TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 870
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that the Assessing Officer, before issuing notice u/s 148, has with due diligence has discovered from the material evidence which has come to his notice that income chargeable to tax has escaped assessment 5) The learned CIT(A) should have appreciated that as per Section 24 of the Indian Evidence Act, 'Confession' is a statement made by an accused person which is sought to be proved against him in criminal proceedings to establish the commission of an offence by him. As such, the 'Confession' given by Sri 1. Ranga Rao, before the Hon'ble Metropolitan Magistrate, Hyderabad, that excess amount over and above the price mentioned in registered documents was collected in cash by him from the buyers of the villa plots at Gachibowli in Emmar Hills Township (P) Limited, Hyderabad, is a valid supporting material to corroborate that on money has been paid by the assessee towards purchase of land Reliance is placed on Hon'ble Supreme Court decision in criminal proceedings in the case of Nishi Kant Jha Vs State of Bihar wherein it was pointed out that there was nothing wrong or relying on a part of the confessional statement 6) The learned CIT(A) ought to have no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Linkwell Telesystems Pvt. Ltd has made an investment of Rs. 3,39,00,000 towards purchase of a villa in M/s. Emaar Hills Townships Pvt. Ltd during the financial year 2006-07 relevant to the A.Y 2007-08. The AO perused the records of the assessee and found that the assessee has failed to disclose the above investment in his return of income and therefore, observed that by accepting the return u/s 143(1), it has resulted in escapement of income to the extent of Rs. 3,39,00,000 due to the failure of the assessee to disclose true facts of the case. 3. In response to the notice u/s 148, the assessee filed a letter dated 26.03.2013, stating that the return filed on 28.03.2008 be treated as the return filed in response to the notice u/s 148 and also requested the AO to furnish the reasons recorded as per the decision of the Hon'ble Supreme Court in the case of M/s. GKN Drive Shaft (India) Ltd vs. ITO and others. The AO communicated the reasons recorded to the assessee vide letter dated 30.05.2013. In response to the same, the assessee, vide letter dated 10.06.2013, raised his objection that the assessee has purchased the villa vide registered agreement of sale dated 15.04.2009 for a c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eedings u/s 147 of the Act to be void on the ground that the AO did not have any material to corroborate that "on money" has been paid by the assessee towards purchase of the villa and that income of Rs. 3,39,00,000 has escaped the assessment for the A.Ys 2007-08, 2009-10 & 2010-11. He held that prima facie quantification of the income which has escaped assessment is an essential requirement u/s 149 of the Act and in the absence of date of payment with evidence, the previous year in which the transaction falls cannot be ascertained. The other ground on which he has held the reopening of the assessment to be bad in law are that there is no tangible material in the possession of the AO of the assessee that the income of the assessee has escaped assessment but the AO has reopened the assessment only on the basis of the information received from another AO and the satisfaction recorded is based only on a possibility and presumption. The CIT (A) also observed that the assessee had raised detailed objections to the reopening of the assessment before the AO, but the AO has rejected the same without passing a speaking order. Further, he also observed that the assessee had sought an opportu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the AO for fresh examination in the light of the directions given by the Tribunal in the case of Mr. Mahesh Babu. 8. The learned Counsel for the assessee, on the other hand, supported the orders of the CIT (A) and submitted that for reopening of the assessment after a period of four years on the basis of material available on record, the AO has to satisfy himself that the income of the assessee has escaped assessment and that it is due to the fault of the assessee to disclose fully and truly all material facts necessary for the estimation of his income. The learned Counsel for the assessee submitted that the assessee has filed his returns of income for all the three years and even in the Wealth Tax returns, the assessee has disclosed the asset. He also submitted that the assessee has made the payment only of Rs. 84,75,000 to M/s Emmar Hills Township Ltd, by way of cheques, and the sources for the said payments have been explained by the assessee to the authorities below and all the payments have been reflected in the books of account and also explained during the re-assessment proceedings. Therefore, according to him, the AO had no material, whatsoever, to come to the conclusion ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....AO has not brought on record, any evidence as to how and when the assessee has made payment of any cash for the purchase of the villa. The AO has unilaterally apportioned the alleged cash payment equally amongst the three A.Ys. Such a procedure is not envisaged under the law. The AO is required to bring on record, the quantum of investment and the mode of investment made during the relevant previous year before making any addition to the returned income of the assessee. No such evidence has been brought on record by the AO. The Hon'ble Courts have held that the AO of the relevant assessee has to record his reasons before reopening of the assessment and where the reopening of assessment is after four years, he is required also to record that the income has escaped the assessment due to the failure on the part of the assessee to disclose all material facts. The AO of the assessee before us has not brought on record any material on the basis of which he had satisfied himself that the assessee has not disclosed the material facts due to which there is an escapement of income for the relevant A.Y. 10. The Hon'ble Bombay High Court in the case of Hindustan Lever Ltd (cited Supra....