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2014 (10) TMI 649 - AT - Income TaxValidity of reassessment u/s 143 r.w section 147 – Change of opinion - Nexus between the reasons recorded and additions made in the guise of escapement of income or not – Held that:- CIT(A) erred in holding that the AO had valid reasons to reopen the assessment of Assessee-company to examine the veracities and financial implications between Assessee-company and M/s. Satyam Computer Services Limited - there is no rationale nexus with such statement by Sri Ramalinga Raju and reassessment made - even though the assessment was reopened to examine the transaction between M/s Satyam computers and assessee, no such exercise was undertaken and no findings were given on that issue - The additions made are routine disallowances out of already allowed expenditure in original assessment - There is no nexus between the reasons recorded and additions made in the guise of escapement of income – relying upon Ganga Saran & Sons P. Ltd. vs. ITO and others [1981 (4) TMI 5 - SUPREME Court] – AO had no tangible material to come to the conclusion that there was escapement of income from the original assessment. The assessment made u/s 143(3) has been wrongly reopened u/s 147 beyond period of 4 years, as there is no failure on the part of the assessee to disclose fully and truly all the material facts in the original assessment itself - The reopening was on wrong foundation of reasoning of the financial implication between the assessee-company and M/s. Satyam Computer Services Limited, which was not established in the reassessment to justify the reopening – thus, there being no nexus or live-link with the reasons recorded and the ‘formation of belief’ to come to a conclusion that there was escapement of income and also since the assessment has been reopened beyond the period of 4 years when there is no failure on the part of the assessee to fully and truly disclose all material facts in the original assessment itself, and there being ‘no tangible material’ for the reopening of the assessment, the CIT(A) erred in confirming the order of the AO – hence, the reopening of the assessment u/s 147 is bad in law and is to be quashed – Decided in favour of assessee.
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