M/s. Instapower Ltd., New Delhi V. ITO, New Delhi

ITA 1389/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3596 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 08-07-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 31-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Keywords: Reopening of assessment; Unexplained cash credit; Depreciation; Business expenditure; Opportunity of being heard; Reason to believe
• Section: 234B; 37(1); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I NEW DELHI) BEFORE SMT. DIVA SNGH, JUDICIAL MEMBER AND SHRI B.K. HALDAR, ACCOUNTANT MEMBER I.T.A. NO.1389 /DEL/2010 ASSESSMENT YEAR : 2000-01 MS INSTAPOWER LTD., ITO, S-19, PANCH SHEEL PARK, WARD-11 (4), NEW DELHI-110017. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO.AAACI-0002-R APPELLANT BY : SHRI SALIL AGARWAL RESPONDENT BY : SHRI A.K./ MONGA, SR. DR. ORDER PER B.K. HALDAR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD CIT(A)-XV, NEW DELHI DATED 22.2.2010 FOR ASSESSMENT YEAR 2000- 01. THE APPELLANT HAS RAISED THE FOLLOWING GROUNDS OF APPEALS:- 1. THAT THE LD CIT(A) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE INITIATION OF PROCEEDINGS U/S 147 OF THE ACT AND COMPLETION OF ASSESSMENT U/S 147/143(3) OF THE ACT WITHOUT APP RECIATING THAT STATUTORY PRE CONDITION FOR NEITHER INITIATION OF PROCEEDINGS AND NOR COMPLETION OF ASSESSMENT HAD BEEN FULFILLED AND THEREFORE, THE SA ME WERE WITHOUT JURISDICTION AND HENCE THE SAME DESERVED TO BE QUAS HED IN LIMINE. PAGE 2 OF 19 ITA NO1389/DEL/10 2. THAT THE LD CIT(A) HAS FAILED TO APPRECIATE THAT SINCE THE PROCEEDINGS ADMITTEDLY AND, UNDISPUTEDLY HAD BEEN INITIATED FOR THE PURPOSE OF INVESTIGATION ASSUMPTION OF JURISDICTION WAS NOT IN ACCORDANCE WITH LAW AND WERE THEREFORE ILLEGAL AND VOID AB INITIO. 2.1. THAT THE LD CIT(A) HAS FAILED TO APPRECIATE TH AT THERE WAS NO MATERIAL ON RECORD ON THE BASIS OF WHICH THE LD OFFICER COUL D VALIDLY HAVE FORMED AN OPINION THAT INCOME OF THE APPELLANT COMPANY HAS ES CAPED ASSESSMENT AND AS SUCH HIS ORDER IS PATENTLY UNTENABLE. IN FAC T, HE HAS FAILED TO APPRECIATE THAT APPELLANT HAD ALSO PAID A SUM OF `. 3 LAKHS TO M/S FRENZY PRODUCTS PVT. LTD. DURING THE INSTANT ASSESSMENT YE AR AND THEREFORE INITIATION OF PROCEEDINGS U/S 147 OF THE ACT BY SEE KING TO TAX THE CREDIT IN THE ACCOUNT OF `.1,70,692/- BY IGNORING THE FACT T HAT THERE WAS AN OPENING BALANCE OF `.1,29,307.65 THEREBY MAKING A TOTAL ADV ANCE OF `.3, LAKHS WHICH WAS REFUNDED OTHERWISE REFLECTS NON APPLICATI ON OF MIND AND IS THEREFORE ENTIRELY MISCONCEIVED. 2.2. THAT THE LD CIT(A) HAS FAILED TO APPRECIATE TH AT THERE WAS NO VALID APPROVAL GRANTED BY THE LD ACIT RANGE-1, NEW DELHI FOR THE INITIATION OF PROCEEDINGS. SINCE THE APPROVAL IS MECHANICAL IN VI EW OF THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF UNITED ELECTRIC ALS LTD. V. CIT REPORTED IN 258 IOTR 377, ASSUMPTION OF JURISDICTION WAS VOI D AB INITIO AND HENCE UNSUSTAINABLE. 2.3. THAT THE LD CIT(A) HAS FURTHER ERRED BOTH IN L AW AND ON FACTS IN FAILING TO APPRECIATE THE ORDER OF THE HON'BLE TRIBUNAL IN THE CASE OF THE APPELLANT FOR ASSESSMENT YEAR 1999-00 WHEREIN ON ALMOST IDENT ICAL FACTS, INITIATION OF PROCEEDINGS HAD BEEN HELD TO BE WITHOUT JURISDIC TION AND HENCE UNSUSTAINABLE. PAGE 3 OF 19 ITA NO1389/DEL/10 3. THAT THE LD CIT(A) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE ADDITION OF `.1,70,692/- BEING ALLEGE D UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT REPRESENTING BY THE APPELLANT COMPANY FROM M/S FRENZY PRODUCTS PVT. LTD. 3.1. THAT THE LD CIT(A) HAS FAILED TO APPRECIATE TH AT THE APPELLANT HAD ALSO PAID A SUM OF `.3 LAKHS TO M/S FRENZY PRODUCTS PV T. LTD. DURING THE INSTANT ASSESSMENT YEAR AND THEREFORE ADDITION MADE BY SEEKING TO TAX THE CREDIT IN THE ACCOUNT AND IGNORING THE DEBIT IS ENTIRELY MISCONCEIVED. 