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2015 (2) TMI 1360 - AT - Income TaxReopening of assessment u/s 147 - validity of notice issued u/s 148 - reason to believe or reason to suspect - suppression of sales - As per AO sale found by the Excise Department to have been suppressed for levy of excise duty has escaped assessment under the Income Tax Act - whether the reasons as recorded in the instant case was a valid reason for forming a belief of escapement of income tax of the income, which is otherwise assessable to income-tax? - HELD THAT:- AO conclusion that the show cause notice issued by the Excise Department is foolproof and substantial material evidence of suppression of sales is contrary to the decision of Futura Ceramics Pvt. Ltd.[2012 (12) TMI 955 - GUJARAT HIGH COURT] wherein held that Merely because the Excise Department issued a show cause notice, that cannot be a ground to presume and conclude that there was evasion of excise duty implying thereby that there was also evasion of tax under the VAT Act. Show cause notice issued by the Excise Department contains the allegation of the Excise Department that the assessee has suppressed sales for the purpose of making payment of excise duty. A perusal of recorded reasons does not show that the AO verified the particulars declared by the assessee in its income-tax return. Nowhere in the recorded reasons, the sale declared by the assessee in its income-tax return, has been brought on record. Information contained in the show cause notice of the Excise Department can be reason to suspect by the AO, but without verifying the relevant particulars declared in the income-tax return, it cannot be reason to believe about the escapement of taxable income under the Income Tax Act. Reopening of the assessment based on the above recorded reasons, is bad in law and cannot be sustained - Decided in favour of assessee.
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