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TMI Blog2016 (3) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... its return for the AY in question on 7th November 2007 declaring NIL income. The return was picked up for scrutiny. On 17th September 2008, notice under Section 143(2) of the Act was issued to the Assessee. This was followed by an elaborate questionnaire under Section 142(1) of the Act issued to the Assessee by the DCIT, Circle-17(1) on 13th July 2009. The Petitioner replied to this questionnaire on 27th November 2009, inter alia enclosing the account of M/s Sunlight Projects Pvt. Ltd. ('SPPL') along with copy of the ledger account. In response to query raised on 8th December 2009 as to why no interest was charged from SPPL, the Petitioner submitted a letter dated 15th December 2009 in which inter alia it was stated that the Assessee had m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that SPPL had taken a loan from the Assessee and that no interest was charged by the Assessee from SPPL from the date of the loan. Reference was also made to the balance sheet of the Assessee where the Assessee had been debiting payment of interest towards loans taken from banks/financial institutions and therefore there had to be proportionate disallowance for all the assessment years beginning with AY 2007-08 till such time the arrangement continued. 7. The second broad reason for reopening the assessment was the receipt by the Assessee of Rs. 1.8 crores towards share capital and premium from various companies. In this regard the reasons states that "MCA/ITD database search and local enquiries revealed that these companies are defunct in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rutiny, a detailed questionnaire was issued, in which specific questions touching upon the said loan to SPPL were raised. The Petitioner replied to the said letter disclosing all the necessary information. Consequently, as far as the first ground for reopening of the assessment is concerned, the Court is satisfied that the precondition of the first proviso to Section 147 regarding failure on the part of the Assessee to fully and truly disclose the material facts, is not fulfilled. The mere fact that the assessment order may itself not advert to the fact that a questionnaire was issued and a reply was filed thereto by the Assessee would not ipso facto lead to an inference that the AO did not apply his mind and form an opinion on that ground. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence to and the proviso is not invoked". However, whether in fact there was a failure on the part of the Assessee to state true and correct facts would depend on the existence of some tangible material which can provide a live link to the formation of the belief that income escaped assessment. The statement that the MCA/ITD database search showed that the companies which had invested in the shares of the Assessee were in the "defunct mode" is vague inasmuch as it is not clear whether any of the said companies were defunct on the date the Petitioner disclosed the details in response to the questionnaire issued to it. 13. Mr. Rahul Chaudhary then urged that the Revenue should now be permitted to produce before the Court the complete record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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