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TMI Blog2022 (4) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... of re- assessment which was reopened merely on the basis of suspicion and surmises, there was nothing in the reasons to show that any income had escaped assessment and the reopening of assessment is liable to be quashed. 4 For that the CIT(A) erred in upholding the validity of reopening of assessment done by the AO when no proper approval from higher authority u/s 151 was taken. 5 For that on the facts and in the circumstances of the case the proceedings initiated u/s 148and continuation thereof is not in accordance with law and is liable to be quashed. 6 For that the CIT(A) erred in confirming the addition of Rs. 16,05,300/- when there was no material to hold that the amount was income of the assessee and in fact the A.O the simply relied on the information while making the addition without making Any enquiry himself with regard to the authenticity of the alleged information. 7 For that the CIT(A) erred in confirming the addition of Rs. 10 Lakhs received from M/s Overall Distributors Pvt. Ltd as unaccounted money when the same was repaid back in the same year and hence, no addition was called for. 8 For that the CIT(A) erred in confirming the addition of Rs. 6,05,300/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier. On the basis of enquiry and information in possession of the undersigned, it is seen that, during the F.Y. 2011-12, the assessee company bank account got credit of Rs. 6,05,300/- from M/S. GOODFAITH BARTER PRIVATE LIMITED (A/C Number: 001783900001650) and Rs. 10,00,000/- from M/S. OVERALL DISTRIBUTORS PRIVATE LIMITED (A/C Number:001783900001790). Further information revealed that large value cash were deposited in the accounts of M/s Smart Udyog, (Prop: AbhaySultania) A/c No.001784000002215) and related parties and further funds were transferred to the bank accounts various entities. ITD information revealed that most of these layering entities do not file return and some file return with meagre income, no fixed assets, no salary or office expense which are primary requirement of running a business. Further investigation revealed that these companies are shell entities managed and controlled by entry operators and the bank accounts were used for layering the funds by the beneficiary companies and in this case M/s. Globe Complex Pvt. Ltd., the assessee, has brought back Rs. 16,05,300/- in its regular books of Accounts through these shell companies, which is nothing but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to form belief that the income of the assessee has escaped assessment as he had received information that the assessee had received credits through bogus concerns. 7. I have heard the rival contentions and gone through the records. As per the settled law in relation to the exercise of the powers of the Assessing Officer to reopen the assessment under the provisions to section 147 of the Act read with section 148 of the Act, the Assessing Officer is authorized to reopen the assessment proceedings, if he has reason to believe that any income chargeable to tax has escaped assessment. The courts of law have time and again held that such a reason to believe should be based on some tangible material which comes to the knowledge of the Assessing Officer. An assessment cannot be reopened u/s 147 of the Act on the basis of mere suspicion. 8. However, a perusal of the above reasons for reopening of the assessment would reveal that the said reasons were vague and were not sufficient to form a belief that the income of the assessee has escaped assessment. The only information which was available to the Assessing Officer was that the assessee had got credit of Rs. 16,05,300/- from M/s Goodfai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form the belief that the assessee was indulged in bogus transactions to bring back his own unaccounted money. Moreover, part of the information in the reasons recorded by the Assessing Officer was factually incorrect as the amount of Rs. 16,05,300/- was not received from M/s Goodfaith Barter Pvt. Ltd., rather the same was paid to it by the assessee. The information received by the Assessing Officer was general and vague information, that of course, can be used to some extent by an Assessing Officer to make further enquiries to ascertain the true facts in a case of an on-going assessment proceedings; however, in a concluded case of assessment, this general information without pointing out any incriminating information against the assessee, cannot be said to be a tangible information sufficient to form belief that the income of the assessee has escaped assessment. The suspicion of the Assessing Officer, thus, was not based on any reliable information or tangible material coming to his possession in this respect. There is no dispute to the well settled proposition that reason to believe must have a material bearing on the question of escapement of income. It does not mean a purely sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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