Ram Chand Keshav Dev ,HUF., Mathura V. A.C.I.T.-3, Mathura

CO 57/AGR/2010

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6700 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-11-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 18-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Business income; Income from undisclosed sources; Share purchase agreement; Period of limitation; Accommodation entries; Onus to prove; Reassessment proceedings
• Section: 143(3); 142(1); 133(6); 147; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO. 233/AGRA/2010 ASSTT. YEAR : 2000-01 A.C.I.T. 3, MATHURA VS. M/S. RAM CHAND KESHAV DEV (HUF), GALI BALLA, MADRAS HOUSE, TILAK DWAR, MATHURA. C.O. NO. 57/AGRA/2010 (IN ITA NO. 233/AGRA/2010) ASSTT. YEAR : 2000-01 M/S. RAM CHAND KESHAV DEV (HUF), VS. A.C.I.T. 3, MATHURA GALI BALLA, MADRAS HOUSE, TILAK DWAR, MATHURA. (PAN : AABHR 2877 K) (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI A.K. SHARMA, JR. D.R. FOR ASSESSEE : DR. RAKESH GUPTA, ADVOCATE DATE OF HEARING : 24.11.2011 DATE OF PRONOUNCEMENT : 26.12.2011 ORDER PER BENCH: PRESENT APPEAL BY THE REVENUE AND THE CROSS-OBJEC TION BY THE ASSESSEE HAVE BEEN FILED AGAINST THE IMPUGNED ORDER DATED 17.03.2010 PASSED BY THE LEARNED CIT(A)-I, AGRA. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL AND BY ASSESSEE IN ITS CROSS-OBJECTION READ AS UNDER : GROUNDS IN REVENUES APPEAL : 1. THAT THE CIT(A)-1, AGRA HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS.19,40,000/- + RS.38, 800/- MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF SHARES AND UND ISCLOSED BROKERS ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 2 COMMISSION THEREON TO OBTAIN ABOVE ENTRIES EVEN WHE N THE ASSESSEE DID NOT DISCHARGE HIS ONUS TO PROVE THE GENUINENESS OF SHARE TRANSACTION RECEIPT. 2. THAT THE ORDER OF THE CIT(A)-1, AGRA IS ERRONEOU S IN LAW AND ON THE FACTS OF THE CASE AND THAT THE ORDER OF THE AO BE R ESTORED. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR DELETE OR ALTER OR MODIFY ANY GROUND DURING APPEAL PROCEEDINGS. 4. THE DEPARTMENT HAS FILED APPEAL BEFORE THE HONB LE ITAT ON IDENTICAL ISSUES IN OTHER CASES. GROUNDS IN ASSESSEES CROSS-OBJECTION: 1. THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADD ITION OF RS.19,40,000/- + 38,000/- MADE ON A/C OF LONG TERM CAPITAL GAIN OF SHARES AND COMMISSION THEREON UNDER THE FACTS OR CIRCUMSTANCES OF THE CASE. 2. THAT THE AUTHORITIES BELOW HAS ERRED IN LAW AND ON FACTS IN MAKING DISALLOWANCES @ 10% AMOUNTING TO RS.13,830.00 OUT O F EXPENSES 138830/- UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE. 3. THAT THE AUTHORITIES BELOW HAS ERRED IN LAW AND ON FACTS IN ASSUMING JURISDICTION U/S. 147 AND THAT TOO WITHOUT COMPLYIN G WITH THE STATUTORY CONDITIONS AS PRESCRIBED U/S. 147 TO 151 OF THE ACT AND HAS THUS ERRED IN FRAMING THE IMPUGNED REASSESSMENT ORDER. 2. FOR THE SAKE OF CONVENIENCE, WE FIRST TAKE UP TH E APPEAL OF THE REVENUE. THE BRIEF FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT THE ASSES SEE FILED ITS RETURN OF INCOME ON 22.08.2000 SHOWING TOTAL INCOME AT RS.193,985/- UNDER THE HEAD S RENTAL INCOME, BUSINESS INCOME, CAPITAL GAINS AND INCOME FROM OTHER SOURCES. A SUM OF RS.18 ,36,574/- WAS SHOWN AS CAPITAL GAIN ON THE SALE OF SHARES BESIDES CAPITAL LOSS OF RS.44,36,855 /- ON SALE OF GOLD COINS, SILVER ETC. (DECLARED UNDER VDIS). THE CAPITAL GAIN ON THE SALE OF SHARES WAS ADJUSTED AGAINST BALANCE FORWARD CAPITAL LOSS FOR A.Y. 1998-99. THE RETURN OF INCOME WAS PRO CESSED U/S. 143(1) OF THE ACT ON 16.03.2000. SUBSEQUENTLY, THE ASSESSING OFFICER INITIATED PROCE EDINGS U/S. 147 ON THE BASIS OF INFORMATION ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 3 RECEIVED FROM INVESTIGATION WING, AGRA REGARDING RE CEIPT OF FICTITIOUS LONG-TERM CAPITAL GAIN. ACCORDINGLY A NOTICE ISSUED U/S. 148 DATED 15.02.20 06 WAS SERVED UPON THE ASSESSEE ON 16.02.2006, COPY OF WHICH WAS ALSO SENT THROUGH SPE ED POST ON 21.02.2006 AND DELIVERED TO THE ASSESSEE ON 22.02.2006 AFTER RECORDING THE REASONS AS UNDER : AN INFORMATION HAS BEEN RECEIVED FROM INVESTIGATIO N WING, AGRA VIDE LETTERS F.NO. DDIT(INV.)/CAPITAL GAIN/AGR/2004-05 D ATED 24.11.2004/14.03.2005 AND 25.05.2005 AND JT. DIT(INV.), AGRA LETTER F. NO .JT. DIT (INV.)/AGRA/CG/2005- 06/5 DATED 04.08.2005/08.08.2005, REGARDING RECEIPT OF FICTITIOUS LONG TERM CAPITAL GAIN BY ASSESSEES THAT HAS BEEN FOUND TO BE BOGUS AS A RESULT OF INQUIRIES MADE BY THE DDIT(INV.), AGRA. ON ENQUIRIES IT HAS B EEN FOUND THAT THE BANK ACCOUNT FROM WHICH MONEY HAS BEEN TRANSFERRED TO VA RIOUS BENEFICIARIES HAVE BEEN OPERATED BY CERTAIN STOCK BROKERS, WHO HAVE BE EN PROVIDING ENTRIES TO THE BENEFICIARIES BY SHOWN THEM TRANSACTIONS MADE BY TH EM IN PURCHASE/SALE OF SHARES OF CERTAIN COMPANIES, WHICH IN FACT NEVER TO OK PLACE. THE ASSESSEE IS ALSO ONE OF THE BENEFICIARIES FIGU RING IN THE LIST SUPPLIED BY THE INVESTIGATION WING, AGRA AND AN AMOUNT OF RS.4, 99,000/- HAS BEEN REMITTED TO THE ASSESSEE THROUGH DRAFT NO.1007045 FROM A/C HELD IN M/S. NAINITAL BANK LTD., DELHI BRANCH IN THE NAME OF M/S. AGARWAL & CO., DEL HI. THE SAID AMOUNT IS FOUND CREDITED IN THE BANK A/C NO. SB A/C 1606 OF I NDIAN BANK, TILAK DWAR, MATHURA WHICH BELONGS TO THE ASSESSEE. SINCE THE SA ID TRANSACTION OF PURCHASE AND SALE OF SHRES HAS BEEN FOUND TO BE BOGUS AND, T HEREFORE, ENTIRE AMOUNT OF SALE PROCEEDS OF SHARES CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE BY BANK DRAFT, IS THE INCOME OF ASSESSEE FROM UNDISCLOSED SOURCES, WH ICH HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T. ACT, 1961. IN THE RETURN OF INCOME FILED ON 22.08.2000, THE A SSESSEE HAS SHOWN SALES OF SHARES FOR RS.19,47,400/- WITHOUT DETAILS & EVID ENCES, THUS, TOTAL SALES ARE BELIEVED TO BE THE BOGUS IN VIEW OF INFORMATION REC EIVED FROM INVESTIGATION WING, AGRA. SIMILARLY, THE SALE OF GOLD COINS FOR RS.1,65 ,60,750/- SHOWN IS ALSO WITHOUT ANY EVIDENCE ON RECORDS WHICH NEEDS VERIFICATION. S IMILARLY, SALE OF SILVER BULLIONS IS REQUIRED TO BE VERIFIED. NOTICES U/S. 142(1) AND 143(2) OF THE ACT WERE ISSU ED ON VARIOUS DATES AS MENTIONED IN ASSESSMENT ORDER. ON SOME OF THE DATES THE AUTHORIZ ED REPRESENTATIVE AND COPARCENER OF THE ASSESSEE-HUF SHRI RAJEEV AGARWAL ATTENDED AND FURNI SHED WRITTEN REPLIES. COPY OF ABOVE REASONS RECORDED WAS SUPPLIED TO THE LEARNED AUTHOR IZED REPRESENTATIVE OF ASSESSEE ON ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 4 26.06.2006. STATEMENTS OF SHRI RAJEEV AGARWAL WERE RECORDED ON 17.12.2006 AND 23.11.2006, THE RELEVANT EXTRACTS OF WHICH HAVE BEEN REPRODUCED BY THE ASSESSING OFFICER AT PAGE 4 TO 8 OF THE ASSESSMENT ORDER. THE ASSESSEE CLAIMED TO HAVE RECEIVED FOUR BANK DRAFTS DATED 20.10.99, 24.01.1999 AND 19.02.2000 EACH FOR RS.4,99,000/- AN D BANK DRAFT DATED 19.02.2000 FOR RS.4,43,080/- TOTALING TO RS.19,40,080/- AS SALE PR OCEEDS OF 21400 SHARES OF M/S. KAUSHAMBHI FINVEST LEASE COMPANY LTD. THESE SHARES WERE CLAI MED TO HAVE BEEN PURCHASED AT THE RATE OF 4.55 PER SHARE ON 19.06.1998 THROUGH THE BROKERS M /S. BATRA INVESTMENTS, KAROL BAGH, DELHI AND WERE SOLD AT THE RATE OF RS.91/- PER SHARE THRO UGH M/S. AGARWAL & CO. ASAF ALI ROAD, NEW DELHI ON 08.09.99. THE ASSESSING OFFICER NOTICED TH AT THE PAYMENT OF RS.98440/- FOR PURCHASE OF THESE SHARES WAS CLAIMED TO HAVE BEEN MADE IN CASH TO M/S. BATRA INVESTMENT BUT NO CASH BOOK WAS PRODUCED TO ASCERTAIN THE AVAILABILITY OF CASH. BOOKS OF ACCOUNT WERE ALSO NOT PRODUCED BY THE ASSESSEE STATING THAT THE SAME WERE LOST. THE ASSESSING OFFICER ALSO OBSERVED THAT THE SUMMON ISSUED U/S. 131 TO M/S. BATRA INVESTMENT RET URNED BACK UNDELIVERED. SIMILARLY, THE SUMMON U/S. 131 SENT TO THE BROKERS M/S. AGARWAL & CO., DELHI THROUGH WHOM THE SALE OF ABOVE SHARES WAS ALLEGED TO HAVE BEEN MADE, ALSO RECEIVED BACK UNDELIVERED AND THE ASSESSEE FAILED TO PRODUCE ANY OF THE PARTIES/PERSONS INVOLVED IN THE SHARE TRANSACTIONS. THE ASSESSING OFFICER ALSO NOTICED THAT M/S. AGARWAL & CO. DELHI HAD BEEN RECE IVING MONEY THROUGH TRANSFER FROM ANOTHER ACCOUNT IN THE NAME OF M/S. CREATIVE INVESTMENT, WH O TRANSFERRED THE MONEY BY DEPOSITING CASH IN ITS ACCOUNT. IT IS ALSO MENTIONED THAT DURING TH E ENQUIRIES DELHI STOCK EXCHANGE ASSOCIATION INFORMED THAT NO DEALING OF SHARES WAS MADE BY M/S. AGARWAL & CO. DURING THE PERIOD 01.05.1998 TO 31.10.1999 AND DSE REPORTED THAT M/S. BATRA INVESTMENT IS NOT A MEMBER OF DELHI STOCK EXCHANGE. THE ASSESSEE WAS NOT DEALING IN TRA DING OF SHARES. NON-PRODUCTION OF BOOKS OF ACCOUNT, NON-PRODUCTION OF ANY PERSON INVOLVED DIRE CTLY OR INDIRECTLY WITH THE TRANSACTION, SHARE ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 5 TRANSACTIONS BEING NOT A USUAL OR REGULAR BUSINESS OF ASSESSEE, RECEIPT OF SUMMONS ISSUED U/S. 131 TO THE ALLEGED BROKERS UNDELIVERED, LETTER OF DELHI STOCK EXCHANGE AND THE STATEMENTS OF SHRI RAJEEV AGARWAL AND SHRI RAKESH GUPTA, ON WHOSE ADVI CE THE ASSESSEE CLAIMED TO HAVE MADE THE INVESTMENT IN THE IMPUGNED SHARES, LED THE ASSESSIN G OFFICER TO CONCLUDE THAT THE RECEIPT OF RS.19,40,080/- SHOWN AS RECEIVED FROM SHARE TRANSAC TION IS NOTHING BUT ITS OWN MONEY ROUTED UNDER THE GARB OF SALE PROCEEDS OF SHARES. HE, THER EFORE, ADDED THE ENTIRE AMOUNT OF RS.19,40,080/- AS INCOME FROM OTHER SOURCES AND RS. 38800/- AS EXPENSES FOR ARRANGING SUCH ACCOMMODATION ENTRIES VIDE ASSESSMENT ORDER DATED 2 8.12.2006 PASSED U/S. 147/143(3) OF THE ACT. AGGRIEVED BY THIS ORDER, THE ASSESSEE WENT IN FIRST APPEAL WHEREIN THE ASSESSEE CHALLENGED THE VALIDITY OF PROCEEDINGS INITIATED U/S. 147 OF T HE ACT AS WELL AS THE IMPUGNED ADDITIONS ON MERITS. THE LD. FIRST APPELLATE AUTHORITY AFTER CON SIDERING THE CONTENTIONS OF THE ASSESSEE ON BOTH THE ISSUES, HELD THE INITIATION OF PROCEEDINGS U/S. 147 AS VALID, BUT DELETED THE ADDITIONS IN DISPUTE ON MERITS BY OBSERVING IN PARA 3.19 TO 3.21 OF THE IMPUGNED ORDER DATED 17.03.2010 AS UNDER : 3.19 I HAVE CONSIDERED THE RELEVANT FACTS AND RIVA L CONTENTIONS AND MY OBSERVATIONS ARE AS UNDER : THE AO HAS NO DENIED THAT THE PURCHASE OF THE IMPUG NED SHARES IN THE PRECEDING YEAR STOOD DISCLOSED IN THE RETURN OF THE APPELLANT. THE AO ADDRESSED A REQUISITION U/S. 133(6) OF THE A CT DATED 03.11.2006 TO M/S. KAUSHAMBHI FINVEST LEASE COMPANY LTD., F-89/11 , OKHALA INDUSTRIAL AREA, PHASE-I, NEW DELHI-110020. THE FACT OF THE SA ID LETTER IS NOT CLEAR FROM THE RECORDS. FROM THE LETTER DATED 19.12.2009 ADDRESSED BY M.P. STOCK EXCHANGE LTD. TO M/S. KAUSHAMBHI FINVEST LEASE COMPANY LTD., THE ADD RESS APPEARS TO BE D- 28, SOUTH EX., PART-I, NEW DELHI. FURTHER, FROM THE LETTER OF THE DELHI STOCK EXCHANGE IT IS EVIDENT THAT THE SHARES OF THE SAID COMPANY WERE BEING TRADED ON THE DELHI STOCK EXCHANGE IN 1998-99. THE APPELLANT HAS FURNISHED PHOTOCOPIES OF SHARE CE RTIFICATES OF M/S. KAUSHAMBHI FINVEST LEASE COMPANY LTD ALONG WITH A L ETTER DATED 26.08.1998 OF M/S. KAUSHAMBHI FINVEST LEASE COMPANY LTD INTIM ATING TRANSFER OF THE ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 6 SAID SHARES IN THE APPELLANTS NAME. THESE HAVE NOT BEEN FOUND TO BE CONTRIVED. IN VARIOUS SIMILAR CASES OF BOGUS LONG TERM CAPITAL GAINS, LETTERS WERE ADDRESSED TO THE INVESTIGATION WING, AGRA CALLING F OR EVIDENCES AS TO SHAM SHARE TRANSACTIONS THROUGH THE BROKER M/S. AGARWAL & CO. IN RESPONSE THERETO, LETTERS HAVE BEEN RECEIE FROM THE INVESTIG ATION WING AND MATERIAL HAS BEEN FURNISHED. ON PERUSAL OF THE MATERIAL PROVIDED BY THE WING, NO MATERIAL/EVIDENCE IS FOUND TO SHOW THAT A. THE COMPANY WHOSE SHARES WERE PURCHASED BY THE APPE LLANT NAMELY KAUSHAMBHI FINVEST LEASE CO. LTD. WAS BOGUS/NON-EXI STENT, B. ITS SHARE PRICES WERE RIGGED BY THE APPELLANT OR OT HERS, C. THERE WERE UNEXPLAINED CASH DEPOSITS IN THE ACCOUNT S OF / MANAGED BY THE BROKER WHICH WAS SO ESTABLISHED BY ENQUIRIES BY THE WING OR BY THE CONCERNED ASSESSING OFFICER D. THE APPELLANT HAD NOT PURCHASED AND SOLD THE SHARES . IT IS ALSO OBSERVED THAT THERE IS NO COMPARABLE CAS E ON RECORD WHEREIN ON SIMILAR FACTS AND CIRCUMSTANCES SUCH CONCLUSION DRAWN AND A DDITION MADE BY THE AO HAS BEEN UPHELD BY ANY APPELLATE/JUDICIAL AUTHORITY. 3.20 IN VIEW OF THE FOREGOING, I FIND THAT THE ADDI TION OF RS.19,40,080/- ON ACCOUNT OF LONG TERM CAPITAL GAINS TREATED AS INCOM E FROM OTHER SOURCES IS NOT TENABLE. CONSEQUENTLY, THE ADDITION OF RS.19,40,080 /- IS DELETED. THE AO IS DIRECTED TO ADOPT THE INCOME FROM CAPITAL GAINS AS PER RETURN. 3.21 AS REGARDS THE ADDITION OF RS.38,800/- AS 2% C OMMISSION DEEMED TO HAVE BEEN PAID FOR OBTAINING THE ABOVE ENTRY, THE SAME I S NOT SUSTAINABLE IN THE ABSENCE OF ANY CORROBORATIVE, CONTEMPORANEOUS EVIDE NCE. IN THIS CONTEXT, RELIANCE IS PLACED ON THE DECISION OF CIT(A)-II, KA NPUR IN THE CASE OF SHRI SUBHASH CHAND TIBEREWALA & HONBLE ITAT, LUCKNOW IN THE CSSE OF BALRAM MANWANI VS. ACIT IN 2005 (6) MTC 974. 3. THE LEARNED DR, RELYING ON THE ORDER OF THE ASSE SSING OFFICER, CONTENDED THAT THE LD. FIRST APPELLATE AUTHORITY WAS NOT JUSTIFIED IN DELETING T HE ADDITION WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE FAILED TO GET THE IMPUGNED SHARE TRANS ACTIONS VERIFIED FROM THE BOOKS OF ACCOUNT NOR COULD BE ABLE TO PRODUCE ANY OF THE PERSONS INVOLVE D IN THE PURCHASE AND SALE OF SHARES. THE SUMMONS ISSUED TO THE SHARE BROKERS RETURNED BACK U NDELIVERED AND THE STATEMENTS OF RAJEEV ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 7 AGARWAL AND SHRI RAKESH GUPTA RECORDED BY THE DEPAR TMENT WERE IN SHARP CONTRADICTION TO THE TRUE STATE OF AFFAIRS ATTENDING THE CASE. IT WAS CO NTENDED THAT THE LD. FIRST APPELLATE AUTHORITY HAS NOT APPRECIATED THE FACT THAT THE ASSESSEE COULD NO T BE ABLE TO PROVE THE GENUINENESS OF PURCHASE OF SHARES AND ALLEGED RECEIPT OF THEIR SALE PROCEED S. HE RELIED UPON THE DETAILED ORDER OF THE ASSESSING OFFICER PASSED U/S. 147 READ WITH SECTION 143(3) OF THE ACT. 4. ON THE CONTRARY, DR. RAKESH GUPTA, THE LD. COUNS EL FOR THE ASSESSEE CONTENDED THAT FROM THE REASONS RECORDED IT STANDS PROVED THAT NO ENQUI RY HAS BEEN MADE BY THE ASSESSING OFFICER INDEPENDENTLY AND THE NOTICE HAS BEEN ISSUED MERELY AT THE BEHEST OF THE INVESTIGATION WING AND THE ENTIRE EXERCISE IS BASED ON PURE GUESS AND SUSP ICION. SUCH GENERAL INFORMATION CONTAINED IN THE LETTER OF INVESTIGATION WING IS NOT A RELEVANT MATERIAL TO SUSTAIN THE INITIATION OF REASSESSMENT PROCEEDINGS. IT IS SUBMITTED THAT IN RESPONSE TO TH E NOTICES U/S. 142(1) AND 143(2) DATED 20.10.2006, THE ASSESSEE VIDE REPLY DATED 27.10.200 6 FURNISHED PHOTOCOPY OF FIR SHOWING LOSS OF BOOKS OF DISPUTED YEAR AND EARLIER YEAR ON 14.12.20 04, BILL DATED 19.06.1998 OF BATRA INVESTMENTS SHOWING PURCHASE OF 21400 SHARES OF M/S . KAUSHAMBI FINVEST-LEASE COMPANY LTD. @ 4.55 PER SHARE, SALE NOTE DATED 24.06.1998 SHOWIN G PURCHASE OF THE SAID SHARES FOR RS.98,440/- GIVING THEIR DISTINCTIVE NUMBERS, CONTRACT NOTE OF AGARWAL & CO. SHOWING SALE OF 21400 SHARES OF KAUSHAMBHI FINVEST-LEASE COMPANY LTD. @ RS.91/- PER SHARE IN SETTLEMENT OF 08.09.1998, BILL DATED 18.09.1999 OF AGARWAL & CO. SHOWING TOTA L SALE CONSIDERATION OF RS.19,44,029/- FOR SALE OF 21400 SHARES AND PHOTOCOPIES OF VARIOUS DRA FTS THROUGH WHICH THE SALE PROCEEDS OF SHARES WERE RECEIVED BY THE ASSESSEE. IN PRESENCE OF THESE DOCUMENTARY EVIDENCE, AND THERE BEING NO ADVERSE REMARKS ON THE AUTHENTICITY OF THESE EVIDEN CE, THE LD. ASSESSING OFFICER WAS NOT JUSTIFIED TO HOLD THE TRANSACTIONS IN DISPUTE AS BOGUS. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE PURCHASED ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 8 THE IMPUGNED SHARES FOR RS.98,440/- IN THE ASSESSME NT YEAR 1999-2000 AND THE RETURN OF INCOME, FILED ALONG WITH COPY OF PURCHASE BILL OF THE IMPUG NED SHARES FROM M/S. BATRA INVESTMENTS AND PHOTOCOPIES OF SHARE CERTIFICATES, FOR A.Y. 1999-20 00 REFLECTING THE PURCHASE OF THE IMPUGNED SHARES STOOD ACCEPTED BY THE DEPARTMENT AND THEREFO RE, THE ASSESSING OFFICER WAS NOT JUSTIFIED TO DOUBT THE PURCHASE OF THE SAME SHARES DURING THE YE AR IN DISPUTE. IT IS ALSO CONTENDED THAT SIMPLY BECAUSE THE SUMMON ISSUED TO M/S. BATRA INVESTMENTS RETURNED BACK UNDELIVERED, THE PURCHASE OF SHARES CANNOT BE DOUBTED PARTICULARLY WHEN THE OWNE RSHIP OF THE SHARES STOOD PROVED BY SHARE CERTIFICATES AND THE TRANSACTION OF PURCHASE OF SHA RES RELATED BACK BY 8 YEARS FROM THE ISSUE OF SUMMONS, WHICH WAS ISSUED AFTER THE DEATH OF THE OW NER OF M/S. BATRA INVESTMENTS ON 31.03.2006. AS SUCH, THIS SUMMON WHICH RETURNED BAC K CANNOT BE READ AGAINST THE ASSESSEE. THE SALE TRANSACTION OF SHARES THROUGH M/S. AGARWAL & C O. CAN ALSO NOT BE DOUBTED PARTICULARLY WHEN SUBSTANTIAL EVIDENCE PROVING THE SALE OF SAID SHARE S WERE SUBMITTED WHICH REMAINED UNCONTROVERED. THE ASSESSING OFFICER WHILE FURNISHI NG THE REMAND REPORT SOUGHT BY THE LD. CIT(A) ON THE SUBMISSIONS OF ASSESSEE, HAS ALSO NOT MADE ANY ADVERSE REMARKS ON THE DOCUMENTARY EVIDENCE FURNISHED BEFORE THE AUTHORITI ES BELOW. THE LD. COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTION TOWARDS A LETTER DATED 19.1 2.2009 ADDRESSED BY M.P. STOCK EXCHANGE LTD. TO KAUSHAMBHI FINVEST LEASE COMPANY LTD. IN SU PPORT OF THE SELLING RATE OF SHARES ON THE DATE OF SALE, I.E., ON 08.09.1999. ON THE STRENGTH OF THESE ARGUMENTS, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE LD. FIRST APPELLATE AUTHOR ITY HAS COMMITTED NO ERROR WHILE DELETING THE IMPUGNED ADDITIONS AND THEREFORE, THE APPEAL FILED BY THE REVENUE MAY BE DISMISSED. RELIANCE HAS BEEN PLACED ON THE FOLLOWING DECISIONS : (I). BAIJNATH AGARWAL VS. ACIT, 113 TTJ (AGRA) (TM ) 129 (II). CIT VS. SMT. PARAMJIT KAUR, 311 ITR (P&H) (III). CIT VS. SFIL STOCK BROKING LTD., 325 ITR (D EL) 285 (IV). SARTHAK SECURITIES CO.(P) LTD VS. ITO 329 IT R 110(DEL.) ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 9 (V). CIT VS. INDIAN SUGAR & GENERAL IND. EXPORT IM PORT CORPN LTD., 8DTR (DEL) 112. (VI). SIGNATURE HOTELS (P) LTD. VS. ITO, WPC NO. 8 067/2010 (DELHI HIGH COURT) 5. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD INCLUDING THE DECISIONS CITED BEFORE US. A PERUSAL OF THE IMPUGNED ORDER REVEALS THAT THE ASSESSEE HAD SUBMITTED BEFORE THE ASSESSING OFFICER, BILL DA TED 19.06.1998 OF BATRA INVESTMENTS SHOWING PURCHSE OF 21400 SHARES OF M/S. KAUSHAMBI FINVEST-L EASE COMPANY LTD. @ 4.55 PER SHARE, SALE NOTE DATED 24.06.1998 SHOWING PURCHASE OF THE SAID SHARES FOR RS.98,440/- GIVING THEIR DISTINCTIVE NUMBERS, CONTRACT NOTE OF AGARWAL & CO. SHOWING SALE OF 21400 SHARES OF KAUSHAMBHI FINVEST-LEASE COMPANY LTD. @ RS.91/- PER SHARE IN SETTLEMENT OF 08.09.1998, BILL DATED 18.09.1999 OF AGARWAL & CO. SHOWING TOTAL SAL E CONSIDERATION OF RS.19,44,029/- FOR SALE OF 21400 SHARES AND PHOTOCOPIES OF VARIOUS DRAFTS T HROUGH WHICH THE SALE PROCEEDS OF SHARES WERE RECEIVED BY THE ASSESSEE. THESE DOCUMENTARY EV IDENCES HAVE NOWHERE BEEN TREATED AS INAUTHENTIC, BOGUS OR FABRICATED IN THE IMPUGNED AS SESSMENT ORDER NOR ANY ADVERSE COMMENT HAS BEEN MADE THEREON IN THE REMAND REPORT SOUGHT BY TH E LD. CIT(A) FROM THE ASSESSING OFFICER ON THE WRITTEN SUBMISSIONS OF THE ASSESSEE. THEREFORE, IN OUR CONSIDERED OPINION, SIMPLY BECAUSE THE SUMMONS ISSUED TO THE BROKERS RETURNED UNDELIVERED, THE SHARE TRANSACTIONS IN DISPUTE CANNOT BE HELD AS BOGUS IN PRESENCE OF DOCUMENTARY EVIDENCES FURNISHED WITH RESPECT THERETO. IN THIS CONTEXT, THE RELIANCE PLACED BY THE ASSESSEE ON THE DECISION OF THE THIRD MEMBER, ITAT, AGRA BENCH IN THE CASE OF BAIJNATH AGARWAL VS. ACIT (SUP RA) SUPPORTS THE CASE OF ASSESSEE WHEREIN THE THIRD MEMBER HAS OBSERVED AS UNDER : - 15. IT WAS THE DUTY OF THE AO TO BRING ON RECORD SUFFICIENT EVIDENCE AND MATERIAL TO PROVE THAT THE DOCUMENTS FILED BY THE ASSESSEE WERE BOGUS, FALSE OR FABRICATED AND THE LONG TERM CAPITAL GAIN SHOWN BY HIM WAS ACTUALLY HI S INCOME FROM UNDISCLOSED SOURCES. THE ONLY MATERIAL TO SUPPORT SUCH CONCLUSION OF THE LOWER AUTHORITIES IS EITHER THE FINDING OF THE DDI IN GENERAL INVESTIGATION OR OBSERVATION THAT THE ASSESSEE COULD NOT PROVE THE TRANSACTION TO BE GENUINE. THIS IS SETTLED LAW IN V IEW OF THE DECISION OF HONBLE SUPREME ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 10 COURT IN THE CASE OF CIT VS DAULAT RAM RAWATMULL 19 72 CTR (SC) 411 THAT APPARENT IS REAL. ONUS IS ON THE PERSON WHO ALLEGES APPARENT IS NOT REAL. NONE OF THE JUDICIAL PRECEDENTS SUPPORT THE CASE OF THE REVENUE. WHILE M AKING ADDITION AS INCOME FROM UNDISCLOSED SOURCES BURDEN ON THE DEPARTMENT IS VER Y HEAVY TO ESTABLISH THAT THE ALLEGED RECEIPT WAS ACTUALLY INCOME OF THE ASSESSEE FROM UN DISCLOSED SOURCES. 6. IT IS ALSO WORTHWHILE POINTING OUT THAT THE ASS ESSEE PURCHASED THE IMPUGNED SHARES FOR RS.98,440/- IN THE ASSESSMENT YEAR 1999-2000 AND TH E RETURN OF INCOME FILED BY THE ASSESSEE FOR THAT YEAR REFLECTING THE PURCHASE OF THE IMPUGNED S HARES STOOD ACCEPTED BY THE DEPARTMENT. COPY OF RETURN IS AVAILABLE AT PAGE 56 OF THE ASSESSEES PAPER BOOK. THE ASSESSEE HAD ALSO FURNISHED COPY OF PURCHASE BILL OF THE IMPUGNED SHARES FROM M /S. BATRA INVESTMENTS AND PHOTOCOPIES OF SHARE CERTIFICATES, COPIES OF WHICH ARE PLACED AT P AGE NOS. 50 TO 58 AND 69 TO 258 OF THE PAPER BOOK. THEREFORE, IN OUR OPINION, IT IS NOW NOT OPEN TO THE ASSESSING OFFICER TO DISBELIEVE THE PURCHASE OF THE SAME SHARES DURING THE YEAR IN DISP UTE ON THE BASIS OF A GENERAL ENQUIRY MADE BY THE INVESTIGATION WING. IT IS NOT THE CASE OF THE REVENUE THAT THE COMPANY WHOSE SHARES WERE TRADED BY THE ASSESSEE-HUF WAS A NON-EXISTENT OR BO GUS COMPANY OR THAT THE SHARES IN QUESTION WERE NOT PHYSICALLY IN POSSESSION OF THE ASSESSEE P ARTICULARLY WHEN THE ASSESSEE HAD FURNISHED THE SHARE CERTIFICATES, WHICH ARE AVAILABLE ON PAPE R BOOK WE ALSO DO NOT FIND ANY MATERIAL ON RECORD TO SUGGEST ANY RIGGING OF SHARE PRICE OF THE COMPANY BY THE ASSESSEE. THE LD. DR COULD NOT BE ABLE TO REBUT THE CONTENTION OF THE ASSESSEE THAT SIMPLY BECAUSE THE SUMMON ISSUED TO M/S. BATRA INVESTMENTS RETURNED BACK UNDELIVERED, THE PU RCHASE OF SHARES CANNOT BE DOUBTED PARTICULARLY WHEN THE OWNERSHIP OF THE SHARES STOOD PROVED BY SHARE CERTIFICATES AND THE TRANSACTION OF PURCHASE OF SHARES RELATED BACK BY 8 YEARS FROM THE ISSUE OF SUMMONS, WHICH TOO WAS ISSUED MUCH AFTER THE DEATH OF THE OWNER OF M/S . BATRA INVESTMENTS. THE COPY OF DEATH CERTIFICATE IN SUPPORT HAS BEEN PLACED AT PAGE 261 OF THE ASSESSEES PAPER BOOK. DURING SUCH A LONG LAPSE OF TIME, IF THE BROKERS HAD CHANGED THEI R LOCATION AND THE ADDRESS, THE ASSESSEE CANNOT ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 11 BE BLAMED FOR THE SAME AND NO ADVERSE VIEW CAN BE D RAWN BY THE AO SAYING THAT THE ASSESSEE DID NOT KNOW THE WHEREABOUTS OF THE BROKERS. IT APPEARS THAT THE ASSESSING OFFICER WAS GUIDED BY THE SUSPICION RAISED ON THE BASIS OF REPORT OF INVESTIG ATION WING AS IS EVIDENT FROM THE REASONS RECORDED BY THE ASSESSING OFFICER. THE PURCHASE OF IMPUGNED SHARES ALSO STANDS PROVED FROM THE STATEMENT OF SHRI RAKESH GUPTA PLACED AT PAPER BOOK PAGES 314 TO 319, ON WHOSE ADVICE AND ASSISTANCE THE SAID SHARES WERE PURCHASED AND SOLD. WE ALSO FIND THAT SHRI RAJEEV AGARWAL, THE COPARCENER OF ASSESSEE-HUF UNEQUIVOCALLY STATED IN HIS STATEMENTS THAT PAYMENT FOR PURCHASE OF IMPUGNED SHARES WAS MADE AFTER TAKING THE CASH FROM THE CASH BOX OF ASSESSEE-HUF. SIMILARLY, THE SALE OF SHARES IN QUESTION STANDS PROVED BY THE BILL AND CONTRACT NOTE OF M/S. AGARWAL & COMPANY WHICH ARE PLACED AT PAGES 67 AND 68 OF THE ASSESSEES PAPER BOOK. MOREOVER, IN OUR OPINION, THE ASSESSEE CANNOT BE EXPECTED TO PRODUCE THE BROKERS IN CONNECTION WITH SUCH OLD TRANSACTIONS OF PURCHASE AND SALE OF SHARES AND AFT ER A LONG LAPSE OF TIME. FOR THE PROPOSITION THAT WHERE BROKERS CANNOT BE PRODUCED BY THE ASSESSEE BE FORE THE ASSESSING OFFICER, NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE, THE RE LIANCE PLACED BY THE ASSESSEE ON THE DECISIONS OF HONBLE CALCUTTA HIGH COURT REPORTED IN 232 ITR 820, 241 ITR 494, 244 ITR 422 AND 250 ITR 539 GO TO SUPPORT THE CASE IN HAND. 7. A PERUSAL OF THE ASSESSMENT ORDER FURTHER REVEAL S THAT THE ASSESSING OFFICER HAS TRIED TO ESTABLISH IN THE PRESENT CASE THAT THE ASSESSEES O WN MONEY IN CASH TRAVELED INTO THE BROKERS BANK ACCOUNT AND THE SAME ROUTED BACK TO THE ASSESS EE THROUGH THE BANKING CHANNELS AS ALSO SPEAK THE REASONS RECORDED. THIS EFFORT OF THE ASS ESSING OFFICER, IN OUR OPINION, IS BASED ON HIS GUESS. IT IS SETTLED PRINCIPLE OF LAW THAT THE PERS ON WHO ALLEGES IS LIABLE TO DISCHARGE HIS ONUS TO PROVE THE ALLEGATION. IN SUCH STATE OF AFFAIRS, HEA VY BURDEN LIES ON THE REVENUE TO PROVE THAT THE ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 12 MONEY OF THE ASSESSEE TOOK SUCH A ROUTE TO THE ASSE SSEE, WHICH THE REVENUE FAILED TO DISCHARGE IN THE INSTANT CASE. THE ASSESSING OFFICER HAS NOT BRO UGHT ANY POSITIVE EVIDENCE ON RECORD TO SUPPORT HIS CONCLUSION AND TO PROVE THE ALLEGATION THAT THE MONEY RECEIVED BY ASSESSEE AS SALE CONSIDERATION OF SHARES, ACTUALLY FLOWED FROM ASSES SEE AND WERE HIS UNACCOUNTED MONEY. THUS, WE FIND THAT THE CONCLUSION OF THE AO IS BASED ON T HE ASSUMPTIONS BEREFT OF ANY EVIDENCE IN POSSESSION OF THE ASSESSING OFFICER. IN OUR CONSIDE RED OPINION, A SUSPICION, HOWSOEVER STRONG IT MAY BE, CANNOT SUBSTITUTE A PROOF SIMPLY BECAUSE TH E ASSESSEE DID NOT PRODUCE THE CONCERNED PERSONS BEFORE THE AO EVEN THOUGH THERE IS NO MATER IAL ON RECORD TO DISPLACE THE DOCUMENTARY EVIDENCES FURNISHED BY ASSESSEE REGARDING PURCHASE AND SALE OF SHARES. OUR THIS VIEW IS FORTIFIED BY THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF KISHAN CHAND CHELLA RAM, 125 ITR 713 (SC), WHEREIN IT HAS BEEN HELD THAT THE BURDEN IS ON THE DEPARTMENT TO PROVE THAT THE MONEY BELONGS TO THE ASSESSEE BY BRINGING PROPER EVIDENCE ON RECORD AND THE ASSESSEE COULD NOT BE EXPECTED TO CALL THE CONCERNED PERSONS IN EVIDENCE TO HELP THE DEPARTMENT TO DISCHARGE THE BURDEN THAT LAY UPON IT. WE, THEREFORE, FIND NO SU BSTANCE IN THE CONTENTION OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS INTRODUCED HIS OWN UN ACCOUNTED MONEY IN THE SHAPE OF SALE PROCEEDS OF SHARES. IN VIEW OF THE AFORESAID DISCUS SION AND THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE, WE FIND THAT THE LD. ASSE SSING OFFICER HAS DOUBTED THE SHARE TRANSACTIONS AS SHAM ON FLIMSY GROUNDS OF SUSPICION AND , THUS, THERE IS NO GOOD REASON TO INTERFERE WITH THE IMPUGNED ORDER IN DELETING THE ADDITIONS IN DISPUTE . AS A RESULT, THE APPEAL FILED BY THE REVENUE HAS TO BE DISMISSED. 