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TMI Blog2023 (11) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... e cash that was withdrawn. The reason for this was that the said money was utilised for the purchase of a parcel of land, which in the books of accounts of the respondent/assessee was shown as stock-in-trade, which in essence got neutralised being reflected in the closing stock. Therefore, clearly the provisions of Section 40A(3) of the Act were not applicable. Thus, the order passed under Section 263 of the Act wrongly took recourse to Section 40A(3) of the Act and therefore, in our view, correctly set aside by the Tribunal. Also Tribunal appears to have adverted to is that if no addition was made viz-a-viz the deposit of Rs.16.80 crores, which was the subject matter of the reassessment proceedings, then it was not open to the AO to make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 5. This appeal concerns Assessment Year (AY) 2006-07. 6. Via the instant appeal, the appellant/revenue seeks to assail the order dated 01.11.2017 passed by the Income Tax Appellate Tribunal [in short, Tribunal ]. 7. The Tribunal via the impugned order set aside the order dated 01.03.2016 passed by the Principal Commissioner of Income Tax [in short, PCIT ] under Section 263 of the Income Tax Act, 1961 [in short, the Act ]. 8. To adjudicate the instant appeal, the following broad facts are required to be noticed: 8.1 On 30.11.2006, the respondent/assessee had filed its Return of Income (ROI). Via the instant ROI, the respondent/assessee declared its income as Nil‟. The respondent/assessee was infact issued an intimation under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 11. As per the PCIT, there was non-application of mind by the AO since he had not noticed the provisions of Section 40A(3) of the Act. Thus, the PCIT concluded that the twin conditions for bringing the matter under the ambit of Section 263 of the Act were fulfilled i.e., that the assessment order was erroneous and it was prejudicial to the interest of the revenue. 12. It is this order of the PCIT which, as noticed above, has been reversed by the Tribunal. What is not in dispute is that the respondent/assessee had not claimed any expenditure with regard to the cash that was withdrawn. The reason for this was that the said money was utilised for the purchase of a parcel of land, which in the books of accounts of the respondent/assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , by taking recourse to provisions of section 147 read with section 148 of the Act, unless it assesses to tax that income with reference to which the Assessing Officer had formed reason to believe (within the meaning of section 147), that it had escaped assessment. 21 To my mind, a careful reading of section 147 of the Act would show that it empowers an Assessing Officer to reopen the assessment, if, he has reason to believe, that any income chargeable to tax has escaped assessment for the relevant year, and also bring to tax , any other income, which may attract assessment, though, it is brought to his notice, subsequently, albeit, in the course of the reassessment proceedings. 21.1. To put it plainly, the purported income discovered subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 331 ITR 236 (Bom); (ii) CIT v. Mohmed Juned Dadani [2013] 355 ITR 172 (Guj); Manu/GJ/0061/2013 (iii) Oriental Bank of Commerce v. Addl. CIT Manu/DE/1935/2014 23.1. The only High Court, which has taken a contrary view, as it were, is the Punjab and Haryana High Court in the matter of: Majinder Singh Kang v. CIT [2012] 344 ITR 358 (P H); (2012) 25 taxmann.com 124 (P H) 23.2. In my opinion, with respect, the court, in rendering the judgment in Majinder Singh Kang's case, ignored the fact that the provisions of Explanation 3 had to be read in conjunction with the main provision, and that, the said Explanation cannot override the main provision. 23.3. This aspect of the matter has also been brought to fore by the Bombay High Court in: CIT J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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