3.2. THAT THE LD CIT(A) HAS FAILED TO APPRECIATE TH AT THE SUM OF `.1,70,692/- RECEIVED BY THE APPELLANT FROM M/S FRE NZY PRODUCTS PVT. LTD. WAS IN CONSIDERATION OF THE BUSINESS TRANSACTION WI TH M/S FRENZY PRODUCTS PVT. LTD. AND HAD BEEN FULLY SUBSTANTIATED BY DOCUM ENTARY EVIDENCE PLACED ON RECORD IN THE COURSE OF ASSESSMENT PROCEE DINGS AND THEREFORE SUCH SUM COULD NOT BE HELD TO BE UNEXPLAINED CASH C REDIT U/S 68 OF THE ACT. 4. THAT THE LD CIT(A) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE DISALLOWANCE OF `.3,80,471/- OUT OF T HE EXPENDITURE CLAIMED AND INCURRED BY THE APPELLANT COMPANY ON ADVERTISEM ENT AND EXHIBITION EXPENSES FOR WHICH COPY OF LEDGER ACCOUNT HAD BEEN SUBMITTED VIDE LETTER DATED 27.11.2006 AND COPIES OF BILL/VOUCHERS HAD BE EN SUBMITTED VIDE LETTER DATED 11.12.2006. 4.1. THAT THE LD CIT(A) HAS FAILED TO APPRECIATE TH AT DISALLOWANCE SO MADE WAS BEYOND THE SCOPE OF REASONS RECORDED AND WAS BA SED ON FISHING AND ROVING ENQUIRIES AND THEREFORE WITH JURISDICTION. 4.2. THAT THE LD CIT(A) HAS ERRED BOTH IN LAW AND O N FACTS IN UPHOLDING THE DISALLOWANCE ON THE FACTUALLY INCORRECT BASIS THAT EVIDENCE FURNISHED BY PAGE 4 OF 19 ITA NO1389/DEL/10 THE APPELLANT WAS NO9T PLACED BEFORE THE ASSESSING OFFICER AND SINCE NO PETITION UNDER RULE 46A HAD BEEN FILED IN THE COURS E OF APPELLATE PROCEEDINGS AND THEREFORE SUCH EXPENDITURE IS NOT E LIGIBLE BUSINESS EXPENDITURE FOR DEDUCTION U/S 37(1) OF THE ACT. IN FACT, NO OPPORTUNITY MUCH LESS ANY VALID OPPORTUNITY WAS GRANTED BEFORE ARRIV ING AT SUCH AN ARBITRARY, PERVERSE CONCLUSION, WHICH IS WHOLLY UNSUSTAINABLE. 5. THAT THE LD CIT(A) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN NOT DIRECTING THE ASSESSING OFFICER TO SET OFF THE UNAB SORBED DEPRECIATION, UNABSORBED BUSINESS LOSS AND, ASSESSED BUSINESS LOS S FOR THE INSTANT YEAR AGAINST THE INCOME DECLARED FOR THE INSTANT AS SESSMENT YEAR. 6. THAT THE LD CIT(A) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEVY OF INTEREST U/S 234B OF THE ACT WHICH IS NOT LEVIABLE ON THE FACTS OF THE INSTANT CASE. 2. THE ASSESSEE COMPANY FILED RETURN OF INCOME ON 3 0.11.2000 DISCLOSING TOTAL LOSS OF `.4,43,153/- WHICH WAS DULY PROCESSED UNDER SECTION 143 (1) OF THE ACT. THE ASSESSMENT WAS RE-OPENED UNDER SECTION 14 7 OF THE ACT AFTER RECORDING REASONS AND PRIOR APPROVAL OF THE ADDL. CIT, RANGE- 2, NEW DELHI. NOTICE U/S 148 WAS ISSUED ON 23.2.2006. IN RESPONSE TO WHICH, THE ASSESSEE VIDE ITS LETTER DATED 18.4.2006 STATED THAT THE RETURN FILED ON 30.11.200 0 MAY BE TREATED AS THE RETURN FILED IN COMPLIANCE TO THE SAID NOTICE. IT IS STATE D BY THE ASSESSING OFFICER THAT AS PER THE REASONS RECORDED FOR REOPENING THE ASSESSME NT, THE ASSESSEE HAD TAKEN ENTRY OF `.1,70,692/- ON 31.5.1999 VIDE CHEQUE NO. 0308251 FROM M/S FRENZY PRODUCTS PVT. LTD. WHICH IS ONE OF THE ALLEGED BOGU S ENTRY GIVING COMPANY AS PER THE INFORMATION RECEIVED FROM THE OFFICE OF THE DIR ECTOR OF INCOME TAX (INV.), NEW DELHI. THE ASSESSEE COMPANY DID NOT RAISE ANY OBJEC TION TO THE RE-OPENING OF THE ASSESSMENT PROCEEDINGS. PAGE 5 OF 19 ITA NO1389/DEL/10 3. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH COPY OF LEDGER ACCOUNT OF THE S AID COMPANY, NAME AND ADDRESSES OF THE DIRECTORS OF THE COMPANY AND CONFI RMATION OF TRANSACTIONS FROM THE SAID PARTY. THE ASSESSEE FURNISHED THE COPY OF LEDGER ACCOUNT OF THE SAID PARTY BUT DID NOT FURNISH THE OTHER INFORMATION CAL LED FOR BY THE ASSESSING OFFICER. THE ASSESSING OFFICER, THEREFORE, INTIMATED THE ASS ESSEE THAT IN THE STATEMENT OF THE ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY R ECORDED ON 7.1.2005 DURING THE ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2002 -03, THE SAID DIRECTOR IN REPLY TO QUESTION NO.8, STATED THAT THE ASSESSEE CO MPANY DID NOT HAVE ANY TRANSACTION WITH M/S FRENZY PRODUCTS PVT. LTD. FOR FINANCIAL YEAR 2001-02 AND THE TRANSACTIONS ENTERED INTO BEFORE THE SAID FINANCIAL YEAR COULD BE EXPLAINED BY HIM ONLY AFTER CONSULTING THE RECORDS OF THE COMPANY. A FTER VERIFYING FROM THE BANK ACCOUNT OF THE ASSESSEE COMPANY THAT INDEED THE ASS ESSEE RECEIVED AN AMOUNT FROM M/S FRENZY PRODUCTS PVT. LTD. DURING THE RELEV ANT PREVIOUS YEAR, THE ASSESSEE WAS REQUIRED TO FURNISH A NOTE ON TRANSACT IONS FOR WHICH AN AMOUNT OF RS.1,70,692/- WAS RECEIVED BY THE ASSESSEE FROM THE SAID PARTY. IN REPLY, THE ASSESSEE STATED THAT VARIOUS MATERIALS WERE SUPPLIE D TO THE SAID PARTY AND MAY BE AN ADVANCE OF RS.3 LAKHS WAS REQUESTED FROM THE PARTY FOR SUPPLY OF THE SAME. ON ACCOUNT OF THE ABOVE, THE PARTY PROBABLY R EMITTED THE SUM OF RS.1,70,692/-. THE ASSESSING OFFICER ISSUED A NOTIC E U/S 131(1) OF THE ACT TO SHRI H.R. VAISH, DIRECTOR OF THE ASSESSEE COMPANY FOR HI S PERSONAL APPEARANCE ALONG WITH THE BOOKS OF ACCOUNTS AND VOUCHERS, CONSIGNMEN T SALE ACCOUNT WITH ALL SALE STATEMENTS OR OTHER DOCUMENTS PREPARED IN THIS REGA RD AND ALL OTHER INFORMATION WHICH WERE NOT FURNISHED BY THE ASSESSEE SO FAR. T HIS NOTICE U/S 131(1) ISSUED BY THE ASSESSING OFFICER WAS NOT COMPLIED BY THE AS SESSEE. THE ASSESSING OFFICER, THEREFORE, ADDED THIS AMOUNT OF `.1,70,692 /- U/S 68 OF THE ACT. THE REASONS FOR MAKING THE SAID ADDITION HAS BEEN SUMMA RIZED BY THE ASSESSING OFFICER IN PARA 12 OF HIS ORDER. 4. THE ASSESSEE FURNISHED LEDGER ACCOUNT OF ADVERTI SEMENT AND EXHIBITION EXPENDITURE AMOUNTING TO RS.3,80,471/-. AS THE ASSE SSEE DID NOT PRODUCE THE PAGE 6 OF 19 ITA NO1389/DEL/10 BOOKS OF ACCOUNTS AND OTHER PRIMARY EVIDENCE IN SUP PORT OF THE ABOVE CLAIM, THE ASSESSING OFFICER DISALLOWED THE SAID EXPENDITURE O F RS.3,80,471/-. 5. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD CIT(A). 6. BEFORE THE LD CIT(A), WITH REFERENCE TO VALIDITY OF REOPENING OF ASSESSMENT U/S 147 OF THE ACT, THE SUBMISSIONS OF T HE ASSESSEE AS REPRODUCED BY THE LD CIT(A) IN HIS ORDER ARE AS UNDER:- THE APPELLANT COMPANY WAS SERVED NOTICES UNDER SEC TION 148 OF THE ACT DATED 20.03.2006. THE COPY OF THE NOTICE SENT BY TH E ASSESSING OFFICER AND RECEIVED BY THE APPELLANT COMPANY IS PLACED AT PAGE 24 OF PAPER BOOK. VIDE LETTER/REPLY DATED 20.3.06, THE ASSESSEE IN COMPLIANCE TO THE AFORESAID NOTICE REQUESTED THE LEARNED INCOME TAX O FFICER TO TREAT THE RETURN OF INCOME FILED AS WAS ORIGINALLY FILED IN C OMPLIANCE TO THE NOTICE U/S 148 OF THE ACT. COPY OF THE AFORESAID LETTER IS PLA CED AT PAGE 26 OF THE PAPER BOOK. THE LEARNED ASSESSING OFFICER SUPPLIED THE COPY OF THE REASONS RECORDED FOR THE ASSESSMENT YEAR 2000-01, A COPY OF WHICH IS PLACED AT PAGE 25 OF THE PAPER BOOK. THE COPY OF TH E REASONS RECORDED FOR THE ASSESSMENT YEAR 2000-01 IS EXTRACTED AS BELOW: 'RETURN OF INCOME FOR THE ABOVE MENTIONED YEAR WAS FILED ON 3.3.2001 DECLARING LOSS OF RS.4,43,163/- WHICH STANDS PROCES SED U/S 143(1) ON 23.3.2001. ON THE BASIS OF SURVEY REPORT AND LIST OF 58 COMPAN IES RECEIVED FROM ADDL. DIRECTOR OF INCOME TAX, INVESTIGATION AND ON HIS EX PRESSING THE POSSIBILITY THAT SOME OF THE COMPANIES MAY HAVE DONE MORE TRANS ACTION WITH SH. SANJAY RASTOGI'S COMPANIES, CASE FOR THE ASSTT. YEA R 2002-03 WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS FOR THE ASSTT YEAR 2002-03, IT WAS FURTHER REVEALED BY THE AO. THAT THE ASSESSEE PAGE 7 OF 19 ITA NO1389/DEL/10 HAD CREDIT ENTRY OF RS.1,70,692/- AS REPORTED BY TH E INVESTIGATION WING. THIS TRANSACTION WAS MADE ON 31/05/1999 VIDE CHEQUE NO. 0308251 BUT NEITHER THE NAME OF THE COMPANY NOR NAME OF THE BAN K HAS BEEN INDICATED BY THE INVESTIGATION WING. THIS NEEDS INV ESTIGATION. I HAVE, REASON TO BELIEVE THAT INCOME OF RS.1,70,69 2/- HAS ESCAPED ASSESSMENT. TIME LIMIT FOR ISSUE NOTICE U/S 148 AS PER PROVISIONS OF SECTION 149(1) (B) OF I.T. ACT NO NOTICE U/S 148 SHALL BE ISSUED FOR THE RELEVANT ASSTT. YEAR IF FOUR YEAR S, BUT NOT MORE THAN SIX YEARS, HAVE ELAPSED FROM THE END OF THE RELEVANT AS SESSMENT YEAR UNLESS THE INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSE SSMENT AMOUNTS TO OR IS LIKELY TO AMOUNT TO ONE LAKH RUPEES OR MORE F OR THAT YEAR. AS PER PROVISIONS OF SUB SECTION (2) OF SECTION 151 OF IT ACT, NO NOTICE SHALL BE ISSUED UNDER SECTION 148 BY AN ASSE SSING OFFICER, WHO IS BELOW THE RANK OF ASSISTANT COMMISSIONER, AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLES S THE (JOINT COMMISSIONER) IS SATISFIED ON THE REASONS RECORDED BY SUCH ASSESSING OFFICER, THAT IT IS FIT CASE FOR ISSUE OF SUCH NOTI CE. IN VIEW OF THE ABOVE, ADD!. CIT R-11, NEW DELHI MAY KINDLY ACCORD NECESSARY APPROVAL FOR ISSUE OF NOTICE U/S 148 OF THE I.T. ACT. ON THE BASIS OF THE AFORESAID REASONS RECORDED FOR INITIATING THE PROCEEDINGS U/S 147 OF THE ACT, IT IS RESPECTFULLY SUBMITTED THAT, NOTICE ISSUED U/S 148 OF THE ACT ON 20.3.2006 IS ILLEGAL A ND VOID AB-INITIO, SINCE THE SAME IS BASED ON REASONS RECORDED, WHICH ARE HI GHLY VAGUE AND ARBITRARY. IT IS SUBMITTED THAT, IN THE REASONS REC ORDED FOR RE-OPENING THE ASSESSMENT, IT HAS BEEN STATED THAT, DURING THE COU RSE OF ASSESSMENT PAGE 8 OF 19 ITA NO1389/DEL/10 PROCEEDINGS FOR ASSESSMENT YEAR 2002-03, IT WAS FUR THER REVEALED THAT BY THE A.O. THAT THE ASSESSEE HAD CREDIT ENTRY OF RS.1 ,70,692/- FROM M/S FRENZY PRODUCT PVT. LTD. AS REPORTED BY THE INVESTI GATION WING. IT WAS FURTHER NOTED THAT THIS TRANSACTION WAS MADE ON 3.0 5.1999 VIDE CHEQUE NO. 0308251 BUT NEITHER THE NAME OF THE COMPANY NOR NAME OF THE BANK HAS BEEN INDICATED BY THE INVESTIGATION WING. IT IS FURTHER OBSERVED THAT THIS PERIOD OF TRANSACT ION PERTAINS TO ASSESSMENT YEAR 2000-01 AND RETURN OF INCOME FOR AS SESSMENT YEAR 2000-01 IS NOT AVAILABLE IN THIS OFFICE. HE HAS THU S NOTED THAT THE ABOVE- SAID CREDIT ENTRY OF RS.1,70,692/- HAS ESCAPED ASSE SSMENT AND NEEDS INVESTIGATION. HE HAS THEREAFTER CONCLUDED THAT IN VIEW OF THE ABOVE CIRCUMSTANCES, HE HAS REASON TO BELIEVE THAT THE IN COME OF RS.1,70,692/- HAS ESCAPED ASSESSMENT FOR THE INSTANT ASSESSMENT Y EAR. SIR, A CAREFUL PERUSAL OF THE ABOVE, WOULD MAKE IT APPARENT THAT T HE INSTANT PROCEEDINGS ARE NOT BASED ON ANY MATERIAL MUCH LESS FRESH MATER IAL TO ALLEGE THAT INCOME OF THE APPELLANT HAS ESCAPED ASSESSMENT. IN FACT ADMITTEDLY AND UNDISPUTEDLY, HERE IS A CASE WHERE THE PROCEEDINGS HAVE BEEN INITIATED FOR THE PURPOSE OF INVESTIGATION AND NO MORE. IT IS SUB MITTED THAT, IT IS SETTLED LAW THAT THE PROVISIONS CONTAINED IN SECTION 147 OF THE ACT CANNOT BE USED AS A TOOL OR AS A PROVISION TO ENABLE THE ASSESSING OFFICER TO CONDUCT INVESTIGATION. IT IS SUBMITTED THAT, HON'BLE APEX C OURT IN THE CASE OF MADHYA PRADESH INDL. CORP. V ITO REPORTED IN 57 ITR 637 HAS HELD THAT, PROCEEDINGS CANNOT BE INITIATED FOR THE PURPOSE OF MAKING FISHING AND ROVING ENQUIRIES. IT IS SUBMITTED THAT THE LEARNED OFFICER WAS OBLIGED IN LAW TO FIRSTLY PLACE ON RECORD ANY MATERIAL WHICH ALLEG ES THAT INCOME OF THE APPELLANT HAS ESCAPED ASSESSMENT AND ONLY THEREAFTE R INITIATE PROCEEDINGS U/S 147 OF THE ACT. IN OTHER WORDS, THE LEARNED ITO HAD TO PLACE ON RECORD MATERIAL TO SHOW THAT THE SUM OF RS .1,70,692/- RECEIVED BY THE APPELLANT COMPANY, WHICH STOOD CREDITED IN T HE BANK ACCOUNT OF THE APPELLANT COMPANY, REPRESENTED THE SUM, WHICH HAD E SCAPED PAGE 9 OF 19 ITA NO1389/DEL/10 ASSESSMENT. IT IS SUBMITTED THAT UNTIL AND UNLESS, THE AFORESAID BURDEN HAD BEEN DISCHARGED. THE LEARNED ITO COULD NOT HAVE RES ORTED TO THE PROVISIONS CONTAINED IN SECTION 147 OF THE ACT. IT IS SUBMITTED THAT THE AFORESAID SUM RECEIVED BY THE APPELLANT COMPANY HAD BEEN REPAID IN THE INSTANT ASSESSMENT YEAR, AS WOULD BE EVIDENT FROM C OPY OF ACCOUNT PLACED AT PAGE 56 OF THE PAPER BOOK. IT IS RESPECTFUL SUBMISSION OF THE APPELLANT COMPA NY THAT ONCE THE AFORESAID SUM HAS BEEN REPAID, WHICH REPAYMENT IS N OT IN DISPUTE, THERE REMAINED NO JUSTIFICATION MUCH LESS ANY VALID JUSTI FICATION TO INITIATE PROCEEDINGS U/S 147 OF THE ACT. IT IS SUBMITTED THA T THE PROCEEDINGS U/S 147 OF THE ACT CANNOT BE RESORTED TO MAKE ANY FISHI NG OR ROVING ENQUIRIES AS HAVE BEEN ASSUMED TO BE SO BY THE LEARNED ASSESS ING OFFICER AND THEREFORE, THE PROCEEDINGS INITIATED ARE NOT TENABL E IN LAW AND THEREFORE DESERVE TO BE QUASHED AS SUCH. APPELLANT HAS RELIED ON THE DECISIONS IN THE CASE O F ASHOK KUMAR SEN VS. ITO REPORTED IN 132 ITR PAGE 707 AT PAGE 710 AND AC IT V STAR FERRO ALLOYS (P) LTD. REPORTED IN 90 ITO 63 (TM) WHEREIN IT WAS HELD THAT, PROCEEDINGS CANNOT BE RESORTED TO MERELY FOR MAKING INVESTIGATION OR ROVING ENQUIRES. THE APPELLANT HAS FURTHER STATED THAT WITHOUT PREJU DICE TO THE AFORESAID AND ASSUMING THERE WAS MATERIAL OR THE PROCEEDINGS COUL D HAVE BEEN INITIATED FOR THE PURPOSE OF INVESTIGATION, IT IS SUBMITTED T HAT NO INCOME OF THE APPELLANT HAD ESCAPED ASSESSMENT. IT IS SUBMITTED T HAT ALL WHAT HAS BEEN ALLEGED IS THAT THE SUM OF RS.1,70,692/- RECEIVED B Y THE APPELLANT COMPANY REPRESENTS THE SUM WHICH HAS ESCAPED ASSESS MENT WHEREAS ON THE CONTRARY, THE AFORESAID SUM ALREADY STOOD DECLA RED IN THE BOOKS OF THE APPELLANT COMPANY AND, OTHERWISE DURING THE INSTANT ASSESSMENT YEAR. IN PAGE 10 OF 19 ITA NO1389/DEL/10 VIEW THEREOF, IT HAS BEEN SUBMITTED THAT, THERE IS NO JUSTIFICATION TO HAVE INITIATED THE PROCEEDINGS U/S 148 OF THE ACT. FURTHER RELIANCE HAS BEEN PLACED ON THE DECISIONS I N THE CASE OF DELHI HIGH COURT IN THE CASE OF UNITED ELECTRICAL CO. PVT . LTD. VS. CIT REPORTED IN 258 ITR 317 BAWA ABHAI SINGH REPORTED AT 253 ITR 83 , CIT VS INDIAN OIL CORPORATION REPORTED IN 159 ITR 956, ITO VS LAKHMAN I MEWAL DAS, REPORTED IN 103 ITR 437 AT PAGE 448, GANGA SARAN & SONS (P) LTD. REPORTED IN 130 ITR 1, MADRAS HIGH COURT IN THE CAS E OF CIT V M. CHELLAPPAN REPORTED IN 281 ITR 444 AND, CIT V C. PA LIANAPAN REPORTED IN 284 ITR 257, WHEREIN IT HAS BEEN HELD THAT, WHERE N O NOTICE U/S 143(2) OF THE ACT WAS SERVED ON THE ASSESSEE WITHIN THE STIPU LATED PERIOD OF TWELVE MONTHS, PROCEEDINGS U/S 143(1) OF THE ACT HAD BECOM E FINAL AND, HON'BLE TRIBUNAL WAS CORRECT IN HOLDING THAT REOPENING OF A SSESSMENT AND, COMPLETION OF ASSESSMENT WAS NOT VALID. RELIANCE HA S ALSO BEEN PLACED ON THE DECISION OF NAGPUR BENCH OF THE ITAT IN THE CASE OF ACIT V MALLI CHAND BAID REPORTED IN 99 TTJ 1016. THE JODHPUR BEN CH OF THE ITAT HAS ALSO REITERATED THIS VIEW IN THE CASE OF BIGABASS M AHESHWARI SEWA SAMITI V ITO REPORTED IN 96 TTJ 385 AND, IN THE CASE OF RA WATSAR K.V. SAHKARI SAMITI LTD V ITO REPORTED IN 102 IT J 682. IN VIEW OF THE ABOVE THE APPELLANT HAS FURTHER SUBM ITTED THAT ONCE THE BASIS FOR INITIATION OF PROCEEDINGS IS ITSELF INCOR RECT AND, BASED ON MISCONCEPTION OF PROVISIONS OF LAW, IT IS PRAYED TH AT, IT BE HELD THAT, THE PROCEEDINGS U/S 147 OF THE ACT ARE WITHOUT JURISDIC TION. 7. THE LD CIT(A), IN THE FACTS AND CIRCUMSTANCES OF THE CASE, HELD THAT ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER U/S 147 OF THE ACT WAS VALID AS THE ASSESSING OFFICER ACTED ON THE BASIS OF SPEC IFIC INFORMATION PROVIDED BY THE INVESTIGATION WING OF THE DEPARTMENT AND NECESS ARY APPROVAL OF THE HIGHER AUTHORITIES AS REQUIRED BY THE ACT WAS OBTAINED. T HE ASSESSING OFFICER DID NOT PAGE 11 OF 19 ITA NO1389/DEL/10 REOPEN THE ASSESSMENT MERELY ON THE BASIS OF THE DI RECTION OF ANY HIGHER AUTHORITY. LD CIT(A) ALSO HELD THAT THE CAASE LAWS CITED BY THE ASSESSEE WERE NOT APPLICABLE IN THE FACTS OF THE CASE. 8. AS REGARDS THE ADDITION OF RS.1,70,692/- ON ACCO UNT OF AMOUNT RECEIVED FROM M/S FRENZY PRODUCTS PVT. LTD., IT WAS SUBMITTE D BEFORE THE LD CIT(A) THAT THE ASSESSING OFFICER OVER-LOOKED THE FACT THAT THE APPELLANT HAD ALSO PAID A SUM OF RS.3 LAKHS TO THE SAID PARTY DURING THE RELEVAN T PREVIOUS YEAR. IN THE ABOVE FACTS, NO ADDITION COULD HAVE BEEN MADE ON THIS ACC OUNT. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- 103 ITR 344 (PAT.) SAROGI CREDIT CORPORATION VS CIT 224 ITR 180 (P& H) CIT VS RAM NARAIN GOEL 256 ITR 360 (GUJ) DCIT VS ROHINI BUILDERS 49 ITR 723 ( BOM) ORIENT TRADING CO. LTD. V CIT 49 ITR 273 (MAD) S. HASTIMAL V CIT 32 ITR 56 (ALL) KANPUR STEEL CO. LTD. V CIT 9. IT WAS FURTHER SUBMITTED THAT THE BURDEN OF PROO F WAS ON THE ASSESSING OFFICER TO SHOW THAT THE MONEY DID NOT BELONG TO TH E CREDITOR BUT TO THE ASSESSEE IN TERMS OF SECTION 103 OF THE EVIDENCE ACT AND AS THE ASSESSING OFFICER HAS FAILED TO DO SO, NO ADDITION ON THIS ACCOUNT COULD BE MADE. THE ASSESSEE ALSO PLACED RELIANCE ON THE SUBMISSION MADE FOR THE ASSE SSMENT YEAR 1999-00. 10. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND TAKING NOTE OF THE FACT THAT THE ADDRESS OF THE DIRECTOR OF M/S FRENZY PRODUCTS PVT. LTD. COULD NOT BE PROVIDED BY THE ASSESSEE AS ALSO THE CONFIRMATION FROM THE S AID PARTY, LD CIT(A) HELD THAT THE INITIAL ONUS PLACED ON THE ASSESSEE TO PROVE PR IMA FACIE THE IDENTITY OF THE CREDITOR, THE CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION HAS NOT BEEN DISCHARGED BY THE ASSESSEE . HE, THEREFORE UPHELD THE IMPUGNED ADDITION. PAGE 12 OF 19 ITA NO1389/DEL/10 11. WITH REFERENCE TO THE DISALLOWANCE OF EXPENDITU RE AMOUNTING TO RS.3,80,471/-, IT WAS SUBMITTED BEFORE THE LD CIT(A ) THAT THE BILLS PERTAINING TO THE SAME WERE AVAILABLE IN ASSESSEES PAPER BOOK PA GES 99 TO 103 AND 111 TO 126. IT WAS ALSO SUBMITTED THAT THIS DISALLOWANCE WAS BEYOND THE SCOPE OF ASSESSMENT FRAMED U/S 147/143(3) OF THE ACT. THE AS SESSING OFFICER IN PROCEEDING U/S 147 CANNOT ENQUIRE INTO ISSUES WHICH ARE NOT COVERED BY THE REASONS RECORDED BY HIM FOR REOPENING THE ASSESSMEN T. FOR THE ABOVE PROPOSITION, RELIANCE WAS PLACED ON THE FOLLOWING C ASE LAWS:- I) 255 ITR 220 (P & H) VIPIN KHANNA VS. CIT II) 189 CTR 154 (P & H) M. P. IRON TRADERS (COPY ENCLOSED) III) 180 CTR 319 (BOM.) PFIZER CORPORATION VS. CI T (COPY ENCLOSED) IV) 97 ITD 390 (DEL.) POONAM RANI SINGH VS. DCIT 12. IT WAS ALSO SUBMITTED THAT THE ABOVE EXPENDITUR E WAS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND THUS TH E ASSESSING OFFICER DISALLOWED THE SAID EXPENDITURE ARBITRARILY. 13. LD CIT(A) DID NOT ACCEPT THE NEW EVIDENCE SUBMI TTED BY THE ASSESSEE IN ITS PAPER BOOK PAGES 99 TO 103 AND 111 TO 126 AS TH E ASSESSEE DID NOT FILE A PETITION UNDER RULE 46A OF THE ACT. AS THERE WERE NO EVIDENCE TO SUBSTANTIATE THE CLAIM OF THE SAID EXPENDITURE, LD CIT(A) CONFIR MED THE IMPUGNED ADDITION. 14. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL. 15. BEFORE US, THE LD AR FOR THE ASSESSEE REITERATE D THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. IT WAS EMPHASIZED BY HIM THAT THE CASE WAS REOPENED MERELY TO INVESTIGATE CERTAIN ISSUES. ACCO RDING TO THE LD AR FOR THE ASSESSEE SECTION 147 CANNOT BE USED AS A TOOL FOR I NVESTIGATION. FOR THE ABOVE PROPOSITION, RELIANCE WAS PLACED ON THE FOLLOWING C ASE LAWS:- PAGE 13 OF 19 ITA NO1389/DEL/10 1. MADHYA PRADESH INDUSTRIES LTD. V. ITO 57 ITR 63 7 (SC). 2. ACIT V. STAR FERRO ALLOYS LTD. 90 ITD 63 (DEL). 3. I.T.A. NO.415/DEL/2008 IN THE CASE OF M/S INSTA POWER LTD. V. ITO FOR ASSESSMENT YEAR 1999-00 BY ITAT DELHI BENCH C, DE LHI DATED 4 TH SEPTEMBER, 2009. 16. SPECIFICALLY REFERRING TO THE LATER DECISIONS C ITED ABOVE, IT WAS ARGUED BY THE LD AR FOR THE ASSESSEE THAT THE REASON RECORDED IN THE INSTANT CASE IS ALMOST IDENTICAL TO THAT OF THE REASON RECORDED IN THE SAI D CASE. THE HON'BLE ITAT IN THE SAID CASE OF THE ASSESSEE IN ASSESSMENT YEAR 1999-0 0 HAS HELD THAT REOPENING OF ASSESSMENT IN THE FACTS AND CIRCUMSTANCES OF THE CASE WAS INVALID. 17. IT WAS SUBMITTED BY THE LD AR FOR THE ASSESSEE THAT IF IT IS DECIDED THAT THE REOPENING OF ASSESSMENT WAS INVALID, THERE WAS NO N EED TO DECIDE THE CASE ON MERIT. FOR THE ABOVE PROPOSITION, THE DECISION OF T HE TRIBUNAL IN I.T.A. NO.415/DEL/.2008 DATED 4 TH SEPTEMBER, 2009 HAS RELIED ON. HOWEVER, THE LD AR FOR THE ASSESSEE HAS ALSO ARGUED THE OTHER GROUNDS ON MERIT. 