SMT.LILA SHARMA, MUMBAI V. INCOME TAX OFFICER RANGE-30(2)(2), MUMBAI

ITA 1726/MUM/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5019 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 16-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K BEPARIDR
• Keywords: Reopening of assessment; Bogus Share capital; Gift; Business income; Depreciation; Transfer pricing; Search and seizure; Opportunity of being heard; International transaction; Cost of acquisition; Tangible material; Difference of opinion; Accommodation entries; Competent authority; Assessment record; Onus to prove; Reason to believe; Documents seized; Change of opinion; Reassessment proceedings
• Section: 44AD; 133A; 147; 131; 68; 69; 148; 37; 139

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.1726/MUM/2018 ASSESSMENT YEAR:2010-11 SMT. LILA SHARMA, 36/1, SOLICITORS BUNGALOW, RANI SATI MARG, MALAD (E), MUMBAI-400097 / VS. INCOME TAX OFFICER, RANGE-30(2)(2), ROOM NO.513, C-13, BKC, MUMBAI-400051 / ASSESSEE / REVENUE P.A. NO . ASYPS3124M $ % & / ASSESSEE BY NONE $ % & / REVENUE BY SHRI S.K. BEPARI-DR / DATE OF HEARING 08/10/2018 & / DATE OF ORDER: 08/10/2018 & / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 28/12/2017 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI, ON THE GROUNDS RAISED IN THE GROUNDS OF APP EAL. ITA NO.1726/MUM/2018 SMT. LILA SHARMA 2 2. DURING HEARING, NOBODY APPEARED FOR THE ASSESSEE IN SPITE OF RECEIPT OF REGISTERED AD NOTIC E, AVAILABLE ON RECORD. THE ASSESSEE NEITHER MOVED ADJOURNMENT PETITION NOR MADE ANY EFFECTIVE REPRESENTATION. IT SEEMS THAT THE ASSESSEE HAS NOTH ING TO SAY, THEREFORE, I HAVE NO OPTION BUT TO PROCEED EX- PARTE, QUA THE ASSESSEE AND TEND TO DISPOSE OF THIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. ON THE OTHER HAND, THE LD. DR, SHRI S. K. BEPARI, DEFENDED THE ADDITIO N MADE BY THE LD. ASSESSING OFFICER, BY POINTING OUT THAT EVEN BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL), NO EFFECTIVE REPRESENTATION WAS MADE IN SPITE OF SUFFI CIENT OPPORTUNITIES PROVIDED TO THE ASSESSEE, FOR WHICH O UR ATTENTION WAS INVITED TO PARA-5 OF THE IMPUGNED ORD ER. 2.1. I HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE F IRST GROUND RAISED BY THE ASSESSEE IS GENERAL IN NATURE, REQUIRES NO DELIBERATION. 3. THE NEXT GROUND PERTAINS TO NOT PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. I HAVE PERU SED THE ITA NO.1726/MUM/2018 SMT. LILA SHARMA 3 RECORD AND FIND THAT THE APPEAL WAS FIXED FOR HEARI NG ON 05/04/2007, 25/04/2007, 08/05/2007, WHEN NOBODY APPEARED FOR THE ASSESSEE. ON 08/05/2017, THE AR OF THE ASSESSEE SHRI N. M. SHEKH APPEARED BUT SOUGHT ADJOURNMENT TO 25/05/2017. ON 26/05/2017, THE LD. COUNSEL ATTENDED BUT AGAIN SOUGHT ADJOURNMENT TO 15/06/2017. ON THAT DATE ALSO, THERE WAS NO COMPLIA NCE. THE LAST NOTICE OF HEARING WAS ISSUED ON 15/10/2017 , WHICH WAS DULY SERVED UPON THE ASSESSEE FIXING THE DATE OF HEARING FOR 21/11/2017. ON THAT DATE ALSO, NONE APPEARED. THUS, THE CONTENTION OF THE ASSESSEE THAT SUFFICIENT OPPORTUNITY WAS NOT PROVIDED TO THE ASSE SSEE IS FACTUALLY INCORRECT. EVEN BEFORE THIS TRIBUNAL, NOB ODY APPEARED IN SPITE OF SERVICE OF NOTICE (ACKNOWLEDGM ENT AVAILABLE ON RECORD), THEREFORE, THERE IS NO MERIT IN THE GROUND RAISED BY THE ASSESSEE, CONSEQUENTLY, DISMIS SED. 4. THE NEXT GROUND IS WITH RESPECT TO NOTICE ISSUE D UNDER SECTION 148 OF THE ACT. THE LD. ASSESSING OF FICER NOTED THAT THE CASH OF RS.11,68,000/- WAS FOUND DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE, WHIC H WAS ITA NO.1726/MUM/2018 SMT. LILA SHARMA 4 NOT EXPLAINED. IN PARA-4.3 OF THE IMPUGNED ORDER, T HE ASSESSEE CLAIM TO HAVE EXPLAINED THAT THE CASH WAS RECEIVED FROM TUITION ACTIVITIES, GIFT RECEIVED ON MARRIAGE AND SALE OF HOUSEHOLD APPLIANCES/ITEMS. THE ASSESSE E WAS ASKED TO FILE THE DETAILS. AS PER THE REVENUE, NO D ETAILS WERE FILED AND ULTIMATELY SHOW-CAUSE NOTICE WAS ISS UED TO THE ASSESSEE AS TO WHY THE CASH SO DEPOSITED SHOULD NOT BE TREATED AS UNEXPLAINED RECEIPTS. THE ASSESSEE FI LED CERTAIN DETAILS BEFORE THE LD. ASSESSING OFFICER, W HICH WERE CONSIDERED BUT NOT FOUND GENUINE. AS PER THE LD. ASSESSING OFFICER AND ALSO BY LD. DR, THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF CASH DEPOSIT IN SPITE OF OPPORTUNITIES. IN THE LIGHT OF THIS UNCONTROVERTED FINDING, NOW I SHALL DEAL WITH THE IMPUGNED ISSUE UNDER SECT ION 148 OF THE ACT. SO FAR AS, RE-OPENING OF ASSESSMENT U/S 147/148 OF THE ACT ON THE PLEA THAT THE LD. ASSESSI NG OFFICER IGNORED THE FACT THAT THERE WAS NO REASON T O BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT AS THERE WAS NO TANGIBLE MATERIAL WITH THE ASSESSING OFFICER AND INDEPENDENT APPLICATION OF MIND IS CONCERNED, I FIN D THAT ITA NO.1726/MUM/2018 SMT. LILA SHARMA 5 THE CASH WAS FOUND DEPOSITED IN THE ACCOUNT OF THE ASSESSEE, THE SOURCE OF WHICH WAS NOT EXPLAINED. 4.1. IN THE LIGHT OF THE FOREGOING DISCUSSIONS, IT IS OUR BOUNDED DUTY TO EXAMINE THE VALIDITY OF REOPENI NG U/S 147 R.W.S 148 OF THE ACT, THEREFORE, BEFORE ADVERT ING FURTHER I AM REPRODUCING HEREUNDER THE RELEVANT PRO VISION OF SECTION 147 OF THE ACT FOR READY REFERENCE AND A NALYSIS:- . IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THA T ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER I NCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF T HE PROCEEDINGS UNDER THIS SECTION, OR RECOMPUTE THE LOSS OR THE DE PRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY B E, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTIO N AND IN SECTIONS 148 TO 153 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 FOR TH E RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THI S SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVA NT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF TH E FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SEC TION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) O F SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY A LL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT Y EAR: PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRST PROVISO SHALL APPLY IN A CASE WHERE ANY INCOME IN RELATION TO ANY ASSET (INCLUDING FINANCIAL INTEREST IN ANY ENTITY) LOCATE D OUTSIDE INDIA, CHARGEABLE TO TAX, HAS ESCAPED ASSESSMENT FOR ANY A SSESSMENT YEAR: ITA NO.1726/MUM/2018 SMT. LILA SHARMA 6 PROVIDED ALSO THAT THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVING MATTER S WHICH ARE THE SUBJECT MATTERS OF ANY APPEAL, REFERENCE OR REV ISION, WHICH IS CHARGEABLE TO TAX