M/s Anupam Tower Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 4516/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7735 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-04-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 30-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: V S RASTOGI
• Keywords: Corroborative evidences; Accommodation entries; Reason to believe
• Section: 143(3); 147; 68; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4516/DEL./2013 (ASSESSMENT YEAR : 2004-05) ANUPAM TOWER PRIVATE LIMITED, VS. ACIT, M 11, MIDDLE CIRCLE, CENTRAL CIRCLE 23, CONNAUGHT CIRCUS, NEW DEHI. NEW DELHI 110 001. (PAN : AABCA0023F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.S. RASTOGI, AR REVENUE BY : SHRI K.K. JAISWAL, DR DATE OF HEARING : 05.04.2016 DATE OF ORDER : 17.05.2016 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. ANUPAM TOWER LIMITED (HEREINAFTER REFERRED TO AS THE ASSESSEE), BY FILING THE PRESE NT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 27.05.2013 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-XXXIII, NEW DE LHI QUA THE ASSESSMENT YEAR 2004-05 ON THE GROUNDS INTER AL IA THAT :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS)-XXXII I, NEW DELHI ERRED IN REJECTING APPELLANT'S CONTENTION THAT ITA NO.4516/DEL./2013 2 ASSESSMENT ORDER MADE BY ASSESSING OFFICER WAS BAD IN LAW AND VOID AB-INITIO. 2. THAT WITHOUT PREJUDICE, ON THE FACTS AND CIRCUMS TANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX(APPEALS)-XXXIII, NEW DELHI ERRED IN UPHOLDING T HE ASSUMPTION OF JURISDICTION U/S 147 BY THE ASSESSING OFFICER AND IN MAKING THE ASSESSMENTS IN PURSUANCE THEREOF. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX(APPEALS)-XXXIII , NEW DELHI ERRED IN CONFIRMING THE ADDITION OF RS.15 LACS MADE BY ASSESSING OFFICER U/S 68 OF THE INCOME TAX ACT,1961. 3.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX(APPEALS)-XXXIII , NEW DELHI ERRED IN CONFIRMING THE ADDITION OF AMOUN T OF RS.15 LACS RECEIVED BY THE APPELLANT TOWARDS SALE O F INVESTMENT IN SHARE AS INCOME U/S 68 OF THE INCOME TAX ACT, 1961 DESPITE SEVERAL JUDICIAL PRONOUNCEMENTS TO THE EFFECT THAT SECTION 68 WAS NOT APPLICABLE IN SUCH A SITUAT ION. 4. THE APPELLANT CRAVES PERMISSION TO ADD, AMEND, A LTER OR VARY ALL OR ANY GROUNDS OF APPEAL ON OR BEFORE T HE DATE OF HEARING OF THE APPEAL. 2. BRIEFLY STATED THAT FACTS OF THIS CASE ARE : ASS ESSMENT OF THE ASSESSEE WAS COMPLETED FOR THE YEAR 2004-05 DECLARI NG TOTAL INCOME AT RS.41,940/- ON 25.10.2014 BUT SUBSEQUENTL Y ON RECEIPT OF INFORMATION FROM ACIT, CENTRAL CIRCLE 19, NEW DE LHI IN MARCH 2011 THAT THE ASSESSEE HAS RECEIVED ACCOMMODATION E NTRIES TO THE TUNE OF RS.15,00,000/- FROM THE FEDERAL BANK ACCOUN T OF M/S. CHANDER PRABHU FINANCIAL SERVICES, A SHELL COMPANY FLOATED BY S.K. GUPTA, DURING THE FINANCIAL YEAR 2003-04 AND C ONSEQUENTLY, TO REASSESS THE INCOME WHICH HAS ESCAPED ASSESSMENT, A NOTICE U/S 148 ITA NO.4516/DEL./2013 3 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER THE ACT) WAS ISSUED AND IN RESPONSE THERETO, ASSESSEE FILED ITS RETURN OF I NCOME ON 25.04.2011 DECLARING TOTAL INCOME AT RS.41,940/-. ASSESSEE FILED OBJECTIONS FOR INITIATION OF PROCEEDINGS U/S 147 OF THE ACT WHICH WERE REJECTED . SHRI AJAY BHAGWANI, CA ATTENDED THE PROCEEDINGS, FILED NECESSARY DETAILS AND CLARIFICATIONS. ASSESS EE WAS PROVIDED WITH COPY OF VARIOUS STATEMENTS OF S.K. GUPTA AS WE LL AS LEDGER ACCOUNT OF SHRI ANEJA IN THE BOOKS OF S.K. GUPTA. ASSESSEE FILED COMPREHENSIVE SUBMISSION EXPLAINING THE QUERIES RAI SED BY THE AO. ASSESSEE ALSO CLAIMED THAT IT HAS SOLD INVESTM ENT OF RS.15,00,000/- DURING THE FINANCIAL YEAR 2003-04 TO CHANDER PRABHU FINANCIAL SERVICES LIMITED (CPFSL). HOWEVER , S.K. GUPTA ADMITTED THAT HE HAS PROVIDED ACCOMMODATION E NTRIES TO VARIOUS CONCERNS IN THE FORM OF SHARE APPLICATION M ONEY / SHARE CAPITAL / SALE & PURCHASE OF SHARE / BOGUS EXPENDIT URE OF ENTRIES / LOAN ETC. ASSESSEE HAS FAILED TO FURNISH ANY CONFI RMATION OR ANY SUPPORTING EVIDENCE TO SUPPORT HIS CONTENTION THAT HE HAS RECEIVED AN AMOUNT OF RS.15,00,000/- FROM CPFSL ON ACCOUNT O F SALE OF INVESTMENT DURING FINANCIAL YEAR 2003-04, THUS FAIL ED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHI NESS OF THE CREDITOR IN RESPECT OF THE AMOUNT OF RS.15,00,000/ -. SO, THE AMOUNT OF RS.15,00,000/- IS TREATED AS UNDISCLOSED INCOME OF THE ITA NO.4516/DEL./2013 4 ASSESSEE U/S 68 OF THE ACT AND THEREBY MADE AN ADD ITION TO THE TOTAL INCOME OF THE ASSESSEE WHICH COMES TO RS.15,4 1,940/-. 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) WHO HAS DISMISSED THE APPEAL. FEELING AGGRIEVED, THE ASSES SEE CAME UP IN APPEAL BEFORE THE TRIBUNAL BY WAY OF FILING THE PRE SENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. LD. AR FOR THE ASSESSEE CONTENDED THAT THE AO WI THOUT APPLYING THE MIND AND WITHOUT BEING SATISFIED HIMSE LF AS REQUIRED U/S 147 OF THE ACT PROCEEDED TO REOPEN THE PROCEEDI NGS WHICH ARE BAD IN LAW AND RELIED UPON THE DECISION RENDERED BY HONBLE JURISDICTIONAL HIGH COURT IN PR. COMMISSIONER OF IN COME TAX- 4 VS. G & G PHARMA LIMITED IN ITA 545/2015 ORDER DA TED 08.10.2015 AND ITAT, DELHI BENCH H, NEW DELHI IN CASE OF USG BUILDWELL PVT. LTD. VS. ACIT, CENTRAL CIRCLE 23 , NEW DELHI ORDER DATED 15.02.2016 . HOWEVER, ON THE OTHER HAND, THE LD. DR FOR THE REVENUE RELIED UPON THE ORDER PASSED BY THE AO AS WELL AS THE LD. CIT (A). 