TaxTMI 
TaxTMI 
2026 (8) TMI 34
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.... year under consideration, along with her spouse and son, purchased a flat from M/s. Midas and Bhoomi Associates in the project "Midas Bhoomi Harmony" vide agreement dated 11/09/2019 for a total consideration of Rs. 1,17,00,000. 1.2. A search and seizure action u/s. 132 of the Income-tax Act, 1961 ('the Act') was conducted in the case of Bhoomi Group. During the course of the search, certain loose papers / excel sheets were found and seized from the premises of the said third party. 1.3. Based on the said seized material, the Ld. AO alleged that the developer had received "on-money" in cash of Rs. 16,60,000/- from the Appellant and other co-owners. However, the said documents so found did not bear the name, PAN, signature, or any identifiable particulars of the Appellant, and were in the nature of uncorroborated third-party notings. 1.4. Solely on the basis of such third-party material and statements of Mr. Nirav Mehta and Mr. Akshay Doshi (persons connected with the Bhoomi Group), the Assessing Officer formed a belief that income chargeable to tax had escaped assessment in the hands of the Appellant. 1.5. Accordingly, Ld.AO initiated the....
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....s, assessee denied payment of any on-money. Assessee also requested to provide copies of the statement recorded, opportunity of cross-examination, copies of the seized documents. Assessee filed bank statements, copy of purchase deed and other details. However, it has been submitted that opportunity of cross-examination was never provided to the assessee. Ld.AR also submitted that specific documents were never provided. 4.3. In this case, the most important fact, which emanates from the assessment order is that there has been addition in the case of Midas and Bhoomi Associates on account of cash receipt for AY. 2022-23. Midas and Bhoomi Associates is the concern from whom, the assessee had purchased a flat. The contradiction is that addition has been made in the case of the assessee of alleged cash money payment for AY. 2020-21, whereas same money has been added in the case of seller for AY. 2022-23. Thus, it apparently seems that the AO was not sure about the actual date of alleged cash payments. 4.4. It is important to mention here that there is a reference to Annexure-A4, page number 1-6 and page number 19-30 in the assessment order. However, these documents were never prod....
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....O in the assessment order of Rs. 5,33,000/- u/s. 69 of the Act is baseless, without any evidence. Therefore, we direct the AO to delete the addition of Rs. 5,33,000/-. Accordingly Ground Nos. 6 & 7 raised by the assessee are allowed. 5. We have read the reasons recorded by the AO for issuing notice u/s. 148 of the Act, which are at Pg. No. 4-10 of the paper book submitted by the assessee. The reopening is based on information available on Insight Portal of Income Tax Department. The para No. 3.4, 4 & 5 of the reasons are reproduced here as under: 5. The above information has been analyzed with the details available. From the details, it is seen that the assessee has filed return of income for A.Y. 2020-21 on 25.10 .. 2020 declaring total income at Rs. 4,98,980/- and claimimg refund of Rs. 68,890/ -. The assessee along with 2 persons i.e. assessee's husband Shri Ramesh M Korgaonkar, her son Shri Vaibhav Ramesh Korgaonkar has purchased an immovable property i.e. Flat No. C- 1404 situated at Midas-Bhoomi Harmony at Nehru Nagar, Kurla(E), Mumbai . The assessee along with 2 co-owners has paid on money of Rs. 16,60,000/ -. Hence, this needs to be brought under taxation as....
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....idence the linkage/nexus to the conclusion that income chargeable to tax has escaped Assessment. This is a settled position as observed by the Supreme Court in S. Narayanappa v. CIT [1967] 63ITR 219, that it is open to examine whether the reason to believe has rational connection with the formation of the belief. To the same effect, the Apex Court in ITO v. Lakhmani Merwal Das [1976] 103 ITR 437 had laid down that the reasons to believe must have rational connection with or relevant bearing on the formation of belief i.e. there must be a live link between material coming the notice of the Assessing Officer and the formation of belief regarding escapement of income. If the aforesaid requirement are not met, the Assessee is entitled to challenge the very act of re-opening of Assessment and assuming jurisdiction on the part of the Assessing Officer. 13. In this case, the reasons as made available to the Respondent-Assessee as produced before the Tribunal merely indicates information received from the DIT (Investigation) about a particular entity, entering into suspicious transactions. However, that material is not further linked by any reason to come to the conclusion that th....