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2014 (12) TMI 177 - AT - Income TaxReopening of assessment u/s 147 r.w section 148 – Reason to believe - Held that:- Assessee has initially shown receipts as revenue receipts and claimed various expenses and declaring incomes in the P & L account - AO found that the expenditure entries made in the books of accounts are not genuine and accordingly, he brought to tax entire receipts as shown in the P & L Account as income of assesse - In the re-assessment proceedings after the notice u/s 148 was issued, assessee revised its accounts and claimed that no income has accrued to it or loss should be assessed - AO has reason to believe that incomes have escaped at that point of time - AO did not find any expenditure vouchers in assessee’s premises during survey proceedings and so, he has reason to believe that income has escaped assessment - Thus he has validly initiated proceedings u/s 147 - as no assessment u/s 143(3) was originally done and only returns were accepted u/s 143(1), following the principles laid down in Assistant Commissioner of Income-Tax Versus Rajesh Jhaveri Stock Brokers P. Limited [2007 (5) TMI 197 - SUPREME Court] - the intimation u/s 143(1) cannot be treated as order of assessment - Prior to 01.04.1989, AO had to pass an assessment order if he decides to accept the return but now amended provisions, requirement of passing the order has been dispensed with and instead only intimation is required to be sent - as there is no assessment u/s 143(3), the question of change of opinion does not arise - what is required at the time of issuance of notice u/s 147 is reason to believe that the income has escaped assessment, but not the established act of escapement of income – thus, the assessee’s contentions on reopening are not valid – Decided against assessee. Revised return filed with revised audited accounts – Held that:- Assessee’s action cannot be supported in the light of the fact that proceedings are u/s 147 - in the case of Commissioner of Income-Tax Versus Sun Engineering Works Pvt. Limited [1992 (9) TMI 1 - SUPREME Court] - it was held that proceedings u/s 147 are for the benefit of Revenue and not for the benefit of assesse - Since, assessee has offered incomes originally which were accepted, the proceedings being initiated are only to add some more to the originally admitted incomes - the entire receipts received by assessee as income is upheld - the action of AO cannot be upheld in treating the entire receipts as income and at the same time - while disallowance of entire expenditure made by AO cannot be upheld as such, the assesse is set aside and the matter is remitted back to the AO for fresh enquiries – Decided in favour of assesse.
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