TMI Blog2022 (12) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... ined from Munjal B. Shah. Therefore, the account reflected that there was an element of income in the transaction. The question of escapment of income chargeable to tax did not arise. The assessing officer misdirected himself in invoking powers to reopen the assessment Undisputedly powers to reopen the assessment were exercised beyond four years from the end of the relevant assessment year. Therefore the First Proviso to section 147 of the Act would require the assessing officer to establish that the assessee had failed to fully and truly disclose all material facts. As in the communication whereby the reasons recorded were supplied, no satisfaction was recorded by the assessing officer that the income chargeable to tax has escaped assessment. Not only the said requirement was not satisfied, but as seen above, there was no actual escapment of income as well. The formation of opinion by the assessing officer for the purpose of exercise of powers to reopen the assessment could be said to have been vitiated to be rendered bad in law. For all the aforesaid reasons, the petitioner is entitled to succeed. - R/SPECIAL CIVIL APPLICATION NO. 18110 OF 2019 - - - Dated:- 5-9-2022 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l transaction during the FY 2012-13 relating to A.Y.2013-14 as per the information received from DDIT (Inv). Unit-1(1), Ahmedabad. According to the said information, there are three major financial transactions in the savings bank account of the assessee amounting to Rs.1,40,00,000/- during the F.Y.2012-13 relating to A.Y.2013-14. The assessee's account has been credited by this amount in total three transactions on various dates from the account of Sarthak Enterprises and debited the same amount on the same dates to the account of Munjal B. Shah. The office of DDIT (Inv), Unit-1(1), Ahmedabad has called for the bank statement of the assessee from Bank of India, Panchvati Branch, Ahmedabad and verified the same. On verification of the bank statement of the assessee, it was noticed that these transactions are correct. Accordingly, summons u/s.133 (1A) of the 1.T.Act was issued to the assessee and the details were called for. On verification of submissions filed by the assessee, it is revealed that the amount of Rs.1,40,00,000/- which is in question, remains unexplained in the hands of the assessee. 3.3 In the objections dated 9.9.2019, the assessee pointed out that transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mujal B. Shah. It was contended that the petitioner did not file any return of income though he had invested huge amount in the Sarthak Enterprises as partner of the firm. It was contended that after recording appropriate satisfaction regarding reasons to believe about escapment of income that the assessing officer took the necessary approval from the competent authority and proceeded to issue notice under section 148 of the Act. 4.1 It was submitted that prima facie material was available to arrive at subjective satisfaction and to have reasons to believe that the income had escaped the assessment. It was further submitted that the return of the income filed by the lenders of money-M/s. Sarthak Enterprises which was a partnership firm for the assessment year 2012-2013 showed Nil income and for assessment year 2013-2014 income of Rs. 16000/- only was shown. It was submitted that similar was the position in respect of the said Munjal Shah to whom the petitioner claimed to have returned the loan amount. It was submitted that there were high value transactions at the end of the petitioner and that substantial income was omitted to be taxed. In support of his submissions, learned s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... summons under section 131(1A) of the Act dated 16.08.2018, the petitioner explained that there was a development agreement entered into between M/s. Sarthak Enterprise and M/s. Savy Unispace Pvt. Ltd. M/s. Sarthak Enterprise received certain amountg as advances from M/s. Savy Unispace Pvt. Ltd. which was partially withdrawn by the petitioner who was partner in the firm M/s. Sarthak Enterprise. The petitioner produced copy of the account from M/s. Sarthak Enterprise alongwith copies of acknowledgment of the returns filed by the firm, copies of accounts of M/s. Savy Unispace Pvt. Ltd was also produced and the bank account of M/s. Savy Unispace Pvt. Ltd was also shown duly reflecting the source of M/s. Sarthak Enterprise for made to the petitioner. 6. The above facts show that the amount was received by the petitioner as partners capital. The amount received had a valid source. The petitioner utilised the amount for repayment of loan obtained from Munjal B. Shah. Therefore, the account reflected that there was an element of income in the transaction. The question of escapment of income chargeable to tax did not arise. The assessing officer misdirected himself in invoking powers to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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