Alosha Marketing Pvt. Ltd., Kolkata V. ACIT, Cir. 4(1), Kolkata

ITA 313/KOL/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1061 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 15-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Opportunity of being heard; Accommodation entries; Onus to prove; Reason to believe; Reassessment proceedings
• Section: 147; 68; 148; 271(1)(c); 142(1); 201; 274; 143(2); 208; 22

Judgement Text

ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 1 THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President (KZ) & Dr. Manish Borad, Accountant Member I.T.A. No. 313/KOL/2024 Assessment Year: 2013-2014 Alosha Marketing Pvt. Ltd.,..........................Appellant 62A, Hazra Road, Kolkata-700019 [PAN:AACCA1930G] -Vs.- Assistant Commissioner of Income Tax,....Respondent Circle-4(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee square, Kolkata-700069 Appearances by: Shri N.S. Saini, A.R. and Priyanka Salarpuria, A.R., appeared on behalf of the assessee Shri Manas Mondal, Addl. CIT, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing : April 30, 2024 Date of pronouncing the order : July 08, 2024 O R D E R Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 2 National Faceless Appeal Centre (NFAC), Delhi dated 29 th January, 2024 passed for assessment year 2013-14. 2. The assessee has taken ten grounds of appeal, but its grievances revolve around two folds of issues, namely- (a) ld. CIT(Appeals) has erred in confirming the reopening of assessment; (b) ld. CIT(Appeals) has erred in confirming the addition of Rs.1,65,00,000/-, which was added by the ld. Assessing Officer with the aid of section 68 of the Income Tax Act. 3. Brief facts of the case are that the assessee has filed its return of income on 13.09.2013 declaring total income of Rs.14,00,450/- . The ld. Assessing Officer has recorded reasons and issued notice under section 148 of the Income Tax Act on 31.03.2019 for reopening of the assessment. The assessee in response to the notice under section 148 filed its return of income on 17.04.2019 declaring total income at Rs.14,00,450/-. The ld. Assessing Officer has issued notice under section 143(2). He has rejected the objections of the assessee against reopening of the assessment and thereafter passed the assessment order. It is a very brief assessment running into five pages only, but in this assessment, there is no contribution of the ld. Assessing Officer on any of the issues except narrating certain facts and reproducing the jurisprudence on section 68 by way of a cut and paste manner. ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 3 Therefore, we deem it appropriate to take note of this complete assessment order, which reads as under:- “The assessee company filed its original return of income for the A.Y. 2013-14 on 13/09/2013 declaring total income of Rs.14,00,450/-. Subsequently, the case was selected for assessment u/s 147 after obtaining approval from Ld. Pr.CIT-2, Kolkata. Notice u/s. 148 of the I.T. Act, 1961 was issued on 31/03/2019 to the assessee requiring to file return in compliance to notice u/s 148. In response to that, the assessee filed return of income on 17/04/2019 declaring total income of Rs. 14,00,450/-. Subsequently notice u/s 143(2) and 142(1) of the I.T. Act, 1961 were issued and duly served upon the assessee company. The assessee was apprised of the reason for selection of case for reassessment. The assessee filed objection to the selection of case for re- assessment which was disposed off by speaking order. Vide show-cause notice, the assessee was asked to explain the following: "It is seen from the information available on records that you have received amount of Rs. 1,65,00,000/- from M/s Bhakti Suppliers Pvt Ltd, M/s Adeline Sales Pvt Ltd, M/s Majestic Retails Pvt Ltd, Inventive Dealers Pvt Ltd and M/s Phlox Tradecomm Pvt Ltd and others during the A.Y. 2013-14. You are requested to furnish details and purpose of such transactions. You are also requested to furnish the details of sources of source of such funds received and the identity, creditworthiness of the party and genuineness of such transactions. It should be noted that in case of non-compliance from your end, the amount of Rs. 1,65,00,000/- from M/s Bhakti Suppliers Pvt Ltd, M/s Adeline Sales Pvt Ltd, M/s Majestic Retails Pvt Ltd, Inventive Dealers Pvt Ltd and M/s Phlox Tradecom Pvt Ltd during the A.Y. 2013-14 will be treated as your undisclosed income, without giving any further opportunity of being heard to you.' Investigation of department has made detail enquiry in the case. It was found that all the abovementioned companies are involved in providing accommodation entry. Further, from perusal of information, it was found that the assessee company ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 4 has taken accommodation entry of Rs. 1,65,00,000/- in its bank account during the financial year 2012-13 relevant to assessment year 2013-14 from above mentioned companies. Even though opportunity of being heard was provided to the assessee but the assessee company failed to discharge the onus to prove the transactions as being genuine and failed to discharge his duties. The burden of proof clearly shifted on the assessee company to substantiate the said cash credit found in the assessee's book by producing substantive evidences and source of sources of the funding. For this compliance, the assessee company has been given reasonable number of opportunities as stated above for the verification of the fresh cash credit introduced during the year in the light of the identify of the party and creditworthiness of the transacting company as well as the genuineness of the said transactions. To make a transaction genuine the three necessary ingredients are the 1) Identity of the person, 2) Creditworthiness of the transaction, 3) Genuineness of the transactions. In this case it is found that neither of the above three conditions are fulfilled and neither is the assessee able to furnish details and documents to substantiate the genuineness of the transaction. It is clear from different Higher Court rulings that mere transfer- through account payee cheques does not make a transaction genuine. The nature, source of funding and the purpose of such transactions are also important. The three ingredients of identity, creditworthiness and genuineness are necessary. The plea taken by the assessee company is also not acceptable as such plea does not prove such transaction to be genuine and the onus to substantiate does not neutralize. We can refer to the principle on the matter of tax evasion and tax avoidance as laid down by the Supreme Court in the landmark judgment in the case of McDowell & Co. Ltd. -vs. CTO (1985) 154 1TR 148 / 22 Taxman 11 (SC) can have its application only where colourable or artificial devices are adopted and not to the transactions which are otherwise legitimate and are undertaken bona fide in the ordinary course of business. In other words, where the devices though seemingly legal are adopted in collusion or where devices adopted are not genuine or bona fide but are sham, make believe or camouflaged to escape the liability for tax or to obtain certain benefit for tax purpose. ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 5 It is a fact that the reason for such transaction is not explained by the assessee company. The company does not have any sort of operation or business activity. If the profit and Loss account of those source companies are perused, it will be seen that in most of the case the company is either having a bit of a interest income or commission, income or some such petty income and the expenses claimed in those companies would either neutralize that income or the returned income of those companies would be a loss return. The nature of every human being is to generate money and get income out of that which is the basic rule that each and every man follows and only here in the case of such companies can we find that reverse occurring. The Modus Operandi of introduction of such bogus transactions is that unaccounted cash is generally deposited in account of different persons/companies and from these accounts, cheques are issued to various other companies and after rotating the money in 3-4 layers or more, the money is introduced as accommodation entries in other companies and this cycle continues till the time unaccounted money reaches its intended destination. The operators of such bogus companies ensure that the money is laundered through more than one layer. That is the reason why while checking the bogus accounts of loan creditor companies, it is invariably found that the said companies have also received similar amount from some other persons or companies by cheque and issued the cheque as subscription to the share capital or unsecured loan after few days, or in most case, the same day. It is well settled principle of law as declared by the Honourable Supreme Court in the case of Sumati Dayal Vs. C1T (214 1TR 801) (SC) that the true nature of transaction have to be ascertained in the light of surrounding circumstances. It needs to be emphasized that standard of proof beyond reasonable doubt has no applicability in determination of matters under taxing statutes. It is also well settled that tax authorities are entitled to look into surrounding circumstances to find out the reality of the transaction by applying the test of human probability. This was the principle laid down by the Honourable Supreme Court in the case of CIT Vs. Durga Prasad More 82 ITR 540 (SC). It is also well settled law that onus of proving credits in its book of accounts lies squarely on the assessee and such proof consists of proving the identity of the subscriber or creditor, capacity of such creditor or subscriber to make payment and also to prove the ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 6 genuineness of the transaction. It is only when the assessee discharges this primary onus, that onus shifts to the Department. Merely establishing the identity of the creditor is not sufficient. This is the ratio in a large number of decisions including Shankar Industries Vs. C1T (1978) 114 ITR 689 (Cal); C. Kant & Co. Vs. CIT, (1980) 126 ITR 63 (Cal); Prakash Textile Agency Vs. CIT, (1980) 121 ITR 890 (Cal); Oriental Wire Industries P. Ltd. Vs. CIT, (1981) 131 ITR 688 (Cal); CIT Vs. United Commercial &. Industries Co. (P) Ltd., (1991) 187 ITR 596 599 (Cal); M.A. Unneeri Kutti Vs. CIT, (1992) 198 ITR 147, 150 (Ker), Special Leave petit on dismissed by the Supreme Court (1993) 201 ITR (St.) 23 (SC); CIT Vs. Precision Finance Pvt. Ltd., (1994) 208 ITR 465, 470 (Cal). The manner of payment by the account payee cheque is also not sacrosanct and this cannot make a bogus transaction as genuine one (CIT Vs. Precision Finance Pvt. Ltd., (208 ITR 465, 470, 471 (Cal). Cf. Nizam Wool Agency -vs.- CIT, (1992) 193 ITR 318, 320 (All)]. All these transactions may apparently seem to be real. However, it needs to be emphasized that apparent has to be distinguished from real. In this context the observations of the Honourable Supreme Court in the case of CIT Vs. Durga Prasad More 82 ITR 540(SC)are pertinent, wherein the Honourable Supreme Court has observed:- "It is true that an apparent must be considered to be real until it is shown there are reasons to believe that the apparent is not the real. In a case of the present kind a party who relies on a recital in a deed has to establish the truth of those recitals, otherwise it will be very easy to make self-serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. The taxing authorities were not required to put on blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents.” In this respect it is reiterated that revenue prefers to place reliance in the following case laws as narrated earlier: 1) Sumati Dayal Vs. CIT (214 ITR 801) (SC) 2) CIT Vs. Durga Prasad More 82 ITR 540 (SC) 3) Shankar Industries Vs. CIT (1978) 114 ITR 689 (Cal); 4) C. Kant & Co. Vs. CIT, (1980) 126 ITR 63 (Cal); 5) Prakash Textile Agency Vs. CIT, (1980) 121 ITR 890 (Cal); ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 7 6) Oriental Wire Industries P. Ltd. Vs. CIT, (1981) 131 ITR 688; 7) CIT Vs. United Commercial & Industries Co. (P) Ltd., (1991) 187 ITR 596, 599(Cal); 8) M.A. Un neeriKutti Vs. CIT, (1992) 198 ITR 147,150 (Ker), 9) Special Leave petition dismissed by the Supreme Court (1993) 201 ITR (St.) 23 (SC); 10) CIT Vs. Precision Finance Pvt. Ltd. (1994) 208 ITR 465, 470 (Cal.) 11) Cf. Nizam Wool Agency -vs.- CIT (1992) 193 ITR 318, 320 (All). In the light of the ratio of the decisions as discussed earlier in the cases of following judicial pronouncements vis-a-vis the facts and circumstances in the instant case as well as the assessee’s inability to discharge its own burden of proof to substantiate its transaction even after given opportunities, it is held that the purported transaction aggregating to 1,65,00,000/- is nothing but the assessee’s unexplained cash credit in its books of accounts from undisclosed sources. In view of the above, the same is treated as undisclosed income of the assessee of the previous year 2012-13. Penalty proceedings u/s 27l(1)(c) is initiated separately for furnishing inaccurate particulars of income. [Addition: Rs.1,65,00,000/-] Subject to the discussions made in the foregoing paragraphs, the total income of the assessee is computed as under: COMPUTATION OF TOTAL INCOME Income declared by the assessee Rs. 14,00,450/- [as per return] Add: as discussed above Rs. 1.65,00,000/- ________________________ Assessed Income : Rs, 1,79,00,450/- __________________________ Assessed u/s 143(3] r.w.s. 147 of the Income-tax Act, 1961 as above. Issued Demand Notice u/s 156, penalty notice u/s 274 read with section 271(1)(c) of the Income-tax Act, 1961, Income and tax computation sheet and a copy of the assessment order to the assessee”. ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 8 4. Dissatisfied with the reopening as well as addition on quantum, the assessee carried the matter in appeal before the ld. CIT(Appeals). The findings of the ld. CIT(Appeals) are also almost on the same analogy without considering any issue substantively. For appreciating both the impugned orders, we deem it appropriate to take note of the finding of the ld. CIT(Appeals), which reads as under:- “5.0. I have perused the order and the appeal documents. The assessee assailed the assessment order are on two grounds:- (1)the re-opening of the assessment was bad as it was based on improper facts without any enquiries, without disposing the objections to reopening and non-application of mind. (2) there were no transactions in the impugned year with the entities stated in the assessment order. Though the assessee was provided with adequate opportunity of being heard in the appeal proceedings, no replies were submitted. However, in the statement of facts the assessee averred as under:- The appellant is a company. The appellant had filed its return of income on 13.9.2013 declaring total income of Rs. 14,00,450/-. Subsequently, vide notice u/s148 dt. 31.3.2019, the return of the appellant was reopened on the basis of alleged informed received from DIT(lnv.) Wing and vide the impugned order the income of the appellant was assessed at Rs. 1,79,00,445/- after making unjustified addition against which this appeal is being preferred. The AO issued the impugned notice u/s 148 on the basis of alleged informed received from DIT(lnv.)Wing and as per the said information the appellant has received sum of Rs. 1,65,00,000/- from certain companies. The AO alleged that the sum so received from such companies are accommodation entry and hence the initiation of reassessment proceedings and the consequent addition. The AO did not make any verification of his own before issuing notice u/s 148 nor any enquiry was made during the course of reassessment proceedings and as such the addition so made in such respect is completely bad and illegal. The AO in the impugned order has further alleged that there was no compliance by the appellant during the course assessment ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 9 proceedings, although the AO itself failed to dispose the objection so filed by the appellant during the course assessment proceedings and as such the proceedings itself are null and void. The appellant during the course assessment proceedings had categorically objected and had submitted that it did not have any transaction with the companies which were named in such reasons record by the AO and hence the reasons were void ab-initio and no proceedings could have been conducted against the appellant company. However, in the disposal of such objection, the AO merely mentioned regarding the legality of the reassessment proceedings without addressing specific objection so raised by the appellant and hence the disposal so made by the AO cannot be construed as valid disposal and hence the consequent proceedings become infructuous. The AO further alleged that the subsequent notice issued by him were not complied, although no such notices were received by the appellant and hence the AOs action in such respect and the consequent addition is bad in law. 6.0. The assessee, in the grounds of appeal 1 to 4 challenged the legality of the order on the premise of non-application of mind and the that AO did not dispose the objections to reopening of assessment. As seen from the assessment order, the AO apparently received the information about assessee’s transactions with bogus accommodation entry providers from the Investigation wing based on which the case was validly re-opened u/s 147 after securing due approval from the competent authorities. The assessee responded to the notice u/s 148 and thereafter AO disposed the objections to re-opening of the assessment. In the appeal proceedings, the assessee neither produced the copy of objections filed nor the order of the AO disposing the objections to support the argument that the specific points raised therein were not addressed. It is imperative for the assessee to bring to the notice of the appellate authority the relevant submission made before the AO while articulating the grounds of appeal. Nothing prevented the assessee from filing the said details in support of his claim before the appellate authority. In absence of any specific details provided by the assessee, the contention of the assessee is not acceptable, and the Ground No.1 to 4 are dismissed. 7.0. As regards ground no 5, it is for the assessee to prove that there were no transactions whatsoever to the extent of Rs 1,65,00,000 in the impugned year with the entities mentioned in the order with the financials of the company and relevant ledger accounts to buttress the claim. As the assessee failed to do so, I am a constrained to dismiss the ground and uphold the addition. ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 10 Ground 6 relating to charging of interest is also dismissed as the levy of interest is consequential. Ground no 7 is a general ground and do not require separate adjudication. In result, appeal is dismissed. Commissioner of Income-tax (Appeals) Income Tax Department”. 5. The ld. Counsel for the assessee while impugning the orders of revenue authorities took us through the reasons for reopening, which are placed in the paper book and such reasons read as under:- Subject: supply of reason An information has been received from DDIT(Inv.), Unit-2(1), Kolkata in the case of Ontrust Agro Foods Pvt. Ltd. (AABCO6376K) having account no. 128005500059 with Batanagar Branch. The account was opened on 14.05.2012. Account Nos. 627705054521 and 127605500052 were linked by way of transactions. The authorized signatory of the account is Kartik Shaw. The assessee is trader/broker in /heat/rice etc. The abovementioned accounts were credited mainly by transfer and cash deposit and debits by transfer and RTGS. Total credits in the account from 15-05-2011 to 04-09-2012 amounted to the tune of Rs.4.5 crores, out of which Rs.2.85 crores was credited by transfer mainly from linked account of Amber Textiles account no.627705054521, Rs.1.52 crores was credited by cash from different locations in India, in the range of Rs.6,600/- to Rs.9.5 lacs, just below the threshold limit of reporting. Total debits for the same period amounted to the tune of Rs.4.43 crores, out of which Rs.2.75 crores was debited by transfer mainly towards the linked account of Peacock Vintrade Pvt. Ltd. account no.127605500052 and Rs.1.65 crores was debited through RTGS mainly towards the account of Matribhumi Commerce Pvt. Ltd. Analysis of bank statement of the above mentioned accounts revealed that the funds were moving to the desired destination through banking channel. This is the common practice of jama-kharchi companies. These were operator driven transaction which resulted into entry received by the beneficiary companies in the books. For obtaining entries in the books beneficiary provides cash to operator which was deposited in the individual or dummy proprietorship accounts followed by transfer to accounts of different concerns. The subject account of Ontrust Agro Foods Pvt, Ltd. had been utilised for layering of transactions and finally reached to the beneficiaries. The assessee company M/s. Alosha Marketing Pvt. Ltd., is one of the beneficiaries who received Rs.1,65,00,000/- from ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 11 different companies, during the F.Y. 2011-12 which appears to have escaped assessment. This information has been passed on for verification in respect of source of fund or genuineness of the transaction and further necessary action. So, I have reason to believe with the materials on record that Rs.1,65,00,000/- has escaped assessment within the meaning of section 147 of I.T. Act 1961”. 6. The ld. Counsel for the assessee contended that there is no head and tail in these reasons. The ld. Assessing Officer has just affixed the information of DDIT in a cut and paste manner without analysing as to how this information is related with the assessee. The assessee has relied upon the written submissions filed before us. On merit, he submitted that the assessee had investment in the shares of Walter Investment Private Limited. Such investment has duly been disclosed in the accounts ending on 31.03.2012. He drew our attention towards page no. 36 of the paper book, wherein investment at Rs.1,90,00,000/- has been disclosed by the assessee. This investment as on 31.03.2013 has been shown at ‘NIL’, meaning thereby this was sold by the assessee and it has received the alleged sum of Rs.1,65,00,000/- from different four Companies. 7. He submitted that the assessee has no concern with any of the Companies stated by the ld. Assessing Officer in its reasons. He has no dealings with either these companies or any person mentioned by him. Therefore, this reopening is not based on any tangible information possessed by the assessee. He relied upon a large number of decisions in his written submission, namely- in the case of Asian Paints Limited -vs.-DCIT & Another reported in [2008] 296 ITR 90 (Hon’ble Bombay High Court); Ess Ess Kay Engineering Co. Pvt. Limited -vs.- CIT reported in [2001] 247 ITR ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 12 818 (Hon’ble SC); CIT -vs.- Jet Airways (I) Limited reported in [2011] 331 ITR 236 (Hon’ble Bombay High Court); Pr. CIT-5-Vs.- Shodiman Investments (P) Limited reported in 422 ITR 337 (Hon’ble Bombay High Court). On the strength of all these decisions, ld. Counsel for the assessee contended that there is no justifiable material available with the ld. Assessing Officer to reopen the assessment of the assessee. On merit, he submitted that ld. Assessing Officer has not issued notice to any of the Companies, to whom the assessee has sold the shares. It has submitted complete details of the four purchaser companies mentioned by the assessee in the first page of the assessment order. The assessee has submitted the banking details etc., but the ld. Assessing Officer did not bother to make any inquiry from any of the vendees in connection with the share purchases. 8. The ld. D.R., on the other hand, contended that the ld. Assessing Officer received information from the Investigation Wing and on the basis of that he has reopened the assessment, which has been upheld by the ld. CIT(Appeals). All these transactions of sale of shares are bogus transactions and the assessee has received accommodation entries. 9. We have duly considered the rival contentions and gone through the record carefully. Section 147 has been amended w.e.f. 1 st April, 2021. The assessment year involved before us is A.Y. 2013-14. Therefore, it is incumbent upon us to take note of the position of law as applicable to this assessment year. A perusal of opening line of section 147 as available in A.Y. 2013-14 would ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 13 contemplate that “if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment”. Though at the time of hearing, ld. Counsel for the assessee has relied upon a large number of judgments, but we do not deem it necessary to recite and recapitulate the proposition laid down in all these judgments suffice would be to say that all the Hon’ble Courts are unanimous in their approach to propound that expression “if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment”, is to be construed that there should be a tangible information possessed by the ld. Assessing Officer on the basis of which he can form an opinion that exhibits the escapement of income. In other words, there should be a live nexus between the information available with the ld. Assessing Officer, vis-à-vis the belief formed by him exhibiting the escapement of income. Bearing it in mind, let us evaluate the reasons recorded by the ld. Assessing Officer. A perusal of the assessment order would indicate that ld. Assessing Officer has not given any bifurcation from whom the assessee has received a sum of Rs.1,65,00,000/-, but he attributed this amount to five companies, namely M/s. Bhakti Suppliers Pvt. Limited, M/s. Adeline Sales Pvt. Limited, M/s. Majestic Retails Pvt. Ltd., M/s. Inventive Dealers Pvt. Ltd. and M/s. Phlox Tradecomm Pvt. Limited. On the other hand, in the reasons name of any such company has not been noticed by the ld. Assessing Officer. He has just noticed the information supplied by the DDIT, which exhibits the opinion of the Income Tax Department about the functioning of jama kharchi or paper companies in order to arrive that such a modus operandi would goad to a result that these are ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 14 accommodation entries. One can appreciate to understand what is the modus operandi of alleged jama kharchi companies but how that general formation of belief of their functioning could be applied qua the assessee. The ld. Assessing Officer has nowhere established any chain between any of the companies whose name has been mentioned in the reasons recorded by him, vis-à-vis the Companies from whom the assessee has received money on sale of shares. Not only in the reasons but no where in the assessment order, the ld. Assessing Officer has dwelled anything. He has simply disbelieved the transaction of the assessee on a general philosophy extending the scope of section 68. In other words, he has used the discussion from a readymade stock of such observation available with him, but on such type of formation of belief, no reopening can be done nor any addition could be made. 10. The position of the ld. 1 st Appellate Authority is almost similar. He had also not deliberated the issue analytically. The ld. CIT(Appeals) failed to record a specific finding challenging the reopening of the assessment, simply reproducing the submission and rejected. His observation is only 2-3 lines, namely “as seen from the assessment order, the AO apparently received the information about assessee’s transactions with bogus accommodation entry providers”. These observations nowhere depict as to how a live nexus is established with those companies, vis-à-vis the assessee-company, within whom the assessee has transactions. Therefore, we are of the view that reopening is bad in the eyes of law. ITA No. 313/KOL/2024 (A.Y. 2013-2014) Alosha Marketing Pvt. Ltd. 15 11. As far as merits of the additions are concerned, these additions have been made by the ld. Assessing Officer without carrying out any investigation. The ld. CIT(Appeals) has further upheld the additions without getting a remand report from the ld. Assessing Officer for verification of these transactions independently. Therefore, on both the counts, additions are not sustainable, which are deleted. 12. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 08/07/2024. Sd/- Sd/- (Manish Borad) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 8 th day of July, 2024 (1) Alosha Marketing Pvt. Ltd., 62A, Hazra Road, Kolkata-700019 (2) Assistant Commissioner of Income Tax, Circle-4(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee square, Kolkata-700069 (3) Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi; (4) CIT- , Kolkata (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.