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TMI Blog2017 (11) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... aid information. The alleged information of the Investigation Wing can alone at the best be a reason to suspect, however, in the absence of any other material, same cannot be a tangible material for the formation of belief. Undisputedly, in the present case, there was no material other than the purported information before the Assessing Officer to form his reasons to believe that there was an escapement of assessable income. - Decided in favour of assessee. - I.T.Appeal No. 6251/Del/2012 - - - Dated:- 12-9-2017 - SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI L. P. SAHU, ACCOUNTANT MEMBER For The Assessee : Shri Salil Aggarwal, Adv.; Shri Shailesh Gupta, Adv. For The Department : Shri Gudrun Nehra, Sr. D. R. ORDER. PER I. C. SUDHIR, J. M. : The assessee has questioned first appellate order on the following grounds :- 1. That the learned CIT (Appeals) has erred both on facts and in law in upholding the initiation of proceedings u/s 147 of the Income Tax Act. despite the fact there was no tangible material to form a reason to believe (as distinguished from, if the Assessing Officer believes') at the time of initiation of proceedings that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in holding the initiation as valid and that the assessee had not discharged the burden. The learned CIT (Appeals) has over-looked the judgment of jurisdictional High Court in the case of CIT vs. Pradeep Gupta reported in 303 ITR 95 at page 98, wherein it was held that, the burden is on the revenue to establish, there is an escapement of income. 7. That the learned CIT (Appeals) has further overlooked the fact of the instant case, that the amount received was returned back within a period of one month and thus it could not be stated that the assessee had take an accommodation entries and assessee had not discharged its burden. 8. That the learned CIT (Appeals) has erred in sustaining the addition without appreciating that the learned Assessing Officer while framing the assessment had though recorded in the order of assessment that, in statement recorded of Shri Rajesh Kumar .Iha and Shri P.N. Jha, by Investigation Wing who were at one time director of M/s Aggregate Finance Investment Pvt. Ltd. had admitted that the said company was involved in providing and received accommodation entries, such evidence was not confronted to the assessee nor was to establish that in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 4.4 and para 6.3) which has not been shown to the assessee for its rebuttal and the quantum appeal order has been passed without providing any opportunity to the assessee to for its rebuttal. 13. That the learned CIT (Appeals) has further erred in upholding the initiation of proceedings, the addition made and the interest levied. 2. Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon. 3. In support of the above grounds, the ld. AR has furnished following submissions :- 1. The initiation of proceedings u/s 148 of the Act by a notice dated 30/31.03.2011, beyond a period of four years is bad in law as the instant proceedings under section 147 of the Act were initiated on the basis of mere an alleged information alleged to have been received from the Director of income Tax Investigation (Delhi). The learned Assessing Officer had no material to form his opinion for a reason to believe that there was an escapement of income. In other words, there was no material other than the purported information. In such circumstances, it has been held that the informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Del/2010 dated 26th July, 2013) xvi. Sri Sushil Kr. Chopra Vs. Dy. Commissioner of Income-tax (I.T.A. Nos. No. 1862/Kol/2009 dated 12th April, 2013) xvii. Income-tax Officer, Wd.-4(3), Kolkata Vs. M/s. A. M. Udyog Ltd. (I.T.A No. 1947/Kol/2010 dated 15th July, 2013) That the alleged information of the investigation wing can alone be a reason to suspect however, in the absence of any other material, same cannot be tangible material for the formation of the belief :- a) CIT vs. Indian Oil Corporation 159 ITR 956 (SC) b) CIT vs. Gupta Abhushan (P.) Ltd. [2009] 312 ITR 166 (Delhi) c) SMCC Construction India Ltd vs. ACIT [2014] 220 Taxman 354 (Delhi) d) CIT vs Paramjit Kaur 311 ITR 38 (P H) Reason to believe entertained by the Assessing Officer must not be arbitrary or irrational and are stronger words is satisfied (Ganga Saran Sons Pvt. Ltd. vs. ITO reported in 130 ITR 1). That both the share applicants from whom the assessee had received the sum along with the application to allot shares were assessed to tax and the amount paid was through account payee cheques. It is submitted that where a payment is made by cheque, genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies were also filed, addition is liable to be deleted (Commissioner of Income-tax Vs. Empire Buildtech (P.) Ltd reported in [2014] 43 taxmann.com 269 (Delhi). Reliance placed by the revenue on the statements of Shri. Rajesh Kumar Jha and Shri. P.N. Jha without providing the copies of statements of the aforesaid persons and without confronting the cross examination, despite assessee s request made and thus have no evidentiary value and has to be excluded :- i. Kishnichand Chellarain Vs. CIT reported in 125 ITR 713 ii. R.B. Shreeram Durga Prasad Fatehchand Nursing Das Vs. Settlement Commission reported in 176 ITR 169 at page 174. iii. Commissioner of Income-tax v. Ashwani Gupta 322 ITR 396 (Del); iv. J.T. (India) Exports Vs. Union of India 262 ITR 269 (Del) (FB) v. CIT vs Dharam Pal Prem Chand Ltd. 295 ITR 105(Del) vi. CIT Vs Pradeep Kumar Gupta 207 CTR 115. 3.1 The ld. AR also referred page Nos. 15 to 22, 37 and 38, 40 to 66, 103 to 146 of the paper book, which are copies of letter from Income Tax Officer communicating reasons recorded for initiating proceedings under section 147, objections raised to the reasons, the order of the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EGAT E FINANCE INVES. RATNAKAR R KAROL BAGH 52 MEDITRONIC S INDIA P. LTD. BANK OF NOVA SCOTIA BARA KHAMBA ROAD 500000 10372 11 JULY, 2003 AGRFEEGAT E FINANCE INVES. SHB KAROL BAGH 50029 MEDITRONIC S INDIA P. LTD. BANK OF NOVA SCOTIA BARA KHAMBA ROAD 500000 16419 11 JULY, 2003 AGRFEEGAT E FINANCE INVES. RATNAKAR KAROL BAGH 52 Information so received has been gone through. The above said instruments are in the nature of accommodation entry, which the assessee has taken after paying unaccounted cash to the accommodation entry giver, who is a known entry operator as per the report of the Investigation Wing. In view of these facts, the alleged transaction is not the bonafide one. Therefore, I have reason to believe that an Income of ₹ 15,00,000/- has escaped assessment in the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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