M/s Greater Mohali Area Development Authority, Mohali V. DCIT, C-6(1), Mohali

ITA 1560/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4947 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 10-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GULSHAN RAJ
• Keywords: Business income; Depreciation; Application of stay; Cost of acquisition; Tangible material; Difference of opinion; Competent authority; Assessment record; Capital receipt; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 148; 6; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 1560/CHD/2017 ASSESSMENT YEAR : 2009-10 GREATER MOHALI AREA DEVELOPMENT VS. THE DCIT, CIRC LE 6(1), AUTHORITY, 2 ND FLOOR, PUDA BHAWAN, MOHALI SECTOR 62, MOHALI PAN NO. AAALG0872G (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL, ADVO CATE RESPONDENT BY : SH. GULSHAN RAJ, CIT DR DATE OF HEARING : 13.03.2018 DATE OF PRONOUNCEMENT : 22. 05.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 17.10.2017 OF THE COMMISSIONER OF I NCOME TAX(APPEALS)-2, CHANDIGARH [HEREINAFTER REFERRED T O AS CIT(A)]. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE ORDER OF LD. CIT(A)IS BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 2. (A)THAT THE ORDER OF LD. CIT(A) IS BAD IN LA W AND ON FACTS IN NOT QUASHING ORDER US 1434(3) R.W.S. 147 OF INCOME TAX AS ALL THE FACTS RELATING TO THE EXTERNAL DEVELOPMENT CHARGES OF RS. 102,83,72,519/- WERE FULLY & TRULY DISCLOSED & DISCUSSED AT THE TIME OF SCRUTINY ASSESSMENT U/S 143(3) OF INCOME TAX. ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 2 ( B) NOTWITHSTANDING OF GROUND NO.1 THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 102,83,72,519/- ON ACCOUNT OF EXTERNAL DEVELOPMENT CHARGES AS IT IS NEITHER INCOME NOR CAPITAL RECEIPT OF THE ASSESSEE BUT IS A DEPOSIT ON BEHALF OF PUNJAB GOVERNMENT. HENCE, ADDITION MADE IS LIABLE TO BE DELETED. 3. THE ASSESSEE IN THIS APPEAL HAS AGITATED THE R EOPENING OF ASSESSMENT U/S 147 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') BY THE ASSESSING OFFICER ON THE GROUND THAT THE EXT ERNAL DEVELOPMENT CHARGES (HEREBY REFERRED TO EDC) RECEIVED BY THE ASSESSEE WAS THE REGULAR BUSINESS INCOME OF THE ASSESSEE WHICH, HOWE VER, WAS REFLECTED BY THE ASSESSEE AS LIABILITY IN ITS BA LANCE SHEET. THE ASSESSING OFFICER, THEREFORE, HELD THAT THE INCOME RELEVANT TO THESE RECEIPTS ON ACCOUNT OF EDC CHARGES HAD ESCAPED ASSE SSMENT LEADING TO THE REOPENING OF THE ASSESSMENT AND FRAMING OF T HE IMPUGNED ASSESSMENT ORDER U/S 147 OF THE INCOME TAX ACT. 4. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE NOTICE FOR REOPENING OF THE ASSESSMENT U/S 148 OF THE ACT HAD BEEN ISSUED AFTER THE END OF FOURTH ASSESSMENT YEAR FROM THE RELEVANT ASSESSMENT YEAR AND THAT INITIALLY ASSESSMENT WAS C ARRIED OUT U/S 143(3) OF THE ACT, THEREFORE, THE REOPENING OF THE ASSESSEE WAS HIT BY THE FIRST PROVISO TO SECTION 147 OF THE ACT, AS PER WHICH THE REOPENING / RE-ASSESSMENT CAN BE RESORTED TO ONLY IF THE INCO ME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON ACCOUNT OF ANY OF TH E FOLLOWING FAILURE ON THE PART OF THE ASSESSEE : A) MAKING RETURN U/S 139 OR IN RESPONSE TO NOTICE U/S 142 OR NOTICE U/S 148. ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 3 B) TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY TO ASSESSMENT. 5. THE LD. COUNSEL HAS FURTHER SUBMITTED THAT IN THIS CASE NO NEW INFORMATION HAD COME INTO THE POSSESSION OF THE ASS ESSING OFFICER FOR FORMING A BELIEF THAT THE INCOME OF THE ASSESSEE HA D ESCAPED ASSESSMENT. THE ASSESSING OFFICER HAS FORMED THE OP INION FOR REOPENING OF THE ASSESSMENT ONLY ON THE BASIS OF RE -APPRAISAL OF THE MATERIAL WHICH WAS ALREADY ON THE RECORD. HE HAS FU RTHER CONTENDED THAT THE ASSESSEE HAD DULY REFLECTED THE EDC CHARGE S IN THE BALANCE SHEET, APART FROM THAT THE ASSESSEE DURING THE ORIG INAL ASSESSMENT PROCEEDINGS HAD DISCLOSED EDC CHARGES RECEIVED DURI NG THE YEAR IN THE DETAIL OF OTHER LIABILITIES FILED IN RESPONS E TO QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER. HE HAS FURTHER CO NTENDED THAT THE REOPENING OF THE ASSESSMENT EXACTLY ON SIMILAR FACT S AND CIRCUMSTANCES WAS ALSO DONE FOR ASSESSMENT YEAR 20 08-09, HOWEVER, THE TRIBUNAL VIDE ITS DETAILED ORDER DATED 28.12.20 17 (ITA NO. 410/CHD/2013) IN THE CASE OF ASSESSEE ITSELF HAS HE LD THAT THE REOPENING WAS BAD IN LAW. HE, THEREFORE, HAS CONTE NDED THAT THE FACTS AS WELL AS THE ISSUE UNDER CONSIDERATION BEING IDEN TICAL, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESSMEN T YEAR 2008-09 VIDE ORDER DATED 28.12.2017 PASSED IN ITA NO. 410/ CHD/2013 (SUPRA). 6. THE LD. DR, ON THE OTHER HAND, HAS MADE THE FO LLOWING WRITTEN SUBMISSIONS:- ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 4 SUB: WRITTEN SUBMISSION IN THE ABOVE CASE REG. THE FIRST GROUND OF APPEAL IN THE CASE IS AGAINST UPHOLDING ORDER PASSED BY THE AO U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 [HENCEFORTH ACT] AS ALL THE FACTS RELATING TO EXTERNAL DEVELOPMENT CHARGES OF RS.102.84 CR WERE FULLY AND TRULY DISCLOSED & DISCU SSED AT THE TIME OF SCRUTINY ASSESSMENT U/S 143(3) OF TH E ACT. AO HAS DEALT THIS ISSUE AT PARA 2 PAGE 1 & 2 OF HIS ORDER . THE CASE WAS REOPENED U/S 147 ON 16.3.2016 AND NOTICE U/S 148 OF THE ACT WAS ISSUED AFTER RECORDIN G REASONS. REASONS WERE DULY PROVIDED TO THE ASSESSEE AND OBJECTIONS FILED BY THE ASSESSEE WERE DULY DISPOSED BY WAY OF SPEAKING ORDER. THE AO HAS DULY COMPLIED WIT H THE MANDATE OF THE ACT AND AS PER FINDINGS OF THE S UPREME COURT JUDGMENT GKN DRIVESHAFTS (INDIA) LIMITED VS. ITO 259 ITR 19. THE CIT (A) AT PARA 2.3 TO 2.5 PAGE S 3 TO 6 HAS CONFIRMED THE ACTION OF THE AO BY WAY OF REASONING THAT AT THE TIME OF ORIGINAL SCRUTINY AO ISSUED JUST A GENERAL QUESTIONNAIRE ON 18.07.2011 AND FURT HER CLARIFICATIONS BY QUESTIONNAIRE ISSUED ON 10.10.201 1. NO SPECIFIC QUERY/CLARIFICATION WAS RAISED BY THE AO O N EXTERNAL DEVELOPMENT CHARGES (EDC). HENCE, THE ISSU E OF EDC WAS NOT EXAMINED AT ALL BY THE AO. WHEN NO OPIN ION HAS BEEN FORMED BY THE AO, THERE IS NO QUESTION ARI SES REGARDING CHANGE OF OPINION. 