Referred Sections:
Section 143(1) of I.T Act.
Section 148 of the Income Tax Act, 1961.
Section 68 of the I.T. Act, 1961.
Section 148. PB-8
Section 147 of the Income Tax Act, 1961.
Section 151(2) of the Income Tax Act, 1961
Section 151(1) of the Act.
Section 10A
Referred Cases / Judgments:
Delhi vs., ITO, Ward-23(2), New Delhi in ITA.No.5747/Del.
CIT vs., RMG Polyvinyl (I) Ltd., [2017] 396 ITR 5 (Del.)
New Delhi vs., ITO-1(5), Rudrapur in ITA.Nos.970,
CIT vs., Atlas Cycle Industries [1989] 180 ITR 319
Shamshad Khan vs., ACIT [2017] 395 ITR 265 (Del.)
Siemens Information Systems Ltd., vs., ACIT & Others [2007] 293 ITR 548 (Bom.)
Delhi vs., ITO, Ward-23(2),
CIT vs., Meenakshi Overseas (P) Ltd., 395 ITR 677 (Del.),
CIT vs., G And G Pharma India Ltd., [2016] 384 ITR 147 (Del.),
//FIT FOR PUBLICATION//
Sd/-OP Kant Sd/-BS
A.M. J.M.
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES "E": DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI O.P. KANT, ACCOUNTANT MEMBER
ITA.Nos.4251 & 4252/Del./2018
Assessment Years 2006-2007 & 2007-2008
Shri S.N. Arora/Sapra,
The ITO, Ward 23 (2),
H-1481, 1st Floor,
C.R. Park, vs., C.R. Building,
New Delhi 110 019.
New Delhi.
PAN ARQPS5550E
(Appellant) (Respondent)
Shri R.S. Singhvi, C.A. And
For Assessee :
Shri Satyajeet Goel, C.A.
For Revenue : Ms. Rakhi Vimal, Sr. D.R.
Date of Hearing : 23.01.2020
Date of Pronouncement : 30.01.2020
ORDER
PER BHAVNESH SAINI, J.M.
Both the appeals by the same Assessee are
directed against the different Orders of the Ld. CIT(A)-31,
New Delhi, Dated 26.03.2018, for the A.Y. 2006-2007 and
Dated 20.03.2018, for the A.Y. 2007-2008.
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
2. We have heard the Learned Representative of
both the parties and perused the material available on
record. The issues are same in both the appeals. Therefore,
the appeals were heard together and are decided as under.
Assessment Year 2006-2007 :
3. Briefly the facts of the case are that assessee filed
return of income declaring income of Rs.2,92,643/- on
04.01.2007. It was processed under section 143(1) of I.T
Act.. The case was re-opened under section 148 of the I.T.
Act on the basis of information received from Addl. Director
of Income Tax (Inv.), Unit-V, New Delhi and after obtaining
the necessary approval, notice under section 148 of the I.T.
Act, 1961 was issued to the assessee on 26.03.2013.
Statutory notices were issued for completion of the
assessment proceedings. Whatever details were submitted
by assessee were placed on record. The assessee also filed
copy of the FIR stating that relevant documents have been
stolen. The assessee in the assessment year under appeal
derived income from business and profession only. The A.O.
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
noted that information received from Addl. DIT (Inv.), New
Delhi, Dated 16.03.2012 revealed that assessee had
deposited unaccounted cash in his bank account
amounting to Rs.2,82,70,090/- during the F.Y. 2005-2006
relevant assessment year under appeal, and had made
investments amounting to Rs.94 lakhs from unexplained
sources. The assessee vide letter stated that original return
filed may be treated as return filed in response to notice
under section 148 of the I.T. Act, 1961. The A.O. on the
basis of the copy of the passbook placed on record and
information received from Investigation Wing found that
there is cash deposit of Rs.2,82,70,090/-, for which, no
explanation have been given by assessee. The A.O,
accordingly, made the addition of the aforesaid amount
under section 68 of the I.T. Act, 1961.
4. The A.O. further noted that the source of the
following investments amounting to Rs.94 lakhs made by
assessee during the year remain unexplained i.e., (1)
Agreement Dated 08.06.2005 with Shri Gurdev Singh for
property No.493, E-Block, Greater Kailash-II, New Delhi, for
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
a sum of Rs.48 lakhs and Agreement Dated 13.09.2005 with
Shri Nilamber Rudrapal for property No.1481, C.R. Park,
New Delhi, for an amount of Rs.46 lakhs, totaling to Rs.94
lakhs. The A.O. completed the re-assessment vide order
dated 19.03.2014.
5. The assessee challenged the said additions before
the Ld. CIT(A), on which, remand report was also called for.
The Ld. CIT(A) allowed the appeal of assessee partly. Both
these additions were confirmed, but, A.O. was directed to
grant relief with regard to cheques that have returned after
making due verification. The assessee in the present appeal
has challenged the initiation of the re-assessment
proceedings and both the above additions.
6. The appeal of assessee is time barred by 08 days.
Learned Counsel for the Assessee submitted that this case
was handled by Shri Avinash Kumar Alok, C.A. who
represented the case before the authorities below. Since, he
did not handled the case property, therefore, the assessee
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
had to change the Counsel, which took some time in
between. Therefore, the nominal delay may be condoned.
7. After considering the rival submissions, we are of
the view that the nominal delay is explained by the assessee
and the explanation of assessee is supported by affidavit of
the assessee. In this view of the matter, we condone the
delay in filing the appeal.
7.1. Learned Counsel for the Assessee referred to PB-4
which is reasons for reopening of the assessment. PB-6 is
Annexure-C supplied by the Department, which would show
that the total deposit in the Bank account of the assessee
was Rs.2,05,54,090/- [Whereas the A.O. has wrongly made
an addition of Rs.2,82,70,090/- on account of cash
deposits]. The Investigation Wing has advised the A.O. to go
through the bank statements and other documents to arrive
at the income escaped assessment before issuing notice
under section 148. PB-8 is summary of total credits in the
Bank Accounts of the assessee to show that actual cash
deposited in various bank accounts of the assessee was
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
Rs.1,23,45,200/- which is supported by copies of the bank
statements filed in the paper book. He has also highlighted
that there are differences in cash deposits in various bank
accounts of the assessee as per information received from
Investigation Wing and actual cash deposited in the bank
account of the assessee. He has referred to PB-128 which is
summary of the investments in the properties. PB-138 is
copy of the sale deed for Rs.48 lakhs, which assessee has
sold to Shri Gurdev Singh bearing property No.493, E-
Block, Greater Kailash-II, New Delhi, which assessee has
purchased from Dr. Rama Nand Jain through an Agreement
to Sell, copy of which is filed at page-130 of the PB. He has,
therefore, submitted that sale could not be an unexplained
investment. He has referred to PB-159 which is
Collaboration Agreement Dated 13.09.2005 with Shri
Nilambar Rudrapal to whom assessee has paid
Rs.46,50,000/- through cash and banking channel for
collaboration of the property. He has submitted that all the
cash have been explained. The A.O. has clubbed the sale
and properties together to make it as an unexplained
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
investment in property. Thus, the A.O. did not applied his
mind to the facts of the case and did not verify the details
submitted by the Investigation Wing and A.O. has also not
followed the advice of the Investigation Wing. Therefore, it is
not a case of reopening of the assessment. A.O. recorded
incorrect and wrong reasons for reopening of the
assessment. The Learned Counsel for the Assessee, in
support of his contention, relied upon the Order of ITAT, F-
Bench, New Delhi in the case of Shri Pankaj Sapra, New
Delhi vs., ITO, Ward-23(2), New Delhi in ITA.No.5747/Del./
2018 vide Order Dated 22.11.2019, in which, on identical
facts, the reopening of the assessment have been quashed.
He has also relied upon Judgment of Hon'ble Delhi High
Court in the case of Pr. CIT vs., RMG Polyvinyl (I) Ltd.,
[2017] 396 ITR 5 (Del.) in which it was held as under :
"Where information was received from investigation
wing that assessee was beneficiary of accommodation
entries but no further inquiry was undertaken by
Assessing Officer, said information could not be said to
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
be tangible material per se and, thus, reassessment on
said basis was not justified."
7.2. He has also relied upon Order of ITAT, Delhi
SMC-Bench, Delhi in the case of Shri Tajendra Kumar Ghai,
New Delhi vs., ITO-1(5), Rudrapur in ITA.Nos.970, 917/
Del./2017, Dated 07.06.2017 in which it was held that "the
deposit in the bank account per se cannot be income of the
assessee. It was a mere suspicion of the A.O. based on
incorrect facts and that income chargeable to tax has escaped
assessment, therefore, reopening was quashed." Learned
Counsel for the Assessee, therefore, submitted that
reopening of the assessment is wholly unjustified and is
liable to be quashed.
8. On the other hand, Ld. D.R. relied upon the
Orders of the authorities below and submitted that assessee
did not produce cash book before A.O. However, bank pass
book were available to the A.O. as per record which is
produced during the course of hearing. The Ld. D.R.
submitted that cash in hand cannot be explained in the
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
absence of the cash book. The Ld. D.R. submitted that there
may be a calculation error in calculating the cash deposited
in the bank account, for which, no adverse information
should be drawn against the Revenue. The Ld. D.R,
therefore, submitted that reopening of the assessment is
justified in the matter.
9. We have considered the rival submissions. It is
well settled Law that validity of the reopening of the
assessment is to be determined with reference to the
reasons recorded for reopening of the assessment. Learned
Counsel for the Assessee filed copy of the reasons at page
No.4 of the PB which reads as under:
"Annexure:
Reasons recorded for initiation proceeding u/s 148 of the I.T
Act 1961 in the case of Shri S.N. Arora / Sapra (Som Nath),
ARQPS5550E, ASEPS5018G
The Addl, Director Income Tax (Inv), Unit-V,
New Delhi, vide his letter Addl.DIT (Inv.)/U-V/2011-
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
12/251, dated 16.03.2012 had sent a report in the case
of Shri S.N Arora / Sapra.
As per the investigations made, the assessee
had deposited unaccounted cash in his Bank account
and also made large scale investment in the assets. The
details are as follows :-
1. Unexplained cash deposit :-
A.Y. 2006-07 Rs.2,82,70,090/-
2. Unexplained investments :-
A.Y. 2006-07 Rs. 94,00,000/-
As per the above facts, the cash deposits and
unexplained investments are liable to tax u/s 68 & 69
of the Income Tax Act, 1961. The income has escaped
assessment in the case of Shri S.N. Arora/Sapra for
A.Y. 2006-07 to the extent of Rs.3,76,70,090/-, as per
the provisions of the Income tax Act 1961.
In view of the above mentioned facts, I have
reason to belief that income to the tune of
Rs.37670090/- has escaped assessment within the
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
meaning of Section 147 of the Income Tax Act, 1961.
Accordingly, necessary permission / approval under
section 151(2) of the Income Tax Act, 1961 may kindly
be accorded for issuance of notice u/s 148 of the
Income Tax Act for A.Y. 2006-07.
Sd/-Umesh Kumar
Income Tax Officer,
Ward-23(2), New Delhi."
9.1. The Hon'ble Punjab & Haryana High Court in the
case of CIT vs., Atlas Cycle Industries [1989] 180 ITR 319
(P&H) held as under :
"Held, (i) that the Tribunal was right in cancelling
the reassessment as both the grounds on which
the reassessment notice was issued were not
found to exist, and, therefore, the Income-tax
Officer did not get jurisdiction to make the
reassessment."
12
ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
9.2. The Hon'ble Delhi High Court in the case of Pr.
CIT vs., SNG Developers Ltd., [2018] 404 ITR 312 (Del.) in
which it was held as under :
"Held, dismissing the appeal, that the reasons
recorded by the Assessing Officer for reopening the
assessment under section 147, issuing a notice
under section 148 did not meet the statutory
conditions. As already held by the Appellate
Tribunal, there was a repetition of at least five
accommodation entries and the total amount
constituting the so-called accommodation entries
would therefore, not work out to Rs.95,65,510. It
was unacceptable that the Assessing Officer
persisted with his "belief" that the amount had
escaped assessment not only at the stage of
rejecting the assessee's objections but also in the
reassessment proceedings, where he proceeded to
add the entire amount to the income of the
assessee. Therefore there was non-application of
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
mind on the part of the Assessing Officer. The
Appellate Tribunal was justified in confirming the
order of the Commissioner (Appeals) and holding
that the reopening of the assessment was bad in
law."
