2014 (1) TMI 1318

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....the basis of change of opinion by the AO on the issue of 'allowability of Sponsorship Expenses' even when the AO did not comment upon this issue either in the original order u/s 143(3) or in the Office Note appended thereto, the assessee's claim of 'Sponsorship Expenses' having being a reasons for re- opening of the original assessment. 1(b) On the facts and in the circumstances of the case, the ld.CIT(A) has erred in annulling the re-assessment proceedings u/s 147 without going in to the merits of the additions including the addition of Rs.2.0 Crore on account of accommodation entries of Rs.2.00 Crore taken by the assessee from M/s B.T.Technet Ltd., admittedly an entry provider." 3. The facts of the case are that the original assessm....

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....of Hon'ble Jurisdictional High Court dated 12th December, 2012 in the case of CIT Vs. Orient Craft Limited in ITA No.555/2012. 6. Learned DR, on the other hand, relied upon the order of the Assessing Officer. 7. We have heard both the sides and perused the material placed before us. The copy of reasons recorded for issue of notice under Section 148 is placed at page 29 of the assessee's paper book, the relevant portion of which reads as under:- "Assessment in this case was completed u/s 143(3) at an income of Rs.35802994/- which was subsequently rectified at Rs.35602994/-. Later on it was noticed that sponsorship expenses amounting to Rs.3554382/- allowed to the assessee were on account of payments made by the assessee on behalf....

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....r proceedings and an abuse of power by the Assessing Officer, both strongly deprecated by the Supreme Court in CIT vs. Kelvinator (supra). The reasons recorded by the Assessing Officer in the present case do confirm our apprehension about the harm that a less strict interpretation of the words "reason to believe" vis-a-vis an intimation issued under section 143(1) can cause to the tax regime. There is no whisper in the reasons recorded, of any tangible material which came to the possession of the assessing officer subsequent to the issue of the intimation. It reflects an arbitrary exercise of the power conferred under section 147. 15. For the above reasons, we answer the substantial question of law framed by us in the affirmative, in fav....