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TMI Blog2021 (7) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. 2.1. The jurisdictional AO received from DDIT (Inv), Unit-3(4), Kolkata on 25/04/2017, which is as under: 2. As per the information, various companies viz - (i) Subhdhan Pratisthan Pvt. Ltd. (ii) Subhankar Dealcom Pvt. Ltd., (iii) Ranpriya Commodeal Pvt. Ltd. and (iv) Sidhidata Distributor Pvt. Ltd: (v) Sadakriti Dealers Pvt. Ltd. (vi) Somanath Vinimay Pvt. Ltd. indulged in multiple account transfer of large amounts with no rationale, The companies doing business in the same address having same line of activity coupled with same persons as common directors. During the course of investigation, Bank accounts of the above mentioned companies were obtained and the Bank statements were perused vis- -vis the ITD profile of the same and it was concluded that the total bank credit and turnover of the said companies does not commensurate with their returned income. Further, Trail of Fund was prepared by the DDIT (Inv), Unit-3(4), Kolkata and Smt. Baljit Kaur received ₹ 41,50,000/- from M/s. Subhankar Dealcom Pvt. Ltd. during the FY 2010-11 relevant to the AY 2011-12. Smt. Baljit Kaur is assessed with the undersigned. 2.2. Accordingly, the AO reopened the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO was not justified in reopening the case beyond the four years and he has reopened the case on the basis of information received from the Investigation Wing without applying his mind. Further, he submitted that the assessee is a registered company and filing returns of income regularly and the amount has been received through banking channels, therefore, there is no violation of provisions of section 68 of the Act as alleged by the AO in this regard. 6. The ld. DR, on the other hand, relied on the orders of revenue authorities. 7. After hearing both the parties and perusing the material on record as well as gone through the orders of revenue authorities and the grounds taken by the assessee, we observe that the assessee has taken a legal ground in Ground No. 4 that the assessee's case has been reopened on the basis of information received from third party. The crux of the issue to be decided is whether the reopening of assessment by the AO is in accordance with law or not. As per the assessment order, it is clear that the assessee's case is reopened on the basis of the information received from the Director of Investigation and without applying his mind, the AO has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In Para 2, the AO has reproduced the particulars of allegedly bogus transactions as given by the Directorate of Income Tax (Investigation) after making the necessary inquiries . The AO did not even care to see those particulars, which are repetitive in nature as is clear from the following: Name of the assessee/Beneficiaries Name of the Bank Beneficiaries Name of the Operator Instrument No. Operator's A/c No. and Bank Date on which entry taken Amount (in Rs.) M/s Infomediary Indian Bank M/s. Suma 311108 2919, Corpn. 23- 10,46,568/- India Pvt. Ltd. Finance Investment Ltd. Bank, Karol Bagh, New Delhi Mar-01 -do- -do- -do- 311108 -do- 16- Feb-01 10,46,568/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had entered into transaction. Both the orders clearly exposit that the assessing officer was made aware of the situation by the investigation wing and there is no mention that these companies are fictitious companies. Neither the reasons in the initial notice nor the communication providing reasons remotely indicate independent application of mind. True it is, at that stage, it is not necessary to have the established fact of escapement of income but what is necessary is that there is relevant material on which a reasonable person could have formed the requisite belief. To elaborate, the conclusive proof is not germane at this stage but the formation of belief must be on the base or foundation or platform of prudence which a reasonable person is required to apply. As is manifest from the perusal of the supply of reasons and the order of rejection of objections, the names of the companies were available with the authority. Their existence is not disputed. What is mentioned is that these companies were used as conduits. In that view of the matter, the principle laid down in Lovely Exports (P) Ltd. (supra) gets squarely attracted. The same has not been referred to while passi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that the Tribunal has arrived at the correct conclusion on facts. The law is well settled. There is no substantial question of law which arises for our consideration. The appeal is dismissed. 47. There is another recent judgment dated 21.7.2011 of this Court in Signature Hotels (P) Ltd. v. ITO [W.P.(C) No. 8067 of 2010 on dated 21-7-2011]. That was also a case where the notice was issued on the basis of information received from Directorate, Income Tax (Investigation). The Court first set out the approach that is to be adopted in such cases, by mentioning as under in para 12: 12. In these circumstances, we are examining the reasons given by the Assessing Officer in the proforma seeking permission/approval of the Commissioner and whether the same satisfy the pre-conditions mentioned in Section 147 of the Act. 48. On examination, the Court set aside the notice under Section 148 of the Act and in the process, discussion therein is as under: 14. The first sentence of the reasons states that information had been received from Director of Income-Tax (Investigation) that the petitioner had introduced money amounting to ₹ 5 lacs during financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Shubhash Gupta recorded on different dates. The said persons have not specifically named the petitioner though other parties have been named and details have been given and it is stated that they were provided accommodation entries. However, it is stated that the entries were made by giving cheque/DD/PO after receiving cash and sometimes expenses entries were provided. The reasons recorded by the Assessing Officer do not make reference to any statement of Mahesh Garg or Shubhash Gupta. This may not also be necessary, if the statements were on record and it is claimed and prima facie established that they were examined by the Assessing Officer before or at the time of recording reasons. On the other hand, in the present case, information as enclosed as Annexure, has been referred. This is the only material relied upon by the Assessing Officer. The said Annexure has been quoted above. In this connection, we may notice that M/s. Swetu Stone Pvt. Ltd. is an incorporated company and the petitioner has pleaded and stated that the said company has a paid-up capital of ₹ 90 lacs. The company was incorporated on 4th January, 1989 and was also allotted a permanent account number i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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