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2024 (5) TMI 1009 - ITAT INDOREValidity of reopening of assessment u/s 147 - information received from DDIT (Inv.)-Unit 2(2), Kolkata which showed that the assessee had entered into sham transactions with shell company - it is a consistent submission of assessee right from beginning that it has not entered into any transaction with any shell company - HELD THAT:- The revenue is not able to show any such transaction having been entered by assessee with M/s Bhagya. Therefore, we safely presume that the assessee has in fact not entered into any transaction with M/s Bhagya as alleged in the reasons. That means, the re-assessment proceeding has been done on the basis of an invalid reason. Once it is so, the entire proceeding becomes invalid on this very premise itself. Revenue/AO authority to make newer additions even if they did not form part of original reasons and such authority comes from 3rd Proviso to section 147 - If the AO does not assess or reassess the income which he has reason to believe had escaped assessment and which formed the basis of a notice u/s 148, it is not open to AO to assess or reassess independently any other income which does not form the subject-matter of the notice. As far as 3rd Proviso to section 147 is concerned, in our considered interpretation, it does not give any authority to AO to assessee independent incomes, rather it places one more restriction upon AO that under the provisions of section 147, he can only assessee or reassess those matters which are not subject-matters of any appeal, reference or revision. The AO’s understanding that it gives authority to him to assess only independent or newer items, even if the original items forming part of reasons do not survive, is not correct. Therefore, respectfully following the decision of Jet Airways which is very much applicable to the facts of present case, we are inclined to quash the order of re-assessment passed by AO. The assessee succeeds in this appeal.
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