AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1148
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....ide the reassessment order passed u/s 147/144B of IT Act on 10.03.2022. 3. The Ld. Pr. CIT's action of setting aside the reassessment order dt: 10.03.2022 is based on the presumption that the assessing authority has not confronted the material and complete information to the appellant during reassessment proceedings in respect of scrip i.e. M/s Yamini Investment Company Ltd which has been rigged up and on which the appellant has claimed exemption of long term capital gain u/s 10(38) of IT Act. But such presumption of the Ld Pr CIT is contrary to facts on records as no material was discussed in reason recorded on the basis of which reassessment proceedings was initiated u/s 147/148. Therefore, the impugned order of revision is therefore bad in law and needs be quashed. 4. The Ld. Pr. CIT has assumed power u/s 263 of the Act holding the assessment order dated 10.03.2022 as erroneous and prejudicial to the interest of revenue on the ground that no independent enquiry or verification of the details were made by the AO. Such assumption of power by the Ld. Pr. CIT is not proper in absence of any minimal inquiry conducted by Pr. CIT to support his finding that the order ....
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....ther submitted that reassessment order was passed u/s 147 r.w.s. 144B of the Act was without disposal of objections of the assessee against reopening of assessment, by passing a speaking order by Assessing Officer and therefore the same is illegal and invalid. Ld. Counsel for the assessee referring to page 32 to 38 of the Paper Book submitted that the assessee during the assessment proceedings filed objections for assumption of jurisdiction u/s 147 of the Act on 24.12.2021 against the reasons provided on 17.12.2021. It is submitted that the above objections of the assessee were never disposed of till completion of reassessment proceedings by the AO as is also evident from the subsequent notice dated 08.02.2021 and screenshot and e-proceedings portal placed at pages 27 & 28 of the Paper Book. It is submitted that none disposal of objections by passing a speaking order by the Ld. AO is a clear violation of the directions of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. vs. ITO (2003) 259 ITR 19. Ld. Counsel further submitted that in the cases of Ferrous Infrastructure P. Ltd. vs. DCIT (63 taxmann.com 201) and CIT vs. Tupperware India Pvt. Ltd. (284 CTR 68) the....
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....at page 16 therein has invoked Explanation 2 to sec 263( 1) of IT Act to hold the assessment order to be erroneous in so far as it is prejudicial to the interest of revenue. The invocation of Explanation-2 implies that the AO had failed to conduct, examine and investigate the issues to the extent it was required. The invocation of Explanation-2 without providing opportunity through above show cause notice amounts to violation of principals of natural justice as held by the Hon'ble Supreme Court in the decision of PCIT, Surat-2 vs. Shree Ji Prints P Ltd. [2021 (9) TMI 108 - SUPREME COURT]. It is very much evident that show-cause-notice dated 21.04.2023 issued under Section 263 of the Act does not mention that the Explanation 2 to S. 263 is going to be invoked. So, invocation of the Explanation 2 in the order passed u/s 263 without confronting the assessee is not sustainable in Law. Further, reliance is also placed on following decisions: * PCIT vs Trojan Developers [2024] 158 taxmann.com 3225 (DELHI); * Arun Kumar Garg vs. PCIT ITA No 3391/DEL/2018 dated 08.01.2019; * Ashok Kumar Jain vs PCIT 2025 (6) TMI 648 (ITAT-Del) dated 06.06.2025. 7. Ld. DR stron....
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....ped assessment for the A.Y. 2016-17 within the meaning of section 147 of the Income Tax Act, 1961. In order to assess the above income or any other income which comes to my notice subsequently in the course of assessment proceedings u/s 147, I proceed to initiate proceedings u/s 147 of the I.T. Act, 1961 in the case for A.Y. 2016- 17." 9. While completing the assessment addition of Rs. 2,23,117/- was made as an unexplained cash credit u/s 68 of the Act in respect of part of the long term capital gain which was claimed as exempt under 10(38) of the Act as against the proposed reopening of assessment for an accommodation entry of Rs. 85,09,000/- from M/s Yamini Investment Company Pvt. Ltd. Therefore, it can be seen that while completing the assessment the AO did not make addition for which the reasons recorded for reopening of assessment. Such an assessment is invalid in view of the decision of the Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs. CIT (supra) and also the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Jet Airways India Ltd. (supra). 10. We also find force in the submission of the Ld. Counsel for the assessee that non dispos....
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....information transaction in M/s Yamini Investment Company Ltd. is nothing but accommodation entries in the shape of long term capital gain to the different assessee. Hence, tax on this amount of Rs. 82,85,883/- is required to be compute and computation of income of the assessee as given under: Returned Income 13,36,890/- Additions to be made 82,85,883/- Tax on addition to be made 24,85,195/- Education Cess 99,430/- Total 25,85,195/- Interest u/s 234B 18,61,340/- Tax effect 44,46,535/- 3. On the basis of discrepancies, it is observed that the assessment framed by NFAC, Delhi u/s 147 r.w.s. 144B is prima facie erroneous in so far as it is prejudicial to the interest of revenue. 4. Keeping in view of the above facts, you are hereby offered an opportunity of being heard on the above said issues and thereby required to attend the office of the undersigned at 2nd Floor, New CGO Complex, Block-B, NH-4, Faridabad - 121001 on 28.04.2023 at 01.00 PM either in person or by a representative duly authorized in writing in this behalf. You or your authorized representative may produce or cause there to be produced at the said time any doc....
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....sentative for appellant/assessee regarding ground of appeal no.2 of ITA No.2627/Del/2024 submitted that Ld. PCIT passed a order by invoking Explanation 2(a) of sub section 1 of Section 263 and set aside the reassessment order to Ld. AO with the direction to make proper verification with regard to applicability of provisions of section 40A(3) of the Act. Order dated 27.03.2024 passed by the Ld. PCIT is not sustainable under Section 263 of the Act. During assessment proceedings, Ld. AO raised specific query for cash purchase/payment under Section 40A(3) in point number 11 in 142(1) dated 28.02.2022 and 13.02.2022. In response to it, the assessee submitted detailed reply on 24.02.2022 along with all relevant documents i.e. ITR, audited balance sheet and profit and loss account, VAT order, G.P.& N.P. comparison, order under Section 143(3) etc. Ld. AO passed reassessment order after proper verification. Learned AO at the time of passing reassessment order considered the following Facts:- 1. Assessment u/s 143(3) was already done, all books of accounts and vouchers are checked as per assessment order and addition was made earlier also. 2. Purchase sales and trading resu....