TMI Blog2010 (4) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment, the second being against the action of the learned Commissioner of Income-tax (Appeals) in upholding the order of the Assessing Officer in bringing to tax, the amount of Rs. 5 lakhs claimed by the assessee as capital receipt and the third relates to levy of interest under section 234B(3) of the Act. Learned counsel for the assessee submitted that the assessee has filed return of income for the relevant assessment year on November 27, 1998 and the same was processed under section 143(1)(a) of the Act on January 21, 2001. The Assessing Officer issued notice under section 148 on March 23, 2001 for reopening of assessment to which, the assessee had replied that the return filed originally on November 27, 1998 be treated as retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statement of Shri Kothandaraman had been recorded on January 18, 2002, whereas, the notice under section 148 had been issued to the assessee on March 23, 2001 and thus, on the date of issue of notice under section 148, there was only a belief of existence of reasons that income has escaped assessment and no material was available with the Assessing Officer to justify the formation of bona fide belief that income has escaped assessment. It was submitted that the material for the formation of belief did not exist and could not have existed on the date of issue of notice, as Shri Kothandaraman was examined much later. It was submitted that the order of the reassessment was bad in law for want of requisite jurisdiction especially the require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was escapement of income and that it was not a slump sale. It was the submission that interest under section 234B is mandatory in nature and it is compensatory in nature. We have considered the rival submissions. In regard to the submissions placed by the learned authorised representative on the reopening of assessment, it is noticed that the original return filed by the assessee was not subjected to any scrutiny or verification. The return filed by the assessee was accepted under section 143(1)(a) of the Act. If the Assessing Officer has cause or justification to know or even suspect that income had escaped assessment, he can be said to have reason to believe that income had escaped assessment. The expression "reason to belie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted fact that Shri Kothandaraman has confirmed that he has not entered into any non-compete agreement with the assessee. Under the circumstances, on the basis of material available with the Assessing Officer being the return filed where the demarcation has been done, the reason recorded of the possibility of escapement of income is valid. Therefore, we are of the view that the reopening of assessment has been done by the Assessing Officer and confirmed by the learned Commissioner of Income-tax (Appeals) is on a right footing and does not call for any interference. In regard to the issue on the merits, the claim of the assessee with respect to non-compete fee receipt falls to the ground on account of the fact that Shri Kothandaraman himself ..... X X X X Extracts X X X X X X X X Extracts X X X X
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