TMI Blog2020 (2) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... property denied by the Ld. A.O. in the appeal filed to Ld. CIT(A), who has still not adjudicated the issue on merit.We therefore quash the reassessment proceedings and allow the legal issue raised by the assessee in Ground No.1. Ground No.2 which is raised on merits we find it to be merely academic to adjudicate the same since we have already quashed the reassessment proceedings and impugned addition of ₹ 39,40,000/- is still pending before Ld. CIT(A) for adjudication in the appeal filed against the original assessment u/s 143(3) of the Act. We therefore dismiss Ground No.2 as infructuous. - ITA No.511/Ind/2018 - - - Dated:- 20-2-2020 - Kul Bharat, Judicial Member And Manish Borad, Accountant Member For the Assessee : Shri S.S. Solanki, CA For the Revenue : Shri Lal Chand, CIT ORDER PER MANISH BORAD, AM The above captioned appeal filed at the instance of the assessee pertaining to Assessment Year 2015-16 is directed against the orders of Ld. Commissioner of Income Tax (Appeals)-II (in short Ld.CIT(A) ], Indore dated 24.12.2018 which is arising out of the order u/s 143(3) of the Income Tax Act 1961(In short the Act ) dated 13.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of ₹ 39,40,000/- made by him. The appeal is still pending with learned CIT(A). 1.4 Notices u/s 148 was issued for alleged violation of the provisions of Section 54F by withdrawing a sum of ₹ 26,00,000/- from the amount deposited under capital gain scheme. However, no addition was made under this head and the income assessed vide order u/s 143(3)/147 remained at ₹ 63,20,135/-. Copy of reasons for initiating proceedings u/s 148 is enclosed. 1.5 Aggrieved the assessee filed an appeal before Learned CIT(A) raising following grounds:- (i) Challenging the reopening u/s 147 (ii) Addition of ₹ 39,40,000/-- made as Long Term Capital Gain. 1.6 Learned CIT (A) vide his order dated 31.3.2016 dismissed ground no. 1 by relying on the decision of Hon'ble Supreme Court in the case of ITO vs. Biju Patnaik. As regard addition of ₹ 39,40,000/- (38,00,000/- + ₹ 1,00,000/-) he dismissed the ground by holding that the assessee has preferred an appeal against order u/s 143(3) on the same issue. 1.7 We have filed an application before learned CIT(A) Bhopal on 24.9.2019 for fixation of the appeal. However, the same has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .7.2007. 2.1 Vide cheque no. 917764 dated 14.8.2007 of ICICI Bank Ltd, the assessee made payment of brokerage of₹ 38.40 Lacs. 2.2 (i) Brokerage amount of ₹ 38,40,000/- (38,40,000/- x 5 = 1,92,00,000) was assessed by the AO in the hands of M/S DSP Finprint Ltd vide order u/s 143(3) dated 30.12.2010. (ii) Learned CIT (A) vide his order dated 18/1112011 in the case of DSP Finprint Ltd dismissed the appeal and confirmed the addition of ₹ 1,92,00,000/- made by the AO. (iii) Hon'ble ITAT Indore Bench vide its order dated 12.6.2012 dismissed the appeal of DSP Finprint Ltd. (iv) Not only this, the penalty of ₹ 58,00,0001- imposed by the AO was also confirmed by Hon'ble ITAT Indore Bench vide its order dated 20.5.2016. 2.3 (i) That the assessee has paid brokerage of ₹ 38.40 lacs under an agreement with DSP Finprint Ltd. (ii) The payment was made through account payee cheque. On merits, the assessee has rightly claimed the brokerage of ₹ 38.40 lacs. (iii) Further brokerage of ₹ 38,40,000/- was assessed in the hands of DSP Finprint Ltd. (iv) When the income has been assessed in the hands of party to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Year 2011-12. In the reassessment proceedings Ld. A.O made no new addition except the addition of Long Term Capital Gain of ₹ 39,40,000/- which was initially made in the assessment proceedings u/s 143(3) of the Act completed on 30.12.2010. 11. So the undisputed fact remains is that no addition was made by the Ld. A.O in the reassessment proceedings for the reasons recorded in the notice issued u/s 148 of the Act. The question before us is that in this situation whether the impugned reassessment proceedings are valid in the eyes of law. 12. We find that similar issue came up for adjudication before various Hon ble Courts and it has been consistently held that if after issuance of notice u/s 148 of the Act the Ld. A.O accepts the contentions of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. 13. Hon'ble High Court of Bombay in the case of Commissioner of Income Tax vs. Jet Airways (I) Ltd reported in 78 CCH 0365 Mum HC held as under:- AO may assess or reassess the income i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact was the foundation ITA No. 2032/Kol/2018 Dipti Mehta AY- 2010-11 based on the information from Director of income Tax and the AO recorded the reason which warranted him to hold the belief that income chargeable to tax has escaped assessment and thereafter, the AO usurped the jurisdiction to reopen the assessment. In other words is the 'income' which according to the AO escaped assessment while recording reasons for reopening assessment u/s 147 r.w.s. 148 of the Act. This 'income' which AO records in his reasons recorded has escaped assessment and which constituted the bedrock/basis for reopening is the jurisdictional fact which empowered him to usurp the jurisdiction to reopen and reassess the escaped income as contemplate u/s 147/148 of the Act. So, when that income which was the foundation on which he based his belief of escapement of income is absent/disappeared then the AO's very usurpation of jurisdiction is on non-existing jurisdictional fact which renders his usurpation of jurisdiction to reopen the assessment legally untenable and so null in the eyes of law and therefore, the assessee succeeds and therefore, we quash the reassessment made by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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