Hopewin Admark & Consultancy Services Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1720/DEL/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2853 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 24-04-2017
• Assessment Year: 2001-2002
• Appeal Filed On: 12-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Assessee Lawyers: SSH DEEPAK OSTWAL; RISHAB OSTWAL
• Keywords: Unexplained cash credit; Gift; Business income; Rectification of order; Principle of natural justice; Period of limitation; Question of law; Tangible material; Accommodation entries; Reassessment proceedings
• Section: 147; 148; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C , NEW DELHI BEFORE SH. I.C. SUDHIR , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO S . 3777 /DEL/ 2010 & 1720/DEL/2012 ASSESSMENT YEAR S : 2000 - 01 & 2001 - 02 M/S. HOPEWIN ADMARK & COUNSEL TANCY SERVICES (PVT.) LTD., 315, DHAKA CHAMBERS, 39/2068, NIAWALA, KAROL BAGH, NEW DELHI VS. INCOME TAX OFFICER, WARD - 12(4), NEW DELHI PAN : AAACH6960P (APPELLANT) (RESPONDENT) APPELLANT BY S/SH. DEEPAK OSTWAL, CA & RISHAB OSTWAL, ADV. RESPONDENT BY SH. AMRIT LAL, SR.DR DATE OF HEARING 24.04.2017 DATE OF PRONOUNCEMENT 16.06.2017 ORDER PER O.P. KANT , A. M. : THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST TWO SEPARATE ORDERS DATED 17/03/2010 AND 16/03/2012 OF THE LD. COMMISSIONER OF I NCOME T AX ( A PPEALS) FOR ASSESSMENT YEAR 2000 - 01 AND 2001 - 02 RESPECTIVELY. THE FACTS AND CIRCUMSTANCES AND THE GROUNDS RAI SED IN BOTH THE APPEALS ARE IDENTICAL EXCEPT AMOUNT OF ADDITION AND THEREFORE BOTH THE APPEALS WERE HEARD TOGETHER AND DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR BREVITY AND CONVENIENCE. 2 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 ITA NO. 3777/DEL/2010 FOR AY: 2000 - 01 2. FIRST WE TAKE UP THE APPEAL IN ITA NO. 3777/DEL/2010 FOR ASSESSMENT YEAR 2000 - 01. THE CONCISE GROUNDS OF APPEAL FILED BY THE ASSESSEE VIDE LETTER DATED 01/12/2016 ARE REPRODUCED AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) - XI, NEW DELHI HAS ERRED BOTH ON FACTS AND IN LAW, IN UPHOLDING THE ILLEGAL ORDER OF THE RESPONDENT ON THE FOLLOWING GROUNDS AND HENCE LIABLE TO BE QUASHED BECAUSE: 1. REASONS RECORDED ARE VAGUE AND SCANTY, WITHOUT APPLICATION OF HIS OWN MIND BY ASSESSING OFFICER AND WITHOUT NECES SARY APPROVAL OF THE JOINT CIT AND HENCE RE - ASSESSMENT PROCEEDING ARE NOT IN TERMS OF SECTION 146 TO 151 OF THE INCOME TAX ACT. 2. OBJECTION SPECIFICALLY RAISED WERE NOT DISPOSED OF BEFORE PASSING THE IMPUGNED ORDER. 3. RE - ASSESSMENT ORDER PASSED IN VIOLAT ION OF NATURAL JUSTICE WITHOUT PROVIDING CORROBORATION OF THE MATERIAL AND WITHOUT PROVIDING CROSS EXAMINATION ASKED AND WITHOUT PROPER SHOW CASE NOTICE. 4. ADDITIONS OF RS.1,44,55,500/ - U/S 68 BY TREATING UNEXPLAINED INCOME. 5. ILLEGAL ADDITIONS AND DISA LLOWANCES AND CONSEQUENT DEMANDS OF INCOME TAX INTEREST AND PENALTIES ILLEGALLY RAISED. 3 . THE FACTS IN BRIEF OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 30/11/200 0 DECLARING TOTAL INCOME OF RS.41, 645/ - AFTER ADJUST ING EARLIER YEARS LOSS ES OF RS.9,71, 706/ - . THE RETURN WAS PROCESS ED UNDER SECTION 143(1) OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT). SUBSEQUENTLY , ON RECEIPT OF INFORMATION FROM THE INVESTIGATION WING, NEW 3 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 DELHI THAT THE ASSESSEE WAS INVOLVED IN GIVING AND TAKING ACCOMMODAT ION ENTRIES, THE ASSESSING OFFICER RECORDED REASONS TO BELIEVE THAT INCOME ESCAPED ASSESSMENT AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT ON 21/09/2006, REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME, WITHIN 30 DAYS OF NOTICE. IN RESPONSE , THE ASS ESSEE SUBMITTED THAT THE RETURN FILED ON 31/10/2000 MIGHT BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSMENT PROCEEDINGS WERE COMMENCED BY ISSUING STATUTORY NOTICES AND THE ASSESSEE WAS ASKED TO PROVE THE GENUINENESS OF THE 91 TRANSACTIONS, A LIST OF WHICH , HAS BEEN REPRODUCED IN THE ASSESSMENT ORDER. THE ASSESSEE REPLIED THAT IT WAS A SERVICE - ORIENTED CONCERN AND SHOWN THE RECEIPTS FROM CONSULT ANCY SERVICES, MARKETING SERVICES, ORGANIZING OF EVENTS, WALL PAINTINGS ETC AND EARNED INTEREST ON LOANS, COMMISSION INCOME FOR CLIENT INTRODUCTION, MARKETING AND SURVEYS DONE FOR CLIENTS ETC. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE AS SESSEE AND MADE A DDITION OF RS. 1,44,55,500/ - . AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) AND CHALLENGED THE VALIDITY OF THE REOPENING OF THE ASSESSMENT AND MERIT OF THE ADDITIONS. THE ASSESSEE CHALLENGED THAT THERE WAS NO MATER IAL BEFORE THE ASSESSING OFFICER TO ENTERTAIN THE BELIEF THAT THE ASSESSEE HAS NOT DISCLOSED A SUM OF RS. 1,44,55,500/ - RECEIVED FROM 91 PERSONS. THE LD. CIT - (A) REJECTED THE CONTENTION OF THE ASSESSEE AND UPHELD THE VALIDITY OF THE REASSESSMENT PROCEEDINGS . ON MERITS ALSO, THE LD. CIT - (A) UPHELD THE FINDING OF THE ASSESSING OFFICER IN ABSENCE OF ESTABLISHING, THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL, RAISING THE GROUNDS AS REPRODUCED ABOVE. 4 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 4 . IN THE GROUND NO. 1, THE ASSESSEE HAS CHALLENGED THE REASONS RECORDED ON THREE PARAMETERS. ACCORDING TO THE ASSESSEE, THE REASSESSMENT PROCEEDINGS ARE NOT IN TERMS OF SECTION 147 TO 151 OF THE ACT BECAUSE , THE REASONS RECORDED ARE , (A)VAGUE AND SCANTY, (B) WITHOUT APPLICATION OF MIND BY THE ASSESSING OFFICER , AND (C) WITHOUT NECESSARY APPROVAL OF THE JOINT COMMISSIONER OF INCOME - TAX . 4.1 B EFORE US, THE LD. COUNSEL, FILED A PAPER BOOK CONTAINING PAGES 1 TO 131 AND SUBMITTED THAT THE ASSESSING OF FICER MERELY REFERRED TO SOME DI T INFORMATION AND ANNEXURE - A IN MECHANICAL MANNER WITHOUT MAKING ANY INDEPENDENT ENQUIRY , EVEN PRIMA FACIE SEEING CORRECTNESS OF THE INFORMATION AND ALLEGED ESCAPEMENT WITHOUT EVEN QUANTIFYING THE INCOME , HE SOUGHT AND EVEN WITHOUT IDENTIFICATION OF DATE ON WHICH THE SAME WAS RECORDED, WITHOUT HAVING CLARITY ABOUT THE NATURE OF TRANSACTION, CAUSE AND EFFECT RELATIONSHIP OR ANY LINK BETWEEN ALLEGED INFORMATION OF BELIEF. IN SUPPORT OF THE ABOVE CONTENTION, THE LD. COUNSEL, RELIED ON FOLLOWING DECISIONS: HON BLE C BENCH OF ITAT, NEW DELHI IN THE CASE OF THE ASSESSE ITSELF HAS ALREADY HELD THE RE - ASSESSMENT INVALID IN THE SIMILAR FACTS AND CIRCUMSTANCES (CASE LAWS P 1 - 10) PAGE - 2 - REFERRED TO THE REASONS WHICH ALLEGES ESCAPEMENT IN LACS AND PAGE 7 PARA 9 ONWARDS IS THE FINDINGS OF THE BENCH. HON BLE DHC IN THE CAS E OF CIT V. SUPREME POLYPROPOLENE PVT. LTD. ITA 266/2011(CASE LAWS P 11 - 16) PAGE 4 & 5 LAST LINE HELD THE REASONS ARE VAGUE AS AO RECORDED THE REASONS WITHOUT GIVING ANY AMOUNT OF INCOME ESCAPED. PAGE - 16 PARA - 6 OBSERVATION. (DHC) CIT VS. INSECTICIDES (IND IA) LTD. ITA 608/2012 DATED 30.05.2013 (CASE LAWS P 17 - 25) PARA 8 PAGE 22 ONWARDS. (ITAT) G & G PHARMA INDIA LIMITED, ITA NO. 3149/2013 DATED 09.01.2015 (CASE LAWS P 26 - 33) PARA 8 ON PAGE 30. 5 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 (DHC) PR. CIT VS. G & G PHARMA INDIA LIMITED, ITA NO. 545/2015 DATED 08.10.2015 (CASE LAWS P 34 - 37) PARA 9 AND 12 ON PAGE 35 & 36. HC) CIT VS. ATUL JAIN 299 ITR 383 (CASE LAWS P 38 - 44) PARA 17 PAGE. 4 .2 FURTHER, T HE LD. COUNSEL, RE FERRED TO PAGE 42 TO 44 OF THE R EVENUE S PAPER BOOK AND SUBMITTED THAT THERE WAS NO IDEN TIFICATION OF SIGNATURE BY THE A DDITIONAL COMMISSIONER OF INCOME - TAX ON THOSE DOCUMENTS AND THEREFORE THE DOCUMENTS CLAIMED TO BE THE ONE AS REASONS RECORDED, WAS DOUBTFUL IN ITSELF. 4 .2 .1 FURTHER , THE LD. COUNSEL SUBMITTED THAT THE ASSESSING OFFICE R HAS NOT APPLIED MIND, WHICH IS EVIDENT FROM THE FACT THAT HE DID NOT BOTHER TO CHECK THE TOTAL OF AMOUNTS IN ANNEXURE A, DUPLICATION OF TRANSACTIONS, TRANSACTIONS NOT BELONGING TO THE ASSESSEE AND DEBIT ENTRIES CONSIDERED AS INCOME. IN THE WRITTEN SUBMISSION, THE LD. COUNSEL SUBMITTED DETAILS OF DUPLICATIONS, ENTRIES NOT BELONGING TO ASSESSEE ETC . AS UNDER: TOTAL ADDITIONS MADE RS.1,44,55,500/ - LESS: TOTALING MISTAKE RS.20,00,000/ - LE SS: ENTRIES NOT PERTAIN TO THE ASSESSEE RS.4,85,000/ - (S. NO. 20,31,45 OF AO ORDER) LESS: PREVIOUS YEAR ENTRIES RS.5,80,000/ - (S. NO. 33,34,35 OF AO ORDER) LESS: PREVIOUS YEAR DUPLICATE ENTRIES RS.5,80,000/ - (S. NO. 71,72,73 OF AO ORDER) L ESS: NEXT YEAR ENTRIES RS.6,75,000/ - (S. NO. 24,54,56,57,58 OF AO ORDER) LESS: DUPLICATE CREDIT ENTRIES LESS: RS.17,57,500/ - TRIPLICATE CREDIT ENTRIES LESS: RS.11,62,500/ - DUPLICATE DEBIT ENTRIES LESS: RS.19,69,000/ - TRIPLICATE CREDI T ENTRIES BALANCE OUT OF WHICH: RS.11,62,500/ - BALANCE RS.52,46,500/ - 6 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 OUT OF WHICH: CREDIT TRANSACTIONS RS.25,37,500/ - LESS: CASH DEPOSITED OUT OF CASH IN HAND RS.2,75,000/ - BALANCE CREDIT TRANSACTIONS ARE ONLY RS.22,62,500/ - DEBIT TRANSACTIONS RS.27,09,000/ - LESS : CASH WITHDRAWN BY THE ASSESSEE RS.3,75,000/ - BALANCE DEBIT TRANSACTIONS ARE ONLY RS.23,34,000/ - 4 . 2 .2 I N SUPPORT OF THE CONTENTION, THAT THE ASSESSING OFFICER HAS NOT APPLIED MIND WHILE REOPENING THE ASSESSMENT, THE LD. COUNSEL, RELIED ON FOLLOWING DECISIONS: (DHC) CIT V. SUREN INTERNATIONAL P. LTD., 357 ITR 24 (CASE LAW P 64 - 79) ON PARA 14 OF PAGE - 76. INCOME TAX OFFICER VS. COMERO LEASING & FINANCIAL PVT. LTD., ITA NO. 4281 & 4949/2010 DATED 14.08.2010 DATED 14.08.2014 (CASE LAWS P 55 - 63) PARA 7 & 8 ON PAGE 60 - 62. 4 . 2 .3 T HE LD. COUNSEL FURTHER SUBMITTED THAT FOR REOPENING THE ASSESSMENT BEYOND FOUR YEARS, REQUIRE D SATISFACTION AND APPROVAL OF JOINT COMMISSIONER OF INCOME - TAX/ADDITIONAL COMMISSIONER OF INCOME T AX , UNDER SECTION 151 OF THE ACT, AND WHICH WAS CONSPICUOUSLY MISSING ON THE FACE OF REASONS SUPPLIED BY THE ASSESSING OFFICER . IN SUPPORT OF T HE CONTENTION, THE LD. COUNSEL RELIED ON THE FOLLOWING TWO DECISIONS: (DHC) CIT VS. ATUL JAIN 299 ITR 383 (CASE LAWS P 38 - 44) PARA 10 & 11 ON PAGE 41 - 42. HON BLE DELHI HIGH COURT IN THE CASE OF UNITED ELECTRICAL CO. PVT. LTD. VS. CIT, 285 ITR 317 (DELHI ) (CASE LAWS P 80 - 85) PAGE 83 - 85 PARA 14,15 & 19. 7 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 4 . 2 .4 F URTHER, THE LD. COUNSEL SUBMITTED THAT THE REASONS RECORDED BY THE ASSESSING OFFICER WERE NOT AS PER LAW FOR THE REASONS OF LACKING INHERENT CLARITY AS UNDER: ALLEGED REASONS ARE NOT AS PER LAW FOR THE REASONS OF INHERENT LACKING OF CLARITY AS: - HOW DIT ENQUIRIES ARE CONNECTED TO THE ASSESSEE IS NOT KNOWN FROM THE REASONS. IN WHAT PROCEEDINGS THE ALLEGED STATEMENTS U/S 131 WERE RECORDED, WHAT WAS THE MATERIAL BASED ON WHICH AO REACHED TO THE CON CLUSION TO FORM HIS BELIEF THAT THE ASSESSEE LIAS ESCAPED ASSESSMENT. WHAT IS THE CONNECTION OF ALLEGED STATEMENTS U/S 131 OF INDIVIDUALS WITH THE ASSESSEE COMPANY AND WHAT IS THE INCRIMINATING MATERIAL AVAILABLE ON RECORD ON THE BASIS OF WHICH AO JUMPED O N THE CONCLUSION THAT THE ASSESSEE COMPANY WAS USED TO PROVIDE ACCOMMODATION ENTRIES. WHAT IS THE NATURE OF TRANSACTIONS? HOW AND IN WHAT MANNER THE ASSESSEE OR THE PERSONS FROM WHOM THE ALLEGED ACCOMMODATION ENTRIES WERE TAKEN ARE ALLEGED AS ENTRY PROVIDE RS/USED FOR ENTRY TRANSACTIONS? HOW CASH WAS PAID BY THE ASSESSEE OR TO THE ASSESSEE? HOW HE REACHED TO THE CONCLUSION THAT THE TRANSACTIONS ARE UNDISCLOSED AND UNACCOUNTED MONEY OF THE ASSESSEE? NOTHING IS COMING OUT FROM THE ALLEGED REASONS. 4 .3 ON TH E OTHER HAND, THE LD. S ENIOR DR REFERRED TO THE PAPER BOOK FILED BY THE R EVENUE CONTAINING PAGES 1 TO 58 AND SUBMITTED THAT THE ASSESSING OFFICER HAS RECORDED REASONS RUNNING INTO THREE PAGES INCORPORATING THE SPECIFIC MATERIAL RELIED UPON , MENTIONING THE INCOME ESCAPED ASSESSMENT IN THE CASE OF THE ASSESSEE. HE SUBMITTED THAT THE ASSESSING OFFICER HAS DULY APPLIED HIS MIND AND NOT ACTED ON THE DIRECTION OF ANY HIGHER AUTHORITIES. FURTHER , THE LD. S ENIOR DR RELIED ON THE DECISION OF THE HON BLE SUPREME COUR T IN THE CASE OF RAYMOND W OOLLEN MILLS LTD ., 236 ITR 34 (SC) AND SUBMITTED THAT WHILE REOPENING THERE SHOULD BE A PRIMA FACIE MATERIAL AND SUFFICIENCY AND CORRECTNESS OF 8 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 THE MATERIAL IS NOT TO BE CONSIDERED AT THE STAGE OF RECORDING REASONS. HE FURTHER SUBMITTED THAT IN THE INSTANT CASE THE RETURN OF INCOME WAS ONLY PROCESSED UNDER SECTION 1 43(1) OF THE ACT AND THERE WAS NO INFORMATION AVAILABLE ON THE RECORD, WITH WHICH THE INFORMATION RECEIVED FROM THE DIT ( I NVESTIGATION) COULD BE RECONCILED. HE SUBMIT TED THAT SH. VISHAL AGRAWAL, SON OF THE D IRECTOR SMT. MANJU AGRAWAL, WHO WAS LOOKING AFTER THE AFFAIRS OF THE ASSESSEE COMPANY, IN THE STATEMENT RECORDED UNDER SECTION 131 OF THE ACT BY THE ADDITIONAL DIRECTOR OF INCOME T AX, ADMITTED OF HAVING ENGAGED IN PROVIDING ACCOMMODATION ENTRIES, WHICH WAS EVIDENT FROM THE STATEMENT OF SH. VISHAL AGGARWA L, PLACED ON PAGE 54 - 58 OF THE R EVENUE S PAPER BOOK. 4 .4 COUNTERING THE ARGUMENT OF THE LD. COUNSEL THAT APPROVAL OF ADDL. CIT WAS MISSING ON THE FACE OF REASONS SUP PLIED TO THE ASSESSEE, THE LD. S ENIOR DR REFERRED TO PAGE 45 OF THE R EVENUE S PAPER BOOK AND SUBMITTED THAT THE LD. ADDITIONAL COMMISSIONER OF INCOME T AX AFTER SEEING THE MATERIAL AND BASIS OF REASONS, RECORDED SA TISFACTION AND GIVEN SANCTION FOR ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT, AND WHICH IS AVAILABLE ON RECORD. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER MOVED LETTER FOR APPROVAL OF THE ADDL. CIT ON 23/03/2007 AND THE APPROVAL HAS BEEN GRANTED ON 28/03/2007, WHICH SHOWS THAT THE ADDL. CIT HAS NOT ACTED IN MECHANICAL MANNER AND SANCTION HAS BEEN GRANTED AFTER DUE SATISFACTION BY THE A DDITIONAL COMMISSIONER OF I NCOME T AX. HE FURTHER SUBMITTED THAT NO SUCH GROUND WAS TAKEN BEFORE THE LD. CIT - (A) AND THEREFORE RAISING THE GROUND FIRST TIME BEFORE THE TRIBUNAL WAS NOT JUSTIFIED. 4 .5 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. BEFORE US, THE LD. COUNSEL HAS SUBMITTED THAT THE TRIBUNAL C B ENCH, NEW DELHI IN TH E CASE OF THE ASSESSEE FOR 9 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 ASSESSMENT YEAR 1999 - 2000 HAS HELD THE REASSESSMENT INVALID IN SIMILAR FACTS AND CIRCUMSTANCES. WE FIND THAT IN THE SAID ORDER, THE TRIBUNAL (SUPRA), IN PARA - 3 HAS RECORDED THE REASONS FOR REOPENING AS UNDER: IT HAS BEEN INFORMED BY THE DIRECTOR OF INCOME TAX (INV.) - I, NEW DELHI VIDE ITS REPORT DATED 02.03.2006 THAT THE COMPANY NAMED M/S. HOPEWIN ADMARK & COUNSEL TANCY SERVICES LTD. WAS INVOLVED IN THE GIVING AND TAKING BOGUS ENTRIES/TRANSACTIONS DURING THE FIN ANCIAL YEAR 1998 - 99. IT HAS ALSO STATED IN THE REPORT ON THE BASIS OF THE INFORMATION GATHERED BY THE DIRECTORATE FROM BANKS AND OTHER SOURCES THAT COMPANY HAD GIVEN AND TAKEN UNSECURED LOANS, ADVANCES RECEIVED, SHARE APPLICATION MONEY AND SHARE CAPITAL IN LACS. AS PER THE RECORDS, IT APPEARS THAT THE ASSESSEE HAD FILED THE RETURN FOR THE YEAR UNDER CONSIDERATION I.E. 1999 - 2000. NOW, IN THE WAKE OF THE INFORMATION GATHERED BY THE DIRECTORATE OF INCOME TAX (INV.), NEW DELHI THAT THE ASSESSEE WAS INVOLVED IN GIVING AND TAKING ACCOMMODATION ENTRIES ONLY AND REPRESENTED UNSECURED MONEY OF THE ASSESSEE COMPANY IS ACTUALLY UNEXPLAINED INCOME OF THE ASSESSEE COMPANY. THE ASSESSEE COMPANY HAS FAILED TO DISCLOSED FULLY AND TRULY ALL THE MATERIAL FACTS AND THE SOURCE S OF THESE FUNDS ROUTED THROUGH BANK ACCOUNTS OF THE ASSESSEE COMPANY. I, THEREFORE, HAVE REASONS TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF THE SEC. 147 OF THE I.T. ACT, 1961 FOR THE A.Y. 1999 - 2000. IN VIEW OF THE PROVISIONS OF SEC. 149(1)(B) NECESSARY APPROVAL FOR THE ISSUE OF THE NOTICE U/S 148 MAY KINDLY BE ACCORDED FOR THE A.Y. 1999 - 2000, IF APPROVED. 