TMI Blog2023 (3) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... have sought explanation from the assessee of the source of investment, and if his inquiries and investigation would have not satisfied him only in such circumstances, the AO could have formed belief of escapement of income on account of source investment in LIC premium remaining unexplained. I am therefore in complete agreement with 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. CIT(A) has proceeded on the exactly wrong premise as that on which the AO had proceeded that the source of investments is to be co-related or explained thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as per the observations of the Assessing Officer. Hence, the amount of Rs. 10,00,000/- was chargeable to tax for A.Y. 2011-12. The case was reopened under Section 147 of the Income Tax Act, 1961 with previous approval of higher authorities and after recording the reasons notice under Section 148 of the Act was issued on 30.03.2018 for filing the return of income. Show-cause notice was issued on 11.10.2018 and thereafter after taking submissions of the assessee the Assessing Officer made addition of Rs. 10,00,000/- as unexplained investment. 4. Being aggrieved by the assessment order the assessee filed before the CIT(A). The CIT(A) dismiss the appeal of the assessee. 5. At the time of hearing the Ld. A.R. submitted that in case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g reasons, reopening of assessment is void, illegal and not tenable in the eyes of law. Assessee relies on following judicial pronouncements: (1) Hon'ble Gujarat High court in the case of Bakulbhai Ramanlal Patel vs. Income Tax Officer 56 DTR 0212 (Guj) (2) Hon'ble High Court of Karnataka in the case of Novo Nordisk India (P) Ltd V/s Deputy Commissioner of Income tax, Circle 12(2), Bengaluru-[2018] 95 taxmann.com 225 (Karnataka) (3) Hon'ble ITAT Ahmedabad in the case of Shri Sumer S Sanghvi Ahmedabad vs The Asstt. Commissioner of Income ITA.No 1424/Ahd/2016 dated 06.02.2020 Considering the facts of the case and above cited judicial pronouncements your honour is requested to quash the assessment order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annexed at Pg No.22 of Paperbook. Summary of funds for payment of premium is as under: Particulars Amount Opening Bank Balance 47,132 Add: Net Cash Deposit 7,54,731 Add: Saving Bank Interest 137 Add: Receipt through cheque 2,00,000 Premium Paid 10,02,000 Assessee has deposited cash out of agricultural income. Considering the facts of the case your honour is requested to delete the addition made by Ld AO. 6. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year. Investments can be made from past earnings /savings also. Therefore merely because income returned for the year was not sufficient to justify investment in LIC premium, it cannot be inferred that the investment was made from undisclosed sources. The AO it 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. The AO needed to conduct some more inquiry, determine the quantum of income which the assessee had been returning in the past years, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant has no sources for making such investment or there is insufficiency of funds, it mean that appellant has made investment out of unaccounted income/funds. The amount of investment which is not explained by appellant for disclosed sources always represent undisclosed income and income element in such payment definitely exist. There is no vague reasons as claimed by the appellant because AO has verified details of investment, when such investment is sold, computation of total income and he found that appellant has no sufficient sources to make such investment, hence this is prima facie good case for issuing notice u/s 148 of the Act. 9. As is evident from the above, the ld.CIT(A) has proceeded on the exactly wrong premise as that on w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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