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2017 (6) TMI 484 - AT - Income TaxAssumption of jurisdiction u/s 147 / 148 - reasons to believe - lower net profit - Held that:- The very basis of initiation of reassessment proceedings for which reasons to believe were recorded were income escaping assessment in respect of lower net profit, the same having not been escaped, the AO proceeded to make additions on account of disallowance of rent and electricity charges and additions made on account of share application money was not permissible u/s 148 of the I.T. Act. In humble view if no additions were made in respect of the reasons i.e. lower net profit, it was not open to the AO to make additions on other grounds such as disallowance of expenses and addition on account of share capital money without first issue a notice 148 of the I.T. Act. The AO was therefore not justified in reopening of the assessment when the reasons for the initiation of reassessment proceedings ceased to survive/exist. - Decided in favour of assessee.
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