AI Drafter 
TaxTMI 
TaxTMI 
2024 (6) TMI 1054
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.... assessment passed u/s 144 of the Income-tax Act, 1961 (hereinafter referred to as "the Act") dated 24.12.2018 by the Assessing Officer, ITO, Ward-3(1), Saharanpur (hereinafter referred to as "ld. AO"). 2. The assessee has raised the following grounds of appeal before us:- "1. That the initiation of proceedings u/s 147, merely on the basis of a vague/unsubstantiated information forwarded by another AO, even without making prima-facie verification in a proper manner, is illegal. 2. That the assumption of jurisdiction u/s 147 is illegal. 3. That the re-assessment proceedings are liable to be quashed because the jurisdictional notice u/s 148 stated to have been dispatched under Speed Post Cover bearing no. RU03318....
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.... building situated at Mahmoodpur Nagli, Faizabad, District Saharanpur. The sale deed contained the market value of the land at Rs. 54,09,000/-, the value of stone crusher machinery at Rs. 25 lakhs, value of duck, which is part of stone crusher unit at Rs. 4,72,500/-, the value of building of Rs. 7,20,790/-, value of tin shed at Rs. 70,245/-. Thus, the total market value came to Rs. 91,74,000/-, which clearly comprises of land and building of Rs. 61,29,790/- and rest is attributed towards machinery, tinshed and duck. The ld AO was of the opinion that that the firm had sold the land and building and accordingly issued notice u/s 148 of the Act on 29.03.2018 by speed post. The said notice was issued to the assessee firm by speed post to the ad....
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.... 5. Finding of the AO: From the information in possession of the department, it is noticed that the assessee has not filed the return of income for the said assessment year and the deposit of Rs. 91,74,000/- in saving bank A/c remain not only unexplained but also unexamined in absence of any documentary evidence. 6. Basis of forming reason and details of escapement of Income:- It is apparent that assessee has not explained the cash deposit despite several opportunities and the unexplained cash deposit of Rs. 91,74,000/- is his undisclosed income which has escaped assessment for A.Y. 2011-12. Hence, considering the above facts prima facie, I have reason to believe that income of Rs. 91,74,000/- has escaped assessment ....
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....evidence and upheld the action of the ld AO ultimately. 6. From the perusal of the reasons recorded, we find that the ld AO had apparently proceeded on the premise that it is the assessee firm which had sold the land. It is not in dispute that assessee's case is non-PAN case and the assessee had not filed its return of income for AY 2011-12, even in response to notice issued u/s 148 of the Act. It is not in dispute that the notice u/s 148 of the Act has been issued by speed post in the address of the property which has already been sold. Hence the notice u/s 148 of the Act could not be served at all on the assessee. Though the ld AO had stated that the said notice was duly served on the assessee, the same is factually incorrect. In view ....
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.... goes to prove that the property was never owned by the firm and that it was owned only by the partners. It is also not the case of the revenue that the subject mentioned property was brought as capital contribution by the partners in the assessee firm in terms of section 45(3) of the Act. It is also pertinent to note that the said property along with stone crusher machines were sold at Rs. 91,74,000/-, and the said sums were credited in the bank accounts of the concerned individuals. None of the credits were made in the bank account of the assessee firm. Hence, the entire facts recorded by the AO and the reasons recorded for reopening the assessment and the assessment order are factually incorrect. Accordingly, it could be safely concluded....