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TMI Blog2021 (10) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... S. PRIYA ENTERPRISES VERSUS THE I.T.O, WARD 63 (3) , NEW DELHI [ 2018 (10) TMI 143 - ITAT DELHI] - Decided in favour of assessee. - I.T.A. No. 3117/DEL/2016 - - - Dated:- 4-10-2021 - Suchitra Kamble, Member (J) And Prashant Maharishi, Member (A) For the Appellant : Amit Goel and Nippun Mittal, CA For the Respondents : Prakash Dubey, Sr. DR ORDER Per Suchitra Kamble, JM This appeal is filed by the assessee against the order dated 31/03/2016 passed by CIT(A)-20, New Delhi for assessment year 2007-08. 2. The grounds of appeal are as under: 1. On the facts and circumstances of case and in law, the notice u/s. 148 issued in this case is illegal, void, barred by limitations and without jurisdiction and the CIT(A) erred in not holding so. 2. On the facts and circumstances of case and in law, the CIT(A) erred in confirming the addition of ₹ 8651758/- made by the assessing officer on account of alleged bogus purchases. 3. On the facts and circumstances of case and in law, the CIT(A) erred in not deleting the addition of ₹ 8651758/- made by the assessing officer on account of alleged bogus purchase. 4. On the facts and circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch reasons namely notice issued u/s. 148, the order passed by the Assessing Officer and the CIT(A) are void-ab-initio and reserved to be quashed. 6. The Ld. DR submitted that the Assessing Officer has rightly recorded the reasons and reopening is just and proper. The Ld. DR also relied upon the orders of the Assessing Officer and the CIT(A). But the Ld. DR could not distinguish the facts of the assessee's case and that of the various Tribunals decision cited by the Ld. AR. 7. We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the Ld. AR during the course of hearing submitted almost 10 decisions of the Tribunal wherein the reasons recorded for reopening are identical and in fact the name of the accommodation entries provider are exactly the same. The Ld. DR also could not point out any distinguishing facts with these orders of the Tribunals. We are reproducing the order cited by the assessee in case of Rajender Prasad Vs. ITO in ITA No. 7060/Del/2017 dated 7/9/2018. The Tribunal held as under:- 5. Reasons for reopening assessment read as under; A letter bearing F. No. Addl. CIT/(Hq)/(Coord.)/Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 7. This information is forwarded to you for early dissemination to various field offices in Delhi (Soft copy also enclosed). It is evident from the assessment order passed by the ACIT, Central Circle-10, New Delhi on 28.03.2013 that Sh. Rakesh Gupta Sh. Vishesh Gupta and Sh. Navneet Jain Sh. Vaibhav Jain during the course of search proceedings, in post search proceedings and in assessment proceedings u/s. 153A of (Tax Act admitted that they have given accommodation entries to the parties whose lists have been provided by them to the ACIT, Central Circle-10, New Delhi. Therefore, the assessment of the Firms/concerns/individuals for A.Y. 2006-07, whose names were appearing in the said list of accommodation entries provided by Sh. Rakesh Gupta Sh. Vishesh Gupta, Sh. Navneet Jain Sh. Vaibhav Jain and whose territorial jurisdiction was lying with this Ward, were reopened u/s. 147 of I. Tax Act and notices u/s. 148 of I. Tax Act were issued. After making necessary verification and disposing off the objections filed by most of the assessees' against reopening of their cases u/s. 147 of I. Tax Act and after considering the replies/details/documents fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that income chargeable to tax amounting to ₹ 10,93,580/- for the F.Y. 2006-07 relevant to A.Y. 2007-08 has escaped assessment. Besides this, any other income chargeable to tax that has escaped assessment, which will come to the notice of this office during assessment proceedings shall also be added back. Thus, I have reasons to believe that it is a fit case for initiation of proceedings u/s. 147 of the Act. Proposal in the prescribed form for the A.Y. 2007-08 (F.Y. 2006-07) is submitted herewith for kind consideration and necessary approval u/s. 151(2) of the I. Tax Act, 1961 as [getting barred by limitation on 31.03.2014. [Pawan Kumar Vashist] Income Tax Officer Ward-39 (3), New Delhi 6. A perusal of the above clearly shows that the Assessing Officer has borrowed the findings. Moreover, the entries pertain to assessment year 2006-07 as is clearly evident from the reasons recorded mentioned hereinabove. It can be further seen that there is a reference to some verification and disposing off the objections filed by most of the assessees against reopening of their cases u/s. 147 of the Act. On the strength of the fate of the other assessees, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which those very entries were provided in the accounts of the Assessee, which must have been tendered along with the return, which was filed on 14th November 2004 and was processed under Section 143(3) of the Act. Without forming a prima facie opinion, on the basis of such material, it was not possible for the AO to have simply concluded: it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries . In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the assessee escaped assessment is missing in the present case. 10. On identical set of facts in the case of Sapra Metal company 2910/DEL/2016, the Bench had occasion to consider the reopening of the assessment on the basis of very same information which was considered in the case in hand and while quashing the reopening, the bench had considered the following judgment of the Hon'ble Jurisdictional High Court in the case of Sarthak Securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tober, 2002 from Swetu Stone PV from the bank and the account number mentioned therein. The last sentence records that as per the information, the amount received was nothing but an accommodation entry and the assessee was the beneficiary. The aforesaid reasons do not satisfy the requirements of Section 147 of the Act. The reasons and the information referred to is extremely scanty and vague. There is no reference to any document or statement, except Annexure, which has been quoted above. Annexure cannot be regarded as a material or evidence that prima facie shows or establishes nexus or link which discloses escapement of income. Annexure is not a pointer and does not indicate escapement of income. Further, it is apparent that the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. The Assessing Officer accepted the plea on the basis of vague information in a mechanical manner. The Commissioner also acted on the same basis by mechanically giving his approval. The reasons recorded reflect that the Assessing Officer did not independently apply his mind to the W.P.(C) No. 8067/2010 Page 13 information received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that reopening of the assessment is without any application of mind and examination of the facts. According, reopening is held to be invalid and the same is quashed. Ground No. 1 is accordingly allowed. 12. Since the reopening has been held to be invalid, I do not find it necessary to dwell into the merits of the case. From the perusal of the reasons recorded in the present assessee's case, it can be clearly seen that the Assessing Officer has simplictor taken the reasons recorded in another cases. In fact, from first page of the reasons it is mentioned that the information of accommodation entry includes A.Y. 2006-07. It can be further seen that there is a reference to some verification and disposing off the objections filed by most of the assessees against reopening of their cases u/s. 147 of the Act. Thus, taking the reasons as it is without verifying the assessee case, the Assessing Officer formed a belief that the assessee has also made bogus purchases and the same has to be treated as income of the assessee for assessment year 2007-08. The Assessing Officer proceeded to make opinion on the basis of borrowed reasons and there is no independent application of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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