Eminent Computers Pvt. Ltd. Vs ITO (ITAT Delhi)
The issue under consideration is whether the re-opening of assessment u/s 147 merely relying upon investigation report is justified in law?
ITAT states that the return of income filed by the assessee has also been analyzed with reference to the information received from the Investigation Wing and keeping in view the factual position found by the Investigation Wing on the basis of documents seized in the search operation and post search inquiries, as discussed above. Considering all these material in totality there is enough material on record to have a reason to believe that share application money/Share premium consideration are merely and accommodation entries for which the assessee company has paid cash from its coffer and commission thereon. Even the AO has not applied his judicial mind independently while recording the reasons for initiating proceedings u/s 147/148 of the Act. Bare perusal of the reasons recorded shows that the entire emphasis is placed on the report of the Investigation Wing, which has otherwise been based upon the statements of Pradeep Kumar Jindal, Shri Subodh Kumar Khandelwal, Ms. Seema Khandelwal & Ms. Meera Mishra who have furnished the list of companies stated to be not doing any business but engaged in providing accommodation entries. Before issuing the notice, the AO has not examined the profile of the said companies to arrive at the logical conclusion so as to issue notice u/s 148 of the Act. In view of what has been discussed above, we are of the considered view that reassessment opened by the AO and sustained by the ld. CIT (A) in this case is not sustainable in the eyes of law, hence hereby quashed.
