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2019 (1) TMI 271 - AT - Income TaxReopening of assessment - assessee have claimed interest expenditure paid in the nature of jamakharchi transactions - validity of reason to believe - Held that:- The assessee had successfully demonstrated during the course of lower appellate proceedings that it had never claimed the impugned interest expenditure in its books. He thereafter holds that the Assessing Officer’s sole reason of re-opening no more survives and this is what brings into action various decisions that if a re-opening is done for “x” reason, then it deserves to be quashed in case no addition is made for the said reason. Mr. Majumdar’s case is that the Assessing Officer had made the twin addition(s) including one forming the subject-matter of re-opening. He fails to dispute the clinching fact that assessee had no where claimed the impugned expenditure in its books for the impugned assessment year which gave rise escapement of taxable income from being assessed. CIT(A) has rightly observed therefore that the above re-opening reason itself had been assumed on an incorrect factual position. That being the case, we find merit in the CIT(A)’s above extracted detailed reasoning that the impugned re-opening would not sustain the test of legality. - Decided in favour of assessee.
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