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TMI Blog2024 (1) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... d included assessee also as a beneficiary while assessee was a company of Pradeep Kumar Jindal and assessee is providing accommodation entries to the beneficiaries. In case in hand the issue was of accommodation entries from numerous companies of one operator and for that assessing officer, while recording reasons the ld. AO should have justified that he has traveled the distance between reasons to suspect and Reasons to believe . Which he failed and CIT(A) has erroneously sustained the reasons to believe, by very general discussion holding that reason are based on specific information. The information as narrated in the reasons may have been specific qua Pradeep Kumar Jindal, but not as against the assessee. Decided against revenue. - Shri M. Balaganesh, Accountant Member And Shri Anubhav Sharma, Judicial Member For the Assessee : Shri Gurjeet Singh, CA And Shri Shantanu Jain, Adv. For the Revenue : Shri Kanav Bali, Sr. DR ORDER PER ANUBHAV SHARMA, JM : The appeal is preferred by the Assessee against the order dated 15.03.2019 of Commissioner of Income Tax (Appeals)-1, New Delhi (hereinafter referred as Ld. First Appellate Authority or in short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te modus operandi for obtaining accommodation entries. In view thereof, addition of Rs. 7,57,360/- is in order and is confirmed. These grounds of appeal (Ground No. 1 to 11) are ruled against the appellant. 4. Assessee is in appeal raising following grounds: 1. Because the action for initiation, continuation and conclusion of reassessment proceedings is being challenged on facts and law. 2. Because the action for the assumption of jurisdiction of reassessment proceedings and the misapplication of the jurisdiction sanction being 'a fit case for issue of notice' is being challenged on facts and law. 3. Because the action for initiation of re-assessment proceedings is unreasonable since while recording reasons, there is non-application of mind much less independent application of mind and merely relying upon investigation report by AO, further reasons recorded are vague, lacking tangible material/ reasonable cause and justification. 4. Because the action is being challenged on facts and law for making addition u/s 68 amounting Rs. 3,78,68000/- on the basis of Hon'ble supreme court in the case of PCIT vs NRA Iron Steel P Ltd. (2019) 103 taxmann.co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used the records. The grounds no. 1 and 2 are general in nature. Nothing was argued on ground no. 5. 6. As with regard to ground no. 3, the Ld. AR submitted that the requirements of the provisions of Section 147 are that there should be 'reasons to believe' by the AO towards the escapement of the income and reasons recorded dt. 29.03.2017 itself reveals, that the 're-opening was on the basis of the reasons as provided in the information of ADIT(Inv.)-2(l), New Delhi, thus an independent satisfaction of AO of assessee was not recorded. It was submitted that the satisfaction mandated has to reveal in itself through the 'application of mind' on the examination and appreciation of the 'material facts containing 'material particulars' which Ld. AR alleges lacked on touch stone of the reading of the 'reasons to believe' resulting in a 'borrowed satisfaction'. 6.1 It was submitted that in reason recorded dt. 29/03/2017 AO has not applied his mind as the information received by AO is of Rs 5,61,85,006/- from Investigation wing wherein the detail contained double entries too and case has been reopened on the basis that assessee company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of the expression I am satisfied says nothing. It is not as if the Pr. CIT has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In assessee s case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. Ld. AR relied judgement in Gorika Investment Export (P) Ltd. Vs ITO (2018) 53 CCH 0168 (Delhi), Hon ble ITAT, Delhi bench D in the case of Virat Credit Holdings (P) Ltd. in ITA No. 89/D/2012 vide order dt. 09.02.2018 (PB 2 Pg. 31-43), Sanjay Kumar vs. ACIT in W.P. (C) No. 999/2022 dated 27.02.2023 (High Court of Delhi) and CIT vs. S. Goyanka Lime Chemical Ltd. (2016) 237 Taxman 278 (SC) 8. As with regard to ground no. 6 to 9, touching merits of the case covered under these grounds, it was submitted by Ld. AR that Assessee has received amount in 3 ways and there was one duplicate entry. Ld. AR pointed that Assessee company had received back the loan given in AY2009-10 Rs. 1,12,00,000/-. There is alleged accommodation ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank Statement (PB 1 Pg. 74) Assessee Bank Statement (PB 1 Pg. 47) Total 1,12,00,000 3) Duplicate entry wrongly taken by AO relating to Luster Finlease Invest P Ltd. 15.06.2009 Lustre Finlease Invest (P) Ltd. PAN: AAAL7150P 15,00,000 Confirmation of Lusture Finlease PB 1 Pg 75. Bank Statement of assessee in Akik Education Centre (P) Ltd. PB 1 Pg. 49. 10. It is submitted by Ld. DR that in investigation report of ADIT (Inv)-Unit 2(1), name of Akik Marketing India Pvt Ltd is in the list of front and nondescript companies of Sh. Pradeep Kumar Jindal (previous Director) (PB 2 Pg. 9 Point 13). Further, it is submitted that in AY 2011-12, similar issue of accommodation entry from related concerns of Pradeep Kumar Jindal was raised in Company s Director Sh. Amish Agarwal (current Director) case wherein it has been accepted by the Ld.AO that large deposit entries in bank accounts are treated as being used for the purpose of providing accommodation entries by charging commission @ 1% on the same (copy of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured loans/transfer of company/bogus sale/bogus purchase etc. 14. The learned AO then observe that; In view of above facts, the assessee company has received amounts of Rs. 5,61,85,006/-as accommodation entries in the form of share application money and other forms from Pradeep Kumar Jindal group of companies. But, on examined the return of income filed for the AY 2010-11 by the assessee company, the assessee company has shown to receive unsecured loan from others of Rs. 1,14,00,000/- during the year. After examined the information available on record and return of income filed for AY 2010-11, I have reasons to believe that the income amounting to Rs. 1,14,00,000/- for the AY 2010-11 has escaped assessment and provisions of section 147/148 of the IT Act 1961 are clearly attracted. It is a fit case for initiating proceedings u/s 147/148 of the IT Act 1961 and for issue of notice u/s 148 of the IT Act 1961. 15. Now when these observations of the assessing officer in the reasons for reopening are considered it appears that the assessing officer had merely relied the information of the investigation being without actually concluding specifically as to what was the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that at the stage of recording reasons assessing officer had not shown any indulgence of his own. It appears that the assessing officer had blindfolded himself to rely the investigation Wing report and made the same foundation of recording the reasons for the reopening. The manner in which the reasons have been recorded make it appear that the assessing officer without actually applying his mind to the information made available by the investigation Wing proceeded to open the cases of all beneficiaries of alleged entries from Pradeep Kumar Jindal group of companies by recording reasons in same template/format and included assessee also as a beneficiary while assessee was a company of Pradeep Kumar Jindal and assessee is providing accommodation entries to the beneficiaries. 19. The judgement which Ld. DR has relied in the case of Experion Developers Pvt. Ltd. (supra), is distinguishable on fact. In that case the Investigation wing report was with regard to sources of a investing/ parent company located in Singapore were found to be not sufficient to make huge investment and that parent company was found to be conduit. However, here in case in hand the issue was of accommodation e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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