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2023 (10) TMI 127 - AT - Income TaxReopening of assessment u/s 147 - Reasons to believe - Additions u/s 41(1) towards written back of liabilities - capital or revenue in nature - assessee submitted that there is no whisper in the reasons recorded by the AO about failure on the part of the assessee to disclose truly and fully, all material facts necessary for the assessment rendering reassessment proceedings invalid - HELD THAT:- From the perusal of the records, it is evident that no where assessee has made a request before the Ld. AO for the supply of reasons to believe. We note that the same are recorded on the order sheet of the assessment proceedings and on the same order sheets, the authorised representative of the assessee is a signatory to various entries made therein. AO in the impugned assessment order has recorded the fact of intimation about the reason of reopening to assessee in the course of assessment. Even in the written submission placed before us, what the assessee is challenging that reasons were not provided before the commencement of reopening proceeding though they were furnished in the course of reassessment proceeding because of which assessee was denied the opportunity to raise objection for reopening. We find that claim of the assessee is not in accordance with the procedural mandate given in the case of GKN. Driveshaft [2002 (11) TMI 7 - SUPREME COURT]and, therefore, has no legs to stand. It is a fact that original return was processed u/s. 143(1) of the Act. There was no scrutiny assessment u/s. 143(3) of the Act. In respect of claim of the assessee that there is no allegation recorded by the Ld. AO of failure on the part of the assessee about the full and true disclosure of all material facts necessary for assessment, we find that this condition is stipulated in first proviso to section 147 wherein requirement of assessment u/s. 143(3) is a pre-condition to record such an allegation by the Ld. AO, if an action is sought to be taken up under this section after the expiry of four years from the end of the relevant assessment year. Thus, even this contention of the ld. Counsel of the assessee fails. Additions u/s 41(1) towards written back of liabilities - capital or revenue in nature - Keeping the above judgment of MAHINDRA AND MAHINDRA LTD. THRG. M.D. [2018 (5) TMI 358 - SUPREME COURT] in the context of facts of the present case before us, it is not discernible from the records and details furnished by the assessee that the liabilities written back were receipts in the nature of cash or money or are towards trading liability for which deduction has been claimed in earlier years as well as status of deduction towards interest thereon. What the assessee has placed on record are the ledger accounts which is not adequate to ascertain their nature so as to bring them within the ambit of the judgment of Hon’ble Supreme Court referred above. CIT(A) had also called for the details but assessee did not respond to the same. However, in the interest of justice and fair play, we find it proper to afford an opportunity to the assessee to substantiate its claim of exemption in respect of write back of its liabilities by adducing all the relevant documentary evidence and explanation, for which we remit the matter back to the file of ld. AO in this respect. Ld. AO is directed to verify the evidence and explanation furnished by the assessee, keeping in perspective, the aforesaid judgment of the Hon’ble Supreme Court and allow the claim in accordance with the provisions of law. Assessee be given reasonable opportunity of being heard who is also directed to be diligent in complying with the requirements before the ld. AO for its effective disposal. Appeal of the assessee is partly allowed for statistical purposes.
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