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TMI Blog2015 (3) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 41(1) of the Act does not apply to the facts of the present case, it has to be determined how the credit balances should be treated. The assessee had conceded before the Tribunal that assessment of the earlier assessment years relating to such purchases can be reopened and he has no objection to the same. The purpose of such concession is to determine the correct tax liability. It was under such circumstances, the Assessing Officer was directed to reopen the assessment of the year in which such purchases were made from third parties to examine whether such purchases were bogus or not. The net result of such a direction may also go in favour of the assessee, if he is able to prove the bona fides. The effect would be that the correct t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection to such action, is now challenging the direction given by the Tribunal to the Assessing Officer to reopen the assessment invoking Explanation 2 to Section 153 of the Act. 3.1. The brief facts of the case are as under: The assessee is a wholesale dealer in cloth. For the assessment year 2001-2002, he filed return of income on 9.10.2001. The return was processed under Section 143(1) on 18.10.2002. The regular assessment under Section 143(3) of the Act was completed on 26.3.2004. 3.2. During the course of assessment proceedings, the Assessing Officer noticed that certain credit balances were lying in the names of M/s.Rakesh Textiles; M/s.Salar Textiles and M/s.Salasar Synthetics totalling to ₹ 17,82,150/-. The Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On this premise, the Tribunal came to hold that there was no evidence before the revenue that there was a remission or cessation of such liability during the relevant assessment year. It was also found that the assessee has also not written off this liability during that year and, therefore, addition cannot be made during the assessment year as there was no remission or cessation of claim. However, as contended by the representative of the department and accepted by the authorised representative of the assessee, the Tribunal ordered reopening of the assessment of the year in which such purchases were made from those parties to examine whether such purchases were genuine. 3.6. Assailing the said order, the assessee has filed this appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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