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TMI Blog2021 (6) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing officer. No substitution or deletion is permissible. No addition or deletion can be made on those reasons. No inference can be allowed to be drawn on the basis of the reasons not recorded. It is for the Assessing officer to disclose and open his mind through the reasons recorded by him, he has to speak through his reasons . And also that the reasons should be self-explanatory and should not keep the assessee guessing for reasons. Assessing officer's reopening reasons have failed in not only recording any such failure in light of sec. 147(1) 1st proviso on assessee's part but also he made it clear that the same were in order to verify the above facts . We thus uphold CIT(A)'s findings deciding the instant legal issue in assessee's favour. Loan(s) taken from Mr. T Nanda K and treated as unexplained u/s. 68 - necessary condition of filing Overseas remittance certificate for the corresponding money transfer from USA had not been complied with at the assessee's behest - HELD THAT:- The same is found to be against the clinching facts recorded in CIT(A)'s order that the impugned sum had nowhere came from any foreign bank account but from a domestic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued. Till date, the assessment record is not received. However, as part of the written submissions (paper book), the appellant. furnished copies of the correspondence relating to the proceedings u/s. 143(3) completed vide order dt. 11.11.2009. As mentioned earlier, the paper book of the appellant was forwarded to the AO, for comments. 5. The grounds of appeal nos. 2 to 5 relate to the contention that the reassessment proceedings u/s. 147 are not valid in law. 6. In the course of the appeal proceedings, the appellant furnished written submissions dt 30.12.2015 and the relevant portion of the same is reproduced, as below. INITIATION OF PROCEEDINGS U/S 147 : The appellant humbly submits that the proceedings initiated u/s. 147 were without jurisdiction, for the following reasons, and as such deserve to be quashed: (i) As submitted in para 1 above, the original assessment was completed u/s 143(3) and the reassessment notice u/s 148 of IT Act, 1961 was issued on 20.11.2012, i.e., after completion of four years from the end of the relevant assessment year, and accordingly the Appellant's case is covered by the first proviso to S. 147. The said proviso mandates th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings in response to the specific query raised by the then AO (Page 43 and 45 to 47 of this Paper 'Book), (c) copies of bank account statements (Kindly refer to Page 44 of this Paper Book), into which all the gifts/loans, sought to be verified during the reassessment proceedings, were credited (d) Capital Account Statement of Affairs (Page 52 53 of this Paper Book), (e) Affidavit in respect of gift received from the Appellant's brother (Page 48 49 of this Paper Book) and (f) the books of account, produced on AO's directions, explaining different sources of amounts received during the year which, in tum, explain the sources for the various investments/advances and deposits into the bank accounts (Page 51 of this Paper Book), constitute the material facts which were already there on record at the time of original assessment proceedings. It was also evident, from the financial statements filed by the Appellant, that all the advances/investments made by the Appellant were out of interest-free funds and as such no adjustment was required on account of interest-free advances or investments made by her. Thus, there was no failure on her part to furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f CIT Vs Usha International Ltd. 348 ITR 485 (Del). The Hon'ble High Court, after elaborate discussion on the principles laid down by various courts on the subject matter, held that for determining whether or not there is change of opinion , the fact that the assessment order is silent is not relevant because the assessee has no control over the way the order is written. It was further held, vide para 27 of the said order, that whether or not the Assessing Officer had applied his mind and examined the subject matter, claim etc. depends upon factual matrix of each case and the Assessing Officer can examine a claim or subject matter even without raising a written query. It went on to observe that there can be cases where though the AO has not raised a query, the issue may be so apparent and obvious that, to say that the AO has not formed an opinion with regard to the particular subject matter, claim etc would be contrary and opposed to normal human conduct. In the instant case, as submitted in Para 1.2. above, the Appellant had filed all the material facts, touching upon the issues in respect of which the assessment was sought to be reopened, during the original assessment proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suspicion as to whether the claims of the Appellant: were genuine, which is not permissible in law. (iv) The Hon'ble Supreme Court, in the case of GKN Driveshafts, and various High Courts Laid down' certain principles as to the procedure to be followed on reopening the assessments. As per such principles, whenever an assessee raises objections to the initiation of reassessment proceedings, it's the bounden duty of the AO to deal with such objections and accordingly pass a speaking order before going ahead with the proceedings so initiated. Assumption of jurisdiction, without fulfilling this legal requirement, is unsustainable in law and as such the reassessment order passed deserves to be quashed. Reliance is placed on the decision of the Hon'ble High Court of Bombay in the case of Godrej Industries Ltd. Vs DCIT Ors 126 DTR 417. In the instant case, the AO proceeded with the reassessment proceedings without dealing with the objections raised by the Appellant and accordingly the order passed requires to be set aside. In view of the above submissions, the CIT(A) is requested to declare the proceedings initiated u/s 147 and the consequent assessment order a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gifts received are not occasional. B. Loans received from the friends on various dates for AY 2007-08 Sl. No. Amount-Rs. Received from Remarks 1. 1,98,869 G.Sanjeev Reddy No confirmation letter/No repayment 2 1,49,464 - Do - - Do - 3 11,36,869 - Do - - Do - 4 11,14,387 - Do - - Do - 5 2,20,790 - J Vinod - Do - 6 2,20,790 - Do - - Do - 7 10,00,000 Gopal Reddy - Do - 8 25,00,000 T Nanda K - Do - c) Sale of acres 9.36 gts at Bulkapur, Shankarpally, Ramachandrapuram Municipality, R.R. District ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 920 sq yards at given for development to M/s. Lumbini Constructions Ltd. and received ₹ 9.0 lakhs advance received on 2.7.2008 and no details of capital gains on development of land or construction details are seen in the record Therefore, in order to verify the above facts, the case is reopened for the AY 2007-08, 2008-09 2009-10. 9. The material available on record has been perused and I am in agreement with the submissions made by the appellant. In the remand report dt. 20.06.2016, no comments have been furnished by the AO in respect of the grounds of appeal no. 2' to 5, challenging the jurisdiction u/s. 147. After considering the written submissions and paper book of the appellant, the AO has stated that no additional evidence has been filed and that the case may be decided' on facts. 9.1. In the case of the appellant, an assessment u/s. 143(3) was already made on 11.11.2009, for A.Y. 2007-08. A copy of the order has been furnished by the appellant which is available at pg. 54 to 56 of the paper book. On perusal of the reassessment record it is seen that the reasons, for reopening the assessment, were recorded on 12.11.2012. On page 2 of the reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings. 9.5. The appellant submitted that the claims were accepted in the original assessment proceedings after duly examining the particulars filed. On page 2 of the assessment order dt. 11.11.2009 that all the information as called for was produced (refer page 54 to 56 of the paper book). The appellant has also furnished copies of the correspondence, in the form of letters addressed to the AO, in the course of original assessment proceedings. These documents are available at page 40 to 53 of the paper book. 9.6. The reasons for reopening of the assessment relate to gifts and loans received, sale of agricultural land, loans advanced, cash deposits in bank account and plots given for development purposes. On perusal of the paper book, it is seen that the loans and the gifts received and transaction relating to sale of agricultural land were verified in the course of the original assessment proceedings. The material facts relating to loans advanced, cash deposits in bank account and plots given for development were disclosed in the course of the original assessment proceedings and were all available before the AO. 9.7. Some of the documents, forming part of the paper b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be permitted by law. 9.11. In the case of Tecumseh Products India Pvt. Ltd., the jurisdictional High Court has held that before issuing notice ix] s. 148 after expiry of four years, the Officer must be satisfied that there has been escapement of income and this is because of failure on the part of the assessee to make a return u/s. 139 or 142(1) or 148 or to disclose material facts. The Court further held that these conditions are sine qua non and conditions must be reflected in the notice itself. 9.12. Considering the totality of facts, and circumstances discussed, as above, the proceedings u/s. 147 cannot be sustained as valid in law. Accordingly, the grounds of appeal nos. 2 to 5 are allowed 3. The Revenue vehemently contended during the course of hearing that the CIT(A) has erred in law and on facts in quashing the impugned reopening as not sustainable. It's case is that this is an instance of Anti Corruption Bureau (ACB)'s proceedings which could see light of the day only after the specified period of four years from the end of the relevant assessment year thereby prompting the Assessing officer to take recourse to sec. 147/148 proceedings by rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found to be against the clinching facts recorded in CIT(A)'s order that the impugned sum had nowhere came from any foreign bank account but from a domestic account of the credit party only. The Revenue's sole substantive argument in favour of impugned addition is outrightly rejected. Coupled with this, the assessee has also filed relevant details of bank account in issue that the impugned sum stood duly repaid vide cheque dated 18.2.2008 cleared on 27.2.2008. Revenue's instant former substantive ground fails therefore. 5. Next comes the latter issue of unexplained bank deposits addition of ₹ 1,44,00,000/-. The CIT(A)'s detailed discussing deleting the same reads as under. 8.1. The material available on record has been perused. Non filing of foreign inward remittance certificates is not relevant at all as the amount under consideration was transferred from the bank account of the creditor, at Guntur. The AO has not disputed facts and documents, furnished by the appellant, while explaining the credits in the bank account. It is a fact that the amounts were received through banking channels. The appellant furnished confirmation letter j notarized affi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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