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Asoke Kumar Sen vs Income-Tax Officer, Special Circle-V, ... on 22 March, 1980

In Asoke Kumar Sen vs. Income-Tax Officer, Special Circle-V, New Delhi and Anr., 132 ITR 707, this Court had an occasion to interpret the expression „if the income-tax officer has reason to believe‟ appearing in Section 147(a) of the Act. The Court was of the opinion that the belief must be that of an honest and reasonable person based upon reasonable grounds and that the ITO may act under that section on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. The powers under that section were treated as not plenary in nature but subject to judicial review. The Court set aside the order when it found that the income-tax officer had merely stated his belief but had not set out any material on the basis of which he formed such belief. In the present case, the nature of exercise carried out by the competent authority is identical.
Delhi High Court Cites 5 - Cited by 39 - Full Document

Commissioner Of Income-Tax vs Arun Mehra on 14 March, 1985

12. Mr. Aggarwal has also referred to the judgment of this Court in CIT vs. Arun Mehra, 157 ITR 308, wherein the authoritative principle laid down is that there must be material before the competent authority showing that the fair market value was more than 15% above the upper end consideration. The Court also pointed out that the competent authority had acted in a stereotype and routine manner and he should have at least examined the valuation report about the difference between two prices (as in that case the competent authority was confronted with two valuation reports). Following observations from the said judgment may also be usefully quoted:-
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