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2021 (11) TMI 760 - AT - Income TaxRevision u/s 263 by CIT - reopening of assessment u/s 147 - "reason to suspect" v/s 'reason to believe' - unaccounted fund was transferred from M/s. Kalyan to M/s. BSR Finance and Construction Ltd. through layering and finally reached to the ultimate beneficiary the assessee (M/s. Usha Polycab Ltd.) - AO has not properly enquired both the issue of ₹ 25 lakhs transacted with M/s. Kalyan; and the loss claimed by the assessee of ₹ 43,02,450/- on account of transaction with M/s. SSL- HELD THAT:- AO has in the reasons recorded for reopening has mentioned about receiving information from the DDIT (Inv.) from which he was informed that huge suspicious transaction of money in the bank statement of M/s. Kalyan took place and that M/s. Kalyan is not doing any actual business and the un-accounted money of beneficiary like assessee are being brought through the guise of share premium/share etc. back to the actual beneficiary. Information adverse may trigger "reason to suspect" and not 'reason to believe'. When an information adverse like this comes to the notice of the AO then it only triggers 'reason to suspect'. Then what the AO should have done was that he should have made reasonable enquiry and should have collected material which could make him believe that there is in fact escapement of income. So in the present case the AO when he got this information from the DDIT (Inv.) should have found out the intermediaries through whose hands the assessee had received ₹ 25 lakhs and then should have properly recorded in the reasons recorded the fact from whom the assessee has received ₹ 25 lakhs which has been layered from M/s. Kalyan. Here in this case this important fact/jurisdictional fact is found missing and, therefore, the factual basis on which the AO reopened itself is fragile and, therefore, the reasons recorded to reopen itself is bad in law and, therefore, the reassessment order dated 27.12.2019 passed by the AO itself stands vitiated on the factual findings recorded by the Ld. Pr. CIT that the assessee has received money not from M/s. Kalyan directly but through several layers from M/s. Kalyan, M/s. BSR Finance & Construction Co. and finally reached to the assessee. This particular assertion of facts itself takes away the base/foundation on which the AO had recorded the reason to believe to reopen the assessment. Therefore, the reassessment order dated 29.12.2019 itself is bad in law and therefore, null in the eyes of law and therefore, the very initiation of revisional proceedings taken by the Ld. Pr. CIT against the assessee itself is void in the eyes of law and therefore quashed. - Decided in favour of assessee.
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