9.3. The Hon'ble Delhi High Court in the case of
Shamshad Khan vs., ACIT [2017] 395 ITR 265 (Del.) in
which it was held as under :
"Held, allowing the petition, that the form for
recording the reasons for initiating the proceedings
under section 148 of the Act for obtaining approval
of the Commissioner itself proceeded on the
erroneous basis that the quantum of income which
had escaped assessment was Rs.28,75,000
whereas the assessee had filed returns showing
income of merely Rs.20,56,145 and it was on this
basis that the Additional Commissioner and the
Commissioner granted their approval for reopening
the assessment. Even though the assessee
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
highlighted this fundamental error at the initiation
of the case by stating that his income was
mentioned as Rs.20,56,145 instead of
Rs.69,71,191, this was summarily rejected stating
that it was a clerical mistake and that the latter
figure would be treated as his income. If the
correct income i.e. Rs.69,71,191 was put before
the Commissioner at the time of seeking his
approval, he might have taken a different view.
There was nothing on record to show that the
clerical mistake of substituting Rs.20,56,145 for
Rs.69,71,191 was ever brought to the notice of the
Commissioner either before or after approval or
sanction under section 151(1) of the Act. The
initiation of the case for reopening of the
assessment was erroneous and without
application of mind especially since the Assessing
Officer had not examined the return filed, which
would have revealed that the assessee had filed
regular returns, had sufficient opening balance in
15
ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
his account and the withdrawals therefrom
substantiated the donation made. Therefore, the
reopening of the assessment was unsustainable in
law and the notice issued under section 147 of the
Act was to be quashed."
9.4. The Hon'ble Bombay High Court in the case of
Siemens Information Systems Ltd., vs., ACIT & Others
[2007] 293 ITR 548 (Bom.) held as under :
"The petitioner had several EOU/STP units
engaged in the business of export of software. In
response to the notice for reopening the
assessment for the assessment year 1999-2000,
the petitioner, objecting to the issuance of the
notice, stated that the reasons furnished by the
authority had quoted the provisions of section 10A
as amended by the Finance Act, 2000, with effect
from the assessment year 2001-02 and as such
could not have been made applicable to the
assessment year 1999-2000 and the notice had
16
ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
been issued under the mistaken belief about the
correct position of law. However, opportunity to
show cause was given to the petitioner as to why
the loss claimed should not be disallowed to be
carried forward. On a writ petition :
Held, allowing the petition, (i) that it would be
clear from the reasons given that the authority
proceeded on the presumption that the law
applicable was the law after the amendment and
not the law in respect of which the petitioner had
filed the return for the year 1999-2000. This by
itself clearly demonstrated that there was total
non-application of mind on the part of the authority
and consequently, the notice based on that reason
would amount to non-application of mind.
(ii) That the income derived by the
assessee from an industrial undertaking to which
section 10A applies could not be included in the
total income of the assessee. Therefore, the
17
ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
petitioner was right in filing the return by
excluding the income in terms of section 10A."
9.5. The crux of the above Judgments had been that,
in case, incorrect, wrong and non-existing reasons are
recorded by the A.O. for reopening of the assessment and
that A.O. failed to verify the information received from
Investigation Wing, the reopening of the assessment would
be unjustified and is liable to be quashed. The ITAT, F-
Bench, New Delhi in the case of Shri Pankaj Sapra, New
Delhi vs., ITO, Ward-23(2), New Delhi (supra) in para-9 held
as under :
"9. We have heard both the parties and perused all
the materials available on record. The issue
relating to proceedings initiated u/s 148
whether the same is valid or not, has already
been decided in assessee's own case for A.Y.
2007-08 by the Tribunal. The Tribunal held as
under :
18
ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
"8. I have considered the rival
submissions made by both the sides and
perused the orders of the authority below. I
find the AO on the basis of the information
received from the investigation wing of the
Department that the assessee has made
cash deposit of Rs.4,97,452/- reopened the
assessment by issuing notice under section
148 and thereafter made addition of
Rs.4,97,452/- to the total income of the
assessee by invoking the provisions of
Section 68 of the I.T. Act, 1961. I find the
learned CIT(A) upheld the action of the AO,
the reasons of which have already been
reproduced in the preceding paragraph. It
is the submission of the learned counsel for
the assessee that there is complete non
application of mind of the AO while
recording the reasons and he has not
verified the facts properly and the
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
reopening was made on the basis of report
of the investigation wing. Further the
deposits in the bank accounts are fully
explained and therefore no addition is
called for.
