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TMI Blog2016 (10) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... U, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER Assessee by : Sh. Salil Kapoor, Adv. Revenue by : Sh. Satpal Gulati, CIT(DR) ORDER PER H.S. SIDHU, J.M. The Assessee has filed these two Appeals against the separate Orders both dated 26.2.2010 of the Ld. CIT(A)-XXX, New Delhi pertaining to assessment years 2002-03 & 2003-04. Since the issues involved in these appeals are common, therefore, the same are being consolidated by this common order for the sake of convenience, by dealing with ITA No. 2036/Del/2010 (AY 2002-03). 2. The following grounds raised in ITA No. 2036/Del/2010:- 1. Action of the CIT(A) in confirming the assessment made by the AO u/s. 148 of the I.T. Act in respect of income already disclosed in the original return and taxes paid thereon as applicable is unjust, illegal, arbitrary and against the facts and circumstances of the case. 2. Action of the CIT(A) in confirming the treatment of Short Term Capital Gain of ₹ 3,505,986/- as income from other sources by the AO is unjust, illegal, arbitrary and against the facts and circumstances of the case. 3. Action of the CIT(A) in confirming the addition of ₹ 3,50,986/- made by AO based up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urces vide his order dated 27.12.2007. 5. Against the Order of the Ld. AO, assessee appealed before the Ld. CIT(A), who vide impugned order dated 26.2.2010 has dismissed the appeal of the assesseee. 6. Aggrieved with the aforesaid order of the Ld. CIT(A), Assessee is in appeal before the Tribunal. 7. Ld. Counsel for the assessee has only argued the legal ground raised vide ground no. 1 stating that the provisions of section 147/148 of the I.T. Act were not applicable to the facts of the assessee's case and therefore, the issue of notice u/s. 147/148 was illegal and consequently, the impugned assessment order as passed u/s. 147/143(3) is unlawful and unjust and therefore the same deserved to be annulled / cancelled. In support of his contention he filed the various Paper Books enclosing therewith the assessment and appellate records and a compilation of various case laws having pages 1 to 123 including the copy of notice u/s. 148 alongwith the reasons recorded. He further stated that Ld. CIT(A) has erred in confirming the action of the AO in framing the impugned assessment order without assuming jurisdiction u/s. 147 and that too without complying with the mandatory conditions as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties were beneficiaries of the bogus transactions / accommodation entries. The above named assessee was also of the beneficiaries as she had taken accommodation entry of ₹ 35,05,986/-(Rupees………………..) from MKM Finsec Ltd. on different dates from its bank account as mentioned below:- S.No. Value of entry taken Date of which entry taken Bank from which entry given Branch entry giving bank A/c No. entry giving bank 1 490327 29.8.01 Corp. Bank Karol Bagh CCSDL 13 2 343168 9.11.01 S.B. of Mysore -do- 6612 3 301115 9.11.01 S.B. of Mysore -do- -do 4 399815 1.09.01 Corp. Bank -do- CSDL 13 5 228962 11.10.01 -do- -do- -do- 6 261712 11.10.01 -do- -do- -do- 7 494262 12.11.01 S.B. of Mysore -do- 6612 8 485597 23.8.01 Corp. Bank -do- CCSDL 13 9 501028 6.9.01 -do- -do- -do- 3505986 Total sum of ₹ 35.05 lacs has been deposited by the 'A' in her bank account 12424 with PNB, Nehru Place, ND (Source of information floppy disc of DIT (Inv.)-I, New Delhi). Such entires are only in the form of accommodation entries which were taken by the 'A' either agt. Cash payment or in the form o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner in which those very entries were provided in the accounts of the Assessee, which must have been tendered along with the return, which was filed on 14th November 2004 and was processed under Section 143(3) of the Act. Without forming a prima facie opinion, on the basis of such material, it was not possible for the AO to have simply concluded: "it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries". In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the Assessee escaped assessment is missing in the present case. 13. Mr. Sawhney took the Court through the order of the CIT(A) to show how the CIT (A) discussed the materials produced during the hearing of the appeal. The Court would like to observe that this is in the nature of a post mortem exercise after the event of reopening of the assessment has taken place. While the CIT may have proceeded on the basis that the reopeni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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. (iv) 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 ₹ 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 the quashed." 10. In view of above, we are of the considered view that the aforesaid issue in dispute is exactly the similar and identical to the issue involved in the present appeal and is squarely covered by the aforesaid decisions of the Hon'ble High Court of Delhi in the case of G&G Pharma (supra) & Signatures Hotels (P) Ltd. (Supra). Hence, respectfully following the above precedents in the case of Pr. CIT-4 vs. G&G Pharma India Ltd. (Supra) and Si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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