TaxTMI 
TaxTMI 
2017 (6) TMI 1328
X X X X Extracts X X X X
X X X X Extracts X X X X
.... such deserves to be quashed in limine. 2. For that, the revising, reopening or reconsidering the whole assessment U/s 147 by issuance of notice U/s148 in the pretext that income escaped assessment, in absence of any credible additional material evidences is not permissible on the ground that, the whole exercise amounts to review not permissible by law, particularly when the assessment is completed U/s143(3). 3. For that, the addition of an amount of Rs. 12,86,100/- to the total income for the alleged contravention of section 40A(3) is a presumption, assumption & misconception and ought to have been allowed. 4. For that, the addition of an amount of Rs. 12,86,100/- to the total income for the alleged contravention....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e issue of claim of freight charges of Rs. 72,37,631/- and after examining the same concluded that all the bills and vouchers for the expenses were not produced and, therefore, the Assessing Officer made an estimated disallowance of 5% out of the total expenses and added Rs. 3,61,882/-. The Assessing Officer has also observed in first para of the assessment order that the assessee had filed audited profit and loss account as required u/s.44AB of the Act in the form of 3CB and statement of particulars in Form No.3CD. The Assessing Officer has recorded that books of account and bills and vouchers were produced and verified by him. In view of above, as the Assessing Officer in the original assessment proceedings u/s.143(3) of the Act has verif....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t Rs. 6,96,610/-. It is seen from the record that the assessee has debited a sum of Rs. 72,37,631/- towards payment of freight charges. On examination of the details, it is found that out of the entire freight charges, a sum of Rs. 13,06,100/- was paid in cash to different persons where on a single day the amount paid in cash exceeded Rs. 20,000/-. According to section 40A(3) of the I.T.Act, 1961, where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds rupees twenty thousand, no deduction shall be allowed in respect of such expenditure. Therefore, the amount of Rs. 13,06,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. In this context, the observations of Hon'ble apex Court at page 564 are very relevant, which are reproduced as follows: "Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to ....