1. AGR INVESTMENT LTD VS. ADDL. COMMISSIONER OF INCOME TAX AND ANOTHER, WP(C) NO.7517/2010, JUDGMENT PRONOUNCED ON: 7TH JANUARY, 2011, HIGH COURT OF DELHI AT NEW DELHI
The
petitioner is desirous of adjudication by the writ court with regard to
the merits of the controversy. In fact, the petitioner requires this
Court to adjudge the sufficiency of the material and to make a roving
enquiry that the initiation of proceedings under Sections 147 and 148
of the Act is not tenable.
Brief Facts
The
assessing officer has assumed jurisdiction to initiate the proceedings
under Section 147 and issued notice under Section 148 of the Act solely
on the basis of certain statements recorded by the Directorate of
Investigation without forming an independent opinion. It is urged by
him that the expression used in Section 147 of the Act is „reason to
believe‟ and not „reason to suspect‟
and it is the settled legal position that there should be direct nexus
or live link between the materials relied upon by the revenue and the
belief that income has escaped assessment. It is contended that on a
bare reading of the reason to believe, it is evident that the
jurisdiction to reassess the income has been assumed on the basis of
unspecific and vague information which cannot justify the formation of
the belief or the reason to believe that income has escaped assessment.
The entire foundation of the belief that the income has escaped
assessment is that “certain investigations were carried out by the
Directorate of Investigation, Jhandewalan” though no particulars had
been given on what basis the Directorate of Investigation had come to
the conclusion that accommodation entries were given to the petitioner.
It is urged that no details of the persons who supposedly alleged that
the transactions of the petitioner were bogus were provided and further
the nature of the alleged accommodation entries have not been referred
to in the reason to believe. In essence, the submission in this regard
is that there is complete absence of material which can be said to have
a live link with or be the basis of formation of the purported belief
or reason to believe that the petitioner‟s
income had escaped assessment. The allegation that the transactions
entered into by the petitioner were bogus is totally without any
substance in the absence of any materials/details provided.
Judgement
The
petitioner is desirous of adjudication by the writ court with regard to
the merits of the controversy. In fact, the petitioner requires this
Court to adjudge the sufficiency of the material and to make a roving
enquiry that the initiation of proceedings under Sections 147 and 148
of the Act is not tenable. The same does not come within the ambit and
sweep of exercise of power under Article 226 of the Constitution of
India. It is open to the assessee to participate in the re-assessment
proceedings and put forth its stand and stance in detail to satisfy the
assessing officer that there was no escapement of taxable income. We
may hasten to clarify that any observation made in this order shall not
work to the detriment of the plea put forth by the assessee during the
re-assessment proceedings.
(Please click here for judgment)
2. GURUPRERNA ENTERPRISES Vs. ASSTT. CIT, I.T.A. Nos 255, 256 & 257/Mum/2010. (ITAT- MUMBAI) (BANCH-‘G’)
Whether
the initiation of proceedings u/s 153C is bad in law, when during the
course of search operation on premises of person and its concerns, a
joint venture agreement entered into between two parties and assessee
(M/s Guruprerna Enterprises) was seized. The contention of the assessee
was that this is a disclosed documents and it is also undisputed fact
that no incriminating material or evidences indicating unaccounted
income, transactions or assets relating to the assessee were found.
Held_that_“A
joint venture agreement was found in which the assessee is a party. The
assessee has certain rights and duties as per terms and conditions of
this agreement. It cannot be said that the agreement does not belong to
him. In our humble opinion, the joint venture agreement belongs to all
three parties. As the agreement which is seized also belongs to the
assessee, in our opinion, the judgment of the Hon’ble Gujart High Court
in the case of Vijay Bhai N. Chandrani (supra) and in the case of
Meghmani Organics Ltd. (supra) does not apply.”
And
Further held that Under Section 153A
“only the assessments pending before the AO for completion shall abate
and that under section 153A the issues decided in the assessment cannot
be reconsidered and re adjudicate, unless there is some fresh material
found during the course of search in relation to such points”.
(Please click here for judgment)
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