M/s Grand Slam Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1791/DEL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2957 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 24-04-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 28-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMRIL LAL
• Keywords: Bogus purchase; Unexplained cash credit; Gift; Business income; Depreciation; Business expenditure; Income from undisclosed sources; Rectification of order; Search and seizure; Question of law; Tangible material; Wrong claim; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 131; 68; 148

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. 1791 /DEL/ 2013 ASSESSMENT YEAR: 2003 - 04 M/S. GRAND SLAM PVT. LTD., G - 5, IIND FLOOR, HAUZ KHAS MARKET, NEW DELHI VS. INCOME TAX OFFICER, WARD - 12(2), NEW DELHI PAN : AAACG0268R (APPELLANT) (RESPONDENT) APPELLANT BY SH. ANIL BHALLA, AR RESPONDENT BY SH. AMRIL LAL, SR. DR DATE OF HEARING 24.04.2017 DATE OF PRONOUNCEMENT 09.06.2017 ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 11/02/2013 OF THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) - XV, NEW DELHI [IN SHORT THE CIT - (A) ] FOR ASSESSMENT YEAR 2003 - 04 RAISING FOLLOWING GROUNDS: 1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE LEARNED ASSESSING OFFICER IN WRONGLY ASSUMING JURISDICTION IN TERMS OF SECTION 147 , IN ASMUCH AS, THE REASONS DID NOT DISCLOSE THE BASIS ON WHICH THE DIT, INVESTIGATION HAD TERMED THE INCOME OF HIRING OF 2 ITA NO . 1791/DEL/2013 STUDIO EQUIPMENT FROM HOPEWIN ADMARK & CONSULTANCY (PVT.) LTD. AS BOGUS ACCOMMODATION ENTRIES. 1.1 ) THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS ERRED BOTH ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE LEARNED ASSESSING OFFICER IN ASSUMING THE INFORMATION PROVIDED BY DIT(INVESTIGATION) AS GOSPEL TRUTH WITHOUT VERIFICATION OR APPLICATION OF MIND. 2) WITHOUT PREJUDICE TO THE AB OVE GROUNDS OF APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH ON FACTS AND IN LAW IN UPHOLDING THE LEARNED ASSESSING OFFICER S ACTION IN MAKING AN ADDITION OF RS.15,00,000/ - AS INCOME FROM UNDISCLOSED SOURCES U/S 68 OF THE ACT WITHOUT RECOGNIZING THAT THE IMPUGNED INCOME OF RS.15,00,000/ - HAS ALREADY BEEN DISCLOSED AS INCOME FROM HIRE OF STUDIO EQUIPMENT IN THE AUDITED PROFIT & LOSS ACCOUNT OF THE RELEVANT PREVIOUS YEAR AND CONSEQUENTLY THE LEARNED ASSESSING OFFICER FURTHER ERRED IN TAXING THE SAME INCOME TWICE. 3) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND THE GROUND OF APPEAL AT A LATER STAGE. 2. THE FACTS IN BRIEF OF THE CASE ARE THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME ORIGINALLY U/S 13A(I) OF THE ACT ON 13/ 10/2003 DECLARING INCOME OF RS.6, 242/ - AS SHORT - TERM CAPITAL GAIN, AFTER ADJUSTING BROUGHT FORWARD DEPRECIATION LOSSES AGA INST CURRENT YEAR S INCOME OF RS. 8,74,087/ - . THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT ) ON 28/02/2004. SUBSEQUENTLY, ON RECEIPT OF SPECIFIC INFORMATI ON FROM THE DIRECTOR OF INCOME - TAX (I NVESTIGATION), NEW DELHI , THE ASSESSING OFFICER RECORDED REASONS TO BELIEVE THAT INCOME ESCAPED ASSESSMENT AND ISSUED NOTIC E UNDER 3 ITA NO . 1791/DEL/2013 SECTION 148 OF THE ACT 19/03/2010 REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME. IN RESPONSE, THE ASSESSEE FILED A LETTER DATED 06/04/2010 TO TREAT THE RETURN FILED U/S 13A(I) OF THE ACT AS THE RETURN FILED IN RESPONSE TO THE NOTICE UNDER SEC TION 148 OF THE ACT. THEREAFTER, NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AND COMPLIED WITH. A COPY OF REASONS RECORDED BY THE ASSESSING OFFICER WAS ALSO SUPPLIED TO THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ON HIS REQUEST. DURING THE ASSESSME NT PROCEEDINGS, THE ASSESSING OFFICER OBTAINED BANK STATEMENT OF M/S HOPEWIN ADMARK C ONSULTANTS PRIVATE LIMITED AND OBSERVED THAT THE ASSESSE E HAD RECEIVED AN AMOUNT OF RS.15, 0 0, 000/ - FROM THE SAID PARTY DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE SU BMITTED THAT SAID AMOUNT WAS RECEIVED TOWARDS STUDIO EQUIPMENT GIVEN ON HIRE TO SAID PARTY AND THE AMOUNT IN QUESTION HAS ALREADY BEEN TAKEN INTO INCOME AND TAX HAS BEEN PAID ON THE SAME. THE ASSESSING OFFICER , ON THE OTHER HAND , OBSERVED THAT THE SUMMON I SSUED UNDER SECTION 131 OF THE ACT TO THE PARTY RECEIVED BACK UNSERVED AND THE ASSESSEE ALSO DID NOT FILE PROOF IN SUPPORT OF IDENTITY OF THE PARTY, PRESENT NAME AND ADDRESS, COPY OF RETURN OF INCOME FILED, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF THE SAID PARTY, THE PARTY COULD NOT BE PRODUCED ETC. THE ASSESSING OFFICER GATHERED AUDIT REPORT AND TRADING ACCOUNT FROM THE ASSESSING OFFICER OF SAID PARTY AND OBSERVED THAT EXPENSES CORRESPONDING TO THE PAYMENT OF RS. 15 LAKH WERE NOT DEBITED IN THE PROFIT AND LOSS ACCOUNT OF SAID PARTY . THUS, ACCORDING TO THE ASSESSING OFFICER, THE AMOUNT IN QUESTION WAS NOT BUSINESS INCOME BUT IT WAS UNEXPLAINED CREDIT UNDER SECTION 68 OF THE ACT. THE ASSESSING OFFICER ASSESSED THE SAID UNEXPLAINED CREDIT OF RS.15,00, 000/ - UNDER THE HEAD INCOME FROM OTHER SOURCES . 2.1 BEFORE THE LD. COMMISSIONER OF INCOME - TAX ( APPEALS), THE ASSESSEE CHALLENGED THE VALIDITY OF THE REASSESSMENT PROCEEDINGS AS 4 ITA NO . 1791/DEL/2013 WELL AS THE ADDITION ON MERIT. THE LD. CIT - A UPHELD THE VALIDITY OF THE REASSESSMENT PROCEEDINGS AS WELL AS UPHELD THE ADDITION OF RS. 15 LAKHS. AGGRIEVED, THE ASSESSEE IS IN THE APPEAL, BEFORE THE TRIBUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. IN G ROUNDS NO. 1 AND 1.1 THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE REASSESSMENT PROCEEDINGS ON THE GROUND THAT THE REASONS DID NOT DISCLOSE THE BASIS OF REOPENING THE ASSESSMENT AND THE INFORMATION PROVIDED BY THE DIT ( I NVESTIGATION) WAS A GOSPEL TRUTH A ND THE ASSESSMENT HAS BEEN REOPENED WITHOUT VERIFICATION OR APPLICATION OF THE MIND. 3.1 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED A PAPER BOOK CONTAINING PAGES 1 TO 100 AND MADE ARGUMENTS SUPPORTING THE GROUNDS. THE ARGUMENTS MADE BY THE LD. CO UNSEL ARE SUMMARIZED AS UNDER: 1. T HAT THE ASSESSING OFFICER IN PARA - 1 OF THE ASSESSMENT ORDER HAS ALLEGED THAT THE ASSESSEE HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN THE GARB OF SHARE CAPITAL AND IN LAST PARA OF THE ASSESSMENT ORDER CHANGED TO GARB OF SALE OF SHARES , WHEREAS THERE WAS NO INCREASE IN THE SHARE CAPITAL DURING THE YEAR, WHICH IS EVIDENT FROM THE BALANCE SHEET DATED 31/03/2003 OF THE ASSESSEE COMPANY, AVAILABLE O N PAGE 5 TO 7 OF THE PAPER BOOK; 2. IN THE REASONS RECORDED, THE NATURE OF THE SO - CALLED ACCOMMO DATION ENTRY HAS NOT BEEN GIVEN; 3. T HE TYPE OF ACCOMMODATION ENTRY AND THE NEXUS TO THE CONCLUSION THAT THESE RESULTING IN ES CAPED INCOME HAS NOT BEEN GIVEN; 4. REASONS RECORDED ARE AD - HOC, RECORDED IN SUMMARY MANNER AND HAVE NO SUBSTANCE. IT HA S NOT EXPLAINED WHAT KIND OF MATERIAL AND REPORT HAS BEEN CONSIDERED BY THE AO. 5. THAT THE REASONS RECORDED ARE SCANTY AND VAGUE. 5 ITA NO . 1791/DEL/2013 6. THERE EXISTED NO BELIEF AND IN ANY CASE, BELIEVE WAS NOT BONAFIDE. THE BELIEF , IF ANY WAS BASED UPON VAGUE, IRRELEVANT AND NON - SPECIFIC INFORMATION. THERE WAS NO MATERIAL AVAILABLE ON RECORD FROM WHICH REQUISITE BELIEF COULD BE FORMED. THE MATERIAL MENTIONED BY THE AO HAD NO RATIONAL CONNECTION WITH AND THERE WAS NO LIVE LINK FOR THE FORMATION OF REQUISITE BELIEF. 7. THE ASSESSIN G OFFICER HAS MERELY RELIED UPON THE ALLEGED FACT RECORDED BY THE DIT ( I NV . ) AND HE HAS NOT APPLIED HIS MIND BEFORE ISSUING NOTICE UNDER SECTION 148 OF THE ACT. HE ASSUMED JURISDICTION IN A MECHANICAL MANNER. 