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2019 (10) TMI 70 - ITAT DELHIReopening of assessment u/s 147 - validity of notice - Assessee as regards the reopening of assessment argued that the Joint Commissioner of Income Tax (“JCIT”) while giving satisfaction/approval to the reopening of the assessment has merely mentioned “Yes” unexplained credit under section 68 - HELD THAT:- No Law as to how satisfaction have to be recorded by the JCIT. It is a Proforma provided by the Department which is correctly taken care by the JCIT. Issue is covered in favour of the assessee by the order of ITAT Delhi Bench in the case of Sunil Agarwal [2018 (7) TMI 231 - ITAT DELHI] . Facts of this case are similar to the case of the assessee. Therefore, following the same decision, hold that initiation of reassessment proceedings under section 147 of the Income Tax Act, 1961, by the assessing officer and uphold by the CIT(A) is non-est in Law and without jurisdiction. Therefore, set aside the Orders of the authorities below and quash the reopening of the assessment. The appeal of assessee on this ground is allowed. Addition u/s 68 - The assessee did not have any business activity in the assessment year under appeal and no business income have been earned. It is, therefore, unbelievable that without setting-up a plant in previous year relevant to assessment year under appeal, the assessee would earn undisclosed income in the same year of establishment of manufacturing plant ? A manufacturing firm would take some time to earn profit after setting-up its plant. Though the assessee may not be able to prove the creditworthiness of the creditors, but, the creditors have confirmed giving loans to the assessee for setting-up of the manufacturing unit. Hence, it could be reasonably assumed that cash credit entries represented the capital receipts. though, the assessee is not able to establish the creditworthiness of the creditors. - Additions deleted.
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