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2018 (9) TMI 1776 - AT - Income TaxValidity of re-assessment proceedings u/s 147 - addition on account of short term capital gains - non-application of mind by the A.O. to the AIR information - Held that:- A.O. in the reasons has mentioned that assessee has not filed income tax return and capital gain on the property have not been shown. The assessee however, filed original return of income on 22.10.2008 mentioning PAN also for assessment year under appeal. Therefore, A.O. again incorrectly reported in the reasons that assessee has not filed return of income. The assessee further explained that property is situated at 13 KM away from Kot Gram Nagar Palika Parishad, Dadri which is supported by Certificate issued by Tehsildar, Dadri. The A.O. however, did not bring any evidence on record to show that property falls within 8 KM from the Municipal limit of Dadri Nagar Palika Parishad. Thus the A.O. recorded non-existing and incorrect reasons in the reasons for reopening of the assessment. A.O. did not explain as to under which provision of law, he has issued the letter to the assessee to seek explanation of assessee on 17.09.2014 when no return for assessment year under appeal was legally pending for assessment before A.O. It, therefore, appears that the A.O. merely in absence of any reply from the assessee and on assumption of incorrect facts, formed his opinion that income chargeable to tax has escaped assessment. The A.O. did not verify the AIR information before taking any action against the assessee because the assessee did not sold the property for a total sale consideration of ₹ 65,84,000/- as noted in the reasons. It is the case of non-application of mind by the A.O. to the AIR information We are of the view that initiation of re-assessment proceedings in this case is bad and illegal and without any basis. We, accordingly, set aside the orders of the authorities below and quash the reopening of the assessment under section 147/148. Resultantly, the addition stands deleted. - Decided in favour of assessee.
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