8. THE EFFECT OF ACCOMMODATION ENTRY, WHETHER IT I S INCOME, LOAN OR SHARE CAPITAL HAS NOT BEEN EXPLAINED IN THE REASONS RECORDED. 9. ONLY THE STATE OF THE MIND OF THE ASSESSING OFFICER AT THE POINT OF TIME ISSUING THE NOTICE UNDER SECTION 148 OF THE ACT HAS TO BE CONSIDERED AND ONLY THE INFORMATION AVAILABLE WITH HIM AT THE POINT OF TIME HAS TO BE CONSIDERED. SUBSEQUENT IMPROVEMENTS ARE NOT ALLOWED 3.1.1 IN SUPPORT OF THE ARGUMENTS, THE LD. COUNSEL RELIED ON THE FOLLOWING DECISIONS: 1. D ECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF ATUL JAIN AND S MT. VINITA JAIN , (2008) 299 ITR 383 (DELHI). 2. DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF SIGNATURE HOTELS PRIVATE L IMITED , (2011) 338 ITR 51 (DELHI). 3. DECISION OF THE HON BLE DELHI HIGH COURT SFIL STOCK B ROKING LTD ., (2010) 325 ITR 285 (DELHI). 4. DEC ISION OF THE ITAT, DELHI BENCH B, IN THE CASE OF ACIT VS. SH.DEVESH KUMAR IN ITA NO. 2068/DEL/2010 FOR AY 2004 - 05, 6 ITA NO . 1791/DEL/2013 5. DECISION OF THE ITA T DELHI BENCH - D IN THE CASE OF ON EXIM PRIVATE L IMITED , REPORTED IN (2013) 40 TAXMANN.COM 133 (DELHI - TRIB) 3.2 O N THE CONTRARY, THE LEARNED S ENIOR DR JUSTIFIED THE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT ON THE BASIS OF IN FORMATION RECEIVED FROM THE DIT (I NVESTIGATION) RELYING MAINLY ON THE FOLLOWING DECISIONS: 1. D ECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA P ROMOTERS AND FINLEASE PRIVATE L IMITED , (2012) 342 ITR 169 (DELHI). 2. DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF AGR I NVESTMENT LTD . VS. A DDITIONAL COMMISSIONER OF I NCOME T AX , 333 ITR 146 (DELHI). 3. DE CISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. INDIA TERMINAL CONNECTORS S YSTEMS LTD . (2012) 208 TAXMANN 231 (DELHI). 3.2.1 THE LD. S ENIOR DR FURTHER SUBMITTED THAT AT THE TIME OF REOPENING, THE ONLY PRIMA FACIE MATERIAL IS REQUIRED. HE PL ACED RELIANCE ON FOLLOWING DECISIONS: 1. D ECISION OF THE HON BLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCKBROKERS P RIVATE LIMITED (2007) 161 TAXMANN 316 (SC). 2. DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF RAYMOND W OOLLEN MILLS LTD . (1999) 236 ITR 34 (SC) 3.2.2 THE LEARNED S ENIOR DR, FURTHER SUBMITTED THAT REASSESSMENT PROCEEDING S IN FOLLOWING DECISIONS HAS BEEN UPHELD WHERE ADDITION WERE 7 ITA NO . 1791/DEL/2013 BASED UPON INFORMATION FROM THE DIT (I NVESTIGATION) RELATING TO ACCOMMODATION ENTRIES: 1. CIT VS. NEELKANTH ISPAT UDHYOG PVT. LTD. DELHIGH HIGH COURT, ITA NO. 427/2012 2. CIT VS. NIPUN BUILDERS & DEVELOPERS PVT. LTD. DELHI HIGH COURT 3. CIT VS. N.R. PORTFOLIO (P) LTD. IN ITA NO. 1018/2011 DATED 22.22.2013 DELHI HIGH COURT. 3.3 WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE LD. COUNSEL OF THE ASSESSEE HAS RELIED ON THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF SH. ATUL JAIN AND S MT . VINITA JAIN (SUPRA) . IN THE AFORESAID CASE, THE HON BLE HIGH COURT HAS NOTED THE REASONS RECORDED AS UNDER: IN THE CASE OF SMT. VINITA JAIN, THE REASONS FOR ISSUING A NOTICE, AS RECORDED BY THE AO, READ AS FOLLOWS : 'AS PER INFORMATION RECEIVED FROM DY. DIRECTOR OF IT (INV.), GURGAON, THE ASSESSEE HAD TAKEN BOGUS ENTRY OF CAPITAL GAINS RS. 2,12,635 ON 27TH JUNE, 1995 (ASST. YR. 1997 - 98) BY PAYING CASH ALONG WITH SOME PREMIUM AND TAKING CHEQUE OF SAME AMOUNT.' SIMILARLY, IN THE CASE OF ATUL JAIN, THE R EASONS FOR ISSUING A NOTICE ARE AS FOLLOWS : 'AS PER INFOR MATION RECEIVED FROM DY. DIRECTOR OF IT (INV.) GURGAON, THE ASSESSEE HAD TAKEN BOGUS ENTRY OF CAPITAL GAINS RS. 1,08,845 ON 22ND JUNE, 1996 (ASST. YR. 1997 - 98) BY 8 ITA NO . 1791/DEL/2013 PAYING CASH ALONG WITH SOME PREMIUM AND TAKING CHEQUE OF SAME AMOUNT.' 3.4 THE HON BLE DELHI HIGH COURT IN THE AFORESAID CASE HELD AS UNDER: 17. LOOKED AT IN THE LIGHT OF THE DECISIONS PLACED BEFORE US AND THE LAW LAID DOWN THEREIN, IT IS NECESSARY TO APPRECIATE THE INFORMATION AVAILABLE WITH THE AO IN THE PRESENT CASE. THE ONLY INFORMATION IS TH AT THE ASSESSEES HAD TAKEN A BOGUS ENTRY OF CAPITAL GAINS BY PAYING CASH ALONG WITH SOME PREMIUM FOR TAKING A CHEQUE OF THAT AMOUNT. THE INFORMATION DOES NOT INDICATE THE SOURCE OF THE CAPITAL GAINS (WHICH IN THIS CASE ARE SHARES). WE DO NOT KNOW WHICH SHA RES HAVE BEEN TRANSACTED AND WITH WHOM HAS THE TRANSACTION TAKEN PLACE. THERE ARE ABSOLUTELY NO DETAILS AVAILABLE AND THE INFORMATION SUPPLIED IS EXTREMELY SCANTY AND VAGUE . INSOFAR AS THE BASIS FOR THE REASONS IS CONCERNED, EVEN THIS IS ABSENT. THE AO DID NOT VERIFY THE CORRECTNESS OF THE INFORMATION RECEIVED BY HIM BUT MERELY ACCEPTED THE TRUTH OF THE VAGUE INFORMATION IN A MECHANICAL MANNER. THE AO HAS NOT EVEN RECORDED HIS SATISFACTION ABOUT THE CORRECTNESS OR OTHERWISE OF THE INFORMATION OR HIS SATISFA CTION THAT A CASE HAS BEEN MADE OUT FOR ISSUING A NOTICE UNDER S. 148 OF THE ACT. READ IN THIS LIGHT, WHAT HAS BEEN RECORDED BY THE AO AS THE 'REASONS TO BELIEVE' IS NOTHING MORE THAN A REPORT GIVEN BY HIM TO THE CIT. AS HELD BY THE SUPREME COURT IN CHHUGA MAL RAJPAL (SUPRA), THE SUBMISSION OF A REPORT IS NOT THE SAME AS RECORDING OF REASONS TO BELIEVE FOR ISSUING A NOTICE. THE AO HAS CLEARLY SUBSTITUTED FORM FOR SUBSTANCE AND, THEREFORE, THE ACTION OF THE RESPONDENT FALLS FOUL OF THE LAW LAID DOWN BY THE SU PREME COURT IN CHHUGAMAL RAJPAL WHICH IS CLEARLY APPLICABLE TO THE FACTS OF THIS APPEALS. 9 ITA NO . 1791/DEL/2013 (EMPHASIS SUPPLIES EXTERNALLY) 3.5 FURTHER , IN THE CASE OF SIGNATURE HOTELS PRIVATE L IMITED (SUPRA) RELIED UPON BY THE LD. COUNSEL OF THE ASSESSEE, THE HON BLE DELHI HIGH COURT NOTED THE REASONS RECORDED AS UNDER: 7. IN THE PRESENT CASE THE UNDATED REASONS RECORDED BY THE AO FOR INITIATION OF PROCEEDINGS READ AS UNDER: 'INFORMATION RECEIVED FROM THE OFFICE OF THE DIRECTOR OF IT (INV.) - VI, NEW DELHI REVEALED THAT M/S SIGNATURE HOTELS (P) LTD. HAS INTRODUCED UNACCOUNTED MONEY IN ITS BOOKS OF ACCOUNT DURING FINANCIAL YEAR 2002 - 03 THROUGH ACCOMMODATION ENTRY FROM M/S SWETU S TONE PV FOR RS. 5 LACS. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE THAT TAXABLE INCOME TO THE TUNE OF RS. 5.00 LAC HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF S. 147 OF THE IT ACT, 1961.' 3.6 IN THE AFORESAID CASE , THE HON BLE HIGH COURT QUASHED T HE PROCEEDING S UNDER SECTION 148 OF THE ACT WITH THE FOLLOWING FINDINGS: 15. THE AFORESAID REASONS DO NOT SATISFY THE REQUIREMENTS OF S. 147 OF THE ACT. THE REASONS AND THE INFORMATION REFERRED TO IS EXTREMELY SCANTY AND VAGUE . THERE IS NO REFERENCE TO AN Y DOCUMENT OR STATEMENT, EXCEPT ANNEXURE, WHICH HAS BEEN QUOTED ABOVE. ANNEXURE CANNOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWS OR ESTABLISHES NEXUS OR LINK WHICH DISCLOSES ESCAPEMENT OF INCOME. ANNEXURE IS NOT A POINTER AND DOES NOT IN DICATE ESCAPEMENT OF INCOME. FURTHER, IT IS APPARENT THAT THE AO DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE 10 ITA NO . 1791/DEL/2013 BASIS AND MATERIAL OF THE INFORMATION. THE AO ACCEPTED THE PLEA ON THE BASIS OF VAGUE INFORMATION IN A MECHANICAL MANNER . THE CIT ALSO ACTED ON THE SAME BASIS BY MECHANICALLY GIVING HIS APPROVAL. THE REASONS RECORDED REFLECT THAT THE AO DID NOT INDEPENDENTLY APPLY HIS MIND TO THE INFORMATION RECEIVED FROM THE DIRECTOR OF IT (INV.) AND ARRIVE AT A BELIEF WHETHER OR NOT ANY I NCOME HAD ESCAPED ASSESSMENT. 16. IT MAY BE NOTED HERE THAT A COMPANY BY THE NAME OF SWETU STONE (P) LTD. HAD APPLIED FOR AND WAS ALLOTTED SHARES IN THE PETITIONER COMPANY ON PAYMENT BY CHEQUE OF RS. 5 LACS. AS NOTICED ABOVE, IN THE ANNEXURE THE NAME OF T HE COMPANY/ACCOUNT HOLDER IS MENTIONED AS SWETU STONE PV. THE SAME IS ALSO MENTIONED IN THE UNDATED REASONS MENTIONED ABOVE. 17. IN THE COUNTER - AFFIDAVIT IT IS STATED THAT M/S SWETU STONE (P) LTD. HAD APPLIED FOR ALLOTMENT OF SHARES WORTH RS. 5 LACS AND THE SAME WERE ALLOTTED BY THE PETITIONER. IT IS FURTHER STATED THAT STATEMENTS OF MAHESH GARG AND SHUBHASH GUPTA WERE RECORDED BY THE DIRECTOR OF IT (INV.) AND ON THE BASIS OF THE STA TEMENTS THEY HAVE COME TO THE CONCLUSION THAT THE SAID PERSONS WERE ENTRY OPERATORS. COPY OF THE STATEMENTS OF MAHESH GARG AND SHUBHASH GUPTA HAVE NOT BEEN PLACED ON RECORD BY THE RESPONDENT. THE PETITIONER, HAS, HOWEVER, ENCLOSED COPY OF STATEMENTS OF MAH ESH GARG AND SHUBHASH GUPTA RECORDED ON DIFFERENT DATES. THE SAID PERSONS HAVE NOT SPECIFICALLY NAMED THE PETITIONER THOUGH OTHER PARTIES HAVE BEEN NAMED AND DETAILS HAVE BEEN GIVEN AND IT IS STATED THAT THEY WERE PROVIDED ACCOMMODATION ENTRIES. HOWEVER, I T IS STATED THAT THE ENTRIES WERE MADE BY GIVING CHEQUE/DD/PO AFTER RECEIVING CASH AND SOMETIMES EXPENSES ENTRIES WERE PROVIDED. THE REASONS 11 ITA NO . 1791/DEL/2013 RECORDED BY THE AO DO NOT MAKE REFERENCE TO ANY STATEMENT OF MAHESH GARG OR SHUBHASH GUPTA. THIS MAY NOT ALSO BE NE CESSARY, IF THE STATEMENTS WERE ON RECORD AND IT IS CLAIMED AND PRIMA FACIE ESTABLISHED THAT THEY WERE EXAMINED BY THE AO BEFORE OR AT THE TIME OF RECORDING REASONS. ON THE OTHER HAND, IN THE PRESENT CASE, INFORMATION AS ENCLOSED AS ANNEXURE, HAS BEEN REFE RRED. THIS IS THE ONLY MATERIAL RELIED UPON BY THE AO. THE SAID ANNEXURE HAS BEEN QUOTED ABOVE. IN THIS CONNECTION, WE MAY NOTICE THAT M/S SWETU STONE (P) LTD. IS AN INCORPORATED COMPANY AND THE PETITIONER HAS PLEADED AND STATED THAT THE SAID COMPANY HAS A PAID - UP CAPITAL OF RS. 90 LACS. THE COMPANY WAS INCORPORATED ON 4TH JAN., 1989 AND WAS ALSO ALLOTTED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER, 2001. TO THIS EXTENT, THERE IS NO DISPUTE. IN THESE CIRCUMSTANCES, WE FEEL THE JUDGMENTS OF THE DELHI HIGH COURT IN CIT VS. SFIL STOCK BROKING LTD. (2010) 233 CTR (DEL) 69 : (2010) 41 DTR (DEL) 98 : (2010) 325 ITR 285 (DEL) AND SARTHAK SECURITIES CO. (P) LTD. VS. ITO (2010) 236 CTR (DEL) 362 : (2010) 47 DTR (DEL) 201 : (2010) 329 ITR 110 (DEL) IN WHICH CIT VS. LOVELY EXPORTS (P) LTD. (2008) 216 CTR (SC) 195 (SC) : (2008) 6 DTR (SC) 308 HAS BEEN APPLIED AND FOLLOWED, ARE APPLICABLE. WE MAY NOTICE HERE THAT THE RESPONDENT IN THEIR COUNTER - AFFIDAVIT HAVE STATED THAT SWETU STONE (P) LTD. IS UNIDENTIFIABLE AND, THEREFORE, THE AFORESAID DECISIONS SHOULD NOT BE APPLIED AND THE RATIO OF THE DECISION DT. 7TH JAN., 2011 IN WRIT PETN. (CIVIL) NO. 7517 OF 2010, AGR INVESTMENT LTD. VS. ADDL. CIT & ANR. [REPORTED AT (2011) 239 CTR (DEL) 378 : (2011) 50 DTR (DEL) 97 ED.] SHOULD BE AP PLIED. IN THE SAID DECISION, DECISIONS IN THE CASE OF SARTHAK SECURITIES COMPANY (P) LTD. (SUPRA) AND SFIL STOCK BROKING LTD. (SUPRA) WERE DISTINGUISHED BY GIVING THE FOLLOWING REASONS: 12 ITA NO . 1791/DEL/2013 '22. .IN SFIL STOCK BROKING LTD. (SUPRA) THE BENCH HAS INTERFERED AS IT WAS NOT DISCERNIBLE WHETHER THE AO HAD APPLIED HIS MIND TO THE INFORMATION AND INDEPENDENTLY ARRIVED AT A BELIEF ON THE BASIS OF MATERIAL WHICH HE HAD BEFORE HIM THAT THE INCOME HAD ESCAPED ASSESSMENT. IN OUR CONSIDERED OPINION, THE DECISION RENDERED T HEREIN IS NOT APPLICABLE TO THE FACTUAL MATRIX IN THE CASE AT HAND. IN THE CASE OF SARTHAK SECURITIES CO. (P) LTD. (SUPRA) THE DIVISION BENCH HAD NOTED THAT CERTAIN COMPANIES WERE USED AS CONDUITS BUT THE ASSESSEE HAD, AT THE STAGE OF ORIGINAL ASSESSMENT, FURNISHED THE NAMES OF THE COMPANIES WITH WHICH IT HAD ENTERED INTO TRANSACTION AND THE AO WAS MADE AWARE OF THE SITUATION AND FURTHER THE REASON RECORDED DOES NOT INDICATE APPLICATION OF MIND. THAT APART, THE EXISTENCE OF THE COMPANIES WAS NOT DISPUTED AN D THE COMPANIES HAD BANK ACCOUNTS AND PAYMENTS WERE MADE TO THE ASSESSEE COMPANY THROUGH THE BANKING CHANNEL. REGARD BEING HAD TO THE AFORESAID FACT SITUATION, THIS COURT HAD INTERFERED. THUS, THE SAID DECISION IS ALSO DISTINGUISHABLE ON THE FACTUAL SCORE. ' 18. THE FACTS INDICATED ABOVE DO NOT SHOW THAT M/S SWETU STONE (P) LTD. IS A NON - EXISTING AND A FICTITIOUS ENTITY/PERSON. DECISION IN AGR INVESTMENT LTD. (SUPRA) THEREFORE, DOES NOT HELP THE CASE OF THE RESPONDENT. 19. FOR THE REASONS STATED ABOVE, THE PRESENT WRIT PETITION IS ALLOWED AND WRIT OF CERTIORARI IS ISSUED QUASHING THE PROCEEDINGS UNDER S. 148 OF THE ACT. IN THE FACTS OF THE CASE, THERE WILL BE NO ORDER AS TO COSTS. (EMPHASIS SUPPLIED EXTERNALLY) 13 ITA NO . 1791/DEL/2013 3.7 IN THE CASE OF SFIL STOCK B ROKING LTD . (SUPRA) , THE HON BLE DELHI HIGH COURT HAS NOTED THE REASONS RECORDED BY THE ASSESSING OFFICER AS UNDER: 3. SUBSEQUENTLY, THE REASONS FOR ISSUANCE OF THE NOTICE UNDER S. 148 WERE PROVIDED TO THE ASSESSEE AND THE SAID REASONS, AS RECORDED, WERE AS UNDER : 'INFORMATION RECEIVED FROM DY. DIRECTOR OF IT (INV), 107, SUSHANT LOK, GURGAON VIDE HIS LETTER NO. DDIT (INV)/GGN/02 - 03/271, DT. 17TH MARCH, 2003 RECEIVED IN MY OFFICE ON 25TH MARCH, 2003, THAT ONE OF MY ASSESSEES M/S SFIL STOCK BROKING LTD. HAD MADE BOGU S CLAIM OF LONG - TERM CAPITAL GAINS SHOWN AS EARNED ON ACCOUNT OF SALE/PURCHASE OF SHARES TAKEN THROUGH BANK ACCOUNT NO. CA - 3097, CORPORATION BANK, KAROL BAGH, NEW DELHI IN THE NAME OF R.K. AGGARWAL & CO. BY OBTAINING ENTRIES FOR RS. 6,00,000, RS. 7,00,000 AND RS. 7,70,000 ON 28TH FEB., 1998, 28TH FEB., 1998 AND 1ST MARCH, 1998 RESPECTIVELY. HE HAS DIRECTED THE AO TO GET NOTICES ISSUED UNDER SECTION 148. SUBSEQUENTLY, I HAVE BEEN DIRECTED BY THE ADDL. CIT - R8, NEW DELHI VIDE HIS LETTER NO. ADDL. CIT R - 8/2002 - 03/572, DT. 26TH AUG., 2003 TO INITIATE PROCEEDINGS UNDER S. 148 IN RESPECT OF CASES PERTAINING TO THIS WARD. THUS, I HAVE SUFFICIENT INFORMATION IN MY POSSESSION TO ISSUE NOTICE UNDER S. 148 IN THE CASE OF M/S SFIL STOCK BROKING LTD. ON THE BASIS OF REASO NS RECORDED AS ABOVE.' 3.8 THE HON BLE HIGH COURT IN THE AFORESAID CASE HELD AS UNDER: 14 ITA NO . 1791/DEL/2013 9. IN THE PRESENT CASE, WE FIND THAT THE FIRST SENTENCE OF THE SO - CALLED REASONS RECORDED BY THE AO IS MERE INFORMATION RECEIVED FROM THE DY. DIRECTOR OF IT (INV.). TH E SECOND SENTENCE IS A DIRECTION GIVEN BY THE VERY SAME DY. DIRECTOR OF IT (INV.) TO ISSUE A NOTICE UNDER S. 148 AND THE THIRD SENTENCE AGAIN COMPRISES OF A DIRECTION GIVEN BY THE ADDL. CIT TO INITIATE PROCEEDINGS UNDER S. 148 IN RESPECT OF CASES PERTAININ G TO THE RELEVANT WARD. THESE THREE SENTENCES ARE FOLLOWED BY THE FOLLOWING SENTENCE, WHICH IS THE CONCLUDING PORTION OF THE SO - CALLED REASONS : 'THUS, I HAVE SUFFICIENT INFORMATION IN MY POSSESSION TO ISSUE NOTICE UNDER S. 148 IN THE CASE OF M/S SFIL STOC K BROKING LTD. ON THE BASIS OF REASONS RECORDED AS ABOVE.' 10. FROM THE ABOVE, IT IS CLEAR THAT THE AO REFERRED TO THE INFORMATION AND THE TWO DIRECTIONS AS 'REASONS' ON THE BASIS OF WHICH HE WAS PROCEEDING TO ISSUE NOTICE UNDER S. 148. WE ARE AFRAID THAT THESE CANNOT BE THE REASONS FOR PROCEEDING UNDER S. 147/148 OF THE SAID ACT. THE FIRST PART IS ONLY AN INFORMATION AND THE SECOND AND THE THIRD PARTS OF THE BEGINNING PARA OF THE SO - CALLED REASONS ARE MERE DIRECTIONS. FROM THE SO - CALLED REASONS, IT IS NOT AT ALL DISCERNIBLE AS TO WHETHER THE AO HAD APPLIED HIS MIND TO THE INFORMATION AND INDEPENDENTLY ARRIVED AT A BELIEF THAT, ON THE BASIS OF THE MATERIAL WHICH HE HAD BEFORE HIM, INCOME HAD ESCAPED ASSESSMENT . CONSEQUENTLY, WE FIND THAT THE TRIBUNAL HAS ARR IVED AT THE CORRECT CONCLUSION ON FACTS. THE LAW IS WELL SETTLED. THERE IS NO SUBSTANTIAL QUESTION OF LAW WHICH ARISES FOR OUR CONSIDERATION. (EMPHASIS SUPPLIED EXTERNALLY) 15 ITA NO . 