TaxTMI 
TaxTMI 
2020 (1) TMI 1070
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....was provided by the Petitioner on 28.03.2018, at the time of hearing. Subsequently, Respondent issued a notice dated 29.03.2018 under Section 148 of the Act, which is impugned in the present petition. In response thereto, Petitioner filed her return of income on 30.04.2018 and pursuant to a request for supply of 'reasons to believe', the AO furnished the same on 10.07.2018. Assessee's objections to the said reasons, filed on 10.09.2018, came to be disposed of vide order dated 08.10.2018. 3. Since the scope of challenge in the instant petition pertains to the assumption of jurisdiction by the AO under Section 147 of the Act, perusal of the reasons to believe is necessary. The same are extracted herein below: "Reasons for reopening of the assessment in case of Ms. Vanita S Anand Asstt.Year 2011-12 U/s.147 of the I.T.Act 1961 1. The ITO (Inv.) Unit-7/2/2017-18/419 dated 09/03/2018 forwards the information that following transactions with M/s.Duggal Associates are appearing in the bank account NO.002901528361 of Ms. Vanita S. Anand maintained with ICICI Bank, Greater Kailash Branch, New Delhi: S.No. Date Amount Received Amount Paid (i) 08.04.2010 20,12,000/- - (ii) 26.04....
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....iii) of clause (24) of section 2'} 74[ib) income referred to in sub-clause (ix) of clause (24) of section 2;] 75[(ic) income referred to in head "profits and gains of business or profession";] 76(id) income by way of interest on securities, if the income is not chargeable to income-tax under the head "profits and gains of business or profession";] (ii) income from machinery, plant or furniture belonging to the assessee and let on hire, if the income is not chargeable to income-tax under the head "profits and gains of business or profession"; (iii) where an assessee lets on hire machinery, plant or furniture belonging to him and also buildings, and the letting of the buildings is insperable from the letting of the said machinery, plant or furniture, the income from such letting, if it is not chargeable to income-tax under the head "profits and gains of business or profession"; 77[liv) income referred to in sub-clause (xi) of clause (24) of section 2, if such income is not chargeable to income-tax under the head "profits and gains of business or profession" or under the head "salaries";] 78(v) where any sum of money exceeding twenty-five thousand rupees is received without consi....
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....5. Ms. M.S. Talha, Advocate appearing for the Revenue argues that the Petitioner had filed her original return of income for AY 2011-12 on 15.07.2011, declaring an income of Rs. 3,57,939/-. Subsequently, information was received from ITO (Investigation), Unit-7, New Delhi dated 09.03.2018, wherein it was intimated that the Petitioner-assessee had entered into suspicious transaction of receiving loan amount of Rs. 70,12,000/- from Duggal Associates during Financial Year (hereinafter referred to as "FY") 2010-11 relevant to AY 2011-12. After careful perusal and examination of the information, the Investigation Wing issued a letter to the Petitioner, calling for certain information under Section 133(6) of the Act. Enquiries were conducted from Shri Anil Duggal, proprietor of M/s. Duggal Associates, who in response thereto furnished a reply stating that he had given loans of Rs. 70,12,000/- to the Petitioner with interest @11% amounting to Rs. 7,05,320/-. Petitioner only made part payment to the tune of Rs. 60 lacs against the loan amount of Rs. 70,12,000/- and interest thereupon of Rs. 7,05,320/- and the remaining amount of Rs. 17,17,320/- (Rs. 77,17,320/- minus Rs. 60,00,000/-) remai....
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.... for his assessment during the concluded assessment proceedings, any part of his income, profit or gains chargeable to income tax has escaped assessment. He may start reassessment proceedings either because some fresh facts come to light which were not previously disclosed or some information with regard to the facts previously disclosed comes into his possession which tends to expose the untruthfulness of those facts. In such situations, it is not a case of mere change of opinion or the drawing of a different inference from the same facts as were earlier available but acting on fresh information. Since, the belief is that of the Income Tax Officer, the sufficiency of reasons for forming the belief, is not for the Court to judge but it is open to an assessee to establish that there in fact existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. To that limited extent, the Court may look into the conclusion arrived at by the Income Tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income Tax Officer and further whether that m....
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....sary to reproduce the same: "XI. In Paragraph 13(c) the Petitioner-Assessee submitted that the Deponent had obtained approval by stating wrong facts that no return was filed by the Petitioner-Assessee. It is put forth that due to urgency and paucity of time, the clerical mistake occurred in the Annexure only. Otherwise, there is no other place where the Deponent has mentioned that the Petitioner Assessee has not filed the return of Income for A.Y. 2011-12. To elaborate, it is put forth that, the Petitioner-Assessee herself has filed income tax returns on the income tax website for A.Y. 2011-12 wherein she had shown different taxable income in her returns. Firstly, return was filed on 15/07/2011 with taxable income of Rs. 2,93,100/-; further another return of income in response to notice u/s 148 was filed under protest on 30/04/2018 and shown taxable income of Rs. 1,75,110/-. In its letter dated 02.05.208, filed on 07.05.2018 the petitioner has made as wrong statement stating that "From the computation of income enclosed your goodself will observe that the assessee's taxable income of Asstt. Year 2011-12 was below taxable limit and therefore there was no obligation to file return ....
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....Officer (Investigation) Unit-7, New Delhi vide letter dated 09.03.2018. The premise for reopening as spelt out in the recorded reasons is that the petitioner-assessee had transactions with Duggal Associates and had received certain credits in her account maintained with ICICI Bank, Greater Kailash Branch, New Delhi. This transaction was considered to be a short term loan from Shri. Anil Duggal, proprietor of M/s Duggal Associates and was partly returned back. It is also the case of Revenue that on enquiries, Shri Anil Duggal confirmed that he had given loan to the Petitioner and the same had been included in his books of account as "Loans and Advances". On a perusal of the loan agreement, the AO concluded that the expiry date of the loan agreement was 15.03.2011 and on the said date, the loan alongwith interest became due. Thereon, taking note of the fact that the Petitioner-assessee has made a payment of Rs. 60,00,000/- to Anil Duggal on 11.08.2011, against the loan amount of Rs. 70,12,000/-, he arrived at the aggregate liability due to Shri Anil Duggal from the Petitioner as Rs. 77,17,320/- after factoring the interest amount of Rs. 7,05,320/-. After adjusting the amount of Rs. 6....
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....sment. The AO does not dispute the loan transaction. In fact the loan transaction forms the basis of computing this notional income. The AO on the basis of the loan transaction, which he does not suspect to be a bogus transaction, proceeds to calculate the interest liability and after hypothetically computing the same, adds it to the principal amount and makes a deduction of the amount repaid, and assumes that the balance amount remains unpaid and charges it to the notional income of the assesse by relying on provisions under Section 56(2) and 56(2)(vii)(a) of the Act. A quick reference of the said provision would be useful. The same reads as under: "56. (1) Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income-tax under the head "Income from other sources", if it is not chargeable to income-tax under any of the heads specified in section 14, items A to E. (2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely :- XXXX [(vii) where an individual or a Hindu undivided f....