TMI Blog2020 (12) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... ch, Delhi recently in the case of Shri Natrajan Monie, Gurgaon [ 2020 (12) TMI 345 - ITAT DELHI] . In assessment year under appeal assessee has paid the installment of the impugned amount. Thus, even the information received from the O/o. Sub-Registrar was not gone into the entirety by the A.O. A.O. has not gone through the contents of the Lease Deed registered with the O/o. Sub- Registrar, Noida which clearly specify that no amount of ₹ 1.59 crore is paid by assessee in assessment year under appeal and the balance amount shall have to be paid by the assessee company in installments. There were no justification for the A.O. to record non-existing, incorrect and wrong facts in the reasons for reopening of the assessment.The entirety of the facts clearly show that A.O. recorded wrong, incorrect and non-existing reasons for reopening of the assessment without application of mind and such reopening of the assessment would be invalid and bad in Law. We are of the view that reopening of the assessment is illegal and 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. Resultantly, all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan of impugned amount of ₹ 33,18,842/- during the year from Shri Ram Kishan Dass which are supported by copy of the bank statements and his ledger account in the books of the assessee. The Ld. CIT(A), however, did not admit the additional evidences and confirmed the addition on merit. The Ld. CIT(A) also rejected the ground of challenging the reopening of the assessment. Thus, appeal of assessee were dismissed. 4. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and referred to Pb-12 which is reasons for recording the reasons for reopening of the assessment. He has submitted that in the reasons A.O. has mentioned that there is an escapement of income of ₹ 1.59 crores on account of purchase of plot at Noida as per information received from O/o. Sub-Registrar, Noida. He has referred to the Lease Deed [PB-71] in favour of assessee company which shows that the total amount was to be paid of ₹ 1.59 crores and till the date of registration of the Lease Deed, an amount of ₹ 47,70,000/- have already been paid and balance amount of ₹ 1,11,30,000/- is to be paid in installments. He has submitted that in assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have considered the rival submissions and perused the material on record. It is well settled Law that validity of the re-assessment proceedings is to be judged with reference to the reasons recorded for reopening of the assessment. Copy of the reasons for reopening of the assessment is placed on record which reads as under : REASONS FOR ISSUE OF NOTICE U/s. 148 FOR THE A.Y. 2010-11 IN THE CASE OF M/s. V.G. GOLDCHEM PVT. LTD., [FORMERLY VAIBHAV TECHNOSOFT PVT. LTD.]. 1. Name and address of the assessee M/s. V.G. Goldchem Pvt. Ltd., [Formerly Vaibhav Technosoft Pvt. Ltd.], 25/75, Shakti Nagar,Delhi 110 007. 2. PAN AACCV5270C 3. Status Company 4. Assessment Year 2010-11 5. Range/Ward ITO, Ward-26(1), New Delhi. The case of M/s. V.G. Goldchem Pvt. Ltd., is received on transfer from ACIT, Cir 27(1) who in turn received it from ITO, Ward-2(5), Noida forwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned that assessee has purchased immovable property valued at ₹ 1.59 crores. The A.O. issued notice to the assessee seeking explanation. The assessee has filed the details of purchase of immovable property which are mentioned in assessee s books of account. The A.O. on going through the balance sheet filed by assessee found there is a difference in the amount as per balance sheet and as per information received from O/o. Sub-Registrar. The A.O, therefore, did not accept the explanation of assessee and found there is an escapement of income to the extent of ₹ 1.59 crores. The A.O. however while passing the assessment order did not make any addition of ₹ 1.59 crores in the re-assessment order. The A.O. has however found from the financial statement of the assessee that there is an increase of unsecured loans to the tune of ₹ 33,18,842/- and made the addition of unsecured loans. Thus, there is a contradiction of the facts recorded in the reasons and ultimately addition was made by the A.O. In the reasons A.O. found escapement of income to the tune of ₹ 1.59 crores on account of purchase of plot at Noida, but, in the re-assessment order A.O. found it is a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Officer did not get jurisdiction to make the reassessment. 6.3. The Hon ble Delhi High Court in the case of Pr. CIT vs., SNG Developers Ltd., [2018] 404 ITR 312 (Del.) in which it was held as under : Held, dismissing the appeal, that the reasons recorded by the Assessing Officer for reopening the assessment under section 147, issuing a notice under section 148 did not meet the statutory conditions. As already held by the Appellate Tribunal, there was a repetition of at least five accommodation entries and the total amount constituting the so-called accommodation entries would therefore, not work out to ₹ 95,65,510. It was unacceptable that the Assessing Officer persisted with his belief that the amount had escaped assessment not only at the stage of rejecting the assessee s objections but also in the reassessment proceedings, where he proceeded to add the entire amount to the income of the assessee. Therefore there was non-application of mind on the part of the Assessing Officer. The Appellate Tribunal was justified in confirming the order of the Commissioner (Appeals) and holding that the reopening of the assessment was bad in law. 6.4. The Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as such could not have been made applicable to the assessment year 1999-2000 and the notice had been issued under the mistaken belief about the correct position of law. However, opportunity to show cause was given to the petitioner as to why the loss claimed should not be disallowed to be carried forward. On a writ petition : Held, allowing the petition, (i) that it would be clear from the reasons given that the authority proceeded on the presumption that the law applicable was the law after the amendment and not the law in respect of which the petitioner had filed the return for the year 1999-2000. This by itself clearly demonstrated that there was total non-application of mind on the part of the authority and consequently, the notice based on that reason would amount to non-application of mind. (ii) That the income derived by the assessee from an industrial undertaking to which section 10A applies could not be included in the total income of the assessee. Therefore, the petitioner was right in filing the return by excluding the income in terms of section 10A. 6.6. In the case of Pr. CIT vs., RMG Polyvinyl (I) Ltd., 396 ITR 5 (Del.) the Hon ble Delhi High Court he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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