Assessee was the director of a company. Records of the company were subject to an audit survey wherein the Assessee had disallowed a sum. On observing an amount related to personal expenditure, the AO formed a belief that income had escaped assessment as he believed that expenditure on personal needs was a prerequisite in the return, thereby reopening the assessment after 4 years. Commissioner (Appeals) quashed the reassessment order. In Appeal held that there was no specific expenditure which could be termed as personal expenditure as there could not be any benefit of personal nature in advertisement expenditure and could not be reopened after 4 years. That the assessee had shareholding of 9 percent and 4.3 per cent.in 2 companies. He did not have substantial interest in these companies. Though the Assessing Officer had to form a prima facie belief only he had not analysed any of these details while forming a belief that income had escaped assessment. Reassessment Order was rightly quashed. (ITA Nos. 2314/Ahd/2016 ) (AY.2008-09)
Dy.CIT v. Shekhar G. Patel (2019) 70 ITR 456 (Ahd.)(Trib.)
S. 147 : Reassessment—After the expiry of four years-Assessing officer not analysing details of expenditure while forming belief that income had escaped assessment-No specific expenditure could be termed as incurred exclusively for personal needs of assessee — Completed assessment of assessee after four years could not be reopened [ S.148]