TMI Blog1978 (4) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... r alia, as follows : " (a) The original assessment for the assessment year 1963-64 was completed on 31st August, 1964, under s. 143(3) of the Act on a total income of Rs. 23,773. The assessee claimed to have received loans from various parties including loan of Rs. 25,000 from one Lachmi Narayan Atmaram (Bombay Office-Ram Gopal Nand Kishore) of P-36, India Exchange Place on 24th May, 1962, and of Rs. 35,000 from Goel Bros. of P-36, India Exchange Place on 10th May, 1962. Confirmation letters from the alleged creditors were filed and the assessment was completed accepting the assessee's claim about the genuineness of the said loans from the aforesaid two parties. (b) Subsequent to the completion of the original assessment information was received that one Rangabeharilal Atmaram Goel carrying on business in the name of M/s. Ramgopal Nand Kishore, Bombay, and in other names in different places, confessed before ITO, Bombay, about carrying on bogus Hawala transaction in various names one of them being Lachmi Narayan Atmaram, Calcutta. Copy of the two confessional statements of the said Sri Goel dated 2nd February, 1970, and 16th February, 1971, is enclosed and marked together as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 with M/s. Goel Bros. having its office at P-36, India Exchange Place, Calcutta-1, and the confirmation, has been signed by the same person as that of Laxminarayan Atmaram whose office is also located at P-36, India Exchange Place, Calcatta-1. I presume that this transaction may also be of the same party, i.e., R. L. A. Goel, and there is every possibility that this transaction is also not genuine. As the full confession is not with me it is not possible to ascertain if this Goel Bros. is the benami concern of R. L. A. Goel. However, as both the transactions relate to the same year, viz., 1963-64, and if the assessment is reopened u/s. 147(a) for transaction with M/s. Lachminarayan Atmaram, at the time of reassessment the transaction with Goel Bros. may be looked into if the transaction is genuine or not. " Therefore, the question is whether on these materials it could be said that there were materials to form the belief that the income of the assessee had escaped assessment as a result of the failure or omission on the part of the assessee to disclose either fully or truly any material or relevant fact. The confessions were alleged to have been made by one Rangabeharilal Atmara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents received a notice dated February 23, 1972, issued by the ITO under s. 148 of the Act. By the said notice, the ITO purported to reopen the assessment of the respondent for the assessment year 1963-64. It was alleged in the notice that the ITO had reason to believe that the respondent's income chargeable to income-tax for the said assessment year had escaped assessment within the meaning of s. 147 of the Act. The respondent, by its application dated March 28, 1972, filed before the ITO, asserted that there was no material in the possession of the ITO for the formation of a reasonable belief that the income of the respondent chargeable to tax had escaped assessment for the said assessment year 1963-64. As the ITO overruled the said contention of the respondent and directed him to file a return of its income for the said assessment year, the respondent moved a writ petition in this court and obtained a rule nisi out of which this appeal arises. In the writ petition, the respondent challenged the authority of the ITO to reopen the assessment under s. 147(a) of the Act. The appellants, who are the income-tax authorities, opposed the said rule and filed an affidavit-in-oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which I could not give you the details as the account books had been lost. I say that in view of the loss of my account books, I have not been able to complete the lists of non-genuine money transactions as well as genuine money transactions. I say that I have already submitted the lists of most of the parties of non-genuine money transactions as well as genuine money transactions but I say that there are still some parties left to whom I had lent my name and also some with whom I have had genuine money transactions. I could not complete the record as my account books had been lost, and I hope that I will be able to complete such lists by 15th March, 1971. I shall also complete the list of genuine money transactions by that date. " The ITO submitted a report to the CIT, West Bengal. The said report, inter alia, contained the following statement : " At the time of original assessment, income of Rs. 25,000 from business has not been disclosed by the assessee. I have reason to believe that for this failure and/or omission on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, the above income has escaped assessment. " The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remote and farfetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. " In the instant case also, we do not find that there is any direct nexus or live link between the material which came to the notice of the ITO and the formation of his belief that there has been escapement of the income of the respondent from assessment in the particular year because of his failure to disclose fully and truly all the material facts. As has been stated already, there is no indication whatsoever in the confessional statements made by the said Sri Goel on which reliance was placed by the ITO, that he had carried on a bogus loan transaction with the respondent in the name of the firm Lachminarayan Atmaram, Calcutta. The appellants have not also disclosed the lists of genuine transactions which were submitted by the said Sri Goel to the ITO, Bombay. In these circumstances, we agree with the view taken by the learned judge that the ITO had no material before him so that he could form a reasonable belief that the income of the respondent had escaped assessment in the assessment year 1963-64. Mr. Pal, learned advocate appearing on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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