INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Reopening based on wrong facts and figures -

AO received information from Investigation Wing as to assessee having rotated funds through bank accounts for the purpose of accommodation entry. Accordingly, AO recorded reasoning that assessee company had no real business activities and there was no logic behind receipt of Rs. 12,00,000 from M/s. Medimix Sales (P) Ltd. which was a shell company and thus, income to that extent of Rs. 12,00,000 as unaccounted income had escaped assessment in terms of section 147. Assessee challenged reopening of assessment contending that nowhere in the information received, it was alleged that there was escapement of income it was a case of non-application of mind by AO.Held: There was clear non-application of mind by AO to the information received, prior to re-opening of assessment. This was clear from the fact that figures given in reasons recorded were wrong. Such non-application of mind to information received by AO prior to recording of reasons for re-opening of assessment makes reopening bad in law and, therefore, reassessment was set aside.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

SUBSCRIBE FOR FULL CONTENT