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TMI Blog2024 (12) TMI 903X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons as well as at the time of completion of assessment. As noticed earlier, the provisions of sec. 147 of the Act makes it mandatory that the AO should be clear about the alleged escapement of income while recording reasons for reopening of assessment. Hence, the reopening has to be invalid on these reasons. AO shall be entitled to make addition on any other issues not mentioned in the reasons for reopening of assessment, only if he makes addition on any one of the issues mentioned in the reasons for reopening. We notice the above said contention of the assessee is supported by the decision rendered in the case of CIT vs. Jet Airways (I) Ltd [ 2010 (4) TMI 431 - BOMBAY HIGH COURT] AO had reopened the assessment on the reasoning that the assessee has availed accommodation entries in the form of bogus purchases. However, while completing the assessment, the AO assessed the income u/s. 68 r.w.s 56 - AO did not make any addition in respect of the issue for which the reopening was done. Decided in favour of assessee. - Justice (Retd.) Shri C.V. Bhadang, President And Shri B.R. Baskaran, Accountant Member For the Assessee : Shri Neelkanth Khandelwal For the Revenue : Shri R.R. Mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R submitted that the assessee has not purchased anything from the above said two companies and hence the reason for reopening recorded by the AO is baseless. He submitted that the assessee had availed loans from the above said two companies. This fact would show that the AO was not sure about the nature of income that has actually escaped the assessment. Relying upon the decision rendered by the Hon ble Bombay High Court in the case of Hindustan Lever Ltd vs. R B Wadkar, ACIT (268 ITR 332) (Bom), the Ld.AR submitted that the reasons, once recorded by the AO, cannot be amended subsequently. Accordingly, he submitted that the impugned assessment has been framed by the AO without proper reasoning and hence, the same is liable to quashed. He further submitted that the AO did not make any addition towards alleged bogus purchases, but made the addition u/s. 68 of the Act. By placing reliance on the decision rendered by the Hon ble Bombay High Court in the case of Jet Airways (I) Ltd (2011)(331 ITR 236) (Bom), the Ld.AR submitted that the AO cannot make any new addition, which was not part of the reasons recorded for reopening of assessment, unless he makes any of the additions mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing an affidavit or making an oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches the court, on the strength of the affidavit or oral submissions advanced. 7. In the instant case, the AO has recorded reasons mentioning alleged bogus purchases, but the fact would remain that the assessee has not made any such purchases. We notice that the AO has made following observations in the assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the AO is making addition u/s 68 r.w.s. 56 of the Act. Under the Act, unexplained investments will be covered by sec.69 of the Act and cash credits will be covered by sec.68 of the Act. Section 56 relates to the Income from other sources including certain receipts deemed as income. The addition towards alleged bogus purchases is made u/s. 28 of the Act. Thus, the AO could invoke any of the above said provisions depending the exact nature of income that has escaped the assessment. The discussions made by the AO in the assessment order would show that he himself was not clear with regard to the nature of alleged accommodation entry availed by the assessee from the operator named Shri Pravin Kumar Jain or exact nature of income that has escaped the assessment. It can be noticed that the AO has used the expressions source of investment and very basis of investment therein remained unexplained , which shows that he AO was under the impression that the assessee has given some money. On the contrary, the Ld.AR submitted that the assessee has taken loans from the companies belonging to Shri Pravin Kumar Jain, which again proves that the AO has reopened the assessment without knowledge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing conjunctive and cumulative. It is of some significance that Parliament has not used the word or . The Legislature did not rest content by merely using the word and . The words and as well as also have been used together and in conjunction. The Shorter Oxford dictionary defines the expression also to mean further, in addition, besides, too''. The word has been treated as being relative and conjunctive. Evidently, therefore, what Parliament intends by use of the words and also is that the Assessing Officer, upon the formation of a reason to believe u/s 147 and the issuance of a notice u/s 148(2) must assess or reassess: (i). ''such income''; and also (ii) (sic) other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. The words ''such income'' refer to the income chargeable to tax which has escaped assessment and in respect of which the Assessing Officer has fanned a reason to believe that it has escaped assessment. Hence, the language which has been used by Parliament is indicative of the position that the assessment or reassessment must be in ..... 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