Case Law Details
Balbir Investment Pvt. Ltd. Vs ITO (ITAT Delhi)
A perusal of the reasons recorded by the Assessing Officer shows that he has reopened the assessment by recording the reasons that shares of G.J. Holdings has been procured by Blabir Investments Pvt. The relevant observations of the Assessing Officer in the reasons recorded by the Assessing Officer have already been reproduced in the earlier paragraphs which clearly show that the case of the assessee was reopened on the ground that it has invested in the shares G.J. Holding Ltd. to the extent of Rs.5,40,000/-. However, the assessment order shows that the Assessing Officer made an addition of Rs.5,40,000/- u/s 68 of the Act on the ground that the assessee has received bogus share capital/premium of Rs.5,40,000/- from G. J. Holding Ltd. Thus, there is contradiction in the reasons recorded and the assessment made. There is complete non-application of mind by the Assessing Officer while recording the reasons for reopening the assessment. The assessment was basically reopened on the basis of information obtained from the Investigation Wing and without due application of mind by the Assessing Officer and such reopening was on borrowed satisfaction. It has been held in various decisions of Hon’ble High Courts and the Co-ordinate Benches of the Tribunal that reopening of assessment on the basis of borrowed satisfaction and without independent application of mind by the Assessing Officer makes such reassessment a nullity. Since, the Assessing Officer in the instant case, has reopened the assessment on the basis of information obtained from the Investigation Wing that it has invested in the shares of G.J. Holdings Ltd., whereas, in the assessment order, the Assessing Officer has finally concluded that the assessee has received an amount of Rs.5,40,000/- from G.J. Holding Ltd. in shape of share capital and share premium, therefore, it clearly shows that there is complete non-application of mind by the Assessing Officer while reopening the assessment, therefore, such reopening of the assessment which is based on irrelevant or non-existent facts makes the reassessment proceedings a nullity. We, therefore, quash the reassessment proceedings initiated by the Assessing Officer which has been upheld by the CIT(A). The grounds raised by the assessee are, accordingly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order dated 02.11.2018 of the learned CIT(A)-33, New Delhi, relating to Assessment Year 2009-10.
2. Facts of the case, in brief, are that the assessee is a company incorporated on 11.06.2008 under the Companies Act, 1956. It filed its return of income on 30.09.2009, declaring income of Rs.4,900/-. The return was processed under 143(1) of the Income Tax Act, 1961 (in short ‘the Act’). Subsequently, on the basis of information received from the Investigation Wing of the Department, the Assessing Officer reopened the assessment after recording the following reasons:-
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