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2017 (6) TMI 641 - AT - Income TaxReopening of assessment - Disallowance of loss on account of trading in cotton knitted fabrics - Held that:- TDS wing of the IT department conducted survey and during the course of said proceedings, understood the entire modus operandi of the assessee’s dealings in the trading of cotton knitted fabrics and drew adverse inference about the same by stating that the loss incurred on such transactions is purely fictitious and the documents prepared in that regard in the form of purchase and sale invoices were purely manufactured and the assessee does not even have any premises for storage of the cotton knitted fabrics and the business address shown thereon is a simple space between the stairs of first and second floor, wherein a small table alone could be occupied. In fact the person in charge of the said premises Shri A Pandey, who was seated in the said small office space also stated before the TDS wing that he had been placed there only to attend to phone calls and receive correspondences. Thus the transactions carried out by the assessee, we hold that the information / report furnished by the CIT TDS to the Jurisdictional Administrative CIT of the assessee about the manner in which loss was self created by the assessee in dealing in cotton knitted fabrics, definitely would constitute information, warranting reopening of assessment u/s 147 of the Act. We find from the reasons recorded by the ld AO, there was a live link with formation of belief that income in the hands of the assessee had duly escaped assessment by way of alleged trading loss of cotton knitted fabrics. Hence we are not inclined to accept the arguments of the ld AR on the validity of assumption of jurisdiction u/s 147 of the Act. Hence we hold that the assessment has been validly reopened in the instant case for the Asst Year 2008-09. - Decided against assessee.
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