TMI Blog1990 (3) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Act, the income-tax Officer required the assessee to file a return in response to the said notice. The assessee requested the Income-tax Officer to give the reasons for his seeking to reopen the assessment and also the provision under which the assessment was being reopened. By his letter dated January 11, 1985, the Income-tax Officer informed the assessee that the assessment was re opened under section 147(b) of the Income-tax Act, 1961, and that the reason for reopening the assessment was that the assessee had disclosed during the course of the original assessment proceedings purchases of cloth mainly from Vardhman Trading Co. and Bajrang Overseas. Its sales were mainly to Chordia International. Both the parties from whom th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee were accepted without investigation. Subsequently, information was received that the assessee's purchasers as well as the sellers were bogus and were indulging in bogus havala transactions. This was, according to him, a piece of information received subsequent to the completion of the assessment. As to the question of direct nexus between the information and the formation of the belief, it was the case of Dr. Balasubramaniam that the provisions of section 147(a) were involved before the Supreme Court in Lakhmani Mewal Das' case [1976] 103 ITR 437. The observations were made in the context of whether the assessee had made a full and true disclosure, of relevant material and not in the context of formation of belief. Moreover, accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect nexus or live link with the formation of belief that the assessee's income chargeable to tax had escaped assessment. For this purpose, reference may once again be made to the reasons given by the Income-tax Officer in his letter dated January 11, 1985, to the assessee, namely, "Both the parties from whom purchases are made and also the party to whom sales are made are found to be non genuine parties and are known to have indulged in bogus havala transactions". There is no indication as to whether and in what context these parties were found to be non-genuine parties and how they were known to have indulged in bogus havala transactions. There is also no indication available from the information that those parties had stated that their tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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