2020 (1) TMI 88

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....d. Addl. CIT, Range-3, New Delhi was accorded without independent application of mind and in a mechanical manner. Hence, the reopening of this case is not valid and untenable as per law. As such, assessment is void-ab-initio and may please be quashed. 3. That the Ld. CIT(A) has erred in law and on facts while upholding the decision of the AO of making additions of Rs. 15,37,500/- on account of share capital received as camouflaged transaction without appreciating the submissions filed by the assessee. As such, the addition of Rs. 15,37,500.00 may please be deleted. 4. That the Ld. CIT(A) erred in law and facts of the case while not appreciating that the addition made by the AO is merely on the basis of conjecture and surmises without bringing on record any specific cogent material against the assessee. As such, the addition of Rs. 15,00,000/- may please be deleted. 5. That the Ld. CIT(A) has failed to appreciate while upholding the addition of Rs. 37,500/- on account of commission, being estimated @2.5% by the AO merely on the basis of presumption without even providing any opportunity to the assessee to provide explanation for the same. As such, the addi....

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....gs. 3. On the contrary, Ld. Sr. DR relied upon the orders of the authorities below and stated that the reasons recorded and satisfaction / approval accorded is within the meaning of section 151 of the Act and need not to be quashed. He stated that apart from relying on the order of the Ld. CIT(A), the following cases laws may kindly be considered with regard to reopening of cases u/s. 147 of the I.T. Act:- 1. Sonia Gandhi vs. ACIT (Delhi High Court) 29018) 97 taxmann.com 150 (Delhi). i) Where Congress Party gave loan to AJL and assigned said loan to non-profit YI which subsequently issued shares to assesses at a price less than FMV, non-disclosure by assesses of allotment of shares in YI would be a reason to initiate reassessment proceedings. ii) Relying on PCIT vs. Meenakshi Overseas Pvt. Ltd. ITA No. 651/Del/2016 dated 11.1.2016 (Hon'ble Delhi High Court) approval u/s. 151 upheld. 2. Raymond Woollen Mills Ltd. v. ITO And Others [236 ITR 341 (Copy Enclosed) where Hon'ble Supreme Court held that in determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the ba....

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....cation provided by a third party, same was justified. 9. Murlibhai Fatandas Sawlani Vs ITO Gujarat High Court 2016-TIQL-370-HC- AHM-IT It is not open to the assessee to object to the reopening by asking the AO to produce the source from where the AO has gathered the information for forming a belief that income chargeable to tax has escaped assessment. 10. Ankit Aqrochem (P.) Ltd. Vs JCIT Rajasthan High Court [2018] 89 taxmann.com 45 (Rajasthan) Where DIT informed that assessee-company had received share application money from several entities which were only engaged in business of providing bogus accommodation entries to beneficiary concerns, reassessment on basis of said information was justified. 11. Rakesh Gupta Vs CIT P&H High Court f20181 93 taxmann.com 271 (Punjab & Haryana) Where Assessing Officer received information from Principle Director of Income Tax (Investigation) that assessee had received bogus loss from his broker by client code modification, reassessment on basis of said information was justified. 12. Home Finders Housing Ltd. Vs. ITO (2018) 94 taxmann.com 84 (SC). SLP dismissed against High C....

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.... present case and the case laws applicable in the case of the assessee, I am of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. I find considerable cogency in the contention of the Ld. Counsel for the assessee that the issue no. 2 raised in this appeal is squarely covered by the decision of the ITAT, SMC, Bench, New Delhi dated 01.03.2018 in the case of Tara Alloys Ltd. vs. ITO Ward 25(1), New Delhi decided in ITA No. 2421/Del/2017 relevant to assessment year 2005-06 wherein the Tribunal has quashed the assessment. My aforesaid view is also fortified by the following decisions :- A) United Electrical Company (P) Ltd. Vs. CIT & Ors. 258 ITR 317 (Del.) In this case, approval by the Addl. CIT u/s. 151 was given in the following terms:- "Yes, I am satisfied that it is a fit case for issue of notice u/s. 148 of the Income Tax Act." Analyzing, the above satisfaction/approval, it has been held that the CIT is required to apply his mind to the proposal put up to him for approval in the light to eh material relied upon by the AO. The said power cannot be exercised casually ....