| The Tax Publishers2020 TaxPub(DT) 3718 (Del-Trib) INCOME TAX ACT, 1961
Section 147
In the garb of reassessment proceedings, the AO sought to verify the same details on the strength of material which was already available on record, therefore, the assumption of jurisdiction by issue of notice under section 148 was bad in law, which was liable to be quashed and accordingly, the reassessment so framed was also liable to be quashed.
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Reassessment - Validity - AO sought to verify same details on the strength of material that was already available on record -
A search was conducted at premises of assessee and assessment was framed under section 153A. Subsequently, AO received information that some brokers affirmed that they were providing accommodation entries in the form of long-term capital gain and one of such scrip was of a company 'N'. AO was of the opinion that since the assessee also dealt in the said company, the long-term capital gain was nothing but accommodation entry received by the assessee in lieu of his unaccounted cash introduced in his accounts as long-term capital gain. Accordingly, he issued notice under section 148 for reopening assessment. Held: On perusal of assessment order under section 153A, it was found that no adverse inference was made to returned income of assessee when AO was fully aware of the long-term capital gain claimed as exempt. In the garb of reassessment proceedings, the AO sought to verify the same details on the strength of material which was already available on record. Therefore, it was clear that the AO did not apply his mind while issuing notice under section 148 in as much as had he gone through the assessment records of the assessee, he would have seen the computation of income filed with original return income and also with the return of income tax in response to notice under section 153A. If he had done this exercise, he would have known that long-term gain had not only been disclosed in the return of income but the same was also claimed to be exempt. Moreover, the reopening was only on the basis of borrowed satisfaction. Hence, the assumption of jurisdiction by the issue of notice under section 148 was bad in law, which was quashed and accordingly, the reassessment so framed was also quashed.
REFERRED : Cargo Clearing Agency (Gujarat) v. Jt. CIT 2008 TaxPub(DT) 2202 (Guj-HC) .
FAVOUR : In assessee's favour
A.Y. : 2011-12
IN THE ITAT, DELHI BENCH
N.K. BILLAIYA, A.M. & SUCHITRA KAMBLE, J.M.
Ishwar Chand Mittal v. ACIT
ITA No. 8706/Del/2019
25 August, 2020
In favour of assessee.
Appellant by: Gautam Jain, Advocate
Respondent by: M. Barnwal, Sr. Departmental Representative
N. K. Billaiya, A.M.
With this appeal the assessee has challenged the correctness of the order of the Commissioner (Appeals)-29, New Delhi, dated 4-1-2019 pertaining to assessment year 2011-12.
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