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2024 (3) TMI 889 - BOMBAY HIGH COURTValidity of reopening of assessment - as alleged Petitioner has availed of hawala/accommodation entries from the Group [provider of provides accommodation entries] - AO states that just because payments were made through banking channel does not sanctify the transaction and submission of purchase and sales bills cannot legitimize the transactions, as the same evidence points to the issuing of accommodation bills as a part of this modus operandi - HELD THAT:- The condition precedent of reason to believe that income chargeable to tax has escaped assessment on correct facts must be satisfied by the AO, who has to have jurisdiction to issue the reopening notice. Even when Assessee has pointed out that her relationship with Karnawat Impex P. Ltd. was only as the jeweller and a customer, payments have been made by cheque and the jewellery bought have been disclosed in the wealth tax returns filed, the AO instead of making a bald statement that payment through cheques does not sanctify, should have brought evidence or confronted Petitioner with evidence to the contrary. Therefore, it would be safe to conclude that the AO, not having done that, did not dispute the facts stated by Petitioner. Liquidated damages - Petitioner has in the computation of income, disclosed by way of a note that she has received a sum of Rs. 32.93 per share for 2,03,152 equity shares of Great Offshore Ltd. as liquidated damages, the amount has been reduced from the cost of the equity shares as per the provisions of Section 51 of the Act and the excess of liquidated damages received over the cost of the equity shares has been treated as ‘capital receipt’ and not offered to tax. Even during the assessment proceedings, as could be evidenced by a letter dated 30th November 2011, query was raised regarding these liquidated damages and Petitioner has given detailed response. Subsequently, an assessment order dated 14th December 2011 has been passed u/s 143(3) of the Act accepting the returned income. Therefore, on the facts as found, there could be no reason for AO to believe that income chargeable to tax has escaped assessment. Assessee appeal allowed.
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