TMI Blog2020 (2) TMI 1382X X X X Extracts X X X X X X X X Extracts X X X X ..... e ORDER PER D. KARUNAKARA RAO, AM: There are four appeals under consideration. All the four appeals are directed against the common orders of the CIT(A)-1, Kolhapur dated 28.08.2019 for the assessment years 2005-06, 2006-07, 2008-09 and 2009-10 respectively. Since the facts and issues are common in both the appeals, therefore, these were heard together and are being disposed of by this composite order. ITA No.1740/PUN/2019 A.Y. 2005-06 2. We shall take up the appeal in ITA No.1740/PUN/2019 for narrating the facts and adjudicating the issue. Briefly stated that relevant facts include that the assessee claims engaged in trading activities of turmeric and filed the return of income declaring total income of ₹ 1,99,500/- in the individual capacity. At the end of the reassessment u/s 143(3) r.w.s. 147 of the Act, the Assessing Officer made the addition u/s 68 of the Act. The CIT(A) confirmed the action of the Assessing Officer and dismissed the appeal of the assessee. 3. Aggrieved with the above decision of the CIT(A), the assessee is in appeal before the Tribunal with the following grounds :- 1. In the facts and circumstances of the case and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arsha Housing Society. Again, one flat is learned to be booked in the name of Shri Gajanan S. Koli, where apparently it is believed that Shri Sunil K. Gidwani, son of Kanhiyalal Gidwani, has lent finance to purchase the same. All payments for the same were apparently made through Gidwani Family's various bank accounts in which apparently cash amounts were deposited and the same were transferred into the accounts of Gidwani's wife, son and daughter-in-law in HDFC Bank at Worli. Thereafter the said amounts were apparently transferred into the account of M/s Jay Maharashtra CPL, HFDC Bank, Worli, in which Gidwani's sons are directors for making payments towards cost of the flats. Shri Kailash Kanhiyalal Gidwani, who is assessed to tax in individual as well as in HUF capacity in this office, has been allotted flat No.2702 on 27th Floor, in Wing- A. He has paid an amount of ₹ 56,05,037/- towards the above flat between the period Feb. 2003, to August, 2010. 2. Therefore, verification of investment made by Shri Kailash Gidwani in his HUF capacity, through his various bank accounts, is necessary to unearth the undisclosed' income. Therefore in view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn has been processed under Section 143(1) of the Act. 8. In the present case it is required to be noted that by the impugned notice, the assessment for AY 2005-06 is sought to be reopened in exercise of power under Section 147 of the I.T Act. The reasons recorded to reopen the assessment are as under : According to information gathered from informed sources, local enquiries and media reports, it has come to be known that Shri Karihaiyalal Gidwani, owns three flats, one in his name and two in the names of his two sons - Kailash and Amit in .the Adarsha Housing Society. Again, one flat is learned to be booked in the name of Shri Gajanan S. Koli, where apparently it is believed that Shri Sunil K. Gidwani, son of Kanhiyalal Gidwani, has lent finance to purchase the same. All payments for the same were apparently made through Gidwani Family's various bank accounts in which apparently cash amounts were deposited and the same were transferred into the accounts of Gidwani's wife, son and daughter-in-law in HDFC Bank at Worli. Thereafter the said amounts were apparently transferred into the account of Ms. Jay Maharashtra CPL, HFDC Bank, Worli, in which Gidwariis sons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extent of loan given has escaped assessment. 9. So far as the proposition of the Ld DR to the effect that when a return of income is processed u/s 143(1) of the Act, the Revenue has greated latitude in reopening an assessment is concerned, I fully agree only to that extent with the aforesaid proposition but at the same time various high courts have held that, even in such cases, where return of income is processed u/s 143(1) of the Act, the reopening of an assessment can only be done if there is reason to believe that income chargeable to tax has escaped assessment. Here it would be relevant to refer to the observations of Hon ble Delhi High Court in the case of CIT Vs. Orient Craft Ltd reported in [2013] 29 taxmann.com 392 (Delhi) wherein the Hon ble High Court has observed that the expression reason to believe cannot have two different standards or sets of meaning, one applicable where the assessment was earlier made u/s 143(3) of the Act and the other applicable where an intimation was earlier issued u/s 143(1) of the Act. It observed that it is open to the assessee to contend that notwithstanding that the argument of change of opinion is not available to him, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent case was not justified in taking recourse to the provisions of s. 147 of the Act and therefore the initiation of reassessment proceedings are not in accordance with law. I therefore set aside the initiation of reassessment proceedings and the consequential assessment order . Thus, the grounds of the assessee in ITA No. 302/PUN/2019 for A.Y. 2005-06 is allowed. 8. Considering the above decision of the Tribunal (supra), I am of the view that the Assessing Officer was not justified in taking recourse to the provisions of section 147 of the Act and therefore, the initiation of reassessment proceedings are not in accordance with law. Therefore, following the rule of consistency, I set-aside the initiation of reassessment proceedings and the consequential assessment. Thus, the legal ground raised by the assessee by way of ground no.1 is allowed. 9. Considering the relief granted to the assessee on the legal issue, the adjudication of the other merits related grounds becomes academic exercise only. Thus, the other grounds raised by the assessee are dismissed as academic. 10. In the result, the appeal of the assessee in ITA No.1740/PUN/2019 is partly allowed. ITA No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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