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2016 (4) TMI 1341 - ITAT CHANDIGARHReopening of assessment - reasons recorded for re-opening of the assessment - unexplained investments - information received from ADIT (Investigation) in reference to the search conducted in the cases of Smt. Mohinder Kaur, legal heir of late Shri Taranjit Singh - Held that:- AO has not applied his mind to the information received from ADIT (Investigation) and he was having no tangible material with him to form his belief that income chargeable to tax has escaped assessment. Rather, there was no material available with the AO to form his belief that income chargeable to tax has escaped assessment in the case of the assessee company. There was no reason to believe that income chargeable to tax has escaped assessment. The re-opening of the assessment has, thus, not been done validly in accordance with law. The re-opening of assessment is bad in law. Set aside the orders of authorities below and quash the re opening of the assessment under section 147/148. It is not a case of A.O. that despite sale of shares/investments, assessee still possessed and controlled the same shares/investments. AO did not record anywhere in the assessment order if these statements recorded by DDIT (Investigation) of the brokers have been supplied to the assessee for the comments of the assessee and whether assessee has been given any opportunity to cross-examine these brokers. In the absence of any evidence or material on record, it is difficult to believe that assessee has been given any opportunity to cross-examine the statements of these three brokers on behalf of the assessee. Therefore, when these brokers have confirmed selling the shares on behalf of the assessee company and giving sale consideration through banking channel to the assessee company and their statements are not adverse in nature against assessee, but in the absence of giving right of cross-examination of their statement, their statements cannot be read in evidence against the assessee on certain points which have been considered by AO to be adverse in nature. AO himself has mentioned in the assessment order that sale consideration and source of giving advance to M/s Taranjit Singh & Co., Chandigarh is the amount received through three brokers through banking channel, therefore, Assessing Officer cannot ask the assessee to prove source of the source. The Assessing Officer has also not brought any evidence on record that despite selling the investments through the brokers, assessee company was still having ownership and possession over the same investments held by the assessee company. These facts and material on record clearly suggest that assessee genuinely sold the investments/shares through three brokers and received the sale consideration through banking channel. Therefore, such consideration could not be treated as undisclosed unaccounted income of the assessee. - decided in favour of assessee.
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