9911796707
TMI Blog2020 (2) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... That Id. CIT(A) grossly erred in sustaining validity of notice u/s 148 against the provision of law read with the decision of binding authorities. 3. That Id. CIT(A) further erred in not appreciating the fact that notice u/s 148 is beyond jurisdiction, being issued without any application of mind/satisfaction of Id. AO/approving authority sheerly to conduct roving enquiries when no addition is made by AO on the basis of reasons recorded. 4. That, without prejudice to above and only as alterative on merits, Id. CIT(A) erred in sustaining addition of Rs. 11,78,304/- u/s 2(22)(e), on a business transaction by wrongly branding same as loan, beside even computation of disallowance is also wrong." 3. Brief facts of the case shows that ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequently the AO issued notice under section 2 (22) (e) of the act that why Rs. 20 Lakhs should not be taken as a deemed dividend income in the hands of the assessee. The assessee explained that Company is operating the business of event management personally and gave a contract for providing the services of the event expenses to the assessee, who was a director of the company.Assessee supplied the services related to event management services to the company and company has paid the amount towards the services to other person on behalf of the assessee and therefore the above sum is not a deemed dividend but is on account of business transaction. It was further stated that above sum cannot be treated as a loan or advance. The learned asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration of event management and the payment has been received from the company against the sale and services is merely a concocted story and afterthought just to avoid the deemed dividend income in the hands of the assessee. Therefore, he made an addition of Rs, 1178304/- in the hands of the assessee as deemed dividend. He further found that assessee has filed his return of income showing that salary income of Rs. 3 80000 therefore to the net returned income as per ITR of Rs. 1 47490/-. He further made an addition of Rs. 3 80000/-. Accordingly the total income of the assessee was determined at Rs. 1 705794/- and passed an order under section 143 (3) of the income tax act on 27/12/2017. 5. Assessee being aggrieved with the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the assessee from that company and therefore it cannot be taxed in the hands of the assessee as a deemed dividend. 7. The learned departmental representative eminently supported the order of the learned lower authorities 8. We have carefully considered the rival contention and perused the orders of the lower authorities. As per the reasons recorded for reopening of the assessment which is placed at page number 20 of the paper book reads as under:- "In this case permanent account number information has been received that the assessee has purchased immovable property of Rs. 40 Lakhs during financial year 2009 - 10 relevant assessment year 2010 - 11. To verify the transaction, very letters were issued to the assessee to furnish part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed for adjusting the income of the assessee. On reading of the provisions of section 147 and explanation 3 to that section, it is mandatory that for the purpose of assessment or reassessment, the assessing officer may assess reassess the income in respect of any issue, which has escaped the assessment and also , such issue comes to his notice subsequently in the course of the assessment proceedings, notwithstanding that the reasons for such issue has not been included in the reasons recorded under section 148 of the income tax act. Therefore it is apparent that if for the reasons the case of the assessee is reopened does not result into any addition on that account, the AO cannot make any addition on any other issue in reopened the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 147 and the issuance of a notice under section 148(2) must assess or reassess : (i)such income ; and also (ii) any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. Explanation 3 does not and cannot override the necessity of fulfilling the conditions set out in the substantive part of section 147. Section 147 has this effect that the Assessing Officer has to assess or reassess the income ("such income") which escaped assessment and which was the basis of the formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which comes to his notice during the course of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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