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2022 (11) TMI 941 - AT - Income TaxValidity of reopening of assessment u/s 147 - Reason to believe - sufficient material to form a prima facie belief - assessee had incurred bogus sub- contracting expenses - HELD THAT:- AO has given detailed reasonings on the basis of which he formed the belief that in the instant set of facts, the AO was of the view / had reason to believe that the assessee has created bogus sub-contracting expenses and thus income had escaped assessment. It is a well settled principle of law that that while recording the reasons, the AO need not establish the escapement of income. The belief at that time is only primafacie and not conclusive. In the case of Raymond Woollen Mills Ltd. [1997 (12) TMI 12 - SUPREME COURT] as observed that the Court has only to see whether there was prima-facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. Accordingly, in our view, the AO had sufficient material to form a prima facie belief that the assessee has engaged in creating bogus subcontracting expenses in the instant set of facts, thereby leading to escapement of income. Therefore, in the instant set of facts, we find no infirmity in the order of Ld. CIT(Appeals) when he held that issuance of notice under section one 47 of the Act was valid in the instant set of facts. Assessee’s application under Rule 27 of the Income Tax Appellate Tribunal Rules, 1963 challenging the reopening of assessment under section 147 of the Act is hereby dismissed.
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