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2016 (10) TMI 1279 - AT - Income TaxReopening of assessment u/s 147 - addition u/s 68 - eligibility of reasons to believe - HELD THAT:- AO has not even mentioned the letter number and date of the letter of Director of Income-tax (Investigation), which constituted the information on the basis of which, he reopened the assessment. Assessing Officer has not mentioned name of persons who gave statement that the assessee was engaged in providing accommodation entry Assessing Officer has not verified that the assessee had already filed return of income for the year under consideration and was not sure of the amount of income escaped and thus he has not even mentioned amount of income escaped , which is evident from the sentence in the reasons recorded that escaped income on account of accommodation entry was likely to exceed ₹ 1 lakh . He not even mentioned the nature of income escaped i.e loans or share application money or share capital etc. AO has not applied his mind to the information and he has recorded the reasons in a mechanical manner, which are vague and non-specific. It is settled law that the action of reopening has to be judged only on the basis of the reasons recorded and no extraneous material can be supplemented to see the validity of the reopening. AO has to apply his mind to the material to conclude that he has reason to believe that income of the assessee escaped assessment and unless the basic jurisdictional requirement is not satisfied, a post-mortem exercise of analysing material produced subsequent to the reopening will not rescue an inherently defective reopening orders from invalidity. - Decided in favour of assessee.
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