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2019 (1) TMI 1360 - HC - Income TaxReopening of assessment - non-genuine expenditure - assessment beyond a period of four years - information received information from Addl. Director of Income Tax - Held that:- AO had received information from Addl. Director of Income Tax (Inv.) after the Assessment was framed that, ₹ 90 lacs paid to M/s. S N Enterprises through bank transfers and that, M/s. S N Enterprises in turn, withdraw a sizeable amount from said payments in order to make cash payments to farmers – owners of buffalo. This information by itself, cannot ultimately lead to the inference that, said payment was for non-genuine expenditure. Merely because M/s. S N Enterprises made cash payments for purchase of buffalos, would not destroy genuineness of the expenditure made by the assessee. There had to be some additional material which would establish the live-link for the formation of belief by the Assessing Officer that, income chargeable to tax has escaped assessment. AO in the present case, neither had time to carry out any follow up enquiries nor had he, in fact, carried out any such enquiry. As per the reasons, the information received from the Investigation Wing, was placed before him at 6.30 p.m. on 31st March, 2017, which was the last date for issuing notice of reopening of an assessment. He, therefore, apparently, acted under great constraint of time. This by itself, in appropriate case may not be fatal the notice of reopening, if the Assessing Officer can otherwise, point out that he had examined information placed before him before forming belief that, on the basis of information, it can be stated that, income chargeable to tax has escaped assessment. Additionally, we also find that, the entire issue was examined by the AO during the original assessment proceedings. Along with letter, Petitioner supplied full breakup of its account with the said M/s. S N Enterprises. It was after such detailed scrutiny, the Assessing Officer passed order of assessment on 5th March, 2013 in which, he made certain observations but had not disturbed the Petitioner's claim of expenditure, particularly, in relation to the payments made to said M/s. S. N. Enterprises. After such minute scrutiny, the AO could not have reopened the assessment beyond a period of four years from the end of the relevant Assessment Year on the basis of information supplied to him and the reasons recorded by him. In the result, impugned notice is quashed and set aside. - Decided in favour of assessee.
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