Allowing the petition, the Court held that the reasons do not furnish any explanation as to on what basis and material the assessing officer came to a conclusion that M/s Magnum Tradex Pvt. Ltd., was indeed a shell entity. The verification of the VAT returns referred to in the reasons recorded suggest only transaction between the Petitioner and M/s Magnum Tradex Pvt. Ltd., in regard to goods sold amounting to Rs. 2,08,76,068/-. There was, thus, no material or basis for the assessing officer to hold the transaction between the Petitioner and M/s Magnum Tradex Pvt. Ltd., as not a genuine transaction of sale or for that reason to hold that M/s Magnum Tradex Pvt. Ltd. was a shell entity. The reasons recorded do not suggest at all whether pursuant to receipt of information, the assessing officer had independently applied its mind to the information received or conducted its own inquiry into the matter for the purpose of coming to a conclusion that indeed income assessable to tax had escaped assessment or that the transaction in question with the alleged shell entity was only a paper transaction. Accordingly the reassessment notice and order disposing the objection. was quashed, Followed ITO v. Lakhmani Mewal Das (1976) 103 ITR 437 (SC) First Source Solutions Ltd. v. Asstt. CIT (2021)) 132 taxmann.com 121 /438 ITR 139 (Bom)(HC) ( HC)).(AY. 2016-17)