TaxTMI 
TaxTMI 
2011 (8) TMI 314
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....t. The learned counsel appearing for the appellant submitted that the Assessing Officer and the CIT(A)-1 Bhopal both have found that there was sufficient material for reassessment under Section 148 of the Income Tax. The Commissioner of Income Tax (Appeals)I in para 2 of the order found that there was sufficient material before the AO for reopening of the assessment and to reassess the assessee. It is submitted that the Income Tax Appellate Tribunal erred in reversing the aforesaid findings. It is further submitted by Shri Lal that substantial question of law no.3 as framed in the memo of appeal arises for consideration of this Court. To appreciate the aforesaid contention, we have perused the order passed by the three a....
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....ver it is not acceptable as it is evident that there is no business in this year and no proof to show that earlier businesses were going on.Hence no business expenses claimed can be allowed. Hence there is an under assessment of income by Rs.7,95,271/- which is added back to the income of the assessee. Initiate penalty under Section 271(1) of the IT Act." Before the CIT (Appeals)-I, the same contentions were agitated. The CIT(Appeals)I in para 2 of the order held as under: "I have considered the submissions of the Ld. Counsel that reassessment proceedings were not validly initiated and there was no justification for initiating such proceedings. I have also perused the asst. order. After due consideratin in the matter I h....
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.... the AO disallowed some of the business expenditure. It would prove that assessee was doing business of building construction and sales in the earlier years also. Ld. Counsel for assessee also filed copy of the acknowledgement of the filing of the return for subsequent AY 2002-03 in which in the PandT a/c, assessee has shown contract receipts and claimed doing the similar business activities. In the AY under appeal, the assessee has claimed in the pandl a/c the deduction of the expenditure on a/c of electricity expenses, misc. expenses, office expenses, petrol and conveyance, repairs and maintenance, salary to partner and staff, telephone and travelling expenses and office rent etc. which are related to the business activities of the assess....
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....operty is computed and thereafter, the assessee claimed set off of business losses against the income from house property as per provision of Sec. 71 of the IT act. The authorities below have not given any adverse finding against the assessee on this computation.Thus, the whole basis of the AO to reopen the assessment is incorrect and without any basis.In the facts and circumstances of the case, the assessee would be entitled for claim of expenditure even if no business income is earned in the AY under appeal due to continuation of business of the assessee. 11. The decisions cited by the learned Departmental Representative noted above would not support the case of the revenue in any manner. The learned Departmental Representative ....
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....ee with the submission of the learned Departmental Representative because in the absence of any material or information on record, the Assessing Officer merely had reason to suspect that the business expenditure is not allowable when there is no business income. There was no material on record to support the belief of the Assessing Officer. Thus, it is a case where there was no material or information or basis available to the Assessing Officer to form his belief that the income chargeable to tax has escaped assessment on account of inadmissible expenditure for want of business income. The AO never doubted existence of business of assessee as well as did not dispute genuineness of expenditure for which assessee claimed deduction. Therefore,....