INCOME TAX ACT, 1961

Sections 147 and 148

Reassessment - Full and true disclosure - Allegation that assessee received accommodation entries - AO merely mentioned that the assessee received a sum as share capital but from whom the same has been received was not mentioned

AO, after relying upon the report of Investigation Wing, proceeded to issue notice under section 147 after taking approval under section 151. Notice under section 148 was issued on 31-3-2018. In response, assessee filed the return of income on 6-10-2018 and pleaded AO to provide reasons recorded. AO recorded the reasons that the assessee was in receipt of bogus share capital and share premium from M/s F. AO passed the assessment order thereby making two additions on account of undisclosed income under section 68 and unexplained expenditure under section 69.Held: There was no whisper in the recorded reason that there was any omission or failure on the part of assessee in disclosing fully and truly material facts in the return of income. The contentions of assessee that information received by AO nowhere in reasons recorded mentioned the name of bank, cheque number through which assessee have received the amount from parties, appears to be correct. In reasons recorded, AO merely mentioned that assessee had received a sum as share capital but from whom the same has been received was not mentioned in the said reasons. AO had not made out any case from the transaction specific valid material which can justify the reopening action under section 148. Reassessment cannot be merely based on the basis of information of ADIT (Inv.). Therefore, notice issued under section 148 was quashed.

Relied:G & G Pharma (2015) 384 ITR 147 (Del) : 2015 TaxPub(DT) 4054 (Del-HC), Meenakshi Overseas (2017) 395 ITR 677 (Del-HC) : 2017 TaxPub(DT) 1791 (Del-HC) and Sarthak Securities Co. (P) Ltd. v. ITO (2010) 47 DTR 201 (Del) : 2010 TaxPub(DT) 2311 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

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