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2023 (9) TMI 492 - DELHI HIGH COURTReopening of assessment u/s 147 - unsecured loan obtained by the petitioner - reasons to believe - HELD THAT:- As reasons to believe are not aligned with what is stated by the respondent/revenue in their counter-affidavit. In the reasons to believe, there is no reference to the report of SFIO; what is referred to is that some information has been received from DDIT (Inv), Unit-5(4), Delhi.There is also no reference to the fact that Mr Surendra Kumar Jain had rotated funds through eleven (11) bank accounts. The counter-affidavit, as noted above, referred to aspects which did not find mention in the document in which reasons to believe stood embedded. Clearly, if there was information available, the same was not independently analysed by the AO. The information should have been processed to indicate, at the very least, a prima facie as to how the loan transaction, which the petitioner claims to have entered into with RKG, was an accommodation entry. AO, has merely labelled the transaction as an accommodation entry, without demonstrating as to how the material on record furnished reasons for him to form a belief that the income chargeable to tax had escaped assessment. What is absent in the reasons to believe framed by the AO is the live link between the material available with him and the formation of the belief that income chargeable to tax had escaped assessment. On the other hand, the record shows that a specific query was raised with regard to the unsecured loan of Rs. 2 crores that the petitioner received from RKG. The record also shows that the petitioner placed on record the relevant material to show that the loan taken was genuine. Thus, it was not as if the AO did not address his mind to various facets of the ROI. Clearly, the route chosen by the respondent/revenue was not the correct course of action. During scrutiny assessment, as noticed above, a specific query was raised vis-à-vis unsecured loan which was answered; whereupon it was closed, presumably on ground that it was indeed a genuine transaction as claimed by the petitioner. A relook, without analysing the information received from the investigation wing and connecting the dots, lends credence to the submission that this is case of change of opinion. According to us, the reasons to believe as recorded by the AO failed to establish that it was a fit case to initiate reassessment proceedings against the petitioner. It is important to bear in mind that it is the material which the AO has in his possession when he forms the belief and not what he gathers thereafter, that is relevant to test the tenability of the reassessment proceedings - Decided in favour of assessee.
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