TMI Blog2023 (3) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... ade from undisclosed sources AO appears has proceeded to form his belief of escapement of income in the present case on an implausible premise. His premise that the investments during the year are sourced from the incomes earned during year suffers from a basic fallacy. In fact, this information could not have even lead to suspicion about the income having escaped assessment. AO needed to conduct some more inquiry, determine the quantum of income which the assessee had been returning in the past years, and whether considering his life style and other factors he could have reasonably accumulated the amount to the extent of Rs.10 lakhs for making investment in LIC premium. He ought to have sought explanation from the assessee of the source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for short), dated 24.6.2019 pertaining to Asst.Year2011-12. 2. The assessee has raised following grounds: i) The order passed by the Ld. CIT (A) is against law, equity justice. ii) The Ld. A.O. has erred in law and on facts in upholding validity of reopening of assessment. iii) The reopening of assessment is bad and illegal as the reasons does not reflect that the income having escaped assessment is more than rupees one lakh or likely to be more than rupees one lakh as laid down under the provisions of s. 149(1)(b) of Act as reopening is made beyond four years. iv) The Ld. CIT(A) has erred in law and on facts in upholding addition of Rs. 10,00,000/~ The appellant Craves liberty to add, amend, alter or modify all or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unexplained. . 5. As is evident from the above, reopening was resorted to on the basis of information that the assessee had made investment by way of LIC premium amounting to Rs.10.00 lakhs which was far in excess of the income returned during the year by the assessee amounting to Rs.3,20,365/-. Since this amount invested was not commensurate with the income returned by the assessee, the AO was of the belief that investment was from undisclosed sources, tantamounting to income to the said extent escaping assessment. 6. We are in agreement with the ld.counsel for the assessee that the information with the AO was insufficient for forming a belief of escapement of income. In other words on the basis of information in the possession of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention of the ld.counsel for the assessee that the information in the possession of the AO could not have lead to belief of escapement of income so as to assume valid jurisdiction to reopening the case of the assessee under section 147 of the Act. 8. The ld.CIT(A), I have noted, has not dealt with this contention of the assessee in the right perspective. His finding at para 6.2 of his order is as under: 6.2 The appellant has also objected reassessment notice and reasons recorded by AO on the ground that such reasons are very vague. It was stated by appellant that AO has issued such notice only for investment made by him and not for income. The Appellant stated that AO is duty bound to disclose income element out of such paym ..... X X X X Extracts X X X X X X X X Extracts X X X X
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