Opinion Of Eminent Legal Luminaries On Controversial Issues

Whether Reopening Of Assessment Is Valid Without Any Corroborative Assessment?

QUERY: Whether an A.O. can assess the income in the hands of an assessee buyer u/s. 148 merely because the builder from whom he bought some property 3 years ago has NOW surrendered during search operations the cash (on money) portion as having received from the assessee? Any case laws favouring assessee buyer?
ANSWER: Unless there is corroborative evidence with the Assessing Office that an assessee has paid “cash-on money” to builders, the reopening is not valid. See (i) ITO v. Lakhmani Mewal Das [103 ITR 437 (Sc)]; (ii) Rungta Sons Pvt. Ltd. v. ITO [125 ITR 708 (Cal) and (iii) CIT v. Narinder Nath Parveen Chand [101 ITR 7 (P2H)].
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