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TMI Blog2024 (12) TMI 1479X X X X Extracts X X X X X X X X Extracts X X X X ..... dentical what was in Ranbaxy Laboratories Ltd. [ 2011 (6) TMI 4 - DELHI HIGH COURT] and of Jet Airways (I) Ltd. of Bombay High Court [ 2010 (4) TMI 431 - BOMBAY HIGH COURT] Since the issue, is in favour of the assessee, we quash the reassessment framed by AO as bad in law. - Shri Mahavir Singh, Hon ble Vice President And Shri S Rifaur Rahman, Accountant Member For the Assessee : Sh. K M Gupta, Adv. And Sh. Muninder Kumar, Adv. For the Revenue : Sh. Rajesh Mahajan, Sr. DR ORDER PER SHRI MAHAVIR SINGH, V.P. These two appeals by Assessee are arising out of the different orders of Commissioner of Income Tax (Appeals)-NFAC, Delhi in Appeal Nos. NFAC/2012-13/10127954 and NFAC/2013-14/10147813 vide order of even dated 19.06.2024. Assessments were framed by National Faceless Assessment Centre (NFAC), Delhi for the assessment years 2013-14 and 2014-15 u/s 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his orders of even dated 31.03.2022. 2. The facts and circumstances and grounds raised are identically worded and hence will take facts from lead year i.e. AY 2013-14 in ITA No.3675/Del/2024. The first issue, which is common in both these appeals, is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases of livestock like sheep includes, buffalow, sheep and goat etc. which are purchases made during the year and all these purchases have been made from the persons residing in villages who are involved in rearing all these livestock for generations. Considering the provisions of section 40A(3) as well as the facts of the case, it is surprising to observe here that the assessee has not placed on record even a single purchase bill which could show the animals purchase, date of purchase, mode of carrying of these live stocks and the evidence of cash payments made to the owners against these purchases which however constitute the basic supporting materials and in the absence of the same there is every reason to doubt the volume as wells as the genuineness of the purchases claimed. Thus considering the facts and circumstances of the case, it is reasonable to disallow 10% of the expenditure so claimed against the purchases which is being added back to the taxable income of the assessee. During the year the assessee has claimed purchase of Rs. 28,62,14,447/-. Hence 10% of the purchases i.e. Rs. 2,86,21,444/- is being added back to the taxable income of the assessee under the head Busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ITR, computation of income and nature source of amount of Rs. 26,91,95,139/- credited in his bank accounts along with supporting documentary evidences. However, on the date so fixed, no compliance made be the assessee firm. Further it is noted that, the above stated huge credit cash entries, appearing in bank account of assessee, do not commensurate with the income disclosed by assessee in his return of income. As, no satisfactory explanation is available on record that may justify the nature source of these credit entries, hence, all these credit entries found to be unexplained. Therefore, l have reason to believe that credit entries including cash deposit to the tune of Rs. 26,91,95,139/- received in bank accounts are unexplained investment and liable to be added in this income u/s 69 of I.T. Act. 1961. To conclude, I have independently examined the entire gamut of facts and circumstances of the case as also the material available on record and after due application of mind on the same as brought out above, I, therefore, have reasons to believe that income of more than Rs. 01 lakhs in the case of assessee that was chargeable to tax, under the provisions of Income Tax Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to believe that any income chargeable to tax has escaped assessment for any assessment year; (ii) Upon the formation of that belief and before he proceeds to make an assessment, reassessment or re-computation, the Assessing Officer has to serve on the assessee a notice under sub-section (1) of section 148, (iii) The Assessing Officer may assess or reassess such income, which he has reason to believe, has escaped assessment 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 the section; and (iv) Though the notice under section 148(2) does not include a particular issue with respect to which income has escaped assessment, he may nonetheless, assess or reassess the income in respect of any issue which has escaped assessment and which comes to his notice subsequently in the course, of the proceedings under the section. 8. Ld. Counsel also relied on the decision of Ranbaxy Laboratories Ltd. (supra) and he drew our attention to para 18, 19 20 which read as under: 18. We are in complete agreement with the reasoning of the Division Bench of Bombay High Court in the case of VI Jaganmoha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome escaping assessment in respect of items of club fees, gifts and presents, etc., but the same having not been done, the Assessing Officer proceeded to reduce the claim of deduction under sections 80HH and 80-1 which as per our discussion was not permissible. Had the Assessing Officer proceeded not to make disallowance in respect of the items of club fees, gifts and presents, etc., then in view of our discussion as above, he would justified as per Explanation 3 to reduce the claim of deduction under sections 80HH and 80-1 as well. 9. The Ld. Sr. DR again relied on the decision of Rajesh Jhaveri Stock Brokers Pvt. Ltd. (supra). We noted that the decision of the Hon ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers Pvt. Ltd. (supra) was in the case of where return of income was processed u/s 143(1) of the Act and not the assessment framed u/s 143(3) of the Act. Moreover, there is no issue regarding that the main issue of reasons recorded is left out or not adjudicated. In the present case before us admittedly the reasons recorded for the purpose of bringing to tax the credit entries in assessee s bank account of Rs. 26,91,95,139/- as against which the assessment was fra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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