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TMI Blog2021 (3) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... ot justified. As reopening of the assessment has been made on the basis of AIR information which is not based on correct facts and the AO has not made independent application of his mind before recording reasons for reopening of the assessment and has simply proceeded on the basis of AIR information, therefore, the reassessment proceedings initiated by the AO being not in accordance with law has to be quashed - Decided in favour of assessee. - ITA No. 2880/Del/2019 - - - Dated:- 3-3-2021 - Shri R.K. Panda, Accountant Member For the Assessee : Shri Gautam Jain, Advocate, Shri Lalit Mohan, CA For the Department : Shri Frat Khan, Sr. DR ORDER PER R.K. PANDA, AM This appeal filed by the assessee is directed against the order dated 21.1.2018 of the Ld. CIT(A) Rohtak relating to assessment year 2009-10. 2. Facts of the case, in brief, are that assessee is an individual . On the basis of information received that assessee has made cash deposit of ₹ 36,98,000/- during the financial year 2008-09 relevant to the assessment year 2009-10, the AO reopened the case of the assessee after recording the following reasons :- As AIR information for F.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation given by the assessee. Rejecting the various explanations given by the assessee and following the decision of Hon ble Supreme Court in the case of Sumati Dayal vs. Commissioner of Income Tax reported in (1995) 214 ITR 801, Kale Khan Mohammad Hanif vs. CIT reported in 1963 50 ITR 1 and various other decisions, the AO finally made addition of ₹ 8,90,000/- being the peak balance of ₹ 8,90,000/- on 17.04.2008. 4. Before the Ld. CIT(A) the assessee apart from challenging the validity of reassessment proceedings challenged the addition on merit. However, the Ld. CIT(A) dismissed both the grounds. So far as the validity of reassessment proceedings are concerned, the Ld. CIT(A) upheld the validity of reassessment proceedings by observing as under :- I have carefully considered the facts of the case, assessee s ''submissions, assessment order and find that: Reopening of assessment : 4.1 In the assessment order, the A.O. has made addition of ₹ 8,90,000/- on account of unexplained cash u/s 68 of the IT Act, 1961 by stating that the assessee had failed to furnish the source of above cash deposits of ₹ 36,98,000/- with documentary ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not hold the belief that there had been such non-disclosure. In other words, the existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the belief. In the instance case the AO not only had sufficient reason but prima facie belief that income had escaped assessment. 4.5 In view of the above discussion in paras 4.1 to 4.4. the assessee s plea that the reopening of assessemtn was invalid, is rejected and this ground of appeal is dismissed. 5. So far as the merit of the case is concerned, she held that assessee could not produce any documentary evidence to support his contention of the opening balance of ₹ 5,50,000/- and agricultural income of ₹ 2,10,000/- declared in the return of income. 6. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising following grounds :- Ground No. Grounds of Appeal 1 That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in upholding the initiation of proceedings under section 147 of the Act and, completion of assessment unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax (Appeals) deserves to be quashed as such. It be further held that addition made and sustained by the learned Commissioner of Income Tax (Appeals) be deleted and appeal of the appellant company be allowed. 6. I have considered the rival arguments made by both sides, perused the orders of the AO and Ld. CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me. The reasons recorded by the AO while reopening of the case has already been reproduced in the preceding paragraphs. A perusal of the same shows that the AO reopened the assessment on the ground that assessee made cash deposit of ₹ 36,98,000/- during the financial year 2008-09. However, when the AO obtained the bank statement from the bank as well as the copy of the same produced by the assessee, he noted that the cash so deposited in fact is ₹ 16,98,000/- and not ₹ 36,98,000/- as stated in the reasons. The relevant observation of the AO in the assessment order reads as under :- The bank statement supplied by the assessee as well as obtained from bank reveals that in fact the assessee has deposited cash of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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