AND HAS ESCAPED ASSESSMENT. EXPLANATION 1.PRODUCTION BEFORE THE ASSESSING OFFI CER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY TH E ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE W ITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, TH E FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARG EABLE TO TAX HAS ESCAPED ASSESSMENT, NAMELY : (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF AN Y OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX ; (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY TH E ASSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOM E OR HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR REL IEF IN THE RETURN ; (BA) WHERE THE ASSESSEE HAS FAILED TO FURNISH A REP ORT IN RESPECT OF ANY INTERNATIONAL TRANSACTION WHICH HE WAS SO REQUIRED UNDER SECTION 92E; (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDERASSESS ED ; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RA TE ; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCE SSIVE RELIEF UNDER THIS ACT ; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR AN Y OTHER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED; (D) WHERE A PERSON IS FOUND TO HAVE ANY ASSET (INC LUDING FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE INDIA. EXPLANATION 3.FOR THE PURPOSE OF ASSESSMENT OR REA SSESSMENT UNDER THIS SECTION, THE ASSESSING OFFICER MAY ASSES S OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED A SSESSMENT, AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, NOTWITHSTANDING THA T THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASON S RECORDED UNDER SUB-SECTION (2) OF SECTION 148. ITA NO.1726/MUM/2018 SMT. LILA SHARMA 7 EXPLANATION 4.FOR THE REMOVAL OF DOUBTS, IT IS HER EBY CLARIFIED THAT THE PROVISIONS OF THIS SECTION, AS AMENDED BY THE FINANCE ACT, 2012, SHALL ALSO BE APPLICABLE FOR ANY ASSESSMENT Y EAR BEGINNING ON OR BEFORE THE 1ST DAY OF APRIL, 2012. 4.2. IF THE AFORESAID PROVISION OF THE ACT IS ANAL YZED, I FIND THAT AFTER INSERTION OF EXPLANATION -3 TO SE CTION 147 OF THE ACT BY THE FINANCE (NO.2) ACT OF 2009 WITH E FFECT FROM 01/04/1989 SECTION 147 HAS AN EFFECT THAT ASSE SSING OFFICER HAS TO ASSESS OR REASSESS INCOME (SUCH INCO ME) WHICH HAS ESCAPED ASSESSMENT AND WHICH WAS BASIS OF FORMATION OF BELIEF AND, IF HE DOES SO, HE CAN ALSO ASSESS OR REASSESS ANY OTHER INCOME WHICH HAS ESCAPED ASSESSM ENT AND WHICH CAME TO THE NOTICE DURING THE COURSE OF PROCEEDINGS. IDENTICAL RATIO WAS LAID DOWN BY HON BLE JURISDICTIONAL HIGH COURT IN CIT VS JET AIRWAYS IND IA PVT. LTD. (2010) 195 TAXMAN 117 (MUM.) AND THE FULL BENC H DECISION FROM HONBLE KERALA HIGH COURT IN CIT VS B EST WOOD INDUSTRIES AND SAW MILLS (2011) 11 TAXMAN.COM 278 (KERALA)(FB). A PLAIN READING OF EXPLANATION-3 TO SECTION 147 CLEARLY DEPICTS THAT THE ASSESSING OFFICER HAS POWER TO MAKE ADDITION, WHERE HE ARRIVED TO A CONCLUSION THA T INCOME HAS ESCAPED ASSESSMENT WHICH CAME TO HIS NOT ICE ITA NO.1726/MUM/2018 SMT. LILA SHARMA 8 DURING THE COURSE OF PROCEEDINGS OF REASSESSMENT U/ S 148. MY VIEW IS FORTIFIED BY THE DECISION IN MAJIN DER SINGH KANG VS CIT (2012) 25 TAXMAN.COM 124/344 ITR 358 (P & H) AND JAY BHARAT MARUTI LTD. VS CIT (2010) TAX LR 476 (DEL.) AND V. LAKSHMI REDDY VS ITO (2011) 196 TAXMA N 78 (MAD.). THE PROVISION OF THE ACT IS VERY MUCH CLEA R AS WITH EFFECT FROM 01/04/1989, THE ASSESSING OFFICER HAS W IDE POWERS TO INITIATE PROCEEDINGS OF REOPENING. THE H ONBLE KERALA HIGH COURT IN CIT VS ABDUL KHADAR AHMAD (200 6) 156 TAXMAN 206 (KERALA) EVEN WENT TO THE EXTENT SO LONG AS THE AO HAS INDEPENDENTLY APPLIED HIS MIND TO ALL THE RELEVANT ASPECT AND HAS ARRIVED TO A BELIEF THE REO PENING CANNOT BE SAID TO BE INVALID. 4.3. I AM AWARE THAT MERE CHANGE OF OPINION CANNOT FORM THE BASIS OF REOPENING WHEN THE NECESSA RY FACTS WERE FULLY AND TRULY DISCLOSED BY THE ASSESSE E IN THAT SITUATION, THE ITO IS NOT ENTITLED TO REOPEN THE AS SESSMENT MERELY ON THE BASIS OF CHANGE OF OPINION. HOWEVER, POWERS UNDER AMENDED PROVISION ARE WIDE ENOUGH WHER E THERE IS A REASONABLE BELIEF WITH THE ASSESSING OFF ICER, THAT ITA NO.1726/MUM/2018 SMT. LILA SHARMA 9 INCOME HAS ESCAPED ASSESSMENT, BECAUSE THE POWERS W ITH EFFECT FROM 01/04/1989 ARE CONTEXTUALLY DIFFERENT A ND THE CUMULATIVE CONDITIONS SPELT OUT IN CLAUSES (A) AND (B) OF SECTION 147, PRIOR TO ITS AMENDMENT ARE NOT PRESENT IN THE AMENDED PROVISION. THE ONLY CONDITION FOR ACTION I S THAT THE ASSESSING OFFICER SHOULD HAVE REASON TO BELIEV E THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. S UCH BELIEF CAN BE REACHED IN ANY MANNER AND IS NOT QUAL IFIED BY A PRE-CONDITION OF FAITH AND TRUE DISCLOSURE OF MATERIAL FACTS BY AN ASSESSEE AS CONTEMPLATED IN PRE-AMENDED SECTION 147. VIEWED IN THAT ANGLE, POWER TO REOPEN ASSESSMENT IS MUCH WIDER UNDER THE AMENDED PROVISIO N. MY VIEW IS FORTIFIED BY THE DECISION FROM HONBLE D ELHI HIGH COURT IN BAWA ABHAI SINGH VS DCIT (2001) 117 TAXMAN 12 AND RAKESH AGARWAL VS ACIT (1996) 87 TAXM AN 306 (DEL.). THE HONBLE APEX COURT IN CIT VS SUN ENGINEERING WORKS PVT. LTD. 198 ITR 297 (SC) CLEARL Y HELD THAT PROCEEDINGS U/S 147 ARE FOR THE BENEFIT FOR TH E REVENUE, WHICH ARE AIMED AT GATHERING THE ESCAPED INCOME. AT THE SAME TIME, I AM AWARE THAT POWERS U/S 147 AND 148 OF THE ACT ARE NOT UNBRIDLED ONE AS IT IS ITA NO.1726/MUM/2018 SMT. LILA SHARMA 10 HEDGED WITH SEVERAL SAFEGUARDS CONCEIVED IN THE INT EREST OF ELIMINATING ROOM FOR ABUSE OF THIS POWER BY THE AO. HOWEVER, THE MATERIAL AVAILABLE ON RECORD, CLEARLY INDICATES THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT, THEREFORE, THE LD. ASSESSING OFFICER W AS WITHIN HIS JURISDICTION TO REOPEN THE ASSESSMENT. THE HONBLE APEX COURT IN ESS ESS KAY ENGINEERING CO. PVT. LTD. (2001) 247 ITR 818 (SC) HELD THAT MERELY BECAU SE THE CASE OF THE ASSESSEE WAS CORRECT IN ORIGINAL ASSESS MENT FOR THE RELEVANT ASSESSMENT YEAR, IT DOES NOT PRECLUDE THE ITO TO REOPEN THE ASSESSMENT OF AN EARLIER YEAR ON THE BASIS OF FINDING OF HIS FACT THAT FRESH MATERIAL CAME TO HIS KNOWLEDGE. 4.4. UNDER SECTION 147, AS SUBSTITUTED WITH EFFECT FROM 01/04/1989, THE SCOPE OF REASSESSMENT HAS BEEN WIDENED. AFTER SUCH SUBSTITUTION, THE ONLY RESTRICT ION, PUT IN THAT SECTION IS THAT REASON TO BELIEVE. THAT R EASON HAS TO BE A REASON OF A PRUDENT PERSON WHICH SHOULD BE FAIR AND NOT NECESSARILY DUE TO FAILURE OF THE ASSESSEE T O DISCLOSE FULLY AND PARTIALLY SOME MATERIAL FACTS RE LEVANT FOR ITA NO.1726/MUM/2018 SMT. LILA SHARMA 11 ASSESSMENT (DR. AMINS PATHOLOGY LABORATORY VS JCIT (2001) 252 ITR 673, 682 (BOM.) IDENTICAL RATIO WAS LAID DOWN BY HONBLE DELHI HIGH COURT IN UNITED ELECTRIC AL COMPANY PVT. LTD. VS CIT (2002) 258 ITR 317, 322 (D EL.) AND PRAFULL CHUNNILAL PATEL VS ACIT 236 ITR 832, 83 8 (GUJ.). THE ESSENTIAL REQUIREMENT FOR INITIATING REASSESSMENT PROCEEDING U/S 147 R.W.S 148 OF THE AC T IS THAT THE LD. ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR. THE HONBLE GUJ ARAT HIGH COURT IN PRAFULL CHUNNILAL PATEL VS ACIT (SUPR A) EVEN WENT TO THE EXTENT THAT AT THE INITIATION STAGE FOR MATION OF REASONABLE BELIEF IS NEEDED AND NOT A CONCLUSIVE FI NDING OF FACTS. IDENTICAL RATIO WAS LAID DOWN IN BRIJMOHAN AGRAWAL VS ACIT (2004) 268 ITR 400, 405 (ALL.) AND RATNACHUDAMANI S. UTNAL VS ITO (2004) 269 ITR 272, 277 (KARNATAKA) APPLYING SOWDAGAR AHMED KHAN VS ITO (1968) 70 ITR 79(SC). 4.5 SO FAR AS, THE MEANING OF EXPRESSION, REASON TO BELIEVE IS CONCERNED, IT REFERS TO BELIEF WHICH PR OMPTS THE ITA NO.1726/MUM/2018 SMT. LILA SHARMA 12 ASSESSING OFFICER TO APPLY SECTION 147 TO A PARTICU LAR CASE. IT DEPEND UPON THE FACTS OF EACH CASE. THE BELIEF M UST BE OF AN HONEST AND REASONABLE PERSON BASED ON REASONA BLE GROUNDS. THE ASSESSING OFFICER IS REQUIRED TO ACT, NOT ON MERE SUSPICION, BUT ON DIRECT OR CIRCUMSTANTIAL EVI DENCE. MY VIEW FIND SUPPORT FROM THE RATIO LAID DOWN IN FO LLOWING CASES:- I. EPICA LABORATORIES LTD. VS DCIT 251 ITR 420, 425-426 (BOM.), II. VISHNU BOREWELL VS ITO (2002) 257 ITR 512 (ORISSA), III. CENTRAL INDIA ELECTRIC SUPPLY COMPANY LTD. VS ITO (2011) 333 ITR 237 (DEL.), IV. V.J. SERVICES COMPANY MIDDLE EAST LTD. VS DCIT (2011) 339 ITR 169 (UTTRAKHAND), V. CIT VS ABHYUDAYA BUILDERS (P. ) LTD. (2012) 340 ITR 310 (ALL.), VI. CIT VS DR. DEVENDRA GUPTA (2011) 336 ITR 59 (RAJ.), VII. EMIRATES SHIPPING LINE FZE VS ASST. DIT (2012) 349 I TR 493 (DEL.). VIII. REFERENCE MAY ALSO MADE TO FOLLOWING JUDICIAL DECISI ONS:- IX. SAFETAG INTERNATIONAL INDIA P. LTD. (2011) 332 ITR 622 (DEL.), X. CIT VS ORIENT CRAFT LTD. (2013) 354 ITR 536 (DEL.) XI. ACORUS UNITECH WIRELSS PVT. LTD. VS ACIT (2014) 362 IT R 417 (DEL.). XII. PRAFUL CHUNILAL PATEL: VASANT CHUNILAL PATEL VS ASST. CIT (1999) 832, 843-44, 844-45 (GUJ.), ITA NO.1726/MUM/2018 SMT. LILA SHARMA 13 XIII. VENUS INDUSTRIAL CORPORATION VS ASST. CIT (1999) 236 I TR 742, 746 (PUNJ.), XIV. SRICHAND LALCHAND TALREJA VS ASST. CIT (1998) 98 TAXM AN 14, 19 (BOM.), XV. USHA BELTRON LTD. VS JCIT (1999) 240 ITR 728, 736-37, 739 (PAT.) XVI. KAPOOR BROTHERS VS UNION OF INDIA (2001) 247 ITR 324 , 331, 332-33 XVII. VIPPY PROCESSORS PVT. LTD. VS CIT (2001) 249 ITR 7, 8 (MP) 4.6. IN DILIP S. DAHANUKAR VS ASST. CIT (2001) 248 ITR 147, 150-51 (BOM.). THE HONBLE JURISDICTIONAL HIGH COURT HELD AS UNDER:- HELD, THAT THERE WAS MATERIAL ON RECORD ON THE BASIS OF SURVEY AND STATEMENT OF PERSON TO SHOW THAT THE ASSESSEE HAD WRONGFULLY CLAIM DEDUCTION U/S 80IA. THEREFORE, THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT FOR ASSESSMENT YEAR 1994-95. IDENTICALLY IN THE CASE OF SRICHAND LALCHAND TALREJA V. ASST. CIT, (1998) 98 TAXMAN 14, 19 (BOM) , WHERE THE INFORMATION REGARDING ACQUISITION OF THE ASSET WAS NOT AVAILABLE WITH THE ASSESSING OFFICER DURING THE RELEVANT ASSESSMENT YEAR 1992-93 AND SUC H INFORMATION WAS DISCLOSED IN THE RETURN FOR THE ITA NO.1726/MUM/2018 SMT. LILA SHARMA 14 ASSESSMENT YEAR 1995-96, THE HONBLE JURISDICTIONAL HIGH COURT HELD THAT THE ASSESSING OFFICER CAN FORM A BONA FIDE BELIEF THAT THERE WAS ESCAPEMENT OF INCOM E IN RELATION TO ASSESSMENT YEAR 1992-93 . 4.7. THE HONBLE JURISDICTIONAL HIGH COURT IN EXP ORT CREDIT GUARANTEE CORPORATION OF INDIA LTD. V. ADDL. CIT, (2013) 350 ITR 651 (BOM), WHERE THERE HAD BEEN NO APPLICATION OF MIND TO THE RELEVANT FACTS DURING TH E COURSE OF THE ASSESSMENT PROCEEDINGS BY THE ASSESSING OFFI CER, THE REOPENING OF THE ASSESSMENT WAS HELD TO BE VALI D. 4.8. THE HONBLE JURISDICTIONAL HIGH COURT IN GIRILAL & CO. V. S.L. MEENA, ITO, (2008) 300 ITR 43 2 (BOM), HELD THAT IN ORDER TO INVOKE THE EXTRAORDIN ARY JURISDICTION OF THE COURT THE PETITIONER MUST ALSO MAKE OUT A CASE THAT NO PART OF THE RELEVANT MATERIAL HA D BEEN KEPT OUT FROM THE ASSESSING OFFICER). THE INFORMATION WAS IN THE ANNEXURES AND CONSEQUENTLY EXPLANATION 2(C)(IV) OF SECTION 147 WOULD APPLY. TH E REASSESSMENT PROCEEDINGS AFTER FOUR YEARS WERE VALI D. ITA NO.1726/MUM/2018 SMT. LILA SHARMA 15 4.9. IN THE CASE OF DEPUTY CIT V. GOPAL RAMNARAYAN KASAT, (2010) 328 ITR 556 (BOM), IT WAS NOT THE CAS E OF THE ASSESSEE THAT THE NOTICE ISSUED WAS AFTER THE E XPIRY OF THE TIME LIMIT PROVIDED IN SECTION 153(2). THE REASSESSMENT PROCEEDINGS WERE HELD TO BE VALID. IN INDIAN HUME PIPE CO. LTD. V. ASST. CIT, (2012) 348 ITR 439 (BOM), BOTH IN THE COMPUTATION OF TAXABLE LONG-TERM CAPITAL GAINS IN THE ORIGINAL RETURN OF INCOME AND IN THE COMPUTATION THAT WAS SUBMITTED IN RESPONSE TO THE Q UERY OF THE ASSESSING OFFICER THERE WAS A COMPLETE SILEN CE IN REGARD TO THE DATES ON WHICH THE AMOUNTS WERE INVES TED, AS SUCH THERE BEING A FAILURE TO DISCLOSE FULLY AND TRULY MATERIAL FACTS NECESSARY FOR ASSESSMENT. THE REASSESSMENT PROCEEDINGS WERE HELD TO BE VALID. THI S VIEW WAS ALSO CONFIRMED IN FOLLOWING CASES:- A. DALMIA P. LTD. V. CIT, (2012) 348 ITR 469 (DEL); B. CIT V. K. MOHAN & CO. (EXPORTS), (2012) 349 ITR 653 (BOM); C. REMFRY & SAGAR V. CIT, (2013) 351 ITR 75 (DEL); D. OPG METALS & FINSEC LTD. V. CIT, (2013) 358 ITR 144 (DEL). ITA NO.1726/MUM/2018 SMT. LILA SHARMA 16 4.10. IN THE CASE OF VENUS INDUSTRIAL CORPORATION V. ASST. CIT, (1999) 236 ITR 742, 746 (P & H) [WHERE INITIATION WAS STARTED WITHIN FOUR YEARS FOR RE-EXA MINING THE DEDUCTION UNDER SECTION 80HHC, WAS HELD TO BE WRONGLY ALLOWED IN THE ORIGINAL ASSESSMENT. IDENT ICALLY, IN THE CASE OF HAPPY FORGING LTD. V. CIT, (2002) 25 3 ITR 413,416-17 (P & H), WHERE EXCISE DUTY PAID IN ADVAN CE WAS SHOWN AS AN ASSET IN THE BALANCE SHEET AND WAS ALLOWED AS A DEDUCTION, REASSESSMENT NOTICE ON THE GROUND THAT EXCISE DUTY WAS SHOWN AS AN ASSET IN TH E BALANCE SHEET AND WAS NOT ROUTED THROUGH THE PROFIT AND LOSS ACCOUNT. THE REOPENING AT THIS STAGE WAS HELD TO BE VALID. IN THE CASE OF VIPAN KHANNA V. CIT, (2002) 255 ITR 220, 230 (P & H), WHERE FROM THE FACTS IT WAS C LEAR THAT THE ASSESSEE HAD CLAIMED DEPRECIATION IN THE R ETURN AT THE RATE OF 50 PER CENT AND HE HAD NOWHERE DISPU TED THE FACT THAT THE ADMISSIBLE RATE OF DEPRECIATION T O HIM WAS 40 PER CENT., SUCH FACT ALONE WAS SUFFICIENT TO INITIATE REASSESSMENT PROCEEDINGS UNDER SECTION 147 AND, THEREFORE, SUCH INITIATION WAS SUSTAINED. THE HONB LE PUNJAB & HARYANA HIGH COURT IN MRS. RAMA SINHA V. C IT, ITA NO.1726/MUM/2018 SMT. LILA SHARMA 17 (2002) 256 ITR 481, 483, 486, WHERE THE REASSESSMEN T NOTICE HAS BEEN ISSUED ON THE BASIS OF DEFINITE INF ORMATION FROM CBI REGARDING INVESTMENTS BY THE ASSESSEE WHIC H HAD NOT BEEN DISCLOSED DURING THE ORIGINAL ASSESSME NT PROCEEDINGS, SUCH INITIATION HAS BEEN UPHELD. 4.11. IN PUNJAB LEASING PVT. LTD. V. ASST. CIT, (2004) 267 ITR 779, 781-82 (P & H), WHERE DEPRECIAT ION WAS ALLOWED TO THE ASSESSEE, WHO WAS ENGAGED IN THE BUSINESS OF FINANCING OF VEHICLES AND CONSUMER DURA BLES ON 'HIRE-PURCHASE BASIS' AS WELL AS ON 'LEASE/RENT BASIS', A REASSESSMENT NOTICE ISSUED AFTER FOUR YEARS HAS BEE N HELD NOT TO SUFFER FROM ANY ILLEGALITY AS THE SAME WAS B ASED ON THE BONA FIDE ACTION OF THE COMPETENT AUTHORITY TO DETERMINE WHETHER OR NOT THE VEHICLES IN RESPECT OF WHICH THE PETITIONER HAD BEEN CLAIMING DEPRECIATION, WERE ACTUALLY OWNED BY IT. 4.12. IN JAWAND SONS V. CIT(A), (2010) 326 ITR 39 (P & H), IN THE INITIAL ASSESSMENT, THE BENEFIT OF DED UCTION OF THE DUTY DRAWBACK AND DEPB UNDER SECTION 80-IB WAS WRONGLY GRANTED TO THE ASSESSEE, FOR WHICH IT WAS N OT ENTITLED. THEREFORE, REASSESSMENT PROCEEDINGS TO WI THDRAW ITA NO.1726/MUM/2018 SMT. LILA SHARMA 18 THE DEDUCTION WERE HELD TO BE VALID. LIKEWISE, IN CIT V. HINDUSTAN TOOLS & FORGINGS P. LTD., (2008) 306 ITR 209 (P & H), WHERE, THE ASSESSEE IN THE REGULAR ASSESSMENT HAD BEEN ALLOWED DEDUCTION MORE THAN ACTUALLY ALLOWABLE UNDER SECTION 80HHC. THEREFORE, THE ACTION INITIATE D BY THE AO FOR REASSESSMENT UNDER SECTION 147(B) COULD NOT BE HELD TO BE INVALID. 4.13. IN THE CASE OF MARKANDA VANASPATI MILLS LTD. V. CIT, (2006) 280 ITR 503 (P & H), WHEREIN, THE INFOR MATION FURNISHED BY THE ASSESSEE GAVE NO CLUE TO THE PAYME NT OF LIABILITY IN REGARD OF THE SALES TAX COLLECTED IN E XCESS. THE ASSESSING OFFICER WAS HELD TO BE VALIDLY INITIATED THE REASSESSMENT PROCEEDINGS UNDER SECTION 147 FOR BOTH THE YEARS UNDER CONSIDERATION. IN THE CASE OF SAT NAR AIN V. CIT, (2010) 320 ITR 448 (P & H), THE DOCUMENT DID N OT FORM THE SOLE BASIS FOR THE ASSESSING OFFICER TO I NITIATE REASSESSMENT PROCEEDING BUT HE ALSO TOOK INTO CONSIDERATION THE LETTER WRITTEN BY THE ASSISTANT COMMISSIONER AS WELL AS THE FACT THAT NO RETURN HAD BEEN FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 1995-96. THUS, ITA NO.1726/MUM/2018 SMT. LILA SHARMA 19 IT WAS HELD THAT THE ASSESSING OFFICER HAD RIGHTLY INVOKED THE JURISDICTION TO INITIATE THE REASSESSMENT PROCE EDINGS UNDER SECTION 147. IN THE CASE OF CIT V. HUKAM SIN GH, (2005) 276 ITR 347 (P & H), IT WAS HELD THAT THE RESPONDENTS DID NOT HAVE THE LOCUS STANDI TO QUESTI ON THE ORDERS OF REASSESSMENT ON THE GROUND OF LACK OF NOT ICE. NON-ISSUANCE OF NOTICE TO SOME OF THE LEGAL HEIRS O F THE LATE P WAS MERELY AN IRREGULARITY AND THE SAME DID NOT A FFECT THE VALIDITY OF THE REASSESSMENT ORDERS. LIKEWISE, IN TILAK RAJ BEDI V. JOINT CIT, (2009) 319 ITR 385 (P & H), WHEREIN, FACTS COMING TO LIGHT IN A SUBSEQUENT ASSESSMENT YE AR COULD VALIDLY FORM THE BASIS FOR INITIATING REASSES SMENT PROCEEDINGS, IN VIEW OF EXPLANATION 2 TO SECTION 14 7. THE ACTION OF THE INCOME TAX AUTHORITIES IN REOPENING T HE ASSESSMENT OF THE ASSESSEE AND RESTRICTING THE DEDU CTION UNDER SECTION 80-IB WAS HELD TO BE VALID. 4.14. IN THE CASE OF SMT. USHA RANI V. CIT, (2008) 301 ITR 121 (P & H), THERE WAS NOTHING ON RECORD TO SHO W THE RELATIONSHIP BETWEEN THE DONOR AND THE DONEE, CAPAC ITY OF THE DONOR TO MAKE GIFTS AND THE OCCASION THEREFORE. THE ITA NO.1726/MUM/2018 SMT. LILA SHARMA 20 ASSESSEE HAD FAILED TO DISCHARGE THE ONUS TO PROVE THE GIFTS. THE REASSESSMENT PROCEEDINGS WERE HELD TO BE VALID. IN THE CASE OF USHA BELTRON LTD. V. JOINT CIT, (199 9) 240 ITR 728, 736-37, 739 (PAT), WHERE THE INVESTIGATION REPORT INDICATED THAT THE OFFICER HAD REASON TO BELIEVE TH AT ON ACCOUNT OF FAILURE ON THE PART OF THE PETITIONER-AS SESSEE TO DISCLOSE TRUE AND FULL FACTS, INCOME HAD BEEN GROSS LY UNDER ASSESSED, REASSESSMENT PROCEEDINGS WERE HELD VALIDLY INITIATED. 4.15. IN THE CASE OF KAPOOR BROTHERS V. UNION OF I NDIA, (2001) 247 ITR 324, 331, 332-33 (PAT), WHERE THE MA TERIAL EVIDENCE FOR THE PURPOSE OF REOPENING OF THE ASSESS MENT ALREADY COMPLETED HAS BEEN BROUGHT TO THE NOTICE OF THE AUTHORITY DURING THE COURSE OF ENQUIRY. THE NOTICE WAS HELD TO BE VALID BY THE HONBLE HIGH COURT. IN THE CASE OF VIPPY PROCESSORS PVT. LTD. V. CIT, (2001) 249 ITR 7 , 8 (MP), WHERE THE NEED TO ISSUE NOTICE AROSE DUE TO NOTICIN G OF VAST DIFFERENCE IN VALUE OF PROPERTIES DISCLOSED BY THE ASSESSEE AND THAT OF THE REPORT OF THE VALUATION OF FICER AND THE REASONS THAT LED TO THE ISSUE OF THE NOTICE WERE ITA NO.1726/MUM/2018 SMT. LILA SHARMA 21 DULY RECORDED AND THE SAME WERE ALSO ADEQUATE AND B ASED ON RELEVANT FACTS AND MATERIAL, INITIATION WAS UPHE LD. IN TRIPLE A TRADING & INVESTMENT PVT. LTD. V. ASST. CI T, (2001) 249 ITR 109, 110-11 (MP), WHERE THE NOTICE WAS ISSU ED AFTER RECORDING REASONS IN THAT REGARD, INITIATION WAS UPHELD. 4.16. LIKEWISE, HONBLE GUJARAT HIGH COURT IN GARD EN FINANCE LTD. V. ADD/. CIT, (2002) 257 ITR 481, 489, 494- 95, SPECIAL LEAVE PETITION DISMISSED BY THE SUPREME COURT: (2002) 255 ITR (ST.) 7-8 (SC), WHERE THE ASSESSEE W AS HOLDING SHARES IN AN AMALGAMATING COMPANY AND HE WA S ALLOTTED SHARES IN THE AMALGAMATED COMPANY AND SUCH SHARES WERE SOLD BY HIM AND HE HAS DISCLOSED THE MA RKET PRICE OF SUCH SHARES AS ON THE DATE OF AMALGAMATION AS THE COST OF ACQUISITION OF SUCH SHARES AND HAS NOT DISCLOSED THE COST OF ACQUISITION OF SHARES IN THE AMALGAMATING COMPANY IN ACCORDANCE WITH SECTION 49( 2) READ WITH SECTION 47(VII), INITIATION OF REASSESSME NT PROCEEDINGS AFTER FOUR YEARS HAS BEEN SUSTAINED BEC AUSE THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DI SCLOSE ITA NO.1726/MUM/2018 SMT. LILA SHARMA 22 MATERIAL FACTS NECESSARY FOR ASSESSMENT. LIKEWISE, IN SUMAN STEELS V. UNION OF INDIA, (2004) 269 ITR 412, 418- 19 (RAJ), WHERE THE RETURN OF THE ASSESSEE FOR ASSE SSMENT YEAR 1995-96 WAS PROCESSED UNDER SECTION 143(1)(A) ACCEPTING THE NET PROFIT RATE DECLARED BY THE ASSES SEE, WHO CARRIED ON CON- TRACT BUSINESS, INITIATION OF REASS ESSMENT PROCEEDINGS BY ISSUING A NOTICE DATED 15-5-2001 PROPOSING TO REASSESS PETITIONER-ASSESSEE AT HIGHER RATE IN VIEW OF THE PRESUMPTIVE RATE PRESCRIBED UNDER SECTI ON 44AD HAS BEEN SUSTAINED. IN THE CASE OF DR. SAHIB RAM GIRI V. ITO, (2008) 301 ITR 294 (RAJ), THE REASSESS MENT PROCEEDINGS WERE INITIATED AFTER RECORDING REASONS IN WRITING BY THE AO. THE NON-AVAILABILITY OF A FEW DO CUMENTS DEMANDED BY THE ASSESSEE WOULD NOT MAKE THE REASSESSMENT PROCEEDINGS INITIATED FOR THE REASONS RECORDED IN DETAIL ILLEGAL. 