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2018 (12) TMI 1320 - AT - Income TaxReopening of assessment - reopening based upon audit objection - addition on account of loss exchange fluctuation - as per revenue assessee is a reseller of Government lottery tickets and there were no foreign currency transaction which could have been entered by the assessee which could have resulted in loss on account of foreign exchange rate fluctuation - Held that:- The entire foundation of re-opening of the concluded assessment u/s 148 based on audit objections was on wrong footing based on the premise that the assessee is engaged only in the business of government lottery resellers , while the fact of the matter is that the assessee was also engaged in the business of manufacturing of moulds and dies and plastic containers and goods. Now, it is established beyond doubt that the AO proceeded on the aforesaid wrong footing despite the assessee bringing in evidence to contrary. There is no rebuttal by the AO to demolish the version of the assessee. The learned CIT(A) has also given finding of fact that the assessee is engaged in the business of manufacturing of moulds and dies apart from government lottery resellers. The said finding has not been challenged by Revenue as no appeal is filed nor CO is filed by Revenue. The only question left to be answered is that if the entire premise/foundation on which the edifice of reopening of the concluded assessment is found to be erroneous , then in that situation will the proceedings conducted u/s 148 itself will be sustainable in the eyes of law or not, even if Revenue has a strong case on merits so much so the assessee has conceded that it has no case on merits keeping in view provisions of Section 43A of the 1961 Act the answer is emphatic "No" as on jurisdictional ground itself the proceedings are required to be quashed because the Revenue proceeded on the entire wrong presumption and footing based on erroneous audit objections raised by Sr. Audit Officer, despite the assessee bringing to the notice of the AO in response to reasons supplied for reopening, the correct factual matrix which was conveniently ignored by the AO and no reasons were supplied by the AO to demolish the contentions of the assessee. - Decided in favour of assessee.
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