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2021 (2) TMI 172 - AT - Income TaxReopening of assessment u/s 147/148 - addition u/s 69 - undisclosed loss in MCX transaction - HELD THAT:- It is condition precedent before invoking jurisdiction u/s 147/148 of the Act that the AO has reason to believe that income chargeable to tax has escaped assessment for any assessment year - in the present case, there is no material what to say of tangible material is available on record to establish that AO has reason to believe if income chargeable to tax has escaped assessment. The information of loss receipt from MCX was not deliberately mentioned by the AO in the reasons. Thus, the AO did not have any definite material or information to record/reasons that there is an escapement of income in the case of the assessee. AO recorded incorrect and non-existing facts in the reasons recorded for reopening of the assessment. AO did not apply his mind to the material on record before recording reasons for reopening of the assessment. AO also failed to verify the information so received due to non-application of mind, therefore, reopening of the assessment would be unjustified and is liable to be quashed. Reopening of the assessment is illegal, bad in law and is liable to be quashed. We, accordingly, set aside the orders of the authorities below and quash the reopening of the assessment. As may also be noted here that the AO without any justification and without bringing any material on record as to which broker assessee has given margin money for trading has made addition of ₹ 11,49,060/-. When the AO does not know as to who is the broker to whom alleged amount is given, AO was not justified in making estimate based on general information that assessee has given the impugned amount to the broker for transaction in MCX. Since, it is an admitted case that assessee suffered loss in MCX transactions, therefore, there was no justification to make estimated addition - Decided in favour of assessee.
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