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Income Tax - Case Laws
Showing 41 to 60 of 325 Records
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2010 (8) TMI 1076 - ITAT HYDERABAD
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... ... ..... a certain percentage of total income and 10 of the rural branch advances, as per the provisions of S.36(1)(viia) provided the conditions laid down in this section are fulfilled. We find that the CIT(A) has directed the Assessing Officer to verify and allow the claim of the assessee of ₹ 172.79 crores under S. S.36(1)(vii) of the Act, but has not given any direction with regard to the other claim of the assessee for the deduction claimed under S.36(1)(viia) of the Act. In these facts, we hold that it would be justified to direct the Assessing Officer to verify the claim of the assessee for deduction made under S.36(1)(viia) of the Act in the light of the decisions of various Hon'ble Courts relied upon by the learned counsel for the assessee noted above, after allowing reasonable opportunity of hearing to the assessee. We direct accordingly. 6. In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the court on 6.8.2010.
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2010 (8) TMI 1075 - ITAT MUMBAI
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... ... ..... (Del). In the said case, the issue was demurrage paid to the railways, the Hon. Delhi High Court by following the decision of Hon. Allahabad High Court in the case of Nanhoomal Jyoti Prasad. v. Commissioner of Income-tax. (supra), has held that the demurrage paid by the trader for storage and safe custody of goods by Port authority or railways and also additional amount for delay in clearance and the payment thereon is by way of liquidity damage. The assessee is entitled to deduction for the money paid by way of demurrage to the railway. 8. Respectfully following the above decisions of the Hon. Delhi High Court and Allahabad High Court, we decide this issue in favour of the assessee and against the revenue. The assessee is entitled for deduction for expenditure in payment of demurrage charges in question. The orders of the lower authorities qua this issue are set aside. 9. In the result, the appeal filed by the assessee is allowed. Pronounced in the Open Court on 31.08.2010.
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2010 (8) TMI 1074 - DELHI HIGH COURT
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... ... ..... he notional interest is not to be added, can such a huge interest-free security deposit (which does not appear to have any rationale with the agreed rent) be totally ignored while determining the "fair rent" which the property might reasonably be expected to yield ? Or else, in a case like this, can it be inferred that the tenant paid part rent by giving interest-free deposit and agreed rent is not what reflected in the lease deed, but part of it is hidden in the form of security ? 19. These aspects were not considered by the Calcutta High Court or this Court in the aforementioned cases, as such abnormal circumstances did not exist in those cases. We are, therefore, of the opinion that the questions posed above, should be answered by a Larger Bench. We accordingly direct that the matter be placed before Hon'ble the Chief Justice for constituting Full Bench to consider these aspects touching the interpretation that needs to be given to s. 23(1)(a) of the IT Act.
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2010 (8) TMI 1073 - ITAT DELHI
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... ... ..... Maharaja Pratap Singh Bahadur of Gidhaur, 41 ITR 421.” 7. In the light of the binding decision of the jurisdictional High Court of Delhi, in the above-referred case, we hold that the approval taken by the AO from CIT has not satisfied the statutory requirement of Section 151(2) of the Act, and, therefore, the assessment made by the AO u/s 147 is cancelled for want of statutory approval of the designated authority specified u/s 151(2) of the Act. Since the assessment order has been cancelled by us for the reasons that it has been made without complying with the statutory conditions of Section 151(2) of the Act, the other grounds of appeal challenging the validity of re-assessment on some other point, and challenging addition of ₹ 5,52,750/- made by the AO, has become redundant at this stage, which need not to be decided upon by us. 8. In the result, the appeal filed by the assessee is allowed. 9. This decision was pronounced in the Open Court on 6th August, 2010.
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2010 (8) TMI 1072 - ITAT MUMBAI
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... ... ..... vour of the assessee by the coordinate bench. As a matter of fact, the shares sold in the current year are carried forward from the earlier year, and, vide Tribunal’s order for the said year, these shares were held as investments. In this view of the matter, the sale of these shares cannot give rise to an income taxable under the head ‘prof its and gains from business and profession’; the said income can only be taxed as ‘capital gains’. In view of these discussions, and bearing in mind entirety of the case, we deem it f it and proper to direct the Assessing Off icer to tax the income on sale of shares as capital gains. We direct so. 6. Ground No. 2, which relates to disallowance of Rs ₹ 3,73,311/- under section 14A of the Income Tax Act, 1961, was not pressed before us. Ground No. 2 is thus dismissed as not pressed. 7. In the result, assessee’s appeal is partly allowed. Pronounced in the open court today on this 20th of August 2010.
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2010 (8) TMI 1070 - ITAT KOLKATA
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... ... ..... erprises (supra), I am of the considered view that the expenditure incurred on application software aggregating to ₹ 10 lakh is merely to assist and aid in operation efficiency of the appellant’s business activity and is in the nature of revenue expenditure. Accordingly, the assessing officer is directed to allow expenditure of ₹ 10 lakh as revenue deduction and is directed to withdraw depreciation allowed to the appellant. This ground of appeal is allowed.” In this view of the matter and, the Ld. DR at the time of hearing before us, did not controvert the above findings of the Ld. CIT(A) by producing any cogent material/evidence to controvert the above findings of the Ld. CIT(A), we do not find any infirmity in his order and the same is hereby upheld. Therefore, this ground of appeal of the revenue is dismissed. 14. In the result, the appeal of the revenue is partly allowed for statistical purposes. 15 Order is pronounced in the open court on 31.8.10
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2010 (8) TMI 1069 - ITAT MUMBAI
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... ... ..... nt beyond four years is a condition precedent i.e. failure to disclose material facts necessary for assessment by the assessee. When the assessee made full disclosure and the AO examined the issue by raising queries, the assessment cannot be reopened. We would like to refer the judgment of the Hon’ble Supreme Court in the case of CIT Vs. Kelvinator India Ltd., 320 ITR 561 (SC) wherein it has been held that the AO has power to reassess and not review. In the case under consideration, in original assessment the AO has examined the issue in detail and the assessee has disclosed full particulars for the purpose of computation of total income. The AO reopened the assessment beyond 4 years, which is not in accordance with law. In view of the above discussion, we do not find any infirmity in the order of CIT(A) and, therefore, the order of CIT(A) is upheld. 7. In the result, the appeal of the revenue is dismissed. Pronounced in the open court on this 20th day of August, 2010.
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2010 (8) TMI 1068 - ITAT CHENNAI
Revision u/s 236 - Applicability of deduction u/s 80P(2)(a)(i) - whether assessee being a regional rural bank established under RRB Act, 1976, was to be treated as a co-operative bank or could be considered as a co operative society? - CIT considered, sub-section (4) of section 80P, which was applicable to co-operative banks, as applicable to assessee also - as per assessee AO was very well aware that assessee was a rural bank under RRB Act, 1976 and it was only after considering relevant provisions, he had decided that the assessee was equivalent to a co operative society eligible for deduction u/s 80P(2)(a)(i)
HELD THAT:- There is much strength in the argument of the assessee that it is to be treated as co-operative society in view of the provisions contained in RRB Act, 1976. If so, it would be eligible under section 80P(2)(a)(i) of the Act.
In present case, the AO had carefully considered the claim of the assessee and allowed deduction u/s 80P(2)(a)(i). AO was very well aware that assessee was a rural bank under RRB Act, 1976 and it was only after considering relevant provisions, he had decided that the assessee was equivalent to a co operative society eligible for deduction u/s 80P(2)(a)(i).
Thus, the issue whether assessee was qualified for deduction u/s 80P(2)(a)(i) was very well within the contemplation of the AO and it was only after applying his mind over it that he decided that assessee had to be treated as co-operative society for income tax purpose. May be the order was cryptic, but application of mind is clearly discernible. AO had adopted one of the courses permissible in law and even if such a course resulted in loss to the Revenue, it could not be deemed as erroneous and prejudicial to the interest of the revenue. This position of law has been clearly laid down by Hon'ble Apex Court in the case of CIT v. Max India Ltd.[2007 (11) TMI 12 - SUPREME COURT].
Thus, CIT was only trying to substitute his view for a lawful view taken by the AO in this regard. This is not possible u/s 263. Hence, the order of CIT passed u/s 263, is quashed. Appeal filed by the assessee stands allowed.
In the result, the appeal filed by the assessee stands allowed.
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2010 (8) TMI 1067 - GUJARAT HIGH COURT
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... ... ..... . The Tribunal has also concurred with the finding of Commissioner (Appeals) that the recovery of the document may be a clue for further investigation but cannot be a conclusive piece of evidence to make any addition. The Tribunal has even indicated the entity who might be liable to actually explain the said seized documents. 11. In light of the aforesaid findings recorded by Commissioner (Appeals) as reproduced hereinbefore, it is not possible to find any legal infirmity in the impugned order made by the Tribunal upholding the deletion of the additions in hands of the respondent assessees. It is apparent that both the appellate authorities have appreciated the facts on record and recorded findings of fact. 12. In the aforesaid facts and circumstances of the case, it is not possible to state that any question of law as proposed in any of the two appeals, much less a substantial question of law, arises in any of the two appeals. Accordingly, both the tax appeals are dismissed
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2010 (8) TMI 1066 - ITAT MUMBAI
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... ... ..... interested in pursuing the appeal. He accordingly dismissed the same. After hearing both the sides, we are of the view that the matter should receive fresh consideration by the CIT(A). The act does not confer any power on the CIT(A) to dismiss the appeal for non-prosecution. He has to examine each and every ground taken before him and dispose of the appeal on merits. In order to enable him to do so, we set aside the impugned order and restore the appeal to his file for fresh disposal in accordance with law. The appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on this 27th day of August, 2010.
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2010 (8) TMI 1063 - PUNJAB AND HARYANA HIGH COURT
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... ... ..... (A) and dismissed the appeal. Hence, the present appeal by the revenue. 3. We have heard learned counsel for the revenue. None appears on behalf of the assessee. 4. The solitary issue raised by the revenue in this appeal is - whether an assessee is entitled to deduction on account of interest paid on loans when net profit rate has been applied by the Assessing Officer for determining the taxable income of the assessee. 5. The matter is no longer res integra. The similar issue came up for consideration before this Court in Girdhari Lal v. Commissioner of Income-tax, Jalandhar and another, 2002 256 ITR 318 and no separate deduction was held admissible to the assessee on account of payment of interest where net profit rate was applied by the Assessing Officer. That being so, the Tribunal was in error in allowing the claim of interest to the assessee-respondent. 6. Accordingly, the appeal is allowed and the question is answered in favour of the revenue and against the assessee.
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2010 (8) TMI 1062 - KERALA HIGH COURT
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... ... ..... unt may be directed to be refunded to the petitioner without prejudice to the contentions of the petitioner that no amount can be deducted from the amount seized. 3. I have considered the rival contentions in detail. 4. I am of opinion that insofar as even if everything goes against the petitioner, the amount payable would only be ₹ 60,24,333/-. The balance amount with the income-tax authorities can be refunded to the petitioner subject to further proceedings under the Income-tax Act and without prejudice to the contentions of the petitioner in the matter. Accordingly, this writ petition is disposed of with a direction to the income-tax authorities to return the amounts retained by them after deducting an amount of ₹ 65,00,000/- (Rupees sixty five lakhs only) pending further proceedings to be taken by respondents 3 and 4 without prejudice, of course, to the contention of the petitioner that no amount is due from him. The amount shall be refunded within one month.
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2010 (8) TMI 1060 - KARNATAKA HIGH COURT
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... ... ..... epreciation putting up of additional construction, which are not in dispute, clearly shows than these leasehold rights was treated a the asset of the partnership firm. Even the will in 1996 subsequent reconstitution of the partner-ship deed is held to be a sham transaction that would in no way takeaway the effect of the leasehold rights which has been for more than two decades at an undisputed point of time. In that view of the matter, the Tribunal is justified in holding that it was an asset of the partnership firm stood earlier to the relevant dated and therefore, when partners retire the consideration paid to them, representing the leasehold rights will not fall within the definition capital gains and therefore, not tax is payable. 6. In view of the undisputed aforesaid facts and the legal position we are of the view that no substantial question of law would arise for consideration in these appeals. 7. Accordingly, all these appeals are rejected at the stage of admission.
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2010 (8) TMI 1059 - ITAT HYDERABAD
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... ... ..... r these very assessment years, holding that no penalty under s.271(1)(c) was leviable on the assessee in these cases, for the reasons discussed at length in para 5 of this order in that context, we hold that there is no merit in the present appeals preferred by the Revenue. Even otherwise, the CIT(A) has merely directed the Assessing Officer to reduce the quantum of penalties imposed to the amounts of tax sought to be evaded after giving effect to the directions of the Tribunal in the quantum appeals of the assessee. There is no mistake whatsoever in the order of the CIT(A) in giving directions to give effect to the order of the Tribunal and reduce the quantum of penalties. We accordingly hold that the grounds of appeal preferred by the Revenue, being devoid of merit, are liable to be rejected. Accordingly they are rejected. 10. In the result, assessee's appeals are allowed and the appeals preferred by the Revenue are dismissed. Order pronounced in the court on 31.8.2010
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2010 (8) TMI 1058 - ITAT AHMEDABAD
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... ... ..... manner prescribed by the statute. As pointed out earlier there is no doubt about the genuineness of the transactions which have been fully accepted in the assessment made for the year under consideration. Even if, there was any ignorance, which resulted in the infraction of law, the default is technical or venial which did not prejudice the interests of the Revenue as no tax avoidance or tax evasion was involved. Therefore, bona fide belief coupled with the genuineness of the transactions would constitute reasonable cause under section 273B for not invoking the provisions of section 271 D of the Act in this case.” 9. Following the above orders, we cancel the penalty levied on the assessee treating the explanation furnished by the assessee as constituting reasonable cause, we decline to go into other arguments raised by the assessee as they are merely academic. 10. In the result, the appeal filed by the assessee is allowed. Order was pronounced in open Court on 6.8.2010
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2010 (8) TMI 1057 - ITAT BANGALORE
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... ... ..... t however, in order that the same will not suffer tax, deduction will have to be made in respect of such profits while computing the income under the head "profits and gains of business and profession" and not from the gross total income as envisaged under Chapter VIA. Thus holding, the Tribunal held that the losses of a non-eligible unit cannot be set off against the profits of the undertaking eligible for deduction u/s 10A of the I T Act. We find that the facts and circumstances of the case before us are exactly the same as that of Special Bench case and therefore, respectfully following the decision of the Special Bench of the Tribunal, we hold that the order of the Assessing Officer is sustainable in law and therefore, the assessment order is not erroneous and prejudicial to the interest of the revenue. 10. In the result, the order of the CIT u/s 263 is set aside and the order of the Assessing Officer is restored. The order pronounced on 10.8.2010 at Bangalore.
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2010 (8) TMI 1054 - ITAT BANGALORE
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... ... ..... the Revenue had favourably considered the issue in favour of the assessee for the earlier assessment years, it would have been just to extend the relief for the A.Y. 2006-07 also. Further, it was submitted by the ld. AR that the assessee had been regularly filing his return of income along with the audit report within the prescribed time since then. Considering the facts of the case, though the assessee has delayed in filing the return for a considerable period of time, we ar of the opinion that a lenient view may be taken in this case. It is apparent that there was no deliberate or intentional inaction on the part of the assessee to comply with the requirements u/s 44AB of the Act. The Act also suggests that the ld. AO “may direct that such person shall pay, by way of penalty, a sum equal to ………….”, thereby conferring a discretionary power. Therefore, in the interest of justice, we hereby delete the penalty confirmed by the d CIT(A).
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2010 (8) TMI 1053 - KARNATAKA HIGH COURT
Bad and doubtful debts - allowable deduction - Commissioner (Appeals) held as the Assessee did not give paticulars about the provision for bad and doubtful debts and as the credit entry continued, he held, the assessee it not entitled to claim deduction and therefore, he dismissed the appeal - Tribunal held that it is the absolute satisfaction of the Assessee while writing off any bad debt, which has to be seen and Assessee is not required to prove that the debt he become bad in the relevant previous year - HELD THAT:- After referring the claim in respect of each year, in the end, the order passed by the Assessing Officer as well as the Appellate Authority was set aside with a direction to the Assessing Officer to allow the claim in the light of the findings they have recorded. Further, the Assessing Officer was directed to grant sufficient opportunity to the Assessee of being heard in the matter and to furnish the details. In fact, a common order came to be passed in respect of 08 assessment years.
In that view of the matter, we decline to answer the aforesaid substantial question of law But, affirm the order of remand to the AO to consider the claim for bad debts, in the light of the observations made by the Tribunal and in the light of the judgments in the case of Vijaya Bank Vs CIT and Another [2010 (4) TMI 46 - SUPREME COURT] and T.R.F. Ltd. V/s CIT and Another [2010 (2) TMI 211 - SUPREME COURT].
Computation of deduction u/s 90HHC - whether excise duty should form part of the total turnover and the computation provided in section 90HHC r.w.s 80AB? - HELD THAT:- In the case of CIT Vs Laxmi Machine Tools [2007 (4) TMI 202 - SUPREME COURT] held that It is important to bear in mind that excise duty and sales-tax are indirect taxes. They are recovered by the assessee on behalf of the Government. Therefore, if they are made relatable to exports, the formula u/s 90HHC would become unworkable. Accordingly we hold that the excise duty cannot form part of the turnover for computing deduction u/s. 90HHC.
Deduction u/s 80HH and 80-I - ITAT allowing notional/hypothetical cost for ascertainment of purchase price of raw material for deduction - assessee set up a unit manufacture of toilet soap in the year 1983-84 at Amalner, and basic raw materials required for the manufacture of toilet soap being fatty acid and glycerin, was not available in and around Amalner - Therefore, assessee was purchasing non-edible oils from up-country suppliers and processed the same at Mumbai, the nearest place to Amalner, thus used to pay octroi at Mumbai for non-edible oils and also at Amalner on fatty acid and glycerin. It used to pay transport charges for transportation of raw materials from Amalner to Mumbai and from Mumbai to Amalner for transportation of finished goods - octroi at Mumbai Municipality, freight from Mumbai to Amalner and Amalneroctroi should be excluded for computing the transfer price of fatty acid from FAGP to toilet soap unit. Accordingly, after working out certain percentage of profits would stand reduced. The same was challenged by the assessee - Tribunal has allowed the appeal and has held in the absence of actual sale for the purpose of 80HH and 80I the assessee was justified in taking the market price prevailing in Bombay
HELD THAT:- In the appeal preferred against the very same judgment in respect of the assessment for several (other) years, a Division Bench [2008 (12) TMI 681 - KARNATAKA HIGH COURT] has already held that the market value would mean that the price of the goods would ordinarily fetch in the open market. It connotes the price at which the seller is willing to sell and the price at which the purchaser is willing to buy. It does not mean only the cost of production. Either way, the cost of the goods at the nearest available market would have to be reckoned and to that the cost of transportation, octroi, local taxes etc. has to be added. The figures so arrived at would in terms of the explanation to Section 80-I(8) would constitute the market value.
In the light of the aforesaid judgment rendered between the very same parties for the earlier assessment year, we do not find any justification to have a different view.
Computation of deduction u/s 90HHC - Income from software exports - for earlier year it has claimed exemption. However for the current year, it did not claim any exemption u/s 90HHC - Tribunal holding that income from software exports do not form part of other income mentioned in explanation (baa) to section 90HHC of the Act which is liable to be excluded before the Computation of deduction under section 90HHC of the Act - HELD THAT:- As both the appellate authorities that for the current assessment year when the said amount is not claimed as a deduction u/s. 90HHC and deduction was claimed u/s.10A of the Act, the question whether the assessee could claim deduction of the said amount in addition to the income derived out of the sale of goods and merchandise which had been produced and manufactured in India and exported would not arise for consideration. Therefore, the aforesaid substantial question of law is wrongly framed and there is no need to answer the said question as it would not arise for consideration in the facts of this case.
Exemption u/s.10A - corporate overheads remaining unallocated under section 10(A) including interest can be notionally attributed to the units claiming exemption under section 10(A) - tribunal on appreciation of the admitted facts of the case held, in the absence of any specific finding by the authorities below that the expenditure is incurred by various units claiming exemption/deduction, artificial way of allocating is not justifiable. The profits of undertaking under Section 10A of the Act is correctly worked out and no artificial working can be attributed thereto - HELD THAT:- A perusal of the statement shows the Corporate Office has spent towards the expenses consisted of salaries etc. excluding interest less revenues. They allocated to the various sub-divisions other than the software export sub-division similarly they have recovered from software exports sub-division in the process the excess recoveries. Further, the interest out go to intra business and external agencies. The interest earned from deployment of founds intra-business and with external agencies.
Considering the facts, it does not represent the expenditure incurred by the Corporate Office in respect of its sub-division. In those circumstances, the AO and the First Appellate Authority were not justified in allocating the substantial portion of the amount as the expenses incurred in respect of Section 10A and disallowing the deduction. That is precisely what the Tribunal has held on proper appreciation of the material on record. In that view of the matter we do not find any justification to interfere with the well considered order of the Tribunal. Accordingly, this question of law is answered in favour of the assessee and against to Revenue.
