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2020 (3) TMI 1143 - AT - Income TaxReopening of assessment u/s 147 - whether no incriminating material against the assessee and was reopened after the expiry of the time limit prescribed under the Income Tax Act, 1961? - HELD THAT - Section 143 assessment was completed in respect of discount and rebate which was categorically inquired by the Assessing Officer during the original assessment. All the details were before the Assessing Officer and after verification only the Assessing Officer passed original assessment without giving any adverse finding to that effect. It is pertinent to mention that the bank statement called for and the information given by the bank to the Assessing Officer itself reveals that the transaction and the payments were the genuine payments in respect of discount and rebate. There is no doubt or suspicious arise from the perusal of these documents. Merely creating a doubt of the transaction does not suffice the Assessing Officer to reopen the case u/s 148 - AO has to give proper reasons in case those documents are not at all produced in the original assessment itself. The reasons recorded by the Assessing Officer u/s 148 are not complete reasons and lack in the context of invocation of Section 148 itself. Therefore, the reopening itself is bad and hence the assessment is bad in law. The appeal of the assessee is allowed. Assessment u/s 153A - addition for bogus claim of rebate/incentive/discount amount - HELD THAT - There is no incriminating material shown by the Assessing Officer upon which the addition was made. In fact, the seized ledger accounts pertains to A.Y. 2011-12 only and therefore the said material cannot be held against the assessee for A.Y. 2012-13 and also cannot be termed as incriminating material. While making the additions on these documents, the Assessing Officer has not specifically pointed out that these expense but has disallowed all these expenses only on ad-hoc basis which is not permissible under the Income Tax Act. Therefore, the additions made itself does not have any foundation as such. Thus, the appeal of the Revenue does not sustain
Issues:
1. Assessment Year 2005-06: Reopening of assessment, addition of discount passed to customers, CIT(A)'s decision. 2. Assessment Year 2012-13: Disallowance of various expenses, CIT(A)'s decision, presence of incriminating documents. Assessment Year 2005-06: - The assessment for this year was reopened under section 148 due to false discount claims made by the assessee. - The Assessing Officer added ?87,17,271 for these claims, leading to an appeal by the assessee to the CIT(A). - The CIT(A) dismissed the appeal, prompting further appeal to the ITAT. - The ITAT found that the original assessment had thoroughly examined the discount and rebate claims, with no adverse findings made. - The bank statements and other evidence supported the genuineness of the transactions, leading the ITAT to conclude that the reopening of the assessment was unjustified. - Consequently, the ITAT allowed the appeal of the assessee for Assessment Year 2005-06. Assessment Year 2012-13: - The assessment for this year involved disallowance of various expenses by the Assessing Officer, including rebate, transportation, new vehicle expenses, traveling expenses, personal expenses, and u/s 14A. - The CIT(A) partially allowed the assessee's appeal against these disallowances. - The Revenue appealed against the CIT(A)'s decision, arguing that the rebate and discount claims were not adequately proven by the assessee. - The ITAT noted the absence of incriminating documents during the search and seizure, indicating that the additions lacked proper foundation. - The ITAT highlighted that the seized ledger accounts pertained to a different assessment year and could not be used against the assessee for the current year. - As a result, the ITAT dismissed the Revenue's appeal for Assessment Year 2012-13, affirming the CIT(A)'s decision to partially allow the assessee's appeal. Judges: - Shri N. K. Billaiya, Accountant Member - Ms. Suchitra Kamble, Judicial Member Legal Representatives: - For the Appellant: Sh. Salil Agrawal, Adv - For the Respondent: Sh. H. K. Choudhary, CIT(DR) Citation: 2020 (3) TMI 1143 - ITAT DELHI
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