TMI Blog2005 (2) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ny part of the income of the assessee had escaped assessment and that such escapement was by reason of omission or failure on the part of the assessee to disclose fully and truly all material facts. – revenue’s appeal dismissed - - - - - Dated:- 14-2-2005 - Judge(s) : S. RADHAKRISHNAN., J. P. DEVADHAR. JUDGMENT The judgment of the court was delivered by S. Radhakrishnan J.- This appeal is sought out of an order passed by the Income-tax Appellate Tribunal holding that the reopening under section 147 of the Income-tax Act, 1961, was not valid and thereby had directed deletion of the additions made to the assessment with regard to the respondent-assessee. The above matter raises the following substantial question of law for decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n pursuance thereof, the respondent-assessee had appeared before the Assessing Officer and produced various records to indicate various loans taken from various persons, however, the Assessing Officer did not accept the explanation with regard to the aforesaid loans and assessed the net taxable income at Rs. 2,90,000. Aggrieved thereby, the respondent-assessee has preferred an appeal before the Commissioner of Income-tax (Appeals), who by his order dated December 13,1994 came to the conclusion that the income ought to be assessed at Rs. 2,25,000. The assessee thereafter appeared before the Income-tax Appellate Tribunal, mainly contending that the officer had completed the assessment under section 143(1) of the Income-tax Act, though he ough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Bhujale, learned counsel appearing for the respondent brought to our notice a judgment of the Supreme Court in Ganga Saran and Sons P. Ltd. v. ITO [1981] 130 ITR 1, wherein the Supreme Court has interpreted the scope of section 147 of the Income-tax Act for the purpose of reopening. In this behalf, the following observation of the Supreme Court in the above judgment will be relevant: "It is well settled as a result of several decisions of this court that two distinct conditions must be satisfied before the Income-tax Officer can assume jurisdiction to issue notice under section 147(a). First, he must have reason to believe that the income of the assessee has escaped assessment and, secondly, he must have reason to believe that such esc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be struck down as invalid." Shri Bhujale, learned counsel for the respondent also referred to the judgment of our High Court in Dr. Amin's Pathology Laboratory v. P.N. Prasad, Joint CIT (No. 2) [2001] 252 ITR 683, wherein also this court has clearly held that the assessment could not have been reopened when there is no allegation of suppression of material facts, leading to the conclusion of escaping of income for the purpose of the assessment. Having heard Shri Desai, learned senior counsel for the appellant, as well as Shri Bhujale, learned counsel for the respondent, it is an admitted position that the assessee had invested a sum of Rs. 2,50,000 for the purpose of purchasing the flat and what was sought to be investigated was the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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