TMI Blog2024 (3) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... us operandi - HELD THAT:- The condition precedent of reason to believe that income chargeable to tax has escaped assessment on correct facts must be satisfied by the AO, who has to have jurisdiction to issue the reopening notice. Even when Assessee has pointed out that her relationship with Karnawat Impex P. Ltd. was only as the jeweller and a customer, payments have been made by cheque and the jewellery bought have been disclosed in the wealth tax returns filed, the AO instead of making a bald statement that payment through cheques does not sanctify, should have brought evidence or confronted Petitioner with evidence to the contrary. Therefore, it would be safe to conclude that the AO, not having done that, did not dispute the facts stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 under Section 147 of the Income Tax Act, 1961. The assessment year is 2009-2010. The reasons for reopening the assessment are that certain transactions allegedly benami and in the nature of Hawala were not revealed at the relevant time and information with regard to which was available later on. If these transactions are carefully examined and scrutinized, according to the Revenue, the income escaped from tax can be assessed and computed. 2. Our attention is invited to the documents which were supplied during the course of assessment and copies of the same including bank statements have been produced with a communication. The copy of the communication in that regard is at page 60 of the paper book. Prima facie, a scrutiny thereof will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt . On 30th July 2009, Petitioner filed her wealth tax return for AY 2009-2010 showing wealth of Rs. 3,53,38,700/- and paid tax thereon. 5. Petitioner s case was selected for scrutiny assessment and queries were raised. By a letter dated 24th November 2011, Petitioner filed details of purchase of mutual funds, long term capital gains, copy of wealth tax return, bank statements, etc. Petitioner also filed a detailed reply dated 30th November 2011 with regard to the receipt of liquidated damages being treated as capital receipt not chargeable to tax and the same being reduced from cost of the shares as per Section 51 of the Income Tax Act, 1961 ( the Act ). 6. An assessment order dated 14th December 2011 under Section 143(3) of the Act c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings. 9. By an order dated 20th June 2016, the objections were rejected without dealing with the factual assertions made by Petitioner. The AO states that just because payments were made through banking channel does not sanctify the transaction and submission of purchase and sales bills cannot legitimize the transactions, as the same evidence points to the issuing of accommodation bills as a part of this modus operandi. No other reason or basis to come to such conclusion is given. 10. We would agree with Mr. Kamdar that the AO acquires jurisdiction to issue a reopening notice only when he has reason to believe that income chargeable to tax has escaped assessment. If Assessee offers explanation with documentary evidence, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced by a letter dated 30th November 2011, query was raised regarding these liquidated damages and Petitioner has given detailed response. Subsequently, an assessment order dated 14th December 2011 has been passed under Section 143(3) of the Act accepting the returned income. Therefore, on the facts as found, there could be no reason for AO to believe that income chargeable to tax has escaped assessment. 11. In the circumstances, Rule issued on 7th October 2016, is made absolute in terms of prayer clause (a), which reads as under : (a) this Hon'ble Court may be pleased to issue a Writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India callin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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