GHANSHYAM K KHABRANI Vs. ASSISTANT COMMISSIONER OF INCOME

JUDGEMENT

(1.) Rule; with the consent of learned Counsel for the parties returnable forthwith. With the consent of Counsel and at their request the Petition is taken up for hearing and final disposal.

(2.) In this proceeding under Article 226 of the Constitution, the petitioner has questioned the legality of a notice issued on 30 March 2011 under Section 148 of the Income Tax Act, 1961 proposing to reopen an assessment for Assessment Year 2004 05. The Assessee is an Advocate. For Assessment Year 2003 04, he filed a return of income on 17 November 2003 declaring an income of Rs. 1.99 crores. A notice was issued under Section 143(2) since the case was selected for scrutiny and an order was passed on 26 December 2005 accepting the return of income submitted by the Assessee. The assessment for Assessment Year 2003 04 was reopened and a notice was issued under Section 148 on 25 March 2010. Pursuant thereto, a fresh order of assessment was passed on 27 December 2010 by which the Assessing Officer made an addition in the amount of Rs.4.9 crores and determined the total assessed income at Rs.6.89 crores. The Assessing Officer, in his order of assessment noted that an N.R.I. by the name of C. K. Pithawalla had advanced an amount of U.S. Dollars 7.3 million in 1995 to M/s. Asian Broadcasting Network. A Criminal Proceeding appears to have been instituted under the Indian Penal Code. The dispute was settled and the criminal case was withdrawn on 19 April 2003. The Assessee in his original return had disclosed an amount of Rs.2.00 crores as having been received by him for professional services rendered in connection with the criminal complaint filed by the creditor above named. The Assessing Officer noted that the creditor had in a statement made before the Enforcement Directorate stated that an amount of Pound Sterling 6,050,000/ was received in repayment of the loan. According to the Assessing Officer, the record shows that the Assessee received an amount of Pound Sterling 6,50,000/ in his bank account at Zurich.

(3.) Learned Senior Counsel appearing on behalf of the Assessee submitted that: