Anil K. Shah (Huf) Vs ITO (ITAT Mumbai)
In the case of Ranbaxy Laboratory Ltd. vs. CIT (supra), the Hon’ble High Court has explained the effect of Explanation 3 to section 147 inserted by Finance Act, 2009 which empowers the AO to assess the any income which comes to his notice subsequently even though no reasons have been recorded in respect thereof holding that Explanation 3 does not empower the AO to make roving enquiries in respect of other matters. Since, the Ld. CIT (A) has held in principle that the AO has made fishing enquiry in the course of reassessment proceedings and allowed the legal ground raised by the assessee for statistical purposes and since the department has not challenged the findings of the Ld. CIT (A), in our considered view, the addition made by the AO except the addition made on account of bogus purchases which was the subject matter of reassessment, are not sustainable. Once, it is established that the AO has made fishing and roving enquiry, the additions made as a result of such enquiry cannot be confirmed. Hence, we allow the legal ground raised by the assessee and delete all the additions sustainrd by the Ld. CIT (A) except the addition made on account of bogus purchases.
