PB 63-70]. He has submitted that A.O. has examined the issue of receipt of share application money from 11 parties in detail based on evidence on record and after scrutiny, accepted the explanation of assessee and no addition on account of unexplained share application money have been made. The issue have been examined in detail after verification. He has referred to the reasons recorded by A.O. for reopening of the assessment, copy of which is filed at page-73 of the PB and has submitted that A.O. in the reasons itself has mentioned that "the case subjected to detailed scrutiny in original assessment Dated 14.12.2011 under section 143(3) and accommodation entries were verified at every stage." The A.O. has referred to the letter of the Investigation Wing Dated 12.03.2013. The A.O. has downloaded the return of income of assessee and found that there is an increase in share application money in assessment year under appeal. The A.O. has referred to first 03 parties in the reasons despite assessee received share application money from 11 parties. The assessee has, therefore, discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant assessment year. Therefore, the case of assessee could not have been reopened unless the escapement of income occasioned due to failure of assessee to disclose truly and fully all material facts necessary for assessment which is not present in the case of assessee. Thus, there is a total non-application of mind on the part of the A.O. to reopen the assessment. He has also submitted that assessee is required to disclose only the primary facts at the original assessment stage which assessee has correctly disclosed. He has relied upon Judgment of the Hon'ble Supreme Court in the case of NDTV vs., DCIT [2020] 424 ITR 607 (SC). He has further submitted that information have been received by the A.O. from Investigation Wing in March, 2013 as is mentioned in the reasons for reopening of the assessment and action under section 147 have been initiated in March, 2016 after full 03 years. In the meantime, the assessments of all the 03 Investor Companies mentioned in the reasons was completed in consequence of the same search which is the basis for action under section 147. In the assessment orders passed in each case, are contrary to what was conveyed by the Investigation Wing, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be determined with reference to the reasons recorded for reopening of the assessment. The Learned Counsel for the Assessee has filed copy of the reasons recorded for reopening of the assessment in the paper book at pages 73 to 76. The same is reproduced as under : 6.2. It is an admitted fact that at the original assessment proceedings the A.O. passed the assessment order under section 143(3) Dated 14.12.2011. The A.O. issued show cause notice under section 142(1) to the assessee and asked for the details of share capital/share application money along with details, complete address, amount and income tax particulars of the Investors which assessee has filed before A.O. at original assessment stage along with confirmations of the investors, their bank statements, their income tax returns and balance-sheets. The assessee explained before the A.O. that assessee has received share application money from 11 parties. The A.O. further asked for the details of share application money so received in assessment year under appeal in a particular Format which was also supplied by the assessee. Further compliance was also made by the assessee by providing bank statements and income tax records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to disclose fully and truly all material facts necessary for assessment. The reopening on mere change of opinion is bad in Law and void abinitio and is liable to be quashed. 6.4. It may also be noted here that original assessment have been passed under section 143(3) on Dated 14.12.2011 and A.O. recorded the reasons for reopening of the assessment in March, 2016. Since, there is no failure on the part of assessee to disclose fully and truly all material facts necessary for assessment, therefore, action under section 147 initiated after expiry of 04 years from the end of the relevant assessment year, the re-assessment would be bad in Law and is clearly hit by First Proviso to Section 147 of the I.T. Act, 1961. Thus, the A.O. did not apply his mind to the reasons recorded for reopening of the assessment and without verifying the record of the Investor Companies also which have been accepted in the assessments under section 153C/153A of the I.T. Act, 1961, prior to recording of the reasons clearly show that A.O. has not applied his mind to the facts already available on record. In view of the above, reopening of the assessment is clearly bad in Law and liable to be quashed. In v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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