The Tax Publishers2020 TaxPub(DT) 2055 (Jp-Trib)

INCOME TAX ACT, 1961

Section 147

Where, AO received information as well as statement recorded by Investigation Wing, Mumbai during search and seizure operation in case of an entry operator from whom assessee claimed to have purchased Diamond than such information constituted prima facie material to form belief that income assessable to tax had escaped assessment and accordingly, reopening was valid.

Reassessment - Validity - Reason to believe - Information emanated from investigation wing

AO received information from investigation wing as to assessee in collusion with alleged entry operator routed back his own unaccounted money in the guise of bogus purchases. Accordinlgy, AO reopened assessment. Assessee challenged this on the ground of no tangible material so as to form reason to believe as to tax escapement.Held: In case of assessee, there was no original assessment under section 143(3) but return filed by assessee was processed under section 143(1). Subsequently, AO received information as well as statement recorded by Investigation Wing, Mumbai during search and seizure operation in case of alleged entry operator from whom assessee claimed to have purchased Diamond and therefore, based on information received from Investigation Wing, Mumbai, there was a prima facie material to form belief that income assessable to tax had escaped assessment and accordingly, reopening was valid.

REFERRED : Raymond Woollen Mills Ltd. v. ITO (1999) 236 ITR 34 (SC) : 1999 TaxPub(DT) 348 (SC), Amit Polyprints (P.) Ltd. v. Dy. CIT (2018) 94 taxmann.com 393 (Guj) : 2019 TaxPub(DT) 6782 (Guj-HC), Jayant Security & Finance Ltd. (2018) 91 Taxmann.com 181 (Gujarat) : 2018 TaxPub(DT) 979 (Guj-HC), Rakesh Gupta v. CIT (2018) 93 Taxmann.com 271 (P & H) : 2018 TaxPub(DT) 2542 (P&H-HC), Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. (2007) 161 Taxman 316 (SC) : 291 ITR 500 (SC) : (2007) 210 CTR 30 (SC) : 2007 TaxPub(DT) 1257 (SC) and R.K. Malhotra ITO v. Kasturbhai Lalbhai (1977) 109 ITR 537 (SC) : 1977 TaxPub(DT) 0935 (SC).

FAVOUR : Against the assessee.

A.Y. : 2010-11

INCOME TAX ACT, 1961

Section 145(3)

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT