2018 (7) TMI 1898

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....s running a small business of trading items. He was also earning a small amount of interest income. 3. I have heard Sri Miraj D. Shah, the ld. Counsel for the assessee and Sri Satyajit Mondal, Addl. CIT, D/R, on behalf of the revenue. The reasons for reopening in this case are at page 4 of the order of the ld. CIT(A), which is extracted for ready reference:- "In the course of assessment proceedings for the asst. year 2005-06, the assessee could not explain the opening capital i.e. as on 01-04-2004 for the previous year 2004-05 and relevant asst year 2005-06. However, the assessee gave a break-up showing that his related to the earlier years capital carried forward and opposed the addition of the year. At this there is a wide ....

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....sessment, I find that the reopening was made on the ground that the opening balance as on 01/04/2004, was not explained. While so, no addition was made on this count. The 'SMC' Delhi Bench of the Tribunal in the case of M/s. Pragati Finsec Ltd. vs. ITO, in ITA No. 634/Del/2018, relying on the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Chiel Communications Pvt. Ltd. (2013) 354 ITR 549 (Del) and the judgment of the Hon'ble Bombay High Court in the case of CIT vs. Jet Airways Ltd. (2011) 331 ITR 236 (Bom) held as follows:- "4. I have heard the rival submissions and perused the relevant material on record. It can be seen from the discussion made supra that the AO resorted to the reassessment on account of one reaso....

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....the addition so made does not pass the scrutiny by the appellate forums, then, obviously, no further addition can be made for income which comes to the notice of the AO during the course of proceedings u/s 147. Without there being such a deterrent, the AO would acquire an unhindered power to initiate re- assessment at the drop of a hat without any legally sustainable reasons and then make other additions resulting in multiplicity of proceedings, which the legislature has sought to curb. Any lawful jurisdiction to make addition on account of other incomes coming to the notice of the AO during the course of proceedings u/s 147 can be acquired only on the foundation of a validly acquired jurisdiction on legally sustainable items of income esca....