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2019 (4) TMI 270 - ITAT DELHIValidity of proceedings u/s 148 - validity of ‘reasons recorded’ - addition u/s 68 on the basis of information received from Investigation wing and on same lines of reasons recorded - HELD THAT:- Once AO receives any information or material from investigation wing or from elsewhere, then instead of recording the reasons from borrowed satisfaction, he has to independently apply his mind and verify the record of the assessee before forming his ‘reason to believe’ for reopening the case u/s 147. Formation of ‘reason to believe’ is a jurisdictional fact, which AO must spell while recording his ‘reasons’ and should be germane to the facts of the assessee and material or information coming on record. If jurisdictional fact has been recorded on wrong premise or on incorrect assumption of facts, whether fully or partially, then jurisdiction cannot be acquired to reopen the assessment. Thus, when any information dehors any live link nexus with the income escaping assessment, then it cannot be held to be valid information for reopening the assessment u/s 147. We agree with the contentions of the Ld. Counsel that, if there are such a huge amount of discrepancy and mistakes in the ‘reasons recorded’, divorced from the facts of the case, then such reasons cannot clothe the AO with the jurisdiction to reopen the assessment u/s 147. Here in this case AO in his remand report submitted before the Ld. CIT(A) and also in view of the observation made by the Ld. CIT(A), it is amply established that there are various discrepancies and it is for this reason alone, Ld. CIT(A) has deleted the various additions. Hence, we hold that such ‘reasons recorded’ cannot be held to be in accordance with law, and because of such huge discrepancy and errors, it cannot be held that AO could have entertained ‘reason to believe’ based on borrowed satisfaction of someone else. Thus, the entire reopening is held to be invalid. Addition u/s 68 - HELD THAT:- In absence of any inquiry, such a material or documents filed by the assessee cannot be discarded. AO has simply relied upon the information received from Investigation Wing, without even carrying out any prima facie inquiry so as to show that assessee’s contention or material filed by him cannot be relied upon. Even at the stage of CIT(A) no such inquiry has been done and most of the additions otherwise also stands deleted for the reasons that they were not received in this year but in the earlier years. No iota of evidence of material so as to confirm these additions on merits and therefore, we have no hesitation in deleting the entire addition, because assessee has been able to discharge its prima facie onus by proving the identity, creditworthiness and genuineness of the share application money received. In absence of any material or inquiry conducted by the AO that these are non-existing entities or a paper company and there being no rebuttal from the side of the department, addition made u/s 68 is directed to be deleted. Accordingly, in view of our finding in assessee’s appeal is allowed.
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