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2015 (11) TMI 1682 - AT - Income TaxReopening of assessment - whether the reasons recorded for forming the belief of escapement of income on the basis of material seized are justified or vague to take recourse of section 147? - Held that:- The ld. Counsel for the assessee has not placed before us any judicial pronouncement for the proposition that the material belonging to the person other than the person search, found and seized in the search and seizure operation, cannot be used against such person for the purpose of assessment u/s. 147. Accordingly, the first limb of assessee’s stand challenging the validity of action u/s. 147 is rejected. The reasons have been recorded by the AO after drawing the inference from the seized documents that trend of payment of interest on PDCs by the group companies stood depicted and the assessee being a group company of BPTP Ltd., might have also paid interest on such PDCs. This approach of the authorities below, to our mind, is not tenable at all being based on fake inferences drawn. The assessee is a separate and distinct assessee under the Act and is to be assessed on the basis of material which belongs to it or specifically relevant for its assessment. In the instant case no specific document is pointed out belonging to the assessee nor any evidence or material, whatsoever, has been demonstrated by the authorities below to show that the assessee had paid interest on PDCs. Therefore, there being no definite material belonging to the assessee, in our opinion, the reasons recorded for initiation of proceedings u/s. 147 against the assessee, are not in consonance with law, having been based on mere suppositions and surmises and extrapolation of material seized. The fact that the assessee is a group company of BPTP Ltd. and overall management is controlled by one person cannot be equated with the existence of incriminating material belonging to the assessee for drawing the adverse inference. - Decided in favour of assessee.
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