4.17. IN THE CASE OF DESH RAJ UDYOG : CHAMAN UDYOG V. ITO, (2009) 318 ITR 6 (ALL), IN THE ASSESSMENT Y EARS IN QUESTION, THE MATTER WAS STILL TO BE DECIDED FINALL Y BY THE ASSESSING AUTHORITY WHETHER THE INCOME SHOULD BE TR EATED ITA NO.1726/MUM/2018 SMT. LILA SHARMA 23 UNDER THE HEAD 'BUSINESS INCOME' OR 'PROPERTY INCOM E'. THE ASSESSEE WOULD GET OPPORTUNITY TO SHOW SUFFICIE NT CAUSE TO THE ASSESSING AUTHORITY DURING THE COURSE OF ASSESSMENT. THUS, IT COULD NOT BE SAID THAT THERE W AS NO RELEVANT MATERIAL TO INITIATE PROCEEDINGS UNDER SEC TION 147. IN THE CASE OF KARTIKEYA INTERNATIONAL V. CIT , (2010) 329 ITR 539 (ALL), IN VIEW OF THE MATTER, THE PETIT IONER WAS NOT ENTITLED FOR THE DEDUCTION ON THE DUTY DRAWBACK AMOUNT UNDER SECTION 80-IB AND SINCE IT HAD BEEN AL LOWED IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(1) , IT HAD ESCAPED ASSESSMENT. ON THESE FACTS THE INITIATI ON OF THE PROCEEDINGS UNDER SECTION 147 READ WITH SECTION 148 FOR ASSESSMENT YEARS 2005-06 AND 2006-07 WAS LEGAL AND IN ACCORDANCE WITH LAW. 4.18. LIKEWISE, IN THE CASE OF SUNIL KUMAR LAIN: SURESH CHANDRA LAIN V. ITO, (2006) 284 ITR 626 (ALL ), NOTWITHSTANDING THE FACT THAT THE AMOUNT HAD BEEN ASSESSED TO TAX IN THE HANDS OF P, HE HAD TAKEN A S TAND THAT THE AMOUNT DID NOT BELONG TO HIM AND INSTEAD BELONGED TO S. THUS, IT WAS NOT CLEAR AS TO IN WHOS E HANDS ITA NO.1726/MUM/2018 SMT. LILA SHARMA 24 THE AMOUNT IN QUESTION HAD TO BE ASSESSED. THE ITO WAS JUSTIFIED IN TAKING PROCEEDINGS UNDER SECTION 147 F OR ASSESSING THE AMOUNTS IN THE HANDS OF THE PETITIONE RS ACCORDING TO THE CLAIM MADE BY THE PETITIONERS. LI KEWISE, HONBLE KERALA HIGH COURT IN CIT V. DR. SADIQUE UMM ER, (2010) 322 ITR 602 (KER), WHERE, THE ASSESSING OFFI CER COLLECTED FURTHER INFORMATION TO COMPLETE THE REASSESSMENTS WHICH WAS ALSO PERMISSIBLE UNDER THE ACT. THE FINDING OF THE FIRST APPELLATE AUTHORITY AS WEL L AS THE TRIBUNAL, THAT THE ASSESSING OFFICER HAD NO MATERIA L TO BELIEVE THAT THE INCOME HAD ESCAPED ASSESSMENT WAS WRONG AND CONTRARY TO FACTS. THE ASSESSEE HAD NOT MAINTAINED ANY BOOKS OF ACCOUNT. THEREFORE, THE REO PENING OF ASSESSMENTS WAS HELD TO BE VALID AND WITHIN TIME . IN THE CASE OF CIT V. UTTAM CHAND NAHAR, (2007) 295 I TR 403 (RAJ), THE NOTICE REQUIRING THE ASSESSEE TO FIL E THE RETURN WITHIN 30 DAYS WAS IN ACCORDANCE WITH SECTIO N 148 AS IT MUST BE DEEMED TO BE IN FORCE WITH EFFECT FRO M 1-4- 1989, AND IN FORCE AS ON THE DATE NOTICE WAS ISSUED . THERE WAS NO VIOLATION OF SECTION 148 IN RESPECT OF THE S PECIFIED ITA NO.1726/MUM/2018 SMT. LILA SHARMA 25 PERIOD WITHIN WHICH THE RETURN IS TO BE SUBMITTED. THE REASSESSMENT PROCEEDINGS WERE HELD TO BE VALID. 4.19. IN THE CASE OF CIT V. C. V. LAYACHANDRAN, (2 010) 322 ITR 520 (KER), WHERE, THE ASSESSEE DID NOT CONC EDE THE INCOME ON CAPITAL GAIN EITHER UNDER THE UN-AMENDED PROVISION OR UN-DER THE AMENDED PROVISION, THE RECO URSE OPEN TO THE DEPARTMENT WAS TO BRING TO TAX INCOME ESCAPING ASSESSMENT UNDER SECTION 147 WHICH WAS NOT TIME BARRED OR OTHERWISE INVALID. LIKEWISE, IN AT UL TRADERS V. ITO, (2006) 282 ITR 536 (ALL), THE ACCOU NT BOOKS OR RECORD AND OTHER MATERIAL WERE ALL COMMON WHICH WERE BEING CONSIDERED BY THE CIT(A) IN THE PROCEEDINGS RELATING TO THREE APPEALS. THE PETITION ER HAD NOTICE AND OPPORTUNITY OF BEING HEARD. THE REASSESS MENT PROCEEDINGS WERE HELD TO BE VALIDLY INITIATED. IN THE CASE OF INDUCTOTHERM (INDIA) P. LTD. V. LAMES KURIAN, AS ST. CIT, (2007) 294 ITR 341 (GUJ), THE ASSESSING OFFICER HA D FOUND THAT THERE WERE ERRORS IN THE COMPUTATION OF ALLOWA NCES. THE REASSESSMENT PROCEEDINGS WERE HELD TO BE VALID. IN THE CASE OF PAPAYA FARMS PVT. LTD. VS. DCIT, (2010) 323 ITR ITA NO.1726/MUM/2018 SMT. LILA SHARMA 26 60 (MAD), WHERE THE ASSESSEE HAD FURNISHED INCORREC T PARTICULARS AND THEREFORE, THE REOPENING OF THE ASS ESSMENT WAS HELD TO BE JUSTIFIED. 4.20. IN THE CASE OF CIT V. KERALA STATE CASHEW DEVELOPMENT CORPORATION LTD., (2006) 286 ITR 553 (K ER), WHEREIN, THE ASSESSEE WAS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING SHOULD NOT HAVE CLAIMED DEDUCTION OF PENAL INTEREST WHICH HAD ACCRUED NOT IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR BUT IN EARLIER YEAR S. THIS THE ASSESSEE HAD NOT DISCLOSED. THE REASSESSMENT WA S HELD TO BE VALID. LIKEWISE, IN KUSUM INDUSTRIES P. LTD. V. CIT, (2008) 296 ITR 242 (ALL), AS THE AWARD HAD BEC OME FINAL IT WOULD BE TAKEN THAT THE DIRECTORS OF THE A SSESSEE HAD ACCEPTED THE FACTUM OF EARNING OF SECRET PROFIT NOT REFLECTED IN THE BOOKS OF ACCOUNT, WHICH WAS ALSO B INDING ON THE COMPANY. THE NON-APPEARANCE OF ONE OF THE ARBITRATORS AND ONE OF THE DIRECTORS IN RESPECT OF THE SUMMON ISSUED UNDER SECTION 131 WOULD NOT MAKE THE REASSESSMENT INVALID. THE HONBLE KERALA HIGH COURT IN CIT V. INDO MARINE AGENCIES (KERALA) P. LTD., (2005 ) 279 ITA NO.1726/MUM/2018 SMT. LILA SHARMA 27 ITR 372 (KER), HELD THAT THE ENTRY WOULD AMOUNT TO AN ORDER UNDER SECTION 144. THE MERE FACT THAT IT WAS NOT COMMUNICATED TO THE ASSESSEE WOULD NOT MAKE SUCH AN ASSESSMENT RECORDED IN THE ORDER SHEET ILLEGAL AND THAT WOULD NOT BAR FURTHER PROCEEDINGS UNDER SECTION 147 . THUS, THE ASSESSMENT WAS HELD TO BE VALIDLY REOPENE D UNDER EXPLANATION 2(C) TO SECTION 147. LIKEWISE, I N CIT V. N. JAYAPRAKASH, (2006) 285 ITR 369 (KER), WHERE, TH E ASSESSEE COULD NOT, AFTER HAVING PERSUADED THE ASSE SSING AUTHORITY TO WITHDRAW THE NOTICE DATED 1-10-1993, POINTING OUT THAT IT WAS NOT IN CONFORMITY WITH LAW , BE ALLOWED TO CONTEND THAT THE NOTICE WAS VALID DUE TO THE OMISSION OF THE TIME-LIMIT BY THE FINANCE (NO.2) AC T, 1996, WITH EFFECT FROM 1-4-1989. IN THE ABSENCE OF SPECIF IC PROVISION IN THE FINANCE (NO. 2) ACT, 1996, INVALID ATING PROCEEDINGS INITIATED BY THE INCOME-TAX OFFICER, TH E ACTION TAKEN BY HIM APPLYING THE THEN EXISTING LAW COULD N OT BE SAID TO BE INVALID. 4.21. LIKEWISE, IN CIT V. S.R. TALWAR, (2008) 305 ITR 286 (ALL), THE FACTUM OF TAKING ADVANCES OR LOAN FR OM T ITA NO.1726/MUM/2018 SMT. LILA SHARMA 28 AND K, IN WHICH THE ASSESSEE WAS ONE OF THE DIRECTO RS HAD NOT BEEN DISCLOSED NOR A COPY OF THE LEDGER ACCOUNT OF THE ASSESSEE MAINTAINED BY THE COMPANY FILED. IN VIEW O F THE ABSENCE OF THESE DETAILS, THE ASSESSING OFFICER COU LD NOT EXAMINE THE TAXABILITY OF ADVANCES OR LOAN RAISED B Y THE ASSESSEE. THERE WAS FAILURE TO DISCLOSE MATERIAL FA CTS NECESSARY FOR ASSESSMENT. THE REASSESSMENT PROCEEDI NGS WERE HELD TO BE VALID. IN ANOTHER CASE, THE HONBL E ALLAHABAD HIGH COURT IN CHANDRA PRAKASH AGRAWAL V. ASST. CIT, (2006) 287 ITR 172 (ALL), WHEREIN, THE I NCOME- TAX DEPARTMENT HAD SENT A REQUISITION ON 27-3-2002, UNDER SECTION 132A REQUISITIONING THE BOOKS OF ACCO UNT AND OTHER DOCUMENTS SEIZED BY THE CENTRAL EXCISE DEPARTMENT. THE RECORD OF THE PROCEEDING DATED 18-4 - 2002, SHOWED THAT THE REQUISITION WAS NOT FULLY EXE CUTED AS ALL THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS HAD NOT BEEN DELIVERED TO THE REQUISITIONING AUTHORITY. THE PROCEEDINGS INITIATED UNDER SECTION 147 WAS HELD TO BE VALID. ITA NO.1726/MUM/2018 SMT. LILA SHARMA 29 4.22. IN RAMILABEN RATILAL SHAH V. CIT, (2006) 282 ITR 176 (GUJ), HELD THAT THE NOTING IN THE DIARY CONSTITUTED SUFFICIENT INFORMATION FOR THE ESCAPEME NT OF INCOME BY EITHER NON-DECLARATION OF CORRECT SALE CONSIDERATION OR FURNISHING OF INACCURATE PARTICULA RS AS REGARDS SALE CONSIDERATION. THUS, THE TRIBUNAL W AS JUSTIFIED IN HOLDING THAT THE ASSESSEE HAD FAILED T O DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR THE ASSESSMENT OF THE RELEVANT ASSESSMENT YEAR. THE REASSESSMENT PROCEEDINGS HAD BEEN VALIDLY INITIATED . 4.23. LIKEWISE, IN CIT V. ABDUL KHADER AHAMED, (2006) 285 ITR 57 (KER), IT WAS CLEAR FROM THE REAS ONS RECORDED BY THE DEPUTY CIT THAT HE PRIMA FACIE HAD REASON TO BELIEVE THAT THE ASSESSEE HAD OMITTED TO DISCLOS E FULLY AND TRULY THE MATERIAL FACTS AND THAT AS A CONSEQUE NCE INCOME HAD ESCAPED ASSESSMENT. THE REASSESSMENT WAS HELD TO BE VALID. IN THE CASE OF U.P. STATE BRASSW ARE CORPORATION LTD. V. CIT, (2005) 277 ITR 40 (ALL), T HE PRINCIPLES LAID DOWN BY THE CALCUTTA HIGH COURT IN CIT V. NEW CENTRAL JUTE MILLS CO. LTD. : (1979) 118 ITR 10 05 ITA NO.1726/MUM/2018 SMT. LILA SHARMA 30 (CAL) DID CONSTITUTE INFORMATION ON A POINT OF LAW WHICH SHOULD BE TAKEN INTO CONSIDERATION BY THE ITO IN FO RMING HIS BELIEF THAT THE INCOME TO THAT EXTENT HAD ESCAP ED ASSESSMENT TO TAX AND, THE REASSESSMENT WAS HELD TO BE VALID. IN SUNDER CARPET INDUSTRIES V. ITO, (2010) 324 ITR 417 (ALL), HELD THAT THE DEPARTMENTAL VALUER'S REPO RT CONSTITUTED MATERIAL FOR ENTERTAINING A BELIEF OF E SCAPED INCOME IN THE YEARS UNDER CONSIDERATION. THE REASSESSMENT PROCEEDING WAS HELD TO BE VALID. 4.24. IN AUROBINDO SANITARY STORES V. CIT, (2005) 276 ITR 549 (ORI), THERE BEING A SUBSTANTIAL DIFFERENCE BETWEEN THE FIGURES OF LIABILITIES TOWARDS SUNDRY CREDITORS IN THE PARTY LEDGERS OF THE ASSESSEE-FIRM AND THE FIGURES OF LIABILITIES TOWARDS SUNDRY CREDITORS IN THE BALANCE -SHEET OF THE ASSESSEE-FIRM FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1989-90. THESE MATERIALS HAD A DIRE CT LINK AND NEXUS FOR FORMATION OF A BELIEF BY THE ASS ESSING OFFICER THAT INCOME OF THE ASSESSEE-FIRM HAD ESCAPE D ASSESSMENT BECAUSE OF FAILURE OF THE ASSESSEE TO DI SCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR TH E ITA NO.1726/MUM/2018 SMT. LILA SHARMA 31 ASSESSMENT. IN THE CASE OF CIT V. BEST WOOD INDUST RIES & SAW MILLS, (2011) 331 ITR 63 (KER), THE ASSESSEE CHALLENGED THE VALIDITY OF THE REASSESSMENT ON THE GROUND THAT THE AO HAD EXCEEDED HIS JURISDICTION UNDER SEC TION 147 AND BOTH THE FIRST APPELLATE AUTHORITY AS WELL AS THE TRIBUNAL ACCEPTED THE CONTENTION OF THE ASSESSEE HO LDING THAT SO FAR AS THE REASSESSMENTS RELATED TO ASSESSM ENT OF UNEXPLAINED TRADE CREDITS, THEY WERE INVALID. ON AP PEAL, IT HAS BEEN HELD THAT THE REASSESSMENTS WERE TO BE VAL ID. IN HONDA SIEL POWER PRODUCTS LTD. V. DEPUTY CIT, (2012 ) 340 ITR 53 (DEL), THERE BEING OMISSION AND FAILURE ON T HE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY MATERIA L FACTS THUS REASSESSMENT PROCEEDINGS WERE HELD TO BE VALID . 4.25. IN ATMA RAM PROPERTIES PRIVATE LTD. V. DEPUT Y CIT, (2012) 343 ITR 141 (DEL), AS THE BOOKS OF ACCO UNT AND OTHER MATERIAL WERE NOT PRODUCED AND NO LETTER WAS FILED, THE ORDER PASSED BY THE COMMISSIONER (APPEALS) IN T HE ASSESSMENT YEAR 2001-02 WOULD CONSTITUTE 'INFORMATI ON' OR MATERIAL FROM ANY EXTERNAL SOURCE AND, AS SUCH, THE REASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 20 00- ITA NO.1726/MUM/2018 SMT. LILA SHARMA 32 01 WERE HELD TO BE VALID. LIKEWISE, IN THE CASE OF CIT V. SMT. R. SUNANDA BAI, (2012) 344 ITR 271 (KER), THE REASSESSMENT IN QUESTION WERE HELD TO BE VALID ON T HE FACT THAT THE ASSESSEE CLAIMED AND WAS GIVEN RELIEF UNDE R SECTION 80HHA FOR THE THREE PRECEDING YEAR WHICH DISENTITLED HER FOR DEDUCTION UNDER SECTION 80HH FO R THE ASSESSMENT YEARS 1992-93 AND 1993-94. 4.26. IN THE CASE OF AQUAGEL CHEMICALS P. LTD. V. ASST. CIT, (2013) 353 ITR 131 (GUJ), SINCE THERE BEING SU FFICIENT MATERIAL ON RECORD FOR THE ASSESSING OFFICER TO FOR M A BELIEF AS REGARDS THE ESCAPEMENT OF INCOME IN RELATION TO THE CLAIM OF DEPRECIATION IN RESPECT OF THE BUILDING OF COAL FIRE BOILER, THE REASSESSMENT WAS HELD TO BE VALID. IN THE CASE OF CONVERGYS CUSTOMER MANAGEMENT V. ASST. DIT, (201 3) 357 ITR 177 (DEL), WHERE THERE BEING PRIMA FACIE MA TERIAL IN THE POSSESSION OF THE ASSESSING OFFICER TO FORM A TENTATIVE BELIEF THAT SECTION 9(1)(I) HELD ATTRACTE D, SAID REASON BY ITSELF CONSTITUTED A RELEVANT GROUND TO R EOPEN THE ASSESSMENT OF THE ASSESSEE. REFERENCE MAY ALSO BE MADE TO I. AJAI VERMA V. CIT [(2008) 304 ITR 30 (ALL)]; ITA NO.1726/MUM/2018 SMT. LILA SHARMA 33 II. ASHOK ARORA V. CIT [(2010) 321 ITR 171 (DEL)]; III. CIT V. CHANDRASEKHAR BALAGOPAL [(2010) 328 ITR 619 (KER)]; IV. JAYARAM PAPER MILLS LTD. V. CIT [(2010) 321 ITR 56 (MAD)]; V. KERALA FINANCIAL CORPORATION V. JOINT CIT [(2009) 30 8 ITR 434 (KER)]; VI. MAVIS SATCOM LTD. V. DEPUTY CIT [(2010) 325 ITR 428 (MAD)]; VII. CIT V. MADHYA BHARAT ENERGY CORPORATION LTD. [(2011) 337 ITR 389 (DEL)]; VIII. KONE ELEVATOR INDIA P. LTD. V. ITO [(2012) 340 ITR 45 4 (MAD)]; IX. VIJAY KUMAR SABOO V. ASST. CIT [(2012) 340 ITR 382 (KARN)]; X. SIEMENS INFORMATION SYSTEMS LTD. V. ASST. CIT [(2012) 343 ITR 188 (BOM)]; XI. I.P. PATEL & CO. V. DEPUTY CIT [(2012) 346 ITR 207 (GUJ)]; XII. DISHMAN PHARMACEUTICALS & CHEMICALS LTD. V. DEPUTY CIT [(2012) 346 ITR 228 (GUJ)]; XIII. VIDEO ELECTRONICS LTD. V. JOINT CIT [(2013) 353 ITR 73 (DEL)]; XIV. A G GROUP CORPORATION V. HARSH PRAKASH [(2013) 353 I TR 158 (GUJ)]; XV. INDUCTOTHERM (INDIA) P. LTD. V. M. GOPALAN, DEPUTY CIT [(2013) 356 ITR 481 (GUJ)]; CIT V. DHANALEKSHMI BAN K LTD. [(2013) 357 ITR 448 (KER)]; XVI. SITARA DIAMOND PVT. LTD. V. ITO [(2013) 358 ITR 424 (BOM)]; ITA NO.1726/MUM/2018 SMT. LILA SHARMA 34 XVII. RAYALA CORPORATION P. LTD. V. ASST. CIT [(2014) 363 IT R 630 (MAD)]. 4.27. SO FAR AS, THE DECISION IN THE CASE OF CIT V S KELVINATOR OF INDIA LTD. (2010) 320 ITR 561 (SC) IS CONCERNED, THE HONBLE APEX COURT, WHILE COMING TO A PARTICULAR CONCLUSION, ONLY IN A SITUATION, WHEN NO T A SINGLE PIECE OF PAPER OR DOCUMENT WAS RECOVERED, THEREFORE, THE HONBLE COURT HELD THAT SINCE THERE WAS NO TANGIBLE MATERIAL FOUND AND THE ADDITION WAS MERELY ON THE BASIS OF STATEMENT ONLY THEN REOPENING OF ASSES SMENT U/S 147 OF THE ACT WAS NOT PERMISSIBLE. LIKEWISE, IN THE CASE OF CIT VS S. KHADER KHAN SON (2012) 254 CTR 22 8 (SC), AFFIRMING THE DECISION OF MADRAS HIGH COURT I N (2008) 300 ITR 157 (MAD.), THE WHOLE ADDITION WAS M ADE SOLELY ON THE BASIS OF STATEMENT U/S 133A AND NO OT HER MATERIAL WAS FOUND, IN THAT SITUATION, IT WAS HELD THAT THE SUCH STATEMENT HAS NO EVIDENTIARY VALUE. 4.28. IN THE CASE OF ARADHNA ESTATE PVT. LTD. VS D CIT (2018) 91 TAXMANN.COM 119 (GUJARAT), THE HON'BLE HI GH COURT OBSERVED/HELD AS UNDER:- ITA NO.1726/MUM/2018 SMT. LILA SHARMA 35 IN REASONS RECORDED BY THE ASSESSING OFFICER FOR R EOPENING THE ASSESSMENT. HE POINTED OUT THAT THE INFORMATION WAS RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT AT CALCUTTA RE GARDING SHELL COMPANIES WHICH HAD GIVEN ACCOMMODATION ENTRIES FOR SHARE PREMIUM TO SURAT BASED COMPANIES. A LIST OF 114 CALCUTTA BA SED COMPANIES WAS PROVIDED WHICH HAD GIVEN ACCOMMODATION ENTRIES TO S UCH SURAT BASED COMPANIES. STATEMENTS OF MANY ENTRY OPERATORS AND D UMMY DIRECTORS RECORDED DURING VARIOUS SEARCH AND SEIZURE OPERATIO N, SURVEY OPERATION AND INVESTIGATION WERE CHECKED. THE ASSESSING OFFIC ER THEREUPON PROCEEDED TO RECORD THAT 'ON PERUSAL OF DATA SO PRO VIDED BY THE DEPUTY DIRECTOR (INVESTIGATION), IT IS NOTICED THAT DURING THE PERIOD UNDER CONSIDERATION, THE ASSESSEE COMPANY HAS ACCEPTED SH ARE CAPITAL/SHARE PREMIUM FROM THE FOLLOWING ENTRIES/PARTIES WHICH HA VE BEEN PROVED TO BE SHELL COMPANIES BASED ON THE INVESTIGATION CONDU CTED BY THE DEPUTY DIRECTOR (INVESTIGATION). UNDERNEATH, HE PROVIDED A LIST OF 17 COMPANIES WHO HAD TRANSACTED WITH THE ASSESSEE COMP ANY DURING THE YEAR UNDER CONSIDERATION AND WERE ALLOTED EQUITY SH ARES BY PURPORTED INVESTMENT OF SIZEABLE SHARE CAPITAL AND SHARE PREM IUM AMOUNTS. ON VERIFICATION OF SUCH MATERIALS, THE ASSESSING OFFIC ER NOTED THAT THE ASSESSEE HAD RECEIVED SHARE CAPITAL/SHARE PREMIUM A MOUNT, SINCE THE INVESTOR COMPANIES WERE FOUND TO BE SHELL COMPANIES INDULGING IN PROVIDING ACCOMMODATION ENTRIES, THE ASSESSING OFFI CER WAS OF THE OPINION THAT THE SHARE CAPITAL/SHARE PREMIUM CLAIME D TO HAVE BEEN RECEIVED FROM THE COMPANY BY THE ASSESSEE WAS NOT G ENUINE. AMOUNT IS NOTHING BUT ASSESSEE'S OWN MONEY INTRODUCED IN THE GARB OF SHARE CAPITAL/SHARE PREMIUM FROM THE SHELL COMPANIES AND THEREFORE, SUCH AMOUNT IS LIABLE TO BE TAXED UNDER SECTION 68. HE T HEREFORE, RECORDED HIS SATISFACTION THAT THE INCOME HAD ESCAPED ASSESS MENT AND THAT THIS WAS DUE TO THE ASSESSEE HAVING FAILED TO DISCLOSE T RULY AND FULLY ALL FACTS. [PARA 7] SECTION 147 PROVIDES INTER ALIA THAT IF THE ASSESSING OFFICER HAS THE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, HE MAY SUBJECT TO THE PROVISIONS OF SEC TIONS 148 TO 153, ASSESS OR REASSESS SUCH INCOME. PROVISO TO SECTION 147 OF COURSE REQUIRES THAT WHERE THE ASSESSMENT UNDER SUB-SECTIO N (3) OF SECTION 143 HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF THE FO UR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY REASON OF THE FAILURE ON PART OF THE ASSESSEE TO MAKE RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR 148 OR TO D ISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. IN THIS CONTEXT, IT IS WELL SETTLED THAT THE REQUIR EMENT OF FULL AND TRUE DISCLOSURE ON PART OF THE ASSESSEE IS NOT CONFINED TO FILING OF RETURN ALONE BUT WOULD CONTINUE ALL THROUGHOUT DURING THE ASSESSMENT PROCEEDINGS ALSO. IN THIS CONTEXT, THE MATERIALS ON RECORD WOULD SUGGEST THAT THE ASSESSING OFFICER HAD RECEIVED FRESH INFOR MATION AFTER THE ASSESSMENT WAS OVER PRIMA FACIE SUGGESTING THAT SIZEABLE AMOUNT OF ITA NO.1726/MUM/2018 SMT. LILA SHARMA 36 INCOME CHARGEABLE TO TAX IN CASE OF THE ASSESSEE HA D ESCAPED ASSESSMENT AND THAT SUCH ESCAPEMENT WAS ON ACCOUNT OF FAILURE ON PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MAT ERIAL FACTS. THE ASSESSING OFFICER FORMED SUCH A BELIEF ON THE BASIS OF SUCH MATERIALS PLACED BEFORE HIM AND UPON PERUSAL OF SUCH MATERIAL . THIS IS NOT A CASE WHERE THE ASSESSING OFFICER WAS REEXAMINING THE MAT ERIALS AND THE DOCUMENTS ALREADY ON RECORD FILED BY THE ASSESSEE A LONG WITH THE RETURN OR SUBSEQUENTLY, BROUGHT ON RECORD DURING THE ASSES SMENT PROCEEDINGS. IT WAS A CASE WHERE ENTIRELY NEW SET OF DOCUMENTS A ND MATERIALS WAS PLACED FOR HIS CONSIDERATION COMPILED IN THE FORM O F REPORT RECEIVED FROM THE INVESTIGATION WING. SUCH MATERIAL WAS PERU SED BY THE ASSESSING OFFICER AND UPON EXAMINATION THEREOF, HE FORMED A BELIEF THAT THE ASSESSEE COMPANY HAD RECEIVED SHARE APPLICATION AND SHARE PREMIUM MONEY FROM AS MANY AS 20 DIFFERENT INVESTOR COMPANIES WHO WERE FOUND TO BE SHELL COMPANIES AND INDULGING IN G IVING ACCOMMODATION ENTRIES. FROM THIS VIEW POINT, SINCE THE ASSESSING OFFICER HAD SUFFICIENT MATERIAL AT HIS COMMAND TO F ORM SUCH A BELIEF. SUCH MATERIALS DID NOT FORM PART OF THE ORIGINAL AS SESSMENT PROCEEDINGS AND WAS PLACED BEFORE THE ASSESSING OFFICER ONLY AF TER THE ASSESSMENT WAS COMPLETED. SINCE ON THE BASIS OF SUCH MATERIALS , ASSESSING OFFICER, CAME TO A REASONABLE BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT, MERELY BECAUSE THESE TRANSACTIONS WERE SCRUTINISED BY THE ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT AL SO WOULD NOT PRECLUDE HIM FROM REOPENING THE ASSESSMENT. HIS SCR UTINY DURING THE ASSESSMENT WILL NECESSARILY BE ON THE BASIS OF THE DISCLOSURES MADE BY THE ASSESSEE. [PARA 8] THE CONTENTION THAT THERE WAS NO FAILURE ON PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY FACTS CANNOT BE ACCEPTED. THE ASSESSING OFFICER, AS NOTED, RECEIVED FRESH MATERIAL AFTER THE ASSESSM ENT WAS OVER, PRIMA FACIE , SUGGESTING THAT THE ASSESSEE COMPANY HAD RECEIVED BOGUS SHARE APPLICATION/PREMIUM MONEY FROM NUMBER OF SHELL COMP ANIES. [PARA 10] MERELY BECAUSE THE TRANSACTIONS IN QUESTION WERE EX AMINED BY THE ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT WO ULD NOT MAKE ANY DIFFERENCE. THE SCRUTINY WAS ON THE BASIS OF DISCLO SURES MADE AND MATERIALS SUPPLIED