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TMI Blog2018 (4) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... of justice the matter on merits is remanded to the record of the Assessing Officer for denovo adjudication after consideration of evidence filed by the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... it can be taken as reason to belief that income has escaped assessment. The pre requisite condition of initiated proceedings u/s 148 have not been complied with and as such the action of the AO is absolutely illegal, void and bad in law and consequently the assessment made by the AO is without jurisdiction being bad in law. In support of his contention he has relied upon the decision of Hon'ble Gujart High Court in case of Varshaben Sanatbhai Patel vs. ITO 282 CTR 75. The ld. AR has thus submitted that the AO was not able to bring on record any material from which it could be held that there has been escapement of income on account of failure on the part of the assessee in fully and truly disclosing the income in his return of income. He has relied upon the decision of Hon'ble Delhi High Court in case of ITO vs. Om Exim P. Ltd. 26ITR 697. Thus, the AO acted on such suspicion and assumption that the income chargeable to tax has escaped assessment. 4. On the other hand, ld. Dr has relied upon the orders of the authorities below and submitted that on an identical issue the AO has already held for A.Y. 2003-04 that the purchases made from M/s Ambica Traders are bogus in nature. 5. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder:- "10. In this background, the facts of the present case would have to be considered. During the course of proceedings for the assessment year 2004-05, a query was addressed by the Assessing Officer on September 7, 2006 inter alia requiring the assessee to make a disclosure of the nature of its business and details of the expenses towards market research. On November 15, 2006; the assessee was directed to furnish a justification and details of expenditure towards advertisements and sales promotion expenses. The assessee furnished the break-up of the expenses incurred towards advertisements and sales promotion and an order of assessment was passed under section 143(3). When the assessment proceedings for the assessment year 2005-06 were taken up, the Assessing Officer by his letter dated August 21, 2007 called up the assessee to furnish the ledger extracts of advertisements and sales promotion expenses/market research expenses. On November 26, 2008 a notice was issued to the assessee under section 142(1). The annexure to the notice drew the attention of the assessee to the fact that the assessee had debited advertisements and sales promotion expenses of ₹ 39.99 crores ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of fresh material which came before him in view of the notice dated November 26, 2008 in pursuance of which the assessee filed a detailed representation elucidating the relevant particulars of the business of the assessee and the reasons for the expenditure. Whether the Assessing Officer was justified in the decision which he took for the assessment year 2005-06 is again not a matter to be considered at this stage of the proceedings. The point is that on the basis of the additional material which was available on record, the Assessing Officer issued a notice for reopening the assessment for the assessment year 2004-05. In our considered view, the Assessing officer did have tangible material to reopen the assessment under section 147 of the Act and to form a reason to believe that income had escaped assessment. Clause (c)(iv ) of Explanation 2 to section 147 creates a deeming fiction where though the assessment has been made, income chargeable to tax is underassessed. In such a case, law deems that income chargeable to tax has escaped assessment. For these reasons, we are of the view that recourse to the provisions of section 147 cannot be faulted." Thus, the Hon'ble Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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