18. WITH REFERENCE TO GROUND NO.3, I.E. THE ADDITIO N OF RS.1,70,692/-, THE LD AR FOR THE ASSESSEE HAS ALSO RELIED ON THE FACTS NA RRATED IN GROUND NO.3.1. & 3.2. THE SUBMISSIONS MADE BEFORE THE AUTHORITIES B ELOW WERE ALSO REITERATED BY HIM BY REFERRING TO VARIOUS PAGES OF THE PAPER BOOK . THE BASIC CONTENTION OF THE ASSESSEE IS THAT IT HAS DISCHARGED THE ONUS THAT WA S CAST ON IT AND THUS NO ADDITION U/S 68 OF THE ACT WAS CALLED FOR. 19. WITH REFERENCE TO ADDITION OF RS.3,80,471/-, I T IS CONTENDED BY THE LD AR FOR THE ASSESSEE THAT THIS BEING NOT A REGULAR ASSE SSMENT, THE IMPUGNED ISSUE COULD NOT HAVE BEEN DECIDED BY THE ASSESSING OFFICE R AS THE SAME WAS NOT THE REASON FOR REOPENING THE ASSESSMENT. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAW: PAGE 14 OF 19 ITA NO1389/DEL/10 1. VIPAN KHANNA V. CIT 255 ITR 220 (P&H) THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW W ERE REITERATED BEFORE US. 20. THE LD DR, ON THE OTHER HAND, RELIED ON THE ORD ERS OF THE AUTHORITIES BELOW. ON THE ISSUE OF VALIDITY OF REOPENING OF ASS ESSMENT U/S 147 OF THE ACT, THE LD DR TOOK US THROUGH PARA 4.1. OF THE LD CIT(A)S ORDER. SIMILARLY, HE READ OUT PARA 5.1. OF THE LD CIT(A)S ORDER WITH REFERENCE TO GROUND NO.3 TAKEN BY THE APPELLANT. WITH REFERENCE TO GROUND NO.4, IT WAS SU BMITTED BY HIM THAT EXPLANATION (3) TO SECTION 147 OF THE ACT EFFECTIVE FROM 1.4.1989 WOULD ENTAIL THE ASSESSING OFFICER TO MAKE SUCH ADDITIONS. 21. IN THE REJOINDER, IT WAS SUBMITTED BY THE LD AR FOR THE ASSESSEE THAT THE REVENUE HAS NOT DISTINGUISHED THE HON'BLE ITATS DE CISION IN I.T.A. NO. 415/DEL/2008 IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1999-00. 22. WE HAVE HEARD THE PARTIES AND PERUSED THE RECOR D. WE FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1999-00, ALMOST IN IDENTICAL FACTS AND CIRCUMSTANCES, HELD AS UNDER:- 5.WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. THE FACTS ARE THAT THE AO RECEIVE D INFORMATION FROM THE INVESTIGATION WING THAT 58 COMPANIES RECEIVED ENTRIES FROM SANJAY RASTOGIS COMPANIES. A VIEW WAS EXPRESSED THA T THERE WAS POSSIBILITY THAT SOME MORE COMPANIES MAY HAVE A LSO TRANSACTED WITH HIS COMPANIES. THE AO VERIFIED THE BANK ACCOU NT OF THE ASSESSEE AND CAME TO KNOW THAT IT HAD TAKEN TWO LOAN S OF RS. 5.00 LAKH EACH FROM ADHUNIK SYSTEM PVT. LTD., A COMPANY OF SANJ AY RASTOGI, ONE OF THE ALLEGED BOGUS ENTRY GIVING COMPANIES. THERE FORE, IT WAS PAGE 15 OF 19 ITA NO1389/DEL/10 MENTIONED THAT THESE ENTRIES REQUIRED INVEST IGATION. IT WAS ALSO RECORDED THAT INCOME OF RS. 10.00 LAKH ESCAPED ASSESSMENT. THE FACTS OF THE CASE OF CHHUGAMAL RAJPAL (SUPRA), ARE THAT THE AO HAD RECEIVED INFORMATION FROM THE COMMISSIONER THAT THE CREDITOR APPEARED NAME-LENDER, THE LOANS WERE BOGUS AND , THEREFORE, PROPER INVESTIGATION INTO THE LOANS TAKEN BY THE ASSESS EE WAS NECESSARY. TO THIS EXTENT, THE FACTS ARE SIMILAR. THE FUR THER FACTS OF THE CASE AT HAND ARE THAT THE ADDITIONAL COMMISSIONER GRA NTED APPROVAL BY WRITING AS PROPOSED. IN THE CASE OF CHHUGAM AL RAJPAL (SUPRA), THE APPROVAL WAS GRANTED BY WRITING YES. THE HON'BLE SUPREME COURT CAME TO THE CONCLUSION THAT SAFEGUARD PROVIDED IN SECTIONS 147 AND 151 WERE TREATED LIGHTLY BY THE ITO AND THE C OMMISSIONER AND, THEREFORE, THE NOTICE U/S 148 WAS HELD TO BE I NVALID. WE FIND THAT THE APPROVAL GRANTED IN THIS CASE IS ALSO ON SIMI LAR LINES AS IN THE CASE OF CHHUGAMAL RAJPAL. THERE WAS NO INFORMATIO N THAT THE LOANS FURNISHED BY SANJAY RASTOGIS COMPANIES WERE ALL BOGUS, NOR SUCH A FINDING WAS RECORDED BY THE AO IN THE REASON S. HIS MENTION THAT THE ENTRIES REQUIRED TO BE INVESTIGATED MERELY S HOWS THAT HE HARBOURED SUSPICION ABOUT THE GENUINENESS OF THE ENTRIES, WHICH CANNOT BE EQUATED WITH REASONS TO BELIEVE. THEREFORE, ON THE BASIS OF THE AFORESAID DECISION ALONE, IT CAN BE HELD T HAT THE NOTICE WAS BAD IN LAW. IT MAY BE MENTIONED THAT IN THE CASE O F BIBI INDERJIT KAUR (SUPRA), THE ISSUE WAS REGARDING VALIDITY OF SERVICE OF NOTICE AND NOT ABOUT THE PRE-CONDITIONS OF THE ISSUE OF NOTICE. THE COURT POINTED OUT THAT THERE COULD BE SOME DEFECTS IN THE SER VICE BUT THE DEFECTS DID NOT JUSTIFY INVOCATION OF DISCRETIONARY JURISD ICTION MORE PARTICULARLY WHEN THE COMMISSIONER GRANTED APPROPRIATE REL IEF TO THE ASSESSEE. THUS, THE RATIO OF THIS CASE IS NOT APPLICAB LE AS THE FACTS ARE DISTINGUISHABLE. IN THE CASE OF GUDUTHUR BRO S. (SUPRA), THE PENALTY WAS VALIDLY INITIATED BUT THE ASSESSEE WAS NOT GIVEN A PROPER OPPORTUNITY OF BEING HEARD BEFORE IMPOSITION OF PENALTY. THE QUESTION PAGE 16 OF 19 ITA NO1389/DEL/10 IN THE CASE AT HAND IS REGARDING SATISFACTIO N OF PRE-CONDITION OF REASON TO BELIEVE BEFORE ISSUE OF NOTICE. TH EREFORE, THE FACTS OF THAT CASE ARE ALSO DISTINGUISHABLE. IN THE CASE OF JAI PRAKASH SINGH (SUPRA), ONE OF THE LEGAL REPRESENTATIVES HAD FILED THE RETURN AND ATTENDED TO THE PROCEEDINGS. THEREAFTER, AN OBJECT ION WAS TAKEN FOR THE FIRST TIME IN THE APPELLATE PROCEEDINGS T HAT NOTICES WERE NOT SERVED ON ALL THE LEGAL REPRESENTATIVES. THE CO URT CAME TO THE CONCLUSION THAT IT WAS A CASE OF IRREGULARITY AND NOT ILLEGALITY, WHICH COULD BE CURED FROM THE STAGE AT WHICH IT OC CURRED. HOWEVER, IN THE INSTANT CASE, THE PRE-CONDITION FOR ISSUE OF N OTICE HAS NOT BEEN SATISFIED AND, THEREFORE, THE FACTS OF THE CA SE ARE ALSO DISTINGUISHABLE. IN THE CASE OF STAR FERROW ALLOYS LTD. (SUPRA), THE NOTICE WAS ISSUED FOR VERIFYING CERTAIN EX PENSES CLAIMED BY THE ASSESSEE AS DEDUCTIBLE IN COMPUTING THE INCOME. THE HONBLE THIRD MEMBER HELD THAT PROCEEDINGS U/S 147 CANNOT BE RESORTED TO FOR MAKING ROVING ENQUIRIES. THE FACTS OF THAT CASE ARE SOMEWHAT SIMILAR TO THE FACTS OF THIS CASE, AS THE RE CORDED REASONS SHOW THAT THE AO INTENDED TO MAKE ENQUIRIES INTO THE GENUINENESS OF THE LOANS. 5.1 THE DECISION IN THE CASE OF RAJESH JHAV ERI STOCK BROKERS (P) LTD. (SUPRA) IS ALSO NOT APPLICABLE AS A REASON ABLE PERSON, AFTER READING THE REASONS, COULD ONLY COME TO THE C ONCLUSION THAT FURTHER INVESTIGATIONS WERE CALLED FOR. IN THE CASE OF VIPIN BATRA (SUPRA), THERE WAS SPECIFIC INFORMATION THAT ENTRIES O F PURCHASE AND SALE OF SHARES WERE BOGUS. IN THE INSTANT CASE, THE INFORMATION ONLY RAISED SUSPICION ABOUT GENUINENESS OF THE ENTRIES. IN THE CASE OF NORTON MOTORS (SUPRA), IT WAS HELD THAT THE PROVISION OF SECTION 292B CANNOT BE INVOKED TO CURE JURISDICTIONAL DEFECT AS IT IS MEANT TO CURE ONLY TECHNICAL DEFECTS AND OMISSIONS. IN THIS CA SE, JURISDICTIONAL DEFECT HAS OCCURRED BECAUSE THE PRE-CONDITION OF HAVING A BONA FIDE PAGE 17 OF 19 ITA NO1389/DEL/10 BELIEF THAT INCOME ESCAPED ASSESSMENT IS NOT SA TISFIED. THEREFORE, WE ARE OF THE VIEW THAT THERE WAS NOTHING IN TH E REASONS RECORDED WHICH SHOWED THAT THERE WAS A BONA FIDE BEL IEF THAT THE INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT. ACCORDI NGLY, IT IS HELD THAT THE NOTICE WAS BAD IN LAW. 23. NOTHING HAS BEEN BROUGHT TO OUR NOTICE BY THE L D DR WHICH WOULD REQUIRE THE CONSIDERATION OF THE ISSUE AFRESH. THE FACTS A ND CIRCUMSTANCES OF THE PRESENT YEAR BEING ALMOST IDENTICAL TO THAT OF ASSE SSMENT YEAR 1999-00, WE HOLD THAT THE ISSUE OF VALIDITY OF REOPENING OF ASSESSME NT U/S 147 IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN C ASE FOR ASSESSMENT YEAR 1999-00. WE, THEREFORE, HOLD THAT INITIATION OF PRO CEEDINGS U/S 147 OF THE ACT IS INVALID. 24. THIS BEING THE CASE, WE DO NOT ADJUDICATE THE I SSUES RAISED BY THE APPELLANT ON MERIT. THE APPEAL OF THE ASSESSEE IS A LLOWED IN TERMS MENTIONED ABOVE. 25. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN THE TERMS INDICATED ABOVE. 26. ORDER PRONOUNCED IN THE OPEN COURT ON THE 15TH DAY OF JULY, 2011. SD/- SD/- (DIVA SINGH) (B.K. HALD AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 15.7.2011. HMS PAGE 18 OF 19 ITA NO1389/DEL/10 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 12.7.2011 DATE OF DICTATION 13.7.2011 DATE OF ORDER SIGNED BY THE HON'BLE MEMBER. 15.7.2011 DATE OF ORDER SENT TO THE CONCERNED BENCH 15.7.2011 PAGE 19 OF 19 ITA NO1389/DEL/10