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2018 (1) TMI 891 - AT - Income TaxReopening of assessment - reasons to believe - Held that:- On this issue with the newly introduced Explanation-3 to Section 147 of the Act, with retrospective effect from 01.04.1989, where some courts held that the AO has to restrict the reassessment proceedings only to the issue in respect of which reasons have been recorded for reopening the assessment, and that it is not open to him to touch upon any other issue for which no reasons have been recorded as contended by the ld. Counsel for the assessee and other courts held in opposite way. Hon’ble Delhi High Court in the case of Ranbaxy Lab Ltd. (2011 (6) TMI 4 - DELHI HIGH COURT) held that there must be some nexus between “reason to believe” recorded and the assessment framed. In this case also, the AO had not made any addition on the basis of reasons recorded and try to reduce other valid claim of the assessee allowed during the assessment u/s 143(3) of the Act. It is well settled law that where two non-jurisdictional High Court’s decisions are opposed to each other, the one in favour of the assessee is required to be followed by the Tribunal. The reference, if any, required, may be made to the decision of CIT Vs. Vegetable Products Ltd. (1973 (1) TMI 1 - SUPREME Court). - Decided in favour of assessee
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