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2022 (9) TMI 1032 - Income Tax
Reopening of assessment u/s 147 - Eligibility of reasons to believe - as submitted both the transactions with the parties are bogus and liable to be added u/s. 69/69A as unexplained investments - HELD THAT:- As per Explanation 3 if during the course of these proceedings the Assessing Officer comes to conclusion that some items have escaped assessment, then notwithstanding that those items were not included in the reasons to believe as recorded for initiation of the proceedings and the notice, he would be competent to make assessment of those items. However, the Legislature could not be presumed to have intended to give blanket powers to the AO that on assuming jurisdiction under section 147 regarding assessment or reassessment of escaped income.
AO would keep on making roving inquiry and thereby would include different items of income not connected or related with the reasons to believe, on the basis of which he assumed jurisdiction. For every new issue coming before the AO during the course of proceedings of assessment or reassessment of escaped income, and which he intends to take into account. In the instant case, the AO was satisfied with the justifications given by the assessee regarding the items, viz., credit transactions with two parties.
During the assessment proceedings, he found the justification of addition U/s 44AD of the Act. He, consequently, while not making additions on transactions, which was supposed to added back with the U/s 69/69A of the Act. The escapement of income was ascertained amount to Rs.79,31,509/-. But the addition was made amount to Rs. 38,10,700/-. The ld. AO was not so justified when the reasons for the initiation of those proceedings ceased to survive. Decided in favour of assessee.