Exemption u/s 10(A) - special import licence premium income and other miscellaneous income considered as income derived from the industrial undertaking - As per AO as the said income is not derived from export of goods manufactured by the assessee as it is in the nature of a by-product, the said amount is not allowable for exemption - HELD THAT:- This special import licence has a direct nexus with the manufacture and export of the products. It falls within the first degree as explained by the Apex Court in more than one judgment. In the judgments relied on by the revenue, as there was no direct nexus and the income did not belong to the first degree and more so the exemption claimed was under Section 80HH not under 10A such exemption was not granted.
Tribunal rightly held those judgments have no application to the facts of the case. This case arises under Section 10A and this special import licence has direct nexus with the manufacturing and export activity of the assessee and this special import licence is a special incentive given to improve the importing of goods. Therefore, the income derived from sale of licence constitutes profits and gains derived by the assessee from the industrial undertaking under Section 10A of the Act and is eligible for exemption. In that view of the matter, we do not see any justification to interfere with the well considered order passed by the Tribunal. Accordingly, this question is held in favour of the assessee and against the revenue.
Deduction u/s 10A - Income from sale of old newspapers deemed to be held as income derived from eligible export oriented units - HELD THAT:- While calculating the profit of the eligible business the expenses and the income of the same unit are required to be netted out. The expenses and the income are relatable to the same nature. Therefore, they directed the computation should be made after netting out expenditure by reducing the income in dispute. Without properly understanding the case put forth by the assessee, the authorities have proceeded on the basis that it is an income derived from the business which has no nexus and, therefore the assessee is not entitled to claim exemption u/s 10A. Therefore, the Tribunal was justified in setting aside those findings and granting the deduction sought for by the assessee. In that view of the matter in the first place the said question do not arise for consideration. We decline to answer the same in the facts of the case.
Revenue or capital expenditure - Expenditure on imported software when the expenditure per se is capital in nature and is not allowable - assessee company claims import of software for the purpose of retail trading pre loading into the Hardware sold and also for in house use. The software is a commodity having copyrights - Tribunal held they cannot go into the question whether the expenditure is capital in nature as that is not what was urged before the lower authorities - HELD THAT:- Assessee claimed deduction on the ground that it falls under revenue expenditure. When the assessing officer accepted the case of the assessee to the substantial portion, merely because the imported goods were used in house by the assessee he was of the opinion that was housed for catering into the requirements of the clients and, therefore, it amounts to royalty and TDS should have been deducted, the same having not been done, the entire amount cannot be claimed as deduction.
Commissioner rightly pointed out it is not a royalty, it is a revenue expenditure and the entire amount is held to be deductible. In those circumstances, it was not open to the revenue to contend that it constitutes and asset. Therefore, the Tribunal declined to entertain the said contention and affirmed the order of the Appellate Authority. In those circumstances, the substantial question of law as framed do not arise for consideration in this appeal and we decline to answer the same.
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2010 (8) TMI 1052 - GUJARAT HIGH COURT
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... ... ..... nsactions and capacity of the depositors by filing relevant details. Thus, both Tribunal as well as CIT(A) have recorded concurrent findings of fact which clearly show that the assessee had discharged the onus under s. 68 of the Act and had proved the identity of the creditors, genuineness of the transactions, as well as capacity of the creditors by furnishing relevant material. In the light of the concurrent findings of fact recorded by the Tribunal it is not possible to state that the conclusion arrived at by the Tribunal is in any manner unreasonable or perverse. On behalf of Revenue, nothing is pointed to show that the Tribunal has taken into consideration any irrelevant material or that any relevant material has been ignored. In the circumstances, there being no infirmity in the impugned order of the Tribunal, the same does not give rise to any question of law, much less a substantial question of law, so as to warrant interference. The appeal is, accordingly, dismissed.
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2010 (8) TMI 1051 - ITAT AHMEDABAD
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... ... ..... plenary. The words of the statute are “reason to believe” and not “reason to suspect”. “Belief” indicates something concrete or reliable. The belief should not be a product of imagination or speculation. The reopening should not be for mere investigation or finding out probability of escaped income. In view of the above, in our considered opinion in the instant case assessment was reopened to find out probability of escaped income which is not permissible in law. Therefore the reopening of assessment was bad in law. We therefore, cancel the impugned order of re-assessment. Thus, this ground of appeal of the assessee is allowed. 8. In view our above decision the other grounds of appeal taken by the assessee have become infructuous and mere academic in nature. We therefore, refrain from adjudicating the same. 9. In the result, the appeal of the assessee is allowed. Order signed, dated and pronounced in the Court on 13th day of August, 2010.
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