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TMI Blog2019 (4) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has given the statement that they have provided accommodation entries to the assessee. The Assessing Officer has simply reopened the case on the basis of information provided by the Investigation Wing without any independent application of mind. There is no tangible material which formed the basis for the belief that income has escaped assessment. It is a settled law that when there are two views, the view in favour of the assessee is to be followed and moreover, there are at least two decisions subsequent to the decision of Paramount Communication (P) Ltd. [2017 (4) TMI 188 - DELHI HIGH COURT], wherein their Lordships have quashed the notice issued under Section 148 on the basis of information from the Investigation Wing. The facts in the case of the assessee are almost identical to the facts in the case of RMG Polyvinyl (I) Ltd. [2017 (7) TMI 371 - DELHI HIGH COURT] and Meenakshi Overseas Pvt.Ltd. [2017 (5) TMI 1428 - DELHI HIGH COURT] While taking the above view, we quash the notice issued under Section 148 of the Act and consequently, the assessment completed in pursuance thereto. Accordingly, ground Nos.1, 1.1 and 1.2 of the assessee’s appeal are allowed. - ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry verification under Section 143(2), the same cannot be done under the garb of Section 148. He also alleged that there is no independent application of mind by the Assessing Officer. The assessment has been mechanically reopened on the basis of some information claimed to have been received from DIT(Investigation). In the reasons recorded, no reason has been given for the allegation that the amount received from Shri S.K. Jain group of cases is bogus accommodation entries. The Assessing Officer has mechanically reopened the assessment without any independent verification at his end. He, therefore, stated that the alleged reopening of assessment is not valid. He also stated that not only the reasons recorded is mechanical, even the approval given by the Additional Commissioner is mechanical and without application of any independent mind. In support of his contention, he relied upon the following decisions :- (i) Sarthak Securities Co.P.Ltd. Vs. ITO [2010] 329 ITR 110 (Delhi). (ii) Signature Hotels P.Ltd. Vs. ITO [2011] 338 ITR 51 (Delhi). (iii) PCIT Vs. G And G Pharma India Ltd. [2016] 384 ITR 147 (Delhi). (iv) PCIT Vs. RMG Polyvinyl (I) Ltd. [2017] 396 ITR 5 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been filed by the assessee company on 20.09.2009 declaring NIL total income. The same was processed u/s 143(1) on 17.01.2011. No assessment u/s 143(3) for the A.Y. 2009-10 has been made in this case. In this case information has been shared by DIT(Investigation)-II (letter flagged as Annexure A) on the basis of search in the case of Sh. Surendra Kr. Jain group of cases (entry operator) New Delhi that during the financial year 2008-09 the aforementioned assessees has introduced its own money by way of taking bogus accommodation entries provided by Sh. S.K. Jain group of cases (entry operator) the details of accommodation entry amount received as beneficiary is given as under as provided by Investigation Wing : S.No. Beneficiaries Name of Entry Provider Amount Total Amount 1 M/s SBS Realtors P.Ltd. S.K. Jain group 235,00,000/- 235,00,000/- In the light of information provided by the investigation wing, it is necessary to examine and verify the genuineness, identification and creditworthiness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Software P.Ltd. SBS Realtors Pvt.Ltd. Axis P.O. No.027055 02.08.2008 1,000,000/- Rajesh Aggarwal 10 Lotus Realcom P.Ltd. SBS Realtors Pvt.Ltd. Axis P.O. No.027123 04.08.2008 2,500,000/- Rajesh Aggarwal 11. Zenith Automotive P.Ltd. SBS Realtors Pvt.Ltd. Axis P.O. No.027201 18.03.2009 2,000,000/- Rajesh Aggarwal 12 Mega Top Promoters P.Ltd. SBS Realtors Pvt.Ltd. Axis P.O. No.027200 18.03.2009 2,500,000/- Rajesh Aggarwal I have reason to belief that the income pertaining to the Asstt. Year 2009-10 has escaped assessment to the extent of ₹ 23500000/- upon receipt of the above information, I have compared the figures in the balance sheets filed by the assessee vide e-return for AYs 2008-09 2009- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuineness, identification and creditworthiness of the aforesaid transaction the case needs to be reopened u/s 147 of the I.T. Act 1961. The conclusion of the Assessing Officer at the end of the reasons recorded as noted above is contradictory. In the first two lines, the Assessing Officer has recorded the finding that the sum of `2,35,00,000/- has escaped assessment but in the last two lines, he has recorded that the case is being reopened to verify the genuineness, identification and creditworthiness of the aforesaid transactions. If the case is being reopened for the purpose of verification of the genuineness, how can there by satisfaction of escapement of income. Any satisfaction with regard to escapement of income or otherwise can be recorded only after the verification of genuineness, identification and creditworthiness of the transaction and not earlier. Thus, we are of the opinion that the Assessing Officer has reopened the case under Section 147 for the purpose of verification of genuineness, identification and creditworthiness of the transactions mentioned in the information supplied by the DIT (Investigation) and this is what the Assessing Officer has concluded at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid reasons, we do not find any application of mind by the Assessing Officer for reaching to the conclusion that there was escapement of income except the information from the Investigation Wing. After getting the information from the Investigation Wing, the Assessing Officer compared the figures in the balance sheet and has found that the assessee has issued share capital of `2,35,00,000/-. The issue of share capital by itself is not sufficient to reach to the conclusion of escapement of income. The Investigation Wing has alleged that 12 companies who have given cheques to the assessee company were accommodation entries. However, the basis of such allegation is not mentioned in the reasons recorded. Whether such conclusion is reached by the Investigation Wing on the basis of statement of director of any company or on the basis of some material seized during the course of search of those companies, is not mentioned in the reasons recorded. Whether there was any material with the Assessing Officer while issuing notice under Section 148 is not clear. Therefore, from the reasons recorded, we do not find any basis for reaching to the conclusion that there was escapement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on us. Therefore, we consider all the decisions of Hon'ble Jurisdictional High Court relied upon by either side. 11. We find that the earlier decisions of Hon'ble Jurisdictional High Court in the case of Sarthak Securities Co.P.Ltd. (supra), Signature Hotels P.Ltd. (supra) and G And G Pharma India Ltd. (supra) were not brought to the knowledge of their Lordships while deciding the case of Paramount Communication (P) Ltd. (supra). We find that the decision in the case of RMG Polyvinyl (I) Ltd. (supra) and Meenakshi Overseas Pvt.Ltd. (supra) are subsequent to the decision of Paramount Communication (P) Ltd. (supra). However, it seems that neither in the case of Meenakshi Overseas Pvt.Ltd. (supra) nor in the case of RMG Polyvinyl (I) Ltd. (supra), the decision of Paramount Communication (P) Ltd. (supra) was brought to the knowledge of their Lordships. Thus, there are two views by the Hon'ble Jurisdictional High Court. While in the case of Paramount Communication (P) Ltd. (supra), the issue of notice on the basis of information from Intelligence Wing of the Income Tax Department has been upheld, in the case of Sarthak Securities Co.P.Ltd. (supra), Signature Hotels P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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