TMI Blog2023 (10) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... r in law and mother in law of the assessee were not in possession of agricultural land of 6.5 acres - since the donors of the gifts are closely related to the assessee being father in law and mother in law and the sources were also explained the gifts cannot be disbelieved. Appeal of assessee allowed. - Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri Manpreet Singh Kapoor, CA For the Revenue : Shri Om Prakash, Sr. DR ORDER This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-5, Ludhiana dated 20.06.2019 for the AY 2010-11. The assessee raised several grounds on merits in sustaining the addition of Rs. 10 lakhs made on account of cash deposit and further an application for admission of additional ground was made in which the assessee challenged the reopening of the assessment by the Assessing Officer and the additional grounds read as under: - 8. Ld.CIT(A) is erred in law by confirming the reopening proceeding u/s 147, which the AO has initiated without conducting proper enquiry and collecting material information, which is bad in law and liable to be deleted. 9. Ld.AO CIT(A) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t u/s 147 of the Act without conducting proper enquiry and reopening of assessment based on AIR Information is bad in law, submits that the AO has initiated the proceeding u/s 147 based upon AIR Information generated from IT Department application, which showed that the assessee has deposited Rs. 17,30,110/- in cash in ICICI Bank. The AO generate reason to suspect in his mind without going into the fact of the case that the assessee had declared a total turnover of Rs. 16,62,200/- from his business. The assessee was engaged in the business of sale purchase of old mobile and distribution of milk supply in his locality, such business is mostly deals in cash. The AO re-opened the assessment without considering sale declared by assessee in its Income Tax return, filed on 10.08.2010, with business income of Rs. 1,68,680/- out of such total turnover of Rs. 16,62,200/- is bad in law. The assessee has also declared agricultural income of Rs. 46,000/- in AY in question. 6. Ld. Counsel further submits that notice was issued by AO u/s 133(6) to ICICI Bank Ltd. on 17.04.2017, i.e. one month after issue of notice u/s 148 and ICICI Bank furnished the requisite information on 24.05.2017 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r hand, the Ld. DR submits that the assessment was reopened on the basis of AIR information which stated that the assessee had huge cash deposits into his bank account and, therefore, the Assessing Officer had reasoned to believe that the income had escaped assessment and the reopening is rightly made by the Assessing Officer. 10. Heard rival submissions, perused the orders of the authorities below and the decisions relied on. In this case the Assessing Officer reopened the assessment by issue of notice u/s 148 dated 18.03.2017 and the reasons for reopened the assessment are as under: Return of income in this case for the AY 2010-11 was filed by the assessee on 10.08.2010 declaring an income of Rs. 1,68,680/- which was processed as such u/s 143(1) of the Income Tax Act, 1961. Later on, as per AIR information, generated from ITD Application, it has come to my notice that Sh. Parminder Singh S/o Bhim Singh H.No. 2748, Urban Estate, Jind has deposited Rs. 17,30,110/- in ICICI Bank Ltd. in his saving joint bank accounts during the financial year 2009-10 relevant to the assessment year 2010-11. The assessee was asked to explain the source the same. But, the assessee has failed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of Rs. 1,68,680/-. The reasons recorded by the Assessing Officer for reopening the assessment are also vague. Further the Assessing Officer did not refer to what sought of details he has called for from the assessee and the assessee failed to furnish the details before recording the reasons for reopening the assessment. 12. Almost an identical issue came up before the Tribunal in the case of Udesh Sharma Vs. ITO in ITA No.7579/2017 dated 29.03.2022, wherein the Tribunal held as under: 6.6 The jurisdictional High Court again in the case of Pr. CIT vs. Meenakshi Overseas Pvt. Ltd., 395 ITR 677 dealt identical with the issue has held as under: In the present case, as already noticed, the reasons to believe contain not the reasons but the conclusions of the AO one after the other. There is no independent application of mind by the AO to the tangible material which forms the basis of the reasons to believe that income has escaped assessment. The conclusions of the AO are at best a reproduction of the conclusion in the investigation report. Indeed it is a 'borrowed satisfaction'. The reasons fail to demonstrate the link between the tangible material and the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing verification letter to the Assessee, has not made proper efforts to find out the veracity and authenticity of information and any corroborative evidence/material thereto and without connecting tangible material and the formation of the reasons to believe for escapement of income 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, we are of the considered opinion that the reasons recorded in the instant case are insufficient, vague and based on un-substantive reasoning, uncorroborated material and lack of evidence and hence tantamount to be based on borrowed satisfaction and accordingly does not sound valid reasons in .the eyes of law, for reopening of the case. 6.11 On the aforesaid discussions, the re-opening of the assessment proceedings u/s 147 of the Act by the AO and affirmation by the Ld. Commissioner was totally unjustified and therefore deserve quashing, hence ordered accordingly. 13. The Hon ble Delhi High Court in the case of Pr. CIT Vs. RMG Polyvinyl (I) Ltd. (396 ITR 5) held as under: Held, dismissing the appeal, that no link between the tangible material and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment, added a sum of Rs. 1.13 crore. On what basis such an addition was made has not been explained. 15. For the aforementioned reasons, the Court is satisfied that no error was committed by the ITAT in holding that reopening of the assessment under Section 147 of the Act was bad in law. 14. Ratios of the above decision applies to the facts of the assessee s case as the reasons recorded for reopening of the assessee s case are insufficient, vague, un-corroborative to form a belief that the income had escaped assessment as there was no link between the tangible materials and the formation of belief of the Assessing Officer that the income had escaped assessment. Thus, the reassessment made u/s 143(3) read with section 147 of the Act based on such reasons is bad in law and accordingly, the reassessment is quashed. 15. Even on merits it is observed that the Assessing Officer even though reopened the assessment on the ground that the assessee had cash deposits of Rs. 17,30,110/- into his account, ultimately addition was made only to the extent of Rs. 10 lakhs disbelieving the gifts received by the assessee from his father in law and mother in law which was utilized f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
