2016 (9) TMI 1285

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....t on the facts and in the circumstances of the case and in law the Learned CIT (Appeal) erred in sustaining the addition of Rs. 31,94,750/- as alleged unexplained deposits without appreciating the material on records including detailed written submissions filed. 3. That the appellant craves leave to add, amend or delete any of the above grounds at the time of hearing and all the above grounds are without prejudice to each other." 2. After hearing the rival contentions, I find that the AO assumed jurisdiction by issuing notice u/s 148 for reopening the assessment. He has recorded two separate reasons for two separate bank accounts as follows:- "Reasons to issue notice under section 148 12.03.2013 On the....

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....ion 148 for the AY 2008-09. Sd/- (Anil Kumar Sharma) Income tax Officer Ward-1(5), Ghaziabad." 3. In this case, two separate reasons have been recorded for reopening. This itself shows non-application of mind. Thus, I have to necessarily conclude that the reasons were recorded without application of mind. Therefore, on this ground itself, the reopening of assessment has to be held bad in law by following the judgements of the jurisdictional High Court in the case Signature Hotels Pvt. Ltd. vs. ITO 328 ITR 51 (Del) wherein it was held that notice issued based on a report from Investigation Wing is invalid where the AO does not examine the evidence. The Hon'ble jurisdictional High Court in the case Princ....

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.... "it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries". In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the Assessee escaped assessment is missing in the present case. 13. Mr. Sawhney took the Court through the order of the CIT(A) to show how the CIT (A) discussed the materials produced during the hearing of the appeal. The Court would like to observe that this is in the nature of a post mortem exercise after the event of reopening o....