9. I find force in the above
arguments advanced by the learned
counsel for the assessee. A perusal of the
notice issued under section 148 shows that
the notice has been issued in a very casual
manner, Clause 3 of the notice reads as
under :-
"Notice under section 148 of the Income Tax Act, 1961.
3. This notice is being issued after obtaining
the necessary satisfaction of the
commissioner of Income Tax.../the Central
Board of Direct Taxes. "
10. Similarly, a perusal of the bank
account maintained with Vijaya Bank
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
account no. 004427, copy of which has been
placed at page no. 25 and 26 of the paper
book, shows that an amount of
Rs.2,50,000/- was by way of clearing of
Cheque No.719443 and not cash deposit. If
the same is excluded from the total deposits
made during the year from the two bank
accounts then there is no such cash deposit
of Rs.4,97,452/ - in the two bank accounts
maintained by the assessee. Therefore, I find
force in the argument of learned counsel for
the assessee that the reasons recorded are
either vague reasons or not based on
ITA.No.4253/Del./2018 & ITA.No.4254/Del.
/2018 6 any application of mind. In any
case, the assessee has explained the source
of each deposit made both in cash as well as
in cheque and therefore, even on merit also
no addition is called for. I, therefore, set
aside the order of the learned CIT(A) and
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
direct the AO to delete the addition. The
ground raised by the assessee is allowed. "
Thus the reasons given by the Assessing
Officer in notice u/s 148 of the Act are merely
mechanical and have not given any concrete
reasons as to why the re-opening is justified. As
regards Ground No. 2 relating to addition u/s 69,
the assessee has given a detail of investments and
the fact that the addition of the said amount is
already made in the hands of the father of the
assessee does not sustain in the hands of the
assessee. As regards Ground No.3 relating to
addition u/s 68 in respect of cash deposits, the
Assessing Officer himself admitted that the cheque
of Rs.10,00,000/- has been returned back which
was not at all considered by the CIT(A). The
reasons are mechanical as all the investment as
well as the loans were demonstrated by the
assessee as per the audited balance sheet itself.
Therefore, the Assessing Officer was not right in
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
reopening the assessment which is bad in law and
without any justified reasons for the additions.
Thus, the appeal of the assessee is allowed."
9.6. The A.O. in the reasons recorded that
"Investigation Wing has reported that there are unaccounted
cash deposit in the bank account of the assessee in a sum of
Rs.2,82,70,090/-." Admittedly the bank pass books are
available at the assessment record which fact is also
mentioned by the A.O. in the assessment order. However,
the Annexure-C supplied by the Investigation Wing to the
A.O, copy of which is filed at page-6 of the PB, reveals that
in fact there is a cash deposit in the bank account of the
assessee was of Rs.2,05,54,090/-. The Investigation Wing
has advised the A.O. to go through the bank statements and
other documents before arriving at the conclusion that there
is escapement of income under section 148 of the I.T. Act.
The assessee, on the other hand, has prepared a chart
based on bank statements of various bank accounts to
show that there is actual cash deposit of Rs.1,23,45,200/-
only. Thus, there is a huge difference between the cash
23
ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
deposited in the bank accounts of the assessee. In these
circumstances, it was the duty of the A.O. to verify the facts
before coming to the conclusion that there is escapement of
income on account of cash deposited in the bank account of
the assessee. The A.O. even did not verify the information
received from Investigation Wing and did not even obey the
directions of the Investigation Wing. It is well settled Law
that mere cash deposited in the bank account of the
assessee per se would not disclose escapement of the
income as is held by the ITAT in the case of Shri Tejendra
Kumar Ghai, New Delhi vs., ITO 1(5), Rudrapur (supra)
and Shri Abrar Ahmad Qasimi, New Dekhi vs., ITO, Ward-
46(5), New Delhi in ITA.No.3177/Del./2017, Dated
01.06.2018. The assessee further explained that there is no
unaccounted investment in the properties because the deal
of Rs.48 lakhs pertain to sale of the property by assessee
which is supported by the Sale Deed and such property was
purchased by the assessee way back in 1996. Thus, the sale
could not be an unexplained investment in the case of the
assessee. In respect of other property, assessee has made
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ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
Collaboration Agreement with Shri Nilambar Rudrapal and
paid Rs.46 lakhs, the source of which itself is explained in
the receipt. Thus, the A.O. has recorded incorrect and
wrong reasons for reopening of the assessment and did not
apply his mind to the facts of the case before recording
reasons for reopening of the assessment. The A.O. has also
failed to verify the information received from the
Investigation Wing before recording the reasons for
reopening of the assessment. Even the sanctioning
authority has not applied its mind to the conclusion drawn
by the A.O. based on specific material on record which
clearly revealed that reasons recorded by the A.O. are
wrong, incorrect and based on no evidence. It is, therefore,
clear case of non-application of mind by the A.O. before
recording reasons for reopening of the assessment. We rely
upon the following decisions.
