Audit Objection cannot be basis of AO’s ‘Reasons to Believe’ after lapse of time period of 6 Years

EIH Associated Hotels Ltd. Vs ACIT (Madras High Court) Conclusion: An audit objection did not satisfy the requirement of AO having an independent ‘reason to believe’ that income had escaped assessment, that too after the elapse of nearly six years from the end of the relevant assessment year, therefore, the impugned reassessment proceedings were vitiated. Held:  AO had neither mechanically adopted the figures supplied by assessee nor the methodology for computation of book profit as he adds expenses attributable to exempt income, increasing the taxable book profit for the purposes of Sect...