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TMI Blog2020 (11) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... aken by the assessee, without even applying his mind to it and verifying the same. The entire reasons, we find, talks about some information with the Department regarding the assessee having availed accommodation entries of ₹ 20 lacs from M/s Virgin Capital Services Pvt.Ltd. a paper company of M/s Surinder Kumar Jain Group, which is engaged in providing such entries, through cheque in lieu of cash. There is nothing in the reasons revealing application of mind by the AO to the information in his possession, as to whether he had verified that any such amount was actually received during the year and if so in what mode or manner i.e as share capital or unsecured loan etc. A.O. has formed his belief solely on this information without e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew Delhi with regard to accommodation entries received by the assessee amounting to ₹ 20,00,000/- on 16/02/2009 in the form of share capital including premium through cheque from Surendra Kumar Jain Group of New Delhi. The A.O. recorded reasons to believe for escapement of income in this case and reopened the assessment under section 147 of the Act. Subsequently after making necessary enquiries the A.O. treated the entire amount of ₹ 20,00,000/- as undisclosed income of the assessee company from undisclosed sources and made addition of the same to the returned income of the assessee under section 68 of the Act. Apart from this, commission stated to be paid by the assessee company to the mediator (₹ 40,000/-), to the acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. 4. That he was further not justified to arbitrarily uphold the action of the Ld. Assessing Officer in making an addition of ₹ 40,000/- made by the Ld. Assessing Officer on account of alleged commission paid to broker by resort to provisions of Section 69C of the Income Tax Act, 1961. 5. We shall take up first the legal challenge raised by the assessee in Ground No.1, to the validity of the assessment framed in the present case. The Ld. Counsel for the Assessee contended that the initiation of proceedings under section 148 in the present case was illegal arbitrary and there was no material for forming belief that income of the assessee had escaped assessment, that the action was initiated on the basis of mere suspicion and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n lieu of cash of an amount of ₹ 20,00,000/- by paying sum of ₹ 20,00,000/- to the said company out of its undisclosed income during the F.Y. 2008-09 relevant to A.Y. 2009-10. The assessee has filed its return of income for the A.Y. 2009-10 declaring income of ₹ 1,99,740/-, though it was having income of ₹ 20,00,000/- during that Assessment Year and thus, income to the tune of ₹ 20,00,000/- in respect of issue as mentioned above has escaped assessment for the A.Y. 2009-10. Therefore, I have reasons to believe that income of ₹ 20,00,000/-applicable to tax for the assessment year 2009-10 has escaped assessment within the meaning of section 147 of the income Tax Act, 1961 by reason of the failure t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt material/information in his/her possession to form a belief that the income of the assessee company to the extent of ₹ 20,00,000/- has escaped assessment. The information received by the Assessing Officer contains complete details of the modus operandi adopted by Surendra Kumar Jain group of new Delhi to provide accommodation entries to the needy persons including the assessee company. It has also been noticed that he Assessing officer has not only applied his mind independently but also recorded his/her satisfaction for escapement of income before reopening the assessment in this case. The judicial pronouncements relied upon by the learned AR of the assessee have distinguishable facts from the facts of the case of the assessee com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the Assessee on latest decision of the ITAT Delhi Bench in the case of M/s Rajshikha Enterprises Pvt. Ltd. (supra) ,is apt, wherein the aforesaid proposition of law was upheld relying on decisions of the Hon ble Delhi High Court in the case of CIT Vs G G Pharma India Ltd.( 2016) 384 ITR 147 Pr.CIT Vs. Meenakshi Overseas Pvt. Ltd. (2017) 395 ITR 677 which held that while report of the Investigation Wing might constitute material for the AO forming reasons to believe ,the process of arriving at such satisfaction could not be a mere repetition of the report of investigation. In the present case on perusing the contents of the reasons recording the satisfaction of escapement of income by the A.O. as reproduced above, it is ve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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