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TMI Blog2015 (10) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... al reads as under:- "That on facts and circumstances of the case the learned CIT(Appeals) has erred in holding that notice issued u/s 148 was a valid notice." 4. We have heard the arguments of both the sides and perused relevant material placed before us. The reasons recorded for reopening of assessment read as under:- "Reasons for the belief that income has escaped assessment in the case of Shri Ashok Mahendru, 351/15, Jacubpura, Gurgaon - Asstt. Year 1999-2000 1. Computation of assessable income as on 31.3.1999 as worked out by the assessee is as under:- Income from Salary : Remuneration income from : Advance Finvest (P) Ltd. 75,000.00 Advance Detergents Ltd. 75,000.00 Advance Coal Mgnt. & Mkt. Ltd. 75,000.00 Advance Design & En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... butable to the investment in shares which has resulted in exempted income of Rs. 17,62,200/- will be much higher than the income declared on account of dividend. The possibility of there being a net loss of a few lacs under the head dividend is not ruled out. As the dividend income being exempt is not includible in the total income, similarly the loss arising therefrom cannot also be set off against the income under the heads salary, commission, interest etc. Dividend income being exempted u/s 10(33) of the Income tax act with effect from asstt. year 1998-99, neither any income from dividends can be included in the total income nor any loss therefrom can be adjusted or set off or carry forward against any income under any heads of income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to tax. In the reasons recorded, except in the heading mentioning that the "reason for the belief that income has escaped assessment", there is no finding in the reasons recorded for escapement of income. The entire finding is with regard to requirement of verification and reworking of dividend income, verification and reworking of capital loss and the verification of household expenses. In our opinion, Section 148 cannot be invoked only for the purpose of verification of certain income or expenses. Section 143(2) reads as under:- "[(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall,- (i) where he has reason to believe that any claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to issue the notice under Section 143(2) within the time limit specified in that Section, he cannot issue the notice under Section 148 just for the purpose of ensuring the correctness of the income disclosed or the loss disclosed or to scrutinize certain income or expenses. In view of the above, we are of the opinion that reopening of assessment by the Assessing Officer for the purpose of scrutiny of dividend income, capital loss or household expenses is not permissible. Therefore, the notice issued under Section 148 is quashed and consequentially, the assessment order framed in pursuance to the notice under Section 148 is also quashed. 7. Since we have quashed the impugned assessment order, the other grounds of appeal which are with reg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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