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2017 (2) TMI 1121 - ITAT AHMEDABADReopening of assessment - arrangement to the sale of shares undisclosed - Held that:- Proviso appended to section 147 puts an embargo upon the powers of the AO for reopening of the assessment in case where an assessment was made under section 143(3) of the Income Tax Act for relevant assessment year and four years have expired from the end of the assessment year. In such cases, no action shall be taken under section 147 unless it is established that income chargeable to tax has escaped on account of failure of the assessee to disclose fully and truly all the material facts necessary for his assessment. Thus the AO was bound to demonstrate that the assessee has failed to disclose material facts fully and truly which has resulted escapement of income. If he fails to demonstrate this aspect, then, in the case where scrutiny assessment has been made and four years have expired, he cannot take action under section 147 of the Income Tax Act. A perusal of the reasons would indicate that the AO has nowhere demonstrated this fact. Apart from the above, a perusal of the assessment order passed under section 143(3) would indicate that all these facts have duly been considered and the AO has accepted the stand of the assessee. Allegation of the AO in the reasons is that in the memorandum of arrangement to the sale of shares shows that a sum of ₹ 28,90,500/- was to be received by the assessee from M/s.Manish Multi Packfilms Pvt. Ltd. It was a sum advanced by the assessee to the company. The AO has observed that a perusal of the balance sheet for the F.Y.2002-03 i.e. 31.3.2003 does not discern that the assessee has advanced any amount. The stand of the assessee is that this sum was advanced after 31.3.2003 and it was repaid during the F.Y.2003-04 itself. Therefore, it will not reflect in the balance sheet of Manish Multi Packingfilms Pvt. Ltd. in F.Y.2002-03. The AO has sought to reopen the assessment after expiry of four years without establishing nexus of the details. He has not analytically examined the alleged advance given by the assessee and his belief that this amount should be available in the balance sheet for F.Y.2002-03. When the assessee has not paid any amount in F.Y.2002-03 to the company how it will appear in the balance sheet. Without looking to the accounts, he simply recorded the reasons. Thus, there is no basis for reopening of the assessment and the ld.CIT(A) has rightly quashed it. We do not find any error in the order of the ld.CIT(A). It is upheld - Decided against revenue.
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