TMI Blog2023 (9) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... ses are fully vouched , payments have been made through account payee cheque and the details have been duly submitted and no fault/defect was pointed out by the AO. Assessee has reiterated that the accounts of the assessee company are duly audited. The closing stock as reflected in the balance sheet has been duly accepted. Appeal of the assessee stands allowed. - Shri Shamim Yahya, Accountant Member And Shri Anubhav Sharma, Judicial Member For the Assessee : Sh. Ashwani Kumar, CA For the Revenue : Sh. Akhilesh Gupta, Sr. DR ORDER PER SHAMIM YAHYA, AM, This appeal by the assessee is directed against the order of Ld. CIT (Appeals)-7, New Delhi, dated 21.08.2017 for the Assessment Year 2010- 11. 2. The grounds of appeal read as under:- 1. That order passed us 250(6) of the Income Tax Act, 1961 by the Ld. Commissioner of Income Tax (Appeals)-7, New Delhi is against law and facts on the file in as much as he was not justified to arbitrarily uphold the action of the Ld. Assessing Officer in initiating proceedings us 147 of the Act. 2. That he was further not justified to arbitrarily uphold the action of the Ld. Assessing Officer in making an add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iana while framing the assessment order of Shri Raj Kumar Gupta Mahavir Hosiery Works for AY 2010-11, the total purchases made by M/s R.K. Machine Tools Ltd. from M/s Mahavir Hosiery Works Ludhiana, throught he said Shri Rajkr. Gupta, amounting to Rs. 1,27,23,330/- is treated as bogus purchases and accordingly added to the total income of assessee. 4. Against the above order, the assessee appealed before the Ld. CIT(A) challenging both the reopening as well as merits of the case. The Ld. CIT(A) held that the reopening was valid and he also confirmed the addition on merits. 5. Against the order of the Ld. CIT(A), the assessee is in appeal before us. 6. We have heard both the parties and perused the records. Before proceeding further, we may gainfully refer to the copy of the reasons recorded reproduced in assessment order at page 68 of the paper book:- 7. A perusal of the reasons recorded by the AO exhibits that he has recorded the reasons solely on the basis of some information received from the Income Tax Officer, Ward-2(2), Ludhiana vide letter No. ITO W- 2(2)/LDH/2016-17/567 dated 17/03/2017. In this regard, nowhere on record is that copy of the said letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in money laundering business for beneficiaries - According to Assessing Officer, sources of transactions were not explained - Notice was issued by Assessing Officer to reopen assessment on aforesaid basis that income chargeable to tax to extent of accommodation entry had escaped assessment - Whether information received from investigation wing could not be said to be tangible material per se without a further inquiry being undertaken by Assessing Officer to establish link between 'tangible material' and formation of reason to believe that income had escaped assessment and consequently, reassessment was unjustified - Held, yes [Para 13] [In favour of assessee] 2. Principal Commissioner of Income Tax vs Meenakshi Overseas (P.) Ltd. [2017] 82 taxmannc.om 300 (Del.) Section 68, read with section 147, of the Income-tax Act, 1961 - Cash credit (Accommodation entries) - Assessment year 2004- 05 - Information was received from Director (Investigation) that during year under consideration, assessee had received accommodation entries from a beneficiary - Notice under section 148 was issued and an assessment order was passed by Assessing Officer treating credit received as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r inquiries into the matter that these companies were non-existent. It was clear that the Assessing Officer did not make any inquiry or investigation, if these companies were in fact 'paper companies'. That being a jurisdictional issue, the assumption of jurisdiction under sections 147 and 148 was erroneous. 9. The ratio emanating from the above case laws duly supported the proposition of the ld. Counsel for the assessee and we are placing reliance upon them also in upholding that reopening in this case is bad in law. Although, we have quashed the reopening as above, adjudication on merits of the case though not necessary but we are dealing with it in any case. 10. As regards merits of the case, it is contention of the ld. Counsel for the assessee that during the course of original assessment proceedings, a detailed questionnaire was issued by the AO on 27.09.2012 copy of which has been placed at pages 49 to 53 of the paper book. In this regard, it is to be noted that in question 26 and 27 at paper book page 52 following specific query was made with respect of the purchase and sales of the company month wise. Q. No.26 Give the details of purchases and sales month ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
