TaxTMI 
TaxTMI 
2018 (6) TMI 292
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....assesee reiterated the contentions raised by the assesee before the ld. CIT(A) that the reopening of assessments are bad in law. He submitted that, a plain reading of the reasons recorded for re-opening the assessment disclosed that no new tangible material has come into the possession of the assesee and that reopening was made "on going through the assessment record". He pointed out to the sentence " perusal of the assessment records shows no such disallowance" and submitted that the reasons demonstrate that the reopening is bad in law as no new or tangible material has come into the possession of the assessee. Relying on a number of decisions and specially on the order of the Hon'ble Mumbai Bench of the ITAT in the case of Motilal R.Todi vs ACIT in ITA No.2910/Mum/2013 order dated 22.09.2015 he further submits that, when a specific direction has been given by the Additional Commissioner u/s 144A of the Act for passing an order u/s 143(3) of the Act on a specific issue, assessment cannot be reopened on the same issue. For this proposition he relied on the judgement of Hon'ble Calcutta High Court in the case of Amrit Sales Promotion vs Union of India 35 taxmann.com 53 (Calcutta).. ....
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....xamine such loss on sale of land and further, directed to examine whether such loss can be adjusted from income shown in the credit side of the P&L A/c." The instructions were general and were not prejudicial to the assessee and were only confined to the general lines of investigation. The Income Tax Inspector (ITI) attached to the office of the AO also made field enquiries and submitted the report on 11.11.2010. The ITI reported that he has visited the residence of Smt. Susama Naskar & Ashok Naskar but could not meet them as they were not present. He however, met one Shri Sourjya Sekhar Naskar, the constituted attorney of the vendors who confirmed that the property has been sold by the vendors and the consideration was made in cash and bankers cheque & A/c payee cheque as mentioned in the Sale Deed. The AO vide order sheet dated 01.11.2010 had also noted as under:- "1.11.10 Shri H P. Agarwal, A/R appear and furnish the details on as asked for in the earlier hearing. The documents relating to Purchase & Sale of lands are checked and verified w.r.t. bank statement and cash book. The documents for development expenses are partly checked. All the document relating to P&L A/cs are....
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....f assessee's claim that the transactions in land had been entered into as business transactions, the payments in cash to the sellers, comes within the purview of sec. 40A(3) of the Income Tax Act '1961, as applicable in the A.Y 2008-09. The provisions of sec. 40A(3) as applicable in the A. Y. 2008-09 is as under, "Where the assessee incurs any expenditure in respect of which payment is made in a sum exceeding twenty thousand rupees otherwise than by an account payee cheque drawn on a bank or account payee bank draft, no deduction shall be allowed in respect of such expenditure." Thus the claim or expenditure in cash amounting Rs. 43,99,7501- cannot be allowed, going by the provisions of sec. 40A(3) of the I.T Act'1961. The perusal of the asstt. order, shows on such disallowance. In view of the above discussion, the undersigned has reason to believe that the income of Rs. 43,99,750/- has been escaped from taxation. 2.0. Further it is noted from the records that the assessee had claimed advance against trading land of Rs. 3,76,06,125/- as per balance sheet for the A. Y. 2008- 09. However, no land on trading account has been disclosed in the said balance sheet. Under ....
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....me of reopening of the case of the assessee. Thus, assertion of the assessee that there was no fresh material with AO for reopening of this case, remained uncontroverted. 6.7. Under these facts and circumstances, let us now examine settled position of law on this issue. It has been held in various judgments coming from various courts that availability of fresh tangible material in the possession of AO at the time of recording of impugned reasons is a sine qua none, before the AO can record reasons for reopening of the case. We begin with the judgment of Hon 'ble Supreme Court in the case of CIT vs. Kelvinator India Ltd. 320 ITR 561 (SC), laying down that for reopening of the assessment, the AO should have in its possession 'tangible material'. The term 'tangible material' has been understood and explained by various courts subsequently. There has been unanimity of the courts on this issue that in absence of fresh material indicating escaped income, the AO cannot assume jurisdiction to reopen already concluded assessment. 6.8. Recently, Hon'ble Delhi High Court in the case of Pr. CIT vs Tupperware India Pvt. Ltd., in its order dt 10-8-15 (ITA no 415 / 2....
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....ce, the AO has to be satisfied on the basis of tangible material or information subsequently available to him that the assessee had not made full and true disclosure which led to income escaping assessment at the stage when the original assessment was completed. Short of that a re-appreciation of the existing materials which really amounts to review is impermissible. The Tribunal, in the circumstances of this case was justified in concluding that re-assessment proceedings themselves were not in accordance with law and consequently dismissing the Revenue's appeal. No question of law arises for consideration. " 6.13. In the case of CIT vs. Shri Atul Kumar Swami in ITA No. 112/2014 dated 18-03-2014 reported at 52 Taxmann.com 47, Hon'ble Delhi High Court observed as under: ".....Reopening of assessment is valid if it is based on tangible material to justify conclusion that there was escapement of income-In instant case note forming part of return clearly mentioned and described nature of the receipt under a non-compete agreement-Reasons for issuance of notice u/s 147 nowhere mentioned that revenue came up with any other fresh material warranting reopening of assessment-Mere co....
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....in the case HV Transmissions Ltd. in I.T.A No. 2230/Mum/2010 held that even though original assessment was made under s. 143(1) and not under s. 143(3), assessee having made full disclosure of its income, AO was not justified in reopening the assessment in the absence of any new material. Hon'ble Bench has relied upon third member judgment from Mumbai Bench of ITAT in the case Telco Dadajee Dhackjee Ltd vs DCIT ( ITA No 4613/Mumbai/2013 dt 12-5-2010), in support of this view. 6.18. Similar view has been expressed by Hon'ble Delhi Bench of ITAT in the case of M/s Nexgen School of Business Vs. Deputy Commissioner of Income Tax, [ITA No. 5609/DEL/2010] holding that the Assessing Officer was not justified to initiate the reopening proceedings in absence of any new information or material on record since the date of filling and processing of the return of income. 6.19. In the present case, it has already been discussed that admitted facts are that there was no fresh material coming into the possession of the AO, at the time of recording of the 'Reasons'. These facts have not been rebutted by Ld DR also. The case law relied upon by Ld DR in the case of Dr. Amin's Pathology, supra i....