TaxTMI 
TaxTMI 
2021 (5) TMI 957
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....ssment proceedings u/s. 147 of the Act even when the whole of the process was illegal and against the provisions of Income Tax Act and hence required to be declared void-ab-initio. 3. That on law, facts and circumstances of the case, Worthy CIT(A) has erred in completing the impugned assessment u/s. 147 without the issuance of valid notice u/s. 143(2) of the Income Tax Act, 1961. 4. That on law, facts and circumstances of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had erred in making aggregate additions of Rs. 3,25,000/- on issue in assessment finalized u/s. 147 even when the re-assessment proceedings were initiated on an altogether different issue, the final addition is on a different issue and no addition on the issue on which re-opening was initiated has been made in the final re-assessment order. 5. That on law, facts and circumstances of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had erred in making the assessment in haste and without affording reasonable framed is against the principles of natural Justice and hence deserves to be quashed. 6. That on law, facts and circumstances of the ca....
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....osal of the same. " 2. A perusal of the above grounds of appeal reveal that ground No. 1 and 12 are general in nature, hence they need no specific adjudication. Ground No. 2 to 6 3. The assessee through ground Nos. 2 to 6 has agitated the validity of the re-opening of the assessment u/s. 147 read with 148 of the Act. 4. I have heard the rival submissions and perused the material available on record. The Assessing Officer (in short 'AO') recorded the following reasons for re-opening of the assessment: Reason for reopening the case u/s. 147/148 of the Income Tax Act. 1961 An information was received from the Deputy Director of-. Income- Tax (Investigation)-II, Chandigarh vide his office letter No. 3578 dated 02.03.2015 that above noted assessee had been evading rental income from House Property. On perusal of return of the said assessee company for A.Y. 2008-09 it is observed that fixed assets have been shown at Rs. 36,29,120/- but no income under any head has been shown except agriculture income of Rs. 1,20,000/- Therefore, I have reason to believe that the rental income from the-house property has escaped assessment within the meaning of section 147(a) of IT Act....
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....oftech Pvt. Ltd. in this regard. That the copy of said Lease Agreement may be obtained from M/s. ICRMS Pvt. Ltd. as Shri Jatinder Singh Dua (shareholder & director of ICRMS Pvt. Ltd.) has stolen the company records as detailed in FIR 286/13 and the orders of dismissal of bail application of JS Dua by ASJ, Chandigarh & Hon'ble High Court. It was also pleaded that the construction otherwise had been done in the year 2006-07 and hence, no income can be added in the year under consideration even on proportionate basis. The assessee also relied upon the valuation report of the approved valuer M/s. Nandini Associates to submit that the construction was made in the year 2006-07 and that the total estimated construction value of the property at that time was at Rs. 15787.70. 8. However, the AO did not agree with the above submissions and relied upon the report of the valuer submitted by the Punjab Vigilance Bureau and added an amount of Rs. 2.05 lacs proportionate to the expenses carried out during the year into the returned income of the assessee. 9. The CIT(A) confirmed the addition so made by the AO. 10. The assessee has thus come in appeal before this Tribunal. 11. I have hear....
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....s agitated the addition of Rs. 1.20 lacs made by the AO as "income from other sources" as against declared by the assessee as 'agricultural income'. The assessee had shown agricultural income of Rs. 1.20 lacs contending that the same was earned from the lease of the agricultural land. The assessee in this respect produced affidavit of one Mr. Kuldeep Singh S/o Shri Chhaju Singh from whom the agriculture income/Batai was received. However, the AO rejected the aforesaid affidavit of Shri Kuldeep Singh and held that the aforesaid income of the assessee was not from agriculture activity and assessed the same as "income from other sources". The ld. CIT(A) confirmed the addition made by the AO. 14. Before this Tribunal, the ld. counsel for the assessee has submitted that the assessee has continuously been offering the agricultural land on Batai and that the aforesaid amount of Rs. 1.20 lacs was earned by the assessee from agriculture operations. The ld. counsel has further submitted that during the subsequent years, the said lessee was examined by the AO and statement was also recorded and after having satisfied, no addition has been made in this respect in the subsequent years.....
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....the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had adopted Rs. 32,84,000/- the Current Value of the construction exp. and added Rs. 8,21,000/- the proportionate const, exp., even though the construction activity was actually carried out in FY 2006-07 and that too by M/s. ICRMS (P) Ltd., to whom the property was given on lease. 7. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had adopted Rs. 32,84,000/- as the construction exp. and added Rs. 8,21,000/- the proportionate const, exp., even though the construction activity was actually carried out in FY 2006-07. The respondent had made this addition in A.Y. 2009-10 as he lacked powers by virtue of limitation period to assessee A.Y. 2006-07. 8. That on law, facts and circumstances of the case, the Worthy CIT(A), has erred in confirming the action of Ld. AO wherein Ld. AO on his own without making any reference to DVO had adopted Rs. 32,84,000/- as the construction exp. and added Rs. 8,21,000/- the proportionate const, exp. 9. That the appellant craves leave for any addition, deletion or amendment in the grounds of appea....
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.... for the assessee, in this respect has submitted that the assessee does not own any marriage palace or resort as alleged by the AO. That there was no reliable information/document/evidences available with the AO to form the belief that the assessee has been running any marriage palace or had constructed a resort as has been alleged in the reasons recorded. He has further submitted that even otherwise, the AO has not made any addition on account of income from any marriage palace/resort. The ld. DR on the other hand has relied upon the findings of the lower authorities. 20. I find that the reasons recorded by the AO are vague and are based on borrowed satisfaction. The AO after receipt of the alleged information was supposed to apply his mind and should have formed the belief based on some reliable evidences that the assessee owned any marriage palace/resort. Even after assessment, the AO has not made any addition on account of any ownership of the assessee of any marriage palace/resort. The AO did not have any material to form the belief that the income of the assessee had escaped assessment. Therefore, the re-opening of the assessment in my view is bad in law and the same is acc....
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.... therefore the said appeal is illegal and deserves to be quashed. 6. That on law, facts and circumstances of the case, the worthy CIT(A) has erred in confirming the action of ld. AO wherein ld. AO had adopted Rs. 32,84,000/- the Current Value of the construction exp. and added Rs. 8,21,000/- the proportionate const, exp., even though the construction activity was actually carried out in FY 2006-07 and that too by M/s. ICRMS (P) Ltd., to whom the property was given on lease. 7. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had adopted Rs. 32,84,000/- as the construction exp. and added Rs. 8,21,000/- the proportionate const, exp., even though the construction activity was actually carried out in FY 2006-07. The respondent had made this addition in A.Y. 2011-12 as he lacked powers by virtue of limitation period to assessee A.Y. 2006-07. 8. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO on his own without making any reference to DVO had adopted Rs. 32,84,000/- as the construction exp. and added Rs. 8,21,000/- the propor....