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TMI Blog2016 (5) TMI 1415X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order, the Assessing Officer has referred to accommodation entries provided by Mahasagar Securities Pvt. Ltd. Therefore, in our view, the impugned assessment order has no nexus to the reasons recorded for re–opening the assessment - Decided in favour of assessee. - ITA no.2802/Mum./2014 - - - Dated:- 31-5-2016 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER Assessee by : Shri Ajay R. Singh Revenue by : Shri Vishwas Jadhav O R D E R PER SAKTIJIT DEY, J.M. Instant appeal of the assessee is directed against the order dated 27th January 2014, passed by the learned Commissioner (Appeals) 27, Mumbai, for the assessment year 2005 06. Assessee has raised three effective grounds along with its sub grounds, which are as under: 1. Violation of principles of Natural Justice: 1.1 The CIT(A) erred in not giving any finding as regards ground Nos. I 2 by observing that, grounds are of general in nature without appreciating that, the principle of Natural Justice was violated and evidences were used against the assessee without furnishing the copy, hence the order of the Assessing officer confirmed by CIT(A) is bad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the validity of re opening of assessment under section 147 of the Income Tax Act, 1961 (for short the Act ). 3. Brief facts relating to the issue are, the assessee is an individual. For the assessment year under consideration, the assessee filed her return of income on 21st December 2005, declaring total income of ₹ 2,28,342. As it appears, the return of income filed by the assessee was processed under section 143(1) of the Act on 23rd October 2006. Subsequently, the Assessing Officer being of the opinion that the assessee has made transactions in share amounting to ₹ 36,45,583 through Gold Star Finvest Securities Ltd., and profit derived therefrom was not offered to income, thereby, resulting in escapement of assessment, reopened the assessment under section 147, by issuing a notice under section 148 of the Act on 27th March 2012. After receiving the notice under section 148, the assessee on 27th April 2012, submitted its reply requesting the Assessing Officer to treat the return of income filed originally as return of income in response to notice under section 148 and at the same time he also requested the Assessing Officer to furnish the reasons recorded. The Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto share transactions through Mahansager Securities Pvt. Ltd., by making intraday transactions and net profit earned from such transactions was ₹ 114462=61. Learned Authorised Representative, drawing the attention of the bench to the impugned assessment order submitted, in the assessment order, the Assessing Officer has referred to share transactions made by the assessee through Mahasagar Securities Pvt. Ltd. He, therefore, submitted the reasons recorded being at variance with the assessment order, the proceedings under section 147 is vitiated, hence, legally unsustainable. He submitted, even the figure of ₹ 36,45,853, does not match to the exact sale figure of shares through Mahasagar Securities Ltd., as reflected in the Balance Sheet of the assessee. Thus, it was submitted, the re opening being bad in law, the assessment order is to be quashed. Learned Authorised Representative submitted, under identical facts and circumstances, the co ordinate bench in the case of another assessee in the group has quashed the assessment order passed under section 143(3) r/w section 147 of the Act. A copy of the order passed in case of Harakchand K. Gada (HUF) v/s ITO, ITA no.2800/Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Securities Ltd. in the assessment order, the Assessing Officer has referred to accommodation entries provided by Mahasagar Securities Pvt. Ltd. Therefore, in our view, the impugned assessment order has no nexus to the reasons recorded for re opening the assessment. Even otherwise also, the very basis for re opening of assessment is on wrong premise as the facts on record would reveal that the assessee has not made any share transactions through Gold Star Finvest Securities Ltd. For this reason alone, assessment made under section 143(3) r/w section 147, deserves to be quashed as there is no live link or nexus between the facts on record and formation of belief. Further, it is observed, the co ordinate bench of the Tribunal while deciding similar issue relating to re opening of assessment on identical facts and circumstances in the case of another assessee in the group viz. Harakchand K. Gada (HUF) (supra) held as under: 4.3.1 We have heard the rival contentions and perused and carefully considered the material on record, including the judicial decision cited. The facts of the matter as emerge from the record are that there was a search and seizure action under section 132 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pened by issue of notice under section 148 of the I.T. Act on 14.03.2011 . This variance in the reasons recorded by the AO as provided to the assessee vide letter dated 04.10.2012 and that recorded in the order of assessment, in our view, prevented the assessee from putting up any defence in respect of the reopening of assessment under section 147 of the Act. This has clearly violated the principles of natural justice as the AO proceeded on a different premise while finalizing the order of assessment dated 25.03.2013. 4.3.4 As contended by the learned A.R. for the assessee it is clearly evident that the reasons recorded by the AO and provided to the assessee vide letter dated 04.10.2012 (supra) were factually incorrect and had neither any bearing nor nexus on the assessee s assessment nor was it part of the facts considered or additions made by the AO while disposing off the case. There is not a mention of or examination of whether the assessee had entered into any transaction with M/s. Gold Star Finvest Securities Pvt. Ltd. This, in our view, establishes that there was no application of mind by the AO resulting in lack of cogent or genuine or factually correct reasons bein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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