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2018 (8) TMI 1199 - ITAT BANGALOREValidity of reassessment proceedings u/s 147 - initiation of proceedings u/s. 148 - The case of the revenue for disallowing the expenses was that in the search conducted u/s. 132 of the act in the case of M/s. Murudeshwar Ceramics Ltd., it transpired that the assessee received labour charges and transportation charges from the above company, but did not incur any expenditure as the assessee did not actually carry out any activity for the aforesaid company. Held that:- there was no direct or live nexus with the belief formed by the AO that income of the assessee has escaped assessment compared with the material that came to the possession of the AO. In other words, there was nothing incriminating against the assessee found in the course of search, which can lead to a belief that income of assessee chargeable to tax has escaped assessment by reason of assessee claiming bogus expenditure. The statements recorded in this regard are general and vague and admission in the case of person searched cannot be the basis to form such belief. I therefore quash the proceedings u/s. 148 of the Act and allow the appeal of the assessee. Decided in favor of assessee.
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