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TMI Blog2011 (8) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... such proposed reopening came to be rejected. 3. For the asst. yr. 2004-05, return filed by the petitioner-assessee and HUF involved principally in the business of moneylending, the AO took the assessment in scrutiny. After detailed exchange of queries, replies, discussions and deliberations, assessment order was framed originally on 28th Dec., 2006. Certain additions were made by the AO and certain claims were disallowed. The assessee to the extent he was aggrieved by such additions and disallowance preferred appeal before the CIT(A) who had dismissed the appeal on 27th Dec., 2007. The assessee then approached the Tribunal. Such appeal is, however, pending. 4. In the meantime, the AO, issued the impugned notice dt. 30th Marc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under s. 68 of the Act. 3. On verification of the balance sheet of the assessee as on 31st March, 2004, it is noticed that the assessee has given loan totalling to Rs. 61,43,410 out of which Rs. 22,43,419 was paid to Smt. Ashaben M. Shah and Rs. 38,99,991 was paid to Shri Manubhai C. Shah (Ind) on which no interest has been charged by the assessee. Since the assessee is engaged in the business of finance and receiving interest, the assessee should have charged interest at least at 12 per cent per month. Thus, the assessee has failed to show interest income to the tune of Rs. 7,37,197." 6. The petitioner objected to reopening notice vide communication dt. 20th July, 2010 and raised several contentions. It was contended that the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case, since the assessee had filed the return which was also taken into scrutiny, it would be necessary to examine whether:- (i) there was any escapement of income from assessment to tax, and (ii) whether the same was on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. 10. We may notice that in the reasons recorded for reopening the assessment, the AO has not stated that he is of the opinion that income chargeable to tax had escaped assessment on account of failure on the part of the assessee to truly and fully disclose all material facts necessary for framing the assessment. Even if such requirement is not insisted upon rigidly and if we look ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal. Whatever may be the outcome of the appeal of the assessee, one thing can be seen clearly, namely, while framing original assessment, the AO was acutely conscious of various unsecured loans shown by the assessee in its accounts. With respect to those unsecured creditors, the AO had doubt, he had called for details from the assessee. The assessee to the extent such details were available had supplied the same. The AO was not satisfied with certain details and therefore made additions under s. 68 of the Act. 13. It could thus be seen that the entire issue was closely examined by the AO. It is not even stated that the assessee did not disclose the five above mentioned creditors and unsecured loans received from such credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. It is, of course, true that in the assessment order, there is no detailed discussion about not making such additions. However, when we find that there was specific query from the AO with respect to this item and the assessee filed detailed reply producing supporting evidence, by no stretch of imagination can it be stated that there was failure on the part of the assessee to fully and truly disclose all materials facts. 16. With respect to third reason, the same pertains to non-charging of interest to one Smt. Ashaben Shah. The AO was of the opinion that the assessee should have charged interest @ 12 per cent. In this regard, the assessee pointed out that non-charging of interest in the year was on account of inadvertent, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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