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2020 (8) TMI 146 - AT - Income TaxReopening of assessment u/s 147 - addition u/s 68 - Validity of reasons to believe - HELD THAT:- AO in the reasons recorded has not even alleged that there is a failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. In the absence of such an allegation or failure on the part of the assessee, the reopening after 4 years from the end of the assessment year when the original assessment was completed under section 143(3) is not permitted. D/R has relied upon the Explanation-1 to section 147, however, said explanation has a limited application only to consider the plea of the assessee that he has produced the books of accounts before the AO and thereby all the facts and details were disclosed during the course of scrutiny assessment. In the case in hand, when finally the accommodation entries were found to be on account of sales made by the assessee which is the primary record as part of the Profit & Loss account as well as computation of income and, therefore, in the absence of any allegation by the AO, the Explanation-1 to section 147 cannot be pressed into service. All the sales including the sales in dispute are duly accounted in the books of account which were audited and subject to scrutiny of the Commercial Taxes Department, therefore, the assessee cannot be held guilty for not furnishing all the information necessary for assessment. If the AO proposed to treat some of the sale transactions as bogus, then the assessee is not expected to disclose any other fact than the transaction itself which is duly recorded in the books of account and part of the primary record of the assessee. Therefore, the primary facts disclosed by the assessee at the time of original assessment and in the absence of any allegation on the part of the AO in the reasons recorded for reopening that there is a failure on the part of the assessee to disclose fully and truly all the relevant facts necessary for assessment, the reopening is hit by the provisions of section 147. Appeal of the revenue is dismissed.
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