| The Tax Publishers2019 TaxPub(DT) 7862 (Del-Trib) INCOME TAX ACT, 1961
Section 147
Where the assessee had demonstrated all the investment as well as the loans, as per the audited balance sheet then reopening made by AO merely on the basis of the information received from Addl. DIT (Inv.) and by merely recording the reasons in notice issued under section 148 i.e. assessee had deposited unaccounted cash in his Bank account and also made large investment in assets, were merely mechanical as no concrete basis was given by the AO to justify the re-opening. Thus, reopening was bad in law and was without any justified reasons for the additions.
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Reassessment - Validity - Reasons recorded for reopening, merely mechanical and not concrete -
AO re-opened the assessment by issuing a notice under section 148 on the basis of the information received from Addl. DIT (Inv.) that the assessee had unexplained cash deposit and had made unexplained investment. Assessee contended that the AO without conducting any inquiry/investigation in respect of cash deposits and agreement to sale entered into by the assessee had presumed that the income had escaped assessment, made an addition under section 68 and section 69. As regards the addition under section 69, assessee contended that he had not made any investment and the complete transaction was related to the collaboration agreement entered into by his father. Moreover, assessee contended that impugned addition was in the nature of double addition because the AO had already made an addition of higher amount in the case of his father. Further, as regards the addition under section 68, assessee contended that AO had also made an addition of cheques deposited and the cheques returned from bank. Held: In the instant case, reopening was made merely on the basis of the information received from Addl. DIT (Inv.). The reasons given by the AO in notice issued under section 148, i.e., assessee had deposited unaccounted cash in his Bank account and also made large investment in assets, were merely mechanical and had not gave any concrete reasons as to why the re-opening was justified because the assessee had given a detail of investments and because of the fact that the addition of said amount was already made in the hands of assessee's father, the addition did not sustain in the hands of assessee. And, as regards the addition under section 68 in respect of cash deposits, since the AO himself admitted that the cheque had been returned back which was not at all considered by the CIT (A). Thus, the reasons recorded by AO were mechanical as all the investment as well as the loans was demonstrated by the assessee as per the audited balance sheet itself. Therefore, the AO was not right in reopening the assessment which was bad in law and without any justified reasons for the additions.
REFERRED : Pr.CIT v. SNG Developers Limited (ITA 92/2017) (12-7-2017) : 2018 TaxPub(DT) 3140 (Del-HC),CIT-III v. Suren International Pvt. Ltd. (2013) 357 ITR 24 (Del) : 2013 TaxPub(DT) 1753 (Del-HC),Hightech Construction Pvt. Ltd. v. ITO (ITA No. 1605/D/19) (ITAT Delhi) (22-3-2019),Inder Jeet v. ITO (ITA No. 2740/D/18) (Delhi ITAT) (3-12-2018) : 2018 TaxPub(DT) 7949 (Del-Trib),Jagat Singh v. ITO (ITA No. 2749/D/18) (Dated 4-9-2018) (ITAT, Delhi),Maveric Electronics (P) Ltd. v. ITO (ITA No. 1835/D/14) (21-3-2017)
FAVOUR : In assessee's favour
A.Y. : 2008-09
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