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2021 (4) TMI 1025 - ITAT DELHIReopening of assessment u/s 147 - unexplained investment in the assets held outside India from an undisclosed and undeclared source of income from India - reopening on the basis of information received from the Investigation Wing about the foreign bank account in the name of Late Sh. Ladli Pershad Jaiswal - HELD THAT:- For the purpose of assuming jurisdiction u/s 147 of the Act, the Assessing Officer should form reason to believe based on tangible material that income has escaped assessment - such belief should not be on mere suspicion but on the basis of some objective material that leads to prima face case of escapement of income. Although in the present case Assessing Officer was in possession of report of the Investigation Wing about the existence of foreign bank account which has not been denied by the legal heir, however, there is no details or evidence that money lying in the bank account represent undisclosed income in terms of section 5(1) of the Income Tax Act. Assessing Officer in the instant case has failed even to take note of the income tax return filed by the assessee while recording reasons which in our opinion shows non application of mind. The reasons recorded do not inspire confidence to make out a prima facie case for escapement of income and the Assessing Officer in the instant case was carried away by the mere fact of existence of foreign bank account. Assessing Officer himself has mentioned that the assessee late Sh. Ladli Pershad Jaiswal was non-resident of India during AY 1993-94 to 2004-05 and not ordinarily resident for AY 2006-07 and 2007-08. The Assessing Officer in the assessment order at clause 5 has also mentioned that assessee is not ordinarily resident. Under these circumstances and in absence of any factual finding, it is not open to dispute the claim of residential status as declared in the return of income. Since, the proceedings u/s 147 are extraordinary proceedings, the onus is on the Revenue to establish the existence of undisclosed income. Mere discovery of a foreign bank account in the name of the assessee is not sufficient to thrust the tax liability without bringing on record the chargeability of the same under the provisions of the Income Tax Act,1961. It is the settled proposition of law that assessment cannot be carried out on the basis of guess work and there must be more than mere suspicion. In the present case, it is seen that there is no whisper of any enquiry or investigation carried out by the Assessing Officer to demonstrate the existence of source of income in India in respect of deposit found in foreign bank account. Moreover, the Assessing Officer has not brought anything on record to prove that there is money trail which actually flew from India to the foreign bank account maintained abroad. Further, the learned counsel for the assessee also clarified that Sh. Ladli Pershad Jaiswal was not having any major stake or financial interest or business connection in India during the AY 2006-07 and 2007-08. Therefore, we find it difficult to subscribe to the reasoning given by the Assessing Officer while assuming that deposit in the foreign bank account in the year under consideration was sourced from India. In any case, when the addition made by the Assessing Officer is on the basis of peak credit in the month of January 2006 and when Sh. Ladli Pershad Jaiswal expired on 11.08.2005, it is not understood as to how any credit in January 2006 could be attributed to the deceased. In the light of our discussion we are of the considered opinion that the assessment order is not in accordance with law and is liable to be set-aside. In the interest of justice and as requested by the learned CIT-DR at the time of hearing before us, the matter is being restored back to the file of the Assessing Officer with a direction to arrive at specific finding based on certified copy of the bank statement and the nature of credit entry in the said bank account. In case, there is no ground or basis to establish any nexus between the alleged deposits in the bank account and any undisclosed income under the provisions of Income Tax Act or how such credit entries are attributable to the assessee who expired on 11.08.2005 there will be no case for assuming jurisdiction u/s 148 or consequential addition on merit. Needless to say the AO shall give due opportunity of being heard to the assessee and decide the issue as per fact and law after providing relevant documents or evidences that may be taken into consideration while deciding the issue. It is further clarified that the Assessing Officer shall restrict his verification only on the basis of documents which are already available on record and shall not resort any roving and fishing enquiry is permitted. The grounds raised by the assessee are accordingly allowed for statistical purposes.
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