TaxTMI 
TaxTMI 
2018 (11) TMI 1599
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....47 of the Income Tax Act, 1961(here-in-after referred to as "the Act") dated 17.03.2015 relevant to Assessment Year (AY) 2010-11. 2. The assessee has raised the following grounds of appeal: "1.1 The order passed u/s 250 on 09.04.2016 for AY 2010-11 by CIT(A)-7, Ahmedabad upholding the addition of Rs. 12,32,500/- as unexplained cash deposits in undisclosed bank account made by AO is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT (A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to confirmation of impugned additions of Rs. 12,32,500/-. 1.3 Both the lower authorities ....
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.... Accounts." 4. The assessee in its first additional ground of appeal has challenged the validity of reopening of assessment made u/s 147 of the Act. 5. At the outset, we note that the assessee has challenged the reopening of the assessment made u/s 147 of the Act by way of additional grounds of appeal. The issue raised in additional grounds of appeal is legal in nature and goes to the route of the matter. Therefore we admit the additional grounds of appeal raised by the assessee after having reliance on the judgment of Hon'ble Supreme Court in the case of NTPC 229 ITR 383. Therefore, we proceed to adjudicate first legal ground of appeal as discussed above. 6. Briefly stated facts are that the assessee in the present case is an indi....
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....elow. 10. We have heard the rival contentions and perused the materials available on record. In the instant case, the reopening was made by the AO u/s 147 of the Act on the basis of AIR information suggesting that the assessee has deposited cash more than Rs. 10,00,000/- in his bank account. 10.1 The provision of Section 147 of the Act requires forming a belief on tangible material which should provide live link i.e. the income of the assessee has escaped assessment. In the case before us, the material which was available with the AO was AIR information which in our considered view does not establish the fact that the income of the assessee has escaped assessment. 10.2 In holding so, we find support and guidance from the order of D....
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....estored to only to examine the facts of a case, no matter how desirable that be, unless there is a reason to believe, rather than suspect, that an income has escaped assessment." 10.3 After considering the fact in totality as discussed above, we note that the AO has not applied his mind to reach to the conclusion that the income of the assessee has escaped assessment. The AO initiated proceedings u/s 147 of the Act merely on the basis of AIR which in our considered view is not sufficient material for initiating the proceedings under section 147 of the Act. It is relevant to refer the reasons recorded for initiating the proceedings under section 147 of the Act which are as under: "Reasons recorded for reopening U/s. 147 of the....