1791/DEL/2013 3.9 ON THE OTHER HAND, IN TH E CASES RELIED UPON BY THE LD. S ENIOR DR, THE HON BLE DELHI HIGH COURT IN THE CASE OF NOVA PROMOTERS AND FINLEASE PRIVATE L IMITED (SUPRA) OBSERVED AS UNDER: 21. IT IS NOT IN DISPUTE IN THE PRESENT CASE THAT THE ASSESSMENT WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT ABOUT THE EXISTENCE OF ACCOMMODATION ENTRY PROVIDERS AND THEIR 'MODUS OPERANDI' IN WHICH THE AS SESSEE WAS ALSO FOUND TO BE INVOLVED. EVEN THE TRIBUNAL HAS RECORDED, WHILE DEALING WITH THE ASSESSEE'S CROSS OBJECTIONS CHALLENGING THE JURISDICTION OF THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT, THAT THE INFORMATION WAS SPECIFIC, NOT GENERAL OR VAGUE , AND REFERRED TO TRANSACTIONS ENTERED INTO BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. IT HAS FURTHER BEEN RECORDED BY THE TRIBUNAL THAT AS PER THE INFORMATION OF THE INVESTIGATION WING, THE NAMES OF THE PERSONS ISSUING THE CHEQUES, THE CHEQUE AM OUNTS, DATES ETC., WERE ALSO MENTIONED PROVIDING A LINK BETWEEN THE ENTRY PROVIDERS AND THE ASSESSEE. WE ARE AWARE OF THE LEGAL POSITION THAT AT THE STAGE OF ISSUING THE NOTICE UNDER SECTION 148 THE MERITS OF THE MATTER ARE NOT RELEVANT AND THE ASSESSING O FFICER AT THAT STAGE IS REQUIRED TO FORM ONLY A PRIMA FACIE BELIEF OR OPINION THAT INCOME CHARGEABLE TO TAX AT ESCAPED ASSESSMENT. HOWEVER, ONCE THAT STAGE IS CROSSED AND THE REASSESSMENT PROCEEDINGS ARE SET IN MOTION, THE MATERIAL ON THE BASIS OF WHICH TH E REQUISITE BELIEF WAS FORMED BY THE ASSESSING OFFICER HAS TO BE APPRAISED AND EXAMINED. THAT MATERIAL ON THE BASIS OF WHICH THE NOTICE UNDER SECTION 148 WAS ISSUED BECOMES RELEVANT IN THE COURSE OF THE REASSESSMENT PROCEEDINGS. .. 16 ITA NO . 1791/DEL/2013 3.10 IN THE CASE OF AGR I NVESTMENTS LTD (SUPRA), THE HON BLE HIGH COURT NOTED THE REASONS RECORDED BY THE ASSESSING OFFICER AS UNDER: 6. UPON RECEIPT OF THE SAID OBJECTIONS, THE SAME WERE DEALT WITH VIDE ANNEX. P - 2, DT. 28TH JUNE, 2010. IN PARA 3, THE AUTHOR ITY CONCERNED REFERRED TO ITS EARLIER DECISION AND REPRODUCED THE SAME. WE THINK IT APPROPRIATE TO REPRODUCE THE RELEVANT PORTION OF THE SAME WHEREBY THE OBJECTIONS HAVE BEEN REJECTED : 'REASONS RECORDED IN WRITING FOR REOPENING THE CASE UNDER S. 148 M/S A GR INVESTMENT LTD. ASST. YR. 2003 - 04. CERTAIN INVESTIGATIONS WERE CARRIED OUT BY THE DIRECTORATE OF INVESTIGATION, JHANDEWALAN, NEW DELHI IN RESPECT OF THE BOGUS/ ACCOMMODATION ENTRIES PROVIDED BY CERTAIN INDIVIDUALS/COMPANIES. THE NAME OF THE ASSESSEE FIG URES AS ONE OF THE BENEFICIARIES OF THESE ALLEGED BOGUS TRANSACTIONS GIVEN BY THE DIRECTORATE AFTER MAKING THE NECESSARY ENQUIRIES. IN THE SAID INFORMATION, IT HAS BE EN INTER ALIA REPORTED AS UNDER : 'ENTRIES ARE BROADLY TAKEN FOR TWO PURPOSES : 1. TO PLOUGH BACK UNACCOUNTED BLACK MONEY FOR THE PURPOSE OF BUSINESS OR FOR PERSONAL NEEDS SUCH AS PURCHASE OF ASSETS ETC., IN THE FORM OF GIFTS, SHARE APPLICATION MONEY, LOANS ETC. 2. TO INFLATE EXPENSE IN THE TRADING AND P&L A/C SO AS TO REDUCE THE REAL PROFITS AND THEREBY PAY LESS TAXES. IT HAS BEEN REVEALED THAT THE FOLLOWING ENTRIES HAVE BEEN RECEIVED BY THE ASSESSEE : 17 ITA NO . 1791/DEL/2013 BENEFICIARY S BENEFICIARY S BENEFICIARY S VALUE NAME BANK NAME BANK NAME ENTRY TAKEN AGR INVESTMENT LTD. SBI PAHAR GANJ 400000 AGR INVESTMENT LTD. SBI PAHAR GANJ 300000 AGR INVESTMENT LTD. SBI PAHAR GANJ 300000 AGR INVESTMENT LTD. SBI PAHAR GANJ 500000 AGR INVESTMENT LTD. SBI PAHAR GANJ 700000 AGR INVESTMENT LTD. SBI PAHAR GANJ 500000 TOTAL 2700000 INSTRUMENT NO. BY WHICH ENTRY TAKEN DATE ON WHICH ENTRY TAKEN NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT 141581 23 - MAY - 02 SAAR ENTERPRISES (P) LTD. 141852 28 - MAY - 02 SAAR ENTERPRISES (P) LTD. 141957 28 - MAY - 02 TULIP ENGG. (P) LTD. 141854 9 - JUN - 02 SAAR ENTERPRISES (P) LTD. 141955 9 - JUN - 02 TULIP ENGG. (P) LTD. 141959 20 - JUN - 02 TULIP ENGG. (P) LTD. 18 ITA NO . 1791/DEL/2013 T H E T R A N S A C T I THE TRANSACTIONS INVOLVING RS.27,00,000/ - MENTIONED IN THE MANNER ABOVE, CONSTITUTE FRESH INFORMATION IN RESPECT OF THE ASSESSEE AS A BENEFICIARY OF BOGUS ACCOMMODATION ENTRIES PROVIDED TO IT AND REPRESENTS THE UNDISCLOSED INCOME/INCOME FROM OTHER SOURCES OF THE ASSESSEE COMPANY, WHICH HAS NOT BEEN OFFERED TO TAX BY THE ASSESSEE TILL ITS RETURN FILED. ON THE BASIS OF THIS NEW INFORMATION, I HAVE REASON TO BELIEVE THAT THE INCOME OF RS. 27,00,000 HAS ESCAPED ASSESSMENT AS DEFINED BY S. 147 OF THE IT ACT. THE REFORE, THIS IS A FIT CASE FOR THE ISSUANCE OF THE NOTICE UNDER S. 148........... .... 3.11 IN THE AFORESAID CASE, THE HON BLE HIGH COURT ANALYZED THE DECISION S IN THE CASES OF RAYMOND WOOLLEN MILLS LTD. VS. ITO & ORS. BANK FROM WHICH ENTRY GIVEN BRANCH OF ENTRY GIVING BANK A/C NO. ENTRY GIVING ACCOUNT CORPN. BANK PASCHIM VIHAR 52116 CORPN. BANK PASCHIM VIHAR 52116 CORPN. BANK PASCHIM VIHAR 52174 CORPN. BANK PASCHIM VIHAR 52116 CORPN. BANK PASCHIM VIHAR 52174 CORPN. BANK PASCHIM VIHAR 52174 19 ITA NO . 1791/DEL/2013 (1999) 152 CTR (SC) 418 : (1999) 236 ITR 34 (SC), PRAFUL CHUNILAL PATEL VS. M.J. MAKWANA, ASSTT. CIT (1998) 148 CTR (GUJ) 62 : (1999) 236 ITR 832 (GUJ); GANGA SARAN & SONS (P) LTD. VS. ITO & ORS. (1981) 22 CTR (SC) 112 : (1981) 130 ITR 1 (SC); BIRLA VXL LTD. VS. ASSTT. CIT (1996) 130 CTR (GUJ) 281 : (1996) 217 ITR 1 (GUJ); SHEO NARAIN JAISWAL & ORS. VS. ITO & ORS. (1989) 176 ITR 352 (PAT); PHOOL CHAND BAJRANG LAL & ANR. VS. ITO & ANR. (1993) 113 CTR (SC) 436 : (1993) 203 ITR 456 (SC); ANANT KUMAR SAHARIA VS. CIT & ORS. (1999) 151 C TR (GAU) 556 : (1998) 232 ITR 533 (GAU); BOMBAY PHARMA PRODUCTS VS. ITO (1999) 153 CTR (MP) 350 : (1999) 237 ITR 614 (MP); H.A. NANJI & CO. VS. ITO (1979) 120 ITR 593 (CAL); N.D. BHATT, IAC & ANR. VS. I.B.M. WORLD TRADE CORPORATION (1993) 115 CTR (BOM) 103 : (1995) 216 ITR 811 (BOM); HINDUSTAN LEVER LTD. VS. R.B. WADKAR (2004) 190 CTR (BOM) 166 : (2004) 268 ITR 332 (BOM); ASSTT. CIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. (2007) 210 CTR (SC) 30 : (2007) 291 ITR 500 (SC); SFIL STOCK BROKING LTD. (2010) 325 ITR 285 ( DELHI); GKN DRIVESHAFTS (INDIA) LTD. VS. ITO & ORS. ( 2002 ) 257 ITR 702 ( DELHI ) SARTHAK SECURITIES CO. (P) LTD. VS. ITO, WRIT PETN. NO. 6087 OF 2010, DECIDED ON 18TH OCT., 2010 [REPORTED AT (2010) 236 CTR (DEL) 362 : (2010) 47 DTR (DEL) 201 ED.] . IN THE BACKGROUND OF ABOVE DECISION, THE HON BLE HIGH COURT HELD AS UNDER: 23. THE PRESENT FACTUAL CANVAS HAS TO BE SCRUTINIZED ON THE TOUCHSTONE OF THE AFORESAID ENUNCIATION OF LAW. IT IS WORTH NOTING THAT THE LEARNED COUNSEL FOR THE PETITIONER HAS SUB MITTED WITH IMMENSE VEHEMENCE THAT THE PETITIONER HAD ENTERED INTO CORRESPONDENCE TO HAVE THE DOCUMENTS BUT THE AO TREATED THEM AS OBJECTIONS AND MADE A COMMUNICATION. HOWEVER, ON A SCRUTINY OF THE ORDER, IT IS PERCEIVABLE THAT THE AUTHORITY HAS PASSED THE ORDER DEALING WITH THE OBJECTIONS IN A VERY CAREFUL AND STUDIED 20 ITA NO . 