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TMI Blog2018 (10) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... opening of the assessment is without any application of mind and examination of the facts - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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, Central 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 that they have given accommodation entries to the parties whose lists have been provided by them to the ACIT, Central Circle-10, New Delhi. Therefore, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 consideration and necessary approval u/s 151(2) of the I. Tax Act, 1961 as [getting barred by limitation on 31.03.2014. [Pawan Kumar Vashist] Income Tax Officer Ward-39 (3), New Delhi" 6. A perusal of the above clearly shows that the Assessing Officer has borrowed the findings. Moreover, the entries pertain to assessment year 2006-07 as is clearly evident from the reasons recorded mentioned hereinab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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." 10. On identical set of facts in the case of Sapra Metal company 2910/DEL/2016, the Bench had occasion to consider the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 prima facie shows or establishes nexus or link which discloses escapement of income. Annexure is not a pointer and does not indicate escapement of income. Further, it is apparent that the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. The Assessing Officer accepted the plea on the basis of vague information in a mechani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The law is well settled. There is no substantial question of law which arises for our consideration." 11. In view of the above discussion, facts of the case in hand, vis a vis the judicial decisions mentioned hereinabove, I have no hesitation in holding that reopening of the assessment is without any application of mind and examination of the facts. According, reopening is held to be invalid and the same is quashed. Ground No. 1 is accordingly allowed. 12. Since the reopening has been held to be invalid, I do not find it necessary to dwell into the merits of the case. 6. As mentioned elsewhere for identical reasons on identical set of facts the assessment has been reopened in the case of the present appellants, therefore, respectfully following the decision of the coordinate bench I hold accordingly. 7. Reliance on the decision of the Hon'ble High Court of Delhi by the Ld. DR is misplaced as that decision of the Hon'ble High Court was given on a different context. In the appeals in hand some search took place in the place of 3rd person wherein on the basis of the statement the assessment has been reopened without any application of mind and examination of the facts. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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