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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
M.S. Sonak, Jitendra Jain, JJ
Pr. Commissioner Of Income Tax – Appellant
Versus
Agfa India Pvt. Ltd. – Respondent
JUDGMENT :
(Per M. S. Sonak, J.)
1. Heard learned counsel for the parties.
2. This Appeal is directed against the Income Tax Appellate Tribunal’s (ITAT) order dated 15 September 2017 allowing the Respondent-Assessee’s Appeal and setting aside the order dated 30 April 2015 made by the Commissioner of Income Tax (Appeals)-I, Thane, for the Assessment Year 2007-08.
3. The assessee, engaged in the business of distributing photographic and electronic imaging systems, filed its return of income on 31 October 2007, declaring a total income of Rs.11,42,17,803/-. This return was revised on 07 November 2007, declaring a total income of Rs.12,30,39,783/-.
4. The Respondent’s return was selected for scrutiny assessment, and the original assessment was completed under Section 143(3) of the Income Tax Act, 1961 (“IT Act”) on 22 December 2010 by accepting the returned income of Rs.12,30,39,783/-. This was in conformity with the price determination by the Transfer Price Officer (“TPO”), who suggested no adjustments to the value of the assessee's international transactions.
5. For the Assessment Year 2008-09, the TPO, while finalizing its order under Section 92CA (3), suggested an adjustment of Rs. 11,22
The Assessing Officer must independently believe that income has escaped assessment; acting under dictation from superiors invalidates reassessment proceedings.
Reopening of assessments under Section 147 requires tangible evidence of income escapement, not just a change of opinion.
The power to reopen assessments under Section 147 of the IT Act is much wider post-1st April, 1989, but must be based on tangible material and have a live link with the formation of belief.
Reopening under section 147 invalid if based on borrowed satisfaction from investigation wing without AO's independent application of mind demonstrating live link to non-disclosure of material facts,....
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