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2013 (11) TMI 162 - AT - Income TaxValidity of reopening of assessment u/s 147 - Held that:- The dispute raised in this ground is regarding legal validity of re-opening of the assessment under section 147 of the Act. Under the provisions of section 147 as amended w.e.f. assessment year 1989-90, an assessment can be re-opened by AO if he has reason to believe that any income chargeable to tax has escaped assessment. It is settled legal position that for re-opening of an assessment there should be a direct nexus between material available before AO and formation of reasonable belief for escapement of income. The material available should be relevant to the formation of belief for escapement of income and it is not necessary that the material should be sufficient for making the addition in the re-assessment. The assessee in this case has challenged the re-opening of the assessment on technical grounds as well as on the merit of formation of belief - The reasons as recorded by AO before re-opening of the assessment have been reproduced in para-2 earlier. We find that reasons conveyed by the AO were the same as recorded by him in the file except the last line which related to formation of belief which had not been given. The assessee had asked for reasons for re-opening of the assessment and the AO had given reasons as recorded by him without any change and, therefore, it can not be said that the AO had given the gist of reasons recorded - Thus re-opening of the assessment under section 147 of the Act was legally in order - Decided against assessee. Disallowance of expenditure - Onus of proving transaction - Held that:- The claim of rendering of services by the companies therefore can not be accepted only on the basis of an affidavit. The transaction can also not be taken as genuine only on the basis of bills or on the ground that service tax and sales tax had been paid when actual rending of the services has not been established. The AO has given a clear finding that no evidence had been produced regarding actual rendering of any services. The assessee had filed only bills which only gave the broad nature of promotional activities such as van campaign. There was no evidence produced with regard to actual carrying on of such activities. The AO had specifically asked for identification of personnel involved in rendering of services which has not been given. The burden is on the assessee to prove the actual rendering of the services for which payments have been made which has not been discharged by producing any relevant material. The photographs do not establish as to who had actually conducted activities and, therefore photographs can not be considered as reliable and proper evidence. Full details of employees had not been given - Disallowance of expenses on the facts of the case is justified. The order of CIT(A) is accordingly upheld - Decided against assessee.
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