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TMI Blog2018 (4) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged personal expenses - Held that:- These two additions do not pertain to the second reassessment proceedings but to first reassessment proceedings. However, as per the doctrine of merger, the earlier assessment order gets merged with the subsequent assessment order and, accordingly, the first assessment order dated 10.06.2005 merges with the second re-assessment order which has been annulled. Since the second reassessment order has been annulled, the first reassessment order dated 10.06.2005 gets and attains finality. Therefore, since the assessee had earlier accepted these two additions made in the first re-assessment order, we are afraid we cannot adjudicate on the appropriateness of these two additions at this stage. - ITA No. 2903/Del /2010 And C.O. No. 260/Del/2010 - - - Dated:- 6-4-2018 - SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Appellant : Shri Atiq Ahmad, Sr. DR For The Respondent : None ORDER PER SUDHANSHU SRIVASTAVA, J.M. This appeal has been preferred by the department against the order dated 31.03.2010 passed by the Ld. Commissioner of Income Tax (Appeals)-IV {CIT (A)}, New Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 69B of the Act but retained the addition of ₹ 7,50,000/- on account of unaccounted income under the head income from other sources /expenses alleged to have been incurred over and above the cash available. The Ld. Commissioner of Income Tax (A) also upheld the addition of ₹ 4,23,374 made u/s 2(22)(e) of the Act. 2.3 Now, aggrieved the department has preferred an appeal before the Income Tax Appellate Tribunal (ITAT) and the assessee has preferred the CO. 2.4 The grounds raised by department are as under:- The Ld. Commissioner of Income Tax(A) has erred on facts and in law in holding that reopening of the case u/s 147/148 was not justified and quashing the assessment particularly in view of the decision of the Hon ble Delhi in the case of Shri Rakesh Aggarwal vs. ACIT(225 ITR 496} 2. The Ld. Commissioner of Income Tax(A) has erred on facts and in law in deleting addition of ₹ 70,77,000/- as unexplained investment treated as deemed income u/s 69B of the l.T.Act, 1961. 3. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d submitted that the Ld. Commissioner of Income Tax (A) had erred in quashing the reassessment proceedings as the reopening was very much justified on the facts of the case which had been elaborated at great length by the Assessing Officer in the assessment order. The Ld. Sr. DR further argued that the Ld. Commissioner of Income Tax (A) had erred in deleting the addition of ₹ 70,77,000/- added to the income of the assessee as unexplained investment without considering the remand report of the Assessing Officer in this regard. 5. We have heard the Ld. Sr. DR and have also perused the material available on record as well as the various orders passed by the lower authorities. As far as ground no. 1 of the department s appeal challenging the quashing of reassessment proceedings is concerned, it is seen that the Ld. Commissioner of Income Tax(A) has made the following observations in respect to this issue on pages 8 and 9 of the impugned order and are contained in paragraphs a, b c. These are being reproduced hereunder for ready reference:- a) On going through the assessment order it is observed that the Assessing Officer has stated that for assessment year 2001-02 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee had raised beyond the objections to the reasons recorded by the Assessing Officer, but these objections have not been disposed of by the Assessing Officer before proceedings with the action u/s 147/148 of the Income Tax Act. In this regard the AR has relied upon the decision of GKN Driveshafts (India) Ltd. 259 ITR (SC). Considering these strong arguments of the AR of the appellant it is clear that proper procedure has also not been followed by the Assessing Officer by recording the reasons for re-opening of the assessment and at the same time the objections filed by the appellant with regard to reasons for re9 opening u/s 148 have not been disposed of. The Assessing Officer has not logically followed the provisions of Section 148 of the Income Tax Act and therefore this action of the Assessing Officer deserves to be quashed. 5.1 On perusal of above, it is seen that the Ld. Commissioner of Income Tax (A) has taken due note of the fact that during the course of the first re-assessment completed u/s 148/143(3) of the Income Tax Act, 1961, the then Assessing Officer had examined this issue relating to the shares held by the assessee and had also recorded the state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of ₹ 70,77,000/- as unexplained investment treated as deemed income u/s 69B of the Act. Since we have already held the action of the Ld. Commissioner of Income Tax (A) in annulling the reassessment proceedings as valid, this ground raised by the department becomes in fructuous and the same is dismissed as having become in fructuous. 5.3 Accordingly, the appeal filed by the department stands dismissed. 6. The CO of the assessee challenges the upholding of addition of ₹ 4,23,334/- in the hands of the assessee as deemed dividend u/s 2(22)(e) of the Act. It is seen that this addition was made for the first time during the course of the second reassessment proceedings which were annulled by the Ld. CIT (A) and which annulment, we have already held to be justified. Under the circumstances, this addition does not have any feet to stand. Accordingly, it is our considered opinion that in view of the reassessment proceedings itself having been annulled, no addition emanating from this order could be sustained. Accordingly, ground nos. 1, 2 and 3 raised by the assessee in his CO are allowed. 6.1 Ground no. 4 in the CO challenges the action of the Ld. Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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