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TMI Blog2013 (7) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has not sold any shares during the year under consideration and therefore he believed that income chargeable to tax has escaped assessment. It was not the case of the Revenue that bank account with ABN AMRO bank of the assessee was not a disclosed bank account recorded in the regular books of account maintained by the assessee. Further in the impugned years the AO admitted that the assessee has shown sale of shares in both the years and therefore the contrary facts observed in the recorded reasons were erroneous. Thus the belief about the escapement of income was formed on the basis of an erroneous assumption of facts and therefore reopening of assessment was not valid. In favour of assessee. - ITA Nos.1479&1480/Kol/2011, C.O.Nos.69 & 70/Kol/2012 - - - Dated:- 21-6-2013 - Sri N. S. Saini AM And Sri Mahavir Singh, JM,JJ. For the Petitioner : Shri D. K. Sonowal,JCIT, Sr. DR For the Respondent : Shri A. K. Tibrewal, FCA ORDER Per Shri N.S.Saini, AM. These are the appeals filed by the Revenue and the Cross Objections filed by the assessee against the order of ld. CIT(A)-VIII, Kolkata dated 14.09.2011 2. In Revenue's appeal the following grounds were t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion has been received that cash deposit of Rs.36,15,000/- was made in Bank (maintained by the assessee company) account no.848741 with ABN-AMRO Bank during the period 01.01.06 to 31.03.06. On verification of its accounts for the financial year 2005-06 relating the A.Y. 2006-07, it is found that (1) Rs.99,379/- was received on account of interest during the relevant previous year (2) There was no fresh loan or capital received during the relevant previous year. (3) There was no sale of shares. There was sale of investment to the tune of Rs.5,51,420 but cheque deposits were more than crore at different dates during the period. (4) There has been increase of cash-in- hand on comparison with the earlier year. All these does not justify the cash deposits of Rs.36,15,000/- as well as cheque deposits at different dates in the said bank accounts during the relevant previous year. On the basis of the above, I have reason to believe that income has been escaped from assessment. Consequently, Notice u/s 148 is issued for the purpose of reassessment u/s 147." A.Yr.2007-08 Information has been received that cash deposit of Rs.56,15,000/- was made in Bank (maintained by the assessee company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiated by the AO. I have carefully perused the submissions made by the appellant. The appellant has challenged the validity of the order u/s 147 and the jurisdiction of the AO for taking such an action. The appellant itself has admitted that prior to such proceedings u/s 147 the return was only processed u/s 143(1). The Hon'ble Supreme Court in Rajesh Jhaveri Stock Brokers Private Ltd. v. ACIT (2007) 291 ITR 500 (SC) has very categorically held that Intimation u/s 143(1) cannot be treated as an order of assessment and there being no assessment u/s 143(3), the question of change of opinion does not arise. The Hon'ble Supreme Court has very categorically held that :"if the Assessing Officer for whatever reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment." And that the AO is free to initiate proceedings u/s 147 and failure to take steps under section 143(3) will not render the AO powerless to initiate re-assessment proceedings even when intimation u/s 143(1) has been issued. Therefore, respectfully following the judgement of Hon'ble Supreme Court in Rajesh Jhaveri Stock Brokers Private Ltd. v. ACIT(supra) I uphold the action of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax has escaped assessment. It was not the case of the Revenue that bank account with ABN AMRO bank of the assessee was not a disclosed bank account recorded in the regular books of account maintained by the assessee. 5.5. Further in the impugned years the AO admitted that the assessee has shown sale of shares in both the years and therefore the contrary facts observed in the recorded reasons were erroneous. In the above circumstances we find that the belief about the escapement of income was formed on the basis of an erroneous assumption of facts and therefore reopening of assessment was not valid. Further we find that no addition was made in both the years under appeal on the ground that any deposit either in cash or in cheque made by the assessee with ABN AMRO bank for which reopening was made in the instant case. 5.6. We find that no addition was made in respect of cheque deposit with ABN AMRO bank by the assessee in both the years. As per recorded reasons the cash deposit in the ABN AMRO Bank by the assessee in the A.Yr. 2006-07 was Rs.36,15,000/- and in the A.Yr. 2007-08 also was Rs.36,15,000/- whereas addition made on re-assessment in the A.Yr.2006-07 was Rs.99,40,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly proceeded to make deductions under sections 80HH and 80-I and accordingly reduced the claim on these accounts. The very basis of initiation of proceedings for which reasons to believe were recorded was income escaping assessment in respect of items of club fees, gifts and presents, etc. but while these items were not disturbed, the Assessing officer proceeded to reduce the claim of deduction under sections 80HH and 80-I which was not permissible. The Tribunal was right in holding that the Assessing Officer had the jurisdiction to reassess issues other than the issues in respect of which proceedings were initiated but he was not justified when the reasons for the initiation of those proceedings ceased to survive." 5.9. Further the Hon'ble Rajasthan High Court in the case of CIT vs Shri Ram Singh 306 ITR 343 (Raj) has held as under :- Pursuant to search operations, the Assessing Officer issued a notice to the assessee under section 148 of the Income-tax Act, 1961, on the ground that the assessee had purchased a plot of land from undisclosed sources of income. The assessee explained that he had purchased the land from his agricultural income which was lying deposited with a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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