2. THAT BRIEF FACTS OF THE CASE FOR PROPER ADJUDIC ATION OF THIS CASE ARE THAT THE ASSESSEE HAS SUBMITTED TH AT THE ORDER OF THE AO DATED 16.12.2016 IS ARBITRARY AND I LLEGAL. IN THIS REGARD, IT IS STATED THAT THE BELIEF IS BAS ED ON FACTS AND DOCUMENTS WHICH HAVE BEEN MENTIONED IN THE REAS ONS RECORDED FOR RE-OPENING I.E. THE EDC ISSUES WERE NO T GONE INTO IN SCRUTINY PROVISIONS, BUT THE ASSESSEE HAD W RONGLY SHOWN THEM AS LIABILITY WHILE FOLLOWING A CASH SYST EM OF ACCOUNTANCY, THEREFORE, THE REASONS RECORDED IS NOT A CHANGE OF OPINION. IT IS EMPHASIZED THAT THE REASON S WERE RECORDED AFTER DUE APPLICATION OF MIND ON THIS MATERIAL/INFORMATION. IT IS EMPHATICALLY STATED THA T THE 'REASON TO BELIEVE' IS NOT BASED ON MERE SUSPICION OR PRESUMPTION AS CLAIMED BY THE ASSESSEE. THE ISSUE I N THE CASE OF THE ASSESSEE IS NOT REGARDING A NOTIONAL/UN REALIZED OR UNCERTAIN INCOME. THE ISSUE IS REGARDING A CLAIM OF EXPENSE/LIABILITY WHEN NO INCOME HAS BEEN SAME QUA THE ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 5 SAME. BEFORE RECORDING REASONS, THE DOCUMENTS WERE CAREFULLY PERUSED AND THE ISSUE WAS PONDERED UPON. THESE DOCUMENTS WERE PERUSED AT THE TIME OF PROCEEDINGS U /S 143(3) R/W SECTION 147 FOR THE A.Y. 2009-10 IN THE CASE OF THIS VERY ASSESSEE. THEREFORE, THIS ISSUE WAS NEVER LOOKED INTO BY THE A.O. IN THE EARLIER YEARS U/S 143(3) OF THE ACT. THERE WAS NO APPLICATION/CONSCIOUS CONSIDERATION OF THE MATERIAL WRONGLY SHOWN BY THE ASSESSEE AS A LIABILI TY. MOREOVER, THERE IS NO REQUIREMENT OF POSSESSION OF ANY 'FRESH MATERIAL' WITH THE A.O. THERE ARE SEVERAL CA SE LAWS WHICH SAY THAT IF NO CONSCIOUS CONSIDERATION OF THE MATERIAL AVAILABLE ON RECORD IS MADE AND A MISTAKE HAS BEEN COMMITTED, IT WILL NOT PREVENT THE COMPETENT O FFICER TO EXERCISE POWERS U/S 147 OF THE ACT. IN VIEW OF T HE ABOVE, THERE IS NO CHANGE OF OPINION AND THE REASON S RECORDED ARE VALID. 3. THE ABOVE MENTIONED CASE IS PENDING ADJUDICATIO N BEFORE THIS HONBLE ITAT. IN THIS RESPECT, IT IS HU MBLY SUBMITTED THAT THE ASSESSEE HAS COME TO THE HONBLE ITAT SEEKING AN ADJUDICATION ON THE NOTICE ISSUED UNDER SECTION 148 AND ASSESSMENT FRAMED UNDER SECTION 147 OF THE ACT FOR AY 2009-10. THE NOTICE HAD BEEN SENT TO THE ASS ESSEE BEYOND 4 YEARS AND THEREFORE, SECTION 147 R/W EXPLANATION 1 WOULD BE APPLICABLE TO THE FACTS OF T HIS CASE. THE ASSESSEE HAS BEEN INCORPORATED IN 2006 UN DER THE PUNJAB REGIONAL AND TOWN PLANNING AND DEVELOPME NT ACT, 1995. THE RECEIPT OF E.D.C IS INCOME OF THE ASSESSEE AS PER CHAPTER VII SECTION 49 WHICH IS REPRODUCED HEREUNDER:- 49. FUND OF THE AUTHORITY: (1) THE AUTHORITY SHALL HAVE AND MAINTAIN ITS OWN FUND TO WHICH SHALL BE CREDITED- A) ALL MONEYS RECEIVED BY THE AUTHORITY FROM THE STATE GOVERNMENT AND THE CENTRAL GOVERNMENT BY WAY OF GRANTS, LOANS, ADVANCES OR OTHERWISE. B) ALL MONEYS RECEIVED BY THE AUTHORITY FROM SOURCES OTHER THAN THE STATE GOVERNMENT OR THE CENTRAL GOVERNMENT BY WAY OF LOANS OR DEBENTURES. C) ALL FEES RECEIVED BY THE AUTHORITY UNDER THIS ACT . ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 6 D) ALL MONEYS RECEIVED BY THE AUTHORITY FROM THE DISPOSAL OF LANDS BUILDINGS AND OTHER PROPERTIES, MOVABLE AND IMMOVABLE; E) ALL MONEYS RECEIVED BY THE AUTHORITY BY WAY OF THE RENT AND PROFITS OR IN ANY OTHER MANNER OR FROM ANY OTHER SOURCE; AND F) ALL MONEYS RECEIVED BY THE AUTHORITY IN CONNECTION WITH THE EXECUTION OF ANY TOWN DEVELOPMENT SCHEME . (2) THE FUNDS OF THE AUTHORITY SHALL BE APPLIED TOWARDS MEETING- A) THE EXPENDITURE INCURRED IN THE ADMINISTRATION, IMPLEMENTATION AND CARRYING OUT THE PROVISIONS OF THIS ACT; B) THE COST OF ACQUISITION OF LAND FOR THE PURPOSES OF THIS ACT. C) THE EXPENDITURE FOR DEVELOPMENT OF LAND AND CONSTRUCTION OF HOUSES; AND D) THE EXPENDITURE FOR SUCH OTHER PURPOSES AS THE STATE GOVERNMENT MAY DIRECT OR PERMIT . 3) THE AUTHORITY SHALL KEEP ITS FUND IN ANY SCHEDULED BANK OR IN ANY APEX CO-OPERATIVE BANK OR A CENTRAL CO-OPERATIVE BANK. 4)THE AUTHORITY MAY INVEST ANY PORTION OF ITS FUND IN SUCH SECURITIES OR IN SUCH OTHER MANNER AS IT MAY DETERMINE FROM TIME TO TIME. 5) THE INCOME RESULTING FROM INVESTMENTS MENTIONED IN SUB SECTION (4) AND PROCEEDS OF THE SALE OF THE SAME SHALL BE CREDITED TO THE FUND OF THE AUTHORITY. 4. THE NOTICE UNDER SECTION 148 AND ASSESSMENT TO BE FRAMED UNDER SECTION 147 WAS ON THE ISSUE THAT THE ASSESSEE HAD SHOWN THE EDC (EXTERNAL DEVELOPMENT CHARGES) AS A LIABILITY IN THE BALANCE SHEET ONLY. IT WAS NOT TAKEN IN THE PROFIT AND LOSS ACCOUNT. IT IS IMPORTA NT TO STATE HERE THAT THE ASSESSEE IS FOLLOWING A CASH SY STEM OF ACCOUNTANCY, THEREFORE, THERE COULD NOT HAVE BEEN A NY LIABILITY STANDING IN ITS BALANCE SHEET AT THE END OF THE YEAR AS PER THE ACCOUNTANCY PRINCIPLES. THE ASSESSING O FFICER HAD ASKED FOR DETAILS OF THE LIABILITIES DURING PRO CEEDINGS UNDER 143(3), THE ASSESSEE DID NOT DISCLOSE TRULY A ND FULLY THE MATERIAL FACTS/ DOCUMENTS PERTAINING TO THE LIA BILITY AND INFACT JUST REPRODUCED THE BALANCE SHEET IN VER BATIM ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 7 WITHOUT ELUCIDATION THEREON. IT IS SEEN THAT THE AS SESSEE DOES NOT DISCLOSE ALL MATERIAL DOCUMENTS PERTAINING TO THE SAID ASSESSMENT YEARS. IT IS IMPORTANT TO STATE HE RE THAT THE ASSESSEE HAD INFORMATION ,MATERIAL AND DOCUMENTS PERTAINING TO THE ISSUE OF EDC, BUT NOT DISCLOSED T HE SAME. THESE DOCUMENTS WERE IN THE EXCLUSIVE KNOWLEDGE OF THE ASSESSEE. THE NOTIFICATION OF 2007 AND 2010 ARE APP LICABLE TO THE FACTS OF THE CASE AND THEREFORE, THE RELEVAN T PORTION OF THE NOTIFICATION IS REPRODUCED HEREUNDER:- EXTERNAL DEVELOPMENTS CHARGES (EDC) ARE THE CHARGES FOR UTILIZATION OF EXISTING INFRASTRUCTURE/ PROPOSED INFRASTRUCTURE. 