Neel Builders Pvt Ltd, New Delhi V. ITO WARD - 18(1), New Delhi

ITA 6336/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2106 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 29-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VED PRAKASH MISHRA
• Keywords: Bogus Share capital; Unexplained investment; Search and seizure; Tangible material; Accommodation entries; Reason to believe; Documents seized; Reassessment proceedings; Set aside
• Section: 143(3); 143(1); 43; 48; 13; 147; 131; 148; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.6336/DEL./2019 ASSESSMENT YEAR 2008-09 NEEL BUILDERS PVT. LTD. C/O KAPIL GOEL, ADV. F-26/124, SECTOR-7, ROHINI, NEW DELHI. PAN NO. AABCN9572C VS. INCOME TAX OFFICER, WARD 18(1), NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI KAPIL GOEL, ADVOCATE FOR REVENUE : SHRI VED PRAKASH MISHRA, SR. DR DATE OF HEARING : 23.11 .2 020 DATE OF PRONOUNCEMENT : 02 .1 2 .20 20 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-37, NEW DELHI DATED 28.06 .2019 FOR AY 2008-09, CHALLENGING THE REOPENING OF THE ASSESS MENT U/S 147/148 OF THE INCOME TAX ACT, 1961 AND ADDITION OF RS. 25 LAKHS AND RS. 45,000/- U/S 68 OF THE ACT. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL ON RECORD. 2 ITA.NO.6336/DEL./2019 3. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE COMPANY FILED ITS RETURN OF INCOME ON 08.07.2008 FOR ASSESS MENT YEAR UNDER APPEAL DECLARING INCOME AT RS. 5,340/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT. DURING THE YEAR, COMPANY WAS ENGAGED IN BUSINESS OF BUILDING AND CONSTRUCTIO N. THE AO HAS RECEIVED INFORMATION FROM DIRECTOR OF INCOME TAX (INVESTIGATION-II) DATED 12.03.2013 MENTIONING THER EIN THAT A SEARCH OPERATION WAS CONDUCTED IN THE CASE OF SHRI S.K. JAIN GROUP OF CASES IN WHICH THE ASSESSEE HAS ALSO FOUND TO HAVE RECEIVED ACCOMMODATION ENTRY FROM M/S NISHA HOLDING LIMITED RS. 9 LAKHS, M/S BRITE INDU RESOURCES LTD. RS. 9 LAKHS AND M/S FINAGE LEASING & FINANCE INDIA LTD. R S. 7 LAKHS, TOTALING TO RS. 25 LAKHS. THE AO INITIATED THE REASSESSMENT PROCEEDINGS AND AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE MADE ADDITION OF RS. 25 LAKHS U/S 68 OF THE ACT AND FURTHER MADE ADDITION OF RS. 45,0 00/- ON ACCOUNT OF UNEXPLAINED INVESTMENT. THE LD. CIT(A) DISMISSED THE APPEAL OF ASSESSEE. 3 ITA.NO.6336/DEL./2019 4. LD. COUNSEL FOR ASSESSEE REFERRED TO COPY OF THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT WHICH IS F ILED AT PAGE 1 & 2 OF THE PAPER BOOK AND READS AS UNDER: ANNEXURE A REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSE SSMENT IN THE CASE OF M/S NEEL BUILDERS PVT. LTD. AY 2008- 09 (PAN AABCN9572C) A SEARCH AND SEIZURE ACTION U/S 132/133A OF THE I NCOME TAX ACT, 1961 WAS CONDUCTED AT THE RESIDENTIAL AND BUSINESS