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2021 (3) TMI 526 - HC - Income TaxReopening of assessment u/ 147 - assessment beyond a period of four years - unexplained investment towards share application money - HELD THAT:- Company having surplus funds at the beginning of the year represented by share capital and advances receivable and the same was the source of investment in the alleged company. Therefore, in our view, it is the omission on the part of the assessee company not to point out this specific particular items of the balance-sheet to show that, the surplus funds was being utilized for the investment. Therefore, failure to highlight specifically the relevant items of the account books or the particular portion of the balance-sheet to the respondent could be said to be an omission on the part of the assessee to disclose fully and truly all the material facts necessary for its assessment. Thus, we hold that, the assessee has failed to disclose the primary facts with regard to the sources of investment. It is an admitted fact that, the original return was processed under Section 143 (1) of the Act without scrutiny assessment. It is pertinent to note that, the explanation 1 to Section 147 of the Act clearly says that, the production before the assessing officer of account books or other evidence could with due diligence have been discovered by the assessing officer will not amount to disclosure. In view of the aforesaid discussions and considering the facts and circumstances of the case, we hold that, in absence of primary facts with regard to the sources of investment, the assessing officer has rightly recorded that the assessee has not furnished the details with regard to the sources of investment and therefore, there is a cause or justification for him to believe that, the unexplained investment chargeable to tax has escaped assessment. Thus, in the overall view of the matter, it cannot be said that, there was no tangible material before the assessing officer to re-open the assessment and that he has proceeded mechanically based only on the information received from the Investigation DDIT (Inv.) I, Ahmedabad and therefore, the impugned notice is without jurisdiction and contrary to Section 147 of the Act. - Decided in favour of assessee.
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