TMI Blog2014 (10) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by the AO is bad in law and deserve to be quashed - second thought on the same material and omission to draw the correct legal presumption during the original assessment do not warrant the initiation of the proceeding u/s 147 of the Act –relying upon ITO Vs. Nawab Meer Barkat Ali Khan Bahadur [1974 (10) TMI 1 - SUPREME Court] - fresh litigation on the ground of new views or new version cannot be permitted - action u/s 147 of the Act cannot be taken on the basis of reasons to suspect or on change of opinion for which he relied upon the decision in the case of CIT Vs. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] and cannot taken advantage of his own wrong doing through reopening the case. AO in original assessment had made specific query and specific reply was filed by the assessee in original assessment, which has been considered by the AO - after considering the reply, a detailed order has been passed by the AO – AO is not authorized to issue notice u/s 147 of the Act on reason to suspect or on change of opinion - even any wrong doing of the AO cannot be remitted through Section 147 of the Act as relied upon by the AR - only change of opinion is there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas the unexplained stock surrendered by the assessee was only ₹ 1.38 crores. b) No consolidated working of unrecorded purchases/sales transactions of the goods covered in all the Approval Memos and other annexures impounded from the various premises of the group concerns and the bifurcation of the same into undisclosed investment and undisclosed income thereon was complied by either the assessee or the learned CIT(A) so as to arrive at the unrecorded fund available with the assessee for investment in the unexplained stock which was eventually surrendered in A.Y. 2006-07 at ₹ 1.38 crores. 2. The first ground of appeal is against quashing the reassessment proceedings U/s 147/148 of the Income Tax Act, 1961 (hereinafter referred as the Act) without providing an opportunity of being heard and on change of opinion. The assessee had shown income from business and other source. A survey U/s 133A of the Act was carried out on 18/5/2005. The case for A.Y. 2006-07 was assessed U/s 143(3) of the Act on 28/12/2008. It has been observed that some annexures were impounded in consequences to the survey conducted and the same were not verified from audited accounts of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted this stock lying outside the business premises as undisclosed stock and addition of ₹ 91,84,116/- was made on account of Annexure-23 and 24. As per Annexure-53, addition of ₹ 1,48,039/- was made U/s 69 of the Act. Further as per Annexure-8, page Nos. 30 and 31, there was an account from Kamlesh Co. on which total sale transactions were shown at ₹ 1,40,64,604/- has not been recorded in the regular books of account, thus he made unexplained income U/s 69 of the Act in the income of the assessee. 3. Being aggrieved by the order of the learned Assessing Officer, the assessee carried the matter to the learned CIT(A), who had allowed the appeal by observing as under:- 4.3 I have carefully perused the order of the A.O. and the submissions of the AR. Regarding the account maintained by the assessee with M/s Kamlesh Co. a categorical finding has been given by the learned CIT(A) vide order dated 29/03/2010, No. 497/BKN/2008-09 in the case of the assessee for A.Y. 2006-07 wherein he has held on page 15 of his order that I find that this paper is a ledger account of the assessee in the books of M/s Kamlesh Co.. The opening balance in this account is ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, there does appear to be some rational in the submission of the AR that the goods could not have been lying with third parties on approval for 6 months. Since the last date on the approval memo is 17/2/2005 and the date of survey was 18/8/2005. If the entire amount of stock is taken as having been returned then it would have been part of excess stock found at the time of survey on 18/5/2005. The excess stock surrendered by the assessee on 18/8/2005 was ₹ 1,38 crores which is more than the amount recorded in the slips. If it is taken that entire goods were sold then g.p. would have to be calculated on these sales and a set off be given against investment in excess stock found at the time of survey, because no evidence was found at the time of survey, because no evidence was found at the time of survey or during the subsequent assessment proceedings that the sale proceeds were being diverted by the partners of the assessee firm for personal consumption or any other investments. Pursuant to the finding of the Hon ble ITAT in the assessee s case for A.Y. 2006-07 if the G.P. during this year is calculated @ 19% on total sales of ₹ 91,84,116/- then unrecorded sale proceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n survey from the premises of the assessee and M/s Khushboo Jewellers. Thereafter, the Assessing Officer vide letter dated 20/12/2007 specifically asked explanation in respect of certain specific papers in the impounded annexures. This was replied by the assessee vide letter dated 23/12/2007. The learned Assessing Officer further examined the books of account and loose papers found in survey, completed the assessment U/s 143(3) of the Act and made addition of ₹ 7,59,442/-. In the reasons recorded for reopening of the assessment, the learned Assessing Officer had referred to six annexures. All these annexures have been enquired into and considered by the Assessing Officer while framing the original assessment as evident from the assessment order. Therefore, reopening of the assessment on the basis of those very papers on the ground that they were not considered in course of assessment proceedings U/s 143(3) of the Act is factually incorrect. Hence, the reassessment proceedings initiated by the Assessing Officer is bad in law and deserve to be quashed. It is further argued that second thought on the same material and omission to draw the correct legal presumption during the ori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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