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Mr. Sujitendra Krishna Deb Versus Deputy Commissioner of Income Tax & Others

2016 (4) TMI 254 - CALCUTTA HIGH COURT

Reopening of assessment - assessing officer seeking to treat the relevant amount as a gift and not as a loan - Held that:- . As to whether the relevant amount in this case should be regarded as a gift or as a loan, is not a jurisdictional fact; though it is a matter which may be covered in course of the reassessment. On a plain reading of the provision, if an assessing officer has reason to believe that some income has escaped assessment, appropriate steps may be taken for reassessment of the in .....

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levant amount paid in the assessment year by the firm to the petitioner as a gift depends on how the additional disclosure ought to be regarded. The additional disclosure could not have been taken into account earlier and the apparent admission on the part of the petitioner that the transaction pertaining to Dalal and Shah should have been included in the original return can be seen as sufficient justification for the reassessment. That is also implied in the impugned order of August 6, 2015, th .....

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.1341 of 2015 was dismissed for default. The order dated February 25, 2016 is recalled and WP No. 1341 of 2015 is restored to the file. The restoration application, GA No. 612 of 2016, is allowed as above, but without any order as to costs. The petition is taken up for immediate consideration. This is another petition inspired by the Supreme Court judgment in GKN Driveshafts (India) Ltd reported at (2003) 1 SCC 72. Pursuant to a notice under Section 148 of the Income Tax Act, 1961 for reassessin .....

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eek reassessment was questioned in course of the petitioner s written protest of December 20, 2014. In tune with the dictum in GKN Driveshafts (India) Ltd, the assessing officer has passed an order on August 6, 2015. It is this order that the petitioner assails as being without reasons and on the ground of the failure of the assessing officer to appreciate the jurisdictional error that was pointed out by the petitioning assessee. Section 147 of the said Act permits an assessing officer to assess .....

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er allegations have to be referred to, if only in passing, to appreciate the matter without seeking to prejudice the petitioning assessee. A certain sum of money was admittedly received by the petitioner from a firm in which the petitioner was a partner in the relevant assessment year. According to the petitioner, such money was received as a loan for the acquisition of the business of another firm in the names of four of the partners of the petitioner s firm. In the revised return which has bee .....

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GKN Driveshafts dictum, the petitioner questioned the basis of the assessing officer seeking to treat the relevant amount as a gift and not as a loan. In the impugned order of August 6, 2015, the assessing officer reiterated his view that it was a gift and not a loan. The petitioner says that since the assessing officer has already made up her mind, it may be a futile exercise to go back before such officer in course of any further opportunity that may be given under Section 142 of the Act. The .....

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ought to be made at the prereassessment stage which will be subject to scrutiny under judicial review for the reasons to be found acceptable before the reassessment exercise can be undertaken. If, for instance, the Court takes a tentative view here that the particular amount ought to be a gift and not a loan, it would not preclude the petitioning assessee from pursuing the remedy of an appeal from the order of reassessment; and in such appeal, the money may be regarded as a loan and not a gift. .....

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s a matter which may be covered in course of the reassessment. On a plain reading of the provision, if an assessing officer has reason to believe that some income has escaped assessment, appropriate steps may be taken for reassessment of the income for the relevant assessment year under Section 147 of the Act. The jurisdictional fact in such a case will not be how a particular amount or a particular transaction ought to be treated. That is the exercise that is reserved for the reassessment stage .....

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