TMI Blog2022 (9) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome earned by the assessee. But nowhere AO has applied his own mind before issuing notice and to arrive at conclusion that assessee has escaped an income and on the basis of report submitted by the Investigation Wing, AO issued notice purely on borrowed satisfaction. In our considered opinion, in such case addition cannot be made. Appeal filed by the Assessee is partly allowed. Disallowance u/s 14A - Assessee has not submitted any evidence regarding sources and applications in support of its contention that there is a direct nexus between utilization of interest free funds and investigation made by it. In our considered opinion, disallowance under S. 14A r.w. Rule 8D was correctly worked out. The assessee has not disallowed any expenditure for earning exempt income in P L account, which does not form part of total income. Further, the assessee has paid interest of Rs.2,36,887/- and assessee has made average investment of Rs.63,85,900/- and having average assets of Rs.2,00,64,030/-. In our considered opinion, learned AO has rightly made disallowance under S.14A r.w. Rule 8D. In view of the above, we concur the decision of the lower authorities and dismiss this ground of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of section 2(47) (v) of the Act nor was there any transfer of property within the meaning of section 53A of the Transfer of Property Act. Such conclusion was derived on the ground that banakhat dated 16.03.2009 entered by assessee to acquire the property as well as possession agreement were simply on stamp paper of Rs. 100/- and were not registered. Therefore, loss of Rs. 34 lacs incurred on sale of said property and consequential set off said loss against profit earned in another land transaction was considered not genuine leading to escapement of income to the extent of loss of Rs.34 lacs. The assessee objected to the re-opening vide letter dated 11th June, 2014 and same are part of paper book at page nos. 62 to 64. The Assessing Officer passed order disposing of the objections of the assessee on 16.06.2014 and the same are part of paper book at Pages 69 to 72. Consequently, Assessing Officer passed assessment order u/s 143(3) r.w.s. 147 on 05.03.2015 wherein following additions/ disallowances were made and which are subject matter of appeal before us: (i) Disallowance of loss on sale of property - Rs. 34,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration of Rs. 1.46 crores and filed its return declaring same as capital gain - Same was processed under section 143(3) and an assessment order was passed - After four years, Assessing Officer issued a reopening notice on ground that an information was received from Dy. Commissioner that during course of search in case of one 'KS1 group it was found that said land was actually sold to said 'KS' group for sale consideration of Rs. 13.08 crores - Thus, differential amount was not shown by assessee in his return of income -Assessee contended that land was not sold by him to 'KS' group and land was sold to two individuals and later if those two individuals sold land to 'KS' group then same had nothing to do with transaction of sale between assessee and two individuals - It was noted that it appeared from materials on record that assessee had been giving abovesaid contention from day one, however, Assessing Officer had kept a conspicuous silence in this regard - Further, source for all conclusions of Assessing Officer was information received from Dy. Commissioner and that too, based on a search and survey carried out at premises in case of 'KS1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer issued notices for reopening assessment on ground that petitioner entered into high value financial transactions and availed accommodation entries by way of bogus sale/purchases/fictitious loans - It was noted that there were no specific details recorded by Assessing Officer in reassessment notices related to particulars of nature of transaction and regard to name of person with whom such transactions were entered into -Whether since, Assessing Officer had mechanically relied on information provided by Investigation Wing and issued impugned notices without proper application of mind, same were to be quashed - Held, yes [Paras 10, 11 and 12] [In favour of assessee] (iv) Patel Engineering Ltd. v. Deputy Commissioner of Income-tax, Central Circle [2022] 136 taxmann.com 115 (Bombay) Section 147. read with section 148, of the Income-tax Act, 1961 - Income escaping assessment - Illustration/Non-disclosure of primary facts (Reasons to believe) - Notice under section 148 was issued seeking to reopen assessment in case of assessee - Entire basis, for reopening was that certain companies were accepting contracts and were subcontracting those contracts to other entities ..... X X X X Extracts X X X X X X X X Extracts X X X X
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