TaxTMI 
TaxTMI 
2017 (10) TMI 1097
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....s against the facts of the case. 4. That on facts & circumstances of the case, the Ld. CIT (A) has erred in upholding an addition of Rs. 25,00,000/- made by the assessing officer on account of gift received from Mr. Rajeev Gupta. 5. That on facts & circumstances of the case, the Ld. CIT (A) has erred in ignoring the evidences furnished before him in regard to the gift of Rs. 25,00,000/- received from Mr. Rajeev Gupta. 6. That on facts & circumstances of the case, the Ld. CIT (A) has erred in upholding an addition of Rs. 3,70,126/- made by the assessing officer on account of gift received from a close relative Mrs. Sonia Wadhawan. 7. That on facts & circumstances of the case, the Ld. CIT (A) has erred in ignoring the evidences furnished before him in regard to the gift of Rs. 3,10,126/- received from Mrs. Sonia Wadhawan. 8. That the Ld. CIT (A) has erred in disallowing an interest of Rs. 35,64,692/- (original disallowance by the AO being Rs. 62,12,924/-) on account of interest paid against exempt income whereas no fresh investment has been made in the companies from which exempt income has been received during the relevant period & the op....
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....x Officer Ward-3, Gurgaon" 3. Before us, the Ld. counsel for the assessee, Shri Ashwani Taneja challenging the validity of reopening under section 147, submitted that the 'reasons' as recorded by the Assessing Officer do not clothe the Assessing Officer with the jurisdiction to reopen the assessment under section 147, as the inference drawn by the Assessing Officer is completely divorced from the material facts on record. AO has mainly relied upon the observations made in the assessment order of Shri Ashok Mahindru and Sons for the assessment year 2001-02, from where he has inferred that the assessee who has received gift from Shri Rajiv Gupta, s/o of Shri Ramesh Chand Gupta in this year, is not genuine. Since in that case the gift received was held to be non-genuine and was treated as undisclosed income, therefore, on same premise, AO has formed his reason to believe that in the case of the assessee also such gifts should also be treated as non-genuine. After filing the copy of assessment order in the case of M/s Ashok Mahindru & Sons, he pointed out that first of all, from a bare perusal of the said assessment order for the assessment year 2001-02 as has been referred by the A....
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....ound in one of the cases of the family members/group has been found to be bogus, then there is prima-facie "reason to believe" that the gifts received by the assessee during the year from the donor, Shri Rajiv Gupta is also not genuine as the assessee and his family members were found to have received several gifts from various persons, therefore, the Assessing Officer has strong belief about the non-genuineness about the gift received by the assessee and hence he has rightly reopened the assessment under section 147, so as to verify the genuineness of the gift. This belief is flowing from the material in the form of one of the assessment order in the case of M/s Ashok Mahindru & Sons which is a HUF belonging to the assessee and, therefore, this is sufficient for examining the nature of gift received by the assessee. Thus, the Assessing Officer was fully justified in reopening the case and the ld. CIT (A) has rightly confirmed the action of the Assessing Officer as per his finding given in paragraph 2.3 of the impugned order. 5. We have heard the rival submissions qua the issue of validity of reopening under section 147 and also perused the relevant material referred to before u....
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....t assessee has received any gift in this year from the said donor or there is any reference of Shri Rajiv Gupta. Thus, formation of 'reason to believe' based on the observations and findings given in the assessment order in the case of M/s Ashok Mahindru & Sons, cannot hold a good ground so as to acquire jurisdiction for reopening the case under section 147, because the 'reason to believe' is not based on relevant material and does not have any rational connection with the facts of the assessee's case so as to hold that the gifts received by the assessee in this year from Shri Rajiv Gupta is not genuine or bogus. The 'reason to believe' thus, falls in the realm of suspicion and howsoever strong suspicion may be but it cannot be reckoned as tangible material having live link nexus with income escaping assessment. 7. It is a trite law that the reasons for formation of belief not only should have a rational connection or relevant bearing with the material, but it must also have direct nexus or live-link between the material coming to the notice of the Assessing Officer and the formation of his belief that there has been escapement of income of the assessee from assessment. It is no....