TaxTMI 
TaxTMI 
2017 (9) TMI 483
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....tor of SHPL, who is impleaded in these writ petitions as Respondent No. 2, has been addressing false and malicious communications about them for several years now and that this has led to the high-pitched assessments in the case of each of the Petitioners. It is further pointed out that disciplinary proceedings were initiated against Respondent No. 2 under the Chartered Accountants Act, 1949. The Appellate Authority constituted thereunder confirmed the suspension of Respondent No. 2 (Naveen Chaudhary) by an order dated 20th September 2011. 5. As far as the facts in Writ Petition (Civil) No. 11791 of 2016 is concerned, the assessments of the Petitioner, Rajiv Agarwal, for the Assessment Years ('AYs') 2006-07 onwards were sought to be reopened by the AO invoking the power under Section 147 of the Act. 6. For AY 2006-07, as a result of the reopening of the assessment, an assessment order was passed under Section 147 and 143 (3) of the Act. As against the returned income in the sum of Rs. 10,90,360, the AO framed the assessment at an income Rs. 14,73,860. The addition was a result of alleged expenditure incurred on construction at the residence of the Assessee. A reference was ma....
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....see had not let out the said property at all. It was alleged that by showing it as let out, the Assessee claimed deduction on interest on payment of loan. As against the rent of Rs. 90,000 the Assessee claimed interest on loan of Rs. 3,05,953 and thereby showing a total loss of Rs. 2,42,953 under the head "income from house property". The further allegation in TEP was that SHPL purchased 'key man insurance policy' for the financial year ('FY') 2004-05 and paid premium amounting to Rs. 20,70,036 for AYs 2005-06, 2006-07 and 2007-08 and sold the same to the shareholder/director during FY 2007-08 for a meagre amount of Rs. 4,16,000. Accordingly, a sum of Rs. 16,54,036 was proposed to be treated as perquisite in the hands of the Assessee. Thus it was alleged that income of Rs. 16,54,036 had escaped assessment under the head salary and Rs. 1,80,000 under the head 'income from house property'. 12. In the case of Rajiv Agarwal the reasons for reopening of the assessment were communicated, despite repeated requests, only by letter dated 31st October 2016. It alleged that payments for Rs. 1,45,25,137 by way of cheques dated 13th September 2008 and 12th December 2008 were made during the ....
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....d in book. The real source of that expenditure was "the matter of investigation." The findings in this regard was that "the exact amount of each director is still to be quantified, therefore, it is clear that unquantified income in this case but quantified income of Rs. 5,50,000 has escaped assessment because the Assessee has not disclosed fully and truly all material facts in the return of income and the same ......" 15. Identical reasons for reopening of the assessment were recorded in the case of Vijaya Laxmi Agarwal and communicated by the letter dated 31st October 2016. As far as Juhi Dixit is concerned, the reasons recorded by the AO were communicated to her by letter dated 17th April 2015 have already been discussed. 16. Each of the three Petitioners filed objections. As far as Rajiv Agarwal was concerned, by his objection dated 1st June 2015 he requested that he should be furnished copies of the TEP. It was submitted that the complaint in the form of TEP cannot constitute fresh material warranting the reopening of the assessment. The reasons merely set out the complaint and then stated that the AO had formed a reasonable belief that income had escaped assessment. Ther....
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....28th November 2016 in the case of Vijay Laxmi Agarwal and 30th November 2015 in the case of Juhi Dixit. 20. This Court has heard the submissions of Mr. S. Krishnan, learned counsel for the Petitioner and Mr. Zoheb Hossain, learned Senior standing counsel for the Respondent. 21. It is seen that the issue concerning deemed dividend under Section 2 (22) (e) was also adduced for the reopening of the assessment for AY 2008-09. That has been comprehensively negatived by this Court and by allowing writ petitions filed by Rajiv Agarwal and Vijay Laxmi Agarwal by order dated 16th March 2016 in Writ Petition (Civil) Nos. 9659-9661 of 2015. 22. As regards the objections by Juhi Dixit, the Court finds that in the order dated 31st October 2015 disposing it the AO has failed to deal with the principal objection. It was pointed out that the AO had completely overlooked the fact that provision of key man insurance under the Act was held to be non-taxable by the High Court in the decision in CIT v. Rajan Nanda (2012) 349 ITR 008. Moreover, the Central Board of Direct Taxes ('CBDT') itself had clarified that income arising from assignment of keyman insurance policies in the assignees' hands....