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TMI Blog2019 (3) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. - ITA No. 4858/Del/2015 - - - Dated:- 22-1-2019 - Smt. Beena A. Pillai, Judicial Member And DR. B.R.R. Kumar, Accountant Member For the Assessee : Shri Kapil Goel, Advocate For the Department : Shri. Surender Pal, Sr. DR ORDER PER DR. B.R.R. KUMAR, AM: The appeal of the Revenue primarily deals with quashing of the order by the Ld. CIT (A) by holding that the notice issued u/s 148 as illegal and deletion of the addition made u/s 68. 2. Brief facts of the case are that the case has been reopened by the AO based on the information issued from the Investigation Wing that the assessee has received amounts from the entry operator. The reasons recorded are as under: Investigations were conducted by the Investigation wing of the Department on certain persons engaged in providing accommodation entries to beneficiaries of their services, in return of commission. It has been revealed that many persons were using services of accommodation entry operators to channelise their own unaccounted money in their regular books of accounts by routing the same through the accounts of Accommodation entry providers. ... 2. The modus operandi of these entry pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t even aware of the tax implications etc. Their only concern was with the few thousand rupees given to them by the entry operators. 3. Summing up, the report as a result of these extensive enquiries carried out by the D.I.T. (Inv.), New Delhi has established the non-genuineness of transactions, whether shown by beneficiaries as inflow of Share Capital or receipt of Gifts or consideration for sale-purchase. The creditworthiness of the persons/persons controlling the concerns who have given these credit entries/share capital/gifts/sale consideration has also not been established as they have been seen to be man of no means. 4. The said report of Investigation wing of the Department:, on the investigations conducted in the case of various accommodation entry provicers along with the list of the beneficiaries of their services, was forwarded to this office through Addl.CIT, Range-$/vide letter F.No. Addl. CIT/Range-5/2005-06/759, dated 13.3.2006. 5. In the instant case of the assessee, M/s.Kanodia Pharmaceuticals (P) Ltd. information has been received that the assessee has taken accommodation entries as noted below:- Bank of the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13-Feb-03 SAUDAMINII TRADING INVESTMENT 500000 246097 13-Feb-03 SAUDAMINII TRADING a INVESTMENT SYNDICATE BANK PUNJABI BAGH 66148 8505 07-Jan-03 MKM FINSEC (P) LTD. SYNDICATE BANK PUNJABI BAGH 425000 15-Jan-03 KHEC (INDIA) P. LTD. SYNDICATE BANK PUNJABI BAGH 450000 15-Jan-03 KHEC (INDIA) P. LTD. SYNDICATE BANK PUNJABI BAGH 500000 15-Jan-03 KHEC (INDIA) P. LTD. SYNDICATE BANK PUNJABI BAGH 350000 246440 15-Jan-03 ROOPIN CAPITAL PVT LTD SYNDICATE BANK ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PUNJABI BAGH 500000 15-Feb-03 K.V.F. SECURITIES P. LTD. SYNDICATE BANK PUNJABI BAGH 505000 15-Feb-03 GANAPATI GENERAL FOODS LTD. SYNDICATE BANK PUNJABI BAGH 300000 247452 15-Feb-03 KANODIA PHARMACEUTICALS PVT LTD SYNDICATE BANK PUNJABI BAGH 500000 246738 15-Feb-03 BHARAT NYLONS LTD. SYNDICATE BANK PUNJABI BAGH 500000 246737 15-Feb-03 BHARAT NYLONS LTD. SYNDICATE BANK PUNJABI BAGH 800000 246739 15-Feb-03 BHARAT NYLONS LTD. SYNDICATE BANK PUNJABI BAGH 100000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o argued based on the judgements in the case of ITO vs. Rajesh Jhaveri Stock Brokers Pvt Ltd. 291 ITR 500 (SC). He also relied on the compilation of 48 cases filed before us consisting of various judgments. 5. On the other hand Ld. AR argued that the AO has not brought anything new on record except rewriting the information forwarded to him by the Investigation Wing. There is no application of mind by the Assessing Officer to arrive at an independent opinion by AO regarding the issue in hand. Hence, the order is liable to be quashed as illegal. He further argued that the amounts said to have received by the assessee through the entry operator was also in correct. Heard the arguments of both the parties. 6. We have gone through the facts of the case on record and they emanate as under: 7. The AO has reopened assessment on the grounds that the assessee received ₹ 1,91,96,148 in the form of share capital from different shareholders through Syndicate Bank, Punjabi Bagh branch whereas the entire share capital of the assessee as per the audited balance sheet as on 31.03.2002 was ₹ 24,42,817 and ₹ 1,29,39,540 as on 31.03.2003. Thus, the allegation that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 and Priyadesh Gupta 385 ITR 452. The Hon ble Delhi High Court in the case of SNG Developers Ltd., 404 ITR 312 held that when AO initiated the re-assessment proceedings without application of mind, such proceedings would be invalid. 7.1 It was held in the following cases that if the AO did not apply his mind and recorded the reasons purely on borrowed satisfaction without making any enquiries on his own and therefore the reasons as recorded are bad in law as held by 1TAT Delhi Bench vide its order dated 14/08/2014- (ITA No. 4281/Del/2010) in the case of ITO vs. Comero Leasing Financial Pvt. Ltd. which was rendered after relying on Jurisdictional High Court judgment in the case of CIT vs. Suren International Pvt. Ltd. reported in 357 ITR 24, relevant portion of such ITAT judgement is reproduced below: From the above, we find that at paragraph Nos.l, 2 3, the Assessing Officer has discussed the facts in general i.e., the investigation carried on by the Director of Income Tax (Investigation) and the finding of such investigation, the modus operandi, how the entry operator worked. The facts relating to assessee's case begin in ITA-4281 4949/D/2010 from paragraph 4. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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