8. ADVERTING TO THE CROSS-OBJECTION OF THE ASSESSEE , WE FIND THAT GROUND NO.1 OF THE C.O. IS SUPPORTIVE OF IMPUGNED ORDER WITH REGARD TO DELETIO N OF ADDITION OF RS.19,40,000/- AND ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 13 RS.38,800/- AND SINCE WE HAVE CONFIRMED THE IMPUGNE D DELETION, THIS GROUND HAVING BECOME INFRUCTUOUS DESERVES TO BE DISMISSED. DURING THE CO URSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE MADE A STATEMENT THAT HE DOES NOT WISH TO PRESS GROUND NO.2, WHICH DESERVES TO BE DISMISSED AS NOT PRESSED. IN GROUND NO. 3, THE ASSE SSEE HAS ASSAILED THE IMPUGNED ORDER ON THE VALIDITY OF PROCEEDINGS U/S. 147 IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE INITIATION OF PROCEEDINGS U/S. 147/148 IS INVALID AND VOID AB INITIO FOR THE REASON THAT T HE ASSESSING OFFICER BORROWED THE BELIEF AS TO THE ESCAPEMENT OF INCOME WITHOUT APPLYING HIS MIND, AS THE REASONS RECORDED UNEQUIVOCALLY GO TO SHOW THAT THE ASSESSING OFFICER WAS GUIDED SOLELY O N THE BASIS OF GENERAL INFORMATION RECEIVED FROM THE INVESTIGATION WING, AGRA WITH REGARD TO PR OVIDING FICTITIOUS ENTRIES OF LONG-TERM CAPITAL GAINS BY THE BROKERS. IT IS SETTLED PRINCIPLE OF LA W THAT THE PROVISIONS OF SECTION 147 DOES NOT GIVE UNFETTERED POWERS TO THE ASSESSING OFFICER TO REOPE N THE ASSESSMENT, BUT IT HAS TO BE BASED ON SOME MATERIAL HAVING LIVE LINK BETWEEN THE MATERIAL IN POSSESSION AND THE FORMATION OF BELIEF AS TO THE ESCAPEMENT OF INCOME. IN THE INSTANT CASE, T HERE WAS NO MATERIAL ON THE BASIS OF WHICH THE ASSESSING OFFICER COULD FORM A BELIEF OF ESCAPEMENT OF INCOME NOR IS THERE ANY LIVE NEXUS BETWEEN THE REASONS RECORDED AND THE BELIEF FORMED BY ASSESSING OFFICER AS TO THE ESCAPEMENT OF INCOME. MERE SUSPICION CANNOT BE MADE BASIS FOR ISS UANCE OF NOTICE U/S. 148 AND THE REASONS TO BELIEVE ESCAPEMENT OF INCOME SHOULD BE BONA FIDE AN D NOT MERE A PRETENCE. THERE IS NO APPLICATION OF MIND OF THE AO OR ANY INDEPENDENT EN QUIRY BY HIM. THEREFORE, THE JURISDICTION ASSUMED U/S. 147 AND REOPENING OF THE ASSESSMENT IS NOT SUSTAINABLE AT ALL AND THE LD. CIT(A) HAS WRONGLY HELD THE PROCEEDINGS AS VALIDLY INITIATED. RELIANCE IS PLACED ON THE FOLLOWING DECISIONS : ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 14 (I). GANGA SARAN & SONS PVT. LTD. VS. ITO, 130 ITR 1(SC) (II). S. NARAYANAPPA VS. CIT 63 ITR 219 (SC) (III). PHOOL CHAND BAJRANG LAL VS. ITO 203 ITR 456 (SC) (IV). INDIAN OIL CORPORATION VS. ITO, 159 ITR 956 ( SC) (V) CIT VS. RAM LAL MANOHAR LAL 158 ITR 9 (DEL.) (VI) CIT VS. JAMNADAS DWARKADAS & CO. 209 ITR 1 (BOM) (VII) CIT VS. DAULAT RAM RAWAT MALL 87 ITR 349 (SC) (VIII) CIT VS. VINITA JAIN 212 CTR 42 (DEL.). THE LD. COUNSEL FOR THE APPELLANT HAS CITED PLENTY OF OTHER DECISIONS TO SUPPORT THE AFORESAID CONTENTIONS. 10. THE REOPENING OF THE ASSESSMENT IS FURTHER ASSA ILED ON THE ARGUMENTS THAT NO NOTICE U/S. 148 OF THE ACT WAS SERVED UPON THE ASSESSEE AS CONT EMPLATED U/S. 282 OF THE ACT, WHICH BEING THE CONDITION PRECEDENT FOR INITIATION OF PROCEEDINGS U /S. 147, THE ASSESSING OFFICER COULD NOT ASSUME JURISDICTION TO FRAME THE IMPUGNED RE-ASSESS MENT AGAINST THE ASSESSEE. RELIANCE IS PLACED ON THE FOLLOWING DECISIONS : (I). CIT VS. THAYABALLI MULLAH JEVAJI KAPASI, 66 I TR 147(SC) (II). CIT VS. HYDERABAD DECCAN LIQUOR SYNDICATE, 9 5 ITR 130 (AP) (III). N. KHADER SHERIFF SAHEB VS. CIT, 113 ITR 50 (MAD) (IV). CIT VS. TRILOKCHAND SWAROOP CHAND, 98 TAXMAN 82 (MP) (V). KESHAV NARAIN BANERJEE VS. CIT, 101 TAXMAN 51 2 (CAL.) (VI). A.K.M. GOVINDASWAMI CHETTIAR VS. ITO, 148 CT R(MAD) 458 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN VIEW OF THE DECISION OF HONBLE ORISSA HIGH COURT IN CWT VS. FATEH CHAND AGARWAL, 97 ITR 701 (O RISSA) AND MADRAS HIGH COURT IN VENKAT NAICKEN TRUST VS. CIT 242 ITR 141 (MAD), THE BURDEN TO PROVE SERVICE OF THE NOTICE WHEN CALLED IN QUESTION LIES ON THE REVENUE, WHICH IT FAILED TO DISCHARGE BEFORE COMPLETING THE REASSESSMENT PROCEEDINGS. ON RECEIPT OF NOTICE U/S. 142(1) (PLAC ED AT PAPER BOOK PAGE 35), THE ASSESSEE VIDE LETTER DATED 15.05.2006 BROUGHT TO THE NOTICE OF AS SESSING OFFICER THAT NO NOTICE U/S. 148 WAS EVER SERVED UPON IT. THEREAFTER THE ASSESSING OFFIC ER SUPPLIED THE COPIES OF NOTICES AND OTHER ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 15 EVIDENCES REGARDING SERVICE OF NOTICE. THE LETTER D ATED 28.03.2006 OF THE POSTAL AUTHORITIES, NO DOUBT SPEAKS THAT THE SPEED POST WAS DELIVERED ON 2 2.02.2006 BUT THE PERSON ON WHOM IT WAS DELIVERED REMAINS ELUSIVE. THE ASSESSEE FURTHER MAD E REQUEST TO SUPPLY THE COPY OF NOTICE U/S. 148 DATED 15.02.2006 (PLACED AT PAGE 43-44 OF THE P APER BOOK), WHICH WAS SUPPLIED VIDE LETTER DATED 26.05.06 INFORMING THAT THE NOTICE U/S. 148 H AD ALREADY BEEN SERVED ON 16.02.06 TO ONE MR. PUSHPENDRA WHO DID NOT RELATED TO THE ASSESSEE. THE ASSESSEE MADE SEVERAL CORRESPONDENCES REGARDING NON-SERVICE OF NOTICE COPIES OF WHICH ARE AVAILABLE ON THE PAPER BOOK. HE, THEREFORE, CONTENDED THAT FOR WANT OF SERVICE OF STATUTORY NOT ICE U/S. 148, THE RE-ASSESSMENT FRAMED IS VOID AB INITIO. 11. ON THE CONTRARY, THE LD. DR RELIED UPON THE ORD ER OF THE LD. FIRST APPELLATE AUTHORITY ON THIS COUNT AND SUBMITTED THAT THERE WAS SUFFICIENT MATER IAL IN POSSESSION OF THE ASSESSING OFFICER AGAINST THE ASSESSEE WHICH LED HIM TO RECORD THE RE ASONS AND TO FORM THE BELIEF AS TO THE ESCAPEMENT OF INCOME. THE INFORMATION RECEIVED FROM THE INVESTIGATION WING CONTAINED THE TRANSACTIONS OF FICTITIOUS ENTRIES OF CAPITAL GAINS , NAME OF THE ASSESSEE LISTED IN THE LIST OF BENEFICIARIES, IDENTIFICATION OF BANK ACCOUNTS OF A SSESSEE AND THE ENTRY PROVIDER, WHICH ALL CONSTITUTE MATERIAL FOR THE BELIEF OF ESCAPEMENT OF INCOME ENTERTAINED BY THE ASSESSING OFFICER. IT WAS ALSO SUBMITTED THAT SUBSTANTIAL EVIDENCE WER E GIVEN TO THE ASSESSEE BY THE AO TO SUBSTANTIATE THAT NOTICE U/S. 148 WAS PROPERLY SERV ED. MOREOVER, AFTER ISSUANCE OF NOTICE U/S. 148 WITHIN THE PERIOD OF LIMITATION, ITS SERVICE IS NOT REQUIRED BY LAW TO BE MADE WITHIN THAT PERIOD OF LIMITATION FOR INITIATING PROCEEDINGS U/S. 147 OF T HE ACT. ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 16 12. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD AND WE FIND THAT SUBSTANTIAL EVIDENCE WERE BROUGHT ON RECORD BY THE LD. ASSESSING OFFICER TO SUBSTANTIATE THAT THE NOTICE ISSUED U/S. 148 WAS SERVED UPON THE ASSESSEE THROUGH SPEED POST, IN THE FORM OF LETTERS OF THE POST OFFICE DATED 28.03.2006 AND 04.04.2006 COP Y OF WHICH WAS ALSO SUPPLIED TO THE ASSESSEE ON 26.05.2006 ON DEMAND. IT IS NOT THE CASE OF THE ASSESSEE THAT THE ISSUANCE OF NOTICE U/S. 148 WAS BEYOND THE PERIOD OF LIMITATION. THEREFORE, IN OUR CONSIDERED OPINION, THE LD. CIT(A) AFTER RELYING UPON THE DECISIONS OF HONBLE APEX COURT IN CIT VS. MAJOR TIKKA KHUSWANT SINGH 212 ITR 650 AND R.K. UPADHYAYA VS.SHANABHAI P. PATEL (1 987) 166 ITR 163, HAS RIGHTLY CONCLUDED THAT EVEN THOUGH THE NOTICE U/S. 148 WAS ISSUED AND SERVED UPON THE ASSESSEE WITHIN THE LIMITATION, YET THE ISSUANCE OF NOTICE WITHIN LIMIT ATION IS NOT DISPUTED. THERE BEING NO CONTRARY MATERIAL ON RECORD, WE DO NOT FIND SUBSTANCE IN THE CONTENTION OF THE ASSESSEE THAT THE RE- ASSESSMENT WAS FRAMED WITHOUT SERVICE OF NOTICE U/S . 148. WE FURTHER DO NOT FIND ANY INCONGRUITY IN THE CONCLUSION OF THE LD. CIT(A) THAT THAT THE P ROCEEDINGS U/S. 147 WERE VALIDLY INITIATED, AS THERE WAS SUFFICIENT MATERIAL WITH THE AO TO FORM A BELIEF AS TO THE ESCAPEMENT OF INCOME. THE LD. CIT(A) HAS ARRIVED AT THIS CONCLUSION AFTER TAK ING INTO CONSIDERATION THE AMENDED PROVISIONS OF SECTION 147 AND THE DECISION OF HONBLE DELHI HI GH COURT IN THE CASE OF CIT VS. VIPIN BATRA 293 ITR 389 (DEL.) WHEREIN, AFTER REFERRING TO THE DECISIONS IN THE CASE OF PHOOL CHAND BAJRANG LAL VS. ITO, 203 ITR 456(SC), RAYMOND WOLLEN MILLS LTD. VS. ITO, 236 ITR 34(SC) AND UNITED ELECTRICAL CO. P. LTD. VS. CIT, 258 ITR 317 (DEL.), THE HONBLE COURT HELD THE PROCEEDINGS INITIATED U/S. 147 ON THE BASIS OF SIMILAR INFORMAT ION AND IN THE IDENTICAL FACTS & CIRCUMSTANCES AS VALID OBSERVING THAT THE THERE WAS ADEQUATE REASON FOR THE ASSESSING OFFICER TO ISSUE A NOTICE TO THE ASSESSEE U/S. 148. THE LD. CIT(A) HAS ALSO OBSE RVED THAT THE DECISIONS CITED BY THE LD. COUNSEL PERTAIN TO THE PERIOD PRIOR TO THE AMENDMENT IN SEC TION 147 OF THE ACT, WHICH FINDING STANDS ITA NO. 233/AGRA/2010 & C.O. NO. 57/AGRA/2010 17 UNREBUTTED ON BEHALF OF THE ASSESSEE. RECENTLY, THE HONBLE DELHI HIGH COURT IN THE CASE OF AGR INVESTMENT LTD. VS. ADDL. CIT, 333 ITR 146 HAS DEAL T WITH THE SIMILAR ISSUE AND HAS TAKEN THE VIEW THAT THE REASONS RECORDED BY THE ASSESSING OFF ICER AMPLY DEMONSTRATE THAT THE INCOME HAS ESCAPED ASSESSMENT AND THEY HELD THAT THERE WAS APP LICATION OF MIND ON THE PART OF THE ASSESSING OFFICER. IN THIS CASE ALSO, CATENA OF DECISIONS CIT ED BY THE LD. COUNSEL FOR THE ASSESSEE HAS BEEN CONSIDERED BY THE HONBLE COURT. WE, THEREFORE, FI ND NO INFIRMITY IN THE ORDER OF THE LD. FIRST APPELLANT AUTHORITY ON THIS COUNT AND GROUND NO.3 O F THE CROSS-OBJECTION IS, THEREFORE, REJECTED. 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.12.2011. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 TH DECEMBER, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY