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2021 (10) TMI 1241 - AT - Income TaxValidity of Reopening of assessment u/s 147 - Addition of commission income for providing accommodation entries through unsecured loans - HELD THAT:- Admittedly, the return of income filed by the assessee was not subjected to scrutiny and was simply processed under section 143(1) of the Act. Subsequently, the assessing officer received specific information from the Investigation Wing indicating that certain unsecured loans advanced by the assessee during the year are non genuine. Based on such opinion, the assessing officer reopened the assessment. Thus, it is very much clear since the return of income filed by the assessee was simply processed under section 143(1) of the Act, the assessing officer had no occasion to verify the genuineness of the loan transaction. When the assessing officer received specific information concerning the genuineness of the loan transaction, he had tangible material available before him to reopen the assessment. While recording the reasons for reopening the assessment, the assessing officer has to prima facie form a belief that the material on record indicate escapement of income. At the stage of reopening, the assessing officer is not required to record any conclusive finding regarding the escapement of income, as, that is a matter which can be ascertained in course of assessment proceedings. Thus, in the facts of the present case, the assessing officer had tangible material to form a belief that income has escaped assessment. That being the case, in our considered view, the assessing officer has validly initiated proceedings under section 147. Genuineness of unsecured loan - The source from which the assessee had received such funds has not been properly explained either before the departmental authorities or even before us. Therefore, this aspect needs to be factually verified as it raises doubt regarding the loan transaction. However, merely based on such doubt and suspicion, no addition can be made as the issue requires further enquiry and investigation. At this stage, it is necessary to observe, in assessee’s own case in assessment year 2010-11, learned Commissioner (Appeals) has accepted similar loan transaction entered by the assessee with two parties, including, a common party as genuine and the addition of commission income has been deleted. Thus, these aspects will also have some bearing on the issue. Considering the fact that proper enquiry has not been made with regard to the source of funds available in assessee’s bank account, we are inclined to restore the issue to the assessing officer for fresh adjudication after proper enquiry and only after due opportunity of being heard to the assessee. Ground 2 is allowed for statistical purposes.
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