TaxTMI 
TaxTMI 
2017 (1) TMI 728
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....ess as Finance and Estate Broker in the name and style of M/s. Amarlal & Company. For the Assessment Year 1989-90, the Petitioner had filed its return of income on 5th January, 1990 declaring an income of Rs. 1.92lakhs. For the Assessment Year 1990-91, the Petitioner had filed its return of income on 23rd August, 1990, declaring an income of Rs. 1.47lakhs and for Assessment Year 1991-92,, the Petitioner had filed its return of income on 31st August, 1991, declaring an amount of Rs. 40.99 lakhs. 4. For the Assessment Years, 1989-90 and 1990-91, the assessment proceedings were completed by intimation under Section 143(1)(a) of the Act on 9th February, 1990 and 6th March, 1991 respectively. While for the Assessment Year 1991-92, the Assessing Officer completed regular assessment by order dated 31st March, 1992 under Section 143(3) of the Act. 5. In the meantime, on 21/22nd September, 1990, search proceedings were initiated against the Petitioner. Consequent to the search proceedings, two re-opening notices under Section 148 of the Act was issued for the Assessment Years 1989-90 and 1990-91. The Assessing Officer, thereafter by two orders dated 31st March, 1995 passed under Secti....
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....age flat 23.7.90 50,000 Uttam Brokerage 25 net 16.8.90 1,00,000 Puri profit Karjat (Also noted in A/1) 29.8.90 19,500 Navani Brokerage account In diary A/1 following profit/brokerage is written which is not incorporated in A/6 diary :- 18.4.90 2,21,000 Murari shop Khar (Total 4,51,000 - 2,30,000=2,21,000 profit) Total 11,60,500 The above income was not shown by the assessee to his return nor assessed. This income of Rs. 11,60,500/- has escaped assessment. B. The assessee is also buying and selling properties. The details of such dealings are also noted in reasons recorded for A.Y. 1989-90. During the year the receipts from property dealings noted in A/6 diaries are: Date Amount Rs. Description 3.4.90 21,000 Mahink Asha Nagar Deposit flat a/c 4.4.90 25,000 - do - 12.4.90 2,93,000 - do - 16.4.90 1,58,000 Murari shop account Khar 16.4.90 1,55,000 Divya Shah flat (also noted in A/1 on 18.4.90) 24.4.90 1,72,500 Mahink Asha Nagar Flat 401 (Also entry ....
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....50,000 Received Divya flat a/c 19.7.90 25,000 Atlanta a/c 27.7.90 1,50,000 L.C. Flat Mad 1501 2.8.90 50,000 Received Dalal Hud Atlanta 6.8.90 1,36,000 Khysh Thana a/c ,, 10,000 Mahink Deposit Asha Nagar(A-1 Rate 630 net) ,, 78,000 Navani 2 A/c 1300 8.8.90 2,00,000 Khysh Silver (A - 1 Silvermist a/c) 9.8.90 1,34,000 Chandru Kandivli , Asha Nagar (A-1 620 net) 13.8.90 1,71,500 Chandru Asha nagar Kandivli (A - 1) 16.8.90 6,25,000 Navani Karjat (A - 1) ,, 1,69,750 Mahink flat payment (A - 1 flat no.504 x 330 + 10 deposit Ashanagar) ,, 2,50,000 Khys Silver (A - 1 diary on 17.8.90 Silver Mist) ,, 28,000 Anand flat 18.8.90 1,50,000 Khysh Silver a/c (A-1 Silver Mist) 22.8.90 1,71,500 Mahink Asha Nagar (A-1 No.504) 22.8.90 4,500 Chandru Asha Nagar 22.8.90 70,000 Received R Vasu Karjat a/c 27.8.90 2,50,000 Atlanta ,, 17,500 ,, 29.8.90 20,000 Navani Divya A/c 5.9.90 ....
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....ruction Co - Dolly Nagpal 3.6.90 2,00,000 Kishor Jaising Flat A/c 11.6.90 1,50,000 Kishore Jaising Flat Divya A/c 30.6.90 60,00,000 Sri Project Nalasopara 34000 x 175 agreement - 90 6.7.90 2,00,000 Deepak Divya Flat a/c 19.7.90 75,000 Navani Flat A/c 1.8.90 4,80,000 Sri Project Shop No.5, 350 x feet x 1500 ft. 2.8.90 9,68,000 Sri Project Worli - Shop 4.8.90 2,20,500 Sri Project 490 feet x 2 x 375 rate x 60 % 7.8.90 50,000 Kum Jaisingh Mud A/c (Also A/6 diary p. 79) 7.8.90 1,00,000 Dilip Divya Flat a/c 10.8.90 1,60,000 K.K. Murari Karjat Sirse A/c ,, 50,000 Kum. Jais Mud A/c 13.8.90 37,50,000 Eagle Farm against material 14.8.90 20,000 Given Divya Shah Navani Stamp A/c 14.8.90 40,000 K.K. Murari Karjat 21.8.90 5,00,000 Atlanta Sonda Against 304 610 ft x 1000 23.8.90 2,50,000 Ramse Jivan Sharda Kutir Deposit 12000 feest 3000 Tenants 25.8.90 5,50,000 Atlanta Construction (Also in A/6 diary on 27.8.90 ) (P. 82) 24.8.90 5,00,000 Kirtikar Deposit office (A/6 diary on 27.8.90 ) (P.82) 24.8.90 5,92,000 Sr....
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....bsp; Rs.5,35,95,762 7. The impugned notices dated 23 September 1997 were challenged in this Court by filing this petition on the ground that the same are without jurisdiction and therefore bad in law. 8. The Respondent-Revenue, has opposed this petition by filing an affidavit in reply dated 12th March, 1988 of one Mr. K. K. Deb Burman, the Commissioner of Income Tax, Central-I, - wherein it is contended that during the assessment proceedings under Section 148 read with Section 143(3) of the Act for Assessment Years 1989-90 and 1990-91 and during assessment proceedings under Section 143 (3) of the Act for the Assessment Year 1991-92 the Petitioner had misled the Assessing officer in respect of the entries found in the six seized diaries(A-1 to A-6) to conclude that he is only a finance and estate broker and not a financer in his own right. Besides, the affidavit also states that the Petitioner's decoding of the seized diaries (A-1 to A-6), during the regular assessment proceedings was incorrect. This on the basis of the examination of the seized diaries(A-1 to A-6). 9. Mr. Joshi, learned Counsel appearing for the Petitioner submits that the reasons as recor....
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....on should be dismissed and the petitioner would have more than sufficient opportunity to explain the facts before the authorities under the Act in the reassessment proceedings. 11. It is a settled position in law that a re-opening of assessment has to be done only by the Assessing Officer based on his reasonable belief that income chargeable to tax has escaped assessment. This satisfaction of the Assessing officer has to be disclosed /made explicit in the reasons recorded and the same cannot be a subject of speculation and /or drawing inferences. This is so conclusively stated this Court in Hindustan Lever Ltd., (supra) as under: ".... the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to drawn based on reasons not recorded. It is for the Assessing officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons.... The reasons recorded should be clear and unambiguous and suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of the ind ....
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....acquisition of the property which was transferred, was for a consideration of Rs. 300/-. The Assessing Officer sought to re-open and complete its assessment by placing reliance upon the trust deed and in, particular, the cost of acquisition of the property which was subjected to capital gains being recorded therein for the purpose of re-opening assessment. In that case, the Assessing Officer as well as this Court while negating a challenge by the Petitioner before it, placed reliance upon Explanation-I to Section 147 of the Act which provides that mere production of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer, will not necessarily amount to disclosure within the meaning of the first proviso to Section 147 of the Act. In the present facts, it is not the case of the Revenue that any material evidence which was a part of the seized six diaries (A1 to A6),was not brought to the notice of the Assessing Officer, and it does not mention which material relied upon by the Petitioner during the assessment proceedings, had led the Assessing Officer to conclude that the Petitioner is only a finance broker a....