9911796707
TMI Blog1992 (8) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... ose to reassess the petitioners' income for the assessment year 1988-89. Dr. Balasubramanian, learned advocate for the respondents, has produced before us the reasons recorded by the Assessing Officer for issuing the notice of December 17, 1990. As per the reasons so recorded, it seems that the assessee-company was the owner of a plot of land together with structures thereon known as "Mor Bunglow" situated at Tejpal Road, Vile Parle (East), Bombay-400 057. The assessee-company entered into an agreement with its parent company, M/s. C. R. Developers Private Limited in respect of this property. The lease agreement is dated April 3, 1967. The lease which the assessee-company has granted is for a period of 98 years with an option of renewal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef must be that of an honest and reasonable person based upon reasonable grounds and that the Income-tax Officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. The Income-tax Officer will be acting without jurisdiction if the reason for his belief does not exist or is not material or relevant to the belief required by the section. The court can always examine this aspect though the declaration or sufficiency of the reasons for the belief cannot be investigated by the court. In the present case, looking to the dates when the above transactions took place, apart from mere suspicion, there is no material at all before the Assessing Officer which would give him reason to believe that for the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is recorded is beyond the scope of section 147. It is an accepted position that the assessee-company has in fact not received any interest in respect of this advance from M/s. C. R. Developers Pvt. Limited in the assessment year 1988-89. When no income is received there is no question of paying any tax on income which the respondents think should have been received but was in fact not received. In the case of CIT v. A. Raman and Co. reported in [1968] 67 ITR 11, the Supreme Court said that the law does not oblige a trader to make the maximum profit that he can out of his trading transaction. Income which accrues to a trader is taxable in his hands. Income which he could have but has not earned, is not made taxable as income accrued to hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
