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2017 (6) TMI 484 - ITAT DELHI

2017 (6) TMI 484 - ITAT DELHI - TMI - Assumption of jurisdiction u/s 147 / 148 - reasons to believe - lower net profit - Held that:- The very basis of initiation of reassessment proceedings for which reasons to believe were recorded were income escaping assessment in respect of lower net profit, the same having not been escaped, the AO proceeded to make additions on account of disallowance of rent and electricity charges and additions made on account of share application money was not permissibl .....

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A Nos. 706, 707,708/Del/2017 - Dated:- 7-6-2017 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER For The Assessee : Shri N.K. Jain, Advocate Ms. Natasha, Advocate For The Department : Ms.Bedobani, Sr. DR Per BHAVNESH SAINI, Judicial Member ORDER All the appeals by assessee are directed against different orders of Ld. CIT(A) Rohtak dated 25th November, 2016 for asstt. Years 2009- 10, 2010-11, 2011-12. 2. Ld. Representatives of both the parties mainly argued in assessment year 2009-10 and submitted that iss .....

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return of income,all the columns of the balance sheet as well as profit and loss account have been filled, the gross receipts have been shown at ₹ 69,67,218/- from where net profits of ₹ 1,99,990/- have been declared. In the computation of income, assessee has not shown income under other heads. A survey u/s 133A of the Act was conducted at the business premises of the assessee on 21st March, 2012. Thereafter reasons u/s 147 of the I.T. Act were recorded by the AO and notice u/s 148 .....

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d further additions were made on account of disallowance of rent and electricity charges for a sum of ₹ 30,000/- and ₹ 36,294/-. Further addition was made on account of unexplained share application money for a sum of ₹ 14,50,000/- u/s 68 of the I.T. Act. 5. The assessee challenged the reopening of the assessment and additions on merit However appeal of assessee has been dismissed. 6. The assessee in the present appeal challenged the assumption of jurisdiction u/s 147 / 148 of .....

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d addition on account of unexplained share application money. Therefore the AO accepted the contention of the assessee and holds that the income on which he has initially formed a belief had escaped assessment, has as a matter of fact has not escaped assessment, it is not open to him to independently assess some other income. If he intends to do so, a fresh notice u/s 148 should be necessarily issued. He has relied upon decision of Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. 23 .....

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ted. There were discrepancy in the books of accounts. Therefore prima facie case was made out for reopening of the assessment. Ld. DR submitted that on making the above additions the profit of the assessee has increased. Therefore, there is no illegality in initiation of the reassessment proceedings. 8. I have considered the rival submissions. It is well settled law that validity of the reassessment proceedings have to be determined with reference to the reasons recorded for reopening of the ass .....

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21.3.2012 at the business premises of M/s. Lamba Bricks Co. Pvt. Ltd. No books of A/cs and any other documents founded belonging to the assessee M/s. Lamba Bricks Co. Pvt. Ltd. The assessee stated about below Banks A/cs numbers in his statement during survey operation. Later on, the information was called for u/s 133(6) of the Income-tax Act, 1961 from the Bank is as under :- Sr. No. Name of Bank Account No. Amt. Deposited (Rs.) 1. Indian Bank, Bhiwani 527103076 70,000/- 2. Axis Bank, Bhiwani 4 .....

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sallowance of ₹ 59,725/- and total income is works out at ₹ 2,59,715/-. I have therefore reasons to believe that income of ₹ 59,725/- chargeable to tax has escaped assessment for the A.Y. 2009-10 and also any other income chargeable to tax which has escaped assessment and which comes to the notice of the AO subsequently in the course of the proceedings under this section. Notice under section 148 of the Income Tax Act, 1961 issued. Date 13.2.2014 (Jitender Singh) Asstt. Commiss .....

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he lessor net profit in the return of income, in a sum of ₹ 59,725/-. The AO however in the reassessment order did not make any addition of ₹ 59,725/- and accepted the returned income of ₹ 1,99,990/-. Hon ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. 239 CTR 183 held as under :- Conclusion : AO may assess or reassess the income in respect of any issue which comes to his notice subsequently in the course of the proceedings though the reasons for such issue we .....

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f the reasons (a) and/or (b) it was not open to the AO to make additions on some other ground such as the disallowance of the deduction under section 36(1) (viia) without first issuing a note under section 148. 10. Hon ble Delhi High Court in the case of Ranbaxy Laboratory Pvt. Ltd. vs. CIT 336 ITR 136 similarly held that items of income said to have escaped assessment on which reassessment proposed not added but other deductions reduced not permissible . 11. Considering the above discussion, in .....

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