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TMI Blog2023 (8) TMI 1467X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted the loan details including the loan confirmation, Bank statement, and the return of income of M/s. Mangal Murti Impex Pvt Ltd. There is merit in the argument that there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for the purpose of assessment. We in this regard notice that the reasons recorded do not allege any failure on part of the assessee to disclose material facts which is the basis on which the reopening is done. In the reasons recorded, AO has elaborated only about the survey proceedings of JPV Group and the enquiry done with regard to the loan transactions of JPV group with certain non-genuine parties including M/s. Mangal Murti Impex Pvt Ltd. The Assessing Officer has not mentioned about any new material that has been brought on record with regard to the loan transaction basis which assessee s case is reopened. A mere recording that I have reason to believe that the income chargeable to tax above Rs 1 Lakh has escaped assessment for the A.Y. 2011-12 in the case of the said assessee within the meaning of section 147 of the Income Tax Act, 1961 does not mean that the restriction imposed by the proviso to Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 68 of the Act. The Assessing Officer further made the disallowance towards interest paid on the loan and the commission expenses as unexplained expenses under section 69C of the Act. Aggrieved, the assessee filed appeal before the CIT(A), who upheld the addition made by the Assessing Officer. Aggrieved, the assessee is in appeal before the Tribunal. 4. The assessee has contended the impugned issues, both on legal grounds and also on merits. 5. We will first consider the legal issue contended by the assessee in which the reopening of assessment made by the Assessing Officer is contended to be bad in law since the pre-requisite under the First Proviso to section 147 of the Act are not satisfied. The assessee has also raised another legal contention that the Assessing Officer had in first round of re-assessment proceedings examined the details pertaining to M/s Mangalmurti Impex Pvt Ltd and concluded the re-assessment accepting the returned income and therefore re-opening for the same reason is nothing but change of opinion. The extract of the notice of reassessment issued by the Assessing Officer under section 148 in which the reasons for reopening are recorded as under:- &qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loans and advances In relation to purchase and sale shown in their respective books of accounts. Therefore, money is routed through the accounts of any of these name lending concerns - all transactions are done through banking channels. Since above set of transactions are taking place on regular basis, at a given point of time there would be sundry credits of Crores of Rupees and corresponding loans to builders / persons dealing in real estate in the accounts of these benami concerns. A simple perusal of the balance sheet filed by this concerns would usually have the following abnormal features which are otherwise not possible in a normal business transaction. In view of the above, following observations are made in case of M/s. Mangal Murti Impex Pvt Ltd. (a) High Sundry Creditors = Rs.39,84,65,1667- (b) The major portion of entire assets in the balance sheet comprising of Loan & Advances (20,51,72,6897-), Debtors (17,50,38,322/-). The total of these assets i.e. (38,02,11,0117-) almost match the figures of their sundry creditors (39,84,65,1667-). In view of the above, it is clear that the assessee has taken bogus loan of Rs.1.25 crores from M/s. Mangal Murti Impex Pvt Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not the requirement that at the time of issue of notice the Assessing Officer should have finally ascertained the facts by examining the evidence or conclusion. The CIT(A) relied on various judicial pronouncements in this regard. Accordingly, the CIT(A) dismissed the legal contended before him. 8. The Ld.AR before us submitted that - * The reasons recorded do not whisper about failure to make a full and true disclosure as mentioned in first proviso to section 147 of the Act * The assessee is nowhere connected with the alleged JPV group on which survey was conducted. * Without even establishing the nexus of the assessee with the said alleged group, the Assessing Officer has without application of mind proceeded to reopen the concluded reassessment merely on the basis of reason to suspect as against reasons to believe. * During the course of previous reassessment, the Assessing Officer had gone into the identical issue and did not made any addition with respect to unsecured loan and interest thereon. Hence, the action on the part of the revenue to now reopen the concluded reassessment is nothing but a change of opinion on the part of the Assessing Officer, which ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard the parties and perused the materials on record. Before proceeding further we will look at the relevant provisions of section 147 - [Income escaping assessment. 72 147. If the 73[Assessing] Officer 74[has reason to believe 75] that any income chargeable to tax has escaped assessment 75 for any assessment year, he may, subject to the provisions of sections 148 to 153 , assess or reassess 75 such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure 76 on the part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan of Rs.1.25 crores from the said party and to examine the financial credentials of the company the Assessing Officer downloaded the balance sheet from MCA site; (iii) based on the analysis of the balance sheet, the Assessing Officer concluded that the loan taken by the assessee from M/s. Mangal Murti Impex Pvt Ltd is bogus and interest paid towards the loan is not genuine; and (iv) based on this finding the Assessing Officer had a reason to believe that the income chargeable to tax has escaped assessment. 14. From the perusal of the above reasons recorded, we notice that the Assessing Officer on the basis of examination of Balance Sheet of M/s. Mangal Murti Impex Pvt Ltd has come to the conclusion that the income in the hands of the assessee has escaped assessment. However the reasons which have been recorded by the Assessing Officer for reopening of the assessment do not disclose that the assessee had failed to disclose fully and truly all material facts necessary for the purpose of assessment. In fact we notice that during the first round reassessment, the assessing officer has called for the details pertaining to the loan transactions and that the assessee has submitted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of these discussions and considering the facts of the present case in the absence of any allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment in the notice for reassessment issued after the expiry of four years from the end of the relevant assessment year under section 148 of the Act, is barred by limitation prescribed in proviso to section 147 of the Act, without jurisdiction. Accordingly we hold that the notice issued under section 148 of the Act to be invalid and the reassessment done under section 147 of the Act based on the said notice is to be quashed. Since we have quashed the reassessment, the additions made in the said proceedings do not survive and hence deleted. ITA No.24/Mum/2022 (A.Y. 2012-13) 15. For the assessment year 2012-13, the assessee filed the return of income 29/09/2012 declaring total income at Nil. Subsequently, the case was selected for scrutiny under CASS and assessment was completed under section 143(3) on 19/03/2015 determining income at Rs.1,83,29,340/-. On appeal, the CIT(A) gave major relief to the assessee whereby the total income for A.Y. 2012-13 was recomputed at Rs.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in AY 2011-12 wherein it is stated that the Assessing Officer has reason to believe that the assessee has shown bogus loan and interest payment totaling to Rs.2,62,40,407 from M/.Madan Impex Pvt Ltd., Om Sai Stone Ltd, M/s.Rajat Diamond Exim Pvt Ltd., M/s. Nikhil Gems Pvt Ltd, M/s.Dev Darshan Diamonds Pvt Ltd and M/s Mangalmurti Impex Pvt Ltd that has escaped assessment. The period of 4 years from the end of the relevant assessment year has already expired when the notice under section 148 of the Act was issued on 29.03.2019 (page 58 of paper book for AY 2013-14). Therefore, the first proviso to section to section 147 is applicable for the year under consideration also. On perusal of the reasons recorded for the year under consideration we notice that the Assessing Officer in the reasons recorded does not allege any failure on part of the assessee to disclose material facts which is the basis on which the reopening is done. It is also noticed that the Assessing Officer during the course of assessment proceedings under section 143(3), the assessee has submitted the relevant details pertaining to all the above mentioned loan creditors before the Assessing officer (pages 35 to 40 & 43 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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