Reopening of assessment u/s 147 justified due to tangible ...

Reopening justified due to tangible material for escapement belief. Firm's brokerage income belonged to company as per partner's statement. Firm claimed bad debts to avoid tax.

Case Laws Income Tax

August 3, 2024

Reopening of assessment u/s 147 justified due to tangible material available with Assessing Officer (AO) to form reasonable belief regarding escapement of income. Brokerage income shown in firm's profit and loss account belonged to petitioner company as confirmed by partner/director's statement recorded during survey. Firm claimed bad debts to offset brokerage income credited in its books to avoid tax liability for petitioner company which performed work. AO rightly relied on Supreme Court decision in ITO v. Atchaiah, as right person (firm) required to be taxed for income from work done for foreign company. Petitioner's contention of regularly showing brokerage income in firm's books is subject to AO's scrutiny during assessment proceedings. Based on facts, income prima facie escaped assessment in petitioner company's case, justifying reopening. In petitioner firm's case, no scrutiny assessment earlier, issues raised by AO prima facie justify reopening. Reliance placed by petitioner on assuming jurisdiction for reopening not applicable, particularly when partner's statement confirms brokerage income belongs to petitioner company. Statement's evidentiary value to be considered during assessment after hearing petitioner. No interference warranted in reopening notice. Petition dismissed.

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Reopening of assessment u/s 147 justified due to tangible ...

Reopening justified due to tangible material for escapement belief. Firm's brokerage income belonged to company as per partner's statement. Firm claimed bad debts to avoid tax.

Case Laws Income Tax

August 3, 2024

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