PREMISES OF SHRI SURENDER KUMAR JAIN GROUP OF CASES (ENTRY OPERATOR). DURING THE COURSE OF POST SEARCH INVEST IGATION AND PREPARATION OF APPRAISAL REPORT IT HAS BEEN EVIDENT LY ESTABLISHED THAT SHRI SURENDER KUMAR JAIN IS KNOWN ENTRY PROVID ERS AND IS IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARY COMPANIES/ENTITIES/PERSONS THROUGH CHEQ UES THROUGH A NUMBER OF PAPER OF DUMMY COMPANIES IN LIE U OF CASH. THESE DUMMY COMPANIES ARE TOTALLY MANAGED AN D CONTROLLED BY SHRI SURENDER KUMAR JAIN. DURING THE COURSE OF SEARCH ACTION VARIOUS INCRIM INATING DOCUMENTS WERE FOUND AND SEIZED. THESE DOCUMENTS I NCLUDES DATE WISE AND MONTH WISE HAD WRITTEN CHEQUE BOOKS A ND CASH BOOKS MAINTAINED BY SHRI SURENDER KUMAR JAIN OVER A LONG PERIOD OF TIME. IN THESE CHEQUE BOOKS AND CASH BOO KS DETAILS OF CHEQUE PROVIDED TO THE BENEFICIARY COMPANIES/ENTITI ES/PERSONS COMPANIES/ENTITIES/PERSON WERE RECORDED DATE WISE. FROM THE EXAMINATION OF THE DOCUMENTS SEIZED FROM THE RESIDENCE OF SHRI SURENDER KUMAR JAIN, IT CLEARLY A PPEARS THAT THE ASSESSEE COMPANY HAD OBTAINED ACCOMMODATION ENT RIES FROM VARIOUS PAPER ENTITIES TO SHRI SURENDER KUMAR JAIN IN LIEU OF CASH DURING THE FY 2007-08 RELEVANT TO THE AY 20 08-09 FOR THE TOTAL AMOUNT MENTIONED AGAINST THEIR NAMES. TH ESE BOGUS SHARE CAPITAL AND PREMIUM HAS CLEARLY ESCAPED TAXAT ION IN THESE ASSESSMENT YEARS THEREFORE, THESE AMOUNTS ARE REQUIRES TO BE TAXED IN THE HANDS OF THESE COMPANIES BY INIT IATING ACTION UNDER SECTION 148 OF THE INCOME TAX ACT, 1961. 4 ITA.NO.6336/DEL./2019 AS PER THE INFORMATION RECEIVED FROM THE INVESTIG ATION WING OF THE DEPARTMENT, VIDE LETTER NO. DIT(INV.)- II/U/S148/2012-13/194 DATED 12/03/2013 DURING FY 20 07-08 M/S NEEL BUILDERS PVT. LTD. HAS RECEIVED TOTAL ACCO MMODATION ENTRIES OF RS. 25,00,000/- FROM THE ENTITIES MANAGE D AND CONTROLLED BY SHRI SURENDER KUMAR JAIN FOR PROVIDIN G ACCOMMODATION ENTRIES TO THE BENEFICIARIES. THE DE TAILS OF ENTRY ARE AS UNDER: S.NO. ENTRY DATE PARTICULAR OF ENTITY THROUGH WHOM ENTRY TAKEN NAME OF THE BANK CHEQUE NO. CHEQUE DATE AMOUNT 1. 13/07/2007 NISHA HOLDING LTD. KOTAK 000147 14/07/2007 RS. 9,00,000/- 2. 13/07/2007 BRITE INDU RESOURCES LTD. KOTAK 000271 14/07/2007 RS. 9,00,000/- 3. 13/07/2007 FINAGE LEASE & FINANCE INDIA LTD. KOTAK 000002 14/07/2007 RS. 7,00,000/- TOTAL RS. 25,00,000/- I HAVE PERUSED THE INFORMATION RECEIVED FROM THE INVESTIGATION WING, NEW DELHI. THE INVESTIGATION W ING OF THE DEPARTMENT HAS SENT COMPREHENSIVE DETAILS COMPRISIN G INTER ALIA THE BENEFICIARYS NAME, VALUE OF ENTRY TAKEN ETC. IN THE AFORESAID CASE RETURN OF INCOME WAS FILED ON 08/07/2008 DECLARING INCOME OF RS. 5,340/-. FURTHE R, IT IS NOTICED THAT THE ASSESSEE COMPANY M/S NEEL BUILDERS PVT. LTD. HAS RECEIVED ACCOMMODATION ENTRIES TO THE TUNE OF R S. 25,00,000/- DURING THE FY 2007-08 RELEVANT TO AY 20 08-09 FROM THE ENTRY OPERATORS AS MENTION IN THE CHART AB OVE. AFTER PERUSAL AND CAREFUL CONSIDERATION ABOUT THE INFORMATION PROVIDED BY THE INVESTIGATION WING OF T HE DEPARTMENT, I HAVE REASON TO BELIEVE THAT INCOME OF THE ASSESSEE COMPANY TO THE EXTENT OF RS. 25,00,000/- H AS ESCAPED ASSESSMENT FOR THE AY 2008-09, THEREFORE, PROCEEDIN GS U/S 147 I.E. CLAUSE (B) OF EXPLANATION 2 OF PROVISIONS OF S ECTION 147 OF THE IT ACT, 1961 IS PROPOSED TO BE INITIATED FOR THE AY 2008-09. AS PER THE RECORD, NO SCRUTINY U/S 143(3) HAS BEEN DON E IN THE CASE FOR AY 2008-09. 5 ITA.NO.6336/DEL./2019 KIND APPROVAL FOR ISSUING NOTICE U/S 147 OF THE I .T. ACT, 1961 IS SOLICITED. SD/- (VIRENDRA SINGH) INCOME-TAX OFFICER WARD 18(1), NEW DELHI. 5. HE HAS SUBMITTED THAT THE SAME AO SH. VIRENDER S INGH, ITO, WARD-18(1), NEW DELHI RECORDED THE SIMILAR REA SONS FOR REOPENING OF THE ASSESSMENT IN THE CASE OF M/S NEEL KANTH PLYWOOD PVT. LTD. FOR SAME AY 2008-09 IN RESPECT OF M/S FINAGE LEASE & FINANCE INDIA LTD. FOR RECEIPT OF RS . 5,50,000/- AND IDENTICAL REASONS HAVE BEEN RECORDED FOR REOPEN ING OF THE ASSESSMENT AND IN THAT CASE ITAT SMC BENCH IN ITA NO. 6702/DEL/2018 VIDE ORDER DATED 21.08.2019 CONSIDERI NG THE ISSUE IN DETAIL QUASH THE REOPENING OF THE ASSESSME NT. COPY OF THE ORDER IS REPRODUCED AS UNDER: IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER ITA NO.6702/DEL/2018 ASSESSMENT YEAR: 2008-09 M/S. NEELKANTH PLYWOOD PVT. LTD. C/O ANIL JAIN DD & CO. CHARTERED ACCOUNTANTS, 611, SURYA KIRAN BUILDING, 19 K. G. MARG, NEW DELHI-110001 PAN NO.AAACN0805B VS INCOME TAX OFFICER WARD 18 (1) NEW DELHI (APPELLANT) (RESPONDENT) 6 ITA.NO.6336/DEL./2019 APPELLANT BY SH.ANIL KUMAR JAIN, CA RESPONDENT BY SHRI S. L. ANURAGI, SR. DR DATE OF HEARING: 02/07/2019 DATE OF PRONOUNCEMENT: /08/2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 31.08.2018 OF THE CIT(A)-37, NEW DELHI RELATING TO A. Y. 2008-09. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY AND FILED ITS RETURN OF INCOME ON 11.09.200 8 DECLARING TOTAL INCOME OF RS.1,77,185/-. THE RETURN WAS PROC ESSED U/S. 143(1) ON 20.07.2009. SUBSEQUENTLY THE ASSESSING O FFICER RECEIVED INFORMATION FROM INVESTIGATION WING OF THE DEPARTMENT THAT A SEARCH OPERATION WAS CARRIED OUT IN THE CASE OF SH. SURENDER KUMAR JAIN GROUP OF CASES, WHO ARE KNOWN A S ENTRY OPERATORS. DURING THE COURSE OF SEARCH AND POST SEA RCH ENQUIRIES IT WAS ESTABLISHED THAT THE SAID GROUP IS INVOLVED IN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS PERSONS WHOSE NAME S WERE NAMED IN THE REPORT. THE NAME OF THE ASSESSEE COMPA NY ALSO APPEARS IN THE SAID LIST AS ONE OF THE BENEFICIARIE S BEING AMOUNT OF RS.5,50,000/- RECEIVED BY THE ASSESSEE AS SHARE CAP ITAL MONEY FROM FINAGE LEASE & FINANCE P. LTD. THE ASSESSING O FFICER THEREAFTER REOPENED THE ASSESSMENT U/S. 147 AND NOT ICE U/S. 148 WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO THE SAM E THE ASSESSEE SUBMITTED THAT THE ORIGINAL RETURN FILED O N 11.09.2008 MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTIC E U/S.148. THE ASSESSING OFFICER ISSUED NOTICE U/S. 133 (6) TO ORI ENTAL BANK OF COMMERCE FOR COPY OF ACCOUNT OPENING FORM AND BANK STATEMENT FROM 01.04.2007 TO 31.03.2008. HE ALSO ISSUED NOTI CE U/S. 133 7 ITA.NO.6336/DEL./2019 (6) TO M/S. FINAGE LEASE & FINANCE P. LTD. ASKING F OR DOCUMENTS REGARDING ITS TRANSACTION WITH THE ASSESSEE. IT WA S REPLIED BY THE SAID COMPANY THAT IT HAS GIVEN AN AMOUNT OF RS.5,50 ,000/- THROUGH CHEQUE NO. 000111 DATED 24.12.2007 DRAWN ON KOTAK MAHINDRA BANK. THE ASSESSING OFFICER ASKED THE ASS ESSEE TO PRODUCE THE DIRECTOR OF ABOVE SAID COMPANY. HE ALSO ASKED THE ASSESSEE TO SUBSTANTIATE THE IDENTITY AND CREDITWOR THINESS OF THE INVESTOR COMPANY AND GENUINENESS OF THE TRANSACTION . HOWEVER, THE ASSESSEE FAILED TO PRODUCE THE DIRECTOR OF THE INVESTOR COMPANY. REJECTING THE VARIOUS EXPLANATION GIVEN BY THE ASSESSEE AND RELYING ON VARIOUS DECISIONS THE ASSESSING OFFI CER MADE ADDITION OF RS.5,50,000/- TO THE TOTAL INCOME OF TH E ASSESSEE U/S. 68 OF THE IT ACT. ON THE GROUND THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE INGREDIENTS OF THE SAID SECTION. 3. BEFORE CIT(A) THE ASSESSEE APART FROM CHALLENGIN G THE ADDITION ON MERIT CHALLENGED THE VALIDITY OF REASSE SSMENT PROCEEDINGS. HOWEVER, THE LD. CIT(A) WAS NOT SATIS FIED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE AND UPHELD THE V ALIDITY OF REASSESSMENT PROCEEDINGS AND ALSO SUSTAINED THE ADD ITION MADE BY THE ASSESSING OFFICER U/S. 68 OF THE IT ACT. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW THE LD CIT(A) HAS FAILED TO APPRECIATE THAT THE INITIATION OF PROCEEDINGS U/S 147/148 IS ILLEGAL AND BAD IN LAW A ND CONSEQUENTLY THE ASSESSMENT FRAMED BEING ILLEGAL REQUIRES TO BE QUAS HED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF THE LAW, THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS5,50,000/-ON ACCOUNT OF SHARE APPLICATION MONEY A S CASH CREDIT U/S 68. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF THE LAW, THE LD. AO HAS ERRED IN INITIATION OF PENA LTY PROCEEDINGS U/S 271(L](C) OF THE ACT. 8 ITA.NO.6336/DEL./2019 4. THAT THE APPELLANT CRAVES LEAVE TO RESERVE TO ITSEL F THE RIGHT TO ADD, ALTER AMEND, VARY, MODIFY AND/OR WITHDRAW AND GROUN DS OF APPEAL AT OR BEFORE THE TIME OF HEARING. 5. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITTED THAT THE REOPENING OF THE ASSESSMENT BY THE ASSESSI NG OFFICER IS ILLEGAL AND VOID AB INITIO. REFERRING TO THE REASO NS RECORDED BY THE ASSESSING OFFICER, COPY OF WHICH IS PLACED AT PAGES 20 AND 21 OF THE PAPER BOOK HE SUBMITTED THAT THE REASONS HAVE B EEN RECORDED IN A MECHANICAL MANNER AND WITHOUT INDEPENDENT APPL ICATION OF MIND BY THE ASSESSING OFFICER. HE SUBMITTED THAT T HE ASSESSING OFFICER HAS SIMPLY MENTIONED THAT AS PER THE INFORM ATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT VIDE LETTER DATED 12.03.2013 THAT THE ASSESSEE DURING THE FINANCIAL Y EAR 2007-08 HAS RECEIVED TOTAL ENTRIES OF RS.5,50,000/- FROM TH E ENTITIES MANAGED AND CONTROLLED BY THE SH. SURENDER KUMAR JA IN FOR PROVIDING ACCOMMODATION ENTRIES TO THE BENEFICIARIE S. HE SUBMITTED THAT IN THE REASONS RECORDED THERE IS NO REFERENCE OF ANY TANGIBLE MATERIAL OR STATEMENT ALLEGING THE INVOLVEMENT OF T HE ASSESSEE. THE NATURE OF THE ENTRY WHETHER IT IS LOAN OR SHARE CAP ITAL OR PURCHASE HAS NOT BEEN CLEARLY SPELT OUT IN THE REASONS ITSEL F. THUS IT IS CLEAR THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND AND REASONS HAVE BEEN RECORDED ON THE BASIS OF BORROWED SATISFA CTION. THERE IS NO LIVE LINK OR NEXUS BETWEEN THE INFORMATION SO RE CEIVED AND FORMATION OF BELIEF BY THE ASSESSING OFFICER FOR ES CAPEMENT OF INCOME. FOR THE ABOVE PROPOSITION HE RELIED ON THE FOLLOWING DECISIONS :- 1. SABH INFRASTRUCTURE LTD. VS. ACIT OF HONBLE DELHI HIGH COURT 2. MEENAKSHI OVERSEAS VS. PCIT ITA NO.692/2016 3. SIGNATURE HOTELS (P) LTD. VS. ITO OF HONBLE DELHI HIGH COURT REPORTED IN 338 ITR 51 4. CIT VS. INSECTICIDES INDIA LTD. OF HONBLE DELHI H IGH COURT REPORTED IN 357 ITR 330 5. CIT VS. G&G PHARMA INDIA LTD. OF HONBLE DELHI HIGH COURT ITA 9 ITA.NO.6336/DEL./2019 NO.545/2015 6. SO FAR AS THE MERIT OF THE CASE IS CONCERNED HE SUBMITTED THAT TO PROVE THE IDENTITY AND CREDIT WORTHINESS OF THE INVESTOR COMPANY AND GENUINENESS OF THE TRANSACTION THE ASSE SSEE COMPANY HAD FILED THE COPY OF CONFIRMATION, COPY OF SHARE APPLICATION FORM, BANK STATEMENTS, BALANCESHEET, IN COME TAX RETURN, AUDITOR REPORT, BOARD RESOLUTIONS, DIRECTOR S REPORT AND RETURN OF ALLOTMENT OF SHARES BEFORE THE ASSESSING OFFICER. FURTHER THE COMPANY M/S. FINAGE LEASE & FINANCE P. LTD IS HAVING NET WORTH OF RS.14.57 CRORES. HE SUBMITTED THAT THE INVESTOR COMPANY HAS COMPLIED WITH THE NOTICE ISSUE D U/S. 133 (6) BY THE ASSESSING OFFICER. 7. SO FAR AS THE PRODUCTION OF THE DIRECTOR IS CONC ERNED HE SUBMITTED THAT ASSESSEE HAD REQUESTED THE ASSESSING OFFICER TO CALL THEM BY ISSUING NOTICE U/S. 131 WHICH WAS NOT DONE BY THE ASSESSING OFFICER. HE SUBMITTED THAT THE ASSESSEE H AS DISCHARGED THE ONUS CAST ON IT BY PROVING THE VARIOUS INGREDIE NTS OF SECTION 68. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) IS NOT PROPER. HE ALSO REL IED ON THE FOLLOWING DECISIONS :- 1. CIT VS. GANGESHWARI OF HONBLE DELHI HIGH COURT REP ORTED IN 361 ITR 10 2. GOODVIEW TRADING VS. PCIT OF HONBLE DELHI HIGH COU RT REPORTED IN 377/2016 3. CIT VS. VICTOR ELECTRODES 329 ITR 271 4. NANCY SALES PVT. LTD. VS. ITO ITA NO.4129/DEL/2017 5. MOTI ADHESIVES PVT. LTD. VS. ITO ITA NO.3133/DEL/20 18 8. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON T HE ORDER OF THE CIT(A). SO FAR AS THE VALIDITY OF REASSESSMENT PROCEEDINGS ARE CONCERNED THE LD. DR RELIED ON THE FOLLOWING DECISI ONS :- 10 ITA.NO.6336/DEL./2019 1. YOQENDRAKUMAR GUPTA VS ITO (51 TAXMANN.COM 383) (SC )/R20141 227 TAXMAN 374 (SC) 2. RAYMOND WOOLLEN MILLS LTD. V. ITO AND OTHERS 236 IT R 3. YUVRAI V. UNION OF INDIA BOMBAY HIGH COURT R20091 3 15 ITR 84 (BOMBAY)/[2009] 225 CTR 283 (BOMBAY) 4. ACIT VS RAJESH JHAVERI STOCK BROKERS (P.) LTD [ 2007] 161 TAXMAN 316 (SC)/[2007] 291 ITR 500 (SC)/[2007] 210 CTR 30 (SC) 5. DEVI ELECTRONICS PVT LTD VS ITO BOMBAY HIGH COURT 2 017-TIQL-92-HC- MUM- IT 6. ACORUS UNITECH WIRELESS (P.) LTD. VS ACIT DELHI HIGH COURT [2014] 43 TAXMANN.COM 62 (DELHI)/[2014] 223 TAXMAN 181 (DELHI )(MAG)/[2014] 362 ITR 417 (DELHI) 7. PRANAWA LEAFIN (P) LTD. VS. DCIT BOMBAY HIGH COURT [2013] 33 TAXMANN.COM 454 (BOMBA) /[2013] 215 TAXMAN 109 (BOM BAY) (MAG.) 8. PCIT VS. PARAMOUNT COMMUNICATIONS (P.) LTD. DELHI H IGH COURT [2017] 79 TAXMANN.COM 409 (DELHI)/[2017] 392 ITR 444 (DELH I). 9. PARAMOUNT COMMUNICATION (P.) LTD. VS PCIT SUPREME C OURT 2017-TIQL- 253- SC-IT 10. - AMIT POLYPRINTS (P.) LTD. VS PCIT GUJARAT HIGH COU RT T20181 94 TAXMANN.COM 393 (GUJARAT) 11. AASPAS MULTIMEDIA LTD. VS PCIT GUJARAT HIGH COURT T 20171 83 TAXMANN.COM 82 (GUJARAT) 12. MURLIBHAI FATANDAS SAWLANI VS. ITO GUJARAT HIGH CO URT 2016-TIOL- 370-HC-AHM-IT 13. ANKIT AGROCHEM (P) LTD. VS. JCIT RAJASTHAN HIGH COU RT [2018] 89 TAXMANN.COM 45 (RAJASTHAN) 14. RAKESH GUPTA VS. CIT P & H HIGH COURT [2018] 93 TAX MAN.COM 271 (PUNJAB & HARYANA) 9. SO FAR AS THE ADDITION ON MERIT IS CONCERNED THE LD. DR RELIED ON THE FOLLOWING DECISIONS :- 1. PCIT VS. NRA IRON & STEEL (P) LTD. [2019] 103 TAXMA NN.COM 48 (SC) 2. PCIT VS. NDR PROMOTERS PVT. LTD. (2019-TIOL-172-HC- DEL-IT) 10. 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 C ONSIDERED THE VARIOUS DECISIONS CITED BEFORE ME. A PERUSAL OF THE REASONS FOR REOPENING OF THE CASE FOR THE IMPUGNED ASSESSMENT Y EAR, COPY OF WHICH IS PLACED AT PAPER BOOK PAGE NO. 20-21 SHOWS THAT THE REOPENING WAS MADE ON THE BASIS OF THE REPORT OF TH E INVESTIGATION WING AND THERE IS NO INDEPENDENT APPLICATION OF MIN D BY THE ASSESSING OFFICER FOR SUCH REOPENING. THE HONBLE DELHI HIGH COURT 11 ITA.NO.6336/DEL./2019 IN A NUMBER OF CASES HAS HELD THAT THE REOPENING ON THE BASIS OF REPORT OF INVESTIGATION WING WITHOUT INDEPENDENT AP PLICATION OF MIND BY THE ASSESSING OFFICER IS NOT VALID. ACCORD INGLY THE REASSESSMENT PROCEEDINGS WHICH WERE BASED ON THE RE PORT OF THE INVESTIGATION WING AND WITHOUT INDEPENDENT APPLICAT ION OF MIND BY THE ASSESSING OFFICER HAVE BEEN HELD TO BE ILLEGAL. SINCE THE ASSESSING OFFICER IN THE INSTANT CASE HAS REOPENED THE ASSESSMENT ON THE BASIS OF REPORT OF THE INVESTIGATION WING AN D THERE APPEARS TO BE NO INDEPENDENT APPLICATION OF MIND BY THE ASSESS ING OFFICER FOR REOPENING OF THE CASE, THEREFORE, THE REASSESSMENT PROCEEDING INITIATED BY THE ASSESSING OFFICER ARE NOT PROPER. I, THEREFORE, HOLD THAT THE REASSESSMENT PROCEEDING INITIATED BY THE A SSESSING OFFICER IS ILLEGAL AND ACCORDINGLY THE SUBSEQUENT PROCEEDIN GS ALSO BECOME ILLEGAL AND VOID. SINCE THE ASSESSEE SUCCEEDS ON TH IS LEGAL GROUND, THEREFORE, THE GROUND CHALLENGING THE ADDITION OF R S.5,50,000/- U/S. 68 OF THE IT ACT ON MERIT BECOMES ACADEMIC IN NATURE AND, THEREFORE, THE SAME IS NOT BEING ADJUDICATED. THE G ROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.08.2019. SD/- (R.K PANDA) ACCOUNTANT MEMBER 5.1 HE HAS, THEREFORE, SUBMITTED THAT ISSUE IS COVE RED IN FAVOUR OF THE ASSESSEE BY ORDER OF THE TRIBUNAL DAT ED 21.08.2019. HE HAS ALSO REFERRED TO OTHER DECISION S OF THE TRIBUNAL TO SHOW THAT ON IDENTICAL FACTS REOPENING WAS HELD TO 12 ITA.NO.6336/DEL./2019 BE ILLEGAL AND BAD IN LAW. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL ON RECORD. IT IS WELL SETTLED LAW THAT VA LIDITY OF THE REASSESSMENT PROCEEDINGS IS TO BE JUDGED WITH REFER ENCE TO THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT WH ICH IS REPRODUCED ABOVE. LD. COUNSEL FOR ASSESSEE IN THE CASE OF M/S NEELKANTH PLYWOOD PVT. LTD. (SUPRA) HAS PRODUCED ON RECORD THE IDENTICAL WORDED REASONS RECORDED BY THE SAME A O SH. VIRENDER SINGH, ITO, WARD-18(1), NEW DELHI FOR REOP ENING OF THE ASSESSMENT, COPY OF THE SAME IS PRODUCED ON REC ORD. IN THE CASE OF M/S NEELKANTH PLYWOOD PVT. LTD. (SUPRA) THE TRIBUNAL CONSIDERING THE ISSUE IN DETAIL VIDE ORDER DATED 21.08.2019 REPRODUCED ABOVE HAS QUASHED THE REOPENI NG OF THE ASSESSMENT. SINCE THE FACTS OF THE CASE OF THE ASSESSEE ARE IDENTICAL WITH THE FACTS OF THE CASE OF M/S NEELKAN TH PLYWOOD PVT. LTD. (SUPRA). THEREFORE, I FIND ISSUE IS IDEN TICAL AND IS COVERED BY THE ORDER OF THE TRIBUNAL DATED 21.08.20 19. FOLLOWING THE REASONS FOR DECISION IN THE CASE OF M /S 13 ITA.NO.6336/DEL./2019 NEELKANTH PLYWOOD PVT. LTD. (SUPRA) I SET ASIDE AND QUASH THE REOPENING OF THE ASSESSMENT U/S 147 OF THE ACT. RE SULTANTLY BOTH THE ADDITIONS STAND DELETED. IN VIEW OF THE A BOVE, THE ISSUE ON MERIT IS LEFT WITH ACADEMIC DISCUSSION ONL Y. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED 02.12.2020 *KAVITA ARORA COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.