TaxTMI 
TaxTMI 
2021 (7) TMI 42
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.... Name & Address of the Assessee Sh Jeet Singh, H.No.432, Chainpura, Vill Kadarpur, Near Govt. High School, Gurgaon. A.Y. 2008-09 PAN -- STATUS -- DATE 27.3.2014 Reasons: As per information available with the department received as STR by the DDIT (Investigation) Unit-1, Gurgaon, the assesses has purchased insurance policy for Rs. 1.684 crores and surrendered the policy within three years. Therefore, I have reasons to believe that the income of the assessee to the tune of Rs. 1.684 Crores has escaped assessment. Sd/- Sanjay Kumar Income Tax Officer, Ward-2(2), Gurgaon." 2.1. Accordingly, he issued notice under section 148 of the I.T. Act, 1961. In response to the notice under section 148, the assessee submitted that the return already filed may be treated as return filed in response to notice under section 148 of the I.T. Act, 1961. 2.2. Subsequently, the A.O. issued statutory notices under sections 143(2) and 142(1) and the case was fixed from time to time. The assessee filed requisite details as and when called for. The A.O. thereafter on verification of the Bank A/c of the assessee ....
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....of the assessee at Rs. 3,12,78,494/- and agricultural income of Rs. 7,88,945/-. 2.5. Before the Ld. CIT(A) assessee made elaborate submissions and filed certain additional evidences. The Ld. CIT(A) called for a remand report from the A.O. After considering the remand report of the A.O. and the rejoinder of the assessee to such remand report, the Ld. CIT(A) sustained the addition made by the A.O. by observing as under: 3.8 I have carefully considered the rival submissions. Brief facts which emerge are as under:- (i) Sh. Dharampal Singh S/o. Sh. Parsa Ram had entered into an agreement with Sh. Phool Chand, Sh. Deep Chand, Sh. Ghanshyam das for purchase of land on behalf of M/s. Vikram Electrical Equipment Pvt. Ltd. (ii) As per the agreement, an amount of Rs. 6,60,93,750/- was paid to the above persons. (iii) On account of some dispute between buyers and sellers entire amount was returned back in the account of the appellant Sh. Jeet Singh who was appointed as mediator between both the parties. (iv) Sh. Jeet Singh, the appellant paid an amount of Rs. 3,60,93,750/- to M/s. Vikram Electrical Equipment Pvt. Ltd. on 22.11.2007 i.e. on the da....
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....es had paid amount of Rs. 3,60,93,750/- to M/s. Vikram Electric Equipment Ltd. on receiving the amount of Rs. 6,60,93,750/-. Regarding balance amount of Rs. 3 crore Sh. Dharampal had given undertaking to Sh. Jeet Singh that no amount was receivable by him and there will be no claim in future. It is evident that the appellant had received an amount of Rs. 3 crores for his role in resolving the property dispute between the buyers and sellers referred to in the assessment order. The addition made by the A.O. is accordingly confirmed. The grounds of appeal filed by the appellant are dismissed. 4. The appeal of the appellant is dismissed. 3. Aggrieved with such Order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds. 1. That the order of the Ld. CIT (A) 1 Gurgaon is erroneous both in law and on facts. 2. That the Ld. CIT(A) has erred in confirming the order of the AO in a case where the AO himself accepts the explanation and objection of the assessee and does not assess the income which was the very basis of issue of notice under section 147/148 of I.T. Act and goes on in making altogether new addition during ....
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....ased insurance policy for Rs. 1.68 crores and surrendered the policy within 03 years. However, in the final order, the A.O. has not made any such addition for which the reopening was made, but, has made addition on some other ground. Referring to the decision of the Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd., vs., CIT reported in 2011-TIOL-356-HC-Delhi, he submitted that when no addition has been made on the issue for which the case was reopened under section 147, the A.O. could not have made any other addition without issuing fresh notice under section 148 of the I.T. Act after recording reasons under section 147 of the I.T. Act, 1961 for escapement of income. Since the A.O. in the instant case has not done so, therefore, such addition being bad in Law has to be deleted and the entire 147 proceedings should be quashed. He also relied upon the decision of the Hon'ble Bombay High Court in the case of CIT vs., Jet Airways India Ltd., [2011] 331 ITR 236 (Bom.) and various other decisions. 6. The Ld. D.R. on the other hand, strongly relied upon the Order of the Ld. CIT(A). She submitted that assessee has not taken any such ground before the Ld. CIT(A),....
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....r to levy taxes on the entire income which has escaped assessment. The learned counsel relied upon the cases of Supreme Court in Commissioner of Income Tax v. Sun Engineering Work Limited 198 ITR 297 and V. Jaganmohan Rao and Ors. Vs. Commissioner of Income-tax and Excess Profits Tax, Andhra Pradesh (1970) 75 ITR 373 (SC). On the other hand learned counsel for the assessee submitted that the words, "and also" in Section 147 signify that unless the Assessing Officer assesses the income with respect to which he has formed reason to believe within the meaning of Section 147, it would not be open for him to assess or reassess any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of proceedings. Learned counsel relied upon the case of Jet Airways (supra) and also Commissioner of Income Tax v. Shri Ram Singh (2008) 306 ITR 343 (Raj) and Commissioner of Income Tax v. Dr. Devender Gupta 174 Taxman 438 (Raj.). Reliance was also placed in the case of C.J. International Hotels Ltd. v. ITO being ITA No. 2736/Del./2006 dated 24th October, 2008. 13. Similar contention was raised before the Division Bench of Bombay High C....
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....eferred to the judgment in the case of Jaganmohan Rao (supra) wherein it was held that the object of Section 147 enures to the benefit of the Revenue and it is not open to the assessee to convert the reassessment proceedings as an appeal or revision and thereby seek relief in respect of items which were rejected earlier or in respect of items not claimed during the course of the original assessment proceedings. 15. In Dr. Devendra Gupta's case (supra), learned Tribunal has relied upon the judgment of the Punjab & Haryana High Court, in Atlas Cycle Industries case (supra), and concluded that the basic condition is, that the AO has reason to believe, that any income chargeable to tax has escaped assessment, for any assessment year, and it was found, that the section puts no bar on the powers of the AO, to put to tax, any other income, chargeable to tax, which has escaped assessment, and which subsequently comes to his notice, in the course of the proceedings, but then, the prefixing words "and also", which succeeded "any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of ss. 148 to 153, assess or reassess such in....
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....s as being conjunctive and cumulative. It is of some significance that Parliament has not used the word "or". The Legislature did not rest content by merely using the word "and". The words "and" as well as "also" have been used together and in conjunction." ... Evidently, therefore, what Parliament intends by use of the words "and also" is that the Assessing Officer, upon the formation of a reason to believe Under Section 147 and the issuance of a notice under Section 148(2) must assess or reassess: (i). 'such income'; and also (ii) any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. The words 'such income' refer to the income chargeable to tax which has escaped assessment and in respect of which the Assessing Officer has formed a reason to believe that it has escaped assessment. Hence, the language which has been used by Parliament is indicative of the position that the assessment or reassessment must be in respect of the income in respect of which he has formed a reason to believe that it has escaped assessment and also in respect of any oth....
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....nce of notice by the Assessing Officer and subsection (1) thereof mandates service of notice to the assessee before the Assessing Officer proceeds to assess, reassess or recompute escaped income. Section 147 mandates recording of reasons to believe by the Assessing Officer that the income chargeable to tax has escaped assessment. All these conditions are required to be fulfilled to assess or reassess the escaped income chargeable to tax. As per explanation (3) if during the course of these proceedings the Assessing Officer comes to conclusion that some items have escaped assessment, then notwithstanding that those items were not included in the reasons to believe as recorded for initiation of the proceedings and the notice, he would be competent to make assessment of those items. However, the legislature could not be presumed to have intended to give blanket powers to the Assessing Officer that on assuming jurisdiction under Section 147 regarding assessment or reassessment of escaped income, he would keep on making roving inquiry and thereby including different items of income not connected or related with the reasons to believe, on the basis of which he assumed jurisdiction. For e....