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TMI Blog2020 (9) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... by passing the composite order. Thus it is clear that objections of all the Assessees were not disposed of prior to passing of the re-assessment order. Thus, it is clearly in violation of Judgment of Hon ble Supreme Court in the case of M/s. GKN Drive Shafts [ 2002 (11) TMI 7 - SUPREME COURT] , Haryana Acleric [Delhi-HC], Fomento Resorts Hotels Ltd., [ 2008 (11) TMI 2 - DELHI HIGH COURT] relied upon by the Learned Counsel for the Assessee. Reopening of the assessment is clearly bad in Law and is liable to be quashed. The A.O. did not assume the jurisdiction under sections 147/148 in accordance with Law and as such, the re-assessment proceedings are liable to be quashed. The addition is also liable to be deleted. In view of the above discussion, we set aside the Orders of the authorities below and quash the reopening of the assessment under sections 147/148 - Resultantly, all additions stand deleted. Appeals of the Assessee are allowed. - ITA.No.7372/Del./2019, ITA.No.7373/Del./2019, ITA.No.7374/Del./2019, ITA.No.7375/Del./2019, ITA.No.7376/Del./2019, ITA.No.7377/Del./2019, ITA.No.7378/Del./2019 - - - Dated:- 10-9-2020 - Shri Bhavnesh Saini, Judicial Member And Shri O.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of assessment were merely on information received from Investigation Wing and there is a presumption of accommodation entry. The data received by the A.O. was prepared on the basis of search and seizure action carried-out by Investigation Wing of the Department, New Delhi on Shri Pradeep Kumar Jindal on 18.11.2015. The reasons recorded by the A.O. shows that assessee has received accommodation entry from Shri Pradeep Kumar Jindal for ₹ 15 lakhs and he has admitted to have provided accommodation entry. The assessee submitted that the material relied upon by the A.O. was not supplied to the assessee along with the reasons. However, the A.O. has noted that this issue have been raised by the assessee only after issue of the show cause notice and assessee could have requested for supply of the material at any time. The A.O, however, accepted that there is an entry of ₹ 5 lakhs only as against entry of ₹ 15 lakhs noted in the reasons. The A.O. considering the explanation of assessee, made addition of ₹ 5 lakhs on account of unexplained accommodation entry which was considered as the money received by the assessee without consideration and made addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings. It was also held that A.O. has not commented any irregularity by not allowing cross-examination to the statement of Shri Pradeep Kumar Jindal. Thus, all the objections of the assessee were found incorrect and addition was confirmed of ₹ 5 lakhs + ₹ 12,500/- under section 69A of the Income Tax Act. The appeal of the assessee were dismissed. 6. The assessee in the present appeal has challenged the reopening of the assessment under section 147/148 of the I.T. Act, 1961 and addition of ₹ 5,12,500/- on merits on various grounds of appeal. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that there is a factual error in the reasons recorded by the A.O. for reopening of the assessment in four cases of Assessees i.e., Smt. Meena Gupta, Shri Narender Kumar Gupta, Shri Hanuman Prasad Aggarwal, and Shri Sourav Jindal. In the case of Shri Hanuman Prasad Aggarwal and Shri Narender Kumar Gupta, the A.O. has recorded in the reasons that assessee has received accommodation entries of ₹ 15 lakhs and ultimately, it was found that entry was of ₹ 5 lakhs and ₹ 10 lakhs only. In the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y from the Orders of the authorities below, all the objections filed by the assessee against the reopening of the assessment under section 148 have been disposed of in the final assessment order which is a serious violation of Judgment of the Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd., vs. ITO Ors [2003] 259 ITR 19 (SC) and same leads to nullification of the entire reassessment proceedings. In support of this contention, he has also relied upon Judgment of Hon ble Delhi High Court in the case of Haryana Acrylic Manufacturing Co. vs., CIT [2009] 308 ITR 38 (Del.), Judgment of Hon ble Bombay High Court in the case of Fomento Resorts Hotels Ltd., in Tax Appeal No.63 of 2007 Dated 30.08.2019, Judgment of Hon ble Madras High Court in the case of CIT vs., M/s. Pentafour Software Employees Welfare Foundation [2019] 418 ITR 427 (Mad.). He has also relied upon Judgment of ITAT, Delhi Bench in the case of Shri Suresh Chandra vs., ITO in ITA.No.3061/Del./2012 Dated 13.03.2015 in which it was held that it is not open to the A.O. to decide the objections raised against notice under section 148 by composite assessment order ----- Thus, we hold the impugned assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name and address of the assessee Shri Hanuman Prasad Aggarwal, H.No.1106, Sector 9, Faridabad. Email: [email protected] PAN ADUPA1670P Asstt. Year 2011-12 Status Individual Date of recording reasons 28.03.2018. Reasons for issuance of notice under section 148 of the Income Tax Act, 1961 1. The assessee filed on 22.07.2011 his return of income declaring income ₹ 5,22,277/- from salaries and income from other sources. No scrutiny assessment has taken place in the case earlier. 