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2015 (9) TMI 121 - AT - Income TaxValidity of reopening of assessment - credit balance in the account of two parties - Held that:- AO reproduced the observation of the CIT(A) and thereafter has recorded that there is a credit balance in the account of Bansal Polyvin (P) Ltd.; and M/s Ek Onkar Foundry, amounting to ₹ 5,40,175/-, which was created for the first time during the FY 2001-02 relevant to AY 2002-03. Thereafter, he recorded the finding that- “Therefore, on the basis of above referred observations made, I have reason to believe that income to the extent of ₹ 5,40,175/- had escaped assessment”. Thus, it is evident that the assessment had been reopened on the basis of observations of the ld. CIT(A) and the claim of the ld. DR that the AO had applied his mind independently, is not correct. The AO has simply found that there is credit balance in the account of two parties during the financial year, relevant to AY 2002-03. The credit balance itself cannot be a ground to arrive at the conclusion of escapement of income. In view of above, in our opinion, the decision of M/s Tejaskiran Pharmachem Industries Pvt. Ltd. (2015 (3) TMI 985 - BOMBAY HIGH COURT ) and M.B. Traders (2009 (7) TMI 1097 - ITAT NAGPUR ) would be squarely applicable to the facts of the assessee’s case. Respectfully following the same, we hold that the impugned reopening of assessment was not valid. - Decided in favour of assessee.
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