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2020 (12) TMI 7 - AT - Income TaxReopening of assessment u/s 147 - addition u/s 40A(3) - HELD THAT:- In the case of Godrej InduStries Limited Vs. B.S. Singh, DCIT & Ors. [2015 (8) TMI 668 - BOMBAY HIGH COURT] has held that the validity of reopening notice shall be determined with reference to reasons which are recorded in support thereof and nothing else - in the absence of reason to believe that income chargeable had escaped assessment, re-assessment notice shall not be sustainable. We are confronted with a case in which the AO initiated re-assessment proceedings on the premise that the assessee had recorded bogus purchases to the tune of ₹ 8,33,600. Addition was finally made u/s 40A(3) of the Act by impliedly accepting the genuineness of the transactions. That being the position, we are of the considered opinion that the reassessment cannot be held to have been validly initiated. Hon‟ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] has held that the AO cannot proceed with re-assessment if the grounds mentioned in re-assessment are non- existent i.e., if no addition is made on that score. When we examine the factual scenario obtaining in the instant case on the touchstone the inescapable conclusion which can be drawn is that the only addition made in the re-assessment on a ground different from the one for which notice u/s 148 of the Act was issued, lacks legality. The same is, therefore, deleted - Decided in favour of assessee.
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