TaxTMI 
TaxTMI 
1995 (9) TMI 94
X X X X Extracts X X X X
X X X X Extracts X X X X
....ditor for a sum of Rs. 60,000 and the assessee credited Rs. 2,900 in his account by way of interest in the year under consideration. A search was conducted by the Intelligence Wing of Madras at the premises of Shri Balbir Prasad Mittal. The ADI, Madras communicated to the ITO the following : "M/s. Srinivasa Khandasari Udyog have utilised the file of Sri Balbir Prasad Mittal for recording a borrowal of Rs. 60,000 on 4-6-1983. A D.D. for Rs. 60,000 was obtained on 4-6-1983 in favour of M/s. Srinivasa Khandasari Udyog. In the light of the pattern adopted in showing borrowals and advances by Sri Balbir Prasad Mittal the loans does not appear to be genuine. The amount has to be assessed as income." The ITO reopened the assessment having re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nds place : "20-6-1986. Please see extract filed. A sum of Rs. 60,000 received through Balbir Prasad Mittal is to be assessed as the income of the firm. Issue notice under section 148 for 1984-85. Sd/ Assessing Officer" The extract as referred to above is the extract from the communication received by the Assessing Officer from the DDI Madras which has been reproduced above. 6. The first citation relied upon by the learned counsel for the assessee is in the case of CIT v. Vyjayanthimala Bali[1985] 155 ITR 662. In that case, the Bombay High Court had held that there was clear evidence that the action was initiated in pursuance of the directives of the Commissioner, which directives the ITO was obliged to follow and which directiv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s are satisfied and these are found on record. In another case of Vijayalakshmi Oil Industries v. ITO [1985] 155 ITR 748, also decided by the Karnataka High Court, it was held on the basis of the facts of the case that the notice could not be sustained either under section 147(a) or even (b). In that case, the Department tried to argue that merely a note prepared even by the same ITO could not be considered as reasons recorded for the purpose of issue of notice under section 148. In this particular case, we have seen above that the Assessing Officer actually recorded the reasons for initiating proceeding, although, may be in a cryptic manner. 6(d). The learned counsel for the assessee has also placed reliance on the decision of the Calcu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d income had escaped assessment. The High Court held that there were materials and reasons to clothe the ITO with jurisdiction under section 147 and the proceedings were also considered to have legally and validly been initiated. 7. The learned DR, on the other hand, strongly contended that in the instant case, the Assessing Officer merely took into consideration the information passed on to him by DDI, Madras and acted on the same on the basis of his own discretion and was in no way dictated by the DDI, Madras. He thus contends that the re-assessment proceeding must be considered to be valid. He has relied on the decision of the Calcutta High Court in the case of Purushottam Das Bangur v. WTO [1984] 148 ITR 651. In the abovementioned ca....