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TMI Blog2023 (2) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the AO: On the basis of material available on record it is seen that the assessee has disclosed payment of advance of Rs. 17,76,08,505/- to M/s Nancy Builders and Developers Pvt Ltd. The assessee had paid the said amount for acquiring development rights in a property which has been acquired by them from one M/s Goel Ganga Developers India Pvt Ltd. A MOU (Memorandum of Understanding) between Goel Ganga Developers Private Limited and Nancy Builders and Developers Private Limited was entered into on 09/09/2011. Further it is noticed that the assessee entered into a MOU on 05/04/2012 with M/s Nancy Builders and Developers to acquire the development rights acquired by them from M/s Goel Ganga Developers Private Limited. Considering the above facts of the case, it is established that MOU is only a colourable device to transfer the money to M/s Nancy Builders as there is no agreement between the assessee and the original owner for transfer of the said development rights. Therefore, such transaction is to be treated as unexplained investment u/s 69 and brought to taxation. (3) Analysis of information collected/received: On perusal of the records it is seen that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment year under consideration. It is pertinent to mention here that reasons to believe that income has escaped assessment for the year under consideration have been recorded above. I have carefully considered the assessment records containing the submissions made by the assessee in response to various notices issued during the assessment proceedings and have noted that full and true disclosures of material facts have not been made and thereby necessitating re-opening of assessment u/s 147 of the Act. It is evident from the above facts that the assessee has not truly and fully disclosed material facts necessary for its assessment for the year under consideration thereby necessitating reopening u/s 147 of the Act. It is true that assessee has fled a copy of annual report and audited P/L account and balance sheet alongwith the return of income where various information/material were disclosed. However the requisite full and true disclosures for the assessment were not made as noted above. It was only after investigation carried out by the department it was estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein the Petitioner assessee submitted as under: "3.1 The details of Loans/Advances given are stated in Schedule I to Audited Balance Sheet (Refer Page 38 of Compilation). A sum of Rs.17,76,08,505/- is receivable from our sister concern Nancy Builders & Developers Pvt. Ltd. 3.2 This amount is paid towards Purchase of Development Rights in land at Pune from Goel Ganga Developers Pvt. Ltd. The advance paid by us is purely of commercial nature since we intended to develop this land jointly with Nancy Builders & Developers Pvt. Ltd." Not only this in continuation of the earlier submissions, the Petitioner further vide communication dated 22nd December, 2017 submitted inter alia, as under: "2.1 It can be seen from our Balance sheet that sum of Rs.17,76,08,505/- is appearing under the head 'Loans & Advances'. (Sch.-J in Audited Balance Sheet) This amount is paid as advance to 'Nancy Builders & Developers Pvt. Ltd. The said 'Nancy Builders & Developers Pvt. Ltd. (hereinafter referred as the said company) had acquired rights in property being Plot B out of S.No. 22, Hissa No. 2 Kharadi, Pune area adm. 18427.87 sq.mtrs from Goel Ganga Developers (India) Pvt. Ltd. (hereinafter r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to the words "reason to believe" failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But reassessment has to be based on fulfllment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1-4-1989, Assessing Officer has power to re-open, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief......" In fact, the Supreme Court in Kelvinator of India Ltd. (Supra) upheld the Full Bench decision of Delhi High Court in Commissioner of Income-tax Vs. Kelvinator of India Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment. Thus, it is a case of mere change of opinion which does not provide jurisdiction to the Assessing Officer to initiate proceedings under Section 147 of the Act." 7. It is also equally well settled that if a notice under Section 148 has been issued without the jurisdictional foundation under Section 147 being available to the Assessing Officer, the notice and the subsequent proceedings will be without jurisdiction, liable to be struck down in exercise of writ jurisdiction of this court. If "reason to believe" be available, the writ court will not exercise its power of judicial review to go into the sufficiency or adequacy of the material available. However, the present one is not a case of testing the sufficiency of material available. It is a case of absence of material and hence the absence of jurisdiction in the Assessing Officer to initiate the proceedings under Section 147/148 of the Act." 8. Testing the facts of the present case on the on the touchstone of the judgment referred to hereinabove, it can be seen that the issue of 'Large Loans/Advances', was not only raised during the scrutiny assessment, but the same was responded to specifically by the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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