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TMI Blog2014 (8) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 31 lacs but its value for the purpose of stamp duty as per the circle rate was ₹ 82.54 lacs, resulting in an escapement of income of ₹ 51.54 lacs - The validity of the reopening of the assessment has to be determined on the basis of reasons which are disclosed by the AO - The legality of the notice reopening the assessment has to be determined, when it is questioned, on the basis of the reasons which are recorded by the AO - the Tribunal was justified in assessing the correctness of the notice for reopening the assessment u/s 148 on the basis of the reasons which were disclosed by the AO – the reasons could not give rise to a reason to believe that income had escaped assessment for the simple reason that in the computation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al was justified in law in not appreciating the fact that the AO had valid reasons to believe that there is escapement of income by the assessee who vide his return of income had shown highly inflated cost of construction and improvement. 3. Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was justified in not appreciating the fact that the value of property, decided by Civil Judge, Kanpur at ₹ 1 lac as per the Court decree dated 15.12.1994, was rightly adopted by the A.O. 4. Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was justified in not appreciating the fact that the assessee during the course of assessment proceedings failed to produce evidence regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be tangible material before the Assessing Officer to come to a conclusion that there is an escapement of income from assessment. Reasons, as the Supreme Court observed, must have a link with the formation of the belief. As a matter of fact, in an earlier decision in M/s. S. Ganga Saran and Sons (Pvt) Ltd., Calcutta v. Income Tax Officer and others2 , the Supreme Court had held as follows: ...First, he must have reason to believe that the income of the assessee has escaped assessment and secondly, he must have reason to believe that such escapement is by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. If either of these conditions is not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exist reasons to believe that income of the assessee had escaped assessment and there must be a rational and intelligible nexus between the reasons and the belief. In the present case, the submission of the assessee before the Tribunal, as recorded in paragraph 3 of the impugned order, is that the only reason which was given by the Assessing Officer for initiating reassessment proceedings was that the property was sold by the assessee for ₹ 31 lacs but its value for the purpose of stamp duty as per the circle rate was ₹ 82.54 lacs, resulting in an escapement of income of ₹ 51.54 lacs. The notice under Section 148 was available on the record of the Tribunal. The Tribunal also had the benefit of perusing the income tax r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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