The Tax Publishers2020 TaxPub(DT) 5162 (All-HC) : (2020) 273 TAXMAN 0066

INCOME TAX ACT, 1961

Section 147

Where AO worked out assessee's profit only on the basis of contract and sub-contract income earned by him but the AO on account of oversight/mistake failed to add interest income duly shown in assessee's books of account, subsequently, on basis of audit objection, the AO was justified in invoking provisions of section 147 and reassessing the 'interest income' earned by the assessee and accordingly, such reassessment would be considered as valid.

Reassessment - Validity - AO on account of oversight/mistake failed to add interest income duly shown in assessee's books of account -

AO work out assessee's profit on the basis of contract income and sub-contract income earned by him. However, the AO on account of oversight/mistake failed to assess interest income earned by the assessee. Accordingly, he invoked provisions of section 147 and reassessed the 'interest income' of the assessee under section 147. Assessee submitted that on the basis of audit objection raised by the Revenue audit party, the reassessment was not permissible because the interest income had been duly disclosed by him in audited Profit & Loss Account and Balance Sheet. Held: From perusal of audited Balance Sheet of the assessee, it was clear that the assessee himself showed interest income as other income in Schedule 12 of the Balance Sheet, thus, no question arose of double addition in the instant case. Further, since the AO on account of oversight/mistake failed to add interest income shown in the books of account of the assessee, subsequently, on basis of audit objection, the AO was justified in invoking provisions of section 147 and reassessing such 'interest income'. Hence, such reassessment was valid.

Distinguished:CIT v. Corpn. Bank Ltd. (2002) 122 Taxman 826 (SC) : (2002) 254 ITR 791 (SC) : 2002 TaxPub(DT) 0052 (SC).

REFERRED :

FAVOUR : Against the assessee

A.Y. :



IN THE ALLAHABAD HIGH COURT

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