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| The Tax Publishers2020 TaxPub(DT) 2812 (Del-Trib) INCOME TAX ACT, 1961
Section 147
Information received from investigation Wing could not be said to be tangible material per se without further enquiry being undertaken by AO to establish link between tangible material and formation of reason to believe that income has escaped assessment. Accordingly, reopening was devoid of any application of mind and addition solely based upon assumptions, conjectures and surmises.
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Reassessment - Reason to believe - Information emanated from investigation wing - Non-application of mind by AO
AO received information from investigation wing as to assessee having declared bogus sales. Accordingly, AO reopened assessment and made addition. Assessee's case was that AO simply relied upon information from INV Wing and without applying his mind reopened assessment. Held: Had AO applied his mind to the nature of the business of assessee, he would have known that before selling the log woods, assessee had not take permission from Forest Department. Information received from INV Wing could not be said to be tangible material per se without further enquiry being undertaken by AO to establish link between tangible material and formation of reason to believe that income has escaped assessment. . Sales were supported by C Forms, VAT Nos and Sales Tax numbers of parties, further supported by the certificates from the forest department. All these have not been examined by AO and had he examined these documents/evidences or made necessary enquiries, he might not have issued notice under section 148 but for non-application of mind, assessment was reopened. Accordingly, reopening was devoid of any application of mind and addition. solely based upon assumptions, conjectures and surmises was deleted.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, DELHI BENCH
N.K. BILLAIYA, A.M. & KULDIP SINGH, J.M.
A.K. Lumbers Ltd. v. ACIT
ITA No. 8761/Del/2019
10 July, 2020
In favour of assessee.
Assessee by: Ajay Wadhwa, Advocate
Revenue by: Jagdish Singh Dahiya, Sr. Departmental Representative
N.K. Billaiya, A.M.
With this appeal the assessee has challenged the validity of the assessment order framed under section 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter referred to as 'The Act' for short) and addition of Rs. 93,34,926 being bogus sales and Rs. 93,349 being commission paid on the alleged accommodation entries.
2. The representatives of both the sides were heard at length, the case records carefully perused and with the assistance of the learned Counsel, we have considered the documentary evidences brought on record in the form of Paper Book in light of rule 18(6) of ITAT Rules and have also perused the judicial decisions relied upon by both the sides.
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