M/s. Gir Shelters & Storage Pvt. Ltd., New Delhi V. ITO, New Delhi

CO 312/DEL/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9377 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 02-05-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 06-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SAUBHAGYA AGARWAL
• Keywords: Unexplained cash credit; Bogus Share capital; Business income; Principle of natural justice; Additional evidence; Accommodation entries
• Section: 147; 68; 148; 144

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI BHAVNESH SAINI , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2186/DEL/2014 (ASSESSMENT YEAR: 2002 - 03 ) ITO, WARD - 12(1), NEW DELHI VS. GIR SHELTERS & STORAGE PVT. LTD, R - 116, 2 ND FLOOR, GK - I, NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 312/DEL/2016 (ASSESSMENT YEAR: 2002 - 03) GIR SHELTERS & STORAGE PVT. LTD, R - 116, 2 ND FLOOR, GK - I, NEW DELHI VS. ITO, WARD - 12(1), NEW DELHI (APPELLANT) (RESPONDENT) REVENUE BY : SHRI AMIT KATOCH, SR. DR ASSESSEE BY: SHRI SAUBHAGYA AG A RWAL ADV DATE OF HEARING 27/11 / 2018 DATE OF PRONOUNCEMENT 2 0 / 12 / 2018 O R D E R PER PRASHANT MAHARISHI , A. M. 1 . THIS APPEAL IS FILED BY THE INCOME TAX OFFICER, WARD 12 (1), NEW DELHI (THE LEARNED AO ) AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) VIII, NEW DELHI DATED 21/1/2014 FOR A.Y. 2002 03 WHEREIN THE ADDITION UNDER SECTI ON 68 OF THE INCOME TAX ACT OF RS 1,03,00,000/ MADE BY THE LEARNED ASSESSING OFFICER UNDER SECTION 68 OF THE INCOME TAX ACT , 1961 ON ACCOUNT OF MONEY RECEIVED FROM AYUSHI STOCKBROKERS PRIVATE LIMITED WAS DELETED. THIS IS THE ONLY GRIEVANCE OF THE REV ENUE. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,03,00,000/ - MADE BY THE AO UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF MONEY RECEIVED FROM AYUSHI STOCK BROKERS PVT. LTD. PAGE | 2 2 . THE ASSESSEE HAS ALSO FILED ACROSS OBJECTION IN THIS APPEAL WHERE THE GRIEVANCE OF THE ASSESSEE IS THAT THAT THE LEARNED ASSESSING OFFICER HAS ASSUMED JURISDICTION UNDER SECTION 147 151 OF THE INCOME TAX ACT WITHOUT OBSERVING THE PRINCIPLES OF THE NATURAL J USTICE. IT IS FURTHER THE GRIEVANCE THAT ASSESSING OFFICER HAS FRAMED THE ASSESSMENT WITHOUT SERVING THE MANDATORY NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT. 3 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LD AO IN ASSUMING JURISDICTION AS PER LAW AND FRAMING THE IMPUGNED ASSESSMENT ORDER AND THAT TOO WITHOUT COMPLYING WI TH THE MANDATORY CONDITIONS AS ENVISAGED U/S 147 TO 151 OF INCOME TAX ACT, 1961 AND WITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFI RMING THE ACTION OF THE LD AO IN FRAMING THE IMPUGNED ASSESSMENT ORDER AND THAT TOO WITHOUT SERVING THE MANDATORY NOTICE U/S 148 WHICH IS PREREQUISITE CONDITION AS PER LAW, MORE SO WHEN THE LATEST ADDRESS OF THE ASSESSEE COMPANY WERE AVAILABLE IN THE KNOWL EDGE OF THE INCOME TAX DEPARTMENT. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LD AO IN FRAMING THE IMPUGNED ASSESSMENT ORDER AND THAT TOO WITHOUT FOLLOWING THE PROCESSOR LAID DOWN IN PROVISIONS OF ORDER 5, RULE 20 OF THE CODE OF CIVIL PROCEDURE, 1908. 4. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF THE LD CIT(A) IN CONFIRMING THE ACTION OF THE LD AO IN FRAMING THE IMPUGNED REASSESSMENT ORDER IS B EYOND JURISDICTION, BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 4 . BRIEF FACTS OF THE CASE SHOWS THAT ASSESSEE IS A COMPANY WHO FILED ITS RETURN OF INCOME ON 3/1/2003 DECLARING TOTAL INCOME OF RS. 10620/ . THE INFORMATION WAS RECEIVED F ROM THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT, AGRA THAT INVESTIGA TION CARRIED OUT IN CASE OF M/S AYUSHI STOCKBROKERS FORMERLY KNOWN AS M / S C OSMOS FINANCIAL SERVICES PRIVATE LIMITED WAS FOUND THAT DECLARED BUSINESS OF THAT COMPANY IS A STOCK BR OKER BUT COMPANY IS ACTUALLY INVOLVED IN MONEY - LAUNDERING BUSINESS ON A VERY LARGE - SCALE IN THE GARB OF STOCK BROKING BUSINESS. IT WAS THE INFORMATION THAT THAT COMPANY IS ACTUALLY PROVIDING ACCOMMODATION ENTRIES IN THE SHAPE OF BOGUS SHARE APPLICATION MON EY, SHARE CAPITAL AND LONG - TERM CAPITAL GAIN AND SHORT - TERM CAPITAL GAIN ETC. THE NAME OF THE ASSESSEE COMPANY ALSO FIGURED AS ONE OF THE BENEFICIARIES OF THESE ALLEGED BOGUS PAGE | 3 ACCOMMODATION TRANSACTION IN THE LIST GIVEN BY THE INVESTIGATION WING (INCOME TA X DEPARTMENT) A GRA AFTER MAKING NECESSARY INQUIRIES. IT WAS NOTED BY THE LEARNED ASSESSING OFFICER THAT ACCOMMODATION ENTRIES AMOUNTING TO 10300000 HAS BEEN RECEIVED BY THE ASSESSEE COMPANY ON VARIOUS DATES FROM THAT COMPANY AND THE SAID AMOUNT HAS BEEN CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE WITH HDFC BANK AND SBP. THEREFORE THE LEARNED ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE INCOME TAX AT ON 31/3/2009 AFTER RECORDING THE REASONS FOR REOPENING OF THE ASSESSMENT. THE NOTICE UNDER SEC TION 148 OF THE ACT REMAIN ED UNCOMPLIED WITH . THE ASSESSEE WAS FURTHER ASKED TO FURNISH THE FRESH CONFIRMATION FROM M / S AYUSHI STOCKBROKERS PRIVATE LIMITED ALONG WITH ITS COMPLETE SET OF INCOME TAX RETURN AND BANK STATEMENT REFLECTING THE TRANSACTIONS AND THE PROOF OF THE PRESENT ADDRESS AND ALSO REQUIRING IT TO PRODUCE THE PARTY FOR EXAMINATION. HOWEVER THE NOTICE RETURNED BACK WITH THE REMARK NO SUCH F I RM. THEREFORE A FURTHER OPPORTUNITY WAS GIVEN BY THE ASSESSING OFFICER BUT THE NOTICE WAS NOT COMPLIED W ITH. THEREFORE THE LEARNED ASSESSING OFFICER ON THE BASIS OF THE INFORMATION AVAILABLE ON RECORD MADE THE ADDITION OF 103000000 IN THE HANDS OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT AND PASSED ASSESSMENT ORDER UNDER SECTION 144 READ WITH SECTION 147 OF THE INCOME TAX ON 29/12/2009 DETERMINING TOTAL INCOME OF THE ASSESSEE AT 10310620/ 5 . AGGRIEVED WITH THE ORDER OF THE LEARNED ASSESSING OFFICER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT A ON VARIOUS COUNTS. THE LEARNED CIT APPEALS UPHELD THE NO TICE UNDER SECTION 148 OF THE INCOME TAX ACT AND DISMISSED THE GROUNDS OF APPEAL OF THE ASSESSEE HOLDING THAT THE REOPENING IS VALID. ON THE MERITS OF THE ISSUE , ASSESSEE SUBMITTED THE DETAILS BEFORE THE LEARNED COMMISSIONER APPEALS IN THE FORM OF CONFIRMA TION AND RELIED ON THE SEVERAL DECISIONS. THE LEARNED CIT (A ) HELD THAT THE ASSESSMENT WAS COMPLETED UNDER SECTION 144 OF THE INCOME TAX ACT AND THE LEARNED ASSESSING OFFICER HAS MERELY STATED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS RECEIVED ACCOMM ODATION ENTRY OF 1.03 CRORES AND THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD THAT IT WAS APPELLANTS OWN MONEY WHICH HAS BEEN RO U TED FROM ENTRY OPERATOR. HE FURTHER HELD THAT THAT APPELLANT HAS RECEIVED THE SUM OF 1.03 CRORES FROM AYUSHI STOCK BROKER PRIVATE PAGE | 4 LIMITED ON ACCOUNT OF SALE PROCEEDS OF SHARES HELD AS INVESTMENT AMOUNTING TO 1.03 CRORES WHICH WERE PERTAINING TO ASSESSMENT YEAR 2001 0 2 AND SOLD IN ASSESSMENT YEAR 2002 03. THE LEARNED CIT APPEAL FURTHER HELD THAT ASSES SEE HAS PRODUCED THE COMPLETE DETAILS OF SHARES SOLD INCLUDING THE CONTRACT NOTES FOR SALE AND PURCHASE OF SHARES ALONG WITH CONFIRMED COPY OF ACCOUNT OF THE PARTY THROUGH WHOM THE SHARES HAS BEEN SOLD. THE LEARNED AUTHORISED REPRESENTATIVE ALSO SUBMITTED A COMPLETE CHART SHOWING DETAILS OF SHARES SOLD AND PURCHASED DURING THE YEAR UNDER CONSIDERATION AS WELL AS THE PREVIOUS YEAR AND THEREFORE ON THE BASIS OF THIS HE HELD THAT THE LEARNED ASSESSING OFFICER HAS FAILED TO VERIFY FROM THE AUDITED ACCOUNTS THAT THOSE SHARES WERE AVAILABLE WITH THE ASSESSEE. HE FURTHER RELIED ON THE DECISION IN IDENTICAL CASE TAKEN BY HIM. HE FURTHER HELD THAT ASSESSEE WAS HAVING SHARES WORTH 1.68 CRORES AT THE END OF THE FINANCIAL YEAR AND THEREFORE THE SHARES HAVE BEEN SOLD B Y THE ASSESSEE AND GAIN OF 78107 WAS DISCLOSED IN THE RETURN OF INCOME AS BUSINESS INCOME. HE FURTHER HELD THAT IT IS NOT THE SHARE APPLICATION MONEY NOR ANY PREMIUM WAS CHARGED TO ANY PERSON HENCE PURCHASE IN THE EARLIER YEARS WAS SOLD WITH SMALL PROFIT . ACCORDINGLY , HE DELETED THE WHOLE ADDITION . THEREFORE BOTH THE PARTIES AGGRIEVED WITH THE ORDER OF THE LEARNED COMMISSIONER APPEALS HAS PREFERRED APPEAL BEFORE US. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUBMITTED THAT BEFORE THE ASSESSING OFF ICER , ASSESSEE HAS NOT PRODUCED ANY DETAILS AND EVEN BEFORE THE LEARNED CIT APPEALS ASSESSEE HAS PRODUCED THE MERE CONFIRMATION. THE ASSESSEE IS SHOWN TO HAVE BEEN PROVIDED THE ACCOMMODATION ENTRY BY THE ABOVE COMPANY TO WHOM THE INVESTMENTS HAVE BEEN SOLD . HE FURTHER STATED THAT THAT THE LEARNED CIT APPEALS HAS SOUGHT THE REMAND REPORT WITHOUT ENCLOSING THE ANY EVIDENCES FURNISHED BY THE ASSESSEE BEFORE HIM. HE FURTHER STATED THAT THE CIT APPEAL HAS ACCEPTED THE ADDITIONAL EVIDENCES SUBMITTED BEFORE HIM WI THOUT ANY ORDER UNDER RULE 46A OF THE INCOME TAX RULES 1962. HE FURTHER SUBMITTED THAT EVEN ON THE MERIT THE LEARNED COMMISSIONER APPEALS HAS ERRED IN ACCEPTING THE ACCOMMODATION ENTRY OF THE SALE OF INVESTMENT BY THE ASSESSEE TO 3RD PARTY. THERE IS NO EVI DENCE THAT WHETHER THE ASSESSEE HAS REALLY SOLD S AME SHARES OF THE COMPANY TO THE OTHER PARTY. EVEN IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX APPEALS THERE IS NO MENTION ABOUT THE NAME OF THE COMPANY WHOSE SHARES PAGE | 5 HAVE BEEN SOLD. EVEN THE ASSES SEE HAS ALSO NOT SUBMITTED ANY DETAILS OF WHICH COMPANY THE SHARES HAVE BEEN SOLD WHETHER IT WAS A LISTED COMPANY OR AN UNLISTED COMPANY. MERELY BECAUSE THE INVESTMENT HAVE BEEN SHOWN IN THE BALANCE SHEET FOR THE EARLIER YEARS IT CANNOT BE SAID THAT THE AMOUNT OF SALE CONSIDERATION RECEIVED FROM THE ACCOMMODATION ENTRY PROVIDED IS GENUINE. HE FURTHER STATED THAT IN CASE OF AN ACCOMMODATION ENTRY PROVIDER THE FAKE CASH BALANCE IS GRANTED TO THE ASSESSEE IN THE FORM OF PURCHASE OF BOGUS SHARES OR ANY ASSETS WHICH IS NEVER EXISTED IN THE BALANCE SHEET OF THE ASSESSEE COMPANY. HE SUBMITTED THAT IN THE BALANCE SHEET THOSE SHARES ARE EXISTING , IT IS THE DUTY OF THE ASSESSEE TO SHOW THAT IT HAS PURCHASED THE SHARES OF THIS COMPANY AND HOW IT IS PURCHASED AND WHE THER THE SHARES WERE IN EXISTENCE AT THE TIME OF SALE OR NOT. FURTHER , THE LEARNED COMMISSIONER OF INCOME TAX HA S MERELY RELIED UPON THE DETAILS OF THE CHART OF THE SHARE SOLD AND PURCHASED. THE TRANSACTION IS REALLY FOR THE SALE OF SHARES OR NOT HAS NOT B EEN VERIFIED BY THE LEARNED COMMISSIONER APPEALS . IN VIEW OF THIS HE SUBMITTED THAT THE ORDER PASSED BY THE COMMISSIONER OF APPEALS IS SUFFERING FROM VARIOUS INFIRMITIES. HE FURTHER RELIED ON DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT VERSUS JANSAMPARK ADVERTISING AND MARKETING PRIVATE LIMITED 375 ITR 373 AND CIT VERSUS MANISH BUILD WELL PRIVATE LIMITED 16 TAXMAN.COM 27 AND STATED THAT WHERE THE ASSESSING OFFICER HAS FAILED TO CONDUCT PROP ER ENQUIRIES IT IS THE DUTY OF THE HIGHER APPELLATE FORUM TO MAKE ADEQUATE ENQUIRY AND THEN DECIDE THE ISSUE ON THE MERIT. 7 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THE AUDITORS REPORT OF THE ASSESSEE COMPANY STATING THAT IN THE PREVIOUS YEAR THE AS SESSEE WAS HAVING INVESTMENT IN THE BALANCE SHEET OF THE COMPANY OF 1 6834163 WHICH IS DISCLOSED AS PER SCHEDULE B OF THE BALANCE SHEET. THOSE SHARES HAVE BEEN SOLD DURING THE YEAR AND THE ASSESSEE HAS EARNED INCOME FROM SUCH A TRANSACTION OF 78107/ . THIS INCOME HAS BEEN SHOWN IN THE PROFIT AND LOSS ACCOUNT UNDER THE HEAD INCOME. THEREFORE, HE SUBMITTED THAT THE ASSESSEE HAS SHOWN THAT SHARES WERE ONLY AS AN INVESTMENT IN THREE COMPANIES. HE FURTHER SUBMITTED THE COPY OF APPLICATION UNDER RULE 46A S UBMITTED TO THE COMMISSIONER OF INCOME TAX APPEALS. PAGE | 6 8 . WITH RESPECT TO THE CROSS OBJECTION OF THE ASSESSEE. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT REOPENING OF THE ASSESSMENT PROCEEDINGS IS INVALID AND THAT TOO WITHOUT COMPLYING WITH THE MANDAT ORY CONDITIONS AS ENVISAGED UNDER SECTION 147 TO 151 OF THE INCOME TAX ACT AND WITHOUT OBSERVING THE PRINCIPLES OF THE NATURAL JUSTICE. IT WAS FURTHER STATED THAT THE MANDATORY NOTICE UNDER SECTION 148 OF THE ACT WHICH IS A PREREQUISITE CONDITION AS PER T HE LAW WHEN THE LATEST ADDRESS OF THE ASSESSEE COMPANY ARE AVAILABLE IN THE KNOWLEDGE OF THE INCOME TAX DEPARTMENT HAS NOT BEEN SERVED AT THAT PARTICULAR ADDRESS. HE REFERRED TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT WHICH WERE SOUNDED THE OLD ADD RESS PLACED AT PAGE NUMBER 2 OF THE PAPER BOOK. HE FURTHER REFERRED TO THE COPY OF THE APPROVAL GRANTED BY THE LEARNED ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 1, 2, NEW DELHI DATED 30/3/2008 STATING THAT IT IS NOT PROPER. 9 . THE LEARNED DEPARTMENTAL R EPRESENTATIVE SUBMITTED THAT WHEN THE ASSESSEE HAS GIVEN AN ADDRESS IN THE RETURN OF INCOME FOR THAT PARTICULAR YEAR, THE NOTICE HAS BEEN SENT ON THAT PARTICULAR ADDRESS ONLY AND THEREFORE THERE IS NO INFIRMITY IN SENDING THE NOTICE TO THE RIGHT ADDRESS OF THE ASSESSEE. IT WAS FURTHER STATED THAT THE APPROVAL HAS BEEN CORRECTLY GRANTED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX BASED ON THE REASONS RECORDED BY THE LEARNED ASSESSING OFFICER. HE FURTHER STATED THAT THE REASONS ITSELF SUGGEST THAT ASSESSEE HAS OBTAINED AN ACCOMMODATION ENTRY AND ON THAT BASIS. THE ADDITIONAL COMMISSIONER OF INCOME TAX AS AFTER READING THE REASONS RECORDED THE APPROVAL. THEREFORE, THERE IS NO INFIRMITY IN THE APPROVAL GRANTED BY THE LEARNED ADDITIONAL COMMISSIONER OF INCOM E TAX. 10 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE LOWER AUTHORITIES. 11 . COMING TO THE 1 ST CROSS OBJECTION OF THE ASSESSEE. IN THE PRESENT CASE, THE NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED WITHIN 6 YEARS FROM THE E ND OF THE ASSESSMENT YEAR BASED ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT. THE ASSESSEE FILED ITS RETURN OF INCOME, WHICH WAS NOT SELECTED FOR THE SCRUTINY. SUBSEQUENTLY, ON 31/3/2009, THE NOTICE WAS SENT BY SPE ED POST BY THE LEARNED AO AT THE ADDRESS OF THE ASSESSEE GIVEN IN THE RETURN OF INCOME. IT IS NOT CLAIMED THAT SUCH NOTICE IS RECEIVED BACK BY THE LEARNED AO. THE ADDRESS MENTIONED IN PAGE | 7 THE RETURN OF INCOME AND IN THE NOTICE, ARE SAME. THEREFORE, IT CANNO T BE SAID THAT THE NOTICE HAS NOT BEEN PROPERLY SOUND ON THE ASSESSEE. FURTHER, WITH RESPECT TO THE APPROVAL GRANTED BY THE LEARNED ADDITIONAL COMMISSIONER OF INCOME TAX, WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT APPEAL IN UPHOLDING THAT THE RE ASONS RECORDED WERE PRODUCED BEFORE THE ADDITIONAL COMMISSIONER OF INCOME TAX AND THE REASONS ALSO EMPHATIC THAT THE APPROVAL GRANTED BY THE LEARNED ADDITIONAL COMMISSIONER OF INCOME TAX CANNOT BE SAID TO BE WITHOUT APPLICATION OF TIME. EVEN IN THE APPROV AL THE LEARNED ADDITIONAL COMMISSIONER OF INCOME TAX IS FURTHER DIVIDED THE INCOME TAX OFFICER TO ENSURE THAT THE NOTICE UNDER SECTION 148 ARE ISSUED AND SOUND UPON THE ASSESSEE WELL WITHIN THE TIME. FURTHER ASSESSEE HAS MERELY PRODUCED THE COVERING LETTE R, WHEREIN THE PROPOSAL DULY SIGNED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX HAS BEEN FORWARDED TO THE LEARNED ASSESSING OFFICER. NOW COMPLETE PROPOSAL HAS BEEN SUBMITTED BY THE ASSESSEE. IN VIEW OF THIS, THE CHALLENGE MADE BY THE LEARNED AUTHORISED REPRESENTATIVE TO THE SANCTION ACCORDED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX DOES NOT SURVIVE. THE LEARNED COMMISSIONER OF INCOME TAX APPEALS HAS ALSO HELD THAT INFORMATION RECEIVED BY THE LEARNED AO WAS VERY SPECIFIC AND THEREFORE THE NOTICE UNDE R SECTION 148 IS A VALID NOTICE AND THE ASSESSMENT ORDER PASSED UNDER SECTION 143 (3) READ WITH SECTION 147 IS ALSO A VALID ORDER. THE LEARNED CIT APPEAL ALSO UPHELD THE ACTION OF REOPENING RELYING ON THE DECISION OF THE HONOURABLE SUPREME COURT IN CAS E OF RAYMOND MILLS LTD VS ITO 235 ITR 34 (SC ). IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT A, IN CONFIRMING THE ACTION OF THE REOPENING OF THE ASSESSMENT PROCEEDINGS BY THE LEARNED ASSESSING OFFICER. ACCORDINGLY, THE CR OSS OBJECTION OF THE ASSESSEE IS DISMISSED. 12 . NOW WE COME TO THE APPEAL OF THE REVENUE. THE MAIN GRIEVANCE OF THE REVENUE IS THAT THE LEARNED CIT A, AS DELETED THE ADDITION OF INR 1 03, 00, 000/ MADE BY THE LEARNED ASSESSING OFFICER UNDER SECTION 68 OF THE INCOME TAX ACT ON ACCOUNT OF MONEY RECEIV ED FROM THE AYUSHI STOCKBROKERS PRIVATE LIMITED BY ADMITTING THE ADDITIONAL EVIDENCES WITHOUT PASSING ANY ORDER UNDER RULE 46A OF THE INCOME TAX RULES 1962. APPARENTLY BEFORE THE ASSESSING OFFICER NO DOCUMENTS AND EVIDENCES WERE PRODUCED BY ASSESSEE. HOW EVER BEFORE THE LEARNED CIT A, ASSESSEE SUBMITTED THE COMPLETE DETAILS PAGE | 8 OF SHARES SOLD INCLUDING THE CONTRACT NOTE FOR SALE AND PURCHASE OF SHARES ALONG WITH THE CONFIRMED COPY OF THE A CCOUNT OF THE PARTY THROUGH WHOM THE S HARES HAVE BEEN SOLD. IT WAS ALSO SUBMITTED IN A FORM OF DETAIL CHART SHOWING DETAILS OF THE SHARES SOLD AND PURCHASED DURING THE YEAR UNDER CONSIDERATION, AS WELL AS THE PREVIOUS YEAR PRIOR TO THE YEAR UNDER CONSIDERATION TO ESTABLISH THAT THE SHARES SOLD WERE AVAILABLE WITH THE AS SESSEE IS OPENING BALANCE AND AUDITED ACCOUNTS OF THE ASSESSEE. THE LEARNED CIT A, ADMITTED ALL THESE EVIDENCES WITHOUT RECORDING HIS SATISFACTION WITH THE APPLICABILITY OF RULE 46A OF THE INCOME TAX RULES 1962. 13 . FURTHER, THE LEARNED CIT A, HAS BELIEVE D THE TRANSACTION AS GENUINE WHEN THE CONFIRMED. COPY OF THE ACCOUNT OF THE PARTY THROUGH WHOM THE SALES HAVE BEEN SOLD IS FURNISHED BEFORE HIM. THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IS NOT REQUIRED TO BE SEEN OF THE PERSON, THROUGH WHO M THE SALES HAVE BEEN SOLD BUT OF THE PERSON WHO HAS PURCHASED THE SHARES FROM THE ASSESSEE. IN FACT, THE TRANSACTIONS THAT ARE REQUIRED TO BE INVESTIGATED AND EXAMINED IS A SUM OF INR 1 0300, 000 RECEIVED FROM AYUSHI STOCKBROKERS PRIVATE LIMITED AND NOT OF THE PERSON, THROUGH WHOM THE SHARES HAVE BEEN SOLD. THE LEARNED CIT A, IS ALSO NOT EXAMINED THAT THOUGH THE AMOUNT HAS BEEN DISCLOSED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS INVESTMENT IN EARLIER YEARS. HOWEVER, THOSE SHARES WERE HELD B Y THE ASSESSEE OR NOT AND THE MONEY THAT HAS BEEN RECEIVED BY THE ASSESSEE IS FOR THE SALE OF THOSE SHARES OR NOT. HERE THE ALLEGATION OF THE INCOME TAX DEPARTMENT IS THAT THE SHARES HAVE NOT BEEN SOLD BY THE ASSESSEE BUT MERELY AN ACCOMMODATION ENTRY HAS BEEN RECEIVED. EVEN THE LEARNED CIT A, DID NOT CARE TO EXAMINE WHICH COMPANIES SHARES WERE SOLD BY THE ASSESSEE. AS ON THE BEGINNING OF THE YEAR THE ASSESSEE WAS HOLDING INVESTMENT IN ON THE QUOTED EQUITY SHARES OF RS. 168,34,163/ - OF THE COMPANIES AN D IN THE END OF THE YEAR, THE INVESTMENT IN UNQUOTED SHARES HAVE BECOME NIL. THEREFORE, IT IS ALSO REQUIRED TO BE EXAMINED BY THE LEARNED CIT A. THAT WHICH SHARES HAVE BEEN SOLD BY THE ASSESSEE AND HE ATTRIBUTED THE TOTAL INCOME FROM SALE TRANSACTION O F INR 78107/ - FULLY TO THE TRANSACTION ENTERED INTO WITH AYUSHI STOCK BROKING PRIVATE LIMITED. NO ANSWERS WERE AVAILABLE WITH RESPECT TO THE ABOVE ISSUES IN THE ORDER OF THE LEARNED CIT A. THE LEARNED CIT CAPITAL HAS ALSO STATED THAT THERE ARE NO PAGE | 9 STAT EMENTS RECORDED BY THE LEARNED ASSESSING OFFICER OR THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT. HOWEVER, IT WAS CATEGORICALLY MENTIONED IN THE REASONS RECORDED THAT INVESTIGATION WAS CARRIED OUT IN THE CASE OF AYUSHI STOCKBROKERS PRIVATE LIMITED WHEREIN IT WAS FOUND THAT THAT COMPAN Y IS ACTUALLY INVOLVED IN THE MONEY LAUNDERING BUSINESS ON A VERY LARGE - SCALE. THE REASONS RECORDED ALSO STATED THAT THE LEARNED ASSESSING OFFICER HAS PERUSED VARIOUS MATERIALS AND REP ORT FROM INCOME TAX DEPARTMENT AN D ON THAT BASIS IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY NEEDS BANK ACCOUNT BY WAY OF ACCOMMODATION ENTRIES. THEREFORE, WE SET ASIDE THE WHOLE ISSUE BACK TO THE FILE OF THE LEARNED CIT A, TO RECONSIDER THE WHOLE I SSUE AFRESH AND RECORD PROPER REASONS FOR ADMITTING THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE. PROPER OPPORTUNITY OF HEARING MAY BE GRANTED TO THE ASSESSEE AS WELL AS THE LEARNED ASSESSING OFFICER. ACCORDINGLY, GROUND NUMBER 1 OF THE APPEAL OF T HE REVENUE IS ALLOWED WITH ABOVE DIRECTION. 14 . IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 0 / 12 / 2018 . - S D / - - S D / - ( BHAVNESH SAINI ) (PRASHAN T MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 0 / 12 / 2018 COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI