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TMI Blog2024 (10) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... sment otherwise the reopening of assessment cannot be sustained. The Hon'ble Delhi High Court has held that where the reasons to believe contain not the reasons but the conclusions of the AO one after the other and there was no independent application of mind by the AO to the tangible material which forms the basis of the reasons to believe that income has escaped assessment. Conclusions of the AO are at best a reproduction of the conclusion in the investigation report. Indeed it is a borrowed satisfaction. In our opinion, the reasons have to be read as were recorded by the AO and no substitution or addition or deletion are allowed at a later stage for the reasons that the AO by reopening the assessment is unsettling the already settled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order u/s 153A read with Section 144 of the Act dated 27.12.2016. During the above search assessment proceedings, the counsel of the assessee appeared before the AO from time to time and furnished the details as called for including the details in respect of loans raised by the assessee during the assessment year in response to query by the AO. Thereafter the assessment was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act dated 28.03.2018 after recording a reasons to believe u/s 148(2) of the Act that the assessee was beneficiary of accommodation entries to the tune of Rs. 3,20,00,000/-. The assessment was framed u/s 147 of the Act vide order dated 24.12.2018 making the addition of Rs. 3,20,00,000/- u/s 68 of the Act to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined by the AO after calling for details/information qua the loans and also calling for details from the loan creditors u/s 133(6) of the Act. The Ld. A.R also referred to page 28 and 29 of PB which is a remand report called for by the Ld. CIT(A) from the AO during the appellate proceedings in the first round of proceedings before the appellate authority which was submitted by the AO on 04.05.2017 in which the AO had clearly stated that during assessment proceedings u/s 153A of the Act the books of accounts, audited report , acknowledgments by third parties, bank statements, confirmation of loans from various parties were furnished by the assessee and notices were issued to various parties and replies were also received u/s 133(6) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on u/s 147 of the Act was validly initiated by the AO. The ld DR further submitted that the assessee did not appear before the AO and therefore the issue may be restored to the file of AO for examination afresh and consequently may be decided as per the facts and law. 7. After hearing the rival contentions and perusing the material on record, we find that the assessment has originally been framed u/s 153A of the Act by the AO following search action u/s 132 of the Act on the assessee. We note that in the said assessment proceedings , the issue of loans raised by the assessee was examined by the AO as is abundantly clear from the facts before us. We note that thereafter the case was reopened u/s 147 of the Act by issuing notice u/s 148 on 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not in a position to confirm the order of Ld. CIT(A) on this issue which appear to be contrary to the provisions of the Act. The case of the assessee finds support from the following decisions The case of the assessee finds support from the decisions of Hon ble Delhi High Court in the case of CIT vs. SFIL Stock Broking Ltd. in [2010] 325 ITR 285 (Del) and in the case of ACIT vs Meenakshi Overseas Pvt. Ltd. [2017] 82 taxmann.com 300 (Del), wherein it was held that the AO has to apply his mind to the information and independently arrived at a belief that income had escaped assessment otherwise the reopening of assessment cannot be sustained. The Hon'ble Delhi High Court has held that where the reasons to believe contain not the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach to the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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