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TMI Blog2013 (10) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... has preferred the appeal on following questions of law:- "1. Whether on the facts and circumstances of the case, Hon'ble ITAT was justified in law in canceling the action u/s.147 of the I.T. Act on the basis of information received from investigation wing leading to a bonafide belief of income escaping assessment. 2. Whether the order of the Hon'ble ITAT is perverse in as much as it failed to take into account the fact that the assessee in course of reassessment surrendered the Long Term Capital Gain thus accepting the reasons recorded by the Assessing Officer that the Long Term Capital Gain shown in the return was bogus. 3. Whether on the facts and circumstance of the case the order of the ITAT is perverse in as much as it placed wrong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient to connect the dates of the purchase of properties by the assessee and that the assessee did not make any payment, as found in the entries in the diary of Shri D.N. Taneja. The A.O. did not accept the objections and found that family members of Arora Group have made investment of about 50 properties during financial year 2001-02, assessment year 2002-03 and that since 8 members were involved in the purchase, in which Smt. Reena Arora had purchased two properties, an income of Rs.21 lacs arrived at by dividing Rs.5.25 crores with 8 was added to her income. 6. The Commissioner (Appeals) allowed the appeals with findings as follows:- "I have considered the submissions of the appellant. I have also perused the copy of the document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Uma Charan Shaw & Brothers vs CIT (37 ITR 271) has held that suspicion, howsoever strong, could not be the substitute for legal proofs. In view of above discussion, I do not find any justification in making the addition of Rs.21 lacs in the case of the appellant. The addition of Rs.21 lacs is deleted." 7. In the second appeal filed by the department under Section 254 of the Act the Tribunal has confirmed the findings as follows:- "The reasons recorded clearly shows that the Assessing Officer is not certain whether income escaped assessment or not. Assessee called for to give details if any payment is made to Shri D.N. Taneja and if the assessee is not made, then the Assessing Officer wants to know from that assessee who ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs.21 lacs paid by Smt. Reena Arora. The entries were with noting on the top (Praveen, Dilbagh) only indicated a schedule of payment. The name of Reena Arora did not appear in the diary. The A.O. while relying upon additions on the basis of the entries did not provide reasonable opportunity to the assessee. He did not allow cross-examination of D.N. Taneja by the assessee nor any bank statement or other records were found connecting these entries to Reena Arora. The A.O. relied upon the report of DI that since investment has been found in the diary entries of D.N. Taneja and which relates to Arora Group, Reena Arora, who had purchased two properties must have made additional undisclosed investment of Rs.21 lacs. The investment ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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