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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 ..... - Shri D. Karunakara Rao, AM For the Assessee : Shri Sunil Ganoo For the Revenue : Shri S. P. Walimbe ORDER PER D. KARUNAKARA RAO, AM: There are two appeals under consideration. Both the appeals are directed against the separate orders of the CIT(A)-1, Kolhapur dated 09.12.2016 and 30.11.2016 for the common assessment year 2009-10 respectively. Since the facts and issues are common in both the appeals, therefore, these were heard together and are being disposed of by this composite order. ITA No.325/PUN/2017 2. We shall take up the appeal in ITA No.325/PUN/2017 for narrating the facts and adjudicating the issue. 3. Briefly stated that relevant facts include that the assessee is engaged in the business of trading activities and filed the return of income declaring total income of ₹ 8,73,400/- in the individual capacity. At the end of the assessment u/s 143(3) r.w.s. 147 of the Act, the Assessing Officer made the additions u/s 68 of the Act. The CIT(A) confirmed the action of the Assessing Officer and dismissed the appeal of the assessee. 4. Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by A.O. Irrespective of the fact that this will be double taxation. Irrespective of the fact that there is no contrary material with A.O. 5. Learned CIT (A) has erred in fact in law in confirming addition u/s 68 in respect of loan received from Sunil Gidwani (HUF) of ₹ 955000/- Irrespective of the fact that ₹ 955000/- are given out of soya trading income all the necessary details / proofs of this income are given during the course of assessment proceedings of appellant also in the case of Sunil Gidwani (HUF) Irrespective of the fact that all this income is shown by Sunil Gidwani (HUF) in the return tax is also paid upon it this fact is also not disputed by A.O. There is no contrary evidence or material with A.O. 6. Learned CIT (A) has erred in fact in law in confirming addition u/s 68 in respect of loan received from Meghna Gidwani of ₹ 60000/- Irrespective of the fact that ₹ 60000/- are given out of disclosed all the necessary details / proofs of this income are given during the course of assessment proceedings of appellant also in the case of Meghna Gidwani. Irrespective of the fact that all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer must have reason to believe that (b) Income chargeable to tax has escaped the assessment and (c) In cases where the assessment sought to be reopened is beyond the period of four years from the end of the relevant assessment year, then an additional condition is to be satisfied viz: there must be failure on the part of the Assessee to fully and truly disclose all material facts necessary for assessment. The requirement in the first proviso to Section 147 of there having to be a failure on the part of the Assessee to disclose fully and truly all material facts does not at all apply where the initial return has been processed under Section 143(1) of the Act. 8. In the present case it is required to be noted that by the impugned notice, the assessment for AY 2005-06 is sought to be reopened in exercise of power under Section 147 of the I.T Act. The reasons recorded to reopen the assessment are as under : According to information gathered from informed sources, local enquiries and media reports, it has come to be known that Shri Karihaiyalal Gidwani, owns three flats, one in his name and two in the names of his two sons - Kailash and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above and on verification of return of income filed for the assessment year 2005-06, along with its enclosures, it is revealed that - (i) During the year under consideration, the assessee has given ₹ 3,50,000/- to Shri Gajanan S. Koli towards investment in Adarsha CHS, the genuineness of the sources of this investment is not proved. Therefore in view of the above, I have reasons to believe that the income chargeable to tax to the extent of ₹ 350,000 has escaped assessment within the meaning of section 147 of the I.T. Act, 1961. Thus, as per the reasons noted hereinabove the reasons recorded by the AO is on the basis of verification of the return of income filed by the Assessee alongwith with the enclosures. According to the AO it shows that assessee has given loan to Shri Gajanan Koli for investment in Adasrsh CHS, the genuineness of the source of investments is not proved and thus he has reason to believe that income chargeable to the extent of loan given has escaped assessment. 9. So far as the proposition of the Ld DR to the effect that when a return of income is processed u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claims, as if it were a scrutiny assessment. 11. When the facts of the present case is seen in the light of the decisions cited hereinabove, I am of the view that the reopening is sought by the AO on the basis of the return of income filed by the assessee and is for the purpose of verification of the issue and is not based on any tangible material. 12. I further find that identical reasons were recorded by the AO for reopening the assessments in the case of Shri Kilash Kaniyalal Gidwani, Shri Sunil Kanhaiyalal Gidwani and Shri Sunil Kanhiyalal Gidwani. When the reopening was challenged before the Co-ordinate Bench of the Tribunal, in their cases, the Tribunal vide order dated 11.09.2019 (ITA No769/PUN/2014) held that the AO was not justified in taking recourse to the provisions of Sec. 147 of the Act and it stuck down the initiation of assessment proceedings and the consequential assessment order passed u/s 147 of the Act. 13. Considering the totality of the aforesaid facts, I am of the view that AO in the present case was not justified in taking recourse to the provisions of s. 147 of the Act and therefore the initiation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lief granted to the assessee on the legal issue, the adjudication of the other merits related grounds becomes academic exercise only. Thus, the other grounds raised by the assessee are dismissed as academic. 11. In the result, the appeal of the assessee in ITA No.325/PUN/2017 is partly allowed. ITA No.327/PUN/2017 12. As stated earlier, the facts and issues in ITA No.325/PUN/2017 are identical to this appeal (ITA No.327/PUN/2017), therefore, our decision in ITA No.325/PUN/2017 shall apply mutatis mutandis to this appeal. Further, on perusal of the reasons as given at page 7 of the Paper Book, we find the following is the reasons for formation of reason to believe about the concealment of income :- ........... Therefore, verification of investment made by Gidwani family through various bank accounts reveals the need to unearth the undisclosed income. Therefore in view of the above, I have reasons to believe that the income of the assessee Shri Sunil Gidwani (HUF) chargeable to tax for the A.Y. 2009-10 has escaped assessment within the meaning of section 147 of the I.T. Act, 1961. 13. From th ..... 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