TaxTMI 
TaxTMI 
2015 (11) TMI 486
X X X X Extracts X X X X
X X X X Extracts X X X X
....dt.23.7.2010 for sale of land at S.No.231/1, Bogadi village, Kasba Hubli, Mysore, in which the assessee was a confirming party. It was also noticed therefrom that the assessee had paid an advance of Rs. 2,27,78,130 to one Sri Mohammed Ahmed, the land owner, as per sale agreement dt.18.7.2007. However, since the said land was not reflected in the assessee's balance sheet as on 31.3.2008, filed for Assessment Year 2008-09, the Assessing Officer initiated proceedings under Section 147 of the Act as he had reason to believe that failure to disclose this investment by the assessee had resulted in the assessee's income chargeable to tax escaping assessment for Assessment Year 2008-09. On the basis of the aforesaid reasons based on findings at the time of survey, the Assessing Officer issued notice under Section 148 of the Act dt.31.1.2012 to the assessee. The assessee in response thereto vide letter dt.9.2.2012, requested that the return of income filed earlier on 31.3.2009 be treated as filed in response to the notice under Section 148 of the Act. The Assessing Officer, however, required the assessee to file a return of income in response to notice issued under Section 148 of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed CIT (Appeals) disposed the appeal vide order dt.26.2.2014 allowing the assessee partial relief. In the impugned order the learned CIT (Appeals) deleted the following additions / disallowances :- 1. Interest and Other expenses disallowed. Rs.12,62,778 2. Vehicle Maintenance Expenses disallowed Rs.1,89,402 3. Loans not confirmed Rs.2,03,13,256 4. Excess Asset Rs.9,50,000 5. Advance to Mohd. Ahmed Rs.1,00,00,000 6. Credit in Bank Account Rs.1,00,00,000 Thus ultimately, the learned CIT (Appeals) sustained two additions (i) Rs. 2,98,176 being negative cash balance and (ii) Rs. 4,50,000 in respect of cash deposit in bank account. The learned CIT (Appeals) has deleted the addition of Rs. 1 Crore in respect of the assessee's transaction with Sri Mohammed Ahmed and that was the ground on which the assessment proceedings under Section 147 of the Act was initiated by the Assessing Officer. The impugned order of the learned CIT (Appeals); deleting the additions / disallowances made by the Assessing Officer, has become final as it appears the Revenue has not preferred any appeal before us in this regard. 3. Aggrieved by the orde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs." 4. Grounds at S.Nos.1 and 5 are general in nature and not being urged before us, are rendered infructuous and accordingly dismissed. 5.1 Ground No.2 - In respect of this ground, the learned Authorised Representative for the assessee contended that the re-opening of the assessment is bad in law since the very foundation for assumption of jurisdiction is merely on suspicion and surmise. The learned Authorised Representative submitted that the mere fact that the assessee has made an advance of Rs. 2,27,78,170 as per sale agreement dt.18.7.2007 does not mean that the same amounts to income of the assessee escaping assessment. It was submitted that the failure to show the amount in the Balance Sheet of the assessee did not warrant a presumption that the advances are given out of undisclosed income. The learned Authorised Representative submits that the said advances were given from various conce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to interfere in the matter. We find on perusal of the records that the Assessing Officer had material based on which he arrived at the belief that income of the assessee had escaped assessment; i.e."the assessee had paid an amount of Rs. 2,27,78,130 as advance to Sri Mohammed Ahmed the land owner, as per the sale agreement dated 18.7.2007. As per the schedules filed with the return of income, this amount of advance is not reflected in the Balance Sheet filed by the assessee. Hence income chargeable to tax had escaped assessment as mentioned in Section 147 of the Income Tax Act, 1961". Considering the fact that the Assessing Officer had the aforesaid material based on which he arrived at the belief that income had escaped assessment, we hold that the learned CIT (Appeals) was justified in rejecting the plea of the assessee in this regard. In the factual matrix of the case, the existence of belief cannot be doubted as, in our considered view, the fact that the advance was not reflected in the assessee's Balance Sheet would be sufficient to induce the belief for escapement of income. In this view of the matter, we reject the objections of the assessee on this count. 5.3.2 At ....