2015 (11) TMI 1523

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....e are that in this case it was gathered by the AO that the assessee had claimed interest of Rs. 1,48,307/- as expenditure in the return originally filed on 27.8.2009. However, the same did not relate to business activities and as such expenditure claimed at Rs. 1,48,307/- was not allowable as per Act. Based on such inference, the AO initiated action u/s. 147 by way of notice u/s. 148 of the Act dated 7.4.2011. In response to notice u/s. 148 of the Act, it was submitted by the assessee that the return filed originally on 27.8.2009 be treated as return filed in response notice u/s. 148 of the Act. Thereafter, the AO completed the assessment at Rs. 8,07,200/- vide his order date 31.1.2013 passed u/s. 143(3)/147 of the I.T. Act, 1961. 4. Aga....

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.... Notice, but no fresh material was available with the AO, except the material already filed by the assessee with the return of income. Therefore, the issuance of notice u/s. 148 of the I.T. Act is illegally bad in law and without jurisdiction, keeping in view of the various decisions referred by the Hon'ble Delhi High Court in the case of CIT vs. Orient Craft Ltd. 354 ITR 536 (Delhi) and CIT vs. Atul Kumar Swami 362 ITR 693 (Delhi). He has also filed the copy of these judgments with the Paper Book filed by the Assesse alongwith the relevant papers which the assessee has filed with the Paper Book containing pages 1 to 59. 7. Ld. DR relied upon the orders of the authorities below and requested that the appeal of the Assessee may be dismiss....

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....u have claimed deduction of interest at Rs. 1,48,307/-. The balance sheet attached with the return shows out of borrowed capital the substantial funds are invested in no business assets. Therefore, deduction u/s. 36(1)(iii) of the I.T. Act, 1961 is required to be restricted to the borrowed funds invested in the business assets. You are required to show cause on 3.2.2011 at 3.30 PM to why notice u/s. 148 of the I.T. Act, 1961 may not be issued to assess the escaped income. Sd/- (V.K. NIGAM) INCOME TAX OFFICER WARD 1(1), MUZAFARNAGAR" REASONS RECORDED "OFFICE OF THE INCOME TAX OFFICER, WARD 1(1), MUZAFFARNAGAR 1. Name & address of the assessee Shri Rakesh Bandhu   1-Mandi Kohna,   ....

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.... of the Income Tax Act, 1961. Sd/- (V.K. NIGAM) INCOME TAX OFFICER WARD 1(1), MUZAFARNAGAR" 8.1 After going through the orders passed by the Revenue Authorities and the arguments advanced by the Ld. Counsel for the Assessee alongwith the judgments cited by the assessee in the case of CIT vs. Orient Craft Ltd. 354 ITR 536 (Delhi) and CIT vs. Atul Kumar Swami 362 ITR 693 (Delhi), I find that the in one of the decisions i.e. in the case of CIT vs. Orient Craft Ltd. (Supra), the Hon'ble has held as under (Head Notes):- "Held, dismissing the appeal, that the reasons disclosed that the Assessing Officer reached the belief that there was escapement of income 'on going through the return of income' filed by the assessee after h....