2. THE EXTERNAL DEVELOPMENT CHARGES WILL BE UTILIZED BY THE CONCERNED LOCAL PLANNING AND URBAN DEVELOPMENT AUTHORITIES FOR PROVIDING INFRASTRUCTURE. IN CASE THE CONCERNED AUTHORITY FEELS THAT CONNECTIVITY IS REQUIRED FROM ANY LOCAL BODY, OR ANY WORK IS TO BE GOT EXECUTED FROM A LOCAL BODY, THE PROPORTIONATE AMOUNT MAY BE DEPOSITED BY THE AUTHORITY WITH THE LOCAL BODY ON CASE TO CASE BASIS. CONVERSION CHARGES WILL BE DEPOSITED IN THE GOVERNMENT TREASURY AND LICENSE/ PERMISSION FEE WILL BE RETAINED BY THE CONCERNED URBAN DEVELOPMENT AUTHORITY FOR PLANNING AND DEVELOPMENT OF AREAS UNDER ITS JURISDICTION. SEPARATE ACCOUNT SHALL BE MAINTAINED FOR EACH OF THE ABOVE CHARGES. 4. LICENSE/PERMISSION FEE IS THE FEE FOR GRANTING PERMISSION TO COLONIZERS/ PROMOTERS FOR THEIR PROJECTS. 4.1. THEREFORE, IT IS SEEMS THAT EXCEPT FOR CONVER SION CHARGES WHICH ARE TO BE DEPOSITED IN GOVT. TREASURY , THE EDC CHARGES AND PERMISSION IS TO BE RETAINED BY THE ASSESSEE AND THEREFORE, AS PER SECTION 49 OF PRTPD ACT, 1995, THE ASSESSEE NOT ONLY RETAINED THE MONEY BUT IT WAS ALSO THE FUND OF THE ASSESSEE AND LIABLE TO BE TAXE D AS REVENUE RECEIPT AND THE ASSESSEE WAS TO TAKE THIS A MOUNT IN HIS PROFIT AND LOSS ACCOUNT AND SHOW IT HAS A RE VENUE RECEIPT AND NOT AS A LIABILITY. THEREFORE, IT IS SE EN THAT THE ASSESSEE DID NOT TRULY AND FULLY DISCLOSE MATERIAL FACTS PERTAINING TO THE CASE, INFACT IT DRESSED UP ITS RETURNS AND AUDITED RETURNS AS PER ITS TERMS AND NOT AS PER LAW. ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 8 5. ON THESE FACTUAL PREMISE CERTAIN LEGAL ISSUES EMANATE WHICH ARE DELINEATED BELOW. THE SECTION 14 7 R.W. EXPLANATION 1 IS REPRODUCED FOR READY REFERENC E:- 147. IF, THE (ASSESSING) OFFICER (HAS REASON TO BELIEVE) THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS, UNDE R THIS SECTION, OR RECOMPUTED THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS T HE CASE MAY BE FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 1 53 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR): PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FO R THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TA KEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS F ROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR . PROVIDED FURTHER XXXX XX PROVIDED ALSO XXX XX EXPLANATION-1 PRODUCTION BEFORE THE ASSESSING OFFICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY THE ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. 5.1. TO CONFER VALID JURISDICTION UNDER THIS SECTI ON TO ISSUE NOTICE IN RESPECT OF ASSESSMENTS BEYOND THE P ERIOD OF FOUR YEARS, TWO CONDITIONS HAVE THEREFORE, TO BE SATISFIED. THE FIRST IS THAT THE INCOME TAX OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME, PROFITS AND GAI N CHARGEABLE TO INCOME TAX HAVE BEEN UNDER ASSESSED. AND ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 9 SECONDLY , THAT SUCH UNDERASSESSMENT HAS OCCURRED DUE TO THE FACT (I) OMISSION OR FAILURE ON THE PART OF AN ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR (II) OMISSION OR FAILURE ON THE PART OF AN ASSESSEE TO DISCLOSE FULL Y AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSME NT FOR THAT YEAR. BOTH THESE CONDITIONS ARE CONDITIONS PRECEDENT TO BE SATISFIED BEFORE THE INCOME TAX OFF ICER COULD HAVE JURISDICTION TO ISSUE A NOTICE FOR THE ASSESSMENT OR REASSESSMENT BEYOND THE PERIOD OF FOU R YEARS . THEREFORE THE SECTION POSTULATES A DUTY ON EVERY ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR HIS ASSESSMENT. 6. A CATENA OF JUDGMENTS, BOTH OF THE HONBLE SUPREME COURT AND OF THE HONBLE HIGH COURTS HAVE GIVEN JUDGMENTS BRINGING CERTAIN BROAD PRINCIPLES O N THIS ISSUE. THE UNDERSIGNED IS HEREBY SUBMITTING, A S ALLOWED BY THE HONBLE BENCH, COPIES OF CASE LAWS A S RECEIVED FROM THE ACIT VIDE LETTER DATED 05.03.2018 WHICH WERE SUBMITTED BY THE DEPARTMENT BEFORE THE HONBLE PUNJAB & HARYANA HIGH COURT ALONGWITH REJOINDER TO THE WRIT PETITIONS FILED BY THE ASSESS EE ON THE SIMILAR ISSUE FOR AY 2010-11 & 2011-12. COPIES OF WRIT PETITIONS AND REJOINDER FILED BY THE DEPARTMEN T IN RESPONSE TO THESE WRIT PETITIONS HAVE ALREADY BEEN SUBMITTED BEFORE THE HONBLE BENCH ON 07.03.2018. I T IS VERY HUMBLY REQUESTED THAT THE REJOINDER AND COPIES OF CASE LAWS FILED BY THE DEPARTMENT BEFORE THE HONBL E HIGH COURT MAY BE CONSIDERED WHILE DECIDING VALIDIT Y OF PROCEEDINGS INITIATED U/S 148 OF THE ACT . 7. THE LD. DR, HAS FURTHER RELIED UPON THE CAT ENA OF JUDGEMENTS, LISTED BELOW, MAINLY TO CONTEND THAT MERE PRODUCTI ON OF BOOKS OF ACCOUNT OR DOCUMENTS ETC. WITHOUT POINTING OUT THE RELEVANT ENTRIES THEREIN DOES NOT AMOUNT OF DISCLOSURE WITHIN THE ME ANING OF SECTION 147 (A) OF THE ACT. SR. NO. PARTICULARS DATED 1 CWP NO. 13806 OF 2010 (P&H, HC ) M/S R.N. GUPTA & CO LTD VS. ACIT 30.11.2010 2 1991 SCC(2) 558 (SC) A.L.A FIRM VS. 21.02.1991 ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 10 CIT 3 1976 AIR 203 (SC) KALYANI MAVJI & CO. VS. CIT 10.12.1975 4 159 ITR 624 ((SC)) INDO-ADEN SALT MANUFACTURING VS. CIT BOMBAY 12.3.1986 5 1TO JODHPUR VS. PURPSHOTTAM DASS BANGAR (SC) 22.1.1997 6 AIR 1977 SC 2129 (SC) R.K. MALHOTRA VS. KASTRIBHAI LAL BHAI 11.8.1977 7 1967 AIR 587 KANTAMANI VENKATA NARAYANA & SONS VS. FIRST ADDL. INCOME TAX 27.10.1986 8 221 ITR 492 (DELHI HC) RAKESH AGGARWAL VS. ACIT 09.01.1966 9 ITA 2026/10 CIT VI, NEW DELHI VS. USHA INTERNATIONAL LTD (DELHI HC) 23.04.2012 10 137 ITR 446 (P&H HC) CIT VS. ESS ESS KAY ENGINEERING CO. PTD 11 258 ITR 170 (P&H HC) GURERA GAS CYLINDERS PVT LTD VS. CIT 29.9.2000 12 207 ITR 929 RAYMOND WOOLEN MILLS LTD VS. ITO (BOMBAY HIGH COURT) 17.8.1991 13 236 ITR 34 (SC), RAYMOND WOOLEN MILLS LTD VS. ITO 17.12.1997 14 RAVATHY C.P. EQUIPMENTS VS. DCIT 15 CWP CIVIL 6205 OF 2016 DALMIA PVT LTD VS. CIT DELHI 26.9.2011 16 SLP CIVIL 23898/11 (SC) CIT & ORS VS. CHAHBIL DASS AGGARWAL 8.8.2013 17 290 ITR 377 (BOMBAY HIGH COURT) PIAGGIO VEHICLES PVT LTD VS. DCIT 06.02.2007 18 203 ITR 456 (SC) PHOOL CHAND BAJRANG LAL & OTHERS VS. ITO 13.7.1993 19 156 DTR 217 (DELHI HIGH COURT) NEW DELHI TELEVISION LTD VS. DCIT 10.08.2017 ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 11 20 1987 AIR 523 (SC) S. NARAYANAPPA & OTHERS VS. CIT 27.9.1966 21 76 ITR 496 (SC) GITA DEVI AGGRWASL S CIT WEST BENGAL & OTHERS 31.7.1969 22 W.P. (CRIMINAL ) (SC) 176/17 KAMINI JAISWAL VS. UNION OF INDIA & ANOTHER 23 1996 AIR (SC) 691 EXECUTIVE ENGINEER, BIHAR STATE HOUSING BOARD VS. RAMESH KUMAR SINGH & OTHER 22.11.1995 8. THE LD. DR, THEREFORE, HAS SUBMITTED THAT A S PER LAW LAID DOWN IN THE AFORESAID CASE LAWS, THE ASSESSEE DID NOT DI SCHARGE HIS DUTY BY MERELY PRODUCING THE BOOKS OF ACCOUNT OR OTHER EVID ENCES. THAT THE ASSESSING OFFICER COULD HAVE FIND OUT THE CORRECT P OSITION BY FURTHER PROBING THE MATTER DOES NOT EXONERATE THE ASSESSEE FREE FROM THE DUTY TO MAKE FULL AND TRUE DISCLOSURE OF THE MATERIAL FA CTS. 9. THOUGH SOME OF THE CASE LAWS REFERRED TO AB OVE ARE NOT APPLICABLE OR RELEVANT TO THE ISSUE UNDER CONSIDER ATION, HOWEVER, THE SUM AND SUBSTANCE AND LD. DR SUBMISSIONS HAS BEEN T HAT THE EDC CHARGES RECEIVED BY THE ASSESSE HAS NOT BEEN REFLE CTED IN THE P&L ACCOUNT, RATHER, THE SAME HAVE BEEN REFLECTED IN TH E BALANCE SHEET. THAT THOUGH THE ASSESSING OFFICER HAD ISSUED A GENE RAL QUESTIONNAIRE ON 18.7.2011 AND FURTHER CLARIFICATION BY QUESTIONN AIRE ISSUED ON 10.10.2011, HOWEVER, NO SPECIFIC QUERY / CLARIFICA TION WAS RAISED BY THE ASSESSING OFFICER ON EDC. HENCE, THE ASSESSING OFFICER DID NOT FORM ANY OPINION ABOUT THE NATURE OF EDC RECEIPTS A ND, THEREFORE, THERE WAS NO QUESTION OF CHANGE OF OPINION. THAT TH E ASSESSEE HAD FAILED TO DISCLOSE FULLY AND TRULY THE MATERIAL FAC TS NECESSARY FOR THE ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 12 ASSESSMENT FOR THAT YEAR. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. UND ISPUTEDLY, THE FACTS OF THE CASE AND ISSUE UNDER CONSIDERATION ARE EXACTLY IDENTICAL TO THAT OF THE ASSESSEES OWN CASE FOR ASSESSMENT Y EAR 2008-09 (ITA NO. 410/CHD/2013) DECIDED VIDE ORDER DATED 28.1.201 7. IN THAT CASE, THIS TRIBUNAL WHILE HOLDING THE REOPENING OF THE AS SESSMENT AS BAD IN LAW OBSERVED AS UNDER:- 12. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES, PERUSED THE ORDERS OF THE AUTHORITIES BELO W AND ALSO THE RELEVANT DOCUMENTS TO WHICH OUR ATTENTION WAS DRAWN DURING THE COURSE OF HEARING. SINCE THE ISSUE BEFORE US IS THE VALIDITY OF THE ASSESSMENT FRAMED U/S 147 OF THE ACT, CERTAIN FACTS WHICH ARE UNDISPUTED NEED TO BE OUTLINED BEFORE PROCEEDING WITH THE ISSUE: A) THE IMPUGNED ASSESSMENT YEAR IS ASSESSMENT YEAR 2008-09. B) ASSESSMENT U/S 143(3) FOR THE SAID YEAR HAD BEEN MADE VIDE ORDER DATED 28.12.2010. C) NOTICE U/S 148 WAS ISSUED ON 25.3.2015. 13. IT IS EVIDENT FROM THE ABOVE THAT RE-ASSESSMEN T PROCEEDINGS WERE INITIATED AFTER FOUR YEARS FROM TH E END OF THE RELEVANT ASSESSMENT YEAR AND ASSESSMENT U/S 143(3) HAD ALREADY BEEN FRAMED ON THE ASSESSEE. IN SUCH FACTUAL CIRCUMSTANCES, IT IS ONLY IN THE CONDITIONS STIPULATED IN THE 1 ST PROVISO TO SECTION 147 THAT THE RE-ASSESSMENT PROCEEDINGS CAN BE RESORTED, WHICH AS PER THE REVENUE IN THE PRESENT CASE IS THE FAILURE TO DISCLOSE MATERIAL FACTS RELA TING TO EDC CHARGES. 14. WE ARE NOT IN AGREEMENT WITH THIS CONTENTION OF THE REVENUE. UNDISPUTEDLY EDC CHARGES HAD BEEN DISCLOSED IN THE BALANCE SHEET OF THE ASSESSEE FOR THE IMPUGNED YEAR AND WHICH FORMED PART OF THE DOCUMENTS FILED WITH THE RETURN OF INCOME. ALSO IT IS ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 13 NOT DISPUTED THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSEE HAD DISCLOSED EDC CHARGES RECEIVED DURING THE YEAR IN THE DETAIL OF OTHER LIABILITIES FILED IN RESPONSE TO QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER. FURTHER, A PERUSAL OF THE REASON S RECORDED FOR REOPENING REVEAL THAT THE INFORMATION PROVIDED BY THE ASSESSEE ITSELF, AS POINTED OUT ABOVE, FORMED THE BASIS OF REOPENING. THE COPY OF REASONS PLACED AT PAPER BOOK PAGES 39 AND 40 READ AS UNDER: DURING PERUSAL OF RECORDS IN THIS CASE, IT. WAS SEEN THAT THE ASSESSES HAD RECEIVED EXTERNAL DEVELOPMENT CHARGES (EDC) FROM LAND DEVELOPERS/COLONIZERS/REAL ESTATE BUILDERS/PROMOTERS DURING THE F.Y. 2007-08. THE SAID EXTERNAL DEVELOPMENT CHARGES WERE NOT BROUGHT TO THE AMBIT OF TAX BY THE ASSESSEE BUT WERE INSTEAD SHOWN AS A LIABILITY IN ITS BALANCE SHEET UNDER THE HEAD 'OTHER LIABILITIES'. IT IS PERTINENT TO MENTION HERE THAT EXTERNAL DEVELOPMENT CHARGES ARE RECEIVED FROM THE LAND DEVELOPERS/COLONIZERS/REAL ESTATE BUILDERS/PROMOTERS WHO SEEK APPROVAL FROM THE ASSESSEE (I.E. GREATERMOHALI AREA DEVELOPMENT AUTHORITY) OR OTHER COMPETENT AUTHORITY TO DEVELOP A RESIDENTIAL OR COMMERCIAL OR INSTITUTIONAL ZONE ON THEIR PIECE/CHUNK OF LAND. THE SAID AMOUNT RECEIVED UNDER THE NOMENCLATURE 'EXTERNAL DEVELOPMENT CHARGES' IS SUPPOSED BE USED BY THE ASSESSEE FOR CARRYING ON OF EXTERNAL- DEVELOPMENT WORKS AND OTHER RELATED JOBS OUTSIDE THE LAND OF THE LAND DEVELOPER/ COLONIZER /REAL ESTATE BUILDER/PROMOTER WHO HAS PAID THE .EXTERNAL DEVELOPMENT CHARGES (EDC). THUS, IT IS SEEN THAT THE RECEIPT OF EXTERNAL DEVELOPMENT CHARGES BY THE ASSESSEE IS ATTRIBUTABLE TO ITS REGULAR BUSINESS. FURTHER, THE RECEIPT AND EXPENDITURE OF THE SAID AMOUNT IS A REGULAR, ROUTINE AND RE- OCCURRING PHENOMENON AS EXTERNAL DEVELOPMENT CHARGES ARE BEING REGULARLY RECEIVED BY THE ASSESSEE FROM LAND DEVELOPERS/ COLONIZERS/REAL ESTATE BUILDERS; PROMOTERS IN EVERY YEAR AND SIMILARLY THESE ARE BEING REGULARLY EXPENDED /UTILIZED/ SPENT FOR THE PURPOSE OF CARRYING OUT EXTERNAL DEVELOPMENT WORKS AND OTHER RELATED JOBS. IN LIGHT OF THE ABOVE, IT IS OBSERVED THAT BOTH THE RECEIPTS AS WELL AS THE EXPENDITURE ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 14 RELATED TO EXTERNAL DEVELOPMENT CHARGES (EDC) ARE CLEARLY REVENUE IN NATURE AS THEY ARE ATTRIBUTABLE TO THE REGULAR BUSINESS OF THE ASSESSEE AND ARE ALSO A ROUTINE, REGULAR AND RE-OCCURRING PHENOMENON. ACCORDINGLY, THE ASSESSEE WAS REQUIRED TO CREDIT THE RECEIPTS OF EXTERNAL DEVELOPMENT CHARGES TO ITS P'&L ACCOUNT AND DEBIT THE EXPENSES INCURRED ON ACCOUNT OF THE SAME. SINCE, THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING, THEREFORE, THE NET AMOUNT RECEIVED BY THE ASSESSEE DURING THE YEAR AS EXTERNAL DEVELOPMENT CHARGES WAS REQUIRED TO BE BROUGHT TO THE AMBIT OF TAX BY CREDITING THE RECEIPTS EARNED DURING THE YEAR AND DEBITING THE EXPENSES INCURRED ON ACCOUNT OF EXTERNAL DEVELOPMENT WORK & OTHER RELATED JOBS. HOWEVER, THE ASSESSEE ------------------ HAS RATHER SHOWN THE EXTERNAL DEVELOPMENT CHARGES EDC RECEIVED AS LIABILITY IN ITS BALANCE SHEET. THE SAID FAILURE ON THE PART OF THE ASSESSEE HAS LED TO ESCAPEMENT OF TAXABLE INCOME AS THE NET INCOME EARNED ON ACCOUNT OF THE EXTERNAL DEVELOPMENT CHARGES HAS ESCAPED THE AMBIT OF TAXATION. THUS AFTER INDEPENDENT VERIFICATION OF RECORDS WITH RESPECT TO THE ABOVE MENTIONED FACTS, I HAVE REASONS TO BELIEVE THAT AN INCOME OF RS.1,59,61,85,128/- HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 1961. A CALCULATION OF THE SAME IS AS UNDER: I. OPENING BALANCE OF EXTERNAL DEVELOPMENT CHARGES (EDC) AS ON 01.04.2007 RS.65,51,36,250/ - II. CLOSING BALANCE OF EXTERNAL DEVELOPMENT CHARGES (EDC) AS ON 31.03.2008 RS.2,25,13,21,37 8/- III. NET AMOUNT RECEIVED DURING THE YEAR ON ACCOUNT OF EXTERNAL DEVELOPMENT CHARGES (I.E. (II) (I) RS.1,59,61,85,12 8/- THIS ESCAPEMENT OF INCOME IS DUE TO FAILURE OF THE ASSESSEE TO FULLY AND. TRULY DISCLOSE ALL THE MATER IAL FACTS RELATING TO ITS INCOME AND DUE TO DEFAULT ON ITS PA RT BY NOT TREATING THE AMOUNT RECEIVED ON ACCOUNT OF EXTERNAL DEVELOPMENT CHARGES (EDC) AS REVENUE RECEIPT. ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 15 ISSUE NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 TO THE ASSESSEE FOR THE A.Y. 2008-09. 15. A PERUSAL OF THE ABOVE REVEALS THAT, IN THE FIR ST PARA OF THE REASON, THE ASSESSING OFFICER RECORDS DURING PERUSAL OF RECORDS IN THIS CASE, IT WAS SEEN THAT EDC CHARGES WERE RECEIVED BY THE ASSESSEE. (EMPHASIS SUPPLIED) THEREAFTER THE REASONS ONLY STATE THE NATURE OF THE EDC CHARGES, WHICH IS GENERAL AND PUBLICLY KNOWN INFORMATION, AND FURTHER ON INFERENCE AND CONCLUSION HAS BEEN DRAWN THEREFROM THAT IT IS IN THE NATURE OF REVENUE RECEIPT OF THE ASSESSEE AND HENCE CHARGEABLE TO TAX . THE ASSESSING OFFICER THEREAFTER STATES THAT SINCE THE ASSESSEE FAILED TO INCLUDE IT IN ITS INCOME, TH E SAME HAS ESCAPED ASSESSMENT. AND LASTLY THE ASSESSING OFFICER MENTIONS THAT AFTER INDEPENDENT VERIFICATION OF RECORDS WITH RESPECT TO THE ABOVE MENTIONED FACTS, I HAVE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. 16. IT IS AMPLY EVIDENT FROM THE ABOVE THAT IT WAS ON THE BASIS OF ALREADY AVAILABLE INFORMATION AND NOT ANY NEW INFORMATION PERTAINING TO EDC CHARGES THAT CAME IN THE POSSESSION OF THE ASSESSING OFFICE R THEREAFTER THAT LED TO THE FORMATION OF BELIEF THAT THE EDC CHARGES WERE IN THE NATURE OF REVENUE RECEIPT OF THE ASSESSEE AND HAD THUS ESCAPED ASSESSMENT. THEREFORE WHEN THE REOPENING WAS RESORTED TO ON THE BASIS OF MATERIAL ALREADY ON THE FILE, THE SAME HAVING BEEN PROVIDED BY THE ASSESSEE ONLY DURING ASSESSMENT PROCEEDINGS, AND NOTHING ELSE, WE FAIL TO UNDERSTAND HOW THE ASSESSEE COULD BE CHARGED WITH FAILURE TO DISCLOSE MATERIAL FACTS RELATING TO THE SAID RECEIPT. 17. MOREOVER THE SECTION EMPOWERS THAT ASSESSING OFFICER TO ASSUME JURISDICTION TO REOPEN THE CASE WHEN THE ESCAPEMENT OF INCOME IS ON ACCOUNT OF FAILURE OF THE ASSESSEE TO DISCLOSE MATERIAL FACTS RELATING TO THE INCOME, MEANING THEREBY THAT ONLY IMPORTANT AND PRIMARY FACTS PERTAINING TO THE INCOME HAVE TO BE DISCLOSED AND NOT THE REASONING OR LOGIC WHICH LEAD TO THE CONCLUSION OF THE NATURE OF THE RECEIPT. IN THE PRESENT CASE, VIS--VIS EDC CHARGES, THE NECESSARY FACTS WERE NATURE OF THE INCOME AND THE QUANTUM OF THE INCOME. THE ASSESSEE HAVING DISCLOSED THAT IT HAD OUTSTANDING ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 16 EDC CHARGES RECEIVED AMOUNTING TO RS.252 CRORES AS AT THE END OF THE YEAR, THE NATURE AND THE QUANTUM OF THE RECEIPT WAS DULY DISCLOSED BY THE ASSESSEE. IT IS NOT THE CASE OF THE REVENUE THAT T HE NATURE OF THE RECEIPT IS SOMETHING OTHER THAN EDC CHARGES OR THAT THE QUANTUM IS NOT AS DISCLOSED BY THE ASSESSEE. THEREFORE, FAILURE TO DISCLOSE ANY MATERIAL FACT CANNOT BE ATTRIBUTED TO THE ASSESSEE. EVEN THE REASONS RECORDED FOR FORMATION OF BELIE F ARE ON THE SAME SET OF FACTS, WHICH HAVING ALREADY BEEN DISCLOSED BY THE ASSESSEE, NO FAILURE TO DISCLOSE ANY MATERIAL FACT CAN THEREFORE BE ATTRIBUTED TO THE ASSESSEE. THE REASONS DO NOT STATE AS TO WHAT OTHER MATERIAL FACT WAS NOT DISCLOSED BY THE ASSESSEE PERTAINING TO THE EDC CHARGES AND WHICH CAME IN THE POSSESSION OF THE ASSESSING OFFICER THEREAFTER WHICH LED TO THE BELIE F OF ESCAPEMENT OF INCOME. WHAT IS DERIVED FROM THE REASONS IS THAT THE INFORMATION RELATING TO EDC CHARGES WAS THE SAME AS PROVIDED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS, AND IT IS ONLY THAT INFERENCE FROM THE SAID INFORMATION, THAT IT IS IN THE NATURE OF REVENUE RECEIPTS, HAS NOW BEEN DERIVED BY THE AO. IN CALCUTTA DISCOUNT CO. LTD. VS ITO 41 ITR 191 THE HONBLE SUPREME COURT HELD THAT THE EXPRESSION MATERIAL FACTS REFERS ONLY TO PRIMARY FACTS, THE DUTY OF THE ASSESSEE IS ONLY TO DISCLOSE PRIMARY FACTS AND HE DOES NOT ALSO HAVE TO INDICATE WHAT FACTUAL OR LEGAL INFERENCES SHOULD PROPERLY BE DRAWN FROM THE PRIMARY FACTS. CLEARLY THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE HAD FAILED TO DISCLOSE ANY MATERIAL FACTS DURING ASSESSMENT. 18. THE RELIANCE PLACED BY THE LD.COUNSEL FOR THE ASSESSEE IN THIS REGARD ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MICRO INKS P. LTD. VS ASSISTANT COMMISSIONER OF INCOME TAX (2017) 393 ITR 366 (GUJ) IS APT WHEREIN REOPENING, BEYOND FOUR YEARS AND WHERE ASSESSMENT HAD BEEN FRAMED EARLIER, ON THE BASIS OF MATERIAL ALREADY ON RECORD WAS HELD NOT TO FULFILL THE CONDITION OF FAILURE ON THE PART OF ASSESSEE TO DISCLOSE MATERIAL FACTS . THE FINDINGS OF THE HONB LE HIGH COURT ARE AS UNDER: AT THE OUTSET, IT IS REQUIRED TO BE NOTED THAT IN TH E PRESENT CASE, THE ASSESSING OFFICER HAS SOUGHT TO REOPEN THE ASSESSMENT FOR A.Y 2009-2010 BEYOND THE PERIOD OF FOUR YEARS. THEREFORE, UNLESS AND UNTIL THE ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 17 CONDITION PRECEDENT TO REOPEN THE ASSESSMENT BEYOND THE PERIOD OF FOUR YEARS AS MENTIONED IN PROVISO TO SECTION 147 OF THE I.T ACT ARE SATISFIED, THE ASSESS ING OFFICER IS NOT JUSTIFIED IN INITIATING THE RE-ASSESSM ENT PROCEEDINGS. AS PER THE PROVISO TO SECTION 147 OF THE ACT, IF IT IS FOUND THAT THERE WAS ANY FAILURE ON TH E PART OF THE ASSESSING IN NOT DISCLOSING THE TRUE AND CORR ECT FACTS, WHICH HAS RESULTED INTO ESCAPEMENT OF THE INCOME, THE ASSESSING OFFICER IS NOT JUSTIFIED IN REOPENING THE ASSESSMENT. 7.1 CONSIDERING THE REASONS RECORDED, THERE IS NO ALLEGATION THAT THERE WAS ANY FAILURE ON THE PART OF T HE ASSESSEE IN NOT DISCLOSING THE TRUE AND CORRECT FAC TS DUE TO WHICH, THERE IS ESCAPEMENT OF INCOME FROM THE ASSESSMENT. 7.2 MOREOVER, FROM THE REASONS RECORDED, IT APPEARS THAT ACCORDING TO THE ASSESSING OFFICER, THE EXPENDITURE WAS INCURRED TO ESTABLISH A SUBSIDIARY IN USA, AND THEREFORE, SUCH EXPENDITURE WAS COVERED UNDER SECTIO N 35D [1] (II) OF THE I.T ACT, AND THEREFORE, ONLY 1/5TH OF THE EXPENDITURE I.E., 47,23,722/- WAS REQUIRED TO BE ALLOWED. INSTEAD, THE ENTIRE AMOUNT CLAIMED BY THE ASSESSEE I.E., 2,36,18,612/- IS ALLOWED TO BE DEBITED. THEREFORE, ACCORDING TO THE ASSESSING OFFICER, HIS PREDECESSOR HAS WRONGLY ALLOWED THE ENTIRE AMOUNT OF 2,36,18,612/- TO BE DEBITED UNDER THE HEAD INTEREST AND FINANCE CHARGES. IN THE REASONS RECORDED, IT IS SPECIFICALLY OBSERVED BY THE ASSESSING OFFICER THAT, ..ON OBSERVATION OF THE ASSESSMENT RECORDS, . .. MEANING THEREBY, WHILE ISSUING NOTICE, THE SUBSEQUENT ASSESSING OFFICER DID CONSIDER THE MATERIAL WHICH WA S ALREADY ON THE RECORD, WHICH WAS CONSIDERED BY THE ASSESSING OFFICER, WHILE FRAMING THE SCRUTINY ASSESSMENT UNDER SECTION 143 OF THE ACT. 8. AS OBSERVED HEREINABOVE, EVEN THERE IS NO ALLEGATION IN THE REASONS RECORDED THAT THERE WAS ANY FAILURE O N THE PART OF THE ASSESSEE IN NOT DISCLOSING TRUE AND CORRECT FACTS NECESSARY FOR THE ASSESSMENT. UNDER TH E CIRCUMSTANCES, THE ASSESSING OFFICER HAS MATERIALLY ERRED IN ASSUMING THE JURISDICTION TO REOPEN THE ASSESSMENT FOR ASSESSMENT YEAR 2009-2010 AND THAT TOO BEYOND THE PERIOD OF FOUR YEARS, AS THE CONDITION PRECEDENT TO ASSUME THE JURISDICTION TO REOPEN THE ASSESSMENT BEYOND THE PERIOD OF FOUR YEARS IS NOT SATISFIED. 9. ON THE AFORESAID GROUND ALONE, THE IMPUGNED NOTICE DATED 31ST MARCH 2016 UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961 AND RE-ASSESSMENT PROCEEDINGS DESERVES TO BE QUASHED AND SET-ASIDE. THE HONBLE DELHI HIGH COURT IN THE CASE OF AVTEC LTD. V S DCIT (2017) 395 ITR 434 REITERATED THE SAME HOLDING AS UNDER: ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 18 IN THE PRESENT CASE, THE TANGIBLE MATERIAL THAT THE A O CAME ACROSS FOR THE AYS IN QUESTION THAT WARRANTED THE REOPENING OF THE ASSESSMENTS IS NOT CLEAR FROM THE 'REASONS TO BELIEVE' RECORDED BY THE AO. THE REASONS MERELY RECORD THE FACT THAT HML HAD BORNE THE COSTS AND EXPENSES INCLUDING PROFESSIONAL FEE AND, THEREFORE , THE CAPITALISATION OF THOSE EXPENSES TO THE VARIOUS BLOCK OF ASSETS WAS NOT ALLOWABLE UNDER SECTION 43(1) OF THE ACT. AFTER RECORDING THE ABOVE STATEMENT, THE AO ADD S: I HAVE REASON TO BELIEVE THAT DUE TO FAILURE ON THE PART OF THE ASSESSE TO DISCLOSE ALL THE MATERIAL FACTS TRULY OR FULLY, INCOME OF 7,16,299 HAVE ESCAPED ASSESSMENT. THIS DOES NOT SATISFY THE REQUIREMENT OF LAW THAT TH E REASONS TO BELIEVE SHOULD, WHERE THE REOPENING IS AFT ER THE EXPIRY OF FOUR YEARS FROM THE END OF THE FY, SPECIFICALLY STATE IN WHAT MANNER THERE WAS A FAILURE BY THE ASSESSEE TO MAKE A FULL AND TRUE DISCLOSURE OF MATERIAL FACTS. THAT, AGAIN, WILL HAVE TO BE PRECEDED BY SPELLING OUT THE TANGIBLE FRESH MATERIAL THAT LED THE AO TO COME TO THAT CONCLUSION. NONE OF THIS IS FOUND IN THE REASONS TO BELIEVE RECORDED BY THE AO IN THE CASE ON HAND. THE NECESSITY FOR TANGIBLE MATERIAL TO BE PRESENT TO TRIGGER THE REOPENING WAS EMPHASISED IN COMMISSIONER OF INCOME TAX V. ORIENT CRAFT LTD . (SUPRA). 24. THE REPEATED ASSERTION BY MR. MANCHANDA THAT THE CLAIM FOR DEPRECIATION FOR AYS 2006-07 AND 2007-08 WAS DISALLOWED BY THE AO IS NOT ENTIRELY CORRECT. IT OVERLOOKS THE HISTORY OF THE LITIGATION AROUND THE CL AIMS FOR THOSE AYS WITH BOTH ENDING IN THE ASSESSEE ULTIMATELY SUCCEEDING ON THE POINT AFTER THE REMAND TO THE AO BY THE ITAT FOR AY 2006-07 AND THE LEVEL OF THE CIT (A) FOR AY 2007-08 . MR. MANCHANDA HAS ALSO NOT BEEN ABLE TO COUNTER THE SUBMISSION THAT FOR AYS 201 1- 12 AND 2012-13 THE SAME CLAIM FOR DEPRECIATION HAS BEEN ALLOWED. 25. FOR ALL OF THE AFOREMENTIONED REASONS, THE WRIT PETITIONS ARE ALLOWED AND THE NOTICES DATED 31ST MARCH , 2015 AND THE CONSEQUENTIAL ORDERS DATED 11 TH JANUARY, 2016 PASSED BY THE AO DISPOSING OF THE PETITIONERS OBJECTIONS ARE HEREBY SET ASIDE. NO ORDER AS TO COSTS. 19. FURTHER WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE LD.DR THAT MERE PRODUCTION OF ACCOUNT BOOKS AND BALANCE SHEET AND PROFIT AND LOSS ACCOUNT WILL NOT TANTAMOUNT TO DISCLOSURE. THE LD.DR HAS BORROWED FROM EXPLANATION-1 TO SECTION 147 OF THE ACT TO SO CONTEND. THE SAID EXPLANATION READS AS UNDER: EXPLANATION 1-PRODUCTION BEFORE THE ASSESSING OFFICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 19 THE ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FORGOING PROVISO. 20. THIS EXPLANATION ONLY DEALS WITH ACCOUNT BOOKS OR OTHER EVIDENCES WHICH ARE PRODUCED BEFORE THE ASSESSING OFFICER. NOW THE WORD PRODUCED WOULD NOT INCLUDE BALANCE SHEET AND PROFIT & LOSS ACCOUNT WHICH THE ASSESSEE IS OBLIGED TO FILE ALONGWITH RETURN AND, THEREFORE, THIS EXPLANATION CANNOT BE INVOKED WHERE THE ASSESSING OFFICER FAILS TO NOTICE AN ENTRY OR STATEMENT IN THE BALANCE SHEET OR THE PROFIT & LOSS ACCOUNT. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT GINNING & MANUFACTURING COMPANY VS. CIT REPORTED IN 108 ITR 674, FOUND THAT THE PROFIT & LOSS ACCOUNT WAS THER E BEFORE THE ASSESSING OFFICER DURING THE ORIGINAL PROCEEDINGS DISCLOSING THE AMOUNTS OF MUNICIPAL TAXES RECOVERED FROM THE TENANTS OF THE ASSESSEE COMPANY WHICH THE ASSESSING OFFICER BELIEVED HAD ESCAPED ASSESSMENT. IT WAS FOUND THAT THE ONLY GRIEVANCE OF THE ASSESSING OFFICER WAS THAT THE SAI D AMOUNTS HAD NOT BEEN SHOWN IN THE STATEMENT FILED ALONGWITH RETURN OF COMPUTATION OF INCOME. THE QUESTION BEFORE THE HON'BLE HIGH COURT WAS WHETHER IN SUCH CASE IT COULD BE HELD THAT THE PRIMARY FACT S NECESSARY FOR ASCERTAINING THE INCOME HAD BEEN DISCLOSED TO THE ASSESSING OFFICER AND THE DISCLOSU RE SO MADE IN THE PROFIT & LOSS ACCOUNT WAS SUFFICIENT IN THE EYES OF LAW. THE HON'BLE HIGH COURT HELD TH AT THE DISCLOSURE IN THE PROFIT & LOSS ACCOUNT WAS SUFFICIENT AND SINCE THE PROFIT & LOSS ACCOUNT WAS SUBMITTED ALONGWITH THE RETURN OF INCOME DISCLOSING AFORESAID RECOVERIES, IT COULD NOT BE BROUGHT WITHI N THE PURVIEW OF PRODUCTION BEFORE THE ASSESSING OFFICER OF ACCOUNT BOOKS OR OTHER EVIDENCES. THE RELEVANT FINDINGS OF THE HON'BLE HIGH COURT ARE AS UNDER: WE ARE UNABLE TO ACCEPT MR. KAJI'S CONTENTION THAT THIS CASE OF THE SUPREME COURT AND THE OBSERVATIONS OF T HE BOMBAY HIGH COURT APPLY TO THE PRESENT CASE. IN THE INSTANT CASE THE ASSESSEE HAS NOT SUPPRESSED MATERIA L FACTS AS WAS THE CASE IN JAI HIND PRINTING PRESS'S CASE (SUPRA). HE HAS NOT FAILED TO DISCLOSE IN THE DOCUMENTS SUBMITTED TO THE ITO THE AMOUNTS OF THE RECOVERIES O F MUNICIPAL TAXES FROM THE TENANTS. ACTUALLY, IN THE PROF IT AND LOSS ACCOUNT ONE FINDS THAT IN EACH OF THOSE TWO ASSESSMENT YEARS, THE TOTAL AMOUNT OF RATES AND TAXES WERE FIRST SHOWN AND THE RECOVERIES WERE SHOWN AS ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 20 DEDUCTIONS FROM THOSE AMOUNTS OF RATES AND TAXES. THEREFORE, TO ANY PERSON READING THE PROFIT AND LOSS ACCOUNT IT WOULD BE OBVIOUS THAT THESE RECOVERIES, NAMELY, RS. 27,098 IN ONE CASE AND RS. 26,477 IN THE OTHER CASE, WERE RECOVERIES OF TAXES FOR WHICH THE ASSESSEE-COMPANY BEFORE US WAS NOT CLAIMING ANY DEDUCTIONS. THUS, THE PRIMARY FACT THAT THESE RECOVER IES WERE MADE WAS BEFORE THE ITO AT THE TIME OF THE ORIGINA L ASSESSMENT PROCEEDINGS. AS THE SUPREME COURT HAS POINTED OUT IN CIT VS. BURLOP DEALERS LTD. (SUPRA), IT WAS FOR THE ITO TO RAISE THE POSSIBLE INFERENCES. THE ASSESSEE-COMPANY WAS UNDER NO OBLIGATION TO INFORM THE ITO ABOUT THE POSSIBLE INFERENCES WHICH COULD BE RAISED AGAINST HIM. IF THE ITO DID NOT RAISE THE APPROPRIATE INFERENCE ON THE PRIMARY FACTS DISCLOSED BEFORE HIM THE INCOME WHICH HAS ESCAPED ASSESSMENT CANNOT BE BROUGHT TO TAX UNDER S. 147(A) OF THE ACT OF 1961. THE DUTY WHICH HAS BEEN CAST UPON THE ASSESSEE IS TO DISCLOSE ALL THE PRIMARY FACTS NECESSARY TO ENABLE THE ITO TO ARRIVE AT THE PROPER FIGURE OF THE TOTAL INCOME AND TO ASSESS THE TAX ACCORDINGLY. BEYOND DISCLOSURE OF THE PRIMARY FACTS, NO OTHER DUTY IS CAST ON THE ASSES SEE. HERE IS NOT A CASE OF BOOKS OF ACCOUNT OR OTHER EVI DENCE PRODUCED BY THE ASSESSEE AT THE TIME OF THE ORIGINAL ASSESSMENT PROCEEDINGS. THE PROFIT AND LOSS ACCOUNT O F THE ASSESSEE-COMPANY WAS SUBMITTED AND IT DID DISCLOSE THE RECOVERIES IN EACH OF THESE TWO YEAR. IN THE REASSESSMENT PROCEEDINGS IT HAS BEEN POINTED OUT THA T AT THE TIME OF THE ORIGINAL ASSESSMENT PROCEEDINGS THO SE PROFIT AND LOSS ACCOUNTS OF THE TWO YEARS WERE BEFOR E THE ITO AND THOSE PROFIT AND LOSS ACCOUNTS DID MENTI ON THESE TWO AMOUNTS OF RS. 27,098 AND RS. 26,477 AS RECOVERIES OF MUNICIPAL TAXES. IF THE ITO DID NOT DR AW THE NECESSARY INFERENCES FROM THESE PRIMARY FACTS, TH E ASSESSEE CANNOT BE BLAMED AND IT CANNOT BE SAID THAT THE TAX HAD ESCAPED ASSESSMENT BECAUSE OF THE OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. THE MATERIAL FACTS WHICH WERE THE PRIMARY FACTS WERE DISCLOSED AND THE ASSESSEE WAS NOT BOUND TO POINT TO THE POSSIBLE INFERENCES WHICH SHOULD BE RAISED FROM THESE PRIMARY FACTS. BECAUSE OF THE FAILURE ON THE PART OF THE ITO TO RAISE THE NECESSARY INFERENCES AT THE TIME OF THE ORI GINAL ASSESSMENT PROCEEDINGS, THE ASSESSEE CANNOT BE BLAMED NOR CAN THE CASE BE BROUGHT UNDER S. 147(A) O F THE IT ACT, 1961, BECAUSE OF SUCH FAILURE OF THE ITO A T THE TIME OF THE ORIGINAL ASSESSMENT PROCEEDINGS. 21. THE CASE LAWS RELIED UPON BY THE LD. DR RELATING TO EXPLANATION-1 TO SECTION 147 OF THE ACT ARE, THEREFORE, NOT APPLICABLE IN THE PRESENT CASE. 22. MOREOVER, AS STATED ABOVE AND AS IS EVIDENT FROM THE FACTS ON RECORD, NO NEW MATERIAL HAS COME ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 21 IN POSSESSION OF THE ASSESSING OFFICER FOR REOPENIN G THE ASSESSMENT AND THE AO IS ONLY ATTEMPTING TO REVIEW HIS EARLIER ORDER THROUGH THE REASSESSMENT PROCEEDINGS WHICH IS NEITHER VALID NOR JUSTIFIED AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF CIT V S KELVINATOR OF INDIA(2010) 320 ITR 561. THE ASSESSEE WAS ASKED TO FURNISH DETAILS IN RELATION TO OTHER LIABILITIES REFLECTED IN THE BALANCE SHEET, WHICH WAS DULY FILED DISCLOSING EDC CHARGES PAYABLE OF RS.225.13 CR. ADMITTEDLY NO FURTHER QUESTIONS WERE ASKED DURING ASSESSMENT PROCEEDINGS. IT IS REASONABLE THEREFORE TO PRESUME THAT THE ASSESSING OFFICER HAD FORMED A VIEW ON EDC CHARGES WHILE GOING THROUGH THE DETAIL FURNISHED TO HIM ON HIS BEHEST. THE REOPENING NOW ON THE SAME SET OF INFORMATION IS NOTHING BUT BASED ON CHANGE OF OPINION. THE CONTENTION OF THE LD.DR THAT THERE WAS NO CHANGE OF OPINION SINCE NO VIEW HAD BEEN FORMED BY THE ASSESSING OFFICER DURING ASSESSMENT AS INFORMATION REGARDING RECEIPT OF EDC HAD BEEN FURNISHED IN RESPONSE TO A GENERAL QUESTIONNAIRE ISSUED TO THE ASSESSEE ASKING FOR BREAK UP OF OTHER LIABILITIES AND NO FURTHER QUESTIONS WERE ASKED THEREAFTER, IS NOT ACCEPTABLE. IF A QUERY IS RAISED DURING ASSESSMENT PROCEEDINGS AND ANSWERED BY THE ASSESSEE, UNDOUBTEDLY THE ATTENTION OF THE ASSESSING OFFICER IS DRAWN TO THE SAME AND IT IS REASONABLE TO PRESUME THAT HE HAS CONSIDERED THE SAME AND FORMED A VIEW ALSO. THE HON'BLE DELHI HIGH COURT HELD SO IN THE CASE OF CIT VS USHA INTERNATIONAL LTD.(2012) 348 ITR 485 (DEL) WHICH HAS BEEN RELIED UPON BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PR. CIT VS ANIL NAGPAL (2017) 291 CTR 272(P&H) WHICH HAS BEEN RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE. MOREOVER, THE REOPENING IN THIS CASE, AS DISCUSSED ABOVE, IS HIT BY THE FIRST PROVISO TO SECTION 147 O F THE ACT. 23. CONSIDERING THE ABOVE DISCUSSION WE DO NOT FIND ANY JUSTIFICATION FOR THE AUTHORITIES BELOW TO JUSTIFY THE REOPENING OF THE ASSESSMENT. THE REOPENING IS THUS CLEARLY BAD IN LAW AND LIABLE TO BE QUASHED. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE REOPENING OF THE ASSESSMENT U/S 147/148 OF THE ACT. GROUND OF APPEAL NO.2(A), THEREFORE, STANDS ALLOWED. ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 22 24. SINCE WE HAVE SET ASIDE THE ASSESSMENT ORDER ON THE LEGAL GROUND RAISED BEFORE US, WE DO NOT FIN D ANY NEED TO ADJUDICATE THE ISSUE RAISED BEFORE US B Y THE ASSESSEE ON THE MERITS OF THE CASE IN GROUND 2(B) SINCE IT WOULD BE A PURELY ACADEMIC EXERCISE. FURTHER SINCE WE HAVE ADJUDICATED THE MAIN APPEAL IN ABOVE TERMS, THE STAY APPLICATION IS ALSO DISPOSED OFF ACCORDINGLY. 25. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 11. A PERUSAL OF THE ABOVE ORDER OF THE TRIBUNA L REVEALS THAT ALL THE CONTENTIONS RAISED BY THE DEPARTMENT AS DISCUS SED / REPRODUCED ABOVE, HAVE ALREADY BEEN DEALT WITH BY THE TRIBUNA L IN ITS ORDER DATED 28.12.2017 (SUPRA). THE TRIBUNAL HAS SPECIF ICALLY DISCUSSED THAT THE EDC CHARGES HAVE BEEN DISCLOSED BY THE AS SESSEE IN THE BALANCE SHEET OF THE ASSESSEE WHICH FORM PART OF TH E DOCUMENTS FILED WITH THE RETURN OF INCOME AND FURTHER THE ASSESSIN G OFFICER HAD ALSO GONE THROUGH THE BALANCE SHEET AND MADE VARIOUS QUE RIES TO ASSESSEE THROUGH QUESTIONNAIRES DATED 18.7.2011 AND 10.10.2 011. THE EDC CHARGES FORMED PART OF SCHEDULE D OF THE BALANCE SH EET UNDER THE HEAD OTHER LIABILITIES. FURTHER, THAT NO NEW TAN GIBLE MATERIAL HAD COME TO THE KNOWLEDGE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS RECORDED THAT DURING PERUSAL OF RECORDS IN THIS CASE, IT WAS SEEN THAT EDC CHARGES WERE RECEIVED BY THE ASSE SSEE. HENCE THE OPINION REGARDING THE ESCAPEMENT OF INCOME HAD BEEN DERIVED BY THE ASSESSING OFFICER ON RE-APPRAISAL OF THE MATERI AL ALREADY AVAILABLE ON RECORD. THE TRIBUNAL HAS ALSO DISCUSSED IN PARA 17 OF THE ORDER (SUPRA) THAT WHAT THE ASSESSEE WAS SUPPOSED TO DISC LOSED WAS THAT IMPORTANT AND PRIMARILY FACTS PERTAINING TO THE IN COME AND NOT ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 23 REASONING OR LOGIC WHICH WOULD LEAD TO THE CONCLUSI ON OF THE NATURE OF RECEIPT. WHEN THE ASSESSEE IN THIS CASE HAD ALRE ADY DISCLOSED THE NECESSARY FACTS ABOUT THE EDC CHARGES I.E THE NATUR E AND QUANTUM OF RECEIPTS, HENCE, THERE WAS NO FAILURE ON THE PART O F THE ASSESSEE TO DISCLOSE FULLY AND TRULY ANY MATERIAL FACTS NECESSA RY FOR THE ASSESSMENT. THE TRIBUNAL WHILE RELYING ON VARIOUS CASE LAWS HAS HELD THAT THE BALANCE SHEET AND PROFIT AND LOSS ACC OUNT ARE THE PRIMARY DOCUMENTS, WHICH ARE ATTACHED ALONG WITH RE TURN. THE ASSESSING OFFICER IS SUPPOSED TO GO THROUGH THESE P RIMARY DOCUMENTS. THESE DOCUMENTS DO NOT FALL IN THE CATEGORY OF BOOK S OF ACCOUNT OR OTHER EVIDENCES WHICH MAY ESCAPE THE ATTENTION OF T HE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. 12. IN THE CASE IN HAND BEFORE US ALSO, THE FACTS ARE IDENTICAL TO THAT FOR ASSESSMENT YEAR 2008-09. THE BALANCE SHEET WHER EIN THE EDC CHARGES FOUND MENTION UNDER THE HEAD OTHER LIABILI TY WAS DULY ATTACHED WITH THE RETURN OF INCOME. THE ASSESSING O FFICER HAD DULY CONSIDERED THE SAID BALANCE SHEET AND APPLIED HIS M IND AND ISSUED VARIOUS QUERIES TO THE ASSESSEE REGARDING VARIOUS E XPENDITURE, LIABILITIES AND ASSETS ETC. FORMING PART OF THE BAL ANCE SHEET THROUGH QUESTIONNAIRES DATED 18.7.2011 AND 10.10.2011. UNDE R THE CIRCUMSTANCES, IT CANNOT BE SAID THAT THERE WAS ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY THE MAT ERIAL FACTS NECESSARY FOR THE ASSESSMENT. THE REOPENING IN THIS CASE IS, THEREFORE, HIT BY THE FIRST PROVISO TO SECTION 147 OF THE ACT, THE SA ME BEING REOPENED AFTER END OF THE FOURTH ASSESSMENT YEAR FROM THE R ELEVANT ASSESSMENT YEAR. THE ISSUE, OTHERWISE, IS SQUARELY COVERED BY THE DECISION OF THE ITA NO.1560/CHD/2017- GREATER MOHALI AREA DEVELOPMENT AUTHORITY, MOHALI 24 TRIBUNAL DATED 28.12.2017 (SUPRA), IN THE OWN CASE OF THE ASSESSEE, FOR ASSESSMENT YEAR 2008-09. IN VIEW OF THIS, THE REOPENING IS HEREBY HELD BAD IN LAW AND RE- ASSESSMENT FRAMED IN THIS CASE IS SET ASIDE AND THE CONSEQUENTIAL ADDITIONS MADE DURING THE RE-ASSESSMENT, HENCE, STO OD DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HEREBY DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 22-05-2018. SD/- SD/- (B.R.R.KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22. 05.2018 RKK COPY TO: THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) THE DR