BY THE ASSESSEE. SUCH MATERIAL I S FOUND TO BE PRIMA FACIE UNTRUE AND DISCLOSURES NOT TRUTHFUL. EARLIER SCRUT INY OR EXAMINATION ON THE BASIS OF SUCH DISCLOSURES OR MAT ERIALS WOULD NOT DEBAR A FRESH ASSESSMENT. EACH INDIVIDUAL CASE OF T HIS NATURE IS BOUND TO HAVE SLIGHT DIFFERENCE IN FACTS. [PARA 11] THE NEXT CONTENTION THAT THE ASSESSING OFFICER DID NOT DEMONSTRATE ANY MATERIAL ENABLING HIM TO FORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT IS FALLACIOUS. THE ASSESSING OFFICER RECORDED DETAILED REASONS POINTING OUT THE MATERIAL AVAILABL E WHICH HAD A LIVE LINK WITH FORMATION OF BELIEF THAT THE INCOME CHARG EABLE TO TAX HAD ESCAPED ASSESSMENT. AT THIS STAGE, AS IS OFTEN REPE ATED, ONE WOULD NOT GO INTO SUFFICIENCY OF SUCH REASONS. [PARA 13] ITA NO.1726/MUM/2018 SMT. LILA SHARMA 37 SECTION 68 AS IS WELL KNOWN, PROVIDES THAT WHERE AN Y SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NA TURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, I N THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITE D MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR. THAT THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE FR OM ABOVE-NOTED COMPANIES WAS ONLY BY NATURE OF ACCOMMODATION ENTRI ES AND IN REALITY, IT WAS THE FUNDS OF THE ASSESSEE WHICH WAS BEING RE -ROUTED. UNDOUBTEDLY. SECTION 68 WOULD HAVE APPLICABILITY. P ROVISO ADDED BY THE FINANCE ACT, 2012 WITH EFFECT FROM 1-4-2013, DO ES NOT CHANGE THIS POSITION. [PARA 14] AS PER THIS PROVISO, WHERE THE ASSESSEE IS A COMPAN Y AND THE SUM SO CREDITED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED, EXPLANATION OFFERED BY THE ASSESSEE COMPANY SHALL BE DEEMED TO BE NOT SATISFACTORY, UNLESS THE PERSON IN WHOSE NAME SUCH CREDIT IS RECO RDED IN THE BOOKS OF THE COMPANY ALSO OFFERS AN EXPLANATION ABOUT THE NA TURE AND SOURCE OF SUM SO CREDITED AND SUCH EXPLANATION IN THE OPINION OF THE ASSESSING OFFICER HAS BEEN FOUND TO BE SATISFACTORY. ESSENTIA LLY, THIS PROVISO EASES THE BURDEN OF PROOF ON THE REVENUE WHILE MAKING ADD ITION UNDER SECTION 168 WITH RESPECT TO NON GENUINE SHARE APPLICATION M ONEY OF THE COMPANIES. EVEN IN ABSENCE OF SUCH PROVISO AS WAS T HE CASE GOVERNING THE PERIODS WITH WHICH WE ARE CONCERNED IN THE PRES ENT CASE, IF FACTS NOTED BY THE ASSESSING OFFICER AND RECORDED IN REAS ONS ARE ULTIMATELY ESTABLISHED, INVOCATION OF SECTION 68 WOULD BE CALL ED FOR. [PARA 15] THE CONTENTION THAT THE ASSESSING OFFICER HAD MEREL Y AND MECHANICALLY ACTED ON THE REPORT OF THE INVESTIGATION WING ALSO CANNOT BE ACCEPTED. ONE HAS REPRODUCED THE REASONS RECORDED BY THE ASSE SSING OFFICER AND NOTED THE GIST OF HIS REASONS FOR RESORTING TO REOP ENING OF THE ASSESSMENT. THE ASSESSING OFFICER HAD PERUSED THE M ATERIALS PLACED FOR HIS CONSIDERATION AND THEREUPON, UPON EXAMINATION O F SUCH MATERIALS FORMED A BELIEF THAT INCOME CHARGEABLE TO TAX HAD E SCAPED ASSESSMENT. [PARA 16] IN THE RESULT, PETITION IS DISMISSED. [PARA 17] 4.29. THE HON'BLE GUJARAT HIGH COURT WHILE VALIDAT ING THE REOPENING OF ASSESSMENT UNDER SECTION 147/148 O F THE ACT IN A LATER ORDER (AFORESAID) DATED 20/02/2018 O N THE ISSUE OF CASH CREDIT (SHARE APPLICATION MONEY) DULY ITA NO.1726/MUM/2018 SMT. LILA SHARMA 38 CONSIDERED THE ARGUMENTS OF BOTH SIDES AND FOLLOWED THE FOLLOWING THE DECISIONS I. JAYANT SECURITY AND FINANCE LTD. V. ASSTT. CIT [SPECIAL CIVIL APPLICATION NO. 18921 OF 2017, DATED 12-2-201 8] (PARA 12); II. RAYMOND WOOLEN MILLS LTD. V. ITO [1999] 236 ITR 34 (SC) (PARA 13); III. CIT V. RAJESH JHAVERI STOCK BROKERS (P.) LTD. [2007] 291 ITR 500/161 TAXMAN 316 (SC) (PARA 13) IV. PR. CIT V. GOKUL CERAMICS [2016] 241 TAXMAN 1/71 TAXMANN.COM 341 (GUJ.) (PARA 16) AND DISTINGUISHED THE FOLLOWING DECISIONS I. ALLIED STRIPS LTD. V. ASSTT. CIT [2016] 384 ITR 424/69 TAXMANN.COM 444 (DELHI) (PARA 11) AND II. YOGENDRAKUMAR GUPTA V. ITO [2014] 366 ITR 186/46 TAXMANN.COM 56 (GUJ.) (PARA 11) 4.30. THE HON'BLE HIGH COURT WHILE UPHOLDING T HE VALIDITY OF REOPENING ALSO CONSIDERED FOLLOWING DEC ISION, WHICH WERE REFERRED BY BOTH SIDES- I. ALLIED STRIPS LTD. V. ASSTT. CIT [2016] 384 ITR 424/69 TAXMANN.COM 444 (DELHI) (PARA 5), II. HARIKRISHAN SUNDERLAL VIRMANI V. DY. CIT [2017] 394 ITR 146 (GUJ.) (PARA 5), III. RAYMOND WOOLEN MILLS LTD.V. ITO [1999] 236 ITR 34 (SC) (PARA 6), IV. YOGENDRAKUMAR GUPTA V. ITO [2014] 366 ITR 186/46 TAXMANN.COM 56 (GUJ.) (PARA 6), ITA NO.1726/MUM/2018 SMT. LILA SHARMA 39 V. AASPAS MULTIMEDIA LTD. V. DY. CIT [2017] 83 TAXMANN.COM 82/249 TAXMAN 568 (GUJ.) (PARA 6), VI. JAYANT SECURITY & FINANCE LTD. V. ASSTT. CIT [SP. CIVIL APPLICATION NO. 18921 OF 2017, DATED 12-2- 2018] (PARA 12), VII. ASSTT. CIT V. RAJESH JHAVERI STOCK BROKERS (P.) LTD. [2007] 291 ITR 500/161 TAXMAN 316 (SC) (PARA 13) AND VIII. PR. CIT V. GOKUL CERAMICS [2016] 241 TAXMAN 1/71 TAXMANN.COM 341 (GUJ.) (PARA 16). 4.31. THE SUM AND SUBSTANCE OF THE AFORESAID DECISION WAS THAT SINCE THE ASSESSING OFFICER WAS H AVING SUFFICIENT MATERIAL AT HIS COMMAND TO FORM A REASON ABLE BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. IN THE PRESENT APPEAL, I FIND THAT CASH OF RS.10,68,000/- WAS FOUND TO BE DEPOSITED AND IN SPI TE OF SUFFICIENT OPPORTUNITY PROVIDED TO THE ASSESSEE, NO EXPLANATION WITH RESPECT TO SOURCE OF CASH WAS ADDU CED, THUS, CONSIDERING THE RATIO LAID DOWN IN THE AFORES AID DECISIONS, WE AFFIRM THE STAND OF THE LD. COMMISSIO NER OF INCOME TAX (APPEAL), SO FAR ALLEGED VAGUE NOTICE IS SUED UNDER SECTION 148 OF THE ACT IS CONCERNED. THUS, TH IS GROUND OF THE ASSESSEE IS ALSO HAVING NO MERIT. 5. SO FAR AS, THE ADDITION OF RS.10,68,000/- MADE UNDER SECTION 69 OF THE ACT IS CONCERNED, THE FACTS ARE ITA NO.1726/MUM/2018 SMT. LILA SHARMA 40 AVAILABLE ON RECORD. AS PER SECTION 69A OF THE ACT, THE ASSESSEE IS EXPECTED TO EXPLAIN SATISFACTORILY THE SOURCE OF INCOME/MONEY/CASH FOUND DEPOSITED IN THE ACCOUNT. T HE ASSESSEE HAS NOT ADDUCED ANY EVIDENCE WITH RESPECT TO SOURCE OF THIS CASH, THEREFORE, I FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. ASSESSING OFFICER AND CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL). FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 08/10/2018. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 08/10/2018 F{X~{T? P.S / ! &($)!*+,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. )) * ( '#$ ) / THE CIT, MUMBAI. 4. )) * / CIT(A)- , MUMBAI 5. -./' , )'#$' 1 , / DR, ITA NO.1726/MUM/2018 SMT. LILA SHARMA 41 ITAT, MUMBAI 6. /23$ / GUARD FILE. &( / BY ORDER, (-#' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI