M/s Indu Arts, Delhi V. ACIT, New Delhi

ITA 6611/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2941 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 27-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus Share capital; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT ITA NO.6611/DEL/2016 ASSESSMENT YEAR : 2006-07 INDU ARTS, A-292, SHASTRI NAGAR, DELHI. PAN: AAAFI2137E VS. ACIT, CIRCLE 19(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.S. AGGARWAL, SR. ADVOCATE DEPTT. BY : SHRI AMRIT LAL, SR.DR DATE OF HEARING : 05.06.2017 DATE OF PRONOUNCEMENT: 07.06.2017 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 03.11.2016 IN RELATION TO THE ASSESSMENT YEAR 2006-07. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE ADDITION OF RS.2,36,875 MADE BY THE LD. CIT(A) ENHANCING THE INCOME OF THE ASSESSEE. ITA NO.6611/DEL/2016 2 3. SUCCINCTLY, THE FACTUAL MATRIX OF THE CASE IS TH AT THE ASSESSEE FILED ITS RETURN DECLARING TOTAL INCOME OF RS.8,73,180/-. SC RUTINY PROCEEDINGS WERE COMPLETED AND AN ASSESSMENT ORDER U/S 143(3) WAS PA SSED. WHILE FINALIZING THE ASSESSMENT FOR THE IMMEDIATELY SUCCEEDING ASSES SMENT YEAR, I.E., 2007- 08, THE ASSESSING OFFICER OBSERVED THAT THE FIGURE OF OPENING STOCK AS ON 01.04.2006 WAS NOT TALLYING WITH THE INVENTORY AS O N 31.03.2006. THE ASSESSEE HAD SHOWN AN OPENING STOCK AMOUNTING TO RS .22,57,055/- ON 01.04.2006 WHICH, IN THE OPINION OF THE ASSESSING O FFICER, SHOULD HAVE BEEN SHOWN AS CLOSING STOCK AS ON 31.03.2006. THE AUDIT REPORT DID NOT DEPICT THE FIGURE OF CLOSING STOCK. INITIATING THE REASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HELD THAT THE ASSESSEE UNDERS TATED ITS CLOSING STOCK TO THE TUNE OF RS.22.57 LAC FOR THE EXTANT YEAR. THE ASSESSEE ARGUED BEFORE THE ASSESSING OFFICER THAT THE ADDITION MADE FOR THE AS SESSMENT YEAR 2007-08, BECAUSE OF DIFFERENCE BETWEEN THE OPENING STOCK AND CLOSING STOCK, WAS DELETED BY THE LD. FIRST APPELLATE AUTHORITY. THE A SSESSING OFFICER DID NOT ACCEPT THE CONTENTION BY OPINING THAT THE SECOND AP PEAL WAS BEING FILED BY THE REVENUE. HE, THEREFORE, MADE AN ADDITION OF RS .22.57 LAC IN THE INSTANT ASSESSMENT. THE LD. CIT(A) DELETED THE ADDITION OF RS.22.57 LAC BY NOTICING THAT THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR TH E ASSESSMENT YEARS 2006- ITA NO.6611/DEL/2016 3 07 AND 2007-08 HAS HELD THAT THERE IS NO DISCREPANC Y IN THE QUANTITATIVE DETAILS IN RESPECT OF THE ITEMS AND THERE WAS NO EX CESS STOCK. HE, HOWEVER, ISSUED NOTICE OF ENHANCEMENT ON THE GROUND THAT THE RE WERE SOME DISCREPANCIES IN THE QUANTITATIVE DETAILS FILED BY THE ASSESSEE. SUCH DISCREPANCIES WERE TRANSLATED INTO AN ADDITION OF R S.2,36,875/- AFTER ADDING THE NECESSARY MARK-UP. THE ASSESSEE IS AGGRIEVED AG AINST SUCH ENHANCEMENT MADE BY THE LD. CIT(A). 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE ASSESSING OFFIC ER INITIATED REASSESSMENT PROCEEDINGS ONLY ON THE PREMISE THAT INCOME OF THE ASSESSEE ESCAPED ASSESSMENT TO THE TUNE OF RS.22.57 LAC, BEING, THE DIFFERENCE IN THE OPENING STOCK OF SUCCEEDING YEAR AND CLOSING STOCK OF THE C URRENT YEAR. THIS WAS THE SOLE REASON AND THE ONLY ADDITION MADE IN THE ASSES SMENT, COMPUTING TOTAL INCOME AT RS.31.30 LAC AS AGAINST THE RETURNED INCO ME AT RS.8.73 LAC. IT IS CLEAR THAT THE ADDITION OF RS.22.57 LAC HAS BEEN DE LETED BY THE LD. CIT(A) AND ADMITTEDLY NO APPEAL HAS BEEN PREFERRED BEFORE THE TRIBUNAL AGAINST SUCH DELETION. IN OTHER WORDS, THE DELETION OF THE ADDITION IN THE FIRST APPEAL HAS ATTAINED FINALITY. ITA NO.6611/DEL/2016 4 5. THUS, THE QUESTION WHICH LOOMS LARGE ON THE C ANVASS IS WHETHER THE CIT(A) CAN MAKE ENHANCEMENT OF INCOME ON ACCOUNT OF DISCREPANCY IN THE QUANTITATIVE DETAILS. IN MAKING SUCH AN ENHANCEMEN T, THE LD. CIT(A) HAS HELD THAT HIS POWER IS COTERMINOUS WITH THAT OF THE ASSESSING OFFICER AND, THUS, HE IS COMPETENT TO MAKE A NEW ADDITION. THER E IS NOT AND CANNOT BE ANY DOUBT ABOUT THE FACT THAT THE POWERS OF CIT(A) ARE COTERMINOUS WITH THAT OF THE ASSESSING OFFICER. THE HON'BLE SUPREME COURT IN CIT VS. KANPUR COAL SYNDICATE (1964) 53 ITR 225 (SC), HAS HELD THAT: THE AAC HAS PLENARY POWERS IN DISPOSING OF AN APPEAL. THE SCOPE OF HIS POWER IS COTERMINOUS WITH THAT OF THE ITO. HE CAN DO WHAT T HE ITO CAN DO AND ALSO DIRECT HIM TO DO WHAT HE HAS FAILED TO DO. THIS G OLDEN RULE HAS BEEN REITERATED IN SEVERAL JUDGMENTS INCLUDING BY THE HO N'BLE SUPREME COURT IN JUTE CORPORATION OF INDIA VS. CIT AND ANR. (1991) 187 ITR 688 (SC). THE PRINCIPLE WHICH, THEREFORE, EMERGES IS THAT THE POW ER OF CIT(A) IS ABSOLUTE AND EXTENDS TO ALL SUCH THINGS WHICH THE ASSESSING OFFICER CAN DO. HOWEVER, THERE IS AN INHERENT LIMITATION OF THIS PR INCIPLE, WHICH IS, THAT THE CIT(A) CANNOT DO WHAT THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT COULD NOT HAVE DONE. IN SIMPLE WORDS, IF THE ASSES SING OFFICER COULD HAVE MADE A PARTICULAR ADDITION ETC., WHICH HE FAILED TO DO, THE CIT(A) WOULD BE ITA NO.6611/DEL/2016 5 INTRA VIRES MAKING SUCH ADDITION WHILE DISPOSING OF THE APPEAL FILED AGAINST THE ASSESSMENT ORDER. PER CONTRA , IF THE ASSESSING OFFICER HAS NOT MADE A PARTICULAR ADDITION ETC., WHICH HE WAS NOT ENTITLED TO AS PER LAW, THE CIT(A) CANNOT EQUALLY EXERCISE HIS POWER TO MAKE SUCH AN A DDITION ETC. WITH THIS SALUTARY PRINCIPLE IN MIND, LET US SEE IF THE ACTIO N OF THE LD. CIT(A) IN MAKING THE ADDITION OF RS.2.36 LAC CAN BE SUSTAINE D? 6. THE ASSESSING OFFICER MADE A SOLITARY ADDITION O F RS.22.57 LAC IN THE ASSESSMENT UNDER SECTION 147 WHICH WAS THE ONLY BAS IS FOR INITIATING THE REASSESSMENT AND THE SAME GOT FINALLY DELETED IN TH E FIRST APPEAL. AT THIS JUNCTURE, IT IS RELEVANT TO NOTE THE MANDATE OF THE SECTION, WHICH PROVIDES THAT : `IF THE ASSESSING OFFICER HAS REASON TO BELI EVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, A SSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENT LY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION. A BARE PERUSAL OF THE ABOVE PROVISION DIVULGES THAT THE AO, IN THE COURSE OF ASSESSMENT P URSUANT TO NOTICE U/S 148, CAN MAKE TWO TYPES OF ADDITIONS, VIZ., FIRST, THE ADDITION FOR WHICH HE ITA NO.6611/DEL/2016 6 FORMED REASON TO BELIEVE ABOUT THE INCOME CHARGEABL E TO TAX ESCAPED ASSESSMENT (HEREINAFTER ALSO CALLED THE `FOUNDATION AL ADDITION) AND SECOND, ANY OTHER ADDITION WHICH COMES TO HIS NOTICE SUBSEQ UENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION (HEREINAFTER ALS O CALLED THE `OTHER ADDITION). IT IS TRITE THAT THE `OTHER ADDITION CAN STAND ONLY IF THE `FOUNDATIONAL ADDITION IS MADE BY THE AO. THE LOGI C APPEARS TO BE SIMPLE AND PLAIN. REASSESSMENT CANT BE MADE AT THE DROP O F A HAT. THERE MUST BE VALID REASONS WITH THE AO ON THE BASIS OF WHICH A B ELIEF IS FORMED THAT SOME INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT. J URISDICTION TO PROCEED WITH THE ASSESSMENT IS ACQUIRED BY THE AO ONLY BY V IRTUE OF SUCH BELIEF. IT IS ANOTHER THING THAT AFTER VALIDLY ACQUIRING THE J URISDICTION, THE AO CAN MAKE OTHER ADDITIONS AS WELL. THUS THE MAKING OF A `FOUNDATIONAL ADDITION IS SINE QUA NON FOR MAKING `OTHER ADDITION. REASON BEHIND THIS I S NOT FAR TO UNDERSTAND, BEING, PROHIBITING THE ASSESSING OFFICE R FROM NEEDLESSLY EXERCISING THE POWER TO REASSESS, BY INITIATING THE ASSESSMENT PROCEEDINGS ON A FALLACIOUS GROUND AND THEN MAKING OTHER ADDITI ONS AS WELL. TO PUT IT SIMPLY, THE ASSESSING OFFICER CANNOT PROCEED WITH T HE REASSESSMENT IF THE GROUNDS MENTIONED IN THE RE-ASSESSMENT NOTICE ARE N ON-EXISTENT. THAT IS WHY, IT HAS BEEN HELD IN SEVERAL CASES THAT NO `OTH ER ADDITION CAN BE MADE ITA NO.6611/DEL/2016 7 UNLESS THE `FOUNDATIONAL ADDITION IS MADE. THE HON BLE JURISDICTIONAL HIGH COURT IN RANBAXY LABORATORIES LTD. VS. CIT (2011) 336 ITR 13 6 (DEL) HAS HELD THAT THE AO HAS JURISDICTION TO REASSESS INCOM E OTHER THAN THE INCOME IN RESPECT OF WHICH PROCEEDINGS UNDER S. 147 WERE I NITIATED BUT HE IS NOT JUSTIFIED IN DOING SO WHEN THE VERY REASONS FOR INI TIATION OF THOSE PROCEEDINGS CEASED TO SURVIVE. THE HONBLE BOMBAY H IGH COURT IN CIT VS. JET AIRWAYS (I) LTD. (2011) 331 ITR 236 (BOM), HAS ALSO REITERATED THE SAME PROPOSITION BY HOLDING THAT THE ASSESSING OFFICER M AY ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE WHICH COMES TO HIS N OTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS THOUGH THE REASONS FO R SUCH ISSUE WAS NOT INCLUDED IN THE NOTICE. HOWEVER, IF, AFTER ISSUING A NOTICE U/S 148, THE ASSESSING OFFICER ACCEPTS THE CONTENTION OF THE ASS ESSEE AND HOLDS THAT THE INCOME, OF WHICH HE HAS INITIALLY FORMED A REASON T O BELIEVE THAT IT HAD ESCAPED ASSESSMENT, HAS, AS A MATTER OF FACT, NOT E SCAPED ASSESSMENT, IT IS NOT OPEN TO HIM TO ASSESS SOME OTHER INCOME. SIMIL AR VIEW HAS BEEN TAKEN BY THE HON'BLE RAJASTHAN HIGH COURT IN CIT VS. SHRIRAM SINGH (2008) 306 ITR 343 (RAJ). ITA NO.6611/DEL/2016 8 7. THE POSITION WHICH FOLLOWS FROM THE ABOVE DISC USSION IS THAT THE ASSESSING OFFICER CAN MAKE `OTHER ADDITION IN THE REASSESSMENT PROCEEDINGS, PROVIDED, THE `FOUNDATIONAL ADDITION IS MADE. WHEN THIS PROPOSITION IS TAKEN TO A NEXT LEVEL, NO DIFFERENT CONSEQUENCES WILL EMERGE, IF THE `FOUNDATIONAL ADDITION IS ITSELF FINALLY DE LETED IN AN APPEAL. IN SUCH A SCENARIO, THE `OTHER ADDITION MADE BY THE ASSESSIN G OFFICER WOULD AUTOMATICALLY CEASE TO STAND IN ISOLATION. THIS VIE W HAS BEEN AFFIRMED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT VS. ADHUNIK NIRYAT ISPAT LTD. (2011) 63 DTR 212 (DEL) . IN THAT CASE, THE RETURN FILED BY THE ASSESSEE FO R THE ASST. YR. 1999-2000 DECLARING INCOME @ RS. 1,22 ,460 WAS PROCESSED UNDER S. 143(1) OF THE IT ACT. HOWEVER, NOTICE WAS ISSUED UNDER SECTION 148 OF THE ACT SUBSEQUENTLY, ON THE INFORMATION REC EIVED FROM THE DIRECTOR OF IT (INV.), NEW DELHI, TO THE EFFECT THAT THE ASS ESSEE HAD ACCEPTED THE ACCOMMODATION ENTRIES FROM M/S I.G. PROPERTIES (P) LTD., M/S PARIVARTAN CAPITAL & FINANCIAL SERVICES (P) LTD. AND FROM M/S VICTORIA (P) LTD. IN THE GARB OF SHARE CAPITAL. THE AO PASSED THE REASSESSME NT ORDER MAKING ADDITIONS OF RS. 31 LACS ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL INCLUDING THE CAPITAL SUBSCRIBED BY THE AFORESAID THREE APPLI CANTS ON THE BASIS OF WHICH THE ASSESSMENT WAS REOPENED. HOWEVER, DURING THE ASSESSMENT ITA NO.6611/DEL/2016 9 PROCEEDINGS, THE AO ALSO MADE CERTAIN ADDITIONS OF THE CREDITS RECEIVED FROM M/S ADHUNIK NIRYAT, M/S MAHADEV METALS, M/S RO YAL INTERNATIONAL AND M/S SINGLE FINSHARE INDIA LTD., ALBEIT THE ASSE SSMENT WAS NOT REOPENED ON THAT BASIS. THE ASSESSEE FILED AN APPEAL AGAINST THESE ADDITIONS. THE CIT(A) CONFIRMED THE ADDITIONS OF RS. 31 LAC WHICH WAS THE BASIS FOR REOPENING REASSESSMENT, BUT DELETED THE OTHER ADDIT ION. BOTH THE ASSESSEE AS WELL AS THE REVENUE PREFERRED APPEALS AGAINST THE O RDERS OF CIT(A). APPEAL OF THE ASSESSEE WAS ALLOWED BY THE TRIBUNAL THEREBY DELETING THE ADDITION OF RS. 31 LAC. AGAINST THIS ORDER, NO APPEAL WAS PREFE RRED BY THE REVENUE. THUS, THE REASONS WHICH PERSUADED THE AO TO REOPEN THE REASSESSMENT PROCEEDINGS AND ON THE BASIS OF WHICH ADDITIONS WER E MADE WERE NOT FOUND VALID OR JUSTIFIABLE AS THOSE ADDITIONS WERE DELETE D BY THE TRIBUNAL. APPEAL OF THE REVENUE WAS DISMISSED. IN FURTHER APPEAL, TH E HONBLE HIGH COURT UPHELD THE ORDER OF THE TRIBUNAL BY HOLDING THAT : `SINCE THE GROUNDS FOR REOPENING THE REASSESSMENT DO NOT EXIST ANY LONGER AND NO ADDITIONS WERE ULTIMATELY MADE ON THAT ACCOUNT, THE ADDITIONS IN R ESPECT OF OTHER ITEMS WHICH WERE NOT PART OF 'REASONS TO BELIEVE' CANNOT BE MADE. ON GOING THROUGH THE RATIO DECIDENDI OF THE ABOVE JUDGMENT, IT IS VIVID THAT IF THE ITA NO.6611/DEL/2016 10 `FOUNDATIONAL ADDITION IS FINALLY DELETED IN APPEA L, THEN `OTHER ADDITION ALSO CANT STAND. 8. AT THIS STAGE, IT IS PERTINENT TO NOTE THE EF FECT OF INSERTION OF EXPLANATION 3 TO SECTION 147 BY THE FINANCE (NO.2) ACT, 2009 W.R.E.F. 1.4.1989, WHICH READS AS UNDER : - `EXPLANATION 3. FOR THE PURPOSE OF ASSESSMENT OR R EASSESSMENT UNDER THIS SECTION, THE ASSESSING OFFICER MAY ASSES S OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED A SSESSMENT, AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, NOTWITHSTANDING THA T THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RE CORDED UNDER SUB- SECTION (2) OF SECTION 148. 9. THE MEMORANDUM EXPLAINING THE PROVISIONS OF THE FINANCE BILL, IN THIS REGARD, READS AS UNDER : `THE EXISTING PROVISIONS OF SECTION 147 PROVIDES, I NTER ALIA, THAT IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY IN COME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY ASSESS OR REASSESS SUCH INCOME AFTER RECORDING REASONS FOR RE -OPENING THE ASSESSMENT. FURTHER, HE MAY ALSO ASSESS OR REASSESS SUCH OTHER INCOME WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF PROCEEDINGS UNDER THI S SECTION. SOME COURTS HAVE HELD THAT THE ASSESSING OFFICER HAS TO RESTRICT THE REASSESSMENT PROCEEDINGS ONLY TO ISSUES IN RESPECT OF WHICH THE REASONS HAVE BEEN RECORDED FOR REOPENING THE ASSESSMENT. HE IS NOT EMPOWERED TO TOUCH UPON ANY OTHER ISSUE FOR WHICH NO REASONS HAVE BEEN RECORDED. THE ABOVE INTERPRETATION IS CONTRARY TO THE LEGISLA TIVE INTENT. WITH A ITA NO.6611/DEL/2016 11 VIEW TO FURTHER CLARIFYING THE LEGISLATIVE INTENT, IT IS PROPOSED TO INSERT AN EXPLANATION IN SECTION 147 TO PROVIDE THAT THE A SSESSING OFFICER MAY ASSESS OR REASSESS INCOME IN RESPECT OF ANY ISSUE W HICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF PROCEEDINGS UN DER THIS SECTION, NOTWITHSTANDING THAT THE REASON FOR SUCH ISSUE HAS NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUB-SECTION (2) OF SECTI ON 148. THIS AMENDMENT WILL TAKE EFFECT RETROSPECTIVELY FROM 1ST APRIL, 1989 AND WILL, ACCORDINGLY, APPLY IN RELATION TO ASSESSMENT YEAR 1989-1990 AND SUBSEQUENT YEARS. [CLAUSE 57] 10. IT IS PALPABLE THAT THE EXPLANATION HAS NOT EN HANCED THE SCOPE OF THE PROVISION. IT SIMPLY EMBODIES THE POSITION MORE CLE ARLY, WHICH IS ALREADY EMBEDDED IN THE OPENING PART OF SECTION 147 PROVIDI NG THAT THE AO MAY: `ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION . THE FOREGOING LEGAL POSITION ABOUT NOT CONTINUING WITH THE `OTHER ADDIT IONS, IF NONE OF THE `FOUNDATIONAL ADDITIONS IS EITHER MADE OR FINALLY SUSTAINED, HAS NOT BEEN WATERED DOWN BY THE INSERTION OF EXPLANATION 3. AM BIT OF THE EXPLANATION IS CONFINED ONLY TO MAKING `OTHER ADDITION AND NOT SUSTAINING THE `OTHER ADDITION, WHEN THE `FOUNDATIONAL ADDITION IS NO T MADE OR FINALLY DELETED. 11. REVERTING TO THE FACTS OF THE INSTANT CASE, IT IS FOUND THAT THE ASSESSING OFFICER MADE THE `FOUNDATIONAL ADDITION OF RS.22.5 7 LAC WHICH CAME TO BE ITA NO.6611/DEL/2016 12 FINALLY DELETED IN THE FIRST APPEAL. IN THE ABSENC E OF SUCH AN ADDITION, NEITHER THE ASSESSING OFFICER NOR FOR THAT PURPOSE, THE LD. CIT(A), EXERCISING HIS COTERMINOUS POWER, COULD HAVE MADE T HE `OTHER ADDITION. 12. THE SITUATION CAN BE VIEWED FROM ANOTHER ANGLE AS WELL. THE ASSESSING OFFICER INITIATED REASSESSMENT PROCEEDINGS AND MADE ADDITION OF RS.22.57 LAC. WHEN THE LD. CIT(A) HELD THAT THE ADDITION OF RS.22.57 LAC WAS NOT SUSTAINABLE, IT MEANT THAT THE JURISDICTION OF THE ASSESSING OFFICER WAS LACKING IN INITIATING THE REASSESSMENT PROCEEDINGS. AS A CONSEQUENCE OF HIS DELETION OF THE ADDITION, NOT ONLY THE ASSESSMENT O RDER BUT ALL THE PROCEEDINGS FLOWING THEREFROM HAD THE EFFECT OF BEC OMING NULL AND VOID. AS SUCH, HE COULD NOT HAVE GONE AHEAD WITH ANY OTHE R ISSUE AND MADE ENHANCEMENT OF INCOME. MAKING AN ENHANCEMENT IN SUC H CIRCUMSTANCES WOULD MEAN THAT THOUGH THE JURISDICTION OF THE ASSE SSING OFFICER IN INITIATING THE REASSESSMENT WAS LACKING, STILL, THE ASSESSMENT WOULD BE VALID AND EX CONSEQUENTI , THE ADDITION WOULD BE SUSTAINABLE. THIS, IN MY CONSIDERED OPINION, IS A TOTALLY ILLOGICAL AND UNSO UND PROPOSITION. I, THEREFORE, ORDER TO DELETE THE ADDITION OF RS.2.36 LAC AND ODD MADE BY THE LD. CIT(A). ITA NO.6611/DEL/2016 13 13. IN THE RESULT, THE APPEAL IS ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 0 7 TH JUNE, 2017. SD/- (R.S. SYAL) VICE PRESIDENT DATED: 07 TH JUNE, 2017. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI