NANCY SALES PVT. LTD., NEW DELHI V. ITO, WARD- 13(1), NEW DELHI

ITA 4129/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3893 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 30-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Bonafide belief; Tangible material; Accommodation entries; Tax effect; Reassessment proceedings
• Section: 69C; 133(6); 147; 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.4129/DEL/2017 ASSESSMENT YEAR : 2007-08 NANCY SALES PVT. LTD., C/O ANIL JAIN DD & CO., CAS, 611, SURYA KIRAN BUILDING, 19, KG MARG, NEW DELHI. VS. ITO, WARD- 13(1), NEW DELHI. PAN : AACCN2492G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL KUMAR JAIN, CA DEPARTMENT BY : SHRI AMIT JAIN, SR.DR DATE OF HEARING : 24-10-2017 DATE OF PRONOUNCEMENT : 19-01-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 06.04.2017 OF CIT(A)- 38, DELHI RELATING TO ASSESSM ENT YEAR 2007-08. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY AND FILED ITS ORIGINAL RETURN OF INCOME ON 28.10.2007 DECLARING T OTAL INCOME OF RS.4,624/-. THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE INVESTIGATION WING THAT A SEARCH OPERATION U/S 132 WAS CONDUCTED IN THE PREMI SES OF SHRI TARUN GOYAL, A CHARTERED ACCOUNTANT. IT WAS FOUND DURING THE SEAR CH AND POST SEARCH ENQUIRIES THAT HE HAD CREATED A NUMBER OF PRIVATE LIMITED COM PANIES AND FIRMS FOR PROVIDING ACCOMMODATION ENTRIES. THE DIRECTORS OF THESE COMPANIES WERE HIS 2 ITA NO.4129/DEL/2017 EMPLOYEES WHO WORKED IN HIS OFFICE AS PEONS, RECEPT IONISTS ETC. A NUMBER OF BANK ACCOUNTS IN VARIOUS BANKS WERE OPENED IN THE N AMES OF THESE COMPANIES AND HIS EMPLOYEES IN WHICH HUGE CASH DEPOSITS WERE MADE. LATER ON CHEQUES WERE ISSUED TO VARIOUS BENEFICIARIES DISGUISING THE WHOLE TRANSACTION AS GENUINE. 3. THE LETTER OF THE ADIT (INV.) ALSO PROVIDED THE LIST OF VARIOUS BENEFICIARIES WHO HAD TAKEN ACCOMMODATION ENTRIES F ROM VARIOUS COMPANIES BEING FLOATED BY SHRI TARUN GOYAL. AS PER THE SAID DETAILS, THE ASSESSEE M/S NANCY SALES PVT. LTD. HAS TAKEN ACCOMMODATION ENTRY OF RS.5,00,000/- FROM A COMPANY CALLED THAR STEELS PVT. LTD. FLOATED BY SHR I TARUN GOYAL. SINCE THE ASSESSEE WAS ALSO A BENEFICIARY OF ACCOMMODATION EN TRIES OF RS.5,00,000/- FROM M/S THAR STEELS PVT. LTD. A COMPANY MANAGED AND CON TROLLED BY SHRI TARUN GOYAL WHO WAS IDENTIFIED TO BE ENGAGED IN THE BUSIN ESS OF PROVIDING ACCOMMODATION ENTRIES AND HAD ALSO ADMITTED THE SAM E ON OATH, THE ASSESSING OFFICER INITIATED PROCEEDINGS U/S 147 BY RECORDING REASONS THAT THE ASSESSEE HAD NOT DISCLOSED ITS TRUE INCOME AND NOTICE DATED 26.0 3.2012 WAS ISSUED U/S 148 OF THE I.T. ACT. 4. THE ASSESSEE FILED A LETTER DATED 16.04.2012 STA TING THAT THE RETURN ALREADY FILED ON 28.10.2007 MAY BE TREATED TO HAVE BEEN FIL ED IN RESPONSE TO NOTICE U/S 148 OF THE I.T. ACT. THE ASSESSEE APPLIED FOR THE REASONS RECORDED FOR SUCH REOPENING WHICH WERE DULY PROVIDED TO THE ASSESSEE. HOWEVER, THE ASSESSEE DID NOT FILE ANY OBJECTION. DURING THE COURSE OF ASSES SMENT PROCEEDINGS, THE 3 ITA NO.4129/DEL/2017 ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS RA ISED FRESH SHARE CAPITAL OF RS.14,00,000/- INCLUDING SHARE PREMIUM OF RS.10,50, 000/- FROM TWO COMPANIES, THE DETAILS OF WHICH ARE AS UNDER :- (A) M/S THAR STEELS PVT. LTD. - RS.5,00,000/- (B) M/S MODERATE CREDIT CORPORATION PVT. LTD. - R S.9,00,000/- 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED VARIOUS DETAILS SUCH AS COPY OF SHARE APPLICATION FORM, COP Y OF PAN OF M/S THAR STEELS PVT. LTD., CONFIRMATION OF INVESTMENTS FROM THIS CO MPANY, COPY OF CERTIFICATE OF INCORPORATION OF M/S THAR STEELS PVT. LTD.. SIMILA R DOCUMENTS WERE ALSO PRODUCED IN THE CASE OF M/S MODERATE CREDIT CORPORA TION PVT. LTD.. HOWEVER, DESPITE BEING ASKED BY THE ASSESSING OFFICER, THE A SSESSEE DID NOT PRODUCE THE DIRECTORS OF THE ABOVE COMPANIES. SINCE THE ASSESS EE FAILED TO PRODUCE THE DIRECTORS OF THE ABOVE TWO COMPANIES, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE DOCUMENTS SO PRODUCED BEFORE HI M DO NOT FULFILL THE CRITERIA REGARDING THE CREDITWORTHINESS OF THE ABOVE TWO COM PANIES. HE FURTHER OBSERVED THAT THE ASSESSEE COMPANY IS NOT DOING ANY SUBSTANTIAL BUSINESS SO AS TO COMMAND SUCH HIGH PREMIUM ON THE SHARE ISSUED BY IT. FURTHER, OUT OF THE SHARE CAPITAL AND PREMIUM RECEIVED BY IT DURING THE YEAR A SUM OF RS.1,79,525/- HAS BEEN GIVEN AS ADVANCES AGAINST THE PROPERTIES A ND THE BALANCE AMOUNT HAS BEEN RETAINED IN THE BANK ACCOUNT. HE, THEREFORE, CAME TO THE CONCLUSION THAT 4 ITA NO.4129/DEL/2017 NEITHER THE ASSESSEE COMPANY WAS IN NEED OF ANY FUR THER SHARE CAPITAL NOR ITS FINANCIAL POSITION WAS SO STRONG THAT ANY PRUDENT I NVESTOR WOULD PURCHASE ITS SHARES AT A PREMIUM. IN VIEW OF THE ABOVE AND RELY ING ON VARIOUS DECISIONS INCLUDING THE DECISIONS IN THE CASE OF M/S NOVA PRO MOTERS & FINLEASE PVT. LTD., M/S N.R. PORTFOLIO PVT. LTD., M/S NLPUN BUILDERS PV T. LTD. AND M/S NEELKANTH ISPAT UDYOG PVT. LTD., THE ASSESSING OFFICER MADE A DDITION OF RS.14,00,000/- RECEIVED FROM THE ABOVE TWO COMPANIES AS UNEXPLAINE D CASH CREDIT U/S 68 OF THE I.T. ACT. FURTHER, HE MADE ADDITION OF RS.28,000/- BEING UNEXPLAINED EXPENDITURE SPENT FROM UNDISCLOSED SOURCES FOR OBTA INING THE ABOVE ACCOMMODATIONS ENTRIES U/S 69C OF THE I.T. ACT. 6. BEFORE THE LD. CIT(A), THE ASSESSEE CHALLENGED T HE VALIDITY OF THE RE- ASSESSMENT PROCEEDINGS AS WELL AS THE ADDITION ON M ERIT. SO FAR AS THE VALIDITY OF RE-ASSESSMENT U/S 147 IS CONCERNED, THE LD. CIT( A) DISMISSED THE SAID GROUND BY OBSERVING AS UNDER :- 4.2 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER, T HE SUBMISSIONS OF THE APPELLANT AND THE CASES LAWS RELIED UPON BY APPELLANT. THIS GROUND OF APPEAL CHALLENGES THE LEGAL VALIDITY OF ISSUE OF NOTICE UNDER SECTION 147 READ WITH 148 OF THE INCOME TAX ACT. IN THIS CA SE ASSESSING OFFICER AFTER RECEIPT OF INFORMATION FROM THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT ISSUED NOTICE U/S 147 R.W.S 148 OF IT ACT ON THE BASIS OF WHICH THE ASSESSMENT WAS REOPENED. IN THE CASE OF P RATIBHA FINVEST P. LTD. VS ITO 14(3), NEW DELHI [2013] 215 TAXMAN 0470 HON'BLE DELHI HIGH COURT HAS HELD AS UNDER:- 9. IN THE OPINION OF THIS COURT, THE LAW AS IT EXISTED ALWAYS WAS THAT IF A VALID NOTICE UNDER SECTION 147 WAS ISSUED BY THE AO, THE SCOPE OF SCRUTINY AND FINAL ASSESSMENT MADE IN THE REOPENING PROCEEDINGS WAS NOT CONDITIONED UPON THE MATERIAL WHICH IMPELLED HI M TO ISSUE NOTICE. TO HOLD SUCH A VIEW WOULD BE TO IMPINGE ON THE CONC EDEDLY WIDE POWER CONFERRED UPON THE REVENUE IN SECTION 147/148 AND UNDERMINE 5 ITA NO.4129/DEL/2017 ITS OBJECTIVE. CONSEQUENTLY, THE W.P.(C) 7538/12 AND 307/12 PAGE 10 APPELLANT'S CONTENTION IN THIS REGARD ARE REJECTED. 10. THIS COURT HAS CAREFULLY CONSIDERED THE SUBMISS IONS. AS REGARDS THE CHALLENGE TO THE REOPENING OF PROCEEDINGS IS CONCERNED, THE COURT IS SATISFIED THAT THE NOTICE UNDER SECTION 147 REFLECT ED DUE APPLICATION OF MIND TO OBJECTIVE MATERIAL FURNISHED TO THE AO, I.E. BY WAY OF INVESTIGATION REPORT WHICH COULD HAVE GIVEN RISE TO A BONAFIDE BELIEF, LEGITIMATELY FALLING WITHIN SECTION 147.' 4.3 RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE DELH I HIGH COURT IN THE CASE OF PRATIBHA FINVEST P. LTD. SUPRA, I HOLD THAT AO HAS FULFILLED THE STATUTORY CONDITIONS PRESCRIBED U/S 147 R.W.S 148 O F THE IT ACT AND HAS ISSUED NOTICE U/S 147 AFTER DUE APPLICATION OF MIND TO MATERIAL FURNISHED TO THE AO BY INVESTIGATION WING. THESE GROUNDS OF A PPEAL ARE DISMISSED. 7. SO FAR AS ADDITION OF RS.9,00,000/- FROM M/S MOD ERATE CREDIT CORPORATION PVT. LTD. IS CONCERNED, LD. CIT(A) DELE TED THE SAME AND THE REVENUE IS NOT IN APPEAL BEFORE THE TRIBUNAL. THER EFORE, I AM NOT CONCERNED WITH THE SAME. HOWEVER, THE LD. CIT(A) SUSTAINED T HE ADDITION OF RS.5,00,000/- MADE BY THE ASSESSING OFFICER ON THE GROUND THAT TH E INFORMATION WAS RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT IN RE SPECT OF THE ACCOMMODATION ENTRIES OF RS.5,00,000/- FROM M/S THAR STEELS PVT. LTD., A COMPANY MANAGED AND CONTROLLED BY SHRI TARUN GOYAL, WHO WAS IDENTIF IED TO BE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES AND ALS O ADMITTED THE SAME ON OATH. THE ASSESSING OFFICER HAS CONDUCTED EXTENSIV E ENQUIRIES IN ORDER TO SUBSTANTIATE THE FINDING OF THE INVESTIGATION WING THAT THE SHARE CAPITAL OF RS.5,00,000/- ALLEGEDLY RECEIVED FROM M/S THAR STEE LS PVT. LTD. IS A PAPER COMPANY CONTROLLED AND MANAGED BY SHRI TARUN GOYAL FOR THE PURPOSE OF 6 ITA NO.4129/DEL/2017 PROVIDING ACCOMMODATION ENTRIES AND IS A SHAM TRANS ACTION. RELYING ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF ONASSIS AXLES (P.) LTD. VS. CIT REPORTED IN 44 TAXMANN.COM 408, LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER IN MAKING THE ADDITION OF RS.5,00 ,000/- U/S 68 OF THE I.T. ACT AND AMOUNT OF RS.10,000/- U/S 69C OF THE I.T. ACT B EING UNEXPLAINED EXPENDITURE FOR GETTING SUCH ACCOMMODATION ENTRIES. 8. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW LD CIT APPEAL HAS FAILED TO APPRECIATE THAT THE INITIA TION OF PROCEEDING U/S 147 AND ISSUE OF NOTICE U/S 148 IS ILLEGAL AND BAD IN LAW AND CONSEQ UENTLY THE ASSESSMENT MADE REQUIRES TO BE QUASHED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW LD CIT APPEAL HAS FAILED TO APPRECIATE THAT THE IMPUGN ED ORDER PASSED U/S 147/143(3) OF THE IT ACT, IS ILLEGAL, BAD IN LAW, WITHOUT JURISDI CTION AND CONTRARY TO THE FACTS. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF THE LAW, THE LD. CIT APPEAL HAS ERRED IN SUSTAINING AN ADDIT ION OF RS. 5,00,000/- ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED BY THE APPELLANT D URING THE YEAR. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF THE LAW, THE LD. CIT APPEAL HAS ERRED IN SUSTAINING AN ADDIT ION OF RS. 10,000/- ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69C. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. AO HAS ERRED IN LAW IN INITIATING THE PENALTY PROCEEDINGS U/S 271(1 )(C) OF THE INCOME TAX ACT 1961. 6. THAT THE LD. AO HAS ERRED IN LAW IN CHARGING OF INTEREST U/S 2348 & 234C OF THE IT ACT. 7. THAT THE APPELLANT CRAVES LEAVE TO RESERVE TO IT SELF THE RIGHT TO ADD, ALTER AMEND, VARY, MODIFY AND/OR WITHDRAW AND GROUND(S) O F APPEAL AT OR BEFORE THE TIME OF HEARING. 9. LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMI TTED THAT NO TANGIBLE MATERIAL WAS AVAILABLE BEFORE THE ASSESSING OFFICER AND THE REOPENING OF THE ASSESSMENT U/S 147 BY ISSUING NOTICE U/S 148 OF THE I.T. ACT WAS ON BORROWED 7 ITA NO.4129/DEL/2017 SATISFACTION. REFERRING TO THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF SIGNATURE HOTELS (P) LTD. VS. ITO REPORTED IN 338 ITR 51 AND VARIOUS OTHER DECISIONS FILED IN THE PAPER BOOK, HE SUBMITT ED THAT THE REOPENING ON THE BASIS OF REPORT OF INVESTIGATION WING WITHOUT APPLI CATION OF MIND BY THE ASSESSING OFFICER IS NOT VALID. 10. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, H E SUBMITTED THAT THE ASSESSEE HAS FILED ALL THE RELEVANT DETAILS BEFORE THE ASSES SING OFFICER TO SUBSTANTIATE THE IDENTIFY AND CREDITWORTHINESS OF THE SHARE APPLICAN T COMPANY AND THE GENUINENESS OF THE TRANSACTION. THE PAYMENT WAS RE CEIVED BY ACCOUNT PAYEE CHEQUE. THE COMPANY HAS REPLIED TO THE NOTICE ISSU ED U/S 133(6) OF THE I.T. ACT. MERELY BECAUSE THE ASSESSEE HAS NOT PRODUCED THE DI RECTOR, THE SAME CANNOT BE A GROUND TO DISBELIEVE THE CREDITWORTHINESS OF THE SHARE APPLICANT COMPANY. REFERRING TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VICTOR ELECTRODES REPORTED IN 329 ITR 271, LD. COUN SEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO PARA 9 OF THE ORDER WHICH READS AS UNDER :- 9. THERE WAS NO LEGAL OBLIGATION ON THE ASSESSEE T O PRODUCE SOME DIRECTOR OR OTHER REPRESENTATIVE OF THE APPLICANT COMPANIES BEF ORE THE ASSESSING OFFICER. THEREFORE, FAILURE OF ASSESSEE TO PRODUCE THEM COUL D NOT, BY ITSELF, HAVE JUSTIFIED THE ADDITIONS MADE BY THE ASSESSING OFFICER, WHEN THE A SSESSEE HAD FURNISHED DOCUMENTS, ON THE BASIS OF WHICH, THE ASSESSING OFFICER, IF HE SO WANTED, COULD HAVE SUMMONED THEM FOR VERIFICATION. NO ATTEMPT WAS MADE BY THE A SSESSING OFFICER TO SUMMON THE DIRECTORS OF THE APPLICANT COMPANIES. THE ADDRESSES OF THESE COMPANIES MUST BE AVAILABLE ON THE SHARE APPLICATIONS, MEMORANDUM AND ARTICLES OF ASSOCIATION AND THEIR INCOME TAX RETURNS. IF THE ASSESSING OFFICER HAD ANY DOUBT ABOUT IDENTITY OF THE SHARE APPLICANTS, HE COULD HAVE SUMMONED THE DIRECT ORS OF THE APPLICANT COMPANIES. NO SUCH ATTEMPT WAS, HOWEVER, MADE BY HIM. THEREFOR E, THE COMMISSIONER OF INCOME TAX(APPEALS) AND THE INCOME TAX APPELLATE TRIBUNAL, IN OUR VIEW WERE JUSTIFIED IN 8 ITA NO.4129/DEL/2017 HOLDING THAT THE IDENTITY OF SHARE APPLICANTS AND T HE GENUINENESS OF THE TRANSACTIONS HAD BEEN ESTABLISHED BY THE ASSESSEE. 11. HE ALSO RELIED ON THE FOLLOWING DECISIONS :- (A) CIT VS. INSECTICIDES INDIA LTD., 357 ITR 330. (B) ITO VS. MAYA GUPTA, ITA NO.3435/DEL/2013. (C) CIT VS. G&G PHARMA INDIA LTD., ITA NO.545/2015 . (D) SABH INFRASTRUCTURE LTD. VS. ACIT, W.P. (C) 13 57/2016. (E) MEENAKSHI OVERSEAS VS. PCIT, ITA NO.692/2016. (F) ITO VS. PRATEEK SECURITIES (P) LTD., ITA NO.78 &2823/DEL/2013 (G) CIT VS. GANGESHWARI METALS (P) LTD., 361 ITR 1 0. (H) GOODVIEW TRADING PVT. LTD. VS. PCIT, ITA NO.37 7/2016 (I) PARBHATAM INVESTMENT PVT. LTD. VS. ACIT, ITA N O.2525/DEL/2015. (J) ARCELI REALTY LTD. VS. ITO, ITA NO.6492/MUM/20 16. (K) ITO VS. N.C. CABLES LTD., ITA NO.4122/DEL/2009 . 12. HE ACCORDINGLY SUBMITTED THAT THE RE-ASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER BEING INVALID THE ENTIRE ASSE SSMENT ORDER SHOULD BE QUASHED. EVEN ON MERIT HE ARGUED THAT SINCE THE AS SESSEE HAS PROVED THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICAN T AND THE GENUINENESS OF THE TRANSACTION, THE ORDER OF THE LD. CIT(A) SHOULD BE SET-ASIDE. HE FURTHER SUBMITTED THAT THAT IN THE ASSESSMENT YEAR 2008-09, THE LD. CIT(A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.10 ,00,000/- BEING SHARE CAPITAL AND SHARE APPLICATION MONEY RECEIVED FROM M /S THAR STEELS PVT. LTD.. THE APPEAL FILED BY THE REVENUE WAS HOWEVER DISMISS ED BY THE TRIBUNAL FOR LOW TAX EFFECT. HE ACCORDINGLY SUBMITTED THAT THE ORDE R OF THE LD. CIT(A) BE SET- ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE BE ALL OWED. 9 ITA NO.4129/DEL/2017 13. LD. DR ON THE OTHER HAND STRONGLY RELIED ON THE ORDER OF THE LD. CIT(A). HE SUBMITTED THAT THE TRIBUNAL IN THE CASE OF TARUN GOYAL AND BATCH OF OTHER APPEALS VIDE CONSOLIDATED ORDER DATED 18.10.2013 HA S RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATIO N. THE SHARE APPLICANT COMPANY M/S THAR STEELS PVT. LTD. ALSO APPEARS IN T HE SAID LIST. THEREFORE, THE ISSUE MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. 14. SO FAR AS VALIDITY OF THE RE-ASSESSMENT PROCEED INGS ARE CONCERNED, HE SUBMITTED THAT THE ASSESSING OFFICER ON THE BASIS O F THE REPORT OF THE INVESTIGATION WING HAS REOPENED THE ASSESSMENT U/S 147 AND NOTICE U/S 148 HAS BEEN ISSUED AFTER APPLY OF MIND PROPERLY BEFORE SUC H REOPENING. THEREFORE, THE REOPENING BEING VALID, THE GROUND RAISED BY THE ASS ESSEE ON THIS ISSUE SHOULD BE DISMISSED. 15. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOUS DECIS IONS CITED BEFORE ME. A PERUSAL OF THE REASONS FOR REOPENING OF THE CASE FO R THE IMPUGNED ASSESSMENT YEAR, COPY OF WHICH IS PLACED AT PAGE 5 AND 6 OF TH E PAPER BOOK, SHOWS THAT THE REOPENING WAS MADE ON THE BASIS OF THE REPORT OF TH E INVESTIGATION WING AND THERE IS NO INDEPENDENT APPLICATION OF MIND BY THE ASSESSING OFFICER FOR SUCH REOPENING. THE JURISDICTIONAL HIGH COURT IN A NUMB ER OF CASES HAS HELD THAT THE REOPENING ON THE BASIS OF REPORT OF THE INVESTIGATI ON WING WITHOUT INDEPENDENT 10 ITA NO.4129/DEL/2017 APPLICATION OF MIND BY THE ASSESSING OFFICER IS NOT VALID. ACCORDINGLY, THE REASSESSMENT PROCEEDINGS WERE HELD TO BE ILLEGAL. SINCE IN THE INSTANT CASE THE REOPENING HAS BEEN MADE ON THE BASIS OF REPORT OF T HE INVESTIGATION WING AND THERE IS NO INDEPENDENT APPLICATION OF MIND BY THE ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT U/S 147 BY ISSUANCE OF NOTICE U/S 148, THEREFORE, I HOLD THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER IS NOT PROPER. THEREFORE, I HOLD THAT THE REASSESSMENT PR OCEEDINGS INITIATED BY THE ASSESSING OFFICER IS ILLEGAL AND ACCORDINGLY THE SU BSEQUENT PROCEEDINGS ALSO BECOME ILLEGAL. SINCE THE ASSESSEE SUCCEEDS ON THI S LEGAL GROUND, THE OTHER GROUNDS BEING ACADEMIC IN NATURE ARE NOT BEING ADJU DICATED. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH JANUARY, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 19-01-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI