Shri Ajay Kumar, New Delhi V. ITO, Bulandshahr

CO 243/DEL/2010

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7171 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-04-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 16-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Gift; Income from undisclosed sources; Difference of opinion; Accommodation entries; Assessment record; Reason to believe; Change of opinion; Borrowed satisfaction
• Section: 133A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A DELHI BEFORE SHRI R.P. TOLANI AND SHRI K.G. BANSAL ITA NO. 1196(DEL)/2009 ASSESSMENT YEAR: 1999-00 INCOME-TAX OFFICER, SHRI A JAY KUMAR, WARD I, BULANDSHAHR, VS. C/O M/S MO HAN DAIRY, UTTAR PRADESH. SI YANA ROAD, BULANDSHAHR. C.O. NO. 243(DEL)/2010 ( ARISING OUT OF ITA NO. 1196(DEL)/2009) ASSESSMENT YEAR: 1999-00 SHRI AJAY KUMAR, C/O RAJ KUMAR INC OME-TAX OFFICER, & ASSOCIATES, C.A., V S. WARD-1, BULANDSHAHR. 4435/7, ANSARI ROAD, DARYAGANJ, NEW DELHI. (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI A.K. SINGH, SENIO R D.R. ASSESSEE B Y : SHRI RAJ KUMAR GUPTA, C.A. DATE OF HEARIN G : 03.04.2012 DATE OF PRONOU NCEMENT: 27 .04.2012. ORDER PER K.G. BANSAL : AM THE REVENUE HAS TAKEN UP FOUR GROUNDS IN THE APPE AL FILED BY IT. THE MAIN GRIEVANCE IS THAT ON THE FACTS AND IN THE CI RCUMSTANCES OF THE CASE, THE ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 2 CIT(APPEALS) ERRED IN NOT CONSIDERING THE MERIT S OF THE CASE AND HOLDING THAT INITIATION OF PROCEEDINGS U/S 147 IS INVALI D. IN THE OTHER GROUNDS, IT IS MENTIONED THAT THE LD. CIT(APPEALS) ERRED IN HOL DING THAT INFORMATION ABOUT BOGUS NATURE OF GIFT, FURNISHED BY THE AO OF THE DONOR, WOULD NOT CONSTITUTE A VALID BASIS FOR FORMATION OF BELIEF THAT INCOME HAD ESCAPED ASSESSMENT. IT IS FURTHER MENTIONED THAT THE DEC ISION OF NON-JURISDICTIONAL BENCH OF THE INCOME-TAX APPELLATE TRIBUNAL WAS NO T BINDING ON THE LD. CIT(A). 1.1 IN THE CROSS OBJECTION FILED BELATEDLY, THE ASSESSEE HAS TAKEN UP THREE GROUNDS. GROUND NO. 2 SUPPORTS THE FINDING OF THE LD. CIT(APPEALS) THAT PROCEEDINGS U/S 147 ARE VOID AND WITHOUT JURISDICTION. WITHOUT PREJUDICE TO THIS GROUND, IT IS MENTIONED IN GRO UND NO. 1 THAT THE LD. CIT(APPEALS) ERRED IN NOT DECIDING ASSESSEES GROUND REGARDING NON- SERVICE OF NOTICE U/S 148. WITHOUT PREJUDICE TO BOTH THESE GROUNDS, IN GROUND NO. 3, IT IS MENTIONED THAT THE CASE MAY BE SENT BACK TO THE CIT(APPEALS) FOR DECIDING THE APPEAL ON MERIT IF GROUND NOS. 1 AND 2 ARE NOT ACCEPTED. ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 3 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED HIS RETURN ON 12.01.2000 DECLARING LOSS OF RS. 60,780/-. THIS RETURN WAS PROCESSED U/S 143(1)(A). 2.1 IT SO HAPPENED THAT SURVEY U/S 133A OF THE AC T WAS CARRIED OUT AT THE OFFICE OF SHRI D.K. AGGARWAL, CHARTERED ACCOUNT ANT, AGRA. VARIOUS INCRIMINATING DOCUMENTS AND REGISTERS WERE FOUND. THE EXAMINATION REVEALED THAT HE CREATED A LARGE NUMBER OF TR USTS UNDER HIS CONTROL AS TRUSTEE. THE TRUSTS ARE EITHER PRIVATE FAMIL Y TRUST OR TRUST IN THE NAMES OF GODS AND GODDESSES. FINANCIAL RECORDS OF TH ESE TRUSTS HAVE BEEN MAINTAINED BY HIM. MOST OF THESE TRANSACTIONS AR E IN THE NATURE OF RECEIPT OF GIFTS AND GRANT OF GIFTS TO A LARGE NUMBER OF UNKNOWN PERSONS OF AGRA, HATHRAS, BULANDSHAHR, BHARATPUR, GWALIOR ET C. IT WAS CONCLUDED THAT THESE TRUSTS ARE BEING USED TO LAUNDER UN ACCOUNTED MONEY OF VARIOUS DONEES TO WHOM GIFTS WERE MADE BY THE TRUSTS. FOR RENDERING THIS SERVICE, SHRI D.K. AGGARWAL RECEIVED SOME COMMIS SION DEPENDING UPON THE AMOUNT INVOLVED IN THE GIFT. BEYOND THAT, THE TRUST DID NOT CONDUCT ANY BUSINESS OR ANY RELIGIOUS OR CHARITABLE ACTI VITIES. THUS, IT WAS CONCLUDED THAT HE IS IN THE BUSINESS OF GRANTING ACCOMMODATION ENTRIES BY ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 4 WAY OF GIFTS. ON RECEIPT OF THIS INFORMATION FRO M THE ASSESSING OFFICER OF SHRI D.K. AGGARWAL, THAT THE ASSESSEE ALSO RECE IVED FOUR GIFTS FROM TWO SUCH TRUSTS, M/S GOPAL JI FAMILY TRUST AND SHYAM TRADING CO., AGGREGATING IN VALUE TO RS. 20.00 LAKH, I.E., OF RS. 5.00 LAKH EACH, IT WAS INTER-ALIA RECORDED THAT SINCE THESE TRUSTS H AVE NOT BEEN CONDUCTING ANY BUSINESS, THEY ARE ONLY NAME LENDERS, THERE IS N O RELATIONSHIP BETWEEN THE DONOR AND THE DONEE, THE AFORESAID MONEY HAS BEE N INTRODUCED IN THE BANK ACCOUNT IN THE GARB OF GIFT, WHICH ACTUALLY R EPRESENT THE UNDISCLOSED MONEY OF THE ASSESSEE. THEREFORE, THERE IS REAS ON TO BELIEVE THAT INCOME OF RS. 20.00 LAKH CHARGEABLE TO TAX ESCAPED ASSE SSMENT WITHIN THE MEANING OF SECTION 147. FOR THE SAKE OF READ Y REFERENCE, THE REASONS ARE REPRODUCED BELOW:- THE ASSESSEE HAS FILED RETURN FOR A.Y. 1999-00 DECLARING A LOSS OF RS. (-) 60,781/- ON 12.01.2000 IN THE STA TUS OF INDIVIDUAL, WHICH WAS PROCESSED U/S 143(1) OF THE IT ACT, 1961 ON THE RETURNED INCOME. FROM THE INFORMATION RECEIVED IN THIS OFFICE IT IS SEEN THAT ON 22.4.2001 A SU RVEY WAS CONDUCTED U/S 133A(1) OF I.T.ACT, 1961 IN THE CAS E OF SHRI DINESH KUMAR AGGARWAL, C.A., INCOME-TAX PRACTITIONE R, AGRA. DURING THE COURSE OF SURVEY SEVERAL INCRIMINATIN G DOCUMENTS/REGISTERS WERE FOUND. ON EXAMINATION IT WAS SEEN THAT SHRI DINESH KUMAR AGARWAL HAD CREATED HUN DREDS OF TRUSTS OVER WHICH HE EXERCISES CONTROL AS TRUST EE. THE DOCUMENTS SHOW THAT SHRI DINESH KUMAR AGGARWAL KEE PS A RECORD OF TRANSACTIONS WHICH ARE MOSTLY WAY OF GIFTS SHOWN TO BE MADE THROUGH THE TRUSTS. THESE TRUSTS DO NOT CONDUCT ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 5 ANY BUSINESS BUT LARGE RECEIPT OF MONEY SHOWN IN THE HANDS OF TRUSTS BY WAY OF GIFT, BUSINESS PROFIT AND DON ATION ETC. FURTHER, THESE TRUSTS HAVE RECEIVED GIFTS IN CA SH FROM OTHER TRUSTS AND THESE TRUSTS HAVE GIVEN GIFTS TO V ARIOUS PERSONS AND THERE IS NO RELATIONSHIP BETWEEN THE DONOR AND THE DONEE. FURTHER, IN THE CASE OF SHRI LALIT KUMAR AGARWAL ASSESSEE OF WARD 4(2), AGRA HAS STATED THAT SHR I D.K. AGARWAL HAS CREATED BOGUS TRUST IN THE NAME OF S HRI LALIT KUMAR AGARWAL AND THAT ALTHOUGH HE HAS BEEN S HOWN AS TRUSTEE, AND HE HAS NO KNOWLEDGE OF THE ACTIVITIES OF THE TRUST. FROM THE DIARY LISTS PREPARED AS PER ANNEXURE A-19 AND A- 21 SHOW THAT THE ASSESSEE HAS RECEIVED GIFTS OF RS.20,00,000/- BY DEMAND DRAFT AND THE DETAILS O F THE SAME IS GIVEN AS UNDER:- (I) RS. 5,00,000/- VIDE DD NO. 138947 DATED 23.1. 1999 FROM M/S GOPAL JI FAMILY TRUST, 27/62, PATHIWARI, AGRA. (II) RS. 5,00,000/- VIDE DD NO. 138948 DATED 23.1 .1999 FROM M/S GOPAL JI FAMILY TRUST, 27/62, PATHIWARI, AGRA. (III) RS. 5,00,000/- VIDE DD NO. 138919 DATED 20. 1.1999 FROM M/S SHYAM TRADING CO., 51, MADHAV KUNJ, PRATA P NAGAR, AGRA. (IV) RS. 5,00,000/- VIDE DD NO. 138919 DATED 23.1 .1999 FROM M/S GOPAL JI FAMILY TRUST, 27/62, PATHIWARJ, AGRA. SINCE THESE TRUSTS DO NOT CONDUCT ANY BUSINESS A CTIVITIES AND THESE ARE ONLY NAME LENDERS. THERE IS NO RELATI ONSHIP BETWEEN THE DONOR AND THE DONEE. IN VIEW OF THESE FACTS, IT IS CLEAR THAT THE MONEY INTRODUCED IN THE GARB OF S O CALLED GIFTS ARE NOTHING BUT ASSESSEES MONEY FROM UNDISCLOS ED SOURCES. THEREFORE, I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO THE EXTENT OF RS. 20,00,000/- HAS ESCAPED AS SESSMENT WITHIN THE MEANING OF SECTION 147 READ WITH EX PLANATION 2 TO IT. THEREFORE, IN VIEW OF ABOVE REASONS NEC ESSARY ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 6 PERMISSION TO ISSUE NOTICE U/S 148 OF I.T.ACT, 1961 MAY KINDLY BE ACCORDED. CONSEQUENTLY, NOTICE U/S 148 DATED 29.03.2006 W AS ISSUED AND STATEDLY SERVED ON THE ASSESSEE. THE ASSESSEE DID NOT COMPLY WITH THIS NOTICE. 2.2 IN THE COURSE OF ASSESSMENT PROCEEDINGS VARIO US NOTICES WERE ISSUED AS DETAILED ON PAGE NO. 2 OF THE ASSESS MENT ORDER. THE ASSESSEE WAS REQUIRED TO PRODUCE THE DONOR FOR EXAMINAT ION, WHICH WAS NOT DONE. HOWEVER, STATEMENT OF THE ASSESSEE WAS RECORDED ON 11.12.2008. IN ANSWER TO QUESTION NO. 6, IT WAS DEPOSED THAT HE HAS BEEN KNOWING SHRI D.K. AGGARWAL FROM THE TIME WHEN HIS ELDER BROTH ER WAS MARRIED AND HE IS AN UNCLE OF THE SISTER-IN-LAW. IN ANSWER TO QUESTION NO. 7, IT WAS DEPOSED THAT GIFTS OF RS. 15.00 LAKH WERE RECEIV ED ON THE OCCASION OF MARRIAGE ANNIVERSARY OF ELDER BROTHER, SHRI BRIJ MOHAN AGGARWAL. THE AO ALSO EXAMINED ASSESSMENT RECORDS OF OTHER DONEES AND FOUND THAT SWEETY GARG, NAND KISHORE, SANJEEV GARG, MANISH GARG AND DHEERAJ GARG WHEN CONFRONTED WITH THE EVIDENCE, SURRENDERED GIFTS OF RS. 5.00 LAKH, RS. 3.00 LAKH, RS. 3.00 LAKH, RS. 4.00 LAKH AND RS. 5.00 LA KH RESPECTIVELY IN THE COURSE OF ASSESSMENT. THE CASES OF OTHER DONEES , BRIJ MOHAN, SANJEEV KUMAR, VIJENDER KUMAR; MUKESH KUMAR GUPTA, SANDEEP KUMAR GUPTA, ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 7 RAJ KUMAR GUPTA; DAVESH GUPTA, POONAM AND MUMTAZ INAYAT, INVOLVING GIFTS OF MORE THAN RS. 1.00 CRORE AND IN NO WAY R ELATED TO SHRI D.K. AGGARWAL, ARE BEING EXAMINED UNDER SCRUTINY ASS ESSMENTS. LOOKING TO ALL THESE FACTS, THE AO CAME TO THE CONCLUSION THAT GIFTS OF RS. 15.00 LAKH RECEIVED BY THE ASSESSEE REPRESENT HIS INCOME FR OM UNDISCLOSED SOURCES, THEREFORE, THIS AMOUNT HAS BEEN BROUGHT TO TAX W HILE COMPUTING THE TOTAL INCOME AT RS. 14,39,220/-. 2.3 THE LD. CIT(APPEALS) EXAMINED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE HIM. IT TRANSPIRED THAT THE CASES OF THREE OTHER BENEFICIARIES, WHERE SIMILAR REASONS WERE RECORD ED FOR ISSUING NOTICE U/S 148, HAD BEEN DECIDED BY THE SMC BENCH OF THE T RIBUNAL IN WHICH THE ASSESSMENT PROCEEDINGS WERE QUASHED ON THE GROUND THAT THE REASONS RECORDED BY THE AO DID NOT CONFORM TO THE PROV ISION CONTAINED IN SECTION 147. AS PER PARAGRAPH 66 OF THE IMPUGNED ORDER, THE DECISION BEARS ITA NO. 171/173/174/175(AGRA)/2008 AND C.O. N OS. 24/26/25/50(AGRA)/2008 FOR ASSESSMENT YEAR 1999-0 0. RELYING ON THIS AND OTHER DECISIONS, THE PROCEEDINGS U/S 147 HAVE BE EN QUASHED. AS A CONSEQUENCE OF THIS DECISION, OTHER GROUNDS HAVE NOT BEEN DECIDED. ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 8 3. THE LD. SENIOR DR REFERRED TO THE RECORDED REASONS, WHICH HAVE ALREADY BEEN REPRODUCED BY US EARLIER. IT IS SU BMITTED THAT INFORMATION WAS RECEIVED BY THE AO AS A CONSEQUENCE OF SURVEY CONDUCTED IN THE CASE OF D.K. AGGARWAL. THE DETAILS OF THE KIND OF TRANSA CTIONS UNDERTAKEN BY HUNDREDS OF TRUSTS CREATED BY HIM HAS BEEN NARRA TED. THE TRUSTS HAVE RECEIVED GIFTS IN CASH FROM OTHERS AND THEREAFT ER GIFTS HAVE BEEN GIVEN TO VARIOUS PERSONS WHO DO NOT HAVE ANY RELATIONSHIP WITH SHRI D.K. AGGARWAL. ONE SHRI LALIT KUMAR AGGARWAL HAS ALS O STATED THAT SHRI D.K. AGGARWAL HAS CREATED BOGUS TRUST IN HIS NA ME AND ALTHOUGH HE HAS BEEN SHOWN AS A TRUSTEE, HE IS NOT IN THE KNOWLED GE OF THE ACTIVITIES OF THE TRUST. THE INFORMATION IS ALSO IMPARTED ABOUT FO UR GIFTS OF RS. 5.00 LAKH EACH, THREE FROM GOPAL JI FAMILY TRUST AND ONE FRO M SHYAM TRADING CO. THE AO HAS EXAMINED THIS INFORMATION BY MENTIONIN G THAT THESE TRUSTS DO NOT CONDUCT ANY BUSINESS. THEY HAVE NO RELATIONS HIP WITH THE DONEES OR THE DONORS AND, THEREFORE, THEY ARE ONLY NAME LEN DERS. IN VIEW OF THIS OBSERVATION, IT IS FURTHER MENTIONED THAT MONEY E ARNED AS INCOME FROM UNDISCLOSED SOURCES HAS BEEN INTRODUCED IN THE GA RB OF GIFTS, THEREFORE, INCOME OF RS. 20.00 LAKH HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147. ON THE BASIS OF THESE REASONS, IT I S ARGUED THAT THE AO HAD NOT ONLY AN AUTHENTIC INFORMATION BEFORE HIM BUT HE ALSO APPLIED HIS ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 9 MIND TO THE INFORMATION AND CAME TO THE CONCLUSI ON THAT INCOME OF RS. 20.00 LAKH HAS ESCAPED ASSESSMENT. IT IS FURTH ER ARGUED THAT DECISION IN THE CASE OF CIT VS. VINITA JAIN DELIVERED BY HON BLE DELHI HIGH COURT ON 23.05.2007 HAS BEEN WRONGLY APPLIED. IT IS ALSO ARGUED THAT THE RATIOS OF THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKE RS (P) LTD. (2007) 291 ITR 50 (SC) AND ITO VS. PURSHOTTAM DAS BANGUR & ANOTHER (1997) 224 ITR 362 (SC) ARE CLEARLY APPLICABLE. IT IS ALSO SUBMITTED THAT THE FACT THAT REASONS WERE RECORDED AND NOTICE U/ S 148 WAS ISSUED ON THE SAME DAY DOES NOT IN ANY MANNER IMPINGE ON THE V ALIDITY OF REASONS AS WHAT IS REQUIRED TO BE SEEN IS AS TO WHETHER T HE PROVISIONS CONTAINED IN SECTION 147 STAND SATISFIED. THE OBVIOUS CONCLUS ION IS THAT PRE-CONDITIONS MENTIONED THEREIN ARE SATISFIED BECAUSE THERE W AS FRESH INFORMATION BEFORE THE AO, HE APPLIED HIS MIND TO THE INFOR MATION AND CAME TO THE CONCLUSION THAT INCOME OF RS. 20.00 LAKH HAS ESCA PED ASSESSMENT. 4. IN REPLY, THE LD. COUNSEL FOR THE ASSESSEE DR EW OUR ATTENTION TO DECISION OF THE TRIBUNAL IN THE CASE OF VIJENDRA KUMAR IN ITA NO. 1202(DEL)/2009 DATED 19.08.2011, PLACED IN THE P APER BOOK FROM PAGE NOS. 17 TO 46. IT IS SUBMITTED THAT VIJENDRA KUMA R IS THE BROTHER OF THE ASSESSEE. IN HIS CASE ALSO SIMILAR REASONS WER E RECORDED AND THE ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 10 ASSESSMENT WAS COMPLETED. THE ASSESSMENT WAS CANCELLED BY THE CIT(APPEALS) AND, THEREFORE, THE REVENUE MOVED AN A PPEAL, WHICH WAS DECIDED BY I BENCH OF THE TRIBUNAL. THE SUBM ISSIONS OF THE RIVAL PARTIES WERE CONSIDERED IN VARIOUS SUB-PARAGRAPH S OF PARAGRAPH NO. 10 AND THE APPEAL OF THE REVENUE WAS DISMISSED. FOR THE SAKE OF READY REFERENCE, THE RELEVANT PORTION OF THE ORDER IS REPRODUCED BE LOW:- 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE JUDGMENTS RELIED UPON BY T HE PARTIES BEFORE THE BENCH AND THE ORDERS OF THE CO-ORDINATE BENCHES REL IED UPON BEFORE THE CIT(A) AND BEFORE US BY THE LD. AR AS WELL AS THE L D. DR HAVE BEEN TAKEN INTO CONSIDERATION. 10.1. ON CONSIDERATION OF THE FACTS AND ARGUMENTS T HEREON ALONG WITH THE LEGAL PRINCIPLES CANVASSED BEFORE US BY THE PARTIES BEFORE THE BENCH THE UNDISPUTED FACTS WHICH REMAIN ON RECORD ARE THAT TH E INFORMATION OF ITO AGRA WARD 4(1) WAS RECEIVED BY FAX BY THE CONCERNED ASSESSING OFFICER ON THE VERY DAY ON WHICH HE RECORDED HIS REASONS, O BTAINED THE NECESSARY APPROVALS AND ISSUED NOTICE. IT IS ALSO AN UNDISPUT ED FACT ON RECORD THAT THE REASONS RECORDED ARE VERBATIM WITH THE FAXED INFORM ATION. IT IS ALSO A MATTER OF RECORD THAT NONE OF THE DONOR TRUSTS ARE THE TRUST FROM WHOM THE ASSESSEE HAS RECEIVED GIFTS. IT IS ALSO A MATTER OF RECORD THAT QUA THE INFORMATION RECEIVED AND REASONS RECORDED THE GIFTS WERE ALLEGEDLY OF RS. 20 LAKHS WHEREAS THE ASSESSMENT ORDER WOULD SHOW TH AT THEY ARE OF RS. 15 LAKH. THESE ARE SOME OF THE FACTS ON THE BASIS OF W HICH IT HAS BEEN CANVASSED THAT THE REASONS RECORDED ARE BASED ON BO RROWED SATISFACTION, THE AO HAS PROCEEDED IN HASTE AND ACTED MECHANICALL Y AS ADMITTEDLY THE SPECIFIC FACTS NAMELY DONOR TRUSTS, AMOUNTS, WERE A LL WRONG. IT IS SEEN THAT ON FACTS THE DEPARTMENT HAS NOT REBUTTED THE ASSESS EES STAND. THE DEPARTMENT HAS RELIED UPON CASE LAW TO CANVASS THAT ONCE THE REASONS ARE RECORDED ON THE INFORMATION RECEIVED, THE ACTION OF RE-OPENING IS JUSTIFIED. NO DOUBT SUFFICIENCY OF REASON CANNOT BE AGITATED H OWEVER THE FIRST HURDLE THAT THE FORMATION OF BELIEF IS OF THE CONCERNED AO AND NOT OF SOME OTHER AO HAS TO BE MET. THE BLIND ACCEPTANCE IN HASTE THE VIEW OF ANOTHER AO HAS NOT BEEN REBUTTED BY ANY COGENT FACT OR ARGUMEN T AND TO OUR MIND CASE LAW CANNOT ADDRESS THE ISSUE. A PERUSAL OF THE FIND ING OF THE CIT(A) REPRODUCED IN THE EARLIER PART OF THIS ORDER WOULD SHOW THAT APPELLATE ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 11 AUTHORITY HAS HELD THAT THE REASONS RECORDED IS NOT HING BUT A COPY OF INFORMATION AS RECEIVED FROM ITO 4(1) AGRA WHO WAS OF THE OPINION THAT THE TRANSACTION IS NON-GENUINE. THE CIT(A) HAS COME TO THE CONCLUSION THAT THE AO HAS PROCEEDED ON BORROWED SATISFACTION . THE AO HAS BEEN HELD TO HAVE PROCEEDED IN ISSUING NOTICE ACCEPTING THE REPORT OF ITO 4 (1) AS GOSPEL TRUTH WITHOUT VERIFYING THE CORRECTNESS O F THE INFORMATION RECEIVED. THE CIT(A) HAS FURTHER TAKEN INTO CONSIDE RATION THE ORDER DATED 23RD MAY, 2008 IN ITA NO. 171TO 175 / AGRA / 2006 A LONG WITH CO. NO. 24 / 25 / AND 50 THE AGRA /2008 SO AS TO CONCLUDE T HAT THE ISSUE IS COVERED. A PERUSAL OF THE ABOVE MENTIONED ORDER DATED 23RD M AY, 2008 PLACED AT THE PAPER BOOK SHOWS THAT THE CO-ORDINATE BENCH CON SIDERED THE CASES OF THREE DIFFERENT ASSESSEES NAMELY VIPIN KUMAR AGGARW AL, SUNIL KUMAR AGGARWAL AND ANIL KUMAR AGGARWAL WHEREIN THE ISSUE FOR CONSIDERATION WAS THE SATISFACTION OF THE AO BASED ON INFORMATION FROM AO AGRA OF BOGUS GIFTS FOR TRUSTS CREATED BY SHRI D.K. AGARWAL ON THE BASIS OF SURVEY U/S 133A CONDUCTED ON 22.4.2001 AT THE PREMISES OF SHRI P.K. AGGARWAL. THE CO-ORDINATE BENCH DISMISSED THE DEPARTMENTAL AP PEAL WHEREIN THE ADDITION HAD BEEN DELETED ON MERIT AND CONSIDERING THE ASSESSEES CROSS OBJECTION WHEREIN THE CIT(A) HAD UPHELD THE PROCEED INGS U/S 147 THE COORDINATE BENCH RELYING UPON CIT VS. ANITA JAIN AN D VINITA JAINS CASE REPORTED IN 299 ITR 383 HELD THAT THE ISSUE IS COVE RED BY THE PRINCIPLE SET DOWN IN THE SAID JUDGMENT IN AS MUCH THE AO ACCEPTE D WITHOUT VERIFYING THE CORRECTNESS OF THE INFORMATION RECEIVED BY HIM IN A MECHANICAL MANNER. THE CO-ORDIANTE BENCH HAS ALSO RELIED UPON INDRA PRASTHA CHEMICALS (P) LTD. VS. CIT 271 ITR 113 (ALL). IN VI EW OF THE PECULIAR FACTS AND CIRCUMSTANCES AS THEY STAND WE ARE OF THE CONSIDERED VIEW THAT THE DEPARTMENTAL APPEAL DOES NOT HAVE ANY MERIT. BE ING SATISFIED WITH THE REASONING AND CONCLUSION ARRIVED AT BY THE CIT(A) A ND CONSIDERING THE SAME IN THE LIGHT OF THE SETTLED LEGAL PRINCIPLE TH E SAME IS UPHELD. IN THE FACTS OF THE PRESENT CASE THE ASSESSEE HAS FURTHER FORTIFIED THE FINDING ARRIVED AT IN THE IMPUGNED ORDER BY THE UNREBUTTED ARGUMENTS ADVANCED NAMELY THAT THE AO HAS MECHANICALLY PROCEEDED WITHO UT VERIFYING THE CORRECTNESS OF THE INFORMATION GIVEN AS NOT ONLY TH E NAME OF THE DONORS AS PER THE REASONS RECORDED BASED ON THE INFORMATION G IVEN IS INCORRECT BUT EVEN THE AMOUNTS QUA THE FACTS IN THE ASSESSEES OR DER WHEN COMPARED WITH THE REASONS RECORDED IS COMPLETELY WRONG. 10.2 BEFORE PARTING WE WOULD LIKE TO DISCUSS THE CA SE LAW RELIED UPON BY THE LD. SR. DR WHICH HAS BEEN TAKEN INTO CONSIDERAT ION BY US. 10.3 ON A CAREFUL CONSIDERATION OF THE PRINCIPLES L AID DOWN BY THE COURTS IN THE FACTS BEFORE THEM IT IS SEEN THAT IN THE FACTS OF THE PRESENT CASE THEY DO NOT STRENGTHEN THE CASE OF DEPARTMENT IN ANY MANNER . NOTWITHSTANDING THE FACT THAT EACH CASE PROCEEDS ON FACTS ENTIRELY PECU LIAR TO ITS OWN. IT IS SEEN THAT THE PRINCIPLES LAID DOWN THEREIN CANNOT HAVE A BLANKET APPLICATION. WE CONSIDER IT APPROPRIATE TO DISCUSS THEM SEPARATELY. IT IS SEEN THAT THE LD. ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 12 DR HAS HEAVILY RELIED UPON PRAFUL CHUNILAL PATEL VS . M.J. MAKWANA/ACIIT, H.A. NANJI & CO. VS. ITO, ACIT VS. R AJESH JHAVERI STOCK BROTHERS (P) LTD., PHOOL CHAND BAJRANG LAL AN D ANOTHER VS. ITO (CITIED SUPRA) FOR THE PROPOSITION THAT FOR THE FOR MATION OF BELIEF SOME INFORMATION IS NECESSARY AND NO PRELIMINARY INQUIRY IS REQUIRED TO BE MADE AND AS LONG AS REASONS ARE RECORDED; THE SATISFACTI ON OF THE AO ON THE BASIS OF INFORMATION AVAILABLE WITH HIM WILL TANTAMOUNT T O FULFILLING THE REQUIREMENTS OF LAW. 10.4 H.A. NANJI & CO. VS. ITO, CALCUTTA ( CITED SUP RA ):- IT IS SEEN THAT THE FACTS AVAILABLE ON RECORD WERE THAT AFTER THE DEDUC TIONS CLAIMED BY THE ASSESSEE ON ACCOUNT OF INTEREST PAID ON HUNDI LOANS WERE ACCEPTED AS GENUINE IN THE ORIGINAL ASSESSMENTS SUBSEQUENTLY TH E ITO RECEIVED A CIRCULAR FROM THE SPECIAL INVESTIGATION DEPARTMENT. THE SAID CIRCULAR GAVE THE LIST OF BOGUS CREDITORS WHICH INCLUDED THE ALLE GED CREDITORS OF THE ASSESSEE. THE INITIATION OF REASSESSMENT PROCEEDING S WAS HELD TO BE A VALID ACTION. THEIR LORDSHIPS HELD THAT IT COULD NOT BE S AID THAT THE DISCOVERY OF CREDITORS OF THE ASSESSEE AS BOGUS CREDITORS WAS AN INFERENTIAL FACT BASED ON THE SAME MATERIALS WHICH THE ASSESSEE DISCLOSED AS PRIMARY FACTS. ON A READING OF THE RECORDED REASONS IT BECAME OBVIOUS T HAT A COMPARISON OF THE NAMES OF THE BOGUS CREDITORS WITH THE LIST OF THOSE SHOWN BY THE ASSESSEE WAS MADE BY THE ITO WHICH WAS THE INVESTIGATION CON TEMPLATED BY THE CIRCULAR AND WHEN SUCH NAMES DISCLOSED BY THE ASSES SEE WERE FOUND IN THE LIST THE ITO STRAIGHTWAY RECORDED HIS PRIME FACIE P OSITIVE BELIEF THAT INCOME HAD ESCAPED ASSESSMENT. IN THE FACTS OF THE PRESENT CASE AS HAS BEEN SUCCESSFULLY DEMONSTRATED BY THE ASSESSEE THAT THE NAMES OF THE DONORS TRUSTS IN THE INFORMATION FOUND HAS BEEN VER BATIM RECORDED IN THE REASONS AND THE ASSESSEE HAS NEVER RECEIVED GIFTS F ROM THOSE DONOR TRUSTS. MOREOVER AS PER THE REASONS RECORDED THE ASSESSEE W AS SUPPOSED TO HAVE RECEIVED GIFTS BY WAY OF SPECIFIC CHEQUES AND DDS A MOUNTING TO RS. 20 LACS AND ON A PERUSAL OF THE ASSESSMENT ORDER PAGE 3 IT IS SEEN THAT THE GIFTS WERE RECEIVED OF RS. 15 LACS. IN THIS BACKGROUND TH E ARGUMENT OF THE ASSESSEE RELYING UPON THE ORDER OF THE COORDINATE B ENCH AT AGRA THAT AO HAS PROCEEDED ON BORROWED SATISFACTION AS NO EFFO RT WAS MADE WHATSOEVER TO AT LEAST TO CROSS CHECK THE NAMES OF THE DONOR AND THE AMOUNT OF GIFTS RECEIVED BY THE ASSESSEE. THE FACT THAT THESE WERE BOGUS GIFTS OR GENUINE GIFTS WOULD BE AN INFERENCE WHICH COULD BE DRAWN ONLY AFTER THE BASIC FACT THAT THE DONOR TRUSTS WERE SAM E AND THE AMOUNT CONSIDERED TO HAVE BEEN RECEIVED BY THE ASSESSEE AS PER REASONS RECORDED AND ASSESSMENT ORDER WERE SAME THE SAME. THE BLIND BELIEF WHICH THE AO PLACED ON THE CORRECTNESS OF THE INFORMATION RECEIV ED IS APPARENT. HAD HE MADE SOME EFFORTS TO CROSS CHECK THE CORRECTNESS OF THE INFORMATION THEN HE WOULD HAVE SEEN THAT NOT ONLY DONOR TRUSTS WERE DIFFERENT BUT THE AMOUNTS WERE DIFFERENT. ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 13 10.5. IT IS SEEN THAT NONE OF THE DECISIONS RELIED UPON BY THE DEPARTMENT LAY DOWN THE PROPOSITION THAT INFORMATION RECEIVED FROM ANOTHER AO EVEN IF INCORRECT SHOULD BE BLINDLY ACCEPTED AND ASSESSEE S HOULD BE SUBJECTED TO REOPENING OF THE PROCEEDINGS. THE AO EXERCISING THE POWERS VESTED IN HIM BY THE STATUTE IS NECESSARILY PRESUMED TO ACT IN AN UNBIASED MANNER ON THE RECEIPT OF INFORMATION IN ORDER TO FORM A BELIEF TH AT INCOME HAS ESCAPED ASSESSMENT. THE HASTE IN WHICH RIGHT FROM THE RECEI PT OF THE INFORMATION TO THE ISSUANCE OF NOTICE LEADS US AGREE WITH THE CONC LUSION OF THE CIT(A) THAT THE AO HAS ACTED ON BORROWED SATISFACTION. THE FACT THAT THE ENTIRE EXERCISE HAS BEEN COMPLETED WITHIN THE DAY SHOWS TH AT THE POWER VESTED IN THE AO HAS BEEN MECHANICALLY EXERCISED. IN THE FACT S OF THE PRESENT CASE WE FIND OURSELVES IN AGREEMENT WITH THE FINDING OF THE CIT(A) IN AS MUCH AS THAT THE CONCERNED AO HAS PROCEEDED ON BORROWED SATISFACTION IN A MECHANICAL MANNER AND NOT EVEN CARING TO MAKE A BAR E MINIMUM EFFORT TO CROSS CHECK THE VERACITY OF THE INFORMATION RECEIVE D. AS SUCH THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE FACTS OF THE PRESENT CASE DOES NOT HELP THE DEPARTMENT IN ANY MANNER. 10.6 RELIANCE HAS ALSO BEEN PLACED UPON BY THE LD. SR. DR ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF PHOOL CHA ND BAJRANG LAL AND ANOTHER VS. ITO (CITED SUPRA). A PERUSAL OF THE FAC TS AS HAVE BEEN TAKEN INTO CONSIDERATION BY THE HONBLE APEX COURT WOULD SHOW THAT IN THE FACTS OF THAT CASE THE ASSESSEE CLAIMED THAT CASH LOAN HA D BEEN TAKEN FROM A SPECIFIC CALCUTTA COMPANY WHICH HAD BEEN ACCEPTED A S GENUINE BY THE AO. SUBSEQUENTLY INFORMATION FROM THE AO OF THE COM PANY AT CALCUTTA CAME INTO THE POSSESSION OF THE CONCERNED AO ACCORD ING TO WHICH THE MANAGING DIRECTOR OF THE CALCUTTA COMPANY HAD CONFE SSED THAT THE COMPANY HAD NOT ADVANCED ANY LOAN TO ANY PERSON DUR ING THE PERIOD COVERING THE DATE OF CASH LOAN. SINCE THE SUBSEQUEN T INFORMATION WAS DEFINITE, SPECIFIC AND RELIABLE NOTICE FOR REASSESS MENT WAS HELD TO BE VALID. THE ARGUMENT THAT IT WAS A MERE CHANGE OF OPINION W AS NOT ACCEPTED. WHEN CONTRASTED WITH THE FACTS OF THE PRESENT CASE THE RECORD WOULD SHOW THAT THE INFORMATION OF THE DIFFERENT AO WAS SUFFER ING FROM INACCURACIES AND WRONG FACTS WHICH HAVE BEEN BLINDLY ACCEPTED BY THE CONCERNED AO AS OBSERVED NOT ONLY THE BASIC NAMES OF THE DONORS ARE ENTIRELY DIFFERENT EVEN THE AMOUNTS RECEIVED AS GIFTS IS DIFFERENT. TH E FACT THAT THE ENTIRE EXERCISE FROM RECEIVING THE INFORMATION ON ISSUANCE OF NOTICE IS COMPLETED IN A DAY SUPPORTS THE STAND OF THE CIT(A) THAT THE AO HAS PROCEEDED ON BORROWED SATISFACTION IN HASTE AND MECHANICALLY AND THE PRESENT CASE CANNOT BE GUIDED BY THE PRINCIPLE LAID DOWN BY THE APEX COURT WHEREIN IN THE ORIGINAL ASSESSMENT THE CLAIM HAD BEEN ALLOWED WHICH WAS SOUGHT TO BE SET ASIDE ON THE BASIS OF SPECIFIC DEFINITE AND RELIABLE INFORMATION. IN THE FACTS OF PHOOL CHAND IT IS SEEN THAT THE CONCER NED AO HAD FORMED HIS INDEPENDENT BELIEF THAT INCOME HAD ESCAPED ASSESSME NT. THE CONCERNED AO HAVING ENTERTAINED THE DOUBTS ABOUT GENUINENESS OF LOANS TRANSACTIONS ADDRESSED A LETTER TO THE ITO CALCUTTA ON MAY 19, 1 970 INQUIRING IF THE ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 14 CALCUTTA COMPANY WAS WITHIN ITS JURISDICTION AND TO GATHER CERTAIN INFORMATION FROM THE CASE RECORDS OF A SPECIFIC COM PANY. THE ITO CALCUTTA REPLIED ON JULY 7, 1970 STATING THAT THE C ONCERNED MD HAS CONFIRMED THAT THE SOCALLED COMPANY IS A DUMMY CONC ERN AND THE POSITION HAD BEEN ACCEPTED BY THE SAID COMPANY IN THE ASSESS MENT OF THE COMPANY OVER 1962-63, 1963-64 AND 1964-65. IT WAS INFORMED THAT TRANSACTIONS WITH THIS CONCERN WERE NOT GENUINE AND THE CONCERNE D ITO STATED THAT HE COULD FURNISH FURTHER INFORMATION OF ANY TRANSACTIO N IF IT WAS SO REQUIRED. ON THE RECEIPT OF THIS COMMUNICATION NOTICE WAS ISS UED TO THE ASSESSEE ON 26TH AUGUST 1971. IT IS SEEN THAT THERE WAS SUFFICI ENT MATERIAL BEFORE THE AO FOR THE FORMATION OF HIS BELIEF AND HE HAD NOT P ROCEEDED IN UNDUE HASTE ACCEPTING AS GOSPEL TRUTH THE INFORMATION FRO M ANOTHER AO. THE CONCERNED AO HAS ACTED AND PROCEEDED DILIGENTLY AND NOT FORMED AN OPINION IN UNDUE HASTE. WHEREAS IN THE FACTS OF THE PRESENT CASE THE INFORMATION RECEIVED BY FAX HAS BEEN FOUND TO BE IN ACCURATE AND WRONG AS IT CONTAINED WRONG NAMES OF THE DONORS MENTIONING W RONG AMOUNTS OF THE GIFTS WERE STATED TO GIVEN. HAD THE CONCERNED AO AP PLIED HIS MIND THE GLARING MISTAKES WOULD HAVE BEEN NOTICED. HAVING PR OCEEDED MECHANICALLY ON BORROWED SATISFACTION THE ACTIONS C ANNOT BE UPHELD. AS SUCH THE PRINCIPLE LAID DOWN THEREIN ON FACTS IS NO T OF MUCH HELP TO THE REVENUE AS THERE THE TIME TAKEN ATTENTION TO DETAIL AND THE EFFORTS TO CROSS- CHECK THE VERACITY CANNOT BE COMPARED TO THE HASTY EXERCISE IN THE PRESENT PROCEEDINGS. 10.7. SIMILARLY IN JUDGMENT OF THE GUJARAT HIGH COU RT IN THE CASE OF PRAFUL CHUNILAL PATEL VS. M.J. MAKWANA/ACIIT, (CITED SUPRA ) IT IS SEEN THAT THEREIN THE CONVERSION OF CAPITAL ASSET INTO STOCK- IN-TRADE AND TRANSFER, THEREOF BY PARTNER TO FIRM IN THE EARLIER YEARS LED THE AO TO FORM THE BELIEF THAT INCOME CHARGEABLE TO TAX IN THE FORM OF CAPITA L GAINS IN RESPECT OF THE TRANSFER WHICH TOOK PLACE IN THE EARLIER YEAR HAD E SCAPED ASSESSMENT AND THE INITIATION OF PROCEEDINGS U/S 147 WERE HELD TO BE VALIDLY INITIATED. IN THE FACTS OF THE CASE THE PRINCIPLE IS OF NO HELP T O THE REVENUE AS HEREIN THE ENTIRE ACTION HAS BEEN BASED ON FAXED RECEIPT OF IN FORMATION OF A DIFFERENT AO WHOSE VERACITY HAS BEEN BLINDLY AND MECHANICALLY ACCEPTED AS CORRECT AND TRUE CONTRARY TO WHAT THE RECORD SHOWS. THE ENT IRE EXERCISE HAVING BEEN COMPLETED IN A SINGLE DAY LEADS US FOR THE CON CLUSION THAT THE IMPUGNED ORDER RELYING UPON THE ORDER OF THE COORDI NATE BENCH IN THE FACTS AS THEY STAND HAS TOBE UPHELD. IN THIS BACKGROUND N OTHING HAS BEEN PLACED BY THE DEPARTMENT TO CANVASS A CONTRARY VIEW EXCEPT RELYING ON THE PRINCIPLES LAID DOWN IN DIFFERENT JUDGMENTS WHICH P ROCEED ON FACTS PECULIAR TO THEIR OWN . IN THE FACTS OF THE GUJARAT HIGH COURT IN THE CASE OF PRAFUL CHUNILAL PATEL VS. M.J. MAKWANA/ACIIT, IT IS SEEN THAT THE AO WHILE MAKING THE ASSESSMENT FOR THE ASSESSMENT YEAR 1993-94 RECORDED HIS REASONS IN WRITING HOLDING THAT INCOME IN 1991-92 A SSESSMENT YEAR HAD ESCAPED ASSESSMENT. BY VIRTUE OF THE FACT THAT INCO ME CHARGEABLE TO TAX IN THE FORM OF CAPITAL GAINS IN RESPECT OF TRANSFER WA S NOT TAKEN INTO ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 15 CONSIDERATION. IN VIEW OF THE FACT THAT THE PROPERT Y WAS CONVERTED FROM CAPITAL ASSETS TO STOCK IN TRADE AND SUBSEQUENTLY T HE PROPERTY WAS SOLD TO THE FIRM AND THE CAPITAL GAIN ARISING FROM THE TRAN SFER TO THE PARTNERSHIP FIRM HAD NOT BEEN SUBJECTED TO TAX. AS SUCH IN THAT BACKGROUND THEIR LORDSHIPS OF THE HIGH COURT HAD AN OCCASION TO FORM THE VIEW THAT THE CONCERNED ITO HAD REASONS TO BELIEVE THAT INCOME HA D ESCAPED ASSESSMENT. AS SUCH THE VIEW FORMED IN THE FACTS OF THAT CASE WAS OF THE CONCERNED AO. WHEREAS IN THE PRESENT PROCEEDINGS IT HAS BEEN EFFECTIVELY DEMONSTRATED BY THE CIT(A) IN THE IMPUGNED ORDER TH AT THE AO PROCEEDED ON BORROWED SATISFACTION. 10.8. RELIANCE HAS ALSO BEEN PLACED ON ACIT VS. RAJ ESH JHAVERI STOCK BROKERS (P) LTD. WHEREIN IT WAS CANVASSED THAT IT W AS A CHANGE OF OPINION. IN VIEW OF THE FACT THAT INTIMATION U/S 143(1)(A) W AS CONSIDERED TO BE NOT AN ASSESSMENT AND WAS DEEMED TO BE A NOTICE OF DEMA ND U/S 156. THEIR LORDSHIPS HELD THAT THERE BEING NO ASSESSMENT QUEST ION OF CHANGE OF OPINION DOES NOT ARISE. AS SUCH THE PRINCIPLE LAID DOWN THEREIN DOES NOT ADVANCE THE CASE OF THE REVENUE. IN THE PRESENT CAS E THE IMPUGNED ORDER HAS QUASHED THE RE-ASSESSMENT NOT ON THE GROUND OF CHANGE OF OPINION BUT ON THE GROUND THAT THE CONCERNED AO HAS PROCEEDED O N BORROWED SATISFACTION, NON-APPLICATION OF MIND AND POWER OF REOPENING EXERCISE EXERCISING MECHANICALLY AMONGST OTHERS. 10.9 THE FACT THAT NOTICE WAS NOT SERVED ON THE COR RECT PERSON AND THE FACT THAT NOTICE BY POST WAS NOT SENT TO THE CORRECT ADD RESS ALSO REMAINING UNREBUTTED ON RECORD. FATUOUS ARGUMENT ADVANCED BY THE SR. DR THAT AT THE ADDRESS AS PER RETURN THE ONLY LIKELY OCCUPANTS WOU LD BE COWS AND BUFFALOES AS SUCH IS OF HELP TO THE DEPARTMENT AS I T MERELY ADDRESSES THE FACT THAT NO ATTEMPT WAS MADE TO SERVE NOTICE TO TH E ADDRESS AVAILABLE ON THE RETURN. SIMILARLY THE ARGUMENT THAT NOTICE WOUL D HAVE BEEN RECEIVED DESPITE A WRONG ADDRESS IN A SMALL PLACE LIKE BULAN DSHAHAR ALSO DOES NOT INSPIRE ANY CONFIDENCE AND IT DEFINITELY CANNOT BE SAID TO BE A REBUTTAL OF THE CONSISTENT UNREBUTTED STAND OF THE ASSESSEE THA T THE NOTICE WAS NEVER SERVED UPON THE ASSESSEE. IN REGARD TO NOTICE ON SO ME MINAKSHI AGARWAL AGAIN IN THE FACE OF CONSISTENT STAND OF THE ASSESS EE RIGHT FROM THE STAGE OF AO THAT HE HAS NOT RECEIVED THE NOTICE AND SHE WAS NOT THE AUTHORIZED PERSON OF THE ASSESSEE A REBUTTAL BY THE DEPARTMENT ON RECORD IS NOT AVAILABLE. THE CASE LAW RELIED UPON THE ASSESSEE ON THE ISSUE NAMELY CIT V. RAJESH KUMAR SHARMA 311 ITR 235 (DELHI) AND CIT V. LAXMI NARAIN 168 TAXMAN 128 (P&H) FURTHER FORTIFY THE ACTION OF THE CIT(A) THOUGH ON A DIFFERENT GROUND. ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 16 4.1 FURTHER, OUR ATTENTION HAS BEEN DRAWN TOWARD S THE DECISION OF A BENCH OF THE TRIBUNAL IN THE CASE OF BRIJ MOHAN IN ITA NO. 1527(DEL)/2009 DATED 16.12.2011, IN WHICH THE DEC ISION IN THE CASE OF VIJENDRA KUMAR (SUPRA) HAS BEEN FOLLOWED. 4.2 OUR ATTENTION HAS ALSO BEEN DRAWN TOWARDS THE FINDINGS IN THE IMPUGNED ORDER IN PARAGRAPH NO. 2, IN WHICH ASSES SEES SUBMISSION IS RECORDED THAT LETTER DATED 22.03.2006 WAS RECEI VED FROM INCOME-TAX OFFICER, WARD 4(1), AGRA ON 28.03.2006 THROUGH FAX AND HE BELIEVES THAT THIS LETTER IS THE FOUNDATION FOR INITIATIN G PROCEEDINGS U/S 147. AS PER PARAGRAPH NO. 3, IT HAS BEEN FURTHER SUBMITT ED THAT THE AO RECEIVED THIS LETTER ON 28.03.2006. ON THE SAME DAY, HE RECORDED REASONS, OBTAINED THE APPROVAL OF THE ADDITIONAL COMMISSIO NER AND ISSUED NOTICE U/S 148. WE FIND THAT NOTICE U/S 148 HAD BEEN IS SUED ON 29.03.2006, WHILE REASONS HAVE BEEN RECORDED ON 28.03.2006. ON THE SE STATED FACTS, IT WAS ARGUED THAT THERE COULD NOT HAVE BEEN ANY APPLICA TION OF MIND IN SUCH A SHORT TIME. ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 17 4.3 IT IS CONTENDED THAT THE DECISION IN THE CAS E OF RAJESH JHAVERY STOCK BROKERS (P) LTD. (SUPRA) IS NOT APPLICABLE AND THE RATIO OF THE CASE OF VINITA JAIN (SUPRA) IS APPLICABLE. 5. IN THE REJOINDER REPLY, THE LD. SENIOR DR S UBMITS THAT THERE IS NO EVIDENCE ON RECORD THAT INFORMATION WAS RECEIVED VIA FAX. THE FACTUAL POSITION IS THAT THE INFORMATION WAS RECEIVED, WHI CH WAS EXAMINED BY THE AO. RECORDING OF THE REASONS ON THE SAME DAY AND ISSUING NOTICE U/S 148 ON THE SUBSEQUENT DAY ONLY SHOW THAT THE AO ACTED WITH DISPATCH FOR TAKING APPROPRIATE ACTION. 6. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. THE FACTS ARE THAT THE AO RECEIVE D INFORMATION FROM INTERNAL SOURCES ARISING FROM SURVEY IN THE CASE OF D.K. AGGARWAL THAT HE HAD FLOATED A NUMBER OF TRUSTS IN WHICH DONATIONS WERE RECEIVED IN CASH AND GIFTS WERE MADE BY WAY OF CHEQUES OR DEMAND DRA FTS TO A LARGE NUMBER OF PERSONS SPREAD IN A NUMBER OF TOWNS. THE AS SESSEE STATEDLY RECEIVED FOUR GIFTS AGGREGATING TO RS. 20.00 LAKH, OF RS. 5.00 LAKH EACH, BY WAY OF DEMAND DRAFTS. THE NUMBERS OF THE DEMAND DRA FTS WERE ALSO INTIMATED. THE AO APPLIED HIS MIND TO THE INFORMATION AND CAM E TO THE CONCLUSION THAT ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 18 THE ASSESSEE LAUNDERED HIS OWN UNACCOUNTED MON EY THROUGH THE INSTRUMENT OF GIFTS. IT MAY BE MENTIONED HERE T HAT THE ASSESSEE HAD ACTUALLY RECEIVED ONLY THREE GIFTS OF RS. 5.00 LA KH EACH. THE DEMAND DRAFT NUMBERS MENTIONED IN THE REASONS AT SERIAL NOS. (I), (II) AND (III) TALLY WITH THE GIFTS ACTUALLY RECEIVED BY THE ASSESSEE. HOWEVER, ACCORDING TO REASONS GIFTS AT NUMBERS (I) AND (II) WERE R ECEIVED FROM GOPAL JI FAMILY TRUST WHILE IN THE ASSESSMENT ORDER THES E ARE MENTIONED TO HAVE BEEN RECEIVED FROM DEEPESH AGGARWAL AND COMPANY. GIFT AT SERIAL NO. (IV) WAS NOT RECEIVED BY THE ASSESSEE. THE INFO RMATION HAD ORIGINATED FROM A RESPECTABLE SOURCE WITHIN THE DEPARTMENT WHICH WAS COMPETENT TO FURNISH INFORMATION OF FACT AND LAW APPLICABLE TO THE FACTS. THE INFORMATION WAS GATHERED IN THE COURSE OF SURVEY OF THE DONOR CONDUCTED U/S 133A. IT IS NO DOUBT TRUE THAT INFORMATION H AD SOME DEFECT IN TERMS OF AMOUNT, THE NAME OF ONE DONOR AND IT INCLUDED ONE GIFT WHICH WAS NOT ACTUALLY RECEIVED BY THE ASSESSEE. ACCORDING TO US, THIS DOES NOT IMPEACH ON THE INFORMATION WHICH MAY HAVE SOME ERRORS IN I T. IN ANY CASE, GIFT OF RS. 5.00 LAKH FROM SHYAM TRADING COMPANY WAS AC TUALLY RECEIVED AND OTHER TWO GIFTS WERE ALSO RECEIVED VIDE DD NO. 138947 AND 138946 DRAWN ON ORIENTAL BANK OF COMMERCE. NOW COMES T HE QUESTION OF APPLICATION OF MIND. THE AO MENTIONED ABOUT LACK OF BUSINESS ACTIVITY ON ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 19 PART OF THE TRUSTS, LACK OF RELATIONSHIP BETWEEN THE DONORS AND THE DONEE, WHICH ACCORDING TO HIM LEAD TO THE INFERENCE TH AT THE ASSESSEE HAD LAUNDERED HIS UNACCOUNTED MONEY THROUGH THE INSTRU MENT OF GIFTS. THEREAFTER, IT HAS ALSO BEEN RECORDED THAT HE HAD REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX AMOUNTING TO RS. 20.00 LA KH HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147. THE QUESTION WHETHER THERE WAS APPLICATION OF MIND ON THE PART OF THE AO STA NDS COVERED IN SIMILAR CIRCUMSTANCES IN THE CASE OF VIJENDRA KUMAR (SUPRA ) DECIDED BY I BENCH OF DELHI TRIBUNAL. THIS DECISION HAS BEEN FOLLOWE D IN THE CASE OF BRIJ MOHAN (SUPRA). THE FACTS IN ALL THESE THREE CASE S ARE SIMILAR. THE DECISION OF THE COORDINATE BENCH IN THE CASE OF VIJENDRA KUMAR HAS A BINDING CHARACTER AND, THEREFORE, WE HAVE NO OPTION BUT TO FOLLOW THIS DECISION. RESPECTFULLY FOLLOWING THIS DECISION, IT IS HELD THAT THE AO DID NOT APPLY HIS MIND TO THE INFORMATION, THUS, HE DID NOT PR OPERLY ASSUME JURISDICTION U/S 147. IN VIEW OF THIS DECISION OF BINDING NATU RE, WE NEED NOT REALLY GO INTO RIVAL SUBMISSIONS IN RESPECT OF APPLICABILITY OF THE RATIO OF THE CASE OF RAJESH JHAVERI STOCK BROKERS (P) LTD. AND VINIT A JAIN (SUPRA). ITA NO. 1196(DEL)/2009 & C.O. NO. 243(DEL)/2010 20 6.1 THE RESULT OF THE DISCUSSION IS THAT GROUND NO . 2 IN THE APPEAL OF THE REVENUE IS DISMISSED. CONSEQUENTLY, IT IS NOT NEC ESSARY TO DECIDE GROUND NOS. 1 AND 3. 7. AS THE APPEAL OF THE REVENUE FAILS, THE CROSS O BJECTION OF THE ASSESSEE DOES NOT SURVIVE FOR DECISION. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THE CROSS OBJECTION IS ALSO DISMISSED AS INFRUCTUOUS. SD/- SD/- (R.P. TOLANI) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- SHRI AJAY KUMAR,C/O MOHAN DAIRY, SIYANA ROAD, BU LANDSHAHR. ITO, WARD-I, BULANDSHAHR. CIT(A) CIT, THE D.R., ITAT, NEW DELHI. ASSISTANT REGISTRAR.