Gajanand Agarwal, Hyderabad, Hyderabad V. ITO, Ward-8(2), Hyderabad, Hyderabad

ITA 1520/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2346 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 11-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P V SUBBA RAJU
• Assessee Lawyers: SIDHARTH TOSHNIVAL
• Keywords: Reopening of assessment; Unexplained investment; Income from undisclosed sources; Principle of natural justice; Wrong claim; Corroborative evidences; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 54F; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1520/HYD/2016 ASSESSMENT YEAR: 2008-09 GAJANAND AGARWAL, HYDERABAD. PAN ABLPA 3831B VS. INCOME-TAX OFFICER, WARD 8(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SIDHARTH TOSHNIVAL REVENUE BY : SHRI P.V. SUBBARAJU DATE OF HEARING : 15-06-2017 DATE OF PRONOUNCEMENT : 07-07-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS IS AN APPEAL OF THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (A) - 2, HYD ERABAD, DATED 29-06-2016 FOR AY 2008-09. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE, AN INDIVIDUAL, FILED HIS RETURN OF INCOME FOR THE AY 2 008-09 ORIGINALLY ON 31/07/2008 WHEREIN THE TOTAL INCOME ADMITTED WAS OF RS. 4,63,060/-. THE AO COMPLETED THE ASSESSMENT BY MAKING THE FOLLO WING ADDITIONS: 1. BOGUS CLAIM OF LONG TERM CAPITAL GAINS OF RS. 9 ,70,351/-. 2. UNACOCUNTED INVESTMENT IN HOUSE PROPERTY OF RS. 6,20,000/- 2. AS REGARDS BOGUS CLAIM OF LONG TERM CAPITAL GAIN S, THE AO HELD THAT THE CAPITAL GAINS CLAIMED BY THE ASSESSEE IS O NLY A SHAM TRANSACTION AND AIMED ONLY TO BRING UNACCOUNTED MON EY IN THE GUISE OF EXEMPTED LONG TERM CAPITAL GAINS AND ACCORDINGLY THE SAID AMOUNT 2 ITA NO. 1520/H/16 GANJANAND AGARWAL IS ASSESSED AS INCOME FROM OTHER SOURCES. THE REA SONS FOR COMING TO THE SAID CONCLUSION BY THE AO WERE AS UNDER: 1. IT IS THE CLAIM OF THE ASSESSEE THAT HE PURCHASE D 30,000/- SHARES OF CABLE CORPORATION OF INDIA LTD., ON 25/04 /2006 FOR A CONSIDERATION OF RS. 52,710 AND SOLD THE SAID SHARE S ON 31/10/2007 FOR A CONSIDERATION OF RS. 10,23,061/- T HROUGH M/S ALLIANCE INTERMEDIATERIES NET WORK PVT. LTD. 2. THE PURCHASE OF THE SAID SHARES IS THROUGH OFF M ARKET DEAL AND NOT THROUGH STOCK EXCHANGE, WHEREAS THE SALE IS THROUGH STOCK EXCHANGE. 3. THE ASSESSEE HAS FURNISHED THE ACCOUNT COPY OF T HE DEMAT ACCOUNT WHEREIN IT WAS OBSERVED THAT THE SAID SHARE S WERE DEMATERIALIZED ONLY 4 DAYS BEFORE THEY WERE ACTUALL Y SOLD. 4. THE ASSESSEE IS UNABLE TO FURNISH ANY OTHER PROO F FOR PURCHASE OF SHARES EXCEPT THE BILL ISSUED BY M/S AL LIANCE INTERMEDIATERIES & NETWORK PVT. LTD. 5. M/S ALLIANCE INTERMEDIATERIES & NETWORK PVT. LTD . IS ONE OF THE CONCERNS THROUGH WHICH THE MAHASAGAR GROUP HAVE ISSUED ACCOMMODATION BILLS OF PURCHASE AND SALE OF SHARES AS PER THE SWORN STATEMENT GIVEN BY SRI MUKESH CHOKSI, ONE OF THE DIRECTORS OF M/S MAHASAGAR GROUP. 2.1 AS REGARDS, UNACCOUNTED INVESTMENT IN HOUSE PRO PERTY, THE AO OBSERVED THAT THE ASSESSEE EARNED LONG TERM CAPITAL GAINS OUT OF THE LISTED SECURITIES AND ON UNLISTED SECURITIES. AGAIN ST THE CAPITAL GAINS ARISING OUT OF THE UNLISTED SECURITIES, THE ASSESSE E CLAIMED DEDUCTION U/S 54F STATING THAT HE HAD PURCHASED A HOUSE PROPE RTY ALONG WITH HIS WIFE FOR A TOTAL CONSIDERATION OF RS. 1,16,09,008/- (INCLUDING STAMP DUTY). DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE SOURCES FOR PURCHASE OF THE ABOVE MENTIONED PROPERTY. THE ASSESSEE COULD FURNISH THE SOURCES AS LOANS TAKEN FROM FRIENDS AND RELATIVES/HOUSING LOAN/INCOM E OF THE ASSESSEE AND HIS WIFE DURING THE YEAR UNDER CONSIDERATION AN D FINALLY PERSONAL SAVINGS OF EARLIER YEARS OF RS. 6,20,000/-. WHEN TH E ASSESSEE WAS 3 ITA NO. 1520/H/16 GANJANAND AGARWAL ASKED AS TO HOW THE ASSESSEE COULD SAVE RS. 6,20,00 0/- OUT OF THE PERSONAL DRAWINGS CLAIMED, THE ASSESSEE COULD NOT S UBSTANTIATE THE AMOUNT EXCEPT STATING THAT THE ASSESSEE HAD BEEN FI LING RETURNS OF INCOME FOR LAST 10 YEARS. AO WAS OF THE VIEW THAT N O DOUBT THE ASSESSEE IS FILING RETURNS AND PREPARING STATEMENT OF AFFAIRS ALSO, IN THE SAID STATEMENT OF AFFAIRS, HE IS SHOWING THE AC CUMULATED CAPITAL BALANCE. HOWEVER HE IS SHOWING ONLY A MEAGRE AMOUNT AS WITHDRAWALS. FOR EXAMPLE FOR THE FINANCIAL YEAR UND ER CONSIDERATION THE WITHDRAWALS SHOWN BY THE ASSESSEE IS ONLY RS.72 ,000/-. THE WITHDRAWALS SHOWN BY THE SPOUSE OF THE ASSESSEE, SM T SEEMA AGARWAL, IS RS.37,940/-. THE TOTAL DRAWINGS SHOWN BY THE ASSESSEE ALONG WITH HIS SPOUSE COMES TO AROUND RS.1.10 LAKHS . THEN THE MOOT POINT FOR CONSIDERATION IS WHETHER THE ASSESSEE IS ABLE TO MANAGE ANY SURPLUS OUT OF THE ABOVE WITHDRAWALS AFTER MEETING THE FAMILY MAINTENANCE. CONSIDERING THE SOCIAL STATUS OF THE A SSESSEE IT CAN BE CONCLUDED THAT IT IS NOT POSSIBLE TO MAINTAIN A FAM ILY WITH PALTRY SUM OF RS.1.10 LAKHS, LEAVING BEHIND SAVINGS OUT OF THE SE WITHDRAWALS. THEREFORE, THE AO CONCLUDED THAT THE ASSESSEE DO NO T HAVE FULL EXPLAINABLE SOURCES FOR PURCHASE OF PROPERTY BY INV ESTING RS.1.16 CRORES. SINCE IT IS CONCLUDED THAT IT IS NOT POSSIB LE TO SAVE FURTHER SAVINGS OUT OF THE WITHDRAWALS SHOWN BY THE ASSESSE E, THE LOGICAL CONCLUSION IS THAT THE SAID AMOUNT IS MET OUT OF TH E UNACCOUNTED INCOME OF THE ASSESSEE. THUS, THE SAID AMOUNT OF RS . 6,20,000/- IS ADDED TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENT IN HOUSE PROPERTY. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A). 4. AS REGARDS LONG TERM CAPITAL GAINS, THE CONTENTI ONS OF THE LD. AR WERE MENTIONED BY THE CIT(A) AT PAGES 6 TO 10 OF HIS ORDER. AFTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE, THE CI T(A) RELYING ON THE DECISIONS, NAMELY, I) CIT VS. DURGA PRASAD, 82 ITR 540, II) SUMATI 4 ITA NO. 1520/H/16 GANJANAND AGARWAL DAYAL, 80 TAXMAN 89 (SC) AND III) CIT VS. P. MOHAN KALA, 291 ITR 273 (SC), HELD THAT THE AO IS JUSTIFIED IN MAKING T HE ADDITION OF RS. 9,70,351/- TREATING THE ASSESSEES CLAIM FOR EXEMPT ION ON LONG TERM CAPITAL GAINS AS BOGUS BY OBSERVING AS UNDER: 5.3. THE CASE OF THE ASSESSEE IS THAT THERE ARE NUM EROUS GAPS IN THE TRANSACTIONS AS POINTED OUT BY THE AO IN THE ASSESSMENT ORDER. HOWEVER, THE AR HAS NOT MADE GOOD THE ABOVE OBSERVATIONS BY PRODUCING SUPPORTING EVIDENCES EVEN DURING THE APPEAL PROCEEDINGS ALSO. THEREFORE, THIS IS A C ASE WHERE THE APPARENT IS NOT REAL. IT IS FURTHER SETTLED THA T MERE TRANSACTION THROUGH BANK WILL NOT TANTAMOUNT TO A P ROPER AND CORRECT TRANSACTION. THIS IS A CASE WHERE CIRCUMSTA NTIAL EVIDENCE AND THEORY OF HUMAN PROBABILITY AS EVOLVED BY THE HON'BLE APEX COURT WOULD COME INTO PLAY. IF THE ENT IRE FACTS AND CIRCUMSTANCES ARE CONSIDERED AS DISCUSSED ABOVE, PR UDENCE WILL GUIDE A PERSON TO ARRIVE AT A CONCLUSION THAT NO TRANSACTION IN PURCHASE AND SALE HAS TAKEN PLACE DURING THE PRE VIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. 4.1 AS REGARDS THE ADDITION OF RS. 6,20,000/- TOWAR DS UNACCOUNTED INVESTMENT IN HOUSE PROPERTY, THE CIT(A) AFTER CONS IDERING THE SUBMISSIONS OF THE ASSESSEE, DIRECTED THE AO TO DEL ETE THE ADDITION MADE ON THIS COUNT. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US AGAINST THE ACTION OF THE CIT(A) IN CONFI RMING THE ADDITION OF RS. 9,70,351/- MADE BY THE AO ON ACCOUNT OF LONG TE RM CAPITAL GAINS. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS.9,70,351/-MADE TO THE RETURNED INCOME TOWARDS AL LEGED BOGUS LONG TERM CAPITAL GAINS WHICH OTHERWISE IS EX EMPT U/S. 10(38). 2. THAT THE LEARNED CIT(A) ERRED IN TOTALLY IGNORIN G THE EVIDENCE FILED BY APPELLANT WHICH ESTABLISHES THE GENUINENES S OF THE CLAIM OF EXEMPTION U/S. 10(38) AND NONE OF THE EVID ENCE SO FILED WAS REBUTTED. 3. THAT THE LEARNED CIT(A) ERRED IN HOLDING THAT NO PURCHASE OR SALE OF SHARES HAS TAKEN PLACE DESPITE THE FACT THA T THAT TRANSACTIONS WERE DONE THROUGH RECOGNISED STOCK EXC HANGE 5 ITA NO. 1520/H/16 GANJANAND AGARWAL AND ALSO SUFFERED SECURITIES TRANSACTION TAX AND WE RE FULLY SUPPORTED BY EVIDENCE. 4. THAT THE ADDITION WAS MADE SOLELY ON THE BASIS O F A STATEMENT GIVEN BY MR. MUKESH CHOKSI (DIRECTOR OF T HE BROKER COMPANY THROUGH WHICH APPELLANT HAD DONE THE TRANSA CTIONS) BUT DESPITE SPECIFIC REQUEST, THE APPELLANT WAS NOT NEITHER GIVEN ANY OPPORTUNITY TO CROSS EXAMINE THE SAID PERSON NO R A COPY OF STATEMENT WAS SUPPLIED TO APPELLANT. 5. THE LEARNED CIT(A) ERRED IN TOTALLY IGNORING THE JUDGMENTS CITED BY APPELLANT (MENTIONED IN PARA 11 OF THE APP EAL ORDER) WHEREIN THE IDENTICAL ISSUE WAS DECIDED IN FAVOUR O F THE APPELLANT. 6. THAT THE LEARNED CIT(A) ERRED IN NOT DECIDING TH E ISSUE OF VALIDITY OF REASSESSMENT PROCEEDINGS RAISED IN GROU NDS OF APPEAL NO.2 & 3 . 7. THAT THE ASSESSMENT MADE U/S. 147 WAS BAD IN LAW AS THERE WAS NO REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. 6. LD. AR SUBMITTED THAT AO HAS TREATED THE PURCH ASE AND SALE OF SHARES AS SHAM TRANSACTION, WHEREAS, HE SUBMITTE D THAT IN FACT THE ASSESSEE HAS BOUGHT THE SHARES THROUGH STOCK EXCHAN GE BY PAYING PROPER CHARGES. HE BROUGHT TO OUR NOTICE THE PURCHA SE NOTE WHICH IS PART OF PAPER BOOK AT PAGE NO. 36. FURTHER, HE BROU GHT TO OUR NOTICE THE COPY OF GROUP DEMAT A/C WHICH IS PLACED AT PAGE 21 OF PAPER BOOK. THIS TRANSACTION WAS ROUTED THROUGH THE ABOVE DEMAT A/C. HE SUBMITTED THAT THESE TRANSACTIONS WERE SHOWN AS PUR CHASES IN THE AY 2007-08 AND THE SAME WAS ACCEPTED IN THAT AY. HE F URTHER SUBMITTED THE COPY OF RETURN OF INCOME FOR AY 2007-08, WHICH WAS FILED BEFORE THE AO TO SHOW THAT THE PURCHASE TRANSACTION WAS PR OPER AND THE SAME WAS ACCEPTED BY THE AO. 6.1 LD. AR SUBMITTED THAT THE AO MERELY RELIED ON T HE STATEMENT OF MR. MUKESH CHOKSI AND MADE THE ADJUSTMENT WITHOUT G IVING PROPER OPPORTUNITY TO ASSESSEE TO EXAMINE MR. MUKESH CHOKS I. HE 6 ITA NO. 1520/H/16 GANJANAND AGARWAL CONTENDED THAT IT IS AGAINST THE PRINCIPLES OF NATU RAL JUSTICE. FOR THIS PROPOSITION, HE RELIED ON VARIOUS JUDICIAL PRONOUNC EMENTS. 6.2 LD. AR FURTHER SUBMITTED THAT THE REOPENING OF ASSESSMENT WAS NOT PROPER AND THE TRANSACTION WAS DONE 7 YEARS BEF ORE, AS ACCORDING TO HIM, AO RELYING ON SUCH TRANSACTION TO REOPEN T HE ASSESSMENT IS NOT PROPER. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SFIL STOCK BROKING LTD., 325 ITR 285. 6.3. LD. AR OF THE ASSESSEE ALSO RELIED ON THE FOLL OWING CASES: 1. CIT VS. JAMNADEVI AGARWAL, 328 ITR 656 2. CIT VS. KORLAY TRADING CO., 232 ITR 820 3. CIT VS. ARUN KUMAR AGARWAL, 210 TAXMAN 405 4. CIT VS. MUKESH RATILAL MAROLIA, ITA NO. 456/200 7 (BOM) 5. ITO VS. SMT. AARTI MITTAL, ITA NO. 165/HYD/2011 6. DALPAT SINGH CHOUDHARY VS. ACIT, 143 TTJ 500 (J ODH.) 7. RAMESH KUMAR JAIN HUF VS. DCIT, ITA NO. 90/JODH /2013 8. ACIT VS. RAVINDRAKUMAR TOSHNIWAL, ITA NO. 3801/ MUM/2011 9. MS. FARRAH MARKER VS. ITO, ITA NO. 3801/MUM/201 1 10. MAYUR M SHAH HUF ITO, ITA NO. 2390/MUM/2013 11. ARVIND ASMAL MEHTA VS. ITO, ITA NO. 2799/MUM/2 015 12. TOLARAM DAGA VS. CIT, 59 ITR 632 13. ITO VS. LAKHAMANI MEWAL DAS, 103 ITR 437 14. CIT VS. SFIL STOCK BROKING LTD., 325 ITR 285 15. ANDAMAN TIMBER INDUSTRIES V. CEE, 281 CTR 241 16. KISHINCHAND CHELLARAM V. CIT, 125 ITR 713 (SC) 17. CIT VS. SANGHAMITRA BHARALI, 361 ITR 481 (GAU. ) 7. LD. DR SUBMITTED THAT THE AO RECEIVED THE INFORM ATION ABOUT THE SHAM TRANSACTION, WHICH IS PLACED BEFORE HIM EN OUGH TO INITIATE THE PROCEEDINGS U/S 147. HE FURTHER RELIED ON THE O RDERS OF REVENUE AUTHORITIES. 7 ITA NO. 1520/H/16 GANJANAND AGARWAL 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. WE FIND THAT THE AO HAS REOPENED THE AS SESSMENT RELYING ONLY ON THE STATEMENT OF MR. MUKESH CHOKSI AS THE T RANSACTION DONE BY HIM IN M/S ALLIANCE INTERMEDIARIES & NETWORK PVT . LTD., WHICH IS ONE OF THE COMPANY, IN WHICH MAHASAGAR GROUP HAS IS SUED ACCOMMODATION ENTRIES. BUT, THE AO HAS NOT GIVEN OP PORTUNITIES TO ASSESSEE TO CROSS EXAMINE MR. MUKESH CHOKSI. WITHO UT GIVING AN OPPORTUNITY OF IN THIS REGARD AND MERELY RELYING ON THE STATEMENT OF MR. MUKESH, WHICH IS AGAINST THE NATURAL JUSTICE, A ND HENCE, THE REASSESSMENT CAN BE TREATED AS VOID AND CANNOT BE E NFORCED BY CONSIDERING THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF ANDAMAN TIMBER LTD. VS. CCE, [2015] 281 CTR 241 (SC ), WHEREIN THE HONBLE APEX COURT HELD AS UNDER: 6. ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO C ROSS-EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNT ED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TW O WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE S TATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDICATING AUTHORITY DID NO T GRANT THIS OPPORTUNITY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFI CALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID PLEA IS NOT EVEN DEAL T WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS C ONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TR IBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DEALERS COULD NO T HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSSESSION OF THE AP PELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX-FACTORY PRICES REMAIN ST ATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. 7. AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DIS CREDIT THEIR TESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNIT Y OF CROSS-EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIE D UPON THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS WERE, IN FACT, SOLD TO THE SAID DEALERS/WITNESSES AT THE PRICE WHICH IS MENTIONED I N THE PRICE LIST ITSELF COULD BE THE SUBJECT MATTER OF CROSS-EXAMINATION. THEREFO RE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COU LD BE THE SUBJECT MATTER 8 ITA NO. 1520/H/16 GANJANAND AGARWAL OF THE CROSS-EXAMINATION AND MAKE THE REMARKS AS ME NTIONED ABOVE. WE MAY ALSO POINT OUT THAT ON AN EARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS COURT IN CIVIL APPEAL NO. 2216 OF 2000, ORDER DATED 17.03.2005 WAS PASSED REMITTING THE CASE BACK TO THE TRIBUNAL WITH THE DIRECTIONS TO DECIDE THE APPEAL ON MERITS GIVING ITS REASONS FOR ACCEPTI NG OR REJECTING THE SUBMISSIONS. 8. IN VIEW THE ABOVE, WE ARE OF THE OPINION THAT IF THE TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED, THERE WAS NO MATERIAL WITH THE DEPARTMENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION, AS THE STATEMENT OF THE AFORESAID TWO WITNESSES WAS THE ONLY BASIS OF ISSUI NG THE SHOW CAUSE NOTICE. 8.1 ACCORDINGLY, GROUND NOS. 1 TO 5 RAISED BY THE A SSESSEE ARE ALLOWED. 8.2 WITH REGARD TO GROUNDS 6 & 7 FOR VALIDITY OF R EOPENING OF ASSESSMENT U/S 147, LD. CIT(A) HAS NOT ADJUDICATED THIS ISSUE AND LD. AR HAS ALSO SUBMITTED THAT REASSESSMENT WAS IMPROPE R, HOWEVER, HE SUBMITTED THAT THIS PLEA AS AN ALTERNATE. CONSIDERI NG THE MERITS OF THIS CASE, WE RESTRAINED OURSELVES TO ADJUDICATE THESE GROUNDS. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 7 TH JULY, 2017. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RA HMAN) JUDICIAL MEMBER AC COUNTANT MEMBER HYDERABAD, DATED: 7 TH JULY, 2017. KV COPY TO:- 1) GAJANAND AGARWAL, C/O SIDHARATH TOSHNIVAL, ADVOC ATE, C/O SHRI K.L. RATHI, ADVOCATE, 3-5-244/5, EDEN GARDEN, HYD 001 2) ITO, WARD 8(2), HYDERABAD. 3) CIT(A) - 2, HYDERABAD 4 PR. CIT - 2, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE 9 ITA NO. 1520/H/16 GANJANAND AGARWAL S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER