TaxTMI 
TaxTMI 
TaxTMI 
2024 (7) TMI 582
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....tion of Rs. 85,98,795/- by the ld. CIT(A) as made by the Assessing Officer treating the unsecured loans taken by the assessee as bogus and thereby making the addition of the aforesaid amount as unexplained income of the assessee. The assessee apart from challenging the additions on merits has also contested the validity of the reopening of the assessment. 3. At the outset, the ld. Counsel has invited our attention to the copy of the reasons recorded by the Assessing Officer for reopening of the assessment. A perusal of the said reasons recorded would reveal that the reasons recorded consists of three pages. In the first two pages, the name of various companies and their directors have been mentioned and it has been further stated that as p....
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....ficiary of the transactions of the above companies during the FY 2011-12. It can be concluded that M/s Shanker Logistics Pvt. Ltd. had used the company as a conduit to bring its own out of books income into the books of the company and thereby avoiding taxation on same and also to book bogus expense, thereby reducing taxable income and thus escaping taxation. As such income to tune of Rs. 20,00,000/- has escaped assessment during the FY 2011-12. Therefore, in the light of the above discussion, I have reason to believe that income assessable to Tax amounting to Rs. 20,00,000/- has escaped assessment within the meaning of Section 147 of the I.T. Act, 1961 during the FY 2011-12. 6. Applicability of the provision of Section 147/151 to the fac....
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.... escaped assessment. However, the said information in itself was not enough to form the belief that the income of the assessee has escaped assessment. That the Assessing Officer was supposed to correlate the said vague information received from the Investigation Wing with the assessment records of the assessee and thereafter he could have formed the belief that the income of the assessee has escaped assessment. The ld. counsel has, therefore, submitted that the reopening in this case was bad in law. 3.2 The ld. Counsel for the assessee has further submitted that the assessment order involved in this case is A.Y 2012-13 and the reasons for reopening of the assessment were recorded on 26.03.2019. He has further submitted that the original as....
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....on. The information was wrong and the Assessing Officer reopened the assessment on the basis of borrowed satisfaction without correlating the same with the facts of the case. Even there is no allegation that the income of the assessee has escaped assessment due to non-disclosure of the facts necessary for the assessment and since the assessment has been reopened after four years of the end of relevant assessment year, hence, the exception provided under 1st Proviso to section 147 is attracted. The issue is covered by various decisions of the higher courts and even of the hon'ble supreme court. Hon'ble Supreme Court in the case of "Dr. Jagmittar Sain Bhagat & Ors vs Dir. Health Services, Haryana" in Civil Appeal No.5476 of 2013 decided on Ju....
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....ers of Assessing Officer to reopen an assessment, though wide, are not plenary. The words of the statute are "reason to believe" and not "reason to suspect". There can be no manner of doubt that the words "reason to believe" suggest that the belief must be that of an honest and reasonable person based upon reasonable grounds and that the Income-tax Officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. The Income-tax Officer would be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the section. Such an action of the Assessing Officer regarding formation of belief of escapement of assess....
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....ntity and creditworthiness of the creditors and genuineness of the transaction: a) ITR Acknowledgement b) Audited accounts c) director list d) loan confirmation e) source of source of creditor f) bank statement of creditor g) bank statement of assessee i) notice & reply u/s 133(6) of the Income Tax Act 1961 j) Assessment Order for A.Y 2012-13 k) loan refund confirmation 6.1 A perusal of the aforesaid documents would reveal that the assessee had duly furnished the sufficient documents to prove the identity and creditworthiness of the creditors and genuineness of the transaction including the list of directors of the creditor, the loan confirmation from the creditor, the source of creditor, the bank statement of the credi....