4 .5 .1 IN BACKGROUND OF THE ABOVE REASONS RECORDED, THE TRIBUNAL (SUPRA) HELD AS UNDER: 9. IN OUR CONSIDERED OPINION THE AFORESAID REASON DOES NOT SATISFY THE REQUIREMENT OF SECTION 147 OF THE ACT TH E REASONS AND THE INFORMATION REFERRED TO IS EXTREMELY SCANTY AND VAGUE. THERE IS NO REFERENCE TO ANY DOCUMENT OR STATEMENT. IN THE PRESENT CASE, WE 10 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 FIND THAT AO HAS RECORDED ABOUT CERTAIN INVESTIGATION IN A VERY G ENERALIZED MANNER REASON APART F ROM BEING VAGUE DOES NOT MENTION ANY CAUSE AND EFFECT RELATIONSHIP BETWEEN THE REASON RECORDED AND FORMATION OF BELIEF. HOW, THE ASSESSEE WAS RELATED TO THE INVESTIGATION, NOTHING IS C OMING OUT FROM THE REASON RECORDED. IT CANNOT BE SAID THAT AO COULD HAVE FORMED THE BELIEF THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. THERE WAS NO MATERIAL HAVING ANY LINK, LET ALONE LIVE LINK WITH THE REASON RECORDED AND FORMATION AND BELIEF AS T O THE INGENUITY OF THE TRANSACTIONS BY THE ASSESSEE. ACCORDING TO THE REASON RECORDED SOME REPORT HAS BEEN RECEIVED FROM DIT(LNV.) THAT THE ASSESSEE COMPANY WAS INVOLVED IN GIVING AND TAKING BOGUS ENTRIES/TRANSACTIONS DURING THE FINANCIAL YEAR 1998 - 99. WE FIND THAT THERE IS ABSOLUTELY NO MATERIAL ON THE BASIS OF WHICH A BELIEF COULD BE FORMED AS TO THE ESCAPEMENT OF THE ASSESSE E S INCOME. IT IS NOT CLEAR FROM THE REASON AS TO WHAT WAS REPORT AND WHAT WAS THE EVIDENCE ON THE BASIS OF WHICH THE REPORT PURPO RTEDLY MENTIONED THAT ASSESSEE COMPANY WAS INVOLVED IN GIVING AND TAKING ACCOMMODATION ENTRIES. IN THE REASONS, IT IS ALSO NOT MENTIONED ABOUT THE PERSONS FROM OR TO WHOM ACCOMMODATION ENTRIES WERE TAKEN OR GIVEN BY THE ASSESSEE AND IN RESPECT OF WHAT AMOU NT IT IS THUS, APPARENT THAT ASSESSING OFFICER DID NOT ACPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF INFORMATION IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRECEDENT ASSUMPTION OF JURISDICTION IN THIS CASE U/S 147 ON THE BA SIS OF REASONS RECORDED IS VITIATED AND SO IS THE IMPUGNED REASSESSMENT ORDER. IN THE LIGHT OF THE FACTS OF THE PRESENT CASE DISCUSSED ABOVE, THE DECISION DATED 7TH JANUARY, 2010 OF HON'BLE DELHI HIGH COURT IN THE CASE OF AGR INVESTMENT LTD. VS. ADDL. CIT AND ANOTHER IN WRIT PETITION (CIVIL) NO. 7517/2010, ON WHICH RELIANCE WAS PLACED BY THE ID. DR, WOULD NOT HELP THE REVENUE. ACCORDINGLY, THE REASSESSMENT ON THE GROUND OF JURISDICTION ITSELF IS QUASHED. 4 .5 .2 HOWEVER , IN THE PRESENT CASE, THE ASSESSING OFFICER HAS RECORDED THE REASONS IN DETAIL, MENTIONING THAT HE HAD STATEMENT S OF THE D IRECTOR AND HER SON , ADMITTING OF ENGAGED IN PROVIDING ACCOMMODATION ENTRY. THE REASONS RECORDED BY THE ASSESSING OFFICER ARE AVA ILABL E ON PAGE 42 TO 44 OF THE R EVENUE S PAPER BOOK , WHICH ARE REPRODUCED AS UNDER: 11 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 A) FOLLOWING ARE THE MAJOR ENTRY OPERATORS (WHICH HAVE COME TO THE ACKNOWLEDGE OF THIS DIRECTORATE) ALONGWITH THE NAMES OF PERSONS & CONCERNS THROUGH THEM THEY HAVE OPERATED ALONGWITH THE NAMES OF BANKS/BRANCH IN WHICH THEY HAD ACCOUNTS AND THE MOST FREQUENT ADDRESSES USED BY THE GROUP. B) THE NETWORK HAS BEEN UTILIZED FOR THE PURPOSE OF DEFRAUDING THE REVENUE IN MASSIVE SCALE. WHEREVER CHEQUES FOR DIFFERENT KINDS OF EXPENSE S ENTRIES HAVE BEEN RECEIVED, THEY HAVE BEEN ROUTED THROUGH A WEB OF BANK ACCOUNTS AND WITHDRAWN FINALLY IN CASH FOR PAYMENT TO THE ISSUER. C) IN SOME CASES SINCE THE GROUP IS INVOLVING IN PROVIDING ACCOMMODATION ENTRIES OF SHARE APPLICATION ETC. INSTEAD OF WITHDRAWING CASH, CHEQUES / PAYORDER / D.D.S ARE ISSUED TO THE BENEFICIARIES. D) VISHAL AGGARWAL OPERATED FROM SANGALI BANK, KAROL BAGH, FEDERAL BANK, KAROL BAGH, STATE BANK OF BIKANER & JAIPUR, NEW ROHTAK ROAD, KESHAV SEHKARI BANK, KAROL BAGH , AND STANDARD CHARTERED BANK, KAROL BAGH USING THE NAME OF ENTITIES VEE KAY & CO., AGGARWAL SALES CORPORATION, HOPEWIN ADMARK & COUNSEL TANCY SERVICES PVT. LTD., SHIVAM SOFTECH, HAN KUMAR & SONS HUF, ARPIT SALES, P.K. INVESTMENT AND S.G. PACKERS AND INDIVI DUALS HARISH KUMAR AGGARWAL, MANJU AGARWAL, AMIT AGGARWAL, MUKESH JAIN AND PARMANAND BHARDWAJ. THE ADDRESSES USED FREQUENTLY BY HIM ARE AS FOLLOWS. IN VIEW OF THE ABOVE INFORMATION RECEIVED FROM DIT (INV.) WITH COPIES OF STATEMENTS RECEIVED OF MR. HARISH KUMAR AGARWAL, MS. MANJU AGARWAL, AND OF MR. VISHAL AGARWAL AND MR MIKAS AGARWAL. A) SH. HARISH AGARWAL IN THE STATEMENT RECORDED ON OATH BEFORE ADDL. DIT (INV.) UNIT - V ON 05.04.05 HAD CATEGORICALLY DENIED THAT HE WAS DOING ANY BUSINESS, OR HE WAS DIRE CTOR IN ANY COMPANY, PARTNER/PROP, OF ANY FIRM. HE FURTHER DENIED THAT HE HAD INVESTED IN ANY COMPANY IN SHARE APPLICATION MONEY, OR GIVEN ANY GIFT OR LOAN. HE FURTHER STATED THAT HIS SON SH. VISHAL AGARWAL WAS LOOKING AFTER THE AFFAIRS OF BANK ACCOUNT AND OTHER DETAILS. B) SMT. MANJU AGARWAL : THE SAME TYPE OF STATEMENT WAS REPEATED BY HER DURING THE STATEMENT RECORDED ON OATH BEFORE ADDL. DIT (INV.) UNIT - V ON 5.4.05. 12 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 C) STATEMENT OF SH, VISHAL AGARWAL WAS RECORDED BY THE ADDI.DIT(INV.)UNIT - V ON OATH ON 05 - 04 - 2005 WHERE HE HAD GIVEN THE NAMES OF THE BANKS AS WELL AS OF COMPANIES USED BY HIM FOR THE PURPOSES OF ACCOMMODATION ENTRIES AND WHICH CONTAINED DIE NAME OF M/S HOPEWIN AD MARK & COUNSEL TANCY SERVICES PVT LTD. AND FURTHER GAVE THE LIST OF ENTITIES U SED WITH BANK ACCOUNTS FOR THE PURPOSES OF ACCOMMODATION ENTRIES. WHEREAS THE FOLLOWING FACTS CAME TO LIGHT FROM THE PERUSAL OF THE IT RETURN FILED BY THE ASSESSEE CO. ON 30.11.2000 FOR A.Y. 2000 - 01. SH. HARISH AGARWAL & SMT MANJU AGARWAL W/O SH. HARISH AGARWAL ARE DIRECTORS OF THE COMPANY AS PER RETURN OF INCOME FILED . AND THE VERIFICATION OF THE RETURN FOR A.Y. 2000 - 01 HAD BEEN SIGNED BY SH. HARISH KUMAR AGARWAL AS DIRECTOR AND THE BALANCE SHEET, P & L A CS WERE SIGNED BY THE DIRECTORS SMT. MANJU AGAR WAI & SH. HARISH KUMAR AGARWAL. THE DATE OF INCORPORATION OF THE COMPANY HAD BEEN SHOWN AS 18 - 08 - 98. THE PAN COLUMN OF THE RETURN SHOWS AS NOT YET ALLOTTED IN THE LIABILITY SIDE, THE FOLLOWING HAS BEEN SHOWN: AUTHORISED SHARE CAPITAL 10,000/ - EQUITY SHARES OF RS 10/ - EACH RS 1,00,000/ - ISSUED, SUBSCRIBED & PAID UP CAPITAL : 200/' - EQUITY SHARES OF RS. 10/ - EACH RS. 2,000/ - SHARE APPLICATION MONEY 1,53,000 EQUITY SHARES OF RS. 10/ - EACH. RS 15,30,000/ - THE LAST YEAR THE SHARE APPLICATION MONEY OF 1,52,500 EQUITY SHARES OF RS.10/ - EACH WAS SHOWN AS RS 15,25,000/ - NO DETAILS WHATSOEVER IN RESPECT OF INTRODUCTION OF RS. 5,000/ - BY WAY OF SHARE APPLICATION MONEY HAS BEEN GIVEN IN ANY SCHEDULE ATTACHED WITH THE RETURN. IN THE AY. 1999 - 200 0 THE CASE WAS REOPENED U/S 147/148 OF THE BASIS OF THE INFORMATION RECEIVED FROM DIT (INV.) NEW DELHI AND VERIFYING THE FACTS FROM THE RETUN OF THE FILED FOR A.Y. 1999 - 2000 AND AFTER GETTING APPROVAL FROM THE ADDL. CIT. RANGE 12, NEW DELHI. THE ASSESSEE W AS GIVEN PROPER OPPORTUNITIES TO FURNISH THE DETAILS /DOCUMENTS TO PROVE THE DETAILS FURNISHED IN A.Y. 1999 - 2000. THE ASSESSEE COULD NOT FURNISH THE 13 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 DETAILS / DOCUMENTS WHICH COULD PROVE THE GENUINENESS OF TRANSACTIONS SHOWN IN THE RETURN OF INCOME FILED. THE FOLLOWING ADDITIONS WERE MAD E IN THE ASSESSMENT ORDER IN A. Y. 1999 - 2000. 