TMI Blog2015 (11) TMI 1523X X X X Extracts X X X X X X X X Extracts X X X X ..... lant : Sh. Ankit Gupta, Adv. For the Respondent : Ms. Garima Jain, Sr. DR ORDER This appeal filed by the Assessee against the Order dated 29.1.2014 passed by the Ld.CIT(A), Muzaffarnagar for Assessment Year 2009-10. 2. The only solitary ground raised by the assessee before the Tribunal is that the notice issued u/s. 148 and reassessment order passed u/s. 147 r.w.s. 143(3) are illegal, bad in law and without jurisdiction. 3. The brief facts of the case are that in this case it was gathered by the AO that the assessee had claimed interest of ₹ 1,48,307/- as expenditure in the return originally filed on 27.8.2009. However, the same did not relate to business activities and as such expenditure claimed at ₹ 1,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ₹ 1,48,307/-. The AO has examined the balance sheet attached with the return of income which shows out of borrowed capital the substantial funds are invested in no business assets. Therefore, the deduction u/s. 36(1)(iii) of the Act is required to be restricted to the borrowed funds invested in the business assets. Ld. Counsel for the assessee stated that AO has recorded his reasons dated 7.4.2011 for issuing of notice u/s. 147 of the I.T. Act on the same reasons mentioned in the Notice, but no fresh material was available with the AO, except the material already filed by the assessee with the return of income. Therefore, the issuance of notice u/s. 148 of the I.T. Act is illegally bad in law and without jurisdiction, keeping in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the I.T. Act, 1961 as well as the reasons recorded by the AO u/s. 147 of the I.T. Act, 1961 dated 7.4.2011 are reproduced as under:- F.No. ACFPB7654J/W-1(1)MZR/10-11 Office of the Income Tax Officer Ward 1(1), Muzaffarnagar Dated : 24.1.2011 To Sh. Rakesh Bandhu, 212, South Civil Lines, Muzzafarnagar Sub:- Notice u/s. 147 of the I.T. Act, 1961 for the AY 2009-10 Reg. In the return filed on 27.8.2009 vide RR No. 1568 you have claimed deduction of interest at ₹ 1,48,307/-. The balance sheet attached with the return shows out of borrowed capital the substantial funds are invested in no business assets. Therefore, deduction u/s. 36(1)(iii) of the I.T. Act, 1961 is required to be restricted to the borrowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to be restricted to the borrowed funds invested in the business income 2. The assessee sought time on 03-02-2011, 23-02-2011, 04-03-2011 and 22--03-2011. However, till date no reply has been received. Moreover after issue of notice under section 148 of the Income Tax Act, 1961 the assessee shall have opportunity to explain his case in the course of settlement of objections to the notice under section 148. Therefore, on the basis of facts mentioned in the show cause dated 24-1-2011. I have reason to believe that income chargeable to tax estimated at RS.75000/- has escaped assessment. Issue notice under section 148 of the Income Tax Act, 1961. Sd/- (V.K. NIGAM) INCOME TAX OFFICER WARD 1(1), MUZAFARNAGAR 8.1 After goi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that no fresh material is brought by the Revenue on record but the assessment has been reopened on the basis of the return of income and the documents submitted alongwith the return of income. Therefore, in view of the above decision of the Hon ble Jurisdictional High Court, reopening of assessment is not valid. Hence, the same is quashed and accordingly, the assessment order passed in pursuance of the notice issued under section 148 is also quashed. 9. Since while adjudicating ground no.1, I have already quashed the assessment order, the other grounds raised by the Assessee do not require any adjudication on merits. 10 In the result, the appeal filed by the Assessee stand allowed. Order pronounced in the Open Court on 17/11/2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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