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2023 (6) TMI 521 - ITAT DELHIReopening of assessment u/s 147 - Proper reasoning - reopening beyond four years from the end of the relevant A.Y. - Disallowance u/s 37(1) for payment of professional fees - HELD THAT:- As per the relevant provisions, the AO is bound to show that there was failure on the part of the assessee to fully and truly disclose all material facts necessary for its assessment. The payment of Rs. 25 lakhs to Sanyals was towards liasoning done by them in furtherance of the contract work of the assessee. A bare perusal of the reasons mentioned hereinabove do not even allege that there has been a failure on the part of the assessee to disclose any material facts. The claim of expenditure was made and was thoroughly examined during the original assessment proceedings. In our considered opinion, whether the claim of expenditure is for legitimate needs of business expediency cannot be questioned in the reassessment proceedings. As decided in E.I. Dupont India [P] Ltd [2013 (2) TMI 406 - DELHI HIGH COURT] Failure to disclose all material facts necessary for assessment is a condition precedent for reopening of an assessment beyond the period of four years from the date of assessment. This is a pre-condition set out in the statute itself. Merely by adding a line in the reasons recorded by the Assessing Officer that the assessee had failed to disclose fully and truly all material facts, requirement of proviso to section 147 of the Act would not be satisfied for the purpose of reopening of the assessment u/s 147 - No merit in the reopening of the assessment - Decided in favour of assessee.
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