2011 (1) TMI 583

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....he Income Tax Act, 1961 (for short, "the Act") against the order of the Income Tax Appellate Tribunal, Chandigarh in I.T.A. No.959/Chandi/96 for the assessment year 1991-92 raising following questions of law:- "i) Whether in the facts and circumstances of the present case the action of the authorities below in initiating the reassessment proceedings merely on the basis of communication dated 12.12.1992 without any reasonable ground having rational connection, is legally sustainable in the eyes of law?   ii) Whether in the facts and circumstances of the present case, the action of the authorities below in holding the consignment sales to be the sales on account of trading without investigating the same appropriately and acting on its ....

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..../s Bharat Trading Co. and M/s Assam Timber Store, the AO had received the information from the Assistant Director of Income-tax (Investigation) Hissar on 12.12.92. The reasons for reopening of assessments had been recorded on 15.2.1993 i.e. after the receipt of information from the ADI, Hisar. The report is based on enquiry. A perusal of the sum and substance of the report, which has been reproduced elsewhere in this order, clearly indicates a sound basis for formation of the belief that income of the assessees had escaped assessments. We are, therefore, of the considered view that the proceedings for reassessments in the case of M/s Bharat Trading Co. for the assessment year 90-91 and 91-92 and in the case of M/s Assam Timber Store for the....