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2024 (1) TMI 1225 - AT - Income TaxValidity of reopening u/s 147 r.w.s. 148 - addition as income from business by treating sale consideration in respect of property owned by the firm which was given for the development and addition on account of deposits made in the bank account - HELD THAT:- AO despite taking note of the fact of the sale deed which was between the two partnership firms and not by the assessee in his individual capacity nor anything pertain to the assessee in his individual capacity qua the said transaction, he still proceeded to entertain his ‘reason to believe’. Even the partnership deed and the PAN of M/s. Sai Developers were also filed during the course of assessment proceedings, which AO has ignored. Once, assessee has brought the facts on record, then ld. AO could not have proceeded to tax the above transaction in the hands of the assessee, because the agreement and transaction was not with the assessee, albeit between two partnership firm. In fact, AO should have issued notice u/s. 148 to the partnership firm. He has simply gone by ITS records, i.e., information from the individual transaction statement and that there is no return of income filed by the name of Sai Developers. Therefore, he presumed that all the transactions belong to assessee. Once the sale deed or the agreement is between the two partnership firms, then how the transaction can be viewed in the individual hands by the ld. AO, is beyond comprehension. Even the reasoning given by the AO as incorporated above is not based on rationale reasoning either on facts or in law. Thus, reasons recorded by the ld. AO based on certain information that assessee has entered into transaction of immovable property itself is incorrect and based on such incorrect assumption of facts, notice u/s. 148 cannot be issued nor the same amount can be taxed in the hands of the assessee. At least when assessee has raised this objection and has filed all the documents like partnership deed, PAN of the partnership firm and more specifically the developer’s agreement entered between two different parties. When all these documents were filed before him then how the assessment can be made u/s. 148 in the hands of the assessee. Accordingly, the reasons recorded itself in the case of the assessee do not give jurisdiction to the ld. AO to make any assessment or issue notice u/s. 148 and accordingly, same is quashed. Accordingly, the entire proceedings u/s. 148 is held to be invalid. Appeal of the assessee is allowed.
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