ITO, Rishikesh V. M/s. M.L. Creations, Dehradun

ITA 4009/DEL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6411 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 3
• Next Hearing Date: 20-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Assessee Lawyers: P S KASHYAP
• Keywords: Valuation report; Reason to believe; Reassessment proceedings
• Section: 143(3); 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-3, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 4009 /DEL/201 6 A.Y. : 20 0 9 - 10 INCOME TAX OFFICER, WARD 1(4)(1), RISHIKESH O/O CISF BUILDING IDPL, CAMPUS, VEERABHADRA, RISHIKESH, DISTT. DEHRADUN VS. M/S M.L. CREATIONS, PLOT NO. A-15, 17 & 18, MINI INDUSTRIAL ESTATE, RANIPOKHARI, THE. RISHIKESH, DISTT. DEHRADUN (PAN: AAPFM5910L) AND C/O RAJ KUMAR & ASSOCIATES, CHARTERED ACCOUNTANT 4435/7, ANSARI ROAD, DARYAGANJ, NEW DELHI 110 002 (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. F.R. MEENA, SR. DR ASSESSEE BY : SH. R.K. GUPTA, CA & SH. P.S. KASHYAP, CA ORDER ORDER ORDER ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-VIII, DEHRADUN DATED 4.4.2016 PERTAINING TO ASSESSMENT YEAR 2009-10 ON THE FOLLOW ING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.34,10,713/- MADE ON ACCOUNT OF DIFFE RENCE IN THE 2 COST OF CONSTRUCTION IN THE VALUATION REPORT AND CO ST DECLARED BY THE ASSESSEE WITHOUT APPRECIATING THE FACTS THAT THE AS SESSEE HAD NEVER COME FORWARD TO PROVE THE COST OF CONSTRUCTION DECL ARED BY HIM BEFORE THE THEN A.O. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN IGNORING THE FACT THAT THE ASSESSEE WAS ALLOWED AMPLE OPPORTUNIT IES BY THE AVO FOR FURNISHING THE DETAILS OF EXPENSES TO PROVE THE COST OF CONSTRUCTION DECLARED BY THE ASSESSEE. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN IGNORING THE FACT THAT THE ASSESSEE NEVER BEEN OBJECTED THE VALU ATION REPORT MADE BY THE AVO DURING THE COURSE OF ASSESSMENT PRO CEEDINGS. 4. THAT THE ORDER OF THE LD. CIT(A) BE SET-A-ASIDE AND THE ORDER OF THE A.O. 2. THE BRIEF FACTS OF THE CASE ARE THE ASSESSEE FIR M FILED ITS RETURN OF INCOME ELECTRONICALLY ON 30.9.2009 DECLARING TOTAL INCOME AT NIL. THE RETURN WAS PROCESSED U/S. 143(1) OF THE I.T. ACT, 1961. LATER THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS. THE ASSESSEE CLAIMED ITS UN IT AS A MANUFACTURING OF GOLD ORNAMENTS. IN THIS CASE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE I.T. ACT ON 28.12.2011.DURING THE YEAR FACTORY WAS CONSTRUCTED AT RANIPOKHRI DEHRADUN 3 SHOWING CONSTRUCTION COST OF RS. 22,29,387/-. DURI NG THE ORIGINAL ASSESSMENT, A REFERENCE WAS MADE TO AVO ON 7.11.2011 FOR ESTIMATI NG COST OF CONSTRUCTION OF FACTORY. THE AVOS REPORT DATED 22.12.2-11 (BEFORE COMPLETION OF ASSESSMENT) WAS RECEIVED BY THE AO ON 5.1.2012. THE AVO ESTIMAT ED THE COST OF CONSTRUCTION AT RS. 56,40,100/-, THUS DIFFERENCE OF RS. 34,10,713/-. THE AO ON THE BASIS OF AVO REPORT, INITIATED RE-ASSESSMENT P ROCEEDINGS AND MADE THE ADDITION OF RS. 34,10,713/- AS UNEXPLAINED INVESTME NT U/S. 69A OF THE I.T. ACT, 1961 VIDE HIS ORDER DATED 18.3.2013 PASSED U/S. 14 3(3)/148 OF THE I.T. ACT, 1961. 3. AGAINST THE AFORESAID ASSESSMENT ORDER, THE ASSE SSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 4.4.2016 HAS DELETED THE ADDITION AND ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED WITH THE IMPUGNED ORDER, THE REVENUE I S IN APPEAL BEFORE THE TRIBUNAL. 5. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS, ESPECIALLY THE ORDERS OF THE AUTHORITIES BELOW. I FIND THAT LD. FIRST APPELLATE AUTHORITY HAS ELABORATELY DISCUSSED THE ISSUE IN D ISPUTE BY CONSIDERING THE 4 SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE AN D ADJUDICATED THE ISSUE IN DISPUTE AS UNDER VIDE PARA NOS.12 TO 21 OF HIS IMPU GNED ORDER. 12. THE FIRST GROUND OF APPEAL RAISES THREE LEGAL I SSUES NAMELY THAT WITHOUT REJECTING THE BOOKS OF ACCOUNTS THE REFEREN CE TO THE AVO WAS ILLEGAL AND UNSUSTAINABLE, WITHOUT PRIOR RECORD ING THE REASONS FOR SATISFACTION OF MAKING REFERENCE TO AVO THE REF ERENCE WAS ILLEGAL AND UNJUSTIFIED AND THE AVO'S REPORT COULD NOT BE THE BASIS FOR INFERRING THE EXISTENCE OF ESCAPED INCOME SO AS TO VALIDLY AND LEGALLY EMPOWER THE AO TO INITIATE PROCEEDINGS ULS 147/148. WE MAY ADDRESS THESE ISSUES ONE BY ONE. FIRSTLY, THE I SSUE OF REFERENCE TO AVO WITHOUT REJECTION OF THE BOOKS OF ACCOUNTS. THE AO HAS RELIED UPON THE CASES OF CIT VS. BHAWANI SHANKAR VY AS (2009) . 311 ITR 8 (UTTARAKHAND) IN SUPPORT OF THE PROPOSITION T HAT THE REFERENCE COULD BE MADE WITHOUT REJECTING THE BOOKS OF ACCOUN TS. HOWEVER, IT IS OBSERVED THAT THE HON'BLE SUPREME COURT IN THE C ASE OF SARGAM CINEMA LTD. VS. CIT (2010) 328 ITR 513 (SC) CONSIDE RED THE JUDGMENT OF THE HON'BLE UTTARAKHAND HIGH COURT IN T HE CASE OF BHAWANI SHANKAR VYAS (SUPRA). AND HELD THAT THE ASS ESSING AUTHORITY CANNOT REFER THE MATTER TO THE DEPARTMENT AL VALUATION OFFICER WITHOUT FIRST REJECTING THE BOOKS OF ACCOUN TS. THE HON'BLE 5 ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. LUCKNOW PUBLIC EDUCATIONAL SOCIETY (2011) 339 ITR 0588 (ALL) HELD THAT, 'ONCE THAT BE THE LAW AS DECLARED BY THE SUPREME COURT, IT IS NOT POSSIBLE FOR US TO CONSIDER THE CONTENTION ADVANCED ON BEHALF OF THE REVENUE'. IN THE PRESENT CASE IT IS QUITE CLEAR THAT THE ASSE SSEE DID MAINTAIN BOOKS OF ACCOUNTS FOR THE CONSTRUCTION AND IT DID P RODUCE THE LEDGER OF CONSTRUCTION ACCOUNT ALONGWITH SUPPORTING VOUCHE RS FOR BUILDING MATERIAL PURCHASED AND PAYMENTS MADE TO THE LABOURS FOR VERIFICATION OF THE AO. HOWEVER, THE AO DID NOT ACC EPT THE SAME ON ACCOUNT OF THE FACT THAT THE ASSESSEE DID NOT PR ODUCE A MAP AND A VALUATION REPORT. HE DID NOT ACTUALLY POINT OUT A NY DEFECT IN THE ACCOUNTS, BEING PRODUCED BY THE ASSESSE, OR IF HE D ID, HE HAS NOT BROUGHT ANY SUCH DEFECT RECORD IN THE ASSESSMENT O RDER FROM WHERE IT CAN BE ASCERTAINED AS TO WHETHER HE NOTICED THAT THESE ACCOUNTS WERE EITHER INCOMPLETE OR INCORRECT. THUS, THE REFE RENCE TO THE DEPARTMENTAL VALUATION OFFICER WITHOUT REJECTING TH E AUDITED CONSTRUCTION ACCOUNT MAINTAINED BY THE ASSESSEE AND PRODUCED BEFORE THE AO ALONGWITH SUPPORTING BILLS AND VOUCHE RS AND WITHOUT RECORDING ANY SATISFACTION OF THE NEED TO MAKE SUCH REFERENCE, IS NOT MAINTAINABLE IN LAW IN VIEW OF THE DECISION OF THE HON'BLE SUPREME, 6 COURT IN THE CASE OF SARGAM CINEMA LTD (SUPRA). THU S, NO COGNIZANCE CAN BE TAKEN OF THE REPORT OF THE ASSIST ANT VALUATION OFFICER AS THE REFERENCE ITSELF WAS BAD IN LAW 13. THE NEXT OBJECTION PERTAINS TO THE FACT THAT TH E AVO'S REPORT CANNOT BE THE BASIS FOR INFERRING THE EXISTENCE OF ESCAPED INCOME SO AS TO RESTORE THE AO THE RIGHT TO INITIATE PROCEEDI NGS U/S 148. IN THIS CONTEXT THE ASSESSEE HAS CITED SEVERAL JUDGMENTS WH ICH HOLD THAT THE REPORT OF THE VALUATION OFFICER IS NOT PER SE A N INFORMATION FOR THE PURPOSES OF REOPENING ASSESSMENT U/S 147. ON THE OT HER HAND THE AO HAS ALSO CITED TWO CASE LAWS WHICH HOLD THAT REA SSESSMENT NOTICES WERE VALID ON ACCOUNT OF SUBSTANTIAL DIFFER ENCE BETWEEN THE VALUE ESTIMATED BY VALUATION OFFICER AND VALUE DECL ARED BY THE ASSESSEE. AFTER CONSIDERING THE SAME, IT IS OBSERVE D THAT IN THE CASE OF DR. ARJUN D BARAD VS. ITO 83 ITO 774 (NAG) THE H ON'BLE ITAT HAS HELD THAT SINCE THE REFERENCE MADE BY THE AO TO THE DVO WAS WITHOUT JURISDICTION AND THEREFORE, INVALID, ASSESS MENTS THAT WERE REOPENED SOLELY ON THE BASIS OF THE AVOS REPORT W ERE NOT VALIDLY INITIATED. CONSIDERING THE FACTS OF THE CASE, THE R ATIO OF THIS JUDGMENT HAS TO APPLY TO THE PRESENT CASE. AS THE REFERENCE TO THE AVO HAS 7 BEEN HELD TO BE BAD IN LAW, THE REOPENING OF THE AS SESSMENT ON THE BASIS OF THE REPORT OF THE AVO CANNOT BE UPHELD. 14. FURTHERMORE, IT IS ALSO OBSERVED THAT THIS IS A CASE OF CONSTRUCTION EXPENSES BEING RECORDED IN THE BOOKS OF ACCOUNTS AN D THE REPORT OF THE AVO WAS PREPARED WITHOUT CONSIDERING THE BOOKS OF ACCOUNTS AND BILLS AND VOUCHERS AS THE SAME WERE APPARENTLY NOT PRODUCED BY THE ASSESSEE BEFORE THE AVO. IN THE CIRCUMSTANCE S, WHEN THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNTS, THE EXPE NSES FOR CONSTRUCTION HAVE BEEN RECORDED IN THE BOOKS OF ACC OUNTS, THE EXPENSES ARE SUPPORTED BY DOCUMENTS IN THE FORM OF BILLS AND VOUCHERS AND THE ACCOUNTS HAVE BEEN AUDITED AND ALS O EXAMINED BY THE AO WHO DID NOT NOTICE ANY DISCREPANCY IN THE SAME, THE ESTIMATION OF INVESTMENT ON THE BASIS OF A FORMULA BASED COMPUTATION CANNOT GIVE REASON TO BELIEVE THAT ANY INCOME HAD ESCAPED ASSESSMENT. THE HON'BLE RAJASTHAN HIGH COUR T IN THE CASE OF CIT VS. PRATAP SINGH, AMRO SINGH, RAJENDER SINGH AND OEEPAK KUMAR 200 ITR 788 (RAJ) HAS POINTED OUT THAT WHERE BOOKS OF ACCOUNTS ARE .MAINTAINED THAN THE ASSESSMENT CANNOT BE DONE ON THE BASIS OF VALUATION REPORT UNLESS THE BOOKS OF A CCOUNTS ARE FIRST 8 SHOWN TO BE INCORRECT. HENCE, THE AVO'S REPORT COUL D NOT BE THE BASIS FOR A VALID REOPENING OF THE ASSESSEE'S CASE. 15. THE NEXT GROUND THAT HAS BEEN AGITATED BY THE ASSESSEE IS THE FACT THAT IT HAD FILED OBJECTIONS TO THE NOTICE U/S 148 AND THE AO HAD PROCEEDED TO COMPLETE THE ASSESSMENT WITHOUT DI SPOSING OFF THE OBJECTIONS FILED BY THE ASSESSEE, THUS VIOLATIN G THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS INDIA LTD. 259 ITR 19 (SC). IT HAS BEEN ARGUED THAT THE HON'BLE DELHI HIGH COURT IN ITS ORDER DATED 10.08.2 015IN THE CASE OF PRO CIT VS. TUPPERWARE INDIA PVT LTD HAS HELD TH AT WHERE THE AO DID NOT MAKE COMPLIANCE TO THE SAID SUPREME COURT O RDER BY PASSING A SPEAKING ORDER, THE CIT(A) HAD COMMITTED AN ERROR IN NOT QUASHING THE REOPENING ORDER AND THE CONSEQUENT ASS ESSMENT. HOWEVER, THE AO DISPOSED THE OBJECTIONS OF THE ASS ESSEE IN THE ASSESSMENT ORDER ITSELF. BEFORE ME, THE ASSESSEE HA S TAKEN THE PLEA THAT THIS RENDERS THE ASSESSMENT ORDER AS BAD IN LAW. 16. I HAVE DULY CONSIDERED THE FACTS AND CIRCUMSTAN CES OF THE CASE OBJECTION. THE QUESTION WHETHER THE FAILURE OF THE AO TO PASS A SPEAKING ORDER DISPOSING OFF THE OBJECTIONS PRIOR T O THE FRAMING OF THE ASSESSMENT ORDER (IN WHICH THE AO DID ADDRESS T HE OBJECTIONS) 9 WOULD RENDER THE ASSESSMENT ORDER BAD IN LAW. THE Q UESTION HAS TO BE EXAMINED IN THE LIGHT OF DECISIONS OF THE VARIOU S COURTS. 17. IN A SUBSEQUENT DECISION IN THE CASE OF GARDEN FINANCE LTD. V. CIT (ASST.) [2004] 268 ITR 48 (GUJ), THE EFFECT OF THE SUPREME COURT DECISION IN THE CASE OF GKN DRIVESHAFTS [2003] 259 ITR 19 CAME UP FOR CONSIDERATION AND BY A MAJORITY OPINION IT WAS LAID DOWN BY THE HON'BLE COURT: 'WHAT THE SUPREME COURT HAS NOW DONE IN THE GKN DRIVESHAFTS (INDIA) LTD.'S CASE [2003] 259 ITR 19 I S NOT TO WHITTLE DOWN THE PRINCIPLE LAID DOWN BY THE CONSTIT UTION BENCH OF THE APEX COURT IN CALCUTTA DISCOUNT CO. LT D. CASE [1961] 41 ITR 191 BUT TO REQUIRE THE ASSESSEE FIRS T TO LODGE PRELIMINARY OBJECTION BEFORE THE ASSESSING OFFICER WHO IS BOUND TO DECIDE THE PRELIMINARY OBJECTIONS TO ISSUA NCE OF THE REASSESSMENT NOTICE BY PASSING A SPEAKING ORDER AND , THEREFORE, IF SUCH ORDER ON THE PRELIMINARY OBJECTI ONS IS STILL AGAINST THE ASSESSEE, THE ASSESSEE WILL GET AN OPPO RTUNITY TO CHALLENGE THE SAME BY FILING A WRIT PETITION SO THA T HE DOES NOT HAVE TO WAIT TILL COMPLETION OF THE REASSESSMEN T PROCEEDINGS WHICH WOULD HAVE ENTAILED THE LIABILITY TO PAY 10 TAX AND INTEREST ON REASSESSMENT AND ALSO TO GO THR OUGH THE GAMUT OF APPEAL, THE SECOND APPEAL BEFORE INCOME-TA X APPELLATE TRIBUNAL AND THEN REFERENCE/TAX APPEAL TO THE HIGH COURT. VIEWED IN THIS LIGHT, IT APPEARS TO ME THAT THE RIG OR OF AVAILING OF THE ALTERNATIVE REMEDY BEFORE THE ASSESSING OFFI CER FOR OBJECTING TO THE REASSESSMENT NOTICE UNDER SECTION 148 HAS BEEN CONSIDERABLY SOFTENED BY THE APEX COURT IN GKN DRIVESHAFTS (INDIA) LTD. 'S CASE [2003J 259 ITR 19 IN THE YEAR 2003. IN MY VIEW, THEREFORE, THE GKN DRIVESHAFTS (I NDIA) LTD.'S CASE [2003J 259 ITR 19 DOES NOT RUN COUNTER TO THE CALCUTTA DISCOUNT CO. LTD. CASE [1961]41 ITR 191 (S C) BUT IT MERELY PROVIDES FOR CHALLENGE TO THE REASSESSMENT N OTICE IN TWO STAGES, THAT IS, (I) RAISING PRELIMINARY OBJECTIONS BEFORE THE ASSES SING OFFICER AND IN CASE OF FAILURE BEFORE THE ASSESSING OFFICER ; (II) CHALLENGING THE SPEAKING ORDER OF THE ASSESSIN G OFFICER UNDER SECTION 148 OF THE ACT. II HONN'BLE GUJRAT HI GH COURT IN THE CASE OF ARVIND MILLS LTD. VS. ACW T [2004] 270 (GUJ) WHILE FOLLOWING THE AFORESAID DECISION CONCLUDED TH AT ONCE 11 THE SUPREME COURT STATED THAT THE AO WAS BOUND TO DISPOSE OF THE OBJECTIONS BY PASSING A SPEAKING ORDER, IT W AS NOT OPEN TO THE AUTHORITIES TO CONTEND THAT IN THE ABSE NCE OF ANY PROVISION IN THE ACT, THE AUTHORITIES COULD NOT HAV E PASSED A SPEAKING ORDER. HON'BLE DELHI HIGH COURT IN THE CAS E OF DELHI TOURISM & TRANSPORT DEVELOPMENT CORPORATION LTD. VS . ACIT [2004] 141 TAXMAN 361 (DELHI), WHILE RELYING UPON T HE AFORESAID DECISION OF THE HON'BLE APEX COURT IN GKN DRIVESHARFTS (INDIA) LTD.(SUPRA) DIRECTED TO FOLLOW THE PROCEDURE LAID DOWN BY THE HON'BLE APEX COURT AND P ASS A SPEAKING ORDER BEFORE PASSING THE ASSESSMENT ORDER. . 19. WHILE ADJUDICATING A SIMILAR ISSUE, HON'BLE GU JRAT HIGH COURT IN THE CASE OF MGM EXPORTS VS. DCIT [201 0] 23 DTR 356 (GUJ) OBSERVED AS UNDER:- 'APPLYING THE AFORESAID SETTLED LEGAL POSITION TO T HE FACTS OF THE CASE IT IS APPARENT THAT THE ACTION OF THE RESPONDENT AUTHORITY IN FRAMING THE REASSESSMENT ORDER, WITHOUT FIRST DISPOSING OF THE PRELIMINARY OBJECTIONS RAISED BY THE PETITIONER, CANNOT BE SUSTAINED. ACCORDINGLY, THE REASSESSMENT ORDER DATE D 12 DECEMBER 16, 2008 IS HEREBY QUASHED AND SET ASIDE AND THE RESPONDENT AUTHORITY SHALL DISPOSE OF THE PRELIMINARY OBJECTIONS BY PASSING A SPEAKING ORDER AND ONLY THEREAFTER PROCEED WITH THE REASSESSMENT PROCEEDINGS IN ACCORDANCE WITH LAW.' 20. IN VIEW OF THE AFORESAID DECISIONS OF THE HON' BLE COURTS, AND THE SELF EVIDENT FACT OF THE A.O. NOT PASSING ANY S PEAKING ORDER IN DISPOSING THE ASSESSEE'S OBJECTIONS, AGAINST T THE NOTICE U/S 148 BEFORE PROCEEDING WITH THE ASSESSMENT, IT IS HELD T HAT THE SUBSEQUENT ASSESSMENT ORDER IS BAD IN LAW AND DESER VING OF BEING QUASHED. 21. IN VIEW OF THE FACT THAT THE REOPENING OF THE CASE HAS BEEN HELD TO BE INVALID AS THE SAME WAS DONE ON THE BASI S OF A VALUATION REPORT FROM THE VALUATION OFFICER WHICH WAS OBTAIN ED BY AN INVALID REFERENCE AND ALSO SINCE THE AO PROCEEDED WITH THE ASSESSMENT WITHOUT DISPOSING OFF THE OBJECTIONS RAISED BY THE ASSESSEE TO THE NOTICE U/S. 148, IT IS HELD THAT BOTH THE REOPENIN G OF THE CASE AND THE CONSEQUENT ASSESSMENT ORDER ARE BAD IN LAW. IN THE CIRCUMSTANCES, THE ADDITION CANNOT BE SUSTAINED. AS THE ASSESSMENT 13 CANNOT BE SUSTAINED ON LEGAL GROUNDS, THE ADDITION OF RS. 34,10,713/- U/S. 69A AS ALLEGED UNDISCLOSED INVESTM ENT IS DELETED. 6.1 ON GOING THROUGH THE AFORESAID FINDING OF THE L D. CIT(A) ON THE LEGAL ISSUE. I FIND THAT LD. CIT(A) BY RESPECTFULLY FOLLOWING TH E JUDGMENT OF THE HONBLE SUPREME COURT I.E. IN THE CASE OF GKN DRIVESHAFTS I NDIA LTD. 259 ITR 19 (SC) AND FURTHER FOLLOWING THE DECISION OF THE HONBLE GUJA RAT HIGH COURT IN THE CASE OF ARVIND MILLS LTD. VS. ACWT (2004) 270 ITR 469 (GUJ. ) AND HAS RIGHTLY OBSERVED THAT AO HAS NOT PASSED THE SPEAKING ORDER IN DISPO SING OF THE ASSESSEES OBJECTIONS AGAINST THE NOTICE U/S. 148 OF THE I.T. ACT, BEFORE PROCEEDING WITH THE ASSESSMENT, HENCE, HE HELD THAT THE SUBSEQUENT ASSE SSMENT ORDER IS BAD IN LAW AND DESERVING OF BEING QUASHED. I ALSO FIND THAT LD. CIT(A) ALSO OBSERVED THAT THAT REOPENING OF THE CASE HAS BEEN HELD TO BE INVA LID AS THE SAME WAS DONE ON THE BASIS OF THE VALUATION REPORT FROM THE VALUATIO N OFFICER WHICH WAS OBTAINED BY AN INVALID REFERENCE AND ALSO SINCE THE AO PROCE EDED WITH THE ASSESSMENT WITHOUT DISPOSING OFF THE OBJECTIONS RAISED BY THE ASSESSEE TO THE NOTICE U/S. 148 OF THE ACT AND ACCORDINGLY HE HELD THAT BOTH THE R EOPENING OF THE CASE AND THE CONSEQUENT ASSESSMENT ORDER ARE BAD IN LAW. IN VI EW OF LD. CIT(A) DELETED THE ADDITION OF RS. 34,10,713/- U/S. 69A AS ALLEGED UN DISCLOSED INVESTMENT IS DELETED. THEREFORE, I DO NOT SEE ANY REASON TO IN TERFERE WITH THE WELL REASONED FINDING OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE, HENCE, I UPHOLD THE SAME. 14 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/12/2016. SD/- [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 26/12/2016 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 15