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TMI Blog2023 (11) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 143(1) of the Act. Subsequently regular assessment was completed under section 143(3) of the Act on 14.3.2014 accepting the loss declared by the assessee. The DDIT, Jodhpur had conducted search in the case of M/s. Varah Infra Group of Jodhpur and it was found that the said company and its group were providing accommodation entries in the form of investments in share capital of various other companies located in Kolkata, Mumbai, Indore and Jodhpur. The main person involved in providing bogus entries was Mr. Jagdish Prasad Purohit. In the statement recorded from him under section 132(4) of the Act, he admitted that he is engaged in the business of providing accommodation entries in the form of share capital, share premium, unsecured loans and bogus bills etc., by receiving commission. Mr. Jagdish P. Purohit also furnished a list of 24 companies, which were controlled and managed by him for this purpose. Based on the said search, the DDIT informed the assessing officer that the assessee herein is one of the beneficiaries of accommodation entries. As per the said information, the assessee has also taken accommodation entries in the form of security premium to the tune ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the beneficiary company who had taken accommodation entry in the form of security premium amounting to Rs. 64,11,34,873/- during the F.Y. 2010-11. In view of above facts, I have reason to believe that income chargeable to tax amounting to Rs. 64,11,34,873/- has escaped assessment for A.Y. 2011-12 within the meaning of section 147 of the Income Tax Act, 1961. Issued notice u/s 148 after taking necessary approval dated 21.03.2016 und section 151(2) of the I.T. Act from Jt. CIT Range 15(1), Mumbai." 6. The Learned AR submitted that the fact would remain that the assessment u/s 143(3) had been completed for this year prior to the reopening of assessment. However, in the above said reasons for reopening, the Assessing Officer did not refer to the assessment completed u/s 143(3) of the Act, but is referring to the intimation issued u/s 143(1) of the Act upon processing of the return of income. Further the Assessing Officer has simply narrated the information received from DDIT, i.e., the facts relating to the search carried out at Varah Infra Group and the allegation that the assessee is one of the beneficiaries of the accommodation entries. He submitted that the AO did not make any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned reopening of assessment is liable to be quashed. The Learned AR placed his reliance on the decision rendered by Hon'ble Bombay High Court in the case of B.U. Bhandari Autolines (P) Ltd. Vs. ACIT (2023) 149 taxmann.com 219 (Bombay) and also decision rendered by Hon'ble High Court of Delhi in the case of PCIT Vs. Meenakshi Overseas (P) Ltd. (2017) 82 taxmann.com 300(Del). 8. The Learned AR further submitted that the assessee has obtained copy of the sworn statement taken from Mr. Jagdish Prasad Purohit on 21.1.2015. In the answer given to Question No. 10, the above said person has submitted a list of 246 companies controlled and managed by him. The above said list is attached as Annexure-A to the statement. Inviting our attention to the above said list, the learned AR submitted that the assessee has not obtained share capital from any of the 246 companies mentioned in the list. On the contrary, name of the assessee is shown as one of the companies controlled by him at serial No. 16 in the list. Hence the question whether the assessee is a conduit or one of the beneficiaries was not examined by the Assessing Officer. Since the AO has not examined the materials supplied by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the said authority that the assessee has taken accommodation entry. After that, the AO simply states that he has reason to believe that income chargeable to tax has escaped. It is well settled proposition of law that the "reason" contemplated in sec.147 is that of the assessing officer and not of anyone else. 13. At this juncture, we may take support of principles laid down by Hon'ble High Courts on the matter of reopening of assessment. In the case of B U Bhandari Autolines (P) Ltd, (2023)(149 taxmann.com 219)(Bom), the AO reopened the assessment on the basis of information provided by DDIT that the above said assessee has taken accommodation entries by way of bogus purchase bills. The Hon'ble Bombay High Court noticed that the assessing officer did not furnish any explanation as to on what basis and material he came to the conclusion that the supplier was a shell entity and its transactions with the assessee was not genuine. Further, the Hon'ble Bombay High Court observed that the reasons recorded did not suggest at all that the AO had independently applied his mind to the said information received or did he conduct his own enquiry into the matter for the purpose of concluding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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