1791/DEL/2013 MANNER. HE HAS TAKEN NOTE OF THE FACT THAT TRANSACTIONS INVOLVING RS. 27 LAKHS MENTIONED IN THE TABLE IN ANNEX. P - 2 CONSTITUTE FRESH INFORMATION IN RESPECT OF THE ASSESSEE AS A BENEFICIARY OF BOGUS ACCOMMODATION ENTRIES PROVIDED TO IT AND REPRESENTS THE UNDISCLOSED INCOME. THE AO HAS REFERRED TO THE SUBSEQUENT INFORMATION AND ADVERTED TO THE CONCEPT OF TRUE AND FULL DISCLOSURE OF FACTS. IT IS ALSO NOTICEABLE THAT THERE WAS SPECIFIC INFORMATION RECEIVED FROM THE OFFICE OF THE DIRECTOR OF IT (INV. - V) AS REGARDS THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE COMPANY WITH NUMBER OF CONCERNS WHICH HAD MADE ACCOMMODATION ENTRIES AND THEY WERE NOT GENUINE TRANSACTIONS. AS WE PERCEIVE, IT IS NEITHER A C HANGE OF OPINION NOR DOES IT CONVEY A PARTICULAR INTERPRETATION OF A SPECIFIC PROVISION WHICH WAS DONE IN A PARTICULAR MANNER IN THE ORIGINAL ASSESSMENT AND SOUGHT TO BE DONE IN A DIFFERENT MANNER IN THE PROCEEDING UNDER S. 147 OF THE ACT. THE REASON TO BE LIEVE HAS BEEN APPROPRIATELY UNDERSTOOD BY THE AO AND THERE IS MATERIAL ON THE BASIS OF WHICH THE NOTICE WAS ISSUED. AS HAS BEEN HELD IN PHOOL CHAND BAJRANG LAL (SUPRA), BOMBAY PHARMA PRODUCTS (SUPRA) AND ANANT KUMAR SAHARIA (SUPRA), THE COURT, IN EXERCISE OF JURISDICTION UNDER ART. 226 OF THE CONSTITUTION OF INDIA PERTAINING TO SUFFICIENCY OF REASONS FOR FORMATION OF THE BELIEF, CANNOT INTERFERE. THE SAME IS NOT TO BE JUDGED AT THAT STAGE. IN SFIL STOCK BROKING LTD. (SUPRA), THE BENCH HAS INTERFERED AS IT WAS NOT DISCERNIBLE WHETHER THE AO HAD APPLIED HIS MIND TO THE INFORMATION AND INDEPENDENTLY ARRIVED AT A BELIEF ON THE BASIS OF MATERIAL WHICH HE HAD BEFORE HIM THAT THE INCOME HAD ESCAPED ASSESSMENT. IN OUR CONSIDERED OPINION, THE DECISION RENDERED THERE IN IS NOT APPLICABLE TO THE FACTUAL MATRIX IN THE CASE AT HAND. IN THE CASE OF SARTHAK SECURITIES CO. (P) LTD. (SUPRA), THE DIVISION BENCH HAD NOTED THAT 21 ITA NO . 1791/DEL/2013 CERTAIN COMPANIES WERE USED AS CONDUITS BUT THE ASSESSEE HAD, AT THE STAGE OF ORIGINAL ASSESSMENT, FUR NISHED THE NAMES OF THE COMPANIES WITH WHICH IT HAD ENTERED INTO TRANSACTIONS AND THE AO WAS MADE AWARE OF THE SITUATION AND FURTHER THE REASON RECORDED DOES NOT INDICATE APPLICATION OF MIND. THAT APART, THE EXISTENCE OF THE COMPANIES WAS NOT DISPUTED AND THE COMPANIES HAD BANK ACCOUNTS AND PAYMENTS WERE MADE TO THE ASSESSEE COMPANY THROUGH THE BANKING CHANNEL. REGARD BEING HAD TO THE AFORESAID FACT SITUATION, THIS COURT HAD INTERFERED. THUS, THE SAID DECISION IS ALSO DISTINGUISHABLE ON THE FACTUAL SCORE. 2 4. IN THE CASE AT HAND, AS WE FIND, THE PETITIONER IS DESIROUS OF AN ADJUDICATION BY THE WRIT COURT WITH REGARD TO THE MERITS OF THE CONTROVERSY. IN FACT, THE PETITIONER REQUIRES THIS COURT TO ADJUDGE THE SUFFICIENCY OF THE MATERIAL AND TO MAKE A ROVING EN QUIRY THAT THE INITIATION OF PROCEEDINGS UNDER SS. 147 AND 148 OF THE ACT IS NOT TENABLE. THE SAME DOES NOT COME WITHIN THE AMBIT AND SWEEP OF EXERCISE OF POWER UNDER ART. 226 OF THE CONSTITUTION OF INDIA. IT IS OPEN TO THE ASSESSEE TO PARTICIPATE IN THE R EASSESSMENT PROCEEDINGS AND PUT FORTH ITS STAND AND STANCE IN DETAIL TO SATISFY THE AO THAT THERE WAS NO ESCAPEMENT OF TAXABLE INCOME. WE MAY HASTEN TO CLARIFY THAT ANY OBSERVATION MADE IN THIS ORDER SHALL NOT WORK TO THE DETRIMENT OF THE PLEA PUT FORTH BY THE ASSESSEE DURING THE REASSESSMENT PROCEEDINGS. 3.12 IN THE CASE OF INDIA TERMINA L CONNECTOR SYSTEM LTD . (SUPRA) , THE HON BLE HIGH COURT NOTED THE REASONS RECORDED AS UNDER: 4. SUBSEQUENTLY, A NOTICE UNDER SECTION 148 OF THE ACT DATED 28TH MARCH, 2008 WAS ISSUED AND THE ASSESSEE FILED A LETTER DATED 10TH 22 ITA NO . 1791/DEL/2013 JUNE, 2008 STATING THAT THE ORIGINAL RETURNED FILED MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO THE SAID NOTICE. THE ALLEGATION AGAINST THE ASSESSEE WAS THAT THEY HAD RECEIVED ACCOMMODATION ENTRIES OF RS.42,03,250/ - AS PER INFORMATION RECEIVED FROM THE INVESTIGATION WING. THE REASONS RECORDED BY THE ASSESSING OFFICER HAVE BEEN MENTIONED IN THE ORDER PASS ED BY THE TRIBUNAL AND READ AS UNDER: - '1. IN THIS CASE, THE ASSESSMENT WAS COMPLETED U/S 143(3)(I) ON 25.10.2001 AS A TOTAL INCOME OF RS.39,73,740/ - AGAINST THE RETURNED INCOME OF RS.3873870/ - . 2. CERTAIN INVESTIGATIONS WERE CARRIED OUT BY THE DIRECTORATE INCOME TAX (INVESTIGATION) - I, NEW DELHI IN RESPECT OF THE BOGUS/ACCOMMODATION ENTRIES PROVIDED BY CERTAIN INDIVIDUALS/COMPANIES. THE NAME OF THE ASSESSEE COMPANY FIGURES AS ONE OF THE BENEFICIARIES OF THESE ALLEGED BOGUS TRANSACTIONS GIVEN BY THE DIRECTOR ATE AFTER MAKING THE NECESSARY ENQUIRIES. THE NAME AND OTHER PARTICULARS OF THE ABOVE SAID ASSESSEE ARE AS UNDER: - NAME OF THE ASSESSEE/ BENEFICIARY NAME OF BANK OF BENEFICIARY NAME OF THE OPERATOR INSTRUMENT NO. OPERATOR S NO. AND BANK DATE ON WHICH ENTRY TAKEN AMOUNT (IN RS.) M /S. INDIAN TERMINAL CONNECTOR SYSTEMS LTD. OBC, GT ROAD SEKHAWATI FINANCE PVT. LTD. 21154 1200235, INNOVATIVE WAZIRPUR 25 - JAN - 01 50000 - DO - - DO - CHINTPUNI CREDITS 5005 8 , SB, DG 16 - JAN - 01 50000 - DO - - DO - PARTICULARS MANAGE FINLEASE PVT. LTD. 50050, SB DG 16 - JAN - 01 50000 23 ITA NO . 1791/DEL/2013 - DO - PROFAN FINANCE & INVESTMENT PVT. LTD. 269453 5035, INDIAN BANK, CH. CHOWK, DELHI 15 - MAR - 01 12014 - DO - TEEM METALS LTD. 900116 2789 VIJAYA BANK, RAM NAGAR 13 - APR - 00 50050 - DO - DINANATH LUHARIWALA SPINNING MILLS PVT. LTD. 7461 1200217, INNOVATIVE WAZIRPUR 14 - MAR - 01 50075 - DO - OBC M. V. MARKETING PVT. 916209 567, FEEDRER KAROL BAGH 14 - MAR - 01 50060 IN VIEW OF THE ABOVE INFORMATION, IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK BY WAY OF ACCOMMODATION ENTRIES. THEREFORE, I HAVE REASONS TO BELIEVE THAT THE INCOME AMOUNTING TO RS.42,03,250/ - HAS ESCAPED ASSESSMENT, WHICH IS REQUIRED TO BE ASSESSED TO TAX UNDER THE PROVISIONS OF SECTION 147 OF THE IT ACT, 1961.' 3.13 AS FAR AS INITIATION OF REASSESSMENT PROCEEDING ON THE BASIS OF REASONS RECORDED, THE HON BLE HIGH COURT IN THE AFORESAID CASE HELD AS UNDER: 8. WE HAVE ALREADY REPRODUCED THE REASON S GIVEN BY THE ASSESSING OFFICER. THE REASONS GIVEN BY THE ASSESSING OFFICER ARE CLEAR AND SPECIFIC. THE INVESTIGATION HAD BEEN CONDUCTED AND ON THE BASIS OF INFORMATION RECEIVED, THE ASSESSING OFFICER FORMED A PRIMA FACIE OR TENTATIVE OPINION THAT THE ASS ESSEE HAD RECEIVED BOGUS CREDIT ENTRIES OF RS.42,03,250/ - FROM THE PARTIES MENTIONED IN THE TABLE. THE REASONS MENTION THE NAME OF THE OPERATOR, 24 ITA NO . 1791/DEL/2013 THE INSTRUMENT NUMBER, THE BANK ACCOUNT AND THE DATE ON WHICH THE ENTRY WAS MADE. THE AMOUNT INVOLVED IN RESPECT OF EACH ENTRY WAS MENTIONED. THE ASSESSING OFFICER HAS FURTHER RECORDED THAT THE ASSESSEE COMPANY HAD INTRODUCED ITS UNACCOUNTED MONEY IN THE BANK BY WAY OF ACCOMMODATION ENTRIES. IN VIEW OF WHAT WAS RECORDED AND STATED IN THE 'REASONS TO BELIEVE', IT IS NOT POSSIBLE TO AGREE WITH THE FINDINGS RECORDED BY THE TRIBUNAL THAT THE ASSESSING OFFICER HAD FAILED TO STATE/RECORD THAT THE ASSESSEE HAD NOT MADE TRUE AND FULL DISCLOSURE OF THE MATERIAL FACTS AND THE SAID FACTUM WAS NOT MENTIONED AND CANNOT BE ELUCIDATED FROM THE REASONS. REASONS RECORDED BY THE ASSESSING OFFICER HAVE TO BE READ AS A WHOLE IN ENTIRETY AND IN A HOLISTIC MANNER. MERE REPRODUCTION OF THE LANGUAGE OF THE SECTION IS NOT SUFFICIENT. WE HAVE TO READ AND UNDERSTAND THE REASONS RECORDED AND WHETHER ON THE BASIS OF SAID REASONS THE ASSESSING OFFICER HAD COME TO THE CONCLUSION OR DRAWN AN INFERENCE THAT THE ASSESSEE HAD NOT MADE FULL AND TRUE DISCLOSURE OF MATERIAL FACTS. AS PER THE 'REASONS TO BELIEVE' MENTIONED ABOVE, THE ASSESSING OFFICE R HAD COME TO A PRIMA FACIE OR A TENTATIVE OPINION THAT THE ASSESSEE HAD INTRODUCED HIS UNACCOUNTED MONEY IN THE FORM OF ACCOMMODATION ENTRIES. THE NAME OF THE OPERATOR, WHO HAD GIVEN THE ACCOMMODATION ENTRY AND THE AMOUNT THEREOF IS MENTIONED. AT THIS STA GE, A FINAL FINDING OR CONCLUSION IS NOT REQUIRED TO BE RECORDED BY THE ASSESSING OFFICER. RECORDING OF REASONS IS FOR INITIATION OF THE REASSESSMENT PROCEEDINGS, WHICH IS THE STARTING POINT. REFERRING TO THE SAID ASPECT IN AGR INVESTMENT LIMITED VERSUS AD DITIONAL COMMISSIONER OF INCOME TAX AND ANOTHER, (2011) 333 ITR 146 (DEL.), IT HAS BEEN OBSERVED THAT THE PHRASE 'REASONS TO BELIEVE' WOULD MEAN THE CAUSE OR JUSTIFICATION FOR THE 25 ITA NO . 