TaxTMI 
TaxTMI 
2025 (3) TMI 2196
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....nst the order dated 21.03.2016 passed u/s 147 of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the ACIT, Circle-46(1), Delhi (hereinafter referred to as the Ld. AO). 2. The assessee's return of income was filed on 30.09.2010 showing an income of Rs. 6,12,750/-. The return was processed u/s 143(1) of the Act at Rs. 36,36,170/-. Subsequently, the case was reopened u/s 147 of the Act and notice u/s 148 of the Act was issued on 27.03.2015. Thereafter, during the reassessment proceedings, certain additions were made on the allegation that by manipulating client code the assessee has benefitted and reported fictitious profits and further addition was made on account of disallowance of interest paid on personal loan as deducti....
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.... "Sub: Reasons for re-opening the case u/s 148 of the IT Act, 1961 PAN: AANPG36888 A.Y. 2010-11 - Reg. Please refer to the above mentioned subject. 2. In this context, the reason for reopening the case for AY 2010-11 are as under: As per the information received from the Office of the DIT (I&CI), Room No.1201, Earnest House, Nariman Point, Mumbai, vide letter F.No.DIT(I&CI)/CCM/2014-15/ dated 27.02.2015 it is found that the above mentioned assessee has escaped of income amounting to Rs. 26,26,630/- created by sold some of the brokers misusing the client code modification facility in F&O segment on NSE during March 2010. The brokers were alleged to be indulging in transferring the fictitious losses to the above me....
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....eceived from the investigation wing. Thus, the crucial link between the information made available to the AO and the formation of belief is absent. In the absence of these details as coming up from the content reproduced above, it has to be assumed that these vital facts were not even with the ld. AO at time of reopening. 8. At the same time what is material is that there is no observation of the ld. AO that on the basis of the information as received any independent enquiry was conducted to verify the information and draw a conclusion that there is any escapement of income, not reported. Infact it was during the assessment notices u/s 133(6) of the Act were issued to the concerned brokers. It is also established that assessee had report....
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....ld constitute tangible material for re-opening the assessment only when the AO establishes the link between tangible material and formation of belief. Reliance can be placed on the decisions in CIT v. SFIL Stock Broking Limited (2010) 325 ITR 285 (Del.), Sarthak Securities Co. Pvt. Ltd. v. ITO (2010) 329 ITR 110 (Del.), Signature Hotels Pvt Ltd v. ITO (supra), CIT v. Insecticides (India) Limited (2013) 357 ITR 330 (Del.) and Krown Agro Foods (P) Ltd v. Assistant Commissioner of Income Tax, Circle 5(1) (2015) 375 ITR 460 (Del). Reliance was also placed on the decision of this Court dated 19th November, 2015 in ITA No. 108 of 2013 (Commissioner of Income Tax- IV v. Independent Media P. Limited), Oriental Insurance Company Limited v. Commissio....
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.... case was after the expiry of four years from the end of the relevant AY, it was not necessary for the AO to show that there was any failure to disclose fully or truly all material facts necessary for the assessment. 26. The first part of Section 147(1) of the Act requires the AO to have "reasons to believe" that any income chargeable to tax has escaped assessment. It is thus formation of reason to believe that is subject matter of examination. The AO being a quasi judicial authority is expected to arrive at a subjective satisfaction independently on an objective criteria. While the report of the Investigation Wing might constitute the material on the basis of which he forms the reasons to believe the process of arriving at such sa....