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2022 (4) TMI 1059 - AT - Income TaxReopening of assessment u/s 147 - link between the tangible material and the formation of the reasons to believe that income had escaped assessment - bogus sales which escaped to tax in the hands of the Assessee - HELD THAT:- Demonstration of link between the tangible material and the formation of the reasons to believe that income had escaped assessment is necessary for reopening the case u/s 147/ 148 of the Act and the information received from the Investigation Wing cannot be said to be a tangible material per se without further inquiry being undertaken by the AO. The conclusion of the AO, based on the investigation report indeed is a borrowed satisfaction. The Hon‟ble High Court in MEENAKSHI OVERSEAS PVT. LTD. [2017 (5) TMI 1428 - DELHI HIGH COURT] also held that it is established principle of law that if a particular authority has been designated to record his/her satisfaction on a particular issue, then it is that authority alone who should apply his/her independent mind to record his/her satisfaction and further mandatory condition is that the satisfaction recorded should be “independent” and not “borrowed” or “dictated‟ satisfaction Admittedly in this case, the AO while recording reasons for selection of the case, neither made any enquiry qua the information dated 14.03.2017 of the ADIT, Investigation, Faridabad nor made any effort to find out the veracity and authenticity of information and any corroborative evidence/material thereto, but only acted on the information while forming belief qua escapement of the income and initiation of proceedings u/s 147/148 of the Act, without connecting tangible material and the formation of the reasons to believe for escapement of income. The reasons recorded in the instant case are vague and based on un-substantive reasoning, uncorroborated material and lack of evidence and hence as per decisions of the jurisdictional High Court referred above, the reasons referred above tantamount to be based on borrowed satisfaction and according to our considered view, does not sound valid reasons in the eyes of law, for reopening of the case. CIT(A) without appreciating the facts of the case, explanation submitted and evidences places on record judiciously, was absolutely unjustified in upholding the reopening of the assessment u/s 147 of the Act. Consequently the order under challenge whereby the addition made by the AO has been sustained by the Ld. CIT(A) along with the re-assessment order stands quashed. - Decided in favour of assessee.
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