TaxTMI 
TaxTMI 
TaxTMI 
2016 (4) TMI 531
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....count of gift received amounting to Rs. 5,00,000/- even when the identity, creditworthiness and genuineness of the transaction was proved by the appellant. 5. That the Hon'ble C.I. T (Appeals) has erred in law and on facts in sustaining the addition u/s 68 amounting to Rs. 15,47,000/- on account of unexplained deposits in the overdraft account. 6. That the order passed by the authorities below is bad in law and against the facts of the case. 7. That any other relief or reliefs deemed fit in the facts and circumstances of the case may be granted. 2. The facts relating to the case are that the assessee is an individual who filed his return of income for the impugned AY declaring income of Rs. 1,33,810/-. Subsequently proceedings under section 147 were initiated and assessment was framed on the assessee making addition of Rs. 5.00 Lacs on account of gift received by treating the same as not genuine and Rs. 15,47,000/- on account of unexplained cash credits. 3. The assessee filed an appeal before the Ld. CIT(A) who dismissed the appeal of the assessee vide his order dt. 20/01/2014. 4. Aggrieved by the same the assessee filed the present appeal before us. 5. Ground No. 1 raise....
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....pening was resorted and also on other income which has been found to have escaped assessment, during the course of reassessment proceedings. Ld. AR thereafter stated that the interpretation of the same is that it is only if addition on account of income which has been found to have escaped assessment as per the reasons recorded is made that addition on account of any other income can be made. Ld. AR drew our attention to the judgment of the Hon'ble Bombay High Court in the case of Jet Airways India vs CIT 331 ITR 236, the Hon'ble Delhi High Court decision in case of Ranbaxy Laboratories Ltd. Vs. CIT 336 ITR 136 and to the decision of the Agra Bench of the Tribunal in the case of ITO Vs. Smt. Urmila Singhal in ITA No. 286/Ag/2011 dt. 20/07/2012, in support of his contention. 7. Ld. DR on the other hand argued that the decision in the case of Jet Airways India vs CIT and Ranbaxy Laboratories Ltd. Vs. CIT relied upon by the AR pertained to those Assessment years, when Explanation 3 was not on the statute. Ld. DR further stated that merely because no addition was made on the issue raised in the reason recorded for reopening the validity of the proceedings under section 147 could not b....
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....me chargeable to tax which has escaped assessment for any assessment year, with respect to which he had reason to believe to be so, then only in addition, he can also put to tax any other income, which has escaped assessment and comes to his notice subsequently in the course of proceedings u/s 147. The Hon'ble court held at para 14-15 of its order as follows:- " 14. The rival submissions which have been urged on behalf of the Revenue and the assessee can be dealt with both as a matter of first principle, interpreting the section as it stands and on the basis of precedent on the subject. Interpreting the provision as it stands and without adding or deducting from the words used by Parliament, it is clear that upon the formation of a reason to believe under section 147 and following the issuance of a notice under section 148, the Assessing Officer has power to assess or reassess the income which he has reason to believe had escaped assessment, and also any other income chargeable to tax. The words "and also" cannot be ignored. The interpretation which the court places on the provision should not result in diluting the effect of these words or rendering any part of the language used....
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....ion 147 with effect from April 1, 1989 clearly stipulated that the Assessing Officer has to assess to reassess the income which he had reason to believe had escaped assessment and also any other income chargeable to tax which came to his notice during the proceeding. In the absence of the assessment or reassessment of the former, he cannot independently assess the latter. " The Hon'ble High Court further held that Explanation 3 to section 147 only lifts the embargo placed by judicial decisions on the making of an assessment or reassessment on grounds other than those recorded in the reasons for reopening. The Hon'ble High Court while dealing with Explanation 3 to section 147, held at para 22 of its order as follows:- "22. Explanation 3 lifts the embargo, which was inserted by judicial interpretation, on the making of an assessment or reassessment on grounds other than those on the basis of which a notice was issued under section 148. Setting out the reasons, for the belief that income had escaped assessment. Those judicial decisions had held that when the assessment was sought to be reopened on the ground that income had escaped assessment on a certain issue, the Assessing offi....
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....hich comes to his notice subsequently during the proceedings as having escaped assessment. The words "and also" are used in a cumulative and conjunctive sense. To read these words as being in the alternative would be to rewrite the language used by Parliament. Our view has been supported by the background which led to the insertion to Explanation 3 to section 147. Parliament must be regarded as being aware of the interpretation that was placed on the words "and also" by the Rajasthan High Court in Shri Ram Singh [2008] 306 ITR 343. Parliament has not taken away the basis of that decision. While it is open to Parliament, having regard to the plenitude of its legislative powers to do so, the provisions of section 147 as they stood after the amendment of April 1, 1989, continue to hold the field." The Hon'ble Delhi High Court following the above decision of the Bombay High Court has also upheld this view in Ranbaxy Laboratories Ltd. Vs. CIT(2011) 336 ITR 136. The argument of the Ld. DR that the ratio propounded in Jet Airways (Supra) and Ranbaxy Laboratories (Supra) does not apply since those cases related to assessment years when Explanation 3 to section 147 was not on the statute,....