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2022 (12) TMI 539 - AT - Income TaxReopening of assessment u/s 147 - necessity of serving notice u/s 143(2) - reliance on borrowed information or independent application of mind - information provided by the Joint Director of Income-tax (Inv.),Unit-1, New Delhi who carried out the search and seizure Operation u/s 132 - Addition u/s 68 - HELD THAT:- We note that satisfaction recorded by the Income Tax Authority is in accordance with law. We have also gone through the online approval given by the CIT and noted that approval given by CIT is in accordance with law, therefore plea taken by the ld Counsel to the effect that approval was not given in accordance with law, hence it is not acceptable. Notice under section 143(2) of the Act, has been served on the assessee. The ld Counsel provided vague information before the Bench and contended that notice under section 143(3) of the Act, was not served on the assessee. Hence, we reject the contention raised by ld Counsel. Whether reasons recorded by the assessing officer is defective and original assessment was framed under section 143(3)? - We have gone through the reasons recorded by the Assessing Officer and noted that assessing officer has recorded the reasons after getting the information from the Directorate of Information New Delhi and applied his own mind in respect of the information received by him. The assessing officer examined the information received from the Directorate of Information and satisfied himself and applied his own mind to issue notice under section 147/148 of the Act. Therefore, assessing officer did not accept the information from the Directorate of Information blindly and without application of mind. We note that in the reasons recorded the figure mentioned at Rs.1,57,00,055/- is part of the total amount of Rs.2,40,00,000/-, therefore, reasons recorded by the assessing officer can not vitiate on account of arithmetical figure. Thus, the reasons recorded, by the Assessing Officer, are prima facie in accordance with law. In the reasons so recorded, there should not be any final adjudication of the issue involved, by the assessing officer, in fact the reasons are recorded prima facie as per the scheme of the Act. Therefore, we do not find any infirmity in the order of ld. CIT(A) in holding that reassessment proceedings are in accordance with law. Assessment was reopened after a period of four years and assessee has disclosed fully and truly all material facts in the original assessment u/s 143(3) of the Act, hence reopening is not valid? - As observed earlier not only there existed new information with the AO from the credible sources, but also he had applied his mind and recorded the conclusion that the assessee is engaged in accommodation entries, which were non-genuine and therefore bogus, (clearly meaning that what was disclosed in original assessment was false and untruthful). The requirements of section 147 r.w.s. 148 have clearly been met; and the reopening is held justified and legal. The Ld Counsel’s contention that the report/information of the Directorate (Inv) of Income Tax Department, cannot constitute a reason to believe within the meaning of section 147 is misplaced in law and facts. As held in the case of Pushpak Bullion (P) Ltd [2017 (8) TMI 961 - GUJARAT HIGH COURT] wherein the court held that the AO had tangible materials at his command to form a bonafide belief on the basis of the information received from Investigation Wing. At the stage of issuance of notice the only question is whether there was the relevant material on which a reasonable person could have formed a reasonable belief. - Decided against assessee. Addition u/s 68 - HELD THAT:- We have observed from the above findings of CIT(A), that assessee has not furnished the important documents and evidences before the lower authorities for their examination and conclusion on the factual position. We note that assessee did not submit copy of the bank account in respect of certain parties, as noted by ld CIT(A) above, therefore loan transactions stood unverified. We have observed from the order of ld. CIT(A) that assessee-trust has failed to furnish certain evidences and documents before the lower authorities, as noted by us above, hence we are of the view that one more opportunity should be given to the assessee-trust to plead his case and furnish these documents and details before the ld. CIT(A).Therefore, we deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) to adjudicate the issue afresh on merits. For statistical purposes, ground No. 2 and 4 are allowed. Disallowance of claim of depreciation and was not allowed set off against income added - HELD THAT:- We have heard both the parties and note that depreciation claim of the assessee and claim of set off, if any, should be allowed as per the provisions of law, therefore, we direct the ld. CIT(A) to examine the claim of the assessee and adjudicate the issue in accordance with law. The ground no. 5 raised by the assessee is allowed for statistical purposes.
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