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2014 (11) TMI 342 - AT - Income TaxReopening of assessment u/s 147 – Disallowances made on the same books of accounts rejected earlier - Held that:- The original assessment was completed u/s 143(3) on 24/09/09 - After completion of the original assessment, CIT initiated proceeding u/s 263 of the Act by issuing show cause notice to assessee on 04/08/11 - when CIT has dropped the proceedings u/s 263 on the very same issue on which reopening of assessment was made, AO was not correct in either initiating proceeding u/s 147 or completing the assessment by making disallowance u/s 40(a)(ia) on subcontract payments - AO has reopened the assessment on the basis of P&L account, and ledger account copies enclosed along with return of income, which not only formed part of the record at the time of original assessment but were also examined by AO while completing original assessment - no fresh and tangible material has come to the possession of AO after completion of original assessment on the basis of which AO has come to believe that income has escaped assessment. Only because books of account, bills and vouchers are not available, AO proposed to reject the book result and estimate the profit and accordingly assessment was completed by estimating the profit at 5.5% clear of deductions and expenses - it cannot be said that books of account of assessee were not rejected - CIT(A) was correct in holding that once books of account are rejected, the AO cannot reopen the assessment for making specific disallowances relying upon the same books of account – relying upon Indwell Constructions Vs. CIT [1998 (3) TMI 121 - ANDHRA PRADESH High Court] - initiation of proceeding u/s 147 of the Act is not valid, thus, the order of the CIT(A) is upheld – Decided against revenue.
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