9.7. In the case of Pr. CIT vs., RMG Polyvinyl (I) Ltd.,
396 ITR 5 (Del.) the Hon'ble Delhi High Court held as under:
25
ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
"In the present case too, the information received
from the Inv. Wing cannot be said to be tangible
material per se without a further enquiry being
undertaken by the learned assessing officer"
9.8. In the case of Pr. CIT vs., Meenakshi Overseas
(P) Ltd., 395 ITR 677 (Del.), the Hon'ble Delhi High Court
held as under :
"Reassessment notice condition precedent
recording of reasons to believe that income has
escaped assessment mere reproduction of
investigation report in reasons recorded absence of
link between tangible material and formation of
ceding illegal Income Tax Act, 1961, Sec.147, 148"
9.9. In the case of Pr. CIT vs., G And G Pharma India
Ltd., [2016] 384 ITR 147 (Del.), the Hon'ble Delhi High
Court held as under :
"Reassessment condition precedent application of
mind by assessing officer to materials prior to
26
ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
forming reason to believe income has escaped
assessment - No independent application of mind
to information received from Directorate of
Investigation and no prima facie opinion formed-
reassessment order invalid".
9.10. In the case of Sarthak Securities Co. (P) Ltd., 329
ITR 110 (Del.), the Hon'ble Delhi High Court held as under :
"No independent application of mind by the
[
Assessing officer but acting under information
from Inv. Wing - Notice U/s. 147 to be quashed".
9.11. Considering the totality of the facts and
circumstances of the case and in the light of material on
record, we are of the view that reopening of the assessment
is illegal and bad in Law and is liable to be quashed. We,
accordingly, set aside the Orders of the authorities below
and quash the reopening of the assessment. Resultantly, all
additions stand deleted.
27
ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
10. In the result, appeal of the Assessee for the A.Y.
2006-2007 is allowed.
Assessment Year 2007-2008 :
11. In this appeal, the assessee has similarly
challenged the reopening of the assessment and addition of
Rs.86,86,537/- on account of unexplained cash deposit in
the bank account of the assessee.
12. The assessee has filed copy of the reasons at page
No.4 of the PB which is similarly worded as is noted in the
A.Y. 2006-2007. PB-6 is Annexure-C supplied by the
Investigation Wing in which similar advice have been given
to the A.O. to verify the facts. PB-8 is summary of the cash
deposited by assessee in the bank accounts to show that
actual deposit was of Rs.20,16,000/- only.
13. Learned Representatives of both the parties
submitted that the issue is same as have been considered in
A.Y. 2006-2007.
28
ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
14. This appeal is also time barred by 08 days.
Following the reasons for decision in A.Y. 2006-2007, we
condone the delay in filing the appeal and set aside the
Orders of the authorities below and quash the reopening of
the assessment under section 148 of the I.T. Act, 1961. All
additions stand deleted.
15. In the result, appeal of the assessee for the A.Y.
2007-2008 is allowed.
16. To sum-up, both the appeals of the Assessee are
allowed.
Order pronounced in the open Court.
Sd/- Sd/-
(O.P. KANT) (BHAVNESH SAINI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Delhi, Dated 30th January, 2020
VBP/-
29
ITA.Nos.4251 & 4252/Del./2018
Shri S.N. Arora/Sapra, New Delhi.
Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT "E" Bench
6. Guard File
// BY Order //
Asst. Registrar, ITAT, Delhi Benches,
Delhi.
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