6. UNDISPUTEDLY, IT IS SETTLED PRINCIPLE OF LAW THA T THE AO IS REQUIRED TO REACH AT AN INDEPENDENT CONCLUSION BY A PPLYING HIS OWN ITA NO.4516/DEL./2013 5 MIND THAT HE HAS REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT TO ASSUME THE JURISDICTION F OR REOPENING OF THE ASSESSMENT U/S 147 / 148 OF THE ACT. 7. NOW BEFORE PROCEEDING FURTHER, WE WOULD LIKE TO PERUSE THE DECISION RENDERED BY THE AO FOR REOPENING OF THE AS SESSMENT U/S 147 OF THE ACT WHICH ARE REPRODUCED FOR READY REFER ENCE AS UNDER :- '2. AS PER THE INFORMATION RECEIVED FROM THE ACIT, CENTRAL CIRCLE-19, NEW DELHI, A SURVEY OPERATION WAS CONDUC TED IN THE S K GUPTA GROUP OF CASES ON 20.11.2007 AT 308. ARUNACHAL BUILDING, 19, BARAKHAMBA ROAD, NEW DELHI- 110001 AND 1007-1008, ARUNACHAL BUILDING, 19, BARAK HAMBA ROAD, NEW DELHI-110001. DURING THE COURSE OF SURVE Y PROCEEDINGS SEVERAL LEDGER ACCOUNTS MAINTAINED IN T ALLY FOR THE FY 2003-04, BESIDES VARIOUS OTHER DOCUMENTS / A CCOUNTS WERE FOUND. FURTHER, DURING THE COURSE OF SURVEY & ASSESSMENT PROCEEDINGS, SH S K GUPTA ADMITTED THAT HE HAD BEEN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS PER SONS BENEFICIARIES THROUGH A LARGE NO. OF SHELL COMPANIE S / CONCERN FLOATED BY & EFFECTIVELY CONTROLLED BY HIM. HE OPER ATED A NUMBER OF ACCOUNTS IN THE SAME BANK/BRANCH OR IN DI FFERENT BRANCHES, IN THE NAMES OF THESE SHELL COMPANIES/CON CERNS. AFTER RECEIVING CASH FROM THE BENEFICIARIES, SH S K GUPTA USED TO DEPOSIT THE SAME IN THE BANK ACCOUNT OF ONE OF THESE SHELL COMPANIES / CONCERN. THEN HE USED TO ROUTE TH E ENTRIES THROUGH TWO TO FOUR ACCOUNTS OF THESE SHELL COMPANI ES / CONCERNS BEFORE ULTIMATELY TRANSFERRING SAME TO THE BANK ACCOUNTS OF THE BENEFICIARIES TO GIVE THE COLOR OF GENUINENESS TO THESE TRANSACTIONS. 3. FURTHER, AS PER THE INFORMATION RECEIVED FROM TH E ACIT, CENTRAL CIRCLE-19, NEW DELHI, M/S ANUPAM TOWE RS PVT LTD HAS RECEIVED AMOUNT OF RS.10,00,000/- VIDE CHEQUE NO. 778929 DATED 15.10.2003 AND AMOUNT OF RS.5,00,0 00/- VIDE CHEQUE NO.778945 DATED 18.11.2003 FROM THE FED ERAL BANK ACCOUNT OF M/S CHANDERPRABHU FINANCIAL SERVICE S/ CHANDERPRABHU FINANCE & SECURITIES LIMITED, A SHELL COMPANY/CONCERN FLOATED/CONTROLLED BY SH. S.K. GUPT A. ITA NO.4516/DEL./2013 6 4. IN VIEW OF THE ABOVE, 1 HAVE REASON TO BELIEVE T HAT AMOUNT/INCOME OF RS.15,00,000/- HAS ESCAPED ASSESSM ENT FOR THE A. Y 2004-05 FOR FAILURE ON THE PART OF THE ASS ESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR ITS ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE IT ACT, 1961. 5. ISSUE NOTICE U/S 148 OF THE IT ACT, 1961' 8. BARE PERUSAL OF THE REASONS RECORDED BY THE AO F OR INITIATION OF THE PROCEEDINGS U/S 147 OF THE ACT APPARENTLY GO ES TO PROVE INTER ALIA THAT HE HAS SIMPLY ACTED ON THE BASIS OF INFOR MATION PROVIDED BY THE ACIT, CENTRAL CIRCLE 19, NEW DELHI WHO HAS C ONDUCTED SURVEY OPERATION IN THE S.K. GUPTA GROUP OF CASES O N 20.11.2007 AT 308, ARUNACHAL BUILDING, 19, BARAKHAMBA ROAD, NE W DELHI- 110001 AND 1007-1008, ARUNACHAL BUILDING, 19, BARAK HAMBA ROAD, NEW DELHI-110 001; THAT THE INFORMATION SUPPL IED BY ACIT, CENTRAL CIRCLE 19, NEW DELHI IS AGAIN BASED UPON TH E STATEMENT OF S.K. GUPTA RECORDED DURING SURVEY PROCEEDINGS; THAT AS PER THE INFORMATION RECEIVED BY THE AO, ASSESSEE REPORTED T O HAVE RECEIVED RS.10,00,000/- VIDE CHEQUE NO. 778929 DATED 15.10.2 003 AND AN AMOUNT OF RS.5,00,000/- VIDE CHEQUE NO.778945 DATED 18.11.2003 FROM THE FEDERAL BANK ACCOUNT OF M/S CHANDERPRABHU FINANCIAL SERVICES/ CHANDERPRABHU FINANCE & SECURITIES LIMITE D, A SHELL COMPANY/CONCERN FLOATED/CONTROLLED BY SH. S.K. GUPT A. ITA NO.4516/DEL./2013 7 9. NOW, THE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS AS TO WHETHER THE AO CAN INITIATE PROCEEDINGS U/S 147/148 OF THE ACT ON THE BASIS OF CERTAIN COMMUNICATION RECEI VED FROM HIS SUPERIOR REVENUE AUTHORITIES SHOWING THAT THE A SSESSEE HAS BEEN PROVIDED WITH ACCOMMODATION ENTRY TO THE TUNE OF RS.15,00,000/- BY A SHELL COMPANY/CONCERN FLOATED B Y S.K. GUPTA? . 10. IDENTICAL ISSUE HAS COME UP BEFORE THE HONBLE SUPREME COURT IN JUDGMENT CITED AS CHHUGAMAL RAJPAL VS. S.P. CHALIHA (1971) 79 ITR 603, WHEREIN IT IS HELD AS UNDER :- THE SUPREME COURT WAS DEALING WITH A CASE WHERE TH E AO HAD RECEIVED CERTAIN COMMUNICATIONS FROM THE COMMISSION ER OF INCOME TAX SHOWING THAT THE ALLEGED CREDITORS OF TH E ASSESSEE WERE NAME-LENDERS AND THE TRANSACTIONS ARE BOGUS. THE AO CAME TO THE CONCLUSION THAT THERE WERE REASONS TO BELIEV E THAT INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT. THE SUPREME CO URT DISAGREED AND OBSERVED THAT THE AO HAD NOT EVEN CO ME TO A PRIMA FACIE CONCLUSION THAT THE TRANSACTIONS TO WHICH HE REFERRED WERE NOT GENUINE TRANSACTIONS. HE APPEARED TO HAVE HAD ONLY A VAGUE FELLING THAT THEY MAY BE BOGUS TRANSACTIONS. IT WAS FURT HER EXPLAINED BY THE SUPREME COURT THAT : BEFORE ISSUING A NOTICE UNDER S. 148, THE ITO MUST HAVE EITHER REASONS TO BELIEVE THAT BY REASON OF THE OMI SSION OR FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETUR N UNDER S. 139 FOR ANY ASSESSMENT YEAR TO THE ITO OR TO DISCLO SE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSE SSMENT FOR THAT YEAR, INCOME CHARGEABLE TO TAX HAS ESCAPED ASS ESSMENT FOR THAT YEAR OR ALTERNATIVELY NOTWITHSTANDING THAT THERE HAS BEEN NO OMISSION OR FAILURE AS MENTIONED ABOVE ON T HE PART OF THE ASSESSEE, THE ITO HAS IN CONSEQUENCE OF INFO RMATION IN HIS POSSESSION REASON TO BELIEVE THAT INCOME CHA RGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YE AR. UNLESS THE REQUIREMENTS OF CL. (A) OR CL. (B) OF S. 147 ARE SATISFIED, THE ITO HAS NO JURISDICTION TO ISSUE A N OTICE UNDER S. 148. ITA NO.4516/DEL./2013 8 THE SUPREME COURT CONCLUDED THAT IT WAS NOT SATISFI ED THAT THE ITO HAD ANY MATERIAL BEFORE HIM WHICH COULD SATISFY THE REQUIREMENTS UNDER SECTION 147 AND THEREFORE COULD NOT HAVE ISSU ED NOTICE UNDER SECTION 148. 11. IDENTICAL ISSUE HAS ALSO COME UP BEFORE HONBLE JURISDICTIONAL HIGH COURT IN JUDGMENT CITED AS G & G PHARMA INDIA LTD. (SUPRA) WHEREIN HONBLE HIGH COURT, BY FOLLOWING T HE JUDGMENT DELIVERED BY HONBLE SUPREME COURT, ENTITL ED CHHUGAMAL RAJPAL VS. S.P. CHALIHA (SUPRA) HELD AS UNDER :- 12. IN THE PRESENT CASE, AFTER SETTING OUT FOUR EN TRIES, STATED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON A SINGLE DATE I.E. 10 TH FEBRUARY 2003, FROM FOUR ENTITIES WHICH WERE TERMED AS ACCOMMODATION ENTRIES, WHICH INFORMATION WAS GIVEN TO HIM BY THE DIRECTORATE OF INVESTIGATION, THE AO STATED: I HAVE ALSO PERUSED VARIOUS MATERIALS AND REPORT FROM INVE STIGATION WING AND ON THAT BASIS IT IS EVIDENT THAT THE ASSES SEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BAN K ACCOUNT BY WAY OF ABOVE ACCOMMODATION ENTRIES. THE ABOVE CONCLUSION IS UNHELPFUL IN UNDERSTANDING WHETHER TH E AO APPLIED HIS MIND TO THE MATERIALS THAT HE TALKS ABO UT PARTICULARLY SINCE HE DID NOT DESCRIBE WHAT THOSE M ATERIALS WERE. ONCE THE DATE ON WHICH THE SO CALLED ACCOMMOD ATION ENTRIES WERE PROVIDED IS KNOWN, IT WOULD NOT HAVE B EEN DIFFICULT FOR THE AO, IF HE HAD IN FACT UNDERTAKEN THE EXERCISE, TO MAKE A REFERENCE TO THE MANNER IN WHICH THOSE VE RY ENTRIES WERE PROVIDED IN THE ACCOUNTS OF THE ASSESSEE, WHIC H MUST HAVE BEEN TENDERED ALONG WITH THE RETURN, WHICH WAS FILED ON 14 TH 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 BAN K BY WAY OF ACCOMMODATION ENTRIES. IN THE CONSIDERED VIEW O F THE COURT, IN LIGHT OF THE LAW EXPLAINED WITH SUFFICIEN T CLARITY BY THE SUPREME COURT IN THE DECISIONS DISCUSSED HEREIN BEFORE, THE BASIC REQUIREMENT THAT THE AO MUST APPLY HIS MI ND TO THE MATERIALS IN ORDER TO HAVE REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT IS MISSING IN TH E PRESENT CASE. ITA NO.4516/DEL./2013 9 12. FURTHERMORE, SIMILAR ISSUE HAS CROPPED UP BEFOR E THE ITAT, DELHI BENCH H IN M/S. USG BUILDWELL PVT. LTD. (SUPRA), WHEREIN ADDITION OF RS.20,00,000/- WAS MADE BY THE AO ON THE BASIS OF SIMILAR INTIMATION SENT BY ACIT, CENTRAL C IRCLE 19, NEW DELHI ON THE BASIS OF SURVEY OPERATION CONDUCTED IN S.K. GUPTA GROUP CASES ON 20.11.2007 AND THE COORDINATE BENCH CAME TO THE CONCLUSION THAT THE AO HAS NOT APPLIED HIS MIND ON THE INFORMATION RECEIVED FORM ACIT AS REQUIRED U/S 147 OF THE ACT A ND AS SUCH, ASSESSMENT FRAMED U/S 143 READ WITH SECTION 143(3) IS NOT SUSTAINABLE. 13. NOW, ADVERTING TO THE CASE AT HAND, WE ARE OF T HE CONSIDERED VIEW INTER ALIA : (I) THAT AO HAS MERELY ACTED IN MECHANICAL MANNER ON RECEIPT OF INFORMATION FROM ACIT, CENTRAL CIRCLE 19 , NEW DELHI THAT HE HAS REASON TO BELIEVE THAT INCOME OF RS.15,00,000/- HAS ESCAPED ASSESSMENT FOR THE YEAR 2004-05 DUE TO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR ASSESSMENT; (II) THAT THE AO HAS NOT EVEN SATISFIED HIMSELF TO PRIMA FACIE MAKE OUT, IF, ON HIS OWN, HE HAS SATISFIED HI MSELF ITA NO.4516/DEL./2013 10 THAT THE INCOME OF RS.15,00,000/- HAS ESCAPED ASSESSMENT IN THE YEAR UNDER ASSESSMENT BY PERUSING RECORD, IF ANY; (III) THAT WHEN THE CHEQUE NUMBERS AND DATE OF THE AMOUNT OF ALLEGED ACCOMMODATION ENTRIES WERE AVAILABLE WIT H THE AO, HE WAS REQUIRED TO CONDUCT INDEPENDENT INVESTIGATION TO SATISFY HIMSELF, THAT SUCH AND SUC H INCOME HAS ESCAPED ASSESSMENT; (IV) THAT AT THE TIME OF FILING THE ORIGINAL RETURN OF I NCOME FILED BY THE ASSESSEE ON 25.10.2014, THE ASSESSEE MIGHT HAVE RECORDED THE TRANSACTION OF RS.15,00,000 /- BETWEEN THE ASSESSEE AND S.K. GUPTA GROUP COMPANY AND AT THAT TIME, THE AO WAS UNDER OBLIGATION TO INVESTIGATE IF THAT TRANSACTION WAS BOGUS WITH A SH ELL COMPANY; (V) THAT FORMING AN OPINION MERELY ON THE BASIS OF INFORMATION SUPPLIED TO THE AO BY ACIT, CENTRAL CIRCLE 19, NEW DELHI THAT S.K. GUPTA HAS PROVIDED ACCOMMODATION ENTRIES TO THE ASSESSEE TO THE TUNE O F RS.15,00,000/- DOES NOT AMOUNT TO SATISFACTION OF T HE AO TO REOPEN THE CASE U/S 147 OF THE ACT; ITA NO.4516/DEL./2013 11 (VI) THAT IN VIEW OF THE LAW LAID DOWN BY THE HONBLE SUPREME COURT AND HONBLE JURISDICTIONAL HIGH COURT IN THE JUDGMENT CITED AS CHHUGAMAL RAJPAL VS. S.P. CHALIHA AND G & G PHARMA INDIA LTD.(SUPRA) RESPECTIVELY, THE INITIATION OF PROCEEDINGS U/S 147 OF THE ACT IS ITSELF BAD IN LAW AND CONSEQUENT ASSESSM ENT FRAMED U/S 143(3)/147 OF THE ACT IS NOT SUSTAINABLE , HENCE HEREBY SET ASIDE. 14. SINCE THE VERY INITIATION OF THE PROCEEDINGS U/ S 147 OF THE ACT AND CONSEQUENT ASSESSMENT FRAMED U/S 143(3)/ 14 7 HAVE HELD TO BE NOT SUSTAINABLE IN THE EYES OF LAW, GROUNDS N O.3 & 3.1 RAISED BY THE ASSESSEE CHALLENGING THE ADDITION OF RS.15,0 0,000/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT (A) U/S 68 OF T HE ACT HAVE BECOME INFRUCTUOUS. RESULTANTLY, PRESENT APPEAL FI LED BY THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 17 TH DAY OF MAY, 2016. SD/- SD/- (N.K. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 17 TH DAY OF MAY, 2016 TS ITA NO.4516/DEL./2013 12 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT-XXXIII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.