2. Information was received from the O/o Addl. Commissioner of Income Tax, Range-1, Faridabad vide letter dated 23.03.2018 (F.No. Addl. CIT/RI/ FBD/2017-18/3553). The information was received in this office on 24.03.2018. The said letter of Addl. Commissioner of Income Tax, Range-1, Faridabad enclosed information from ADIT(Inv.) Unit-2(1), New Delhi, dated 14.03.2018 and was seen by Pr. Commissioner of Income Tax, Faridab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surate with the transaction/investment of property. 5. From the above information, it is clear that the assessee has accommodation entry from his unexplained sources of income, and the same is liable to be treated unexplained income of the assessee from undisclosed sources. Furthermore, it is evident that there is a Live Link between the material available on record and escaped income, as mentioned above. 6. In this case has income declared by the assessee in his return of income is from his Salaries and income from other sources and does not commensurate with accommodation entry of the assessee for the year under consideration and assessment was made and the only requirement to initiate proceedings u/s 147 reason to believe which has been recorded in this case. In view of the above, the provisions of clause (b) of Explanation 2 of section 147 applicable to facts of the case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment. 7. Keeping in view the statutory provisions, legal principles, and factual matrix, accommodation entry remained unexplained. Therefore, I have reason to believe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d above clearly show that A.O. did not verify the report of the Investigation Wing and accepted the same as it is that assessee has received accommodation entries of ₹ 15 lakhs despite it was a wrong and incorrect fact which would show that A.O. did not apply his mind to the information and material supplied by the Investigation Wing. Thus, the reopening of the assessment have been done totally without application of mind and without any justification. Similarly, in the case of assessee Shri Narender Kumar Gupta, A.O. recorded in the reasons that assessee received accommodation entry of ₹ 15 lakhs, but, ultimately, it was found to be accommodation entry of ₹ 10 lakhs. In the case of assessee Smt. Meena Gupta and Shri Sourav Jindal the A.O. recorded in the reasons that assessee received bogus entries of the purchases, but, later on it was found to be loan. Thus, these facts clearly show that A.O. without verifying the information received from the Investigation Wing, recorded the reasons for reopening of the assessment based on wrong and non-existing, incorrect facts. Thus, there was no justification for the authorities below to reopen the assessment in these four ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... propose to decide the same at this stage. In view of the above, the Orders of the authorities below are set aside and addition is deleted. Appeal of the Assessee is allowed. 9. In the result, ITA.No.7376/Del./2019 of the Assessee allowed. REMAINING APPEALS : ITA.No.7372/Del./2019 [ Smt. Meena Gupta] ITA.No.7373/Del./2019 [ Smt. Sheela Aggarwal] ITA.No.7374/Del./2019 [Smt. Garima Aggarwal] ITA.No.7375/Del./2019 [Shri Narender Kumar Gupta] ITA.No.7377/Del./2019 [Shri Gourav Aggarwal] ITA.No.7378/Del./2019 [Shri Sourav Jindal] 10. In these appeals the Assessees challenged the initiation of re-assessment proceedings and additions of ₹ 5 lakhs and commission of ₹ 12,500/- each except in the case of Shri Narender Kumar Gupta. In the case of Shri Narender Kumar Gupta, the assessee challenged the addition of ₹ 10 lakhs and commission of ₹ 25,000/-. Since the issue is same in these appeals, therefore, following the Order in the case of assessee Shri Hanuman Prasad Aggarwal (supra), we set aside the Orders of the authorities below and quash the reopening of the assessment and additions stand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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