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TMI Blog2011 (8) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee which were earlier allowed by the AO. There was no other material for the AO for reopening of the assessment and found that the reopening of the assessment on the same material - Reopening of assessee is unjustified. - ITA No. 175/2009 - - - Dated:- 1-8-2011 - Krishn Kumar Lahoti and Vimla Jain, JJ. JUDGEMENT Shri Sanjay Lal, counsel for the appellant. This appeal is directed against an order passed by the order of Income Tax Appellate Tribunal, Indore Bench, Indore Annexure A/3 dated 29th May, 2009 by which the second appeal preferred by the assessee was allowed and the Tribunal found that there was no sufficient material before the Assessing Officer for reopening of the assessment under Sections 147 and 148 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. Against the aforesaid order, the assessee preferred an appeal before the CIT(A)-I Bhopal. which was dismissed vide order dated 17.2.2006. Second appeal preferred by the Assessee before the Income Tax Appellate Tribunal, Indore Bench, Indore was heard and decided by the impugned order. The Tribunal considered the entire matter and found that there was no justification for the AO to reopen the assessment and set aside all the reassessment proceedings. This order is under challenge in this appeal. To appreciate the contention of the appellant, we have perused the order. In order Annexure A/1, the A.O considered the objection of the assessee in para 6, he observed as under: "The reply of Ld AR is considered, however it is not ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the assessment. For ready reference we quote paras 10 and 11 of the aforesaid order. "10. Considering the facts of the case in the light of material available on record, it is clear that the AO recorded reasons for reopening the assessment that expenditure is claimed when assessee had no business income. This reason is not relevant because there could be loss as well in the business. Ld. Counsel for assessee filed copy of the assessment order for AY 1998-99 dated 31.10.2003 passed u/s 143(3)/148 of the IT Act in which the nature of business of assessee is shown to be building construction and sales as is stated in the AY under appeal. The assessee filed return at loss of Rs.98,510/- and the AO disallowed some of the business expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her business in the year under appeal. The authorities below have not taken into consideration that in the earlier years and subsequent years, assessee was doing the same business. It is, therefore, not possible to hold that by mere lull in activity of assessee, it had ceased to do business. The reasons for reopening of the assessment u/s 147 that there was no business income, so no expense is allowable is irrelevent criteria for reopening the assessment. Thus, there was no material or basis to reopen the assessment. The assessee has filed computation of income which shows that income from business and profession has been separately computed showing business loss and further income from house property is computed and thereafter, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 147 of the Incometax Act is vital and significant in the sense that there should be some basis upon which the belief can be built by the Assessing Officer. It does not matter whether the belief is ultimately proved right or wrong but there must be some material upon which some belief can be founded. In the present case, we have notices as a fact that there was no material on record upon which the Assessing Officer could have based his belief that the income has escaped assessment. The learned Departmental Representative merely submitted that the information contained in return is sufficient for the Assessing Officer to form his belief that the income has escaped assessment. We do not agree with the submission of the learned Departmental R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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