The Tax Publishers2020 TaxPub(DT) 2311 (Mum-Trib) : (2020) 184 ITD 0278 : (2020) 081 ITR (Trib) 0111

INCOME TAX ACT, 1961

Section 147

Information received by AO that export prices recovered by assessee were less in some cases than prevailing market prices was highly doubtful, since there was nothing to indicate that there was any particular market price as at the relevant date which ruled or which alone was the correct price and, therefore, reopening of assessment on the basis of such information having no direct nexus to form belief as to tax escapement was not valid.

Reassessment - Reason to believe - No direct nexus between information received by AO and escapement of income -

AO received information from investigation wing as to assessee having conducted illegal/unaccounted mining activity in various financial years Retd. Justice M.B. Shah Commission report was also available on website of Ministry of Mines, Govt. of India. Accordingly, AO reopened assessment on the gorund that assessee had suppressed information regarding under invoicing of export of iron ore. Held: There must be a direct nexus or live link between information found by AO and escapement of income arising in the case. In the instant case, all that was available to AO was the information that export prices recovered by assessee were less in some cases than the market prices said to be prevailing on those days. This information itself was highly doubtful, since there was nothing to indicate that there was any particular market price as at the relevant date which ruled or which alone was the correct price. Export prices of other exporters, considered in relevant commission report, did not suggest even a trend to indicate any particular market price and, therefore, reopening was not valid.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

INCOME TAX APPELLATE TRIBUNAL RULES, 1963

Rule 34(5)(c)

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT