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TMI Blog2010 (9) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... objection assessee has canvassed that Ld. Commissioner of Income Tax (Appeals) erred in law in confirming the action of the Assessing Officer in assuming jurisdiction u/s 147 of the IT Act. 3. In this case assessee filed return of income on 25.10.2001. the assessment was completed on 9.12.2002 and the income was revised to ₹ 39,73,739/-, as result of order giving effect to Ld. Commissioner of Income Tax (Appeals) s order dated 24.3.2003. Notice u/s 148 was issued to the assessee on 28.3.2008. Assessing Officer noted that from verification from the case records, it has been observed that assessee had received accommodation entries of ₹ 42,03,250/-. The assessee was, was therefore asked to explain the following:- Informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant case detailed investigation has been carried out by the DIT(Inv.). The persons who have given the entries have accepted that they are merely the entry providers, hence Assessing Officer disallowed the amount and added to the total income. 4. Before the Ld. Commissioner of Income Tax (Appeals) at the threshold assessee agitated against the reopening. Ld. Commissioner of Income Tax (Appeals) in the appellate order noted that reasons recorded for reopening was as under:- The reason recorded is as under:- 1. In this case, the assessment was completed u/s 143(3)(i) on 25.10.2001 as a total income of ₹ 39,73,740/- against the returned income of ₹ 3873870/-. 2. Certain investigations were carried out by the Directora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -do- Teem Metals Ltd. 900116 2789 Vijaya Bank, Ram Nagar 13-Apr-00 50050 -do- Dinanath Luhariwala Spinning Mills Pvt. Ltd. 7461 1200217, Innovative Wazirpur 14-mar-01 50075 -do- OBC M.V. Marketing Pvt. Ltd. 916209 567, Feedrer Karol Bagh 14- Mar-01 50060 In view of the above information, it is evident that the assessee company has introduced its own unaccounted money in its bank by way of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration of 2.34.500/- @ 3.35 per share through share broker M/s Sunuiti Co. the payment of these shares was made by the assessee after about 11 months from the date of purchase of shares. Later on, the assessee sold these shares on 9.12.1994 through two shares brokers namely M/s M. Goenka Co. (40,000/-) and M/s. M.P. Rawat Co. (30,000 shares) for ₹ 15,83,600/- and ₹ 11,87,400/- respectively. The assessee received these payments through cheques. As per enquiries made by the DDI(Inv.) M/s. M. Goenka co. in their statements have admitted that they used to issue bills only. The party to whom the bills are issued, pays the amount in cash. For this work commission @ 0.25% to 0.50% of the amount of the bill issued is charged. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer has nowhere recorded a finding that the escapement of income in respect of receipts by way of sale of shares had escaped assessment by reasons of failure on the part on the assessee to disclose fully and truly all material facts necessary for the assessment. The Hon ble Delhi High Court has observed and held in the above two referred decisions that the condition that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment has got to be satisfied, and the Assessing Officer has to prove and establish that assessee has failed to disclose fully and truly all material facts necessary for the assessment, and he has to stated so in the reasons recorded. In the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pement of income with regard to the capital gain from shares has been resulted by reason of assessee s failure to disclose fully and truly all material facts relating to the share transactions. Therefore, reopening made by the Assessing Officer u/s 147 after the expiry of four years from the end of the relevant assessment year is hit by proviso to section 147 of the Act, and as such we hold the initiation of proceedings u/s 147 of the Act without jurisdiction and bad in law. 12. Since the re-assessment proceedings initiated by the Assessing Officer u/s 147 of the Act has been held to be not in conformity with the provisions contained in proviso to section 147 of the Act, and have been held invalid by us as per view we have taken above, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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