TaxTMI 
TaxTMI 
2018 (2) TMI 2150
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....brokerage earned by the assessee. 3. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming addition of Rs. 5,33,334/- u/s 37 of the Act. 4. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming addition of Rs. 16,18,395/- being alleged disallowance u/s 40(a) 5. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the above addition of Rs. 10,00,000/- Rs. 5,33,334/- and Rs. 16,18,395/- without any evidence and without making independent enquiry by AO and by solely relying on the application u/s 245C (1) of the LT. Act filed by the Assessee before the Hon'ble Income Tax Settlement Commission (ITSC), which was not admitted on the ground from pendency of proceedings. 6. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in confirming non-granting of deduction u/s 80IB(10) on the enhanced business income after the disallowances. 7. The Assessee craves leave to add, to amend, to delete, to modify the above grounds of appeal." 3. Ground No.1 relates to validity of reopening of the assessment u/....
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....rutiny was done, therefore, no assessment has been made to express the correctness of the income as declared in the return of income for A. Y. 2008-09. Since no scrutiny was done in the case for A. Y. 2008-09, hence reopening the same within the meaning of section 147 does not need to meet the stringent requirements of proviso to section 147/148. Reliance is placed on the case law in the case of ACIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd., 291 ITR 500 (SC). Hence, I have reason to believe that income chargeable to tax has escaped assessment for A. Y. 2008-09 in the case of the assessee within the meaning of section 147 of the Income Tax Act, 1961." In response to notice u/s.148 the assessee submitted that the assessee has filed its return of income for A.Y.2008-09 on 30.09.2008, declaring income of Rs.10,90,24,333/- which may be treated as having been filed in compliance with the notice u/s.148. The assessee had filed an application u/s.245C of I.T. Act, 1961 for settlement of their case before the Settlement Commission on 30.01.2013 showing additional income of Rs.31,51,729/-. It was observed by the assessing officer that the assessee had disclosed addit....
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....must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words "reason to believe" did not mean a change of opinion. The Hon'ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon'ble Court first held that the section provides that there must exist "reasons to believe" and not "reasons to suspect". We note that in the assessee`s case under consideration, there was reason to believe, that is, declaration before the Income Tax Settlement Commission ( ITSC) was a tangible material to reopen the assessment and the assessing officer was right in reopening the assessment U/s 147/148 of the Act. Therefore, it is clear that reopening of the assessment has been done on the basis of tangible material after duly recording the reasons, that being so, we decline to interfere with the order of the ld. CIT(A) in upholding the reopening valid. 3.3. In the result, the appeal filed by the assessee (Ground No.1) is dismissed. 4. In Ground Nos.2, 3, 4 & 5, the grievance of the assess....
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.... 4.2. On appeal, the ld. CIT(A) confirmed the addition made by the AO. The ld. CIT(A) held that assessee had not been able to show that the said disclosure before the ITSC was not bona fide or incorrect. Therefore, AO was correct in assessing the said additional income u/s 143(3) of the Act and this way, the ld. CIT(A) confirmed the addition of Rs.31,51,729/- (Rs.10,00,000/- + Rs.5,33,334/- + Rs.16,18,395/- ). 4.3. Not being satisfied with the order of the ld. CIT(A), the assessee is in appeal before us. The ld. Counsel for the assessee has submitted before us that because the assessee made an application before the Income Tax Settlement Commission (ITSC), no addition can be made unless there is a corroborative evidence to prove that the income belongs to assessee and chargeable income has escaped assessment. The assessee explained during the assessment proceedings, that no incriminating material was found by the search team. However the assessee, in the settlement petition, filed before the ITSC, had offered an income of Rs.10,00,000/- being alleged land brokerage income by the assessee Rs.5,33,334/- on account of disallowance u/s 37 and Rs.16,18,395/- being disallowance of ex....
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....after the AO reopened the assessment under section 147 of the Act. After reopening the assessment order, the AO has not brought any material or information but relied only on the basis of declaration made by the assessee before Settlement Commission and made the addition of Rs.5 lakhs. Therefore, the reopening was held to be invalid. 4.5 On the other hand, the ld. DR for the Revenue has primarily reiterated the stand taken by the AO which we have noted in our earlier para and is not being repeated for the sake of brevity. 4.6 We have given a careful consideration to the rival submissions and perused the materials available on record, we note that assessee has filed petition before the ITSC and offered an income of Rs.10,00,000/- being alleged land brokerage income by the assessee Rs.5,33,334/- on account of disallowance u/s 37 and Rs.16,18,395/- being disallowance of expenditure u/s 40(a) of the Act, aggregating Rs.31,51,729/-. The assessee submitted that the above amount has been offered as income before the ITSC for the sake of meeting the threshold limit of maintainability of the petition before the ITSC in spite of the fact that the assessee has neither earned such income....