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Here is a case of a person who is slapped with a notice of reopening on the basis of search in the case of a person to whom he sold his land. It was alleged that the noticee received cash amount of Rs. 1.3 crores which transaction was not scrutinised during original assessment since the information in that regard has come up to knowledge only subsequent to the original assessment.

The AO issued reopening notice stating that he received information in accordance with Risk Management Strategy formulated by CBDT that assessee had received cash receipt of certain amount which was undisclosed. Section 68 has thus been invoked in this case alleging such sum is assessable as undisclosed cash credit and accordingly proceedings were initiated under section 148A leading to issue of notice u/s 148 both of which found challenge in the Court.

The High Court in (2025] 170 taxmann.com 243 (Bombay)[07-01-2025] declined to interfere in the impugned proceedings or to quash the notice challenged in the present petition.

Now section 68 come into picture only when a sum is found credited in the books maintained by the assessee and not any other person’s books for which he has no plausible explanation to offer.

Thus to the contrary in this case the search on the third party prompts this reopening which scenario is not fitting in section 68 stream.

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