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TMI Blog2013 (10) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... res through M/s. R.K. Agarwal & Co., New Delhi by the assessee. The notice u/s. 148 was issued with the approval of additional CIT, Range-I, Agra by the ITO 1(4), Agra on 28.03.2003 as no such assessee was assessed to tax with him at the address given in the information and the same was served upon the assessee on the same day. As per information, a sum of Rs.5,92,809/- was remitted to the assessee through draft drawn on Corporation Bank, Karol Bagh, New Delhi in the name of M/s. R.K. Agarwal & Co., New Delhi. The said amount of draft was found credited in the account of the assessee. It was, therefore, found that said M/s. R.K. Agarwal & Co. have been providing entries to the beneficiaries by showing the purchase and sale of shares which had not taken place. In response to notice u/s. 148, the assessee filed written reply that he is filing return of income with the Income-tax Officer 3(4), Mathura, hence, the notice u/s. 148 was wrong and incorrect. On 18.08.2003, again notice u/s. 142(1) with the same queries was issued and the assessee challenged the said notice also on the same reasons. Then this case was transferred to ITO, Mathura and, therefore, notice u/s. 142(1) was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income with ITO, Mathura, therefore, the AO at Agra has no jurisdiction to issue notice u/s. 148. The matter was, therefore, transferred to ITO, Mathura, who without recording reasons proceeded with Income-tax proceedings and when he was apprised that notice u/s. 148 and 142(1) issued by the ITO, Mathura is without jurisdiction then a fresh notice u/s. 148 was issued on 13.01.2004, copy of which is filed at page 10 of the paper book. He has referred to page 8 & 9, which is letter dated 08.12.2003 issued by ITO, Mathura and copy of the reasons recorded by the ITO, Agra. He has submitted that the Assessing Officer at Mathura solely followed the same reasons, which were recorded by ITO, Agra. Therefore, it was merely a borrowed satisfaction and the Assessing Officer at Mathura did not apply his mind to the facts of the case and was having no reasons to believe that income chargeable to tax has escaped assessment. The AO at Mathura has also not examined any information, which was alleged to have been supplied by the DDIT(Inv.), Gurgaon. Therefore, reassessment proceeding is bad in law. 7. On the other hand, the ld. DR produced the assessment record and stated that there is no orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the assessee by Bank Draft, is the income of assessee from undisclosed sources, which has escaped assessment within the meaning of section 147 of the IT Act, 1961. Since, no regular assessment has been made in the assessee's case for A.Y. 98-99, approval u/s. 151(2) of the IT Act is considered necessary to assess the above said income by issuing a notice u/s. 148 of the IT Act, 1961. From the above, it is clear that above reasons were recorded by the ITO 1(4), Agra, which on approval by Addl. CIT, Range-I, Agra, the ITO 1(4), Agra issued notice u/s. 148 of the IT Act to the assessee. There is no other reasons available on record as produced by the ld. DR. It would mean that the AO at Mathura did not record any reasons at his own, but merely followed the same reasons which were recorded by the ITO at Agra. No material is produced before us to counter the submissions of the ld. counsel for the assessee. The details noted in the assessment order and the appellate order would also clarify that initially the re-assessment proceedings were initiated at Agra and the Revenue department finding no jurisdiction over the assessee transferred the case to the ITO, Mathura and the ITO M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs.90 lakhs and was incorporated on January 4, 1989, and was also allotted a permanent account number in September, 2001. Thus, it could not be held to be a fictitious person. The reassessment proceedings were not valid and were liable to be quashed." 8.1 Hon'ble Rajasthan High Court in the case of CIT vs. Shree Rajasthan Syntex Ltd., 313 ITR 231 held as under : "The assessee company had leased out certain plant and machinery to another company under agreements executed on different dates for a specified period of time. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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