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TMI Blog2021 (2) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... sment in the matter. - Decided in favour of assessee. - ITA.No.8083/Del./2019 - - - Dated:- 19-2-2021 - Shri Bhavnesh Saini, Judicial Member And Shri O.P. Kant, Accountant Member For the Assessee : Shri Kapil Goel, Advocate For the Revenue : Shri Ved Prakash Mishra, Sr. D.R. ORDER PER BHAVNESH SAINI, J.M. This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-15, Delhi, Dated 28.12.2018, for the A.Y. 2010-2011, challenging the reopening of the assessment under section 147/148 of the I.T. Act, 1961 and addition of ₹ 12,19,594/-. 2. We have heard the Learned Representative of both the parties through video conferencing and perused the material available on record. 3. Briefly the facts of the case are that in this case information from ADIT (Inv.), New Delhi vide his letter Dated 26.08.2016 has been received. On perusal of the report, it was seen that M/s. Yogesh Trading Co. has maintained Bank account in Mahamegha Urban Cooperative Bank, Ghaziabad which bears Account No.xxxxx13022 and reflects the credit of ₹ 1.37 crores. As per the report, transaction was found to be without any economic rationale and it is suspe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n so received and recorded wrong and incorrect facts in the reasons recorded for reopening of the assessment, therefore, reopening of the assessment is liable to be quashed. 5. On the other hand, Ld. D.R. relied upon the Orders of the authorities below. 6. We have considered the rival submissions. In the present case the A.O. received information from Investigation Wing that assessee being a proprietary concern maintained Bank Account of M/s. Yogesh Trading Co., New Delhi with Mahamegha Urban Cooperative Bank bearing Account No.xxxxx13022 having credit of ₹ 1.37 crores. The A.O, therefore, recorded reasons for reopening of the assessment that income chargeable to tax has escaped assessment in a sum of ₹ 1.37 crores. The A.O. also noted that the income has escaped assessment under section 147(b) of the I.T. Act, 1961. It may be noted that Section 147(b) does not exist in the Statute for the assessment year under appeal i.e., 2010-2011. It is also a fact that assessee did not maintain any such Bank Account with Mahamegha Urban Cooperative Bank, Ghaziabad. It is also a fact that no amount of ₹ 1.37 crores alleged to have been escaped assessment belonging to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory notice for completion of the assessment. The assessee filed information before A.O. which were discussed by the A.O. with the Counsel for Assessee. The A.O. noted that as per information available with him, assessee had received salary on which TDS had been deducted by the employer. The assessee has also made investment of ₹ 10 lakhs in the purchase of Mutual Funds and deposited cash of ₹ 52 lakhs in his ICICI Bank account in assessment year under appeal. Further the assessee had also made contract in commodity exchange exceeding ₹ 10 lakhs. During the course of assessment proceedings the assessee furnished copy of Form No.16, Form No 26AS, statement of his bank accounts maintained with different Banks, copy of the computation of income and documents relating to MCX business made with Aditya Birla Commodities Broking Ltd. The assessee also filed copy of the sale deed of property at Gurgaon Dated 21.03.2011 sold by assessee for a consideration of ₹ 1.20 crores. The A.O. issued detailed show cause notice to the assessee and after considering the reply of the assessee, made certain additions and computed the total income at ₹ 84,37,210/-. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncorrect. He has referred to page-14 of the PB which is the details supplied to the assessee which may be the basis for reopening of the assessment and referred to item Nos.5, 6 and 9 which are information received from CIB Code for deposit of cash of ₹ 2 lakhs with the Bank, contract of ₹ 10 lakhs or more in commodity exchange and payment of ₹ 2 lakhs or more for purchase of units of mutual funds. He has submitted that these are incorrect information and did not relates to the assessee. He has, therefore, submitted that reopening of the assessment is illegal and bad in law and as such reopening of the assessment is liable to be quashed. He has submitted that no notice under section 142(1) or any query under section 133(6) have been issued. No letter have been delivered to the assessee. 5. On the other hand, Ld. D.R. relied upon the Orders of the authorities below as regards reopening of the assessment. 6. We have considered the rival submissions and perused the material on record. It is well settled Law that validity of the re-assessment proceedings is to be judged with reference to the reasons recorded for reopening of the assessment. The copy of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of assessee. Learned Counsel for the Assessee categorically stated at Bar that assessee has not made any fresh investment in assessment year under appeal in mutual fund. The written submissions to that effect is also placed on record. Learned Counsel for the Assessee has also categorically stated that A.O. has not made any addition of ₹ 2 lakhs in assessment year under appeal which fact is corroborated by the net income computed by A.O. as reproduced above. It is, therefore, clear that neither assessee has made any investment of ₹ 2 lakhs for purchase of mutual fund in assessment year under appeal nor the A.O. has made any such addition in the assessment year. Therefore, such information received by A.O. was totally wrong, incorrect and non-existing and thus the fact mentioned in the reasons recorded for reopening of the assessment as regards investment made in purchase of mutual fund is wrong, non-existing and incorrect. The A.O. has recorded wrong, incorrect and non-existing reasons for reopening of the assessment which is not permissible under Law. As regards the transaction in commodity exchange contract of ₹ 10 lakhs, Learned Counsel for the Assessee refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons required to be furnished under sub-section (1) of Section 285BA of the Act in Form 61-A. This Rule provides that return or the statement shall be provided in respect of receipt from any person of an amount of ₹ 2 lakhs rupees or more for acquiring units of mutual fund and other statements in different cases of the amount more than ₹ 10 lakhs in different categories. It, therefore, appears that the information which A.O. has received as per page-14 of the PB was the details to be submitted under Rule 114E of the I.T. Rules. It may not be actual figure received by the A.O. as per NMS information. The actual figure might be different as is noted above. Therefore, such information received by the A.O. is not in accordance with Law and would not provide any information to the A.O. to record reasons for reopening of the assessment as regards escapement of income for making the investment in purchase of mutual funds or transaction of different commodity exchange contract. Thus the entirety of facts clearly show that A.O. recorded wrong, incorrect and non-existing reasons for reopening of the assessment without application of mind. It may also be noted that A.O. himself has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act for obtaining approval of the Commissioner itself proceeded on the erroneous basis that the quantum of income which had escaped assessment was ₹ 28,75,000 whereas the assessee had filed returns showing income of merely ₹ 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 highlighted this fundamental error at the initiation of the case by stating that his income was mentioned as ₹ 20,56,145 instead of ₹ 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. ₹ 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 ₹ 20,56,145 for ₹ 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 espec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 6.8. 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 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 re-assessment order invalid . 6.9. 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 . 6.10. The crux of the above Judgments had been that in case incorrect, wrong and non-exis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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