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TMI Blog2020 (2) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. The CIT(A) confirmed the action of the Assessing Officer and dismissed the appeal of the assessee. 4. Aggrieved with the above decision of the CIT(A), the assessee is in appeal before the Tribunal with the following grounds :- "1. Learned CIT (A) has erred in fact & in law in confirming reopening of the assessment u/s 147. Without any reason to believe about the escapement of income & reopening is done merely on suspicion & doubts & without any material or evidence of escapement. & Because it is already mentioned by A.O. in the reasons recorded by A.O. that assessee has not proved genuineness of the loan taken which clearly shows that assessment is made in prejudice manner & it was already fixed by A.O. to make addition u/s 68 irrespective of facts & evidences, which is highly illegal. & Because there was no occasion for appellant to prove the creditworthiness in A.Y. 2009-2010 which fact was knew to A.O. & this is nothing but fishy & arbitrary reason of A.O. about the escapement merely based on whims & hence reassessment is bad in law & against the factual position also. 2. Learned CIT (A) has erred in fact & in law in treating business income of the appellant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also paid by Meghna Gidwani & this fact is also not disputed by A.O. & There is no contrary evidence or material with A.O. 7. The appellant craves to leave, add / amend or alter any other grounds of appeal." 5. Before me, at the outset, referring to the ground no.1, which is legal in nature, ld. Counsel for the assessee brought our attention to the "reasons recorded" by the Assessing Officer and submitted that reasons recorded by the Assessing Officer before issuing of notice u/s 148 of the Act, are aimed at making verification to dig out the concealed income and hence the reassessment proceedings are invalid. Further, ld. Counsel for the assessee submitted that an identical issue with identical "reasons" came before the Co-ordinate Bench of the Tribunal in assessee's own case for the assessment years 2005-06 to 2007-08 vide ITA Nos.302 to 304/PUN/2019 order dated 01.11.2019. Eventually, the Tribunal decided the same in favour of the assessee on technical grounds. Further, ld. Counsel submitted that the contents of para 7 to 13 of the said order of the Tribunal (supra) are relevant in this regard. 6. After hearing both the parties and considering the said order of the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Sunil K. Gidwani, son of Kanhiyalal Gidwani, has lent finance to purchase the same. All payments for the same were apparently made through Gidwani Family's various bank accounts in which apparently cash amounts were deposited and the same were transferred into the accounts of Gidwani's wife, son and daughter-in-law in HDFC Bank at Worli. Thereafter the said amounts were apparently transferred into the account of Ms. Jay Maharashtra CPL, HFDC Bank, Worli, in which Gidwariis sons are directors for. making payments towards cost of the flats. On verification, it is seen that Shri Sunil Gidwani, the assessee, is assessed to income-tax and that he has advanced in terest-free loans to the extent of Rs. 51.3 lakhs to Shri Gajanan Koli for purchase of flat in Adarsha Coop. Housing Society, Mumbai, payments as under :- S.No Date Amt (Rs.) 1 15.07.2004 50,000 2 15.09.2004 3,00,000 3 27.10.2005 9,75,000 4 06.07.2006 5,00,000 5 07.08.2007 5,00,000 6 25.10.2007 10,71,000 7 19.03.2008 5,70,000 8 12.02.2009 11,65,000 51,31,000 The loan advanced to Shri Koli is interest-free loan and there are no business connection I relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... believe or that the alleged reason to believe is not relevant for the formation of the belief that income chargeable to tax has escaped assessment. It further observed that in doing so, it is further open to the assessee to challenge the reasons recorded u/s 148(2) of the Act on the ground that they do not meet the standards set in various judicial pronouncements. 10. I also find that various High Courts have held that for a mere verification of the claim, the power of reopening of assessment could not be exercised. The High Courts have also held that the AO under the guise of power to reopen an assessment cannot seek to undertake a fishing or roving inquiry and seek to verify the claims as if it were a scrutiny assessment. Here the reference could be made to the decision of Hon'ble Gujarat High Court in the case of Inductotherm (India) P Ltd Vs. M Gopalan, DCIT reported in (2013) 356 ITR 481 (Guj) wherein it has been observed by Hon'ble High Court that for a mere verification of the claim, the power of reopening of assessment could not be exercised. It further observed that the Assessing Officer under the guise of power to reopen an assessment, cannot seek to undertake a fishing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the reasons, the Tribunal already quashed the reassessment proceedings as invalid. From the above extract, it is also evident that the Assessing Officer, based on mere suspicion regarding the genuineness of sources of investment, is of the opinion that the said amount has escaped to the assessment. There is no prima-facie reason for the Assessing Officer to come to that line of the reason to believe about the concealed income. In our opinion, it is a case of issuing notice u/s 147 of the Act for conducting roving enquiries and without having any tangible material that works as a "live wire'. 9. Considering the above decision of the Tribunal (supra), I am of the view that the Assessing Officer was not justified in taking recourse to the provisions of section 147 of the Act and therefore, the initiation of reassessment proceedings are not in accordance with law. Therefore, following the rule of consistency, I set-aside the initiation of reassessment proceedings and the consequential assessment. Thus, the legal ground raised by the assessee by way of ground no.1 is allowed. 10. Considering the relief granted to the assessee on the legal issue, the adjudication of the other merits ..... X X X X Extracts X X X X X X X X Extracts X X X X
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