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TMI Blog2018 (10) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... d. - Decided in favour of assessee - ITA No.7060/DEL/2017 - - - Dated:- 7-9-2018 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER Assessee by : Shri Naveen Kumar Goyal, CA Revenue by : Shri Anil Kumar Sharma, Sr. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER: This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals]-18, New Delhi dated 15.09.2017 pertaining to assessment year 2007-08. 2. The grievance of the assessee is two-fold. Firstly, the assessee has challenged the validity of the assessment order framed u/s147 r.w.s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] on the ground that reopening of the assessment was bad in law. Secondly, on merits of the case, the assessee is aggrieved by the addition of ₹ 10,93,580/-. 3. Briefly stated, the facts of the case are that the assessee is a proprietor of M/s Priya Metals and is engaged in the business of trading in metals. Return for the year under consideration was filed on 18.10.2007 declaring income of ₹ 1,42,145/-. Return was processed u/s 143(1) of the Act. Later on, on the basis of information received fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Jain Sh. Vaibhav Jain has provided accommodation entry through thirty- seven paper entities. The list of the firms giving accommodation entry is enclosed as annexure- B. The list of accommodation entry recipients, has been obtained from Sh. Naveneet Jain Sh. Vaibhav Jain. It does not give year wise bifurcation. Hard copy of the list is enclosed as annexure-C, duly signed by Sh. Vaibhav Jain. Thus, the firms mention in the list B' have provided accommodation entries to the firms mentioned in list C. 5. The soft copy of the information in respect to annexure A, B C is also enclosed. 6. The information of accommodation entry includes A.Y. 2006-07 also, which is a time barring year for taking action u/s 148 of the Act 7. This information is forwarded to you for early dissemination to various field offices in Delhi (Soft copy also enclosed).'' It is evident from the assessment order passed by the ACIT, Centra! Circle-10, New Delhi on 28.03.2013 that Sh. Rakesh Gupta Sh. Vishesh Gupta and Sh. Navneet Jain Sh. Vaibhav Jain during the course of search proceedings, in post search proceedings and in assessment proceedings u/s 153A of ( Tax Act admitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,69,408/- 2. OM Agencies M/s Priya Enterprises ₹ 7,24,172/- Total amount of entries = ₹ 10,93,580/- Also the details of Income tax Return filed by M/s Priya Enterprises for A.Y. 2007-08 and processing done u/s 143(1) of I.Tax Act thereof were tried to be taken out from ITD System, However, the same were not found available there. Thus, as per our record, the assessee has not filed any return of income for A.Y. 2007-08. Further, no scrutiny assessment was done in A.Y. 2007-08. Therefore, I have reasons to believe that income chargeable to tax amounting to ₹ 10,93,580/- for the F.Y. 2006-07 relevant to A.Y. 2007-08 has escaped assessment. Besides this, any other income chargeable to tax that has escaped assessment, which will come to the notice of this office during assessment proceedings shall also be added back. Thus, I have reasons to believe that it is a fit case for initiation of proceedings u/s 147 of the Act. Proposal in the prescribed form for the A.Y. 2007-08 (F.Y. 2006-07) is submitted herewith for kind c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation, the AO stated: I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company has introduced its own unaccounted money in its bank account by way of above accommodation entries. The above conclusion is unhelpful in understanding whether the AO applied his mind to the materials that he talks about particularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the AO, if he had in fact undertaken the exercise, to make a reference to the 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(31 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 suffici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings. It is totally unwarranted. Resultantly, the initiation of proceedings under Section 147 and issuance of notice under Section 148 of the Act are hereby quashed. 12 In the case of Signature Hotels P Ltd Vs. ITO 338 ITR 51, it has been held as under: The first sentence of the reasons states that information had been received from Director of Income-Tax (Investigation) that the petitioner had introduced money amounting to ₹ 5 lacs during financial year 2002-03 as per the details given in W.P. (C) NO. 8067/2010 Page 12 Annexure. The said Annexure, reproduced above, relates to a cheque received by the petitioner on 9th October, 2002 from Swetu Stone PV from the bank and the account number mentioned therein. The last sentence records that as per the information, the amount received was nothing but an accommodation entry and the assessee was the beneficiary. The aforesaid reasons do not satisfy the requirements of Section 147 of the Act. The reasons and the information referred to is extremely scanty and vague. There is no reference to any document or statement, except Annexure, which has been quoted above. Annexure cannot be regarded as a material or evidence that prim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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