TaxTMI 
TaxTMI 
2018 (12) TMI 907
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....the reassessment framed be quashed. 2. Because there being no material to form reason to believe, the notice issued under section 148 is without jurisdiction, bad in law, the re-assessment framed be quashed. 3. Because the authorities below have erred on facts and in law in estimating and adding a sum of Rs. 99,051/- as presumptive income under section 44AD of the I.T. Act, 1961, which addition is contrary to facts, bad in law and be deleted. 4. Because the peak credit in the savings bank with ICICI Bank being Rs. 63,922/-only, there was no reason for the AO to estimate the profit at Rs. 99,051/- and make an addition of the same, against Rs. 63,922/- if at all, the addition made be deleted. 5. Because the....
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....of Rs. 5,39,995/-under the head income from salary pension. The assessee is not showing any income from business and profession or capital gain. Therefore, it is not understood as to why the assessee earning salary only is depositing cash amounting to Rs. 11,18,886/- in his bank accounts. In view of the above facts, I have reason to believe that income of Rs. 11,18,886/- chargeable to tax has escaped assessment as per the provisions of Sec.147 of the IT. Act, 1961 read with explanation 2(b). Therefore this is a fit case for issue of notice u/s.148 of the IT. Act, 1961." 5. The ld. counsel for the assessee has contended that the AO had no material to form reason of belief of escapement of income and so, the notice issued....
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....t does not indicate that these deposits constitute an income which has escaped assessment. It was observed that the reasons recorded did not make out a case that the assessee was engaged in some business and the income from such a business had not been returned by the assessee. In the case at hand also, the reasons recorded do not contain any such recital. The Tribunal held that the factum per se, of deposits in the bank account of the assessee could not be made the basis for holding the view that income had escaped assessment, over-looking that the sources of the deposits need not necessarily be the income of the assessee; and that as such, the reasons recorded were not sufficient to believe escapement of income; that rather, they were rea....
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....d on a standalone basis and nothing can be added to the reasons. It was also observed that the reasons must point out to an income escaping assessment and not merely need of an enquiry which may result in detection of an income escaping assessment. It was observed that it is necessary that there must be something which indicates, even if it does not establish, the escapement of income from assessment; that it is only on that basis that the AO can form a prima-facie belief that an income has escaped assessment; that merely because some further investigations have not been carried out, which, if made, could have led to detection of an income escaping assessment, this can not be reason enough to hold the view that the income has escaped assess....
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.... been made in the bank account of the assessee, but the mere fact that these deposits have been made in a bank account does not indicate that these deposits constitute an income which has escaped assessment. The reasons recorded for reopening the assessment do not make out a case that the assessee was engaged in some business and the income from such a business has not been returned by the assessee. As we do not have the liberty to examine these reasons on the basis of any other material or fact, other than the facts set out in the reasons so recorded, it is not open to us to deal with the question as to whether the assessee could be said to be engaged in any business; all that is to be examined is whether the fact of the deposits, per se, ....
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....rrectness of this proposition but then, as we have elaborately explained earlier in this order, the material must indicate income escaping assessment rather than desirability of further probe in the matter which may or may not lead to income escaping the assessment, in our humble understanding, cannot be drawn." 49. Now, in keeping with 'Bir Bahadur Singh Sijwali' (supra), this information cannot form a valid basis for initiating assessment proceedings under section 147 of the I.T. Act. As observed in 'Bir Bahadur Singh Sijwali' (supra), the mere fact that the deposits had been made in the bank account does not indicate that these deposits constitute income which has escaped assessment. 50.Thus, it was a mere suspicion of ....