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TMI Blog2019 (1) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... PPN Properties Private Limited. Thus, the above recording does not satisfy requirement of law which is mandatory for assuming jurisdiction to reopen the assessment. My above view is supported by decision of Coronation Agro Industries Limited Vs. DCIT [2017 (1) TMI 904 - BOMBAY HIGH COURT]. Therefore, the reassessment orders passed pursuant to the above recording are hereby quashed and ground of appeals of the assessee is allowed. - ITA No.3059/Del/2018 And ITA No.3060/Del/2018 - - - Dated:- 16-1-2019 - SHRI N.S. SAINI, ACCOUNTANT MEMBER For The Appellant : Sh. Salil Aggarwal, Advocate Sh. Shailesh Gupta, Advocate For The Respondent : Sh. S. L. Anuragi, Sr. DRa ORDER PER N. S. SAINI AM: 1. These are appeals filed by the assessee against the order CIT(A)-7, New Delhi dated 19.03.2018 for the A. Y. 2009-10 and CIT(A)-7, New Delhi dated 19.03.2018 for A. Y. 2009-10. 2. ITA No.3059/Del/2018 the assessee has taken following grounds of appeal of the assessee as under :- 1 That the learned Commissioner of income Tax (Appeals) has grossly erred both in law and on facts in sustaining an assessment framed under section. 143(3)/147 of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s erred in law and on facts in relying on judgments totally inapplicable on the facts of the assessee appellant and further, sustaining additions in the hands of assessee company, without giving any fair and proper opportunity of being heard to the assessee company and passing the assessment in undue haste,-thereby, violating the principles of natural justice. 3. ITA No.3060/Del/2018 the assessee has taken following grounds of appeal of the assessee as under :- 1. That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in sustaining an assessment framed under section 143(3)/l47 of the Act at an income of ₹ 3, 08, 440/- as against returned income being filed at ₹ 61, 130/-. 2 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in sustaining the initiation of proceedings under section 147 of the Act and, further completion of assessment under section 143(3)/]47 of the Act without satisfying the statutory pre-conditions for initiation of the proceedings and, completion of assessment under the Act. 2.1 That the learned Commissioner of Income Tax (Appeals) has further erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer on the ground that the assessee did not come out clean with the facts with whom he wants cross-examination. Further the Assessing Officer disposed of the objection of the assessee to the reopening of the assessment vide it is letter dated 01.07.2016 wherein it was observed that the assessee had raised objection to reopening and the same was being disposed off as follows. Thereafter the Assessing Officer observed that on the basis of information received after complying with necessary provisions as laid out in the income Act 1961 notice u/s 148 has been sent and, therefore, you are requested to comply with the proceedings at the earliest to complete the proceedings in time. Thus, it was the submissions of the AR of the assessee that neither cross-examination of the person on whose statement the Assessing Officer has relying for reopening the assessment was supplied to the assessee nor the Assessing Officer passed speaking order on the objections raised by the assessee to the reopening of the assessment and hence the reopening of assessment initiated by the Assessing Officer was bad in law. 9. He relied on decision of Hon ble Delhi High Court in the case of Signature Hotels Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Who was the accommodation entry giver and how he could be said to be a known entry operator were not mentioned. The source for all the conclusions was the investigation report. The tangible material which formed the basis for the belief that income had escaped assessment must be evident from a reading of the reasons. The reasons failed to demonstrate the link between the tangible material and the formation of the reason to believe that income had escaped assessment. The Assessing Officer had not independently considered the tangible material which formed the basis for the reasons to believe that income had escaped assessment. No error had been committed by the Appellate Tribunal in concluding that the initiation of the reassessment proceedings under section 147 / 148 to reopen the assessments for the assessment year 2004-05, was not legal. SIGNATURE HOTELS PVT. LTD. v. ITO [2011] 338 ITR 51 (Delhi) applied. 11. He further relied on the decision of Hon ble High court in the case of CIT Vs. Pradeep Gupta (2008) 303 ITR 95 (Del) where it was held as under :- that the assessment had not been completed under section 143(3) of the Act. There were banking transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the view that the Order of the ITAT is unassailable. In this case, the assessment had not been completed under Section 143(3) of the IT Act. There are banking transactions between the Assessees and Shri Anand Prakash and, therefore, initiation of reassessment Proceedings under Sections 147/148 may be impregnable even to the charge of legitimacy of invocation of Sections 147/148. In other words, since there were banking transactions between these persons, and Shri Anand Prakash had, in fact, deposed that he had provided bogus transactions to the Assessees that would constitute reasons for the AO to believe that income chargeable to tax had escaped assessment justifying action under Sections 147/148. Shri Anand Prakash cannot be seen as a busybody or an informer or a stock witness wholly unconnected with the Assessee concerned. Learned counsel for the Revenue had drawn our attention to Phool Chand Bajrang Lai -vs Income- Tax Officer, [1993] 203 ITR 456 where the ITO had learnt that the party from whom that Assessee had allegedly borrowed ₹ 50,000/- in cash had not actually done so. Information pertaining to the false nature of these transactions was exchanged between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessment has gone through under Section 143(1) of the Act. The Tribunal has, therefore, arrived at the correct conclusion. 6. The views so expressed by the Hon ble juri sdic tional High Cour t bind us. Viewed thus, the very reassessment was legally unsustainable in this case. In this view of the mat ter, we quash the impugned reassessment proceedings. As reassessment i tself is quashed, all other issues, raised on meri ts, are academic in effec t. We, therefore, see no deal to deal wi th those grievances. 13. On the other hand Ld. DR relied on the orders of authorities below. He also relied on the decision of Hon ble Supreme Court in the case of Home Finders Housing Limited Vs. ITO [2018] 94 taxman.com 84 (SC) and submitted that SLP against the order of Hon ble High Court was dismissed by the Hon ble Supreme Court by observing that non compliance of direction of Supreme Court in GKN drive shorts (India) Limited Vs. ITO (2002) 125 taxman.com 963 that on receipt objection given by the Assessing Officer to notice u/s 148, the Assessing Officer is bound to dispose of objections by passing a speaking order, would not make reassessment order abinito. 14. In the rejoind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plain and unambiguous and can be reasonably interpreted in only one way it has to be understood in that sense, and any involved principle of artificial construction has to be avoided. Further, if there be any doubt about the decision, the entire judgment has to be considered, and a stray sentence or a casual remark cannot be treated as a decision.(see p.627E-G) 16. He further relied on the decision of Hon ble full Bench of the Hon ble Delhi High Court Lachman Dass Bhatia Hingwala Vs. CIT 330 ITR 243 (Del) where it was held as under :- A judgment has to be read in context, and discerning of factual background is necessary to understand the statement of principles laid down therein. It is obligatory to ascertain the true principle laid down in the decision and it is inappropriate to expand the principle to include what has not been stated therein. A decision is only an authority for what it actually decides and it is the duty to ascertain the real concrete or ratio decidendi which has binding effect. Mechanical application of a decision treating as a precedent without appre-ciating the underlying principle is not allowable. 17. Hence he prayed that the consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n clients across India on 23.03,2015. In this survey also was found that Client Code Modification (CCM) is being used as a tool for tax evasion by the brokers After analysis of data it was concluded that 4890 assessee have availed contrived losses of ₹ 1206,18.25.287/- in the four years out of which ₹ 580,12,39.534/- pertains to A.Y. 2009-10. The list of such entities has been forwarded for the cases where losses are quantum of ₹ 1,00,000/- or more and of the cases where quantum of profit shifted is of ₹ 1,00,000/- or more. The entity M/s Parshant Agencies Pvt, Ltd. is one of the beneficiary availing such arrangements in the A.Y, 2009-10. The details of such entry in respect of the above mentioned assessee is as follows :- No Pan no. Name of the beneficiary Name the broker A.Y. Ascertained Ascertained Net reduction profit losses shifted income due Shifted out CCM 1. AAACP5839K M/s Prshant Crimson Financial Services 2009- 10 0 (- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure that establishes that it was not for genuine purposes. This has been established true in the finding of the investigation unit while analysis the data for four years. In this regard, survey has been conducted by Ahmedabad Investigation Directorate u/s 133A of the IT Act, 1961 at the premises of 12 brokers and few of their clients across India on 23.03.2015. In this survey also was found that Client Code Modification (CCM) is being used as a tool for tax evasion by the brokers-. After analysis of data it was concluded that 4890 assessees have availed contrived losses of ₹ 1206,18,25,287/- in the four years out of which ₹ 580,12,39,534/- pertains to A.Y. 2009-10. The list of such entities has been forwarded for the cases where losses are quantum of ₹ 1,00,000/- or more and of the cases where quantum of profit shifted is of ₹ 1,00,000/- or more. The entity M/s PPN Properties Pvt. Ltd. is one of the beneficiary availing such arrangements in the A.Y. 2009-10. The details of such entry in respect of the above mentioned assessee is as follows: No Pan no. Name of the beneficiary Name th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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