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TMI Blog2018 (1) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... n u/s 147 without properly appreciating the facts & circumstances of the case. 2. That the ld. CIT(A) has erred in law & facts in confirming an addition of Rs. 1150353/- by declining u/s 54F without properly appreciating the facts & circumstances of the case. 3. Because the ld. CIT(A) has erred in law & facts in making an addition of Rs. 86,432/- on account of alleged FDR interest without properly appreciating the facts & circumstances of the case." 2. The ld. Counsel for the assessee modified Ground No.1, vide application dated 12.12.2017, which is reproduced hereunder: "Because the ld. AO & CIT(A) have erred in law in assuming jurisdiction u/s 147 without properly appreciating the facts of the case more so when: a) The time f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und to the tune of Rs. 11,24,308 in the year in question. This refund was due to him because the department had encashed the FDR's seized in the course of search. These FDR's pertained to be undersigned & also his family members. Apart from these FDR's which were seized in course of search operations, cash to the time of Rs. 15,00,000 was also created by the department which belonged to M/s Gupta Academics Pvt. Ltd. The entire seizure was made in the punchnama of the undersigned and therefore only the undersigned was emitted to the refund. In spite of the fact that refund has not been received in totality yet on the basis of the assets impounded of different persons, the proportionate interest was paid to the actual owners of im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted this fact that no addition can be made on the reasons recorded on the issue of interest income amounting to Rs. 11,24,308/- paid by the Department by observing in Para 5.4 of the impugned order, as follows: - "5.4 I have gone through the assessment order, submission of the assessee and legal position in this regard. A search had taken place on the appellant's group in which certain FDRs were seized and these FDRs were encashed. Later this interest amounting to Rs. 11,24,308/- was paid to the appellant by the department. The appellant had shown interest amounting to Rs. 3,73,578/- in his computation of income, a fact that is not disputed, Balance interest amounting to Rs. 7,50,730/- was added by the Assessing Officer in the han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such, no more existed. The assessee's counsel contended that if two reasonable constructions of a taxing provision are possible, the construction which favors the assessee must be adopted. This is an accepted rule of construction recognized by the courts is several to is decision. For this purpose, he relied on the following decisions: 1. CIT Vs. Jet Airways (I) Ltd. 331 ITR 236 (Bom.) 2. Ranbaxy Lab Ltd. vs. CIT 336 ITR 136 (Del.) 9. The ld. DR relied upon the order of the Assessing Officer and contending that once the validity of the notice is survived the assessment is open to make addition on any account for which no reasons have been recorded. The Explanation-3 to Section 147 is inserted to provide that AO may assess or reasses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formed a reason to believe that it has escaped escapement, has, as a matter of fact, not escaped assessment, it is not open to him to indirectly assess some other income. 12. Similar view is taken by the Hon'ble Delhi High Court in the case of Ranbaxy Lab Ltd. (Supra), holding that there must be some nexus between "reason to believe" recorded and the assessment framed. In this case also, the AO had not made any addition on the basis of reasons recorded and try to reduce other valid claim of the assessee allowed during the assessment u/s 143(3) of the Act. 13. Neither of the judgments as above, referred by the ld. Sr DR have been rendered by the jurisdictional High Court so far assessee is concerned. In such a situation, it is well settle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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