2023 (3) TMI 606

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....of reopening of assessment. 3. The Ld. CIT(A) has erred in law and on facts in upholding addition of Rs. 10,00,000/-. 4. The appellant craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal." 3. In this case the information was received that the assessee has paid single premium of Rs. 10,00,000/- of L.I.C Pension Policy but not filed his return of income nor offered said amount for taxation as per the observations of the Assessing Officer. Hence, the amount of Rs. 10,00,000/- was chargeable to tax for A.Y. 2011-12. The case was reopened under Section 147 of the Income Tax Act, 1961 with previous approval of higher authorities and after recording the reasons notice under Section 14....

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....upees one lakh or more, the AO is also required to record a finding to that effect. Copy of reasons recorded for reopening of assessment is annexed at Pg No. 6 of Paperbook. However while going through the reasons recorded for reopening of assessment, we noticed that Ld AO have not mentioned that income exceeding Rs. 1,00,000/- escaped assessment. In absence of recording that income escaped assessment exceeding Rs. 1,00,000/- while recording reasons, reopening of assessment is void, illegal and not tenable in the eyes of law. Assessee relies on following judicial pronouncements: (1) Hon'ble Gujarat High court in the case of Bakulbhai Ramanlal Patel vs. Income Tax Officer 56 DTR 0212 (Guj) (2)....

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....AT Ahmedabad in the case of Shri Sumer S Sanghvi, Ahmedabad vs The Asstt. Commissioner of Income ITA No 1424/Ahd/2016 dated 06.02.2020 Considering the facts of the case and above cited judicial pronouncements your honour is requested to quash the assessment order. Issue No. II: The CIT(A) has erred in law and on facts in upholding addition of Rs. 10,00,000/- Assessee has paid LIC premium of Rs 10,00,000/ out of opening bank balance and agricultural Income Copy of Cash flow statement is annexed at Pg No.22 of Paperbook. Summary of funds for payment of premium is as under: Particulars Amount Opening Bank Balance 47,132 Add: Net Cash Deposit 7,54,731 Add: Saving Bank Interest 137 A....

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....e basis of information in the possession of the AO, there possibly could not have been formed any belief of income escaping assessment. 7. The income of the assessee during the year alone is not sufficient to draw any conclusion regarding source of investments made during the year. Investments can be made from past earnings /savings also. Therefore merely because income returned for the year was not sufficient to justify investment in LIC premium, it cannot be inferred that the investment was made from undisclosed sources. The AO it appears has proceeded to form his belief of escapement of income in the present case on an implausible premise. His premise that the investments during the year are sourced from the incomes earned durin....

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....d that AO is duty bound to disclose income element out of such payment. This contention of appellant is not acceptable for the reasons that AO has verified returned income and amount of investment and came to conclusion that appellant has no sufficient sources of make such investment. If appellant has no sources for making such investment or there is insufficiency of funds, it mean that appellant has made investment out of unaccounted income/funds. The amount of investment which is not explained by appellant for disclosed sources always represent undisclosed income and income element in such payment definitely exist. There is no vague reasons as claimed by the appellant because AO has verified details of investment, when such investment is ....