SARITA DEVI CHOUDHARY, MUMBAI V. INCOME TAX OFFICER-25(3)(4), MUMBAI

CO 314/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6836 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 26-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJORE SATISHCHANDRA R
• Keywords: Bogus purchase; Unexplained cash credit; Accommodation entries; Reason to believe; Reassessment proceedings; Borrowed satisfaction; Set aside; Capital Gains
• Section: 143(3); 133(6); 143(1); 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI PAWAN SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 4771/MUM/2017 ASSESSMENT YEAR: 2012 - 13 INCOME TAX OFFICER - 25(3)(4), ROOM NO. 605, C - 10, 6 TH FLOOR, PRATYAKSHAKARBHAVAN, BANDRAKURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051. VS. SMT. SARITA DEVI CHOUDHARY 12, DEV PARK CHSL, OPP. CHANDAN CINEMA, NEAR UTPALSANGHVI SCHOOL, JUHU, VILE PARLE (W), MUMBAI - 400049. PAN NO. AACPC7789E APPELLANT RESPONDENT C.O. NO. 314 /MUM/2018 (ITA NO. 4771 /MUM/2017) ASSESSMENT YEAR: 2012 - 13 SMT. SARITA DEVI CHOUDHARY 12, DEV PARK CHSL, OPP. CHANDAN CINEMA, NEAR UTPALSANGHVI SCHOOL, JUHU, VILE PARLE (W), MUMBAI - 400049. VS. INCOME TAX OFFICER - 25(3)(4), ROOM NO. 605, C - 10, 6 TH FLOOR, PRATYAKSHAKARBHAVAN, BANDRAKURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051. PAN NO. AACPC7789E APPELLANT RESPONDENT REVENUE BY : MR. RAJORE SATISHCHANDRA R. , DR ASSESSEE BY : MR. RAKESH JOSHI , AR DATE OF HEARING : 22/11 /2018 DATE OF PRONOUNCEMENT : 28/02/2019 SMT. SARITA DEVI ITA NO. 4771/MUM/2017 & CO NO. 314/MUM/2018 2 ORDER PER N.K. PRADHAN, AM THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - 37 [IN SHORT CIT(A) ], MUMBAI AND ARISE OUT OF THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER (AO) U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961, (THE ACT). ITA NO. 4771/MUM/2017 ASSESSMENT YEAR: 2012 - 13 2. THE GROUNDS OF APPEAL FILED BY THE R EVENUE READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.1,40,00,000/ - ON ACCOUNT OF UNSECURE D LOANS STATING THAT NATURE AND SOURCE OF LOAN TRANSACTIONS OF RS.1,40,00,000/ - STANDS EXPLAINED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3,63,445/ - ON ACCOUNT OF INTEREST PAID O N LOANS STA T ING THAT INTEREST PAID ON LOAN HELD TO BE GENUINE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT THE ADDITION WAS MADE ON THE BASIS OF INFORMATION RECEIVED FROM DIT(INV.) THAT A S EARCH AND SEIZURE OPERATION WAS CARRIED OUT IN THE CASE OF SHRI PRAVIN KUMAR JAIN HE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES IN THE FORM OF UNSECURED LOANS /DEPOSITS/ PURCHASES ENTRIES TO A LARGE NUMBER OF PARTIES THROUGH VARIOUS BENAMI CONCERNS. THE ASSESSEE WAS ONE OF THE BENEFICIARY OF ACCOMMODATION ENTRIES OF RS.1,40,00,000/ - FROM VARIOUS PARTIES MANAGED BY SHRI PRAVIN KUMAR JAIN AND ASSOCIATES, 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSID ERING THAT SHRI PRAVIN KUMAR JAIN HAVE ADMITTED ON SMT. SARITA DEVI ITA NO. 4771/MUM/2017 & CO NO. 314/MUM/2018 3 OATH BEFORE THE DIT (LNV.) A UTHORITIES THAT THE ASSESSES IS ONE OF THE BENEFICIARY OF ACCOMMODATION ENTRIES OF RS.1,40,00,000/ - . 5. ON THE FACTS AND IN THE CIRCUMSTANCE A OF THE CASE AND IN LAW, THE LD. CIT( A) HAS ERRED IN NOT CONSIDERING THAT NOTICES ISSUED U/S133(6) TO THE PARTIES WIRE UNSERVED AND THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE LOAN TRANSACTIONS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND M LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THAT PURCHASES WERE MADE FROM SOME OTHER PARTIES WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS AND ONLY ACCOMMODATION BILLS WERE OBTAINED FROM HAWALA PARTIES AND THERE BY ATTRACTING PROVISIONS OF SECT ION 40A(3). 7. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2012 - 13 ON 21.09.2012 DECLARING TOTAL INCOME AT RS.8,82,701/ - . THE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE ACT. THE ASSESSING OFFICER (AO) RECEIVED AN INFORMATION FROM THE DIRECTOR GENERAL OF INCOME TAX (INVESTIGATION), MUMBAI THAT CONSEQUENT TO A SEARCH CARRIED OUT IN THE CASE OF SHRI PRAVIN KUMAR JAIN ON 01.10.2013, IT WAS FOUND THAT SHRI JAIN HAD FLOATED VARIOUS COMPANIES, WHICH WERE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES IN THE FORM OF BOGUS UNSECURED LOANS, BOGUS PURCHASES AND BOG US CAPITAL GAINS ETC. AND THE ASSESSEE WAS ONE OF THE BENEFICIARIES OF THE BOGUS CONCERNS OPERATED AND CONTROLLED BY SHRI JAIN. THE ASSESSEE HAD OBTAINED, AS PER THE AO, BOGUS LO ANS FROM THE FOLLOWING CONCERNS, CONTROLLED BY SHRI JAIN, WHICH WERE IN THE BU SINESS OF PROVIDING ACCOMMODATION ENTRIES AND THE DETAILS ARE AS UNDER: SMT. SARITA DEVI ITA NO. 4771/MUM/2017 & CO NO. 314/MUM/2018 4 NAME OF THE ENTITY A.Y. AMOUNT (RS.) M/S ATHARV BUSINESS PVT. LTD. (FASTSTONE TRADE (I) PVT. LTD.) 2012 - 13 20,00,000/ - DUKE BUSINESS PVT. LTD. (JPK TRADING (I) PVT. LTD.) 2012 - 13 25,00,000/ - NAKSHATRA BUSINESS PVT. LTD. (HEMA TRADING CO. PVT. LTD.) 2012 - 13 30,00,000/ - OLIVE OVERSEAS PVT. LTD. (REALGOLD TRADING CO. PVT. LTD.) 2012 - 13 65,00,000/ - TOTAL 1,40,00,000/ - ON THE BASIS OF THE ABOVE REASONS, THE AO REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE ACT. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, AS PER THE AO, THE ASSESSEE FAILED TO FILE CONFIRMATION REGARDING IDENTITY, CREDITWORTHINESS OF THE PARTI ES AND GENUINENESS OF THE TRANSACTIONS. FURTHER, THE AO OBSERVED THAT THE NOTICES ISSUED BY HIM U/S 133(6) TO THE ABOVE PARTIES WERE RETURNED BACK BY THE POSTAL AUTHORITIES WITH THE REMARK NOT KNOWN, LEFT. IN RESPONSE TO A QUERY RAISED BY THE AO TO EXP LAIN WHY THE ABOVE AMOUNT SHOULD NOT BE ADDED AS BOGUS UNSECURED LOANS, THE ASSESSEE FILED A REPLY DATED 25.02.2016 STATING THAT ALL THE TRANSACTIONS WITH THE PARTIES WERE DONE THROUGH REGULAR BANKING CHANNELS AND THE LOANS WERE DULY REPAID IN NEXT ASSESSM ENT YEAR. AS PROOF OF THE SAME THE ASSESSEE FILED COPIES OF CONFIRMATIONS OF THE PARTY ALONG WITH INCOME TAX RETURN, FINANCIAL STATEMENT AND BANK STATEMENTS. HOWEVER, THE AO WAS NOT CONVINCED WITH THE SAID REPLY FILED BY THE ASSESSEE FOR THE REASON THAT THE NOTICES ISSUED BY HIM U/S 133(6) WERE RETURNED BACK BY THE POSTAL AUTHORITIES AS UNSERVED. THE AO PLACED RELIANCE ON THE STATEMENT OF SHRI PRAVIN KUMAR JAIN RECORDED U/S SMT. SARITA DEVI ITA NO. 4771/MUM/2017 & CO NO. 314/MUM/2018 5 132(4) IN WHICH HE ADMITTED THAT THROUGH VARIOUS DUMMY DIRECTORS ON PAPERS, HAD CONTROLLED, OPERATED AND MANAGED LARGE NUMBER OF CONCERNS, WHICH WERE NOT CARRYING OUT ANY BUSINESS ACTIVITIES. SIMILAR RELIANCE WAS PLACED BY HIM ON THE STATEMENT OF SHRI UTTAM HINGER AND SHRI NILESH PARMAR. THEREFORE, THE AO BROUGHT TO TAX THE UNSECURED LOANS OF RS.1,40,00,000/ - AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 4. IN APPEAL, THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAD SUBMITTED DURING THE ASSESSMENT PROCEEDINGS, LOAN CONFIRMATIONS, COPY OF ACKNOWLEDGEMENT AND COPIES OF BANK STATEMENT OF TH E CONCERNED PARTIES. ALSO IT IS OBSERVED BY HIM THAT THE GENUINENESS OF THE TRANSACTION IS ESTABLISHED FROM THE FACT THAT BOTH THE ACCEPTANCE AND REPAYMENT OF LOAN HAS BEEN THROUGH BANKING CHANNELS. THUS, THE LD. CIT(A) FOUND THAT THE ASSESSEE HAD FILED SU FFICIENT DOCUMENTS TO PROVE THE GENUINENESS OF THE LOAN TRANSACTION DURING THE YEAR UNDER CONSIDERATION. CONSIDERING THE ABOVE, HE DELETED THE ADDITION OF RS.1,40,00,000/ - MADE BY THE AO U/S 68 OF THE ACT. 5. BEFORE US, THE LD. DR RELIES ON THE DECISION I N PAVANKUMAR M. SANGHVI V. ITO (2018) 90 TAXMANN.COM 386 (GUJ) & 97 TAXMANN.COM 398 (SC) AND ITO V. LAL CHAND YADAV (2017) 82 TAXMANN.COM 429 (JAIPUR - TRIB) (TM). RELYING ON THE ABOVE DECISIONS, IT IS ARGUED BY HIM THAT IN THE INSTANT CASE THE ASSESSEE HA S NOT SATISFIED THE CONDITIONS LAID DOWN U/S 68 REGARDING CASH CREDIT AND THE ORDER PASSED BY THE CIT(A) BE SET ASIDE. SMT. SARITA DEVI ITA NO. 4771/MUM/2017 & CO NO. 314/MUM/2018 6 6. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSEE RELIES ON THE DECISION IN SMT. NISHA UMASHANKAR CHAUDHARY V. DCIT (ITA NO. 6982/M/ 2016 FOR AY 2012 - 13 AND ITA NO. 6983/MUM/2016 FOR AY 2007 - 08); ITO V. M/S SHREEDHAM CONSTRUCTION PVT. LTD . (ITA NO. 3754/MUM/2017 FOR AY 2008 - 09, ITA NO. 3755/MUM/2017 FOR AY 2009 - 10 & ITA NO. 3756/MUM/2017 FOR AY 2012 - 13) , PR. CIT V. VEEDHATA TOWER PVT. L TD. (ITA NO. 819 OF 2015) BY BOMBAY HIGH COURT. RELYING ON THE ABOVE DECISIONS, THE LD. COUNSEL SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE REASONS FOR OUR DECISION S ARE GIVEN BELOW. WE BEGIN WITH THE CASE LAWS RELIED ON BY THE LD. DR . I N THE CASE OF PAVANKUMAR M. SANGHVI (SUPRA), THE HONBLE GUJARAT HIGH COURT OBSERVED THAT THE ASSESSEE RECEIVED CERTAIN SUM AS LOAN FROM TWO COMPANIES AND THE AO HAVING FOUND THAT S AID LENDER COMPANI ES WERE SHELL ENTITIES, ADDED LOAN AMOUNT TO THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT. FURTHER, IT IS OBSERVED THAT THE BANK STATEMENT OF THE LENDER COMPANIES REVEALED HIGH TRANSACTIONS DURING THE DAY AND A CONSISTENTLY MINIMAL BA LAN CE AT THE END OF WORKING DAY. FURTHER, THE DAY THE ASSESSEE WAS GIVEN LOAN, THERE WERE CREDIT ENTRIES OF ALMOST SIMILAR AMOUNTS, AND BALANCE AFTER THESE TRANSACTIONS WAS A SMALL AMOUNT. THE TRIBUNAL, TAKING INTO ACCOUNT BANK STATEMENTS OF LENDER COMPANIES AND FACT THAT THE ASSESSEE FAILED TO PRODUCE THESE LENDERS FOR VERIFICATION HELD THAT THE ALLEGED LOAN TRANSACTIONS WERE NOT GENUINE. IN APPEAL, THE HONBLE HIGH COURT DISMISSED THE APPEAL FILED BY THE ASSESSEE ON THE REASON THAT THE SMT. SARITA DEVI ITA NO. 4771/MUM/2017 & CO NO. 314/MUM/2018 7 TRIBUNAL HAD GIVEN ELABORATE REASONS TO COME TO THE CONCLUSION THAT ENTIRE LOAN TRANSACTION WAS NOT GENUINE. THE SLP FILED BY THE ASSESSEE HAS SINCE BEEN DISMISSED BY THE HONBLE SUPREME COURT AS REPORTED IN (2018) 97 TAXMANN.COM 398 (SC). IN THE CASE OF LAL CHAND YADAV (SU PRA), IT IS HELD THAT WHERE IN RESPECT OF LOAN TAKEN FROM VARIOUS CREDITORS, THE ASSESSEE BROUGHT ON RECORD THEIR CONFIRMATIONS, SINCE CREDITORS WERE EARNING MEAGER INCOME AND THEY FAILED TO PRODUCE ANY COGENT AND RELIABLE EVIDENCE OF SOURCE OF THEIR INCOM E, THE IMPUGNED ADDITION MADE U/S 68 WAS TO BE CONFIRMED. IN THE SAID CASE, DURING THE RELEVANT YEAR, THE ASSESSEE BORROWED MONEY FROM 9 CREDITORS. IN COURSE OF ASSESSMENT, 7 CREDITORS WERE PRODUCED BEFORE THE AO WHO CONFIRMED THE FACT OF GRANTING LOAN TO THE ASSESSEE. 7.1 NOW WE TURN TO THE DECISIONS RELIED ON BY THE LD. COUNSEL. IN THE CASE OF SMT. NISHA UMASHANKAR (SUPRA), IT IS HELD THAT IN THE INSTANT CASE ALSO, THE ASSESSING OFFICER DID NOT FIND FAULT WITH THE DOCUMENTS FURNISHED BY THE ASSESSEE TO SUPPORT THE CASH CREDIT. SO FAR AS THE IMPUGNED LOAN TRANSACTIONS ARE CONCERNED, THE PRAVIN KUMAR JAINS STATEMENT HAS GOT ONLY A SECONDARY CONNECTION, SINCE THE ORIGINAL OWNERS OF THE CONCERNS HAVE CONFIRMED THE LOAN TRANSACTIONS. HENCE, IN MY VIEW, THE R ELIANCE PLACED BY THE AO EXCLUSIVELY ON THE STATEMENT OF SHRI PRAVIN KUMAR JAIN MAY NOT BE JUSTIFIED, PARTICULARLY IN VIEW OF THE FACTS THAT THE ASSESSEE HAS DISCHARGED THE PRIMARY RESPONSIBI LITY PLACED UPON HER SHOULDERS. IN M/S SHREEDHAM CONSTRUCTIONS PVT. LTD. (SUPRA), THE TRIBUNAL HAS CONFIRMED THE ORDER PASSED BY THE LD. CIT(A). SMT. SARITA DEVI ITA NO. 4771/MUM/2017 & CO NO. 314/MUM/2018 8 IN THE CASE OF VEE DHATA TOWERS PVT. LTD . (SUPRA), THE HONBLE BOMBAY HIGH COURT REFERRING TO THE DECISION IN CIT V. GAGANDEEP INFRASTRUCTURE PVT. LTD. HELD THAT THE PROVISO TO SECTION 68 OF THE ACT HAS BEEN INTRODUCED BY THE FINANCE ACT, 2012 W.E.F. 01.04.2013 AND THEREFORE, IT WOULD BE EFFECTIVE ONLY FROM THE ASSESSMENT YEAR 2013 - 14 ONWARDS AND NOT FOR THE EARLIER ASSESSMENT YEARS. FURTHER REFERRING TO THE DECISION IN THE C ASE OF CIT V. LOVELY EXPORTS (P.) LTD . (2009) 319 ITR (ST.) 5 (SC), IT IS HELD THAT THIS WOULD NOT ENTITLE THE REVENUE TO INVOKE SECTION 68 OF THE ACT WHILE ASSESSING THE RESPONDENT FOR NOT EXPLAINING THE SOURCE OF ITS SOURCE. 7.2 IT IS SETTLED LAW THAT T O DISCHARGE THE ONUS U/S 68 OF THE ACT, THE ASSESSEE MUST PROVE THE FOLLOWING: (I) THE IDENTITY OF THE CREDITOR, (II) THE CAPACITY OF THE CREDITOR TO ADVANCE MONEY; AND (III) THE GENUINENESS OF THE TRANSACTIONS . IN THE INSTANT CASE, AS RIGHTLY HELD BY THE LD. CIT(A), THE ASSESSEE HAS FILED SUFFICIENT DOCUMENTS TO PROVE THE GENUINENESS OF THE LOAN TRANSACTION DURING THE YEAR. THE AO HAS RELIED EXCLUSIVELY ON THE STATEMENT OF SHRI PRAVIN KUMAR JAIN RECORDED U/S 132(4) OF T HE ACT. THE AO HAS NOT BROUGH T O N RECORD ANY CORROBORATIVE EVIDENCE TO SUPPORT THE ADDITION MADE BY HIM. IN FACT, THE ASSESSMENT ORDER IS A NARRATION OF THE STATEMENT GIVEN BY SHRI JAIN. IN VIEW OF THE ABOVE FACTS, WE UPHOLD THE ORDER OF THE LD. CIT(A). SMT. SARITA DEVI ITA NO. 4771/MUM/2017 & CO NO. 314/MUM/2018 9 8. IN THE RESULT THE APPEAL FIL ED BY THE R EVENUE IS DISMISSED. 9 . THE CROSS OBJECTION FILED BY THE ASSESSEE READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN REOPENING THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 10 . IN THE INSTANT CASE, AS MENTIONED EARLIER , THE AO REOPENED THE ASSESSMENT PROCESSED U/S 143(1) BY ISSUING NOTICE U/S 148 DATED 05.02.2015. AGAINST THE GROUND RAISED BY THE ASSESSEE ON RE - OPENING, THE LD. CIT(A) DISMISSED IT ON THE GROUND THAT ONLY PRIMA FACIE BELIEF IS SUFFICIENT FOR REOPENING THE ASSESSMENT. 1 1 . BEFORE US, THE LD. COUNSEL OF THE ASSESSEE RELIES ON THE DECISION IN PR. CIT V. M/S SHODIMA N INVESTMENT PVT. LTD . (ITA NO. 1297 OF 2015) BY BOMBAY HIGH COURT, FIAT INDIA AUTOMOBILES LTD. V. VIRENDRA SINGH (2012) 27 TAXMANN.COM 37 (BOM) AND M/S INDORAMA SOFTWARE SOLUTION LTD. V. ITO (ITA NO. 5290/M/2011 FOR AY 2003 - 04). ON THE OTHER HAND, THE LD. DR RELIES ON THE DECISION IN JAYANT SECURITY & FINANCE LTD. (2018) 91 TAXMANN.COM 181 (GUJ.) 1 2 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE CASE OF M/S SHODIMAN INVESTMENTS PVT. LTD. (SUPRA), THE RETURN OF I NCOME FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1). THEREAFTER, ON 30.03.2010, THE AO ISSUED NOTICE U/S 148 OF THE ACT, SEEKING TO REOPEN THE ASSESSMENT FOR AY 2003 - 04. THE REASONS IN SMT. SARITA DEVI ITA NO. 4771/MUM/2017 & CO NO. 314/MUM/2018 10 SUPPORT OF THE SAID NOTI CE, AS SUPPLIED TO THE ASSESSEE AND AS EXTRACT ED IN THE ORDER, READS AS UNDER: IT WAS INTIMATED THAT SEARCH ACTION WAS CONDUCTED U/S 132 OF THE I.T .ACT, 1962 ON 25/11/2009. IN THE CASE OF MAHASAGAR SECURITIES PVT. LTD., WHERE IT IS FOUND SUSPICIOUS TRANSACTION TAKEN PLACE IN THE BANK ACCOUNT OF THE COMPANY AND ITS RELATED COMPANY. THE HONBLE HIGH COURT HELD : 13. IN THIS CASE, THE REASONS AS MADE AVAILABLE TO THE RESPONDENT ASSESSEE AS PRODUCED BEFORE THE TRIBUNAL MERELY INDICATES INFORMATION RECEIVED FROM THE DIT (INVESTIGATION) ABOUT A PART ICULAR ENTITY, ENTERING INTO SUSPICIOUS TRANSACTIONS. HOWEVER, THAT MATERIAL IS NOT FURTHER LINKED BY ANY REASON TO COME TO THE CONCLUSION THAT THE RESPONDENT ASSESSEE HAS INDULGED IN ANY ACTIVITY WHICH COULD GIVE RISE TO REASON TO BELIEVE ON THE PART OF T HE ASSESSING OFFICER THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IT IS FOR THIS REASON THAT THE RECORDED REASONS EVEN DOES NOT INDICATE THE AMOUNT WHICH ACCORDING TO THE ASSESSING OFFICER, HAS ESCAPED ASSESSMENT. THIS IS AN EVIDENCE OF A FISHING ENQUIRY AND NOT A REASONABLE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 14. FURTHER, THE REASONS CLEARLY SHOWS THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE INFORMATION RECEIVED BY HIM FROM THE DDIT (INV.). THE ASSESSING OFFI CER HAS MERELY ISSUED A REOPENING NOTICE ON THE BASIS OF INTIMATION REGARDING REOPENING NOTICE FROM THE DDIT (INV.) THIS IS CLEARLY IN BREACH OF THE SETTLED POSITION IN LAW THAT REOPENING NOTICE HAS TO BE ISSUED BY THE ASSESSING OFFICE ON HIS OWN SATISFACT ION AND NOT ON BORROWED SATISFACTION. 15. THEREFORE, IN THE ABOVE FACTS, THE VIEW TAKEN BY THE IMPUGNED ORDER OF THE TRIBUNAL CANNOT BE FOUND FAULT WITH. THIS VIEW OF THE TRIBUNAL IS IN ACCORDANCE WITH THE SETTLED POSITION IN LAW. SMT. SARITA DEVI ITA NO. 4771/MUM/2017 & CO NO. 314/MUM/2018 11 IN THE CASE OF FIAT INDIA AUTOMOBILES LTD . (SUPRA), IT IS HELD THAT THERE IS NOT PROVISION UNDER THE ACT WHICH EMPOWERS THE COMMISSIONER TO TEMPORARILY WITHDRAW THE ORDER PASSED BY HIM U/S 127(2) FOR THE SAKE OF ADMINISTRATIVE CONVENIENCE. IN INDORAMA SOFTWARE SOLUTION LTD . ( S UPRA), IT IS HELD THAT WHEN IT IS APPARENT THAT THE NOTICE U/S 148 WAS ISSUED BY THE AO WHO WAS NOT VESTED WITH THE JURISDICTION OVER THE ASSESSEE THEN, THE SAME IS PATENTLY ILLEGAL AND VOID. THERE IS NOTHING ON RECORD IN THE INSTANT CASE WHICH WOULD I NVITE THE APPLICABILITY OF FIAT INDIA AUTOMOBILES LTD. (SUPRA) AND SOFTWARE SOLUTION LTD. (SUPRA) 1 2 .1 WE FIND THAT IN THE INSTANT CASE , THE AO HAS LINKED TH E MATERIAL TO CONNECT THAT THE ASSESSEE HAS INDULGED IN ACTIVITIES WHICH GIVE RISE TO REASON TO BEL IEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT . ALSO THE RECORDED REASONS MENTION THE AMOUNT WHICH ACCORDING TO THE AO HAS ESCAPED ASSESSMENT. THEREFORE, THE DECISION IN M/S SHODIMAN INVESTMENTS PVT. LTD. (SUPRA) IS DISTINGUISHABLE FROM THE PRES ENT CASE. AS MENTIONED EARLIER , THE AO REOPENED THE ASSESSMENT WHICH WAS PROCESSED U/S 143(1) OF THE ACT. IN THE CASE OF ACIT V. RAJESH JHAVERI STOCK BROKERS PVT. LTD. 291 ITR 500 . (SUPRA), THE HONBLE SUPREME COURT HELD THAT INTIMATION U/S 143(1)(A) IS NOT AN ASSESSMENT AND HELD VALID THE NOTICE ISSUED U/S 148. IN THE CASE OF KONE ELEVATOR INDIA P. LTD. V. ITO 340 ITR 454 (MAD), CIT V. IDEAL GARDEN COMPLEX P. LTD . 340 ITR 609 (MAD) , IT IS HELD THAT IN THE CASE OF RETURN OF INCOME PROCESSED U/S SMT. SARITA DEVI ITA NO. 4771/MUM/2017 & CO NO. 314/MUM/2018 12 143(1), THE ONLY CONDITION TO BE SATISFIED FOR REOPENING IS TAXABLE INCOME HAS ESCAPED ASSESSMENT AND THE ASSESSEES PLEA THAT NO FRESH MATERIAL BEFORE THE AO WARRANTING REOPENING, IS NOT RELE VANT. IN THE RESULT, THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED . 1 3 . TO SUM UP, THE APPEAL FILED BY THE R EVENUE AND THE CROSS - OBJECTION FILED BY THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 28/02/2019. SD/ - SD/ - ( PAWAN SINGH ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 28/02/2019 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// ( SR. PRIVATE SECRETARY ) ITAT, MUMBAI