SUKUMAR RAJAGOPALAN,NEW DELHI vs. ACIT, NEW DELHI

Common issues are involved in these appeals which were heard together so these are being disposed off by this consolidated order for the sake of convenience and brevity.

In 2006- 07, following grounds have been raised: “1. That on the facts and in the circumstances of the case the Learned CIT (A) was not justified in holding that the action of the Learned Assessing Officer in reopening the Assessment u/s 148 is valid. & 719/Del/2016 2 Sukumar Rajagopalan 1.1 That the Learned CIT (A) has erred in sustaining the action in reopening the assessment u/s 148 merely on the basis of information from investigation department in absence of any material or reasonable nexus with the appellant pointing to the escapement of income.

2. That on the facts and in the circumstances of case, the Learned CIT (A) was not justified in sustaining the addition of Rs.4,00,000 on account of unsecured loans u/s 68 of the Income Tax Act.

During the course of hearing the ld. Counsel for the assessee at the very outset stated that identical issues having similar facts were involved in the case of the daughter of the assessee Jyotsana Sukumar Vs ITO, Ward-32(4), New Delhi in & 4065/Del/2015 where in the case of assessee was also reopened on the same facts and similar additions were made and the matter traveled upto the ITAT in ITA Nos. 4064 & 4065/Del/2015 for the assessment year 2006-07 and 2009-10 wherein vide order dated 30.10.2015, the additions made were deleted (copy of the said order was furnished which is placed on record). The aforesaid contention of the ld. Counsel for the assessee was not controverted by the ld. DR.

I have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the cases of the assessee as well as his daughter Jyotsna Sukumar were & 719/Del/2016 4 Sukumar Rajagopalan reopened in similar circumstances and even the additions made in both the cases are similar. The only difference is in the amounts involved.

It is noticed that the similar issues have been decided in the case of Jyotsna Sukumar Vs ITO, Ward-32(4), New Delhi and the additions were deleted by the ITAT vide order dated 30.10.2015 in & 4065/Del/2015 for the assessment years 2006-07 and 2009-10, the relevant findings have been given in paras 4 to 7 which read as under: “4. I have heard the rival contentions and have perused the material on record. The reasons for reopening of assessment are as follows:- “As requested, the reasons for re-opening the case are reproduced as under:- “An information has been received from the Investigation Wing, New Delhi through ITO, Ward- 32(2), New Delhi that Ms Jyotsna Sukumar, Prop., Bureau of International Conference Services (PAN – AMHPS4797H) has taken accommodation entry in the form of unsecured loan amounting to Rs.5,25,000/- from following parties during the A.Y. 2006-07: i) Vineet Bansal Rs.1,25,000/- ii) Anurag Bansal Rs.2,00,000/- iii) Bansal Inhold Ltd. Rs.2,00,000/- Total Rs.5,25,000/- ITA Nos. 718 & 719/Del/2016 5 Sukumar Rajagopalan The information so received has gone through and considered by me. Accordingly, I have reason to believe that the amount of Rs.5,25,000/- has escaped assessment during the F.Y. 2005-2006 relevant to the A.Y. 2006-2007 within the meaning of Section 148 of the Income Tax Act, 1961.” Your case is fixed for hearing o 01.11.2012. Yours faithfully, Sd/- (S.P. BAXLA) Income Tax Officer, Ward-32(4), New Delhi.” 5. The Hon’ble Delhi High Court in the case CIT vs. G & G Pharma India Ltd. in ITA 545/2015 vide judgement dated 8.10.2015, held as under:- “12. In the present case, after setting out four entries, stated to have been received by the Assessee on a single date i.e. 10th 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 Investigation Wing and on that basis it is evident that the assessee company has introduced its own http://www.itatonline.org ITA No. 545/2015 Page 7 of 8 unaccounted money in its bank account by way of above accommodation entries.” The above conclusion is unhelpful in understanding whether the AO applied his mind to the materials that he ITA Nos. 718 & 719/Del/2016 6 Sukumar Rajagopalan talks about particularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the AO, if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the Assessee, which must have been tendered along with the return, which was filed on 14th 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 & 4065/Del/2015 in its bank by way of accommodation entries”. In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the Assessee escaped assessment is missing in the present case.”

In the result, appeals of the assessee are allowed. (Order Pronounced in the Court on 19/05/2017)