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2019 (7) TMI 1675 - AT - Income TaxReopening of assessment u/s 147 - estimating the income of the assessee firm at 25% on the advance received by the assessee from its customer - HELD THAT:- The words 'reason to believe' cannot mean that the Assessing Officer should have finally ascertained the facts by legal evidence. They only mean that he forms a belief from the examination he makes or from any information that he receives. If he discovers or finds or satisfies himself that the taxable income has escaped assessment, it would amount to saying that he has reason to believe that such income had escaped assessment. The justification for his belief is not to be judged from the standards of proof required for coming to a final decision. A belief though justified for the purpose of initiation of the proceedings under section 147, may ultimately stand altered after the hearing and while reaching the final conclusion on the basis of the intervening enquiry. At the stage where he finds a cause or justification to believe that such income has escaped assessment, the Assessing Officer is not required to base his belief on any final adjudication of the matter. Thus it is evident that the AO has initiated the reassessment proceedings u/s 147/148 as per the provisions of the Act and all the conditions laid down for reopening has been fulfilled. Hence, this ground of the appellant fails and the ground of appeal is dismissed. Estimation of income - As in compliance of the agreement no registered sale deed was executed in the year under consideration and the amount of total area sold was also reduced from 34720 to 18954 sq.ft for the total consideration of ₹ 11,76,70,000/- instead of the original amount of ₹ 16,73,50,400/-. Therefore, the Assessing Officer has wrongly determined the profit @25% of ₹ 13,53,76,000/- without any basis or material in position merely on the basis of presumption which is not sustainable in the eye of law. Even otherwise, the sale deeds in dispute was executed in financial year 2015-16 for which the assessee has offered its income. Therefore, the ld.First Appellate Authority has rightly deleted the addition in dispute by passing the detailed order mention above. Therefore, no interference is called for in the well-reasoned order passed by the ld.First Appellate Authority in deleting the addition in dispute and we dismiss the Revenue appeal and uphold the impugned order. After going through the findings given by the ld.First Appellate Authority, which we have reproduced above, we fully agree with the same and uphold the impugned order for initiating the proceedings u/s.147 of the Income Tax Act and dismissed the appeal filed by the assessee.
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