1 . RECEIPTS SHOWN AS BUSINESS RECEIPTS TREATED AS INCOME FROM OTHER SOURCES (AS DISCUSSED ABOVE): RS.22,17,679/ - 2. ON A/C OF SHARE APPLICATION MONEY U/S 68 : RS.12,40,000/ - 3 . ON ACCOUNT OF ADDITION IN ASSETS, : RS.1,13,430/ - 4. ON AC COUNT OF BOGUS SUNDRY CREDITORS; : RS.14,05,625/ - THE A/CS OF SUNDRY DEBTORS AND SUNDRY CREDITORS WERE NOT PROVED BEYOND DOUBT. THE BALANCES OF SUNDRY DEBTORS AND SR CREDITORS HAVE BEEN CARRIED FORWARD TO THE A.Y. 2000 - 01, THERE IS INCREASE IN INVESTMENT FROM RS. 2.00 LACS TO RS. 12.50 LACS IN THIS YEAR AND CASH AND BANK BALANCES TOO HAVE INCREASED FROM RS. 15,825/ - TO RS.7,47,885/ - . FURTHER INFORMATION HAS BEEN RECE IVED FROM DIT (INV.) - I , NEW DELHI VIDE F.NO. DTT(INV ) - I/20O6 - 07/AR./1536 DT 31.01 2007 WHEREBY THE SUPPLEMENTARY LIST HAS BEEN SENT SHOWING THE ACCOMMODATION ENTRIES WITH DETAILS AND THE BENEFICIARIES OF SUCH ACCOMMODATION ENTRIES . THE NAME OF THE ABOVE ASSESSEE ALSO APPEARS IN THE SAME WITH ENTRIES PERTAINING TO FINANCIAL YEAR 1999 - 2000 I.E RELEVANT TO A.Y 2000 - 2001. THE LIST OF SUCH ENTRIES ARE ANNEXED AS ANNEXURE - I. IN THE WAKE OF THE INFORMATION GATHERED BY THE DIRECTORATE OF INCOME TAX (INV.),NEW DELHI THAT THE ASSESSEE WAS INVOLVED IN GIVING AND TAKING ACCOMMODATION ENTRIES AND REPRESENTED UNEXPLAINED INCOME OF THE ASSESSEE COMPANY AND ALSO KEEPING IN VIEW THE INFORMATION GATHERED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y. 1999 - 2000 AS DISCUSSED ABOVE AND FURTHER VERIFICATION MADE WITH THE RETURN OF INCOME OF AY 2000 - 01 AS DISCUSSED ABOVE, I AM OF THE VIEW THAT THE ASSESSEE COMPANY HAS FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS AND THE SOURCES OF THESE FUNDS ROUTED THROUGH BA NK ACCOUNTS OF THE ASSESSEE COMPANY. I THEREFORE, HAVE REASONS TO BELIEVE THAT THE INCOME IN LACS HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF THE SECTION 147 OF THE I.T. ACT. 1961 FOR THE ASSESSMENT YEAR 2000 - 2001 AND THIS IS A FIT CASE OF INITIATION OF P ROCEEDINGS U/S 147 OF THE ACT. 14 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 THE ASSESSEE HAD FILED HIS RETURN WITH DCIT COMPANY CIRCLE 25(4) NEW DELHI, FOR AY. 2000 - 01 (I.E RELEVANT ENTRIES AS MENTIONED ABOVE PERTAINING TO FINANCIAL YEAR 1999 - 2000 ) ON 30.11.2000. THE JURISDICTION OF THE ASSESSEE A S ON TODAY LIES WITH WARD 12(4) AND AS PER RECORD NO ASSESSMENT HAD BEEN DONE EARLIER. IN VIEW OF THE PROVISIONS OF SECTION 149(1) (B) R.W.SEC. 151(2) OF THE I.T. ACT NECESSARY APPROVAL FOR THE ISSUE OF NOTICE U/S 148 MAY KINDLY BE ACCORDED FO R THE A.Y. 2 000 - 01. 4 .5 .3 I N OUR OPINION, THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE ARE DIFFERENT FROM THE FACTS AND CIRCUMSTANCES FOR ASSESSMENT YEAR 19 99 - 2000. IN THE PRESENT CASE THERE IS A SPECIFIC REFERENCE OF THE ASSESSEE COMPANY OF HAVING ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. THE ASSESSING OFFICER HAS RELIED ON THE STATEMENT OF THE D IRECTOR OF THE COMPANY AND HER SON WHO WAS LOOKING AFTER THE AFFAIRS OF THE COMPANY. THESE STATEMENTS ARE PART OF THE REPORT OF THE DIT(I NVE STIGATION). SMT. MANJU AGGARWAL , WHO WAS DIRECTOR IN THE ASSESSEE COMPANY DURING RELEVANT PERIOD, IN HER STATEMENT DATED 05/04/2005, WHICH IS AVA ILABLE ON PAGE 5O TO 52 OF THE R EVENUE S PAPER BOOK, STATED THAT SHE USED TO GIVE BLANK SIGNED PAPER S TO SH. VISHAL AGGARWAL, HER SON. SHE ALSO SAID THAT ANY QUESTIONS REGARDING ACCOUNTS SHOULD BE MADE TO HER SON SH. VISHAL. STATEMENT OF SH. VISHAL AGGARWAL IS AVAILABLE ON PAGE 54 TO 56 OF TH E R EVENUE S PAPER BOOK. THE ANSWERS GIVEN IN RESPONSE TO QUESTION 10 TO QUESTION 14 DURING STATEMENTS ARE REPRODUCED AS UNDER: Q. N O. 10 - PLEASE GIVE IN DETAIL , WHAT TYPE OF BUSI NESS IS DONE IS ABOVE COMPANIES? ANS. THE ABOVE ACCOUNTS WERE USED FOR GIVING ACCOMMODATION ENTRIES TO DIFFERENT PERSONS IN THE SHAPE OF SHARE APPLICATION MONEY/LOAN/GIFT ETC. AS PER NEEDS AND DIRECTION OF PERSONS. 15 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 Q. NO. 11 FROM THE QUESTION TO ANSWER NO. 10, IT APPEARS THAT NO ACTUAL TRANSACTION WAS MADE IN THE ABOVE SAID ACCOUNTS ? ANS. YES, NO ACTUAL TRANSACTION WAS MADE EXCEPT PAPER TRANSACTION. Q. NO. 12 FOR DOING THE ABOVE WORK, WHAT IS/WAS GETTING? ANS. I WAS GETTING AN AVERAGE BEING A COMMISSION OF RS.0.25 PAISE ON CASH TRANSACTION & 0.52 PAISE ON TRANS FER TRANSACTION OUT OF WHICH 0.25 PAISE WERE PAID TO PERSON GIVING CASH TRANSFER. Q. NO. 13 - PLEASE GIVE IN DETAIL OF BUSINESS OF ACCOMMODATION ENTRY? ANS. ANY PERSON WHO APPROACH FOR ACCOMMODATION ENTRY WAS/WERE USE TO GIVE CASH IN LIEU OF P.O./D.D./ CHEQUES AND THAT CASH IS ROUTED THROUGH BANK ACCOUNTS OF OTHER PERSON TO THEM BY WAY OF TRANSFER IN MY ACCOUNT TO THEIR ACCOUNT. Q. NO. 14 DO YOU WANT TO SAY ANYTHING? ANS. I WAS USING THE FOLLOWING ACCOUNTS FOR THE PURPOSE OF ACCOMMODATION ENTRIES, SH. HARISH KUMAR AGARWAL, M/S. AGARWAL SALES CORP., SBBJ, HARISH KUMAR & SONS (HUF), KSBL & SANG A LI BANK, SMT. MAJU AGARWAL, SBBJ & FBL, VIKAS AGARWAL, SBBJ & FBL, AR P IT SALES CORP., KSBL, P.K. INVESTMENT, FBL, AMIT JAIN, FBL, MUKESH JAIN, FBL, PARMANAND B HARDWAJ, SBBJ, HOPEWIN ADMARK & COUNSEL TANCY SERVICES PVT. LTD ., SBB J, SCB. 4 . 5 .4 IT IS EVIDENT FROM THE ANSWER TO QUESTION NO. 14, THAT THE BANK ACCOUNTS OF THE ASSESSEE COMPANY WERE ALSO USED BY SH. VISHAL AGGARWAL FOR THE PURPOSE OF ACCOMMODATION ENTRIES. 4 . 5 .5 IN THE CASE OF COMMISSIONER OF INCOME T AX VS. M/S I NSECTICIDE (INDIA) LTD . (SUPRA) , THE HON BLE HIGH COURT UPHELD THE FINDING OF THE TRIBUNAL THAT THE REASONS RECORDED BY THE ASSESSING OFFICER ARE TOTALLY VAGUE, SCANTY AND AMBIGUOUS, SILENT WITH REGARD TO AMOUNTED NATURE OF 16 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 BOGUS ENTRIES AND TRANSACTIONS AND THE PERSONS WITH WHOM THE TRANSACTION HAD TAKEN PLACE. IN THE CASE OF CIT VERSUS ATUL JAIN (SUPRA) ALSO THE HON BLE HIGH COURT FOUND THE INFORMATION AV AILABLE WITH THE ASSESSING OFFICER AS SCANTY AND VAGUE. IN THE CASE OF G & G PHARMA INDIA LTD (SUPRA), THE TRIBUNAL ALSO CONCLUDED THAT THE REASONS RECORDED ARE VAGUE AND NOT BASED ON ANY TANGIBLE MATERIAL AND THE AO HAD MECHANICALLY ISSUED NOTICE UNDER SE CTION 148 OF THE ACT. IN THE CASE OF G & G PHARMA INDIA LT D , THE R EVENUE EVEN FAILED TO PRODUCE THE INFORMATION OR THE MATERIAL RELIED UPON FOR RECORDING REASONS BEFORE THE HON BLE DELHI HIGH COURT . IN THOSE CIRCUMSTANCES, THE HON BLE DELHI HIGH COURT OBSERVED THAT THE BASIC REQUIREMENT THAT THE ASSESSING OFFICER MUST APPLY HIS MIND TO THE MATERIALS IN ORDER TO HAVE THE REASONS TO BELIEVE THAT INCOME ESCAPED ASSESSMENT, IS MISSING. 4 . 5 .6 BUT IN PRESENT CASE, ON PERUSAL OF THE REASONS RECORDED ABOVE AND THE MATERIAL AVAILABLE WITH THE ASSESSING OFFICER , WE DO NOT AGREE WITH THE ARGUMENTS OF THE LD. COUNSEL THAT THE REASONS RECORDED ARE VAGUE AND SCANTY AND RECORDED IN MECHANICAL MANNER. 4 . 5 .7 THE HON BLE SUPREM E COURT IN THE CASE OF RAYMOND W OOLLEN MILLS LTD . (SUPRA) HAS HELD THAT THERE SHOULD BE PRIMA FACIE MATERIAL FOR REOPENING THE ASSESSMENT AND SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT TO BE EXAMINED AT THE STAGE OF RECORDI NG REASONS. THUS , IN OUR OPINION, THE CONTENTION OF THE LD. C OUNSEL OF THE ASSESSEE THAT ASSESSING OFFICER HAS REFERRED TO DIT (I NFORMATION ) AND ANNEXURE - A IN MECHANICAL MANNER, WITHOUT MAKING ANY INDEPENDENT I NQUIRY AND EVEN PRIMA FACIE SEEING CORRECTNESS OF THE INFORMATION AND WITHOUT QUANTIFYING THE AMOUNT FORMED THE BELIEF, IS NOT CORRECT AND WE REJECT THE SAID CONTENTION. WE MAY ALSO LIKE TO REFER THE DECISION OF THE HON BLE DELHIN HIGH COURT IN THE 17 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 CASE OF PR . CIT VS. PARAMOUNT COM MUNICATIONS P . LTD ., REPORTED IN[2017] 392 ITR 444 (DEL) WHERE IT IS HELD AS UNDER: HAVING REGARD TO THE CONTENTS OF THE NOTICE FOR THE ASSESSMENT YEAR 2003 - 04, THE COURT IS UNABLE TO AGREE WITH THE FINDINGS OF THE INCOME - TAX APPELLATE TRIBUNAL. IT CONS TITUTES REFERENCE TO TANGIBLE MATERIAL 'OUTSIDE' THE RECORD, I.E., INFORMATION BASED UPON THE INVESTIGATION OF THE COMMISSIONER OF CENTRAL EXCISE WITH RESPECT TO THE PURCHASES MADE BY THE ASSESSES. HOWEVER, AS FAR AS THE SECOND ISSUE IS CONCERNED, THE COUR T IS OF THE OPINION THAT EVEN THE RECTIFIED ORDER DOES NOT ADDRESS THE ISSUES SQUARELY. THUS, ARGUENDO SUCH ARGUMENTS COULD BE VALIDLY RAISED. AT THE SAME TIME, THE COURT NOTICES THAT FOR BOTH THE ASSESSMENT YEARS 2004 - 05 AND 2005 - 06, THE NOTE DISCLOSES TH E SOURCE OF THE INFORMATION, I.E., DIRECTORATE OF REVENUE INTELLIGENCE, LOCAL UNIT AT JAIPUR, SENDING INFORMATION BASED UPON THE COMMISSIONER OF CENTRAL EXCISE'S INVESTIGATIONS. TO REQUIRE THE REVENUE TO DISCLOSE FURTHER DETAILS REGARDING THE NATURE OF DOC UMENTS OR CONTENTS THEREOF WOULD BE VIRTUALLY REWRITING THE CONDITIONS IN SECTION 147. AFTER ALL, SECTION 147 MERELY AUTHORIZES THE ISSUANCE OF NOTICE TO REOPEN WITH CONDITIONS. IF THE COURT WERE TO DICTATE THE MANNER AND CONTENTS OF WHAT IS TO BE WRITTEN, THE STATUTORY CONDITIONS WOULD BE ADDED AS IT WERE. IN THIS CONTEXT, IT NEEDS TO BE EMPHASIZED THAT THE COURT WOULD INTERPRET THE STATUTE AS THEY STAND IN THEIR OWN TERMS , BUT AT THE SAME TIME BEING CONSCIOUS OF THE RIGHTS OF THE CITIZENS. SO VIEWED, KELV INATOR (SUPRA) STRIKES JUST BALANCE. TO ADD FURTHER CONDITIONS TO THE NATURE OF DISCUSSION/REASONS THAT THE OFFICER AUTHORIZING THE NOTICE WOULD HAVE TO DISCUSS IN THE NOTE OR DECISION WOULD BE BEYOND THE PURVIEW OF THE COURTS AND WOULD NOT BE JUSTIFIED. FOR THE ABOVE REASONS, THIS COURT IS OF THE OPINION THAT THE IMPUGNED ORDER AND THE CONSEQUENTIAL ORDER OF JANUARY 5, 2017 CANNOT BE SUSTAINED. THEY ARE ACCORDINGLY SET ASIDE. THE QUESTION OF LAW URGED BY THE REVENUE IS ANSWERED IN ITS FAVOUR. THE PARTIES ARE DIRECTED TO BE PRESENT BEFORE THE INCOME - TAX APPELLATE TRIBUNAL ON MARCH 6, 2017. THE INCOME - TAX APPELLATE TRIBUNAL SHALL PROCEED TO HEAR THE REVENUE'S APPEALS ON ITS MERITS AND RENDER DECISION IN ACCORDANCE WITH LAW. ALL RIGHTS AND CONTENTIONS OF THE PARTIES WITH RESPECT TO THE MERITS ARE RESERVED. 18 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 4 . 5 .8 THUS , THE HON BLE HIGH COURT HAS CONCLUDED THAT MENTIONING OF THE SOURCE OF INFO RMATION AS FROM DIRECTORATE OF REVENUE I NTELLIGENCE WOULD BE SUFFICIENT COMPLIANCE OF LAW AND NO FURTHER CONDITIONS AS TO NATURE OF DOCUMENTS OR CONTENTS COULD BE ATTACHED TO THE REASONS RECORDED. 4 . 6 THE SECOND ARGUMENT, WHICH WAS TAKEN BY THE LD. COUNSEL OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS NOT APPLIED MIND WHILE RECORDING THE RE ASONS IN VIEW OF NO TOTALING OF AMOUNT, DUPLICATION OF TRANSACTIONS, TRANSACTIONS NOT BELONGING TO THE ASSESSEE, DEBIT ENTRIES ETC. IN OUR OPINION, NOT MAKING THE TOTAL OF THE AMOUNTS DOES NOT IN ANY WAY CAN BE NON APPLICATION OF MIND. IT IS MERELY AN ARIT HMETIC EXERCISE. THE AMOUNT IN QUESTION ARE PRIMA FACIE MORE THAN THE MINIMUM AMOUNT FOR INVOKING PROVISIONS OF SECTION 1 47 OF THE ACT. TOTALING OF AMOUNT B ECOMES RELEVANT AT THE TIME OF FINAL ASSESSMENT OF INCOME AND NOT AT THE STAGE OF RECORDING REASONS. THE LD. COUNSEL FURTHER CONTENDED DUPLICATION OF TRANSACTIONS IN THE LIST OF 91 TRANSACTIONS. WE DO NOT AGREE WITH THE SAID CONTENTION BECAUSE IT MAY BE POSSIBLE THAT ON ONE DAY, THE ASS ESSEE M IGHT HAVE RECEIVED TWO OR MORE ENTRIES OF THE SAME AMOUNT. IN THE ENTRIES, THE INSTRUMENT NUMBER OF TRANSACTION IS NOT MENTIONED, WITHOUT WHICH , IT COULD NOT BE CONFIRMED WITH CERTAINTY THAT TWO OR MORE TRANSACTIONS ARE SAME AND REPEATED BY THE ASSE SSING OFFI CER WHILE RECORDING THE REASONS . F URTHER , IN THE RETURN OF INCOME FILED, INFORMATION RELATED TO NATURE OF THE SUMS RECEIVED AS FOR S HARE APPLICATION MONEY OR LOANS, IS NOT CONTAINED AND NO SCRUTINY ASSESSMENT WAS COMPLETED IN THE CASE OF THE ASSE SSEE, PRIOR TO ISSUE OF THE NOTICE UNDER SECTION 148 OF THE ACT . THEREFORE , NO INFORMATION WAS AVAILABLE ON RECORD, WITH WHICH, THE ASSESSING OFFICER COULD TALLY, WHETHER PARTICULAR ENTRY REFLECTED IN THE ACCOUNTS OF THE ASSESSEE OR THAT ENTRY WAS A DEBIT ENTRY ETC. ACTUALLY THE 19 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 ASSESSING OFFICER IS SUPPOSED TO VERIFY THE INFORMATION IN DETAILS IN THE PROCESS OF REASSESSMENT PROCEEDINGS AND NOT AT THE STAGE OF RECORDING REASONS. AT THE STAGE OF RECORDING REASONS, THE ASSESSING OFFICER SHOULD HAVE A PRIMA FA CIE RELEVANT MATERIAL AND SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT REQUIRED TO BE EXAMINED AT THE STAGE OF RECORDING REASONS. THE ASSESSING OFFICER HAS RECORDED REASONS ON THE BASIS OF MATERIAL AVAILABLE BEFORE HIM AND NOT UNDER THE DIRECTION OF A NY OF THE HIGHER AUTHORITY. IN THE ABOVE CIRCUMSTANCES, WE ARE OF THE OPINION THAT CONTENTION OF THE LD. COUNSEL THAT THE ASSESSING OFFICER HAS NOT APPLIED MIND, IS NOT CORRECT AND LIABLE TO BE REJECTED. THE LD. COUNSEL HAS RELIED ON THE DECISION OF THE TR IBUNAL IN THE CASE OF ITO VS. COMERO LEASING AND F INANCIAL P RIVATE L IMITED (SUPRA) WHEREIN THE TRIBUNAL HAS FOLLOWED THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SUREN INTERNATIONAL PRIVATE L IMITED (SUPRA). IN THE SAID CASE IN THE LIST OF TRANSACTIONS, THE INSTRUMENT NUMBER THROUGH WHICH ENTRIES WERE OBTAINED, WAS MENTIONED AND FEW ENTRIES HAVING SAME INSTRUMENT NUMBER WERE REPEATED IN THE LIST OF ENTRIES ALLEGEDLY OBTAINED AS ACCOMMODATION EN TRY. THE TRIBUNAL (SUPRA) NOTED THAT ITEM NO. 2 & 3, 4 & 5, 6 & 7, 8 & 9, AND 10 & 11 WERE CONSIDERED TWICE AND IN SUCH CIRCUMSTANCES HELD THAT IT WAS A CASE OF NON - APPLICATION OF MIND. BUT IN THE PRESENT CASE, WE DO NOT AGREE WITH THE CONTENTION OF THE LD . COUNSEL THAT ENTRIES ARE REPEATED, BECAUSE INSTRUMENT NUMBER IS NOT MENTIONED IN THE TRANSACTIONS AND THERE IS A POSSIBILITY THAT THE ASSESSEE MIGHT HAVE RECEIVED TWO OR MORE ENTRIES OF SAME A MOUNT ON A PARTICULAR DAY. THUS, THE FACTS OF THE DECISION IN THE CASE OF COMERO LEASING AND FINANCIAL PRIVATE L IMITED(SUPRA) ARE DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE. 20 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 4 . 7 NEXT ARGUMENT TAKEN BY THE LD. COUNSEL OF THE AS SESSEE IS THAT THE APPROVAL OF ADDL. CIT UNDER SECTION 151 OF THE ACT IS MISSING IN THE PRESENT CASE. WE FIND THAT IN THE PAPER BOOK FILE D BY THE R EVENUE THE SAID APPROVAL IS AVAILABLE ON PAGE 47 OF THE PAPER BOOK. IT IS EVIDENT FROM THE SAID APPROVAL THAT THE ADD L . CIT HAS SEEN RECORDS AND AFTER PERUSAL OF RECORDS, HE WAS SATISFIED THAT IT WAS A FIT CASE FOR ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT AND ACCORDINGLY , HE GRANTED THE APPROVAL TO THE ASSESSING OFFICER FOR ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. THUS THE CONTENTION OF THE LD. COUNSEL THAT APPROVAL IS CONSPICUOUSLY M ISSING IS NOT CORRECT. IN THE INSTANT CASE, THE SON OF THE DIRECTOR WHO WAS LOOKING AFTER THE AFFAIRS OF THE ASSESSEE COMPANY, ADMITTED IN CLEAR TERMS THAT BANK ACCOUNTS OF THE ASSESSEE COMPANY WERE USED FOR ACCOMMODATION ENTRIES. WE NOTE THAT THE APPROVAL HAS BEEN GRANTED BY THE ADDL. CIT KEEPIN G IN VIEW OF THE RECORDS. THE LD. S ENIOR DR ALSO ARGUED BEFORE US THAT IT IS NORMAL IN THE ADMINISTRATIVE SETUP TO DISCUSS THE MATTERS BY THE SUBORDINATE AUTHORITY IN ONE - TO - ONE MEETING WITH THE HIGHER A UTHORITIES AND THE HIGHER AUTHORITIES AFTER GOING THROUGH RECORDS, ARRIVE AT A CONCLUSION, WHICH IS RECORDED IN THE FILE AT THE RELEVANT PLACE. 4 . 8 WE AGREE WITH THE CONTENTION OF THE LD. S ENIOR DR ABOUT THE PRACTICE OF DISCUSSING THE MATTERS WITH HIGHER AUTHORITIES. FURTHER, T HE DECISIONS RELIED UPON BY THE LD. COUNSEL OF THE ASSESSEE ARE DISTINGUISHABLE ON FACTS AS IN THE PRESENT CASE THERE WAS STATEMENTS OF THE PERSON LOOKING AFTER THE AFFAIRS OF THE ASSESSEE COMPANY , ADMITTED OF HAVING ENGAGED IN ACCO MMODATION ENTRY. 4 . 9 THUS , IN O UR OPINION, IN THE INSTANT CASE , THE ADDL. CIT HAS APPLIED HIS MIND TO THE MATERIAL AND THEN ARRIVE D AT A CONCLUSION. 4 .10 IN VIEW OF OUR DISCUSSION, WE SUMMARISE THAT 21 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 (I) REASONS RECORDED BY THE ASSESSING OFFICER ARE NEITHE R SCANTY NOR VAGUE NOR RECORDED IN MECHANICAL MANNER AND (II) REASONS RECORDED ARE WITH DUE APPLICATION OF MIND (III) REASONS RECORDED ARE WITH NECESSARY APPROVAL OF THE ADDITIONAL CIT 4 .11 H ENCE , WE HOLD THAT THE REASSESSMENT PROCEEDING ARE IN TERMS OF SECTION 1 47 TO 151 OF THE ACT . AC CORDINGLY, GROUND NO. 1 CHALLENGING THE VALIDITY OF REASSESSMENT IS DISMISSED. 5 . IN GROUND NO. 2 THE ASSESSEE HAS CHALLENGED THE JURISDICTION ON THE GROUND THAT OBJECTIONS RAISED BY THE ASSESSEE AGITATING THE JURISDICTION WERE NOT DISPOSED OF F BY THE ASSESSING OFFICER, BEFORE PASSING THE IMPUGNED ORDER. 5 .1 IN SUPPORT OF THE GROUND, THE LD. COUNSEL OF THE ASSESSEE REFERRED TO LETTER DATED 24/12/2007 OF THE ASSESSEE, WHICH IS AVAILABLE ON PAGE 16 OF THE ASSESSEE S PAPER BOOK , AND SUBMITTED THAT THE ASSESSING OFFICER WAS REQUIRED TO DISPOSE O F F THE OBJECTION OF THE ASSESSEE IN VIEW OF THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF GKN D RIVESHAFT INDIA LTD VS. ITO (2003) 259 ITR 19(SC) . THE LD. COUNSEL SUBMITTED THAT NO T DISPOSING OFF THE OBJECTION OF THE ASSESSEE HAS RENDERED THE ENTIRE R EASSESSMENT PROCEEDINGS ILLEGAL . 5 .2 THE LD. S ENIOR DR , ON THE OTHER HAND, SUBMITTED THAT IN THE YEAR UNDER CONSIDERATION NO SUCH OBJECTIONS WERE RAISED BY THE ASSESSEE AND THEREFORE T HE GROUND NEEDS TO BE DISMISSED. 5 .3 WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE LETTER DATED 24/12/2007, WHICH IS AVAILABLE ON PAGE 16 OF THE ASSESSEE S PAPER BOOK, THE ASSESSEE COMPANY SOUGHT CROSS - EXAMINATION OF THE AUTHORITY, WHO PREPARED THE REPORT AND TOOK STATEMENTS ON OATH OF SH. VISHAL AGRAWAL ETC. THE ASSESSEE HAS NOT 22 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 SPECIFIED ANY OBJECTION AND MADE A GENERAL STATEMENT AS REASONS ARE NOT ACCEPTABLE. IN THE LETTER DATED 24/12/2007, THE ASSESSEE FILED TH E SUBMISSION IN RESPONSE TO QUERIES RAISED BY THE ASSESSING OFFICER, AND THUS, IT WAS NOT OBJECTIONS TO RE - ASSESSMENT PROCEEDINGS EFFECTIVELY. MOREOVER, THIS LETTER IS ALSO FILED AT THE FAG END OF PERIOD OF LIMITATION OF ASSESSMENTS PROCESS. THE NOTICE U/S. 148 OF THE ACT WAS ISSUED ON 21.09.2006 AND THEREAFTER THE ASSESSEE FILED LETTER THAT RETURN FILED EARLIER U/S 139(1 ) MIGHT BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S 148. NO REASONS WERE ASKED AFTER FILING THE LETTER. THE ASSESSING OFFIC ER ISSUED NOTICE U/S. 143(2) & 1 42(1) ON 14.08.200 7, AFTER A GAP OF ALMOST ONE YEAR FROM ISSUE OF NOTICE U/S 148 OF THE ACT, BUT THE ASSESSEE DIDN T COMPLY SAID NOTICE. THE ASSESSING OFFICER ISSUED A FINAL SHOW CAUSE NOTICE ON 04.12.2007 PROPOSING TO ASSESSEE THE INCOME AS MENTIONED IN THE NOTICE. THE ASSESSMENT WAS TO BE COMPLETED ON 31.12.2007 AND THE ASSESSEE ASKED REASON S RECORDED ON 20.12.2007, WHICH WERE PROVIDED. THE ASSESSEE VIDE LETTER DT. 24.12.2007 FURNISHED REPLY OF THE QUERIES RAISED ABOUT INCOME OF THE ASSESSEE AND IN THAT LETTER THE ASSESSEE RAISED THE ISSUE THAT REASON WERE NOT ACCEPTABLE. IN THE FACTS & CIRCUMSTANCES, WE FIND THAT THE ASSESSEE RAISED OBJECTIONS NOT AS PER THE DECISION OF THE HON BLE SUPREME COURT IN GKN DRIVESHAFT INDIA LTD. (SU PRA). S INCE IN THE YEAR UNDER CONSIDERATION, NO OBJECTION S HAVE BEEN FILED EFFECTIVELY BY THE ASSESSEE , THEREFORE , DISPOSING OF F SUCH OBJECTIONS SPECIFICALLY A LSO DOES NOT ARISE. ACCORDINGLY, THE GROUND OF THE ASSESSEE IS DISMISSED. 6 . IN GROUND NO. 3 THE ASSESSEE HAS RAISED THE ISSUE THAT INCRIMINATING MATERIAL WAS NOT MADE AVAILABLE FOR REBUTTAL OF SHOW CAUSE NOTICE ISSUED PROPOSING THE ADDITION AND NO CROSSS - EXAMINATION WAS 23 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 PROVIDED, WHICH IS IN VIOLATION OF NATURAL JUSTICE AND THUS T HE ORDER OF THE ASSESSING OFFICER IS A NULLITY. 6 .1 BEFORE US, T HE LD. COUNSEL IN SUPPORT OF THE GROUNDS RAISED RELIED ON THE DECISION OF THE HON BLE SUPREM E COURT IN THE CASE OF ANDAMAN T IM BER I NDUSTRIES VS. CCE , 127 DTR 0241. THE LD. COUNSEL FURTHER SU BMITTED THAT THIRD - PARTY STATEMENT CANNOT BE BASIS OF REOPENING OF THE ASSESSMENT RELYING ON THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VERSUS SH. PRADEEP GUPTA 207 CTR 115(DEL). 6 .2 THE LD. S ENIOR DR , ON THE OTHER HAND , SUBMITTED TH AT THE ASSESSEE DID NOT ASK FOR ANY SUCH MATERIAL FROM THE ASSESSING OFFICER. AS REGARDING THE CROSS EXAMINATION, THE LD. COUNSEL SUBMITTED THAT IT WAS THE ADMISSION OF THE AUTHORIZED SIGNATORY HIMSELF AND HE HAD NOT RETRACTED FROM THE STATEMENT. IT WAS NOT A THIRD - PARTY WHO GAVE STATEMENT, BUT IT IS AUTHORIZED SIGNATORY , WHO WAS LOOKING AFTER THE AFFAIRS OF THE ASSESSEE COMPANY. 6 .3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD . ON PERUSAL OF THE RECORD, WE FIND THAT NOTICE UNDER SECTION 143 (2) AND 142 (1) OF TH E ACT WERE ISSUED ON 14/08/2007 , WHICH ARE AVAILABLE ON PAGE 3 TO 6 OF THE PAPER BOOK OF THE ASSESSEE , BUT NO COMPLIANCE WAS MADE BY THE ASSESSEE. AGAIN ONE MORE NOTI CE UNDER SECTION 143(2) WAS ISSUED ON 20/09/2007 FIXING THE CASE ON 01/10/2007, HOWEVER NO COMPLIANCE WAS MADE BY THE ASSESSEE AND ASSESSEE FILED A LETTER ON 17/10/2007 SEEKING ADJOURNMENT. ON 14/11/2007, THE ASSESSING OFFICER AGAIN ISSUED A LETTER TO THE ASSESSEE COMPANY REQUESTING COMPLIANCE OF THE NOTICES ISSUED EARLIER, BUT THIS OPPORTUNITY WAS ALSO NOT AVAILED BY THE ASSESSEE. ON 04/12/2007, THE ASSESSING OFFICER ISSUED A FINAL SHOW CAUSE NOTICE TO FURNISH EVIDENCE IN SUPPORT OF CLAIM OF SHARE CAPITAL, LOANS ETC APPEARING IN THE BALANCE SHEET. THE 24 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 ASSESSEE FILED A LETTER DATED 17/12/2007 FOR PROVIDING COPY OF REASONS RECORDED FOR REOPENING THE ASSES SMENT . THE ASSESSING OFFICER PROVIDED THE REASONS RECORDED ON 20/12/2007 . ON 24/12/2007, THE ASSESSEE PROV IDED ONLY PART INFORMATION AND IN ABSENCE OF DISCHARGING ITS ONUS UNDER SECTION 68 OF THE ACT, THE ASSESSING OFFICER MADE THE ADDITION IN RESPECT OF THE AMOUNT RECEIVED DURING THE YEAR. WE FIND THAT ASSESSEE HAS NOWHERE ASKED FOR COPY OF THE STATEMENTS OF THE DIRECTORS RECORDED BY THE INVESTIGATION WING. IN THE REASONS RECORDED, THERE WAS A CLEAR REFERENCE OF THE STATEMENTS OF, SH HARISH AGRAWAL, SMT. MANJU AGGARWAL AND SH. VISHAL AGGARWAL, WHEREIN SH. VISHAL AGGARWAL ADMITTED OF PROVIDING ACCOMMODATION ENT RY BY THE ASSESSEE COMPANY. THE LD. SENIOR DR SUBMITTED THAT A COPY OF STATEMENTS OF THE CONCERNED PERSONS WAS ALSO MADE AVAILABLE TO THE ASSESSEE IN PRESENT APPELLATE PROCEEDINGS . NO LETTER RETRACTING THAT STATEMENT WAS FILED EITHER BEFORE THE ASSESSING O FFICER OR BEFORE THE APPELLATE AUTHORITIES. MOREOVER, THE STATEMENTS RELIED UPON BY THE ASSESSING OFFICER ARE THE STATEMENTS OF THE DIRECTORS AND AUTHORIZED SIGNATORY OF THE ASSESSEE COMPANY, NO QUESTION OF PROVIDING CROSS - EXAMINATION ARISES AS THEY ARE NO T THIRD - PARTY WITNESSES. FURTHER , THE ASSESSING OFFICER HAS MADE ADDITION UNDER SECTION 68 OF THE ACT NOT ONLY ON THE BASIS OF THE STATEMENTS BUT DUE TO FAILURE ON THE PART OF THE ASSESSEE IN DISCHARGING ITS ONUS OF ESTABLISHING IDENTITY AND CREDITWORTHINE SS OF THE PERSONS WHO PAID MONEY AND GENUINENESS OF THE TRANSACTION CARRIED OUT. THE ASSESSMENT PROCEEDINGS ARE TO BE COMPLETED BY THE ASSESSING OFFICER IN LIMITED TIME PERIOD BUT THE ASSESSEE SOUGHT ADJOURNMENT AGAIN AND AGAIN & DELAYED IN REPLYING TO QUERIES OF THE ASSESSING OFFICER. IN VIEW OF THE CIRCUMSTANCES, THE GROUND OF THE ASSESSEE THAT IT IS DEPRIVED OF NATURAL JUSTICE FOR NOT PROVIDING CROSS - EXAMINATION AND PROPER SHOW CAUSE NOTICE IS NOT 25 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 SUSTAINABLE IN LAW. ACCORDINGLY , THE GROUND NO. 3 OF THE APPEAL IS DISMISSED. 7 . IN SUPPORT OF GROUND NO. 4, THE LD. COUNSEL SUBMITTED THAT NO ENQUIRY WAS MADE IN RESPECT OF THE TRANSACTIONS BASED ON WHICH THE CASE WAS REOPENED AND ADDITIONS ARE MADE. THE SUBMISSION OF THE LD. COUNSEL ARE REPRODUCED AS UNDER: 4 . GENERAL QUESTIONER WAS ISSUED BY THE AO VIDE LETTER DATED 14.08.2007 AND AGAIN ON 04.12.2007. THE ASSESSEE FULLY DISCHARGED ITS ONUS BY PLACING ON RECORD EXTENSIVE DOCUMENTS AND DETAILS OF THE REQUISITE PARTIES WITH THEIR COMPLETE ADDRESS, CONFIRMATION, AFFIDAVITS AND INCOME TAX PARTICULARS. BUT NOTHING CONTRARY WAS BROUGHT ON RECORD BY LD. AO TO DISPROVE ANY OF THE EXPLANATION. AO OUT RIGHTLY REJECTED THE EXPLANATION WITHOUT ASSIGNING ANY REASON TO IT. ALL TRANSACTIONS AR E DULY RECORDED IN THE BOOKS AND ARE EXPLAINED TO BE HELD IN THE NORMAL COURSE OF BUSINESS. THE LEDGER, CONFIRMATION AND DETAILS OF ALL TRANSACTIONS HELD WITH M/S. ONYX EXIM & SALES (P) LTD. WAS GIVEN. THE LEDGER, CONFIRMATION AND DETAILS OF ALL TRANSAC TIONS HELD WITH M/S. AGARWAL SALES CORPORATION WAS GIVEN. THE LEDGER, CONFIRMATION AND DETAILS OF ALL TRANSACTIONS HELD WITH M/S. SWASTIK ADVERTISING AGENCY WAS GIVEN. THE LEDGER, CONFIRMATION AND DETAILS OF ALL TRANSACTIONS HELD WITH M/S. KRISHNA CINEM A INDIA LTD. WAS GIVEN. NONE OF THE DOCUMENTS SUBMITTED WAS DISPROVED BY THE AO BUT REJECTED/IGNORED WITHOUT ANY ENQUIRY WHATSOEVER OR WITHOUT ADDUCING ANYTHING CONTRARY TO THE CLAIM OF THE ASSESSEE OR IN SUPPORT OF HIS ALLEGATION OF GIVING AND TAKING ACC OMMODATION ENTRIES. CIT, VS. GANGESHWARI METAL PVT. LTD. ITA 597/2012 DATED 21.01.2013 (DHC) (CASE LAWS P 144 - 153) LAST PARA ON PAGE 152 . 26 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 7 .1 THE LD. S ENIOR DR , ON THE OTHER HAND , SUBMITTED THAT ASSESSEE COMPANY FAILED TO DISCHARGE ITS ONUS UNDER SECTI ON 68 OF THE ACT IN RESPECT OF THE AMOUNT RECEIVED DURING THE YEAR NOT ONLY BEFORE THE ASSESSING OFFICER BUT ALSO BEFORE THE LD. CIT - (A). THE ASSESSEE ONLY PLACED RELIANCE ON THE VARIOUS DECISIONS OF THE HON BLE COURT , BUT DID NOT FILE ANY DOCUMENTARY EVID ENCE IN SUPPORT OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION AND THEREFORE THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING ADDITION UNDER SECTION 68 OF THE ACT. 7 .2 WE HAVE HEARD THE RIVAL SUBMISSION S AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE LD. CIT - (A) IN PARA - 2.12 OF THE IMPUGNED ORDER HAS OBSERVED AS UNDER: 2.12 THE APPELLANT ADMITTEDLY RECEIVED THE CREDIT FROM 91 PERSON TOTALING RS.1,44,55,500/ - . BEFORE ME ALSO THE LEARNED AR COULD NOT PR ODUCE ANY EVIDENCE WHICH COULD ESTABLISH THAT THE OBSERVATION MADE BY THE AO WAS WRONG. THE CRUX OF THE ISSUE IS THAT THE APPELLANT HAS NOT COOPERATED WITH THE AO AT THE ASSESSMENT STAGE. THIS LEADS TO AN INESCAPABLE CONCLUSION THAT THE APPELLANT WAS NOT I NTERESTED TO COMPLY WITH THE DIRECTION OF THE DEPARTMENT RATHER IT WANTS TO BASE ITS ARGUMENT ONLY ON COURT DECISION AND NOT ON FACTUAL EVIDENCE. 7 .3 F URTHER , IN PARA - 2.17 TO 2.20 ALSO , HE EMPHASIZED ON NOT PROVIDING THE EVIDENCE IN RESPECT OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION AS UNDER: 2.17 THE ESSENTIAL QUESTION BEFORE ME IS A QUESTION OF ESTABLISHMENT OF THE IDENTITY, CREDIT WORTHINESS OF THE SUBSCRIBER AND THE GENUINENESS OF THE TRANSACTION. THE IDENTITY OF THE SUBSCRIBER, IN THIS CASE HAS NOT BEEN ESTABLISHED, YET LET US EXAMINE THE NEXT POINT I.E. THE CREDITWORTHINESS OF THE INVESTOR AND ALSO THE LAST ONE WITH REGARD TO THE ESTABLISHMENT OF GENUINENESS OF THE TRANSACTION. 27 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 2.18 IN THE PRESENT CASE, IN ORDER TO ESTABLISH THE CREDITWORTHINESS, IT WAS SHOWN THAT RS.1,44,55,500/ - RECEIVED FROM 91 PERSONS BY WAY OF CHEQUE. WHEN THE IDENTITY OF THE PERSONS FAILS, IT WILL BE IMPRACTICAL AT THIS STAGE TO GO FOR OTHER T WO CRITERIA I.E. CREDITWORTHINESS OF THE INVESTOR AND THE GENUINENESS OF TRANSACTION. FURTHERMORE THERE WAS CASH/CHEQUE INTRODUCTION OF IDENTICAL AMOUNT BEFORE ISSUE OF THE CHEQUE AND HENCE THE GENUINENESS OF THE TRANSACTION IS FAR FROM ESTABLISHED. 2.19 ON THESE MATERIALS, NO ONE CAN FORM AN OPINION THAT THESE APPLICANTS HAD ANY INCOME EXIGIBLE TO TAX UNDER INCOME TAX LAWS. SINCE IT IS NOT KNOWN WHETHER ALL SUCH INVESTORS DID HAVE ANY SOURCE OF INCOME OR BUSINESS WHICH COULD BE DERIVED AND WHICH COULD HEL P THEM TO INVEST RS.1,44,55,500/ - BY WAY OF CREDIT. THEREFORE, ON THE BASIS OF MATERIAL PRODUCED, IT WAS NOT JUST POSSIBLE FOR ANY REASONABLE MAN TO FORM AN OPINION WITH REGARD TO CREDITWORTHINESS OF THE INVESTOR. THERE IS NO MATERIAL EVIDENCE ON RECORD TO ESTABLISH THAT THE AMOUNT WAS HELD BY THE INVESTORS TO PROVE THEIR CREDITWORTHINESS. IT IS ONCE AGAIN PLACED ON RECORD THAT REPEATED OPPORTUNITIES FAILED TO URGE THE APPELLANT TO FILE THE CORRECT POSTAL ADDRESS, AND LEDGER COPY OF ALL THESE PERSONS. 2.20 IT IS ADMITTED THAT THE IDENTITY OF THE SUBSCRIBER WAS NOT ESTABLISHED AND ALSO THE GENUINENESS OF THE TRANSACTION COULD NOT BE ESTABLISHED, NEITHER THE CREDITWORTHINESS NOR FINANCIAL STRENGTH COULD BE ESTABLISHED. NO CORRECT ADDRESS OF ALL SUCH PERSONS W AS GIVEN AND WHETHER THE SAID PERSONS ARE FILING THE RETURN ON REGULAR BASIS COULD NOT BE STATED BY THE LD AR BEFORE ME AND WITH THIS SUBMISSION, NO FRUITFUL ENQUIRY COULD BE CAUSED BY THE DEPARTMENT. SINCE THE DEPARTMENT HAS ESTABLISHED THAT SUCH PERSON D OES NOT HAVE SUFFICIENT CREDITWORTHINESS AS SUCH IDENTITY ITSELF REMAINS TO BE VERIFIED, THE ONUS AUTOMATICALLY SHIFTS FROM THE DEPARTMENT TO THE APPELLANT AND NOW IT IS THE APPELLANT TO ESTABLISH BEFORE THE DEPARTMENT SUCH CREDITWORTHINESS OF CREDITORS WH O HAVE INVESTED SUCH FUND. NON FURNISHING OF CORRECT ADDRESS, FAILURE OF THE APPELLANT TO PRODUCE NECESSARY EVIDENCE BEFORE THE ASSESSING OFFICER AND ALSO BEFORE THE APPELLATE AUTHORITY, WHICH ARE PECULIAR TO THE CASE IN HAND. 7 .4 F URTHER , IN PARA - 2.25, THE LD. CIT - (A) HAS OBSERVED AS UNDER: 28 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 2.25 IT IS ADMITTED THAT THE IDENTITY OF THE SUBSCRIBER WAS NOT ESTABLISHED AND ALSO THE GENUINENESS OF THE TRANSACTION COULD NOT BE ESTABLISHED, NEITHER THE CREDITWORTHINESS NOR FINANCIAL STRENGTH COULD BE ESTABL ISHED. NO CORRECT ADDRESS OF SUCH INVESTORS WERE GIVEN AND ALSO WHETHER THE SAID PERSON IS AT ALL FILING THE RETURN ON REGULAR BASIS COULD NOT BE STATED BY THE LD AR BEFORE ME AND WITH THIS SUBMISSION NO FRUITFUL ENQUIRY COULD BE CAUSED BY THE DEPARTMENT. IT GOES WITHOUT SAYING THAT SUCH PERSONS HAVE NOT SUFFICIENT CREDITWORTHINESS AS SUCH IDENTITY ITSELF REMAINS TO BE VERIFIED, THE ONUS AUTOMATICALLY SHIFTS FROM THE DEPARTMENT TO THE APPELLANT AND NOW IT IS THE APPELLANT TO ESTABLISH BEFORE THE DEPARTMENT, CREDITWORTHINESS OF SUCH INVESTORS WHO HAVE INVESTED FUND. ALL SUCH MATERIAL EVIDENCE NEVER BROUGHT ON RECORD IN THE CASE OF LOVELY EXPORTS PVT. LTD. (SUPRA) AND HENCE SUCH CASES ARE DISTINGUISHABLE FOR THE LIMITED PURPOSE OF ADJUDICATING THE PRESENT CAS E. 7 .5 F INALLY , HE UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER WITH FOLLOWING OBSERVATIONS: 2.30 THE JURISDICTIONAL ITAT IN RECENT CASE OF ITO WARD 6(3) VS MAYANK CONTAINERS P LTD IN ITA NO.2283/DEL/09 DATED 11/08/09, REFERRING THE DECISION OF LOVELY EXPORTS (SUPRA) AND DIVINE LEASING & FINANCE (SUPRA) HAS HELD AS BELOW: - IN OUR VIEW, HON BLE DELHI HIGH COURT AND HON BLE SUPREME COURT WHILE RENDERING JUDGMENTS IN THE ABOVE CASES WERE NOT DEALING WITH THE CASE OF HAWALA OPERATORS AND BOGUS ENTRY PROVIDERS. 2.31 APPLYING THE ABOVE TESTS IN THE PRESENT CASE, IT APPEARS TO ME THAT THERE CANNOT BE ANY TWO OPINIONS, HAVING REGARD TO THE MATERIAL PRODUCED WITH REGARD TO IDENTITY, THE CREDITWORTHINESS OF THE SUBSCRIBER AS WELL AS TO THE QUESTION OF GENUINENESS OF TRANSACTION, THE SAME COULD NOT BE ESTABLISHED BY THE APPELLANT AND HENCE THE AO HAS RIGHTLY ADDED RS.1,44,55,500/ - AND SUCH DECISION OF THE AO IS SUSTAINED. 29 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 7 .6 W E FIND THAT ON ONE HAND THE ASSESSEE IS CLAIMING THAT IT HAS FILED THE REQUIRED DOCUMENTS BEFORE THE ASSESSING OFFICER WHEREAS THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) HAS HELD THAT THE ASSESSEE HAS NOT FILED ANY EVIDENCE SUPPORTING THE IDENTITY AND CREDITWORTHINESS OF THE PAYER, AND GENUINENESS OF THE TRANSACTION. THE LD. CIT - (A) HAS EVEN OBSERVED THAT NO CORRECT ADDRESSES OF THE INVESTOR WAS PROVIDED. 7 .7 BEFORE US, THE ASSESSEE HAS FILED DOCUMENTS IN RESPECT OF INVESTORS AS FOLLOWS AND CLAIM ED THAT THOSE WERE FIL ED BEFORE THE ASSESSING OFFICER : 1. ONYX EXIM AND SALES PRIVATE L IMITED (I) COPY OF LEDGER ACCOUNTS IN THE BOOKS OF THE ASSESSEE COMPANY( PAGE 35 TO 36 OF THE PAPER BOOK) (II) COPY OF CONFIRMATION OF ACCOUNTS DULY SIGNED BY THE PAYER.(PAGE 37 PAPER BOOK) (III) COPY OF LETTER ADMITTING THE TRANSACTIONS( PAGE 38 OF THE PAPER BOOK) (IV) COPY OF AFFIDAVIT BY THE DIRECTOR OF THE COMPANY( PAGE 39 OF THE PAPER BOOK) (V) COPY OF CERTIFICATE OF PAN( PAGE 40 OF THE PAPER BOOK) (VI) COPY OF ACKNOWLEDGEMENT OF RETURN( PAGE 41 OF THE PAPER BOOK) (VII) COPY OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT ( PAGE 42TO 43 OF PAPER BOOK). 2. AGGARWAL SALES CORPORATION (I) COPY OF LEDGER ACCOUNTS IN THE BOOKS OF ASSESSEE( PAGE 44 OF THE PAPER BOOK) 30 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 (II) COPY OF LETTER ADMITTING TRANSACTIONS( PAGE 45 OF THE PAPER BOOK) (III) COPY OF AFFIDAVIT OF THE DIRECTOR ( PAGE 46 OF THE PAPER BOOK) 3. SWASTIK ADVERTISING A GENCY (I) COPY OF LEDGER ACCOUNT IN THE BOOKS OF THE ASSESSEE( PAGE 47 OF THE PAPER BO OK) (II) COPY OF CONFIRMATION( PAGE 48 OF THE PAPER BOOK (III) COPY OF ACKNOWLEDGEMENT OF RETURN 4. KRISHNA C INEMA INDIA LTD . (I) COPY OF LEDGER ACCOUNT IN THE BOOKS OF THE ASSESSEE( PAGE 50 OF THE PAPER BOOK) (II) COPY OF CONFIRMATION OF ACCOUNTS(PAGE 51 OF THE PAPER BOOK) (III) COPY OF LETTER ADMITTING TRANSACTIONS( PAGE 52 OF THE PAPER BOOK) (IV) COPY OF AFFIDAVIT BY THE DIRECTOR (PAGE 53 OF THE PAPER BOOK) (V) COPY OF ORDER UNDER SECTION 143 (1) OF THE ACT( PAGE 54 OF THE PAPER BOOK) (VI) COPY OF ACKNOWLEDGEMENT OF THE RETURN FILED(PAGE 55 OF THE PAPER BOOK) (VII) COPY OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT( PAGE 56 AND 57 OF THE PAPER BOOK) 7 .8 IN VIEW OF THE CONTRADICTORY CLAIMS REGARDING THE FILING OF THE DOCUMENTARY EVIDENCES IN SUPP ORT OF IDENTITY AND CREDITWORTHINESS OF THE PAYER AND GENUINENESS OF THE TRANSACTION, IN THE INTEREST OF JUSTICE, WE 31 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 FEEL IT APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE MERIT OF THE ISSUE OF ADDITION UNDER SECTION 68 OF THE ACT, AFRESH WITH THE DIRECTION TO THE ASSESSEE TO PRODUCE ALL THE ABOVE DOCUMENTS, BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER MAY CARRY OUT THE ENQUIRIES WHICH DEEMED FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE INCLUDING ENQUIRIES F ROM THE BANKS OF PARTIES TRANSACTED. THE ASSESSEE SHALL BE AFFORDED SUFFICIENT OPPORTUNITY OF HEARING. ACCORDINGLY THE GROUND NO. 4 OF THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED PARTLY FOR STATISTI CAL PURPOSES. ITA NO. 1720/DEL/2012 FOR AY: 2001 - 02 9 . NOW WE TAKE UP THE APPEAL OF THE ASSESSEE HAVING ITA NO. 1720/DEL/2012 FOR ASSESSMENT YEAR 2001 - 02. THE CONCISE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER: ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE, THE CIT (A) - XI, NEW DELHI HAS ERRED BOTH ON FACTS AND IN LAW, IN UPHOLDING THE ILLEGAL ORDER OF THE RESPONDENT ON THE FOLLOWING GROUNDS AND HENCE LIABLE TO BE QUASHED BECAUSE: 1. REASONS RECORDED ARE VAGUE AND SCANTY, WITHOUT APPLICATION OF HIS OWN MIND BY AO AND WITHOUT NECESSARY APPROVAL OF THE JOINT CIT AND HENCE RE - ASSESSMENT PROCEEDING ARE NOT IN TERMS OF SECTION 147 TO 151 OF THE INCOME TAX ACT. 2. OBJECTION SPECIFICALLY RAISED WERE NOT DISPOSED OF BEFORE PASSING THE IMP UGNED ORDER. 3. RE - ASSESSMENT ORDER PASSED IN VIOLATION OF NATURAL JUSTICE WITHOUT PROVIDING CORROBORATION OF THE MATERIAL AND WITHOUT PROVIDING CROSS EXAMINATION ASKED AND WITHOUT PROPER SHOW CAUSE NOTICE. 32 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 4. ADDITIONS OF RS. 1,54,80,753/ - U/S. 68 BY TREATING UNEXPLAINED INCOME. 5. ILLEGAL ADDITIONS AND DISALLOWANCES AND CONSEQUENT DEMANDS OF INCOME TAX, INTEREST AND PENALTIES ILLEGALLY RAISED. 6. THE APPELLANT CRAVES LEAVE TO RAISE FURTHER/ADDITIONAL GROUNDS AND DOCUMENTS AND FILE PAPER BOOK BEFORE THE HEARING OF THE APPEAL AND PRAYS FOR THE APPEAL TO BE ALLOWED AFTER HEARING BOTH SIDES. 10 . T HE FACTS AND CIRCUMSTANCES OF THE CASE IN THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS AND CIRCUMSTANCES IN ASSESSMENT YEAR 2001 - 02 EXCEPT THE A MOUNT OF ADDITION MADE. 11 . IN GROUND NO. 1, THE ASSESSEE HAS RAISED OBJECTIONS IDENTICAL TO THE GROUND NO. 1 OF THE APPEAL FOR ASSESSMENT YEAR 2000 - 01. THUS FOLLOWING OUR FINDING IN ITA NO. 3777/DEL/2012 IN PARA NUMBER 4 TO 4.1 1 , WE DISMISS THE GROUND OF THE APPEAL. 1 2 . IN GROUND NO. 2, THE ASSESSEE HAS RAISED ISSUE OF OBJECTIONS SPECIFICALLY RAISED , NOT DISPOSE D OFF BEFORE PASSING THE IMPUGNED ORDER. 12.1 THE LD. COUNSEL SUBMITTED THAT LACK OF JURISDICTIO N WAS AGITATED BY THE ASSESSEE V IDE LETTER DATED 12/12/2008, A COPY OF WHICH IS PLACED ON PAGE 161 - 169 OF THE ASSESSES PAPER BOOK, BUT NO ORDER RESOLVING THE ISSUE OF JURISDICTION WAS PASSED BY THE ASSESSING OFFICER, WHICH IS VIOLATION OF THE DIRECTION S OF THE HON BLE SUPR EME COURT IN THE CASE OF G KN D RIVESHAFT INDIA LTD VS. INCOME TAX OFFICER (2003) 259 ITR 19(SC). 12.1 THE LD. S ENIOR DR , ON THE OTHER HAND, SUBMITTED THAT NO SUCH OBJECTIONS WERE FILED BEFORE THE ASSESSING OFFICER AND THE LETTER FILED BY THE ASSESSEE BEFORE THE TRIBUNAL ARE NOT BE ARING ANY ACKNOWLEDGEMENT BY THE OFFICE OF THE ASSESSING OFFICER. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT PRODUCED ANY OTHER DOCUMENTARY EVIDENCE TO ESTABLISH 33 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 THAT THE ASSESSEE FILED ANY OBJECTION BEFORE THE ASSESSING OFFICER AGAINST THE REASSESSMEN T PROCEEDINGS. 12.2 WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE PAGES 161 TO 162 OF THE ASSESSES PAPER BOOK , IS A LETTER DATED 25/11/2008 CONTAINING OBJECTIONS TO THE NOTICE ISSU ED UNDER SECTION 148 OF THE ACT . T HE PAGES 163 TO 172 IS A LETTER DATED 12/12/2008 EXPLAINING THE ACCOMMODATION ENTRIES. THE LD. COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT THESE OBJECTIONS WERE FILED BEFORE THE ASSESSING OFFICER, BUT THE LD. S ENIOR DR POINTED OUT THAT THOSE PAPERS ARE NOT BEARING ANY STAMP OF ACKNOWLEDGEMENT BY THE ASSESSING OFFICER AND THEREFORE THERE IS NO EVIDENCE AS THOSE PAPERS WERE FILED BEFORE THE ASSESSING OFFICER. WE FIND THAT , IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2001 - 02, THERE IS A MENTION OF LETTER OF FI NAL OPPORTUNITY DATED 18/11/2008 ISSUED BY THE ASSESSING OFFICER AND IN RESPONSE THE ASSESSEE FILED LETTER DATED 18/12/2008. THERE IS NO REFERENCE OF LETTER DATED 25/11/2008 AND 12/12/2008 FILED BY THE ASSESSEE. IN THE CIRCUMSTANCES IT CANNOT BE CONCLUDED THAT THE ASSESSEE FILED ANY OBJECTIONS BEFORE THE ASSESSING OFFICER AND THUS ISSUE OF DISPOSING OFF THE SAME, ALSO DOES NOT ARISE. ACCORDINGLY , WE DISMISS THE GROUND NO. 2 OF THE APPEAL. 13. THE GROUND NO. 3 RAISED IN THE APPEAL, IS IDENTICAL TO THE GROUN D NO. 3 RAISED IN ITA NO. 3777/DEL/2012 FOR ASSESSMENT YEAR 2000 - 01, WHICH WE HAVE ALREADY DECIDED IN AFORESAID PARAS 6 TO 6.3. THUS , FOLLOWING OUR FINDING IN SAID PARA, WE DISMISS THE GROUND OF THE APPEAL. 14. IN GROUND NO. 4, THE ASSESSEE HAS CHALLENGE D ADDITION OF RS.1,54, 8 0, 753/ - UNDER SECTION 68 BY TREATING AS UNEXPLAINED INCOME. THE FACTS OF THE ADDITION MADE DURING THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THE ADDITION MADE IN ASSESSMENT YEAR 2000 - 01, WHEREIN WE 34 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 HAVE RESTORE D THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH. 14.1 BEFORE US , THE LEARNED COUNSEL SUBMITTED THAT O UT OF TOTAL ADDITION MADE, ONLY RS.27, 50,500/ - WAS AMOUNT OF CREDIT ENTRIES. THE LIST OF THE CREDIT ENTRIES PROVIDED BY THE LEARNED C OUNSEL OF THE ASSESSEE IN HIS WRITTEN SUBMISSION IS AS UNDER: 1. SK INVESTMENT (SHARE BROKER) RECEIVED ON SALE OF INVESTMENT R S.3,00, 000 2. HARISH KUMAR AND SONS( RECEIVED ON SALE OF INVESTMENT) RS.9,30, 500 3. VEE AAY & COMPANY(RECEIVED ON SALE OF INVESTMENT) RS.3, 75,000 4. GRADUATE UNITED SERVICES( REFUND OF MONEY ADVANCED EARLIER) RS.6,00, 000 5. M/S AGGARWAL SALES CORPORATION( REFUND OF MONEY ADVANCED EARLIER) RS.3, 45,000 6. MUKESH JAIN(SHARE APPLICATION MONEY) RS. 1,00,000 7. AMIT JAIN(SHARE APPLICATION MONEY) RS. 1,00,000 14.2 THE LD. COUNSEL FURTHER SUBMITTED THAT FOLLOWING AMOUNTS ARE DEBIT AND WHICH CANNOT BE TREATED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 1. PAID TO AGGARWAL SALES CORPORATION RS. 9,32,286/ - 2. PAYMENT TO M/S SWASTIK ADVERTISING AGENCY RS. 1,50,000/ - 3. PAID TO M./S ONYX EXIM AND SALES RIGHT LIMITED RS 1,30,000/ - 14.3 SINCE IN ITA NO. 3777/DEL/2012 FOR ASSESSMENT YEAR 2000 - 01 WE HAVE ALREADY RESTORED THE ISSUE FOR DECIDING AFRESH, FOLLOWING OUR FINDING IN SAID APPEAL, WE RESTORE THE ISSUE IN THE YEAR UNDER CONSIDERATION ALSO FOR DECIDING AFRESH WITH DIRECTION SIMILAR TO GIVEN IN ITA NO. 3777/DEL/2012. 35 ITA NOS . 3777/DEL/2010 & 1720/DEL/2012 14.4 IN THE RESULT, APPEAL IS ALLOWED PARTLY FOR STATISTICAL PURPOSE. 15. ACCORDINGLY, BOTH THE APPEAL S FILED BY THE ASSESSEE ARE ALLOWED PARTLY FOR STATISTICAL PURPOSE S . THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 16 TH JUNE , 201 7 . SD/ - SD/ - ( I.C. SUDHIR ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16 TH JUNE , 201 7 . RK / - (D.T.D) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI