TO Vs. M/s Comero Leasing & Financial (ITAT Delhi) , ITA No. 4281/Del/2010, Date of Order: 14/08/2014

At the time of hearing before us, it is submitted by the learned DR that the Assessing Officer had received definite information from the Director of Income Tax (Investigation), New Delhi with regard to accommodation entries being provided by various entry operators. The assessee was the beneficiary of such accommodation entries. That during the course of investigation by the Investigation Wing, the so called creditors have accepted that they are only entry providers. That the Assessing Officer has reopened the assessment on the basis of specific information with regard to the accommodation entries taken by the assessee, the details of which are given in the reasons recorded which shows complete detail with regard to the date on which the entry is received, the account from which that entry is received, name and branch of the bank and the amount. She, therefore, submitted that the CIT(A) wrongly held that the reopening of assessment was bad in law. 

Learned counsel for the assessee, on the other hand, relied upon the order of the learned CIT(A) and he referred to the reasons recorded and pointed out that in the reasons recorded, the Assessing Officer simply reproduced certain details received from the Investigation Wing and, without any application of mind, issued notice under Section 148. He referred to the details and pointed out that on five occasions, the same entry has been mentioned in the chart twice and the Assessing Officer accepted the same at the face value. The Assessing Officer has not even referred to the assessment record which is available with him. That the CIT(A) has properly appreciated the facts after examining the whole records. That the CIT(A) has also mentioned that he has examined the statements of alleged entry providers. At no place, it has been mentioned by any of the persons that the assessee was the beneficiary of the accommodation entries. He, therefore, submitted that the order of learned CIT(A) should be sustained. 8. The facts in the assessee’s case are identical. In this case also, the Assessing Officer, except preparing the table of alleged accommodation entries from the details claimed to have been received from the Investigation Wing, has not at all applied his mind. From a bare perusal of the table of the alleged accommodation entries, it is evident that the same entries have been repeated five times. This is the clear indication of non-application of mind by the Assessing Officer. Therefore, the above decision of Hon’ble Jurisdictional High Court would be squarely applicable to the facts of the assessee’s case.

Thus, we find that the facts and contention of the assessee in the appeal before us are altogether different. In the appeal before us, the contention of the assessee is that the Assessing Officer issued the notice under Section 148 mechanically simply on the basis of information alleged to have been received from the Investigation Wing without application of mind. On the facts of the case, we find this contention of the learned counsel to be correct and moreover, on identical facts, Hon’ble Jurisdictional High Court in the case of Suren International P.Ltd. (supra) held that the reasons recorded without any application of mind cannot be said to be a proper belief with regard to escapement of income. We, therefore, respectfully following the decision of Hon’ble Jurisdictional High Court in the case of Suren International P.Ltd. (supra), uphold the order of learned CIT(A) and dismiss the appeal filed by the Revenue.

At the time of hearing before us, both the parties have fairly admitted that the issue raised in the case of Camboj Brothers Pvt.Ltd. vide ITA No.4949/Del/2010 and the facts in the said case are identical to the facts in the case of Comero Leasing & Financial Pvt.Ltd. Therefore, for the detailed discussion from paragraph No.6 to 9 above, we uphold the order of learned CIT(A) in the case of Camboj Brothers Pvt.Ltd. also and dismiss both the appeals of the Revenue.

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