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TMI Blog2017 (11) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... diction lies with this Ward. The A.O. after completing the re-assessment proceedings on merit, made addition of Rs. 9 lakhs under section 68 of the I.T. Act vide re- assessment order under section 147/143(3) of the I.T. Act, dated 31st March, 2015. The assessment was completed by ITO, Ward-1(1), Meerut. 2. The assessee challenged the addition on merit before Ld. CIT(A). However, the appeal of assessee has been dismissed on merit. The also raised additional ground of appeal before Ld. CIT(A) challenging the re-assessment order as bad in law, illegal and without jurisdiction. The Ld. CIT(A) however, noted that re- assessment has been initiated on the basis of information received from Investigation Wing. Therefore, additional ground was also dismissed and appeal of assessee was accordingly dismissed. 3. The assessee in the present appeal has challenged the initiation of re-assessment proceedings under section 148 of the I.T. Act as there was addition of Rs. 9 lakhs under section 68 of the I.T. Act, 1961. 4. I have heard the learned Representatives of both the parties and perused the material on record. The Ld. D.R. also produced assessment record and filed the correspondence betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e part of the assessee to disclose fully and truly-all. material facts necessary for the above assessment year, the income chargeable to tax to the extent of entry mentioned above for A.Y. 2009-10 has escaped assessment within the meaning, of section 147 of the I. T. Act, 1961 and is a fit case for issue of-notice u/s 148 of the I. T. Act. Sd/-xxx 9-07-2013 ITO, W-1(1), GZB." 5.1. The above reasons would show that reasons have been recorded by ITO, Ward-1(1), Ghaziabad when re-assessment order have been passed by ITO, Ward-1(1), Meerut. The A.O. in the re- assessment order dated 31st March, 2015, specifically recorded that the case of the assessee-company transferred to ITO, Ward-1(1), Meerut being jurisdiction lies with this Ward. 5.2. The Ld. D.R. filed copy of the letter dated 20th May, 2014 written by the assessee-company to ITO, Ward-1(1), Ghaziabad on receipt of notice under section 142(1) and notice under section 143(2) of the I.T. Act. The assessee in this letter explained to ITO, Ward-1(1), Ghaziabad who issued notice under section 148 and recorded reasons for the same that he has been allotted PAN at Meerut and one more PAN was issued wrongly by the Department he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nquiries it has been found that the bank a/c from which money has been transferred to various beneficiaries have been operated by certain stock brokers, who have been providing entries to the beneficiaries by showing them transactions made by them in purchase / sale of shares of certain companies, which in fact never took place." The assessee is also one of the beneficiary figuring in the list supplied by the DDIT Wing, Gurgaon and an amount of Rs. 5,92,809 has been remitted to the assessee through Draft No. DD. 186676 dated 12.04.97 from a/c. No. CA-3097 held in Corporation Bank, Karol Bagh, New Delhi n the name of M/s. R.K. Agarwal & Company, 1748/55, Naiwala, Karol Bagh, New Delhi. The said amount is found credited in the Bank A/C. No. SB/8069, Canara Bank, Vibhav Nagar, Agra which belongs to the assessee. Since the said transaction of purchase and sales of the shares has been found to be bogus and therefore, entire amount of sale proceeds of shares claimed to have been received 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o believe that any income chargeable to tax has escaped assessment for the assessment year under appeal. Further, the reasons have not been recorded by the Assessing Officer of the present assessee. Further the concerned AO at Mathura has nowhere reason to believe that any income chargeable to tax has escaped assessment. The Assessing Officers at Mathura and Agra did not examine any of the information received from DDIT (Inv.) Gurgaon before proceeding with the matter. The AO at Mathura merely followed the reasons recorded at Agra and proceeded with the matter. Hon'ble Delhi High Court in the case of Signature Hotels P. Ltd. vs. ITO, 338 ITR 51 held as under : "Held, allowing the petition, that the reassessment proceedings were initiated on the basis of information received from the Director of Income-tax (Investigation) that the petitioner had introduced money amounting to Rs. 5 lakhs during financial year 2002-03 as stated in the annexure. According to the information, the amount received 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 refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xing that it was "borrowed satisfaction" which was not sufficient to confer power on the Assessing Officer to initiate reassessment proceedings against the assessee." Aforesaid decision has been confirmed by the Hon'ble Supreme Court by dismissing the departmental Special Leave Petition as is reported in 313 ITR (Statute) 27. 9. Considering the above discussion, it is clear that the Assessing Officer at Agra was not having jurisdiction over the assessee. Therefore, he should not have recorded the reasons for reopening of assessment and further he did not examine any information supplied by DDIT(Inv.) and that he was having no reasons to believe that income chargeable to tax has escaped assessment and such facts are also not mentioned in the reasons recorded for reopening of assessment. The AO at Mathura did not do anything in the matter and merely followed the reasons recorded by ITO at Agra and that he has initiated the proceedings u/s. 148 against the assessee on borrowed satisfaction of ITO, Agra. He has also not examined any record of the case or the information received from DDIT(Inv.). The reasons which are not in accordance with law have been recorded at Agra by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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