No Reason To Believe Income Chargeable To Tax Escaped Assessment: Gujarat High Court Quashes Income Tax Notice
Case: Bhagwati Polyfill Pvt. Ltd. Versus The Assistant Commissioner Of Income Tax
Coram: Justice Biren Vaishnav and Bhargav D Karia
Case No.: R/Special Civil Application No. 17669 Of 2019
Court Observation: “Perusal of the reasons would indicate that except making a statement that the petitioner had an access with Shri Kamal Zaveri and that the tainted concerns, namely, Jay Traders and Shubham Enterprise were conduits for securing unsecured loans. No material came forth in terms of any statement or details to pin-point a live link or a nexus of the petitioner with the transaction in question.”
“Apparently, the reasons were suggesting that it was a case where the revenue merely entered into a roving and fishing inquiry without any material on record. It was merely based on suspicion, especially when the exercise has been undertaken in light of the scrutiny assessment so done. There was no tangible material so as to come to a conclusion or “reason to believe that the income chargeable to tax has escaped assessment”
“What is therefore evident from perusal of the material and the disclosure of income and the questions which were asked and respondend to by the petitioner in the scrutiny assessment would indicate that there was ample justification brought out by the petitioner in the context of unsecured loans.”
“For the aforesaid reasons, the notice dated 30.04.2019 issued under Section 148 of the Income-Tax Act, 1961 for the Assessment Year 2012-13, is hereby quashed and set aside. The petition is allowed, accordingly. Rule is made absolute accordingly,”
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