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2016 (11) TMI 1562 - HC - Income TaxReopening of assessment - AO reopen the concluded scrutiny assessment based upon a satisfaction that income has escaped assessment - addition on basis of audit report - Held that:- It is quite evident that the AO did not receive any objective material warranting reopening of a concluded scrutiny assessment and that the re-assessment was based upon the observations of the audit report which had scrutinized the return for the concerned year on standalone basis. These observations were entirely on the basis of that scrutiny. It is now settled law that audit reports cannot be the sole basis for reopening of assessment (refer Indian and Eastern Newspaper Society v. CIT, (1979 (8) TMI 1 - SUPREME COURT), Xerox Modicorp Ltd. v. DCIT, (2013 (1) TMI 160 - DELHI HIGH COURT) and CIT v. Lucas TVS Ltd.(2000 (12) TMI 102 - SUPREME COURT). In the circumstances, the audit report could not have been the sole basis for reopening the concluded assessment for AY 2008-09. - Decided in favour of assessee
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