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TMI Blog2013 (6) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... e case in brief are that the assessee filed the return of income on 31-10-2002 declaring total income of Rs. 1,24,430/- which was processed u/s 143(1) of the Income Tax Act, 1961 ((hereinafter referred to as 'the Act' in short) on 14-02-2003. Thereafter, the Assessing Officer received information from Addl. CIT, Central Range, Udaipur vide letter dated 19-12-2006 that Shri Bhupender Shrimali partner of M/s Lavti & Company i.e. the assessee had taken accommodation entry in the assessee firm in the form of advance amounting to Rs. 18.00 lacs during the Financial Year 2001-02 on payment of 1% commission for it from M/s Abhvya Investment Pvt. Ltd. , Mumbai a concern of Shri Gajendra Porwal. |The Assessing Officer on the basis of above facts was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatus of the firm has been a proprietorship owned by Shri Bhupendra Shrimali. There is no change in the nature and style of business carried out as compared to preceding years. The appellant maintains regular books of accounts viz. cash book, ledger, bill, voucher and quantitative records and these are subject to tax audit u/s 44AB of the Act The appellant has filed its original return of income at an income of Rs.124430/-on 31st Oct.2002 and its assessment was completed u/s 143 (1) of the Act. Notice U/s 148 issued on 27.03.2009 was responded by the appellant that return of income filed on 31 Oct.2002 i.e original return filed may be considered in response to this notice too. However, request for providing of reasons for initiation of rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional A.O. ; the ACIT, Udaipur in his case. This fact is verifiable from the copy of reason recorded in the case of Bhupender Shrimali. In nutshell and on facts of the case, the Ld. A.O. in the case of appellant and also jurisdictional A.O. in the case of Shri Bhupender Shrimali initiated re- assessment proceeding u/s 147 on the basis of the very same material and observations. And therefore vide letter dated 25.9.2009 these proceedings were objected seeking a speaking order before proceeding further in the matter of reassessment proceeding u/s 147 of the Act. It was stated that from the reasons recorded in both the hands, it is evidently inferred that reasons recorded in both the assessees were not forming "reason to believe" which is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal be allowed on this primary submission. On settled law, it is further submitted that if the Ld. A.O. has "reason to believe" that any income has escaped assessment for any assessment year gives wide powers but not plenary. It cannot depend on mere whims and fancies of the Ld. A.O. The existence of material therefore must be real and there must be nexus between material and the belief of escapement. The exercise must contain a definite application of mind by the Ld. A.O. to reach an inference based on material justifying the income escaped assessment. The whole exercise u/s 147 is mainly based on facts that there must be one assessment and one assessment alone on the income. In the above parameters it could be further said that reason t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. CIT(A) after considering the submissions of the assessee observed that the Assessing Officer completed the assessment u/s 143(1) of the Act on 14-02-2003 and reopened the assessment by issuing notice u/s 148 of the Act on 27-03-2009 which was served on the assessee on 31-03-2009 and the basis for issue of notice u/s 148 was the copy of account of Shri Bhupender Shrimali in the books of account of M/s Abhvya Investment Pvt. Ltd., Mumbai for the period 1-04-2001 to 31-03-2002. The ld. CIT(A) observed that the above said copy of account was in the name of Shri Bhupender Shrimali and not in the name of M/s Lavati & Co. i.e. the assessee, partnership firm where Shri Bhupender Srimali is one of the two partners. The ld. CIT(A) further obser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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