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TMI Blog2012 (12) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... not escape tax liability. Non-supply of documents/statements by the Assessing Officer to the assessee can be termed as procedural lapse. Therefore, the amount is liable to the taxed in the hands of the assessee. Issue decides in favour of revenue. Disallowance of interest expense – AO argued that assessee had diverted the borrowed funds for non-business purposes – Held that:- As concluding from the facts of the case that it was categorically stated that the personal accounts and business accounts were separately maintained by the assessee and there was no inter-connection transaction between personal and business accounts. The assessee had advanced monies from her personal account. This fact is reflected from bank statement. Issue decides in favour of assessee - ITA No.741/Mds/2010 & C.O. No.42/Mds/2010 - - - Dated:- 24-7-2012 - Dr. O.K. NARAYANAN AND SHRI VIKAS AWASTHY, JJ. Appellant by : Ms. Anupama Shukla, IRS CIT DR Respondent by : Mr. R.Meenakshisundaram, Advocate ORDER PER VIKAS AWASTHY, JUDICIAL MEMBER: The appeal has been filed by the Revenue assailing the order of the CIT(A)-V, Chennai dated 25.02.2010 whereby the appeal of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that the CIT(A) has erred in holding that the Assessing Officer has validly assumed jurisdiction to reopen the assessment. 5. Ms. Anupama Shukla, representing the Department submitted that the original return was filed by the assessee on 31.10.1997. The information from DCIT., Company Circle-I(1) was received by the Assessing Officer on 10.11.2000 that the assessee had received gifts to the tune of Rs.95,80,935/- during her marriage. However, the assessee was able to explain source of gifts to the tune of Rs.5,80,935/- only. Therefore, addition of Rs.90.00 lakhs was made under the provisions of section 68 of the Act. The Assessing Officer in the order has specifically stated that the said amount was credited in the bank account of the assessee. 6. The learned D.R. further submitted that the CIT(A) has also disallowed the interest amounting to Rs. 23,20,861/-. The assessee had diverted the borrowed funds for non-business purposes. Therefore, the assessee was not entitled to claim the benefit of the interest paid thereon. 7. On the other hand, Shri R.Meenakshisundaram, counsel appearing on behalf of the assessee submitted that the amount of Rs.90.00 lakhs received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer on 10.11.2000 from the DCIT., Company Circle-I(1), Chennai along with a copy of assessment order dated 27.03.2000 for the assessment year 1997-98 in the case of Shri N.P.V.Ramasamy Udayar(HUF), wherein it was stated that out of Rs. 95,80,935/- as gifts received by the assessee on the occasion of her marriage on 15.9.1996, a sum of Rs. 90.00 lakhs has been added in the income of the HUF as unexplained investment under the provisions of section 69/69A of the Act. The Assessing Officer initiated proceedings under section 147 against the assessee by issuing notice under section 148. Initially, the aforesaid amount of Rs.90.00 lakhs was assessed as income of the HUF i.e. assessee s father Shri N.P.V. Ramasamy Udayar. However, on appeal to CIT(A) by the aforesaid HUF, the CIT(A) deleted the said addition and thereafter the Department did not file any appeal impugning the order of the CIT(A). The income had escaped in the original assessment although the amount of Rs. 90.00 lakhs was credited in the bank account of the assessee. Prior to the amendment, two conditions had to be complied with for initiating reassessment. After the amendment only one condition has to be satisfied i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant s assessment order. (c) On the strength of those sworn statements, the learned Assessing Officer has passed the order in the case of the appellant but copies were not supplied to the appellant. (d) The learned CIT(A)-I has already given a finding that the learned Assessing Officer has not brought out enough material to hold that Rs. 90 lakhs is unaccounted income of NPV Ramaswamy Udayar (HUF) which were converted into marriage gifts in the form of demand drafts, cheques and cash, whereas the learned Assessing Officer has passed the assessment order of the appellant on the strength of the assessment order of NPV Ramaswamy Udayar(HUF) only. (e) Further, the learned Assessing Officer has passed the order on the presumption that the appellant could have earned Rs. 90 lakhs from her flour business though she was a student at the time of marriage. (f) Apart from relying on the assessment order of NPV Ramaswamy Udayar(HUF) the Assessing Officer has not brought any new material or independent enquiry for passing such an assessment order. We do not concur with the findings of the CIT(A). Non-supply of copies of the statements which were recorded at the assessment stage ..... 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