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Jiten Gurnani Versus Income Tax Officer Ward 19 (1) , New Delhi

2015 (3) TMI 1185 - ITAT DELHI

Validity of reassessment proceedings - Held that:- As essentially implies that even when an information is received from another wing, the Assessing Officer must apply his mind to the same before one can deal with the question as to whether such an information constitutes legally sustainable reasons for reopening the assessment. The question of existence or adequacy of reasons for reopening the assessment will still be a step away from this fundamental exercise. Once Sections 147/148 are resorte .....

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I C Sudhir JM and Pramod Kumar AM Salil Agarwal, for the appellant P Domkaunajma, for the respondent O R D E R Per Pramod Kumar, AM: 1. This is an appeal filed by the assesse and is directed against the order dated 28th June 2012 passed by the CIT(A) in the matter of assessment under section 143(3) r.w.s. 147 of the Income Tax Act, 1961, for the assessment year 2002-03. 2. One of the grievances raised in this appeal is against the validity of reassessment proceedings. As this is a fundamental a .....

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statement before the investigation wing, had accepted that the bank account of M/s Amrit Impe (India) has been used for providing accommodation entries . The assesse objected to this reopening on several grounds, including the ground that the AO had not applied his mind to the matter, that there was not even a casual reference to the return having been filed by the assesse under section 139(1), that he has proceeded to reopen the assessment without examining the corroborating the material receiv .....

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is in further appeal before us. 4. We have heard the rival submissions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 5. As noted by a coordinate bench of this Tribunal, in the case of ITO Vs Vijendra Kumar (67 DTR 283), No doubt sufficiency of reason cannot be agitated however the first hurdle that the formation of belief is of the concerned AO and not of some other AO has to be met. The blind acceptance in haste the view of .....

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away from this fundamental exercise. As we make note of this position, we may also refer to the observations made by Hon ble jurisdictional High Court, in the case of CIT Vs Pradeep Kumar Gupta (303 ITR 95), as follows: 4. Having heard learned counsel for the parties at great length, we are of the view that the Order of the ITAT is unassailable. In this case, the assessment had not been completed under Section 143(3) of the IT Act. There are banking transactions between the Assessees and Shri An .....

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8. Shri Anand Prakash cannot be seen as a busybody or an informer or a stock witness wholly unconnected with the Assessee concerned. Learned counsel for the Revenue had drawn our attention to Phool Chand Bajrang Lal -vs Income- Tax Officer, [1993] 203 ITR 456 where the ITO had learnt that the party from whom that Assessee had allegedly borrowed ₹ 50,000/- in cash had not actually done so. Information pertaining to the false nature of these transactions was exchanged between the respective .....

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on the deposition of a third party in order to upset the Return filed by an Assessee. 5. This is where the failure of the Revenue to produce Shri Anand Prakash for cross-examination by the Assessees, assumes fatal consequences. Reassessment proceedings have been initiated after several years of the acceptance of the Return under Section 143(1) of the IT Act. The Assessees have themselves relied on the banking transactions between themselves and Shri Anand Prakash; secondly on bills issued by the .....

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