INCOME TAX ACT, 1961

Section 147, Explanation 3

Reassessment - AO had not made addition on account of escapement of income for which he had recorded reasons - Addition on other issues--Possibility -

Assessee submitted that the case of was reopened under section 147 on the ground that assessee had entered in the financial transaction/activities in buying shares of the scrip named 'Tuni Textile and Others' which was a penny stock and alleged to have been used for providing bogus accommodation entries. However, the addition was not made on the income alleged to have been escaped but instead the addition was made on some other issue. In this respect assessee invited attention of Tribunal to the copy of notice wherein reasons were recorded and further took to assessment order where no such addition, on the alleged amount of escaped income, was made. Held: Admittedly, nowhere in the assessment order it was mentioned that AO had made the addition on account of escapement of income for which he had recorded the reasons. Instead, he made addition on other issue i.e. long-term capital gains holding it to be bogus. Therefore, the addition made was to be deleted and reassessment notice was quashed.

Followed:Ranbaxy Laboratories Ltd. v. CIT 2011 TaxPub(DT) 1457 (Del-HC) : (2011) 336 ITR 136 (Del), Sanju Jalan v. ITO in I.T.A. No. 634/Kol/2017, dated 10-1-2018 and CIT v. Jet Airways (I.) Ltd. 2011 TaxPub(DT) 0218 (Bom-HC) : (2011) 331 ITR 236 (Bom) .

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2013-14

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