1791/DEL/2013 ASSESSING OFFICER TO KNOW OR SUPPOSE THAT INCOME HAD ESCAPED ASSESSMENT. IT DOES NOT MEAN THAT THE ASSESSING OFFICER SHOULD HAVE FINALLY ASCERTAINED THE FACT BY LEGAL EVIDENCE OR CONCLUSION. AT THAT STAGE, THE FINAL OUTCOME OF THE PROCEEDINGS IS NOT RELEVANT. THE ONLY QUESTION IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REAS ONABLE PERSON COULD HAVE FORMED A REQUISITE BELIEF. WHETHER OR NOT THE MATERIAL WOULD CONCLUSIVELY PROVE ESCAPEMENT IS NOT THE ASPECT OR CONCERN AT THAT STAGE BUT THIS ASPECT HAS TO BE EXAMINED SUBSEQUENTLY IN THE REASSESSMENT PROCEEDINGS. FURTHER, WE HAVE TO ASCERTAIN WHETHER THE ASSESSING OFFICER HAD APPLIED HIS MIND TO THE INFORMATION AND INDEPENDENTLY ARRIVED AT THE BELIEF ON THE BASIS OF THE MATERIAL WHICH WAS PRODUCED BEFORE HIM. IN AGR INVESTMENT LIMITED (SUPRA), THE DIVISION BENCH HAD REFERRED TO AN EARLIER DECISION IN SARTHAK SECURITIES COMPANY PRIVATE LIMITED VERSUS ITO, 174 (2010) DLT 161(DB). IN THE SAID CASE ALSO REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM DIRECTORATE OF INVESTIGATION REGARDING BOGUS/ACCOMMO DATION ENTRIES. THE DECISION IN SARTHAK SECURITIES COMPANY PRIVATE LIMITED (SUPRA) WAS ELUCIDATED AND EXPLAINED. 3.14 I N A RECENT DECISION, IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME T AX VS. PARAMOUNT COMMUNICATION PRIVATE L IMITED [2017] 392 ITR 44 4 (DEL) THE HON BLE DELHI HIGH COURT NOTED THE REASONS RECORDED AS UNDER: ... THE RELEVANT REASONS FURNISHED IN RESPECT OF EACH ASSESSMENT YEAR READ AS FOLLOWS : 'ASSESSMENT YEAR 2003 - 04 26 ITA NO . 1791/DEL/2013 RETURN DECLARING LOSS OF RS. 1,99,75,520 WAS FILED BY THE ASSESSEE ON NOVEMBER 22, 2003. ASSESSME NT UNDER SECTION 143(3) WAS COM PLETED ON MARCH 24, 2006 AT A TOTAL LOSS OF RS. 1,24,75,520. INFORMATION WAS RECEIVED FROM THE DIRECTORATE OF REVENUE INTELLI GENCE, REGIONAL UNIT , JAIPUR AND PASSED ON THIS OFFICE THAT CENTRAL EXCISE COMMISSIONER, JAIPUR - 1 DETECTED BOGUS PURCHASE MADE BY THE ASSESSEE COMPANY FROM M/S. KASHISH IMPEX PVT. LTD. AND THE INFORMATION RECEIVED FOR THE PERIOD SEPTEMBER 17, 2002 TO MAY 20, 2005 AND THE AMOUNT OF PURCHASES (BO GUS) FOR THE PERIOD UNDER CONSI DERATION AMOUNTED TO RS. 1.64 CRORES HAS ESCAPED TAXATION. ASSESSMENT YEAR 2004 - 05 RETURN DECLARING LOSS OF RS. 1,39,50,580 WAS FILED BY THE ASSESSEE ON OCTOBER 29, 2004. ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED ON DECE MBER 22, 2006 AT A TOTAL LOSS OF RS. 34,02,989. INFORMATION WAS RECEIVED FROM THE DIRECTORATE OF REVENUE INTELLIGENCE, REGIONAL UNIT JAIPUR AND PASSED ON THIS OFFICE THAT CENTRAL EXCISE COMMISSIONER, JAIPUR - 1 DETECTED BOGUS PURCHASES MADE BY ASSESSEE COMPANY FROM M/S. KASHISH IMPEX P. LTD. AND THE INFORMATION RECEIVED FOR THE PERIOD SEPTEMBER 17, 2002 TO MAY 20, 2005 AND THE AMOUNT OF PUR CHASES (BOGUS) FOR THE PERIOD UNDER CONSIDERATION AMOUNTED TO RS. 6.20 CRORES. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT INCOME TO THE TUNE OF RS. 6.20 CRORES HAS ESCAPED TAXATION. PUT UP FOR APPROVAL AND SANCTION FOR ISSUE OF NOTICE UNDER SECTION 148 OF INCOME - TAX ACT, 1961. ASSESSMENT YEAR 2005 - 06 27 ITA NO . 1791/DEL/2013 RETURN DECLARIN G NIL INCOME WAS FILED BY THE ASSESSEE ON OCTOBER 8, 2005. ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED ON DECEMBER 22, 2006 AT A TOTAL LOSS OF RS.1,81,99,014. INFORMATION WAS RECEIVED FROM THE DIRECTORATE OF REVENUE INTELLI GENCE, REGIONAL UNIT JAIPUR AND PASSED ON THIS OFFICE THAT THE CENTRAL EXCISE COMMISSIONER, JAIPUR 1 DETECTED BOGUS PURCHASES MADE BY THE ASSESSEE COMPANY FROM M/S. KASHISH IMPEX PVT. LTD. AND THE INFOR MATION RECEIVED FOR THE PERIOD SEPTEMBER 17, 2002 TO MAY 20, 2005 AND THE AMOUNT OF PURCHASES (BO GUS) FOR THE PERIOD UNDER CONSI DERATION AMOUNTED TO RS. 74.08 LAKH. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT INCOME TO THE TUNE OF RS. 74.08 LAKH HAS ESCAPED TAXATION.' 3.15 WITH REFERENCE TO ABOVE REASONS RECORDED, THE CHALLENGE OF JURISDICTION IN REOPENING THE ASSESSMENT WAS CONSIDERED BY THE HON BLE DELHI HIGH COURT IN THE AFORESAID CASE, AND AFTER CO NSIDERING THE ARGUMENTS OF THE R EVENUE AND THE LD. COUNSEL OF THE ASSESSEE , THE HON BLE DELHI HIGH COURT HELD AS UNDER: 1) AS FAR AS THE ASSESSMENT YEAR 2004 - 05 IS CONCERNED, THIS COURT IS OF THE OPINION THAT IN THE REFERENCE TO THE BOGUS PURCHASE MADE BY THE ASSESSEE FROM M/S. KASHISH IMPEX PVT. LTD. AND THE INFORMATION RECEIVED FOR THE PERIOD SEPTEMBER 17, 2002 TO MAY 20, 2005 AND THE AMOUNT OF BOGUS PURCHASE FOR THE PERIOD UNDER CONSIDERATION AMOUNTED TO 1.64 CRORES WAS ENTIRELY BASED UPON THE INFORMATION RECEIVED FROM THE DIRECTORATE OF REVENUE INTELLIGENCE (DRI) REGIONAL UNIT AT JAIPUR. THIS IN TURN WAS BASED UPON INFORMATION GIVEN BY THE CENTRAL EXCISE DEPARTMENT. WHILE IT IS TRUE 28 ITA NO . 1791/DEL/2013 THAT THE COURT IS CONSCIOUS THAT THE REASSESSMENT NOTICE SHOULD NOT HAVE BEEN ROUTINELY ISSUED, AT THE SAME TIME, THE NATURE OF POWER IS WIDE ENOUG H THAT WHEN THERE IS AN ESCAPEMENT OF INCOME AND THE REVENUE HAS INFORMATION RULING THAT THIS ESCAPEMENT IS ALSO RELATABLE TO SUPPRESSION OF MATERIAL FACTS (WHICH COULD INCLUDE FALSE CLAIMS), THE POWER TO REOPEN CONCLUDED ASSESSMENT CAN VALIDLY BE EXERCISE D. THE CONSIDERATION WHICH OUGHT TO WEIGH WITH THE REVENUE AND ARE CONSIDERED VALID ARE THE EXISTENCE OF TANGIBLE MATERIAL OR INFORMATION IN THE LIGHT OF THE JUDGMENT IN CIT V. KELVINATOR OF INDIA LTD. [2010] 320 ITR 561 (SC). 2) HAVING REGARD TO THE CONTENT S 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 CONSTITUTES 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 COURT IS OF THE OPINION THAT EVEN THE RECTIFIED ORDER DOES NOT ADDRESS THE ISSUES SQUARELY. THUS, 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 THE 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 DOCUMENTS OR CONTENTS THEREOF WOULD BE VIRTUALLY REWRITING THE CONDITIONS IN SECTION 147. AFTER ALL, SECTION 147 MERELY AUTHORI ZES 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 29 ITA NO . 1791/DEL/2013 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, KELVINATOR (SUPRA) STRIKES JUST BALANCE. TO ADD FURTHER CONDITIONS TO THE NATURE OF DISCUSSION/REAS ONS 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 CONSEQUENTIA L 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. _______ (EMPHASIS SUPPLIED EXTERNALLY) 3.16 WE FI ND THAT IN THE CASE OF RAYMOND W OOLLEN MILLS VS. ITO (1999) 236 ITR 34, THE HON BLE SUPREME COURT HELD THAT IF PRIMA FACIE SOME MATERIAL EXIST ON THE BASIS OF WHICH DEPARTMENT CAN REOPEN THE CASE, IT IS SUFFICIENT TO INITIATE THE REASSESSMENT PROCEE DING AND THE SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THIS STAGE. THE SAME VIEW HAS BEEN EXPRESSED BY THE HON BLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK B ROKER (P) LTD (2007) 291 ITR 500 (SC) AS UND ER: 30 ITA NO . 1791/DEL/2013 16. SEC. 147 AUTHORISES AND PERMITS THE AO TO ASSESS OR REASSESS INCOME CHARGEABLE TO TAX IF HE HAS REASON TO BELIEVE THAT INCOME FOR ANY ASSESSMENT YEAR HAS ESCAPED ASSESSMENT. THE WORD 'REASON' IN THE PHRASE 'REASON TO BELIEVE' WOULD MEAN CAUSE OR JUSTIFICAT ION. IF THE AO HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAD ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE REASON TO BELIEVE THAT AN INCOME HAD ESCAPED ASSESSMENT. THE EXPRESSION CANNOT BE READ TO MEAN THAT THE AO SHOULD HAVE FINALLY ASCERTAIN ED THE FACT BY LEGAL EVIDENCE OR CONCLUSION. THE FUNCTION OF THE AO IS TO ADMINISTER THE STATUTE WITH SOLICITUDE FOR THE PUBLIC EXCHEQUER WITH AN INBUILT IDEA OF FAIRNESS TO TAXPAYERS. AS OBSERVED BY THE DELHI HIGH COURT IN CENTRAL PROVINCES MANGANESE ORE CO. LTD. VS. ITO (1991) 98 CTR (SC) 161 : (1991) 191 ITR 662 (SC), FOR INITIATION OF ACTION UNDER S. 147(A) (AS THE PROVISION STOOD AT THE RELEVANT TIME) FULFILMENT OF THE TWO REQUISITE CONDITIONS IN THAT REGARD IS ESSENTIAL. AT THAT STAGE, THE FINAL OUTCO ME OF THE PROCEEDING IS NOT RELEVANT. IN OTHER WORDS, AT THE INITIATION STAGE, WHAT IS REQUIRED IS 'REASON TO BELIEVE', BUT NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME. AT THE STAGE OF ISSUE OF NOTICE, THE ONLY QUESTION IS WHETHER THERE WAS RELEVANT M ATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED A REQUISITE BELIEF. WHETHER THE MATERIALS WOULD CONCLUSIVELY PROVE THE ESCAPEMENT IS NOT THE CONCERN AT THAT STAGE. THIS IS SO BECAUSE THE FORMATION OF BELIEF BY THE AO IS WITHIN THE REALM OF SUBJECTIV E SATISFACTION [SEE ITO VS. SELECTED DALURBAND COAL CO. (P) LTD. (1996) 132 CTR (SC) 162 : (1996) 217 ITR 597 (SC); RAYMOND WOOLLEN MILLS LTD. VS. ITO (1999) 152 CTR (SC) 418 : (1999) 236 ITR 34 (SC)]. 31 ITA NO . 1791/DEL/2013 3.17 I N THE LIGHT OF ABOVE DECISIONS , WE CAN SUMMARI ZE : (I) THAT THE REASONS RECORDED SHOULD NOT BE VAGUE AND SCANTY AND SAME SHOULD BE SPECIFIC . (II) THAT A T THE STAGE OF ISSUING THE NOTICE UNDER SECTION 148 OF THE ACT , THE MERITS OF THE MATTER ARE NOT RELEVANT AND WHAT IS REQUIRED IS RELEVANT MATERIAL TO FORM O NLY A PRIMA FACIE BELIEF OR OPINION THAT INCOME CHARGEABLE TO TAX AT ESCAPED ASSESSMENT. (III) THAT T HE ASSESSING OFFICER IS NOT REQUIRED TO CARRY OUT DETAILED INVESTIGATION AT THE STAGE OF RECORDING REASONS. (IV) THAT T HE ASSESSING OFFICER HIMSELF SHOULD APPLY MIN D TO THE MATERIAL OR INFORMATION AND RECORD REASONS, AND NOT ON THE DIRECTION OF THE HIGHER AUTHORITY. (V) MENTIONING PRIMARY SOURCE OF INFORMATION IS SUFFICIENT AND FURTHER DETAILS OF NATURE OF DOCUMENTS OR CONTENTS THEREOF IS NOT REQUIRED. 3.18 NOW, WE PROCEED TO EXAMINE THE REASONS RECORDED IN THE INSTANT CASE IN THE LIGHT OF THE FINDING OF THE HON BLE HIGH COURT AND SUPREME COURT IN CASES DISCUSSED ABOVE . 3.19 THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS RE PRODUCED THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AS UNDER: AS PER INFORMATION RECEIVED FROM THE OFFICE OF THE DIT(INV.), NEW DELHI, THE ASSESSEE COMPANY HAS TAKEN FOLLOWING ACCOMMODATION ENTRY TOTALING TO RS.9,00,930/ - VALUE OF ENTRY TAKEN DATE OR ENTRY FROM WHOM TAKEN INSTRUMENT NO. 32 ITA NO . 1791/DEL/2013 RS.6,00,615/ - 22.02.2003 HOPEWIN ADMARK CONSULTANTS PVT. LEARNED (A/C. NO. 24394, STATE BANK OF BIKANER & JAIPUR, NEW ROHTAK ROAD, DELHI) CHQ. 00781511 RS.3,00,315/ - 25.02.2003 HOPEWIN ADMARK CONSULTANTS PVT. LTD. (A/C. NO. 24394, STATE BANK OF BIKANER & JAIPUR, NEW ROHTAK ROAD, DELHI) CHQ. 00781512 THE SAID AMOUNT HAS BEEN CREDITED INTO ASSESSEEE S BANK ACCOUNT WITH STATE BANK OF BIMANER & JAIPUR, NEW DELHI BY WAY OF TRANSFER ENTRY. ON INVESTIGATION MADE BY THE INVESTIGATION WING IT HAS BEEN FOUND THAT ASSESSEE IS A BENEFICIARY OF TAK ING THE AFORESAID ACCOMMODATION ENTRY. I HAVE ALSO PERUSED VARIOUS MATERIALS AND REPORT FROM INVESTIGATION WING AND ON THAT BASIS IT IS EVIDENT THAT THE ASS ESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK BY WAY OF ACCOMMODATION ENTRIES; THEREFORE, I HAVE REASONS TO BELIEVE THAT THE INCOME AMOUNT TO AT LEAST RS.9,00,390/ - HAS ESCAPED ASSESSMENT. THE ESCAPEMENTS OF INCOME HAS BEEN CLEARLY ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE TO TRULY & FULLY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. THUS, IT IS A FIT CASE FOR INITIATION OF PROCEEDINGS U/S 147 OF THE ACT. 3.20 ON PERUSAL OF THE REASONS RECORDED ABOVE, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT ON THE BASIS OF SPECIFIC INFORMATION THAT ASSESSEE HAS RECEIVED ACCOMMODATION ENTRIES FROM M/S HOPEWIN. THE ASSESSING OFFICER HAS MENTIONED VALUE OF THE ACCOMMODATION ENTRIES RECEIVED , DATE OF ENTRIES RECEIVED, BANK ACCOUNTS FROM WHICH THE ENTRIES RECEIVED AND THE INSTRUMENT NUMBERS THROUGH WHICH THE ENTRIES WERE RECEIVED . IN SUCH CIRCUMSTANCES , THE REASONS RECORDED CANNOT BE SAID AS SCANTY AND VAGUE AS AGAINST THE OBSERVATION OF THE H ON BLE HIGH COURT OF DELHI IN THE CASE OF SH. ATUL JAIN AND S MT . VINITA JAIN (SUPRA) AND S IGNATURE HOTELS (PVT.) L TD . (SUPRA). 3.21 THE NATURE OF ACCOMMODATION ENTRIES, WHETHER THOSE HAVE SHOWN BY THE ASSESSEE AS LOAN, INCOME OR SHARE CAPITAL ETC, CAN BE KNOWN ONLY 33 ITA NO . 1791/DEL/2013 AFTER EXAMINATION OF THE BOOKS OF ACCOUNTS OR RECORDS OF THE ASSESSEE AND WHICH CAN BE DONE ONLY IN THE REASSESSMENT PROCEEDINGS AF TER REOPENING OF THE ASSESSMENT . THUS, CONTENTION OF THE LD. COUNS EL THAT IN THE REASONS RECORDED , THE ASSESSING OFFICER HAS NOT MENTIONED AS WHAT KIND OF ACCOMMODATION ENTRIES WERE OBTAINED AND ITS NEXUS TO THE CONCLUSION HAS NOT BEEN EXPLAINED, IS NOT IN ACCORDANCE WITH LAW EXPLAINED BY THE HON BLE SUPREM E COURT IN THE CASE OF RAYMOND W OOLLEN MILLS LTD . (SUPRA ) , RAJESH JHAVERI (SUPRA) AND PARAMOUNT COMMUNICATIONS PVT. LTD . (SUPRA) 3.22 ON PERUSAL OF THE REASONS RECORDED, WE DO NOT AGREE WITH THE ALLEGATION OF THE LD. COUNSEL OF THE ASSESSEE T HAT THE REASONS RECORDED ARE AD - HOC AND RECORDED IN SUMMARY MANNER. 3 .23 THE REASONS RECORDED HAVE DULY MENTIONED THE SOURCE OF INFORMATION AS THE DIRECTOR OF INCOME T AX ( I NVESTIGATION), WHICH IS A DEPARTMENTAL AUTHORITY AND A CREDIBLE SOURCE OF INFORMATION. THE INFORMATION IS GATHERED BY THE D IRECTOR OF INCOME - TAX (I NVESTIGATION ) THROUGH SEARCH AND SURVEY PROCEEDINGS WHICH ARE MEASURES PROVIDED UNDER THE ACT . 3.24 THE REASONS RECORDED ITSELF MANIFEST THAT THE ASSESSING OFFICER HAS SEEN THAT THE ENTRIES IN QUESTION BELONGED TO THE ASSESSEE AND THOSE ENTRIES ARE SP ECI FIC AS REGARD TO VALUE, DATE , BANK ACCOUNT, INSTRUMENT NUMBER ETC. IN THE CASE OF SFIL S TOCK B ROKING LTD . (SUPRA), THE ASSESSING OFFICER IN THE REASONS RECORDED HAS REFERRED TO THE DIRECTIONS OF THE HIGHER AUTHORITY, AND THUS IT IS HELD THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS OWN MIND WHILE RECORDING THE REASONS, WHEREAS IN THE PRESENT CASE WE DO NOT FIND MENTION OF ANY SUCH DIRECTION OF THE HIGHER AUTHORITIES PRIOR TO RECORDING OF REASONS. THUS , WE DO NOT FIND ANY STRENGTH IN THE ARGUMENTS OF THE LD. COUNSEL THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND BEFORE ISSUE OF NOTICE UNDER SECTION 148 OF THE 34 ITA NO . 1791/DEL/2013 ACT AND JURISDICTION HAS BEEN ASSUMED IN MECHANICAL MANNER . W HE THER THE ASSESSING OFFICER WAS HAVING REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT, IS TO BE EXAMINED ON THE BASIS OF THE REASONS RECORDED ITSELF AND NOT ON THE BASIS WHAT HAS BEEN MENTIONED IN THE ASSESSMENT ORDER, WHICH IS A SUBSEQUENT ACTION. THUS THE CONTENTION OF THE LD . CONSUL THAT IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS MENTIONED THAT THE ASSESSEE AS BENEFICIARY OF ACCOMMODATION ENTRY OF INTRODUCING OWN UNACCOUNTED MONEY IN THE GARB OF SHARE CAPITAL OR IN THE GARB OF SALE OF SHARES, IS NOT RELEVANT FOR EXAM INING THE VALIDITY OF REASSESSMENT PROCEEDING. 3.25 WE AGREE WITH THE CONTENTION OF THE LD. COUNSEL THAT ONLY THE INFORMATION AVAILABLE WITH THE ASSESSING OFFICER AT THE POINT OF TIME OF ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT HAS TO BE CONSIDERED AND SUBSEQUENT IMPROVEMENTS ARE NOT ALLOWED AS CONSIDER ED BY THE LD. CIT(A). WE FIND THAT IN THE MATERIAL AVAILABLE BEFORE THE ASSESSING OFFICE R AS HAS BEEN SHOWN BY THE LD. S ENIOR DR, IT WAS MENTIONED T HAT M/S HOPEWIN WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES AND THIS FACT WAS ADMITTED BY S H. VISHAL AGGA RWAL, SON OF THE D IRECTOR OF THE COMPANY. THE D IRECTOR, MRS. MANJU AGGARWAL ADMITTED IN HER STATEMENT THAT ALL AFFAIRS OF THE COMPANY WERE USED TO BE LOOKED AFTER BY SH. VISHAL AGRAWAL. 3.26 THUS , WE CAN SUMMARIZE THAT THE REASONS RECORDED BY THE ASSESSI NG OFFICER ARE SPECIFIC AND HE HAS DULY APPLIED MIND ON THE MATERIAL AVAILABLE BEFORE HIM AND RECORDED THE REQUISITE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. IN VIEW OF ABOVE , WE ARE OF CONSIDERED OPINION, THAT THE ASSESSING OFFICER ASSUMED JURISDICTION VALIDLY AND NOTICE UNDER SECTION 148 OF THE ACT HAS BEEN ISSUED AFTER FORMING REQUISITE BELIEF AS REQUIRED UNDER THE PROVISIONS OF SECTION 147 OF THE ACT. 35 ITA NO . 1791/DEL/2013 ACCORDINGLY , WE UPHOLD THE VALIDITY OF THE REASSESSMENT PR OCEEDING AND GROUNDS NO. 1 AND 1.1 OF THE APPEAL ARE DISMISSED. 4. IN GROUND NO. 2 , THE ASSESSEE HAS CHALLENGED ADDITION OF RS. 15,00,000 / - AS INCOME FROM UNDISCLOSED SOURCES UNDER SECTION 68 OF THE ACT, UPHELD BY THE LD. CIT - A. 4.1 BEFORE US , THE LD. CO UNSEL OF THE ASSESSEE INVITED OUR ATTENTION TO THE PAPER BOOK AT PAGES 34 AND 35, WHICH ARE INVOICES ISSUED BY THE ASSESSEE COMPANY TO M/S HOPEWIN AND SUBMITTED THAT THE ASSESSEE COMPANY HAD RECEIVED HIRE CHARGES OF STUDIO EQUIPMENTS FROM M/S H OPEWIN THRO UGH ACCOUNT PAYEE CHEQUE. THE LD. COUNSEL FURTHER REFERRED TO DETAILS OF HIRE CHARGES AVAILABLE ON PAGE 15 TO 17 OF THE PAPER BOOK AND SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE RECEIVED HIRE CHARGES OF RS.39,07,739/ - INCLUDING RS.15,0 0,000/ - FROM M/S H OPEWIN. THE LD. COUNSEL ALSO SUBMITTED THAT ASSESSEE WAS A REGULAR BUSINESS AND DISCLOSED STUDIO INCOME IN PROFIT AND LOSS ACCOUNT OF EARLIER YEARS ALSO. THE LD. COUNSEL SUBMITTED THAT UNDER SECTION 68 OF THE ACT ONLY ADDITION IN RESPECT OF CREDIT WHICH IS OUTSTANDING AT THE END OF THE YEAR AS A LIABILITY OR SHARE CAPITAL CAN ONLY BE ADDED WHEREAS IN THE INSTANT CASE IT WAS BUSINESS INCOME. HE FURTHER SUBMITTED THAT ASSESSING OFFICER HAS ALREADY COLLECTED AUDITED ACCOUNTS OF THE ASSE SSEE C OMPANY FROM THE INCOME TAX DEPARTMENT AND, THEREFORE , IDENTITY OF THE SAID PARTY WAS ESTABLISHED. HE F URTHER SUBMITTED THAT THE PARTY HAD MADE PAYMENT BY CHEQUE AGAINST THE BILL FOR HIRING CHARGES AND , THEREFORE , THE ASSESSEE COMPANY WAS NOT CONCERNED WITH THE ACCOUNTING TREATMENT GIVEN BY THE CUSTOMER IN ITS BOOKS OF ACCOUNTS. THE LD. COUNSEL SUBMITTED THAT THE ASSESSING OF FICER HAS ONLY RELIED UPON THE INVESTIGATION OF THE DIT (I NVESTIGATION). HE FURTHER SUBMITT ED THAT THE LD. CIT - ( A ) HAS NOT CONSIDERED THE ABOVE FACTS. HE ALSO 36 ITA NO . 1791/DEL/2013 SUBMITTED WITHOUT PREJUDICE THAT THE ADDITION SO MADE BY THE ASSESSING OFFICER HAS RESULTED INTO A DOUBLE ADDITION. 4.2 ON THE OTHER HAND , THE LEARNED S ENIOR DR RELIED ON THE FINDING OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE FAILED TO DISCHARGE ITS ONUS IN TERMS OF SECTION 68 OF THE ACT AND PARTICULARLY GENUINENESS OF THE TRANSACTION. 4.3 WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN T HE CASE , IT IS CONTESTED BY THE LD. COUNSEL THAT NO ADDITION COULD BE MADE UNDER SECTION 68 OF THE ACT AS THE AMOUNT BEING THE BUSINESS INCOME. IN OUR OPINION , THE CONTENTION OF THE LD. COUNSEL IS NOT CORRECT. AS PER THE PROVISIONS OF SECTION 68 OF THE ACT , WHENEVER ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE ASSESSING OFFICER S ATISFACTORY, THEN THE ASSESSING OFFICER MAY CHARGES SAID SUM SO CREDITED TO INCOME TAX AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN THE INSTANT CASE , THE ASSESSEE HAS CLAIMED THAT SAID CREDIT AS BUSINESS INCOME , HOWEVER , ON VERIFICATION BY THE ASSE SSING OFFICER , THE SAID PAYMENT HAS NOT BEEN FOUND DEBITED IN THE PROFIT AND LOSS ACCOUNT OF M/S HOPEWIN AS BUSINESS EXPENDITURE. THE SUMMON ISSUED TO THE SAID PARTY FOR APPEARING BEFORE THE ASSESSING OFFICER RETURNED UNSERVED. THE ASSESSEE ALSO FAILED TO PRODUCE THE SAID PARTY BEFORE THE ASSESSING OFFICER. AS THE AMOUNT IN QUESTION WAS APPEARING AS CREDIT IN BOO KS OF ACCOUNT AND THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS TO EXPLAIN THE NATURE OF THE CREDIT, IN OUR OPINION, THE ACTION OF THE ASSESSING OFFICER IN INVOKING SECTION 68 OF THE ACT IS JUSTIFIED. 4.4 THE ASSESSING OFFICER HAS OBSERVED THAT THE AMOUNT IN QUESTION WAS NOT APPEARING AS BUSINESS EXPENDITURE IN THE PROFIT AND LOSS ACCOUNT 37 ITA NO . 1791/DEL/2013 OF M/S . HOPEWIN, WHEREAS THE CLAIM OF THE ASSESSEE THAT AMOUNT IN QUESTION WAS BUSINESS INCOME. BUT THE ASSESSEE NE ITHER BEFORE THE LD. CIT - ( A ) , NOR BEFORE US, REBUTTED THIS FINDING OF THE ASSESSING OFFICER. THUS , THE ASSESSEE HAS FAILED TO DISCHARGE ITS RESPONSIBILITY AND MORE PARTIC ULARLY SO WHEN THE ASSESSING OFFICER COMMUNICATED THE FINDING OF THE LEARNED D IRECTOR OF INCOME - TAX (I NVESTIGATION ) THAT M/S HOPEWIN WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRY. THE ASSESSEE WAS REQUIRED TO PROVE WITH EVIDENCES TO SUPPORT ITS CONTENTION T HAT SAID RECEIPT WAS FROM HIRE CHARGES OF THE STUDIO EQUIPMENTS. THE ASSESSEE WAS REQUIRED TO PROVIDE DETAIL OF THE EQUIPMENTS, AGREEMENT WITH M/S HOPEWIN REGARDING HIRING OF EQUIPMENT, THE PLACES WHERE THE EQUIPMENTS WERE SUPPLIED OR INSTALLED AND OTHER E VIDENCES TO ESTABLISH THAT M/S HOPEWIN WAS GIVEN THOSE EQUIPMENTS ON HIRE. THOUGH THE EXISTENCE OF THE PARTY GOT VERIFIED FROM THE AUDITED FINANCIAL STATEMENT COLLECTED BY THE ASSESSING OFFICER OF THE PRESENT CASE FROM THE ASSESSING OFFICER OF THE PARTY , W E OBSERVED THAT THE ASSESSEE NOT ONLY FAILED IN PRODUCING THE PARTY BUT ALSO FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE TO ESTABLISH THAT THE RECEIPT IN QUESTION WAS AGAINST HIRING OF THE STUDIO EQUIPMENTS. IN THE CIRCUMSTANCES, IN OUR OPINION , THE ACTION OF THE LD. CIT - A IN UPHOLDING THE RECEIPT OF RS. 15,00,000/ - FROM M/S HOPEWIN AS INCOME FROM UNDISCLOSED SOURCES UNDER SECTION 68 OF THE ACT IS JUSTIFIED AND ACCORDINGLY , WE UPHOLD THE SAME. 4.5 HOWEVER, WE AGREE WITH THE ARGUMENTS OF THE LD. C OUNSEL THAT IT AMOUNT S TO DOUBLE ADDITION. THE ASSESSEE HAS CLAIM ED THAT THE SAID RECEIPT OF RS. 15,00,000/ - IS INCLUDED UNDER THE HEAD BUSINESS INCOME . IN THOSE CIRCUMSTANCES , IF THE SAID SUM IS ADDED AGAIN UNDER SECTION 68 OF THE ACT, DEFINITELY, IT WILL AMOUNT TO DOUBLE ADDITION. IN OUR OPINION, IN SUCH CIRCUMSTANCES , THE ASSESSING OFFICER IS REQUIRED TO REDUCE THE SAID AMOUNT FROM THE BUSINESS INCOME. WE FEEL IT APPROPRIATE TO RESTORE THIS 38 ITA NO . 1791/DEL/2013 ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION OF FACTS , WHET HER THE CREDIT OF RS.15 L ACS WAS PART OF BUSINESS INCOME RECORDED IN BOOKS OF ACCOUNTS OR IT WAS IN ADDITION TO THE BUSINESS INCOME RECORDED IN THE BOOKS OF ACCOUNTS AND DECIDE IN VIEW OF OUR FINDINGS ABOVE. WE ORDER ACCORDINGLY. IT IS NEEDLESS TO MENTION THAT ASSESSEE SHALL BE AFFORDED SUFFICIENT OPPORTUNITY OF HEARING ON THE ISSUE. THE GROUND NO. 