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2021 (1) TMI 788 - HC - Income TaxReopening of assessment u/s 147 - re-opening the assessment beyond the period of four years under Section 147 - Undisclosed interest on capital' or 'remuneration' from the partnership firm - HELD THAT:- It is the settled position of law that the condition precedent for the purpose of resorting to re-opening of the assessment is that the Assessing Officer should be satisfied based on some cogent or tangible material, that the case is one of escapement of income chargeable to tax. In the absence of escapement of any income chargeable to tax, it is not open for the department to re-open the case of the assessee. Mr.Hemani is right in his submission that mere incorporation of interest on partners capital and remuneration does not necessarily mean or should be construed as mandatory. There has to be some material on record to indicate that the writ-applicant had actually received any 'interest on capital' or 'remuneration' from the partnership firm. Where no such income has been earned by the writ-applicant, the question of taxing the same does not arise at all. Applying the very same dictum of law as laid in the case of Alidhara Taxspin Engineers [2017 (5) TMI 1684 - GUJARAT HIGH COURT] we have no hesitation in arriving at the conclusion that the re-opening of the assessment is not justified. - Decided in favour of assessee.
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