Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 445 - HC - Income TaxReopening of assessment - assessee resorting to hoarding of potatoes and making huge profits by fluctuating the day to day price of potatoes in the market - Held that:- During the course of survey, the Assessee's manual books of accounts, cash balance, stock etc. were physically verified and inventory was prepared. The backup of the books of accounts maintained on computer has been taken and impounded for further verification. The details of the group's bank accounts have been obtained and kept on record. The further contents of this report would reveal that there were some discrepancies and which are very minor in nature. Therefore, the cash physically found was short of ₹ 5020/- for which it is explained that the same pertains to day to day and misc. expenses incurred on the day of survey. Secondly, the physical stock of 672 bags of potato was found. The explanation for the same is recorded. Thus, neither the survey report nor any other material indicates that any income chargeable to tax for the relevant assessment year has escaped assessment. The Assessing Officer, therefore, had nothing before him which would enable him to record his belief that any such escapement has taken place. In the circumstances, the reasons recorded and which pertain to all the assessment years prior and subsequent to the survey can hardly satisfy requirement in law. This is not how the power under section 147 should be exercised.That is to be exercised and in exceptional cases. It should not be exercised as a manner of routine and merely because some survey of this nature had taken place. At any point of time and when there was shortage of potato in the market, that such powers of survey were invoked. If nothing has been found therein which would indicate escapement of income and chargeable to tax, then, the basis for reopening ought not be such survey actions and the report. Something more was required in law for the Assessing Officer to exercise his powers.When there is absolutely no material to institute the proceedings or issue the notice proposing reassessment of income, then, it is the duty of the Court to interfere and quash the proceedings at the threshold. In these circumstances, this Writ Petition is allowed. - Decided in favour of assessee.
|