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2017 (6) TMI 605 - HC - Income TaxReopening of assessment - scrutiny assessment concluded - reasons to believe - tangible material - figures of sale of teakwood trees for year consideration were not genuine if, at all, exaggerated - as trees were planted some 8 to 10 years back and the agricultural operations were carried out under the personal supervision of the partners themselves, thus it was for the re-opening - Held that:- The reasons recorded during inquiry reveal that three entities to whom the sale was supposed to have been made belong to Shri Saket Jain, a Chartered Accountant. All the entities had a common address at Ashram Road, Ahmedabad. It was noticed that Shri Sunil Agrawal was unable to adduce necessary evidences to prove that the sales figures of the teakwood were genuine. Assessing Officer further noted that on account of such discrepancies, Shri Sunil Agrawal had voluntarily disclosed unaccounted income from such sales as part of total disclosure of ₹ 23.5 crore broken into the hands of separate entities with respect to year under consideration. The reasons referred to the refusal of Shri Sunil Agrawal to comment on the genuineness of the sale of teakwood for Assessment Year 2009-2010 stating that during such period ownership of the firm and the partners were different. It was recorded that there is a similarity of pattern in sale of teakwood during a year under survey i.e. 2013-2014 and the year under consideration i.e. 2009-2010. It was on the basis of such material that the Assessing Officer formed a belief that the assessee had failed to disclose true and full facts necessary for assessment. It can thus be seen that the Assessing Officer had recorded elaborate reasons to prima facie demonstrate that the figures of sale of teakwood trees for year consideration were not genuine if, at all, exaggerated. This would have direct link to the failure on the part of the assessee to disclose true and full necessary facts. It is by now well settled that for re-opening of the assessment, Assessing Officer had to form a bonafide belief that the income chargeable to tax has escaped the assessment. Such belief would be on the basis of such tangible material. However, this sufficiency of reasons would not be a subject matter of minute judicial scrutiny. As long as material exists on record and a bonafide belief has been found by the Assessing Officer, the Court would maintain a healthy restrain. It is also well settled that in cases of sham transactions, the assessee cannot avoid the re-opening on the ground that earlier the issue was scrutinized In the case of Pal Jain v. Income-Tax Officer and Another [2004 (3) TMI 59 - PUNJAB AND HARYANA HIGH COURT] wherein found that upon availability of subsequent material the very transaction which was subject matter of the original assessment was found to be bogus transaction and it was therefore observed that mere disclosure of transaction at the time of original assessment proceedings cannot be said to be a disclosure of the “true” and “full” facts in the case and the Income-tax Officer would have the jurisdiction to reopen the concluded assessment in such a case. Decided against assessee.
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