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TMI Blog2017 (6) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... reopening of assessment under Section 147 of the Income-tax Act, 1961 (in short 'the Act'). According to the Ld. counsel, the assessee filed return of income on 29.10.2007 and the same was processed under Section 143(1) of the Act. Subsequently, the Assessing Officer reopened the assessment by issuing notice under Section 148 of the Act on 25.03.2015. The Ld.counsel submitted that once the assessment proceeding was terminated by operation of law, the Assessing Officer cannot reopen the same under Section 147 of the Act. Placing reliance on the judgment of Madras High Court in TANMAC India v. DCIT in Tax Case (Appeal) No.1426 of 2007 dated 19.12.2016, the Ld.counsel submitted that the Madras High Court, after considering the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. Subsequently, a notice under Section 148 of the Act was issued on 25.03.2014. The question arises for consideration is whether the Assessing Officer has rightly reopened the assessment by issuing notice under Section 148 of the Act. 5. We have carefully gone through the judgment of Madras High Court in TANMAC India (supra). The issue before the Madras High Court is an identical reopening of assessment after processing the return under Section 143(1) of the Act. The Madras High Court after referring to the judgment of Apex Court in Rajesh Jhaveri Stock Brokers Pvt. Ltd. (supra), found that for initiating proceeding under Section 147 of the Act, reason to believe on the part of the Assessing Officer that income chargeable to tax wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 143(1) of the Act, the Assessing Officer received a report from the Deputy Director of Income Tax (Investigation)-II, Mumbai regarding bogus purchase of diamonds from M/s Daksh Diamonds, Mumbai. Therefore, the report received from Deputy Director of Income Tax (Investigation)- II, Mumbai was the basis for reopening of assessment. Hence, it cannot be said that the reopening was made on the basis of the material already existed on record. This Tribunal is of the considered opinion that when the Assessing Officer received information with regard to bogus purchase of diamonds from M/s Daksh Diamonds, she rightly reopened the assessment by issuing notice under Section 148 of the Act, therefore, this Tribunal do not find any reason to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el, the cost of diamonds is only Rs. 9,70,515/-. It can be carried easily by hand, therefore, the way bill or lorry bill is not required to prove the transport of diamonds from Surat to Chennai. Since the assessee produced all the materials, according to the Ld. counsel, the CIT(Appeals) is not justified in confirming the addition. 9. On the contrary, Shri AR.V. Sreenivasan, the Ld. Departmental Representative, submitted that the assessee has not produced any material before the Assessing Officer to substantiate the transaction, therefore, the entry made in the books of account to the extent of Rs. 9,70,515/- was found to be bogus. Moreover, the Assessing Officer made an attempt to verify the purchases by issuing notice under Section 133( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds has not responded to the letters issued by the Assessing Officer under Section 133(6) of the Act, that would not create any doubt in the mind of the Assessing Officer that the information received from Deputy Director of Income Tax (Investigation)-II, Mumbai would be proved. 11. Income-tax Act is a special enactment for the purpose of computation of taxable income as per the material available on record. No tax can be levied on presumption. Unless the material available on record establishes that the assessee has earned the income, no tax can be levied by the authorities on the presumption that the third party has not responded to the query made by the Assessing Officer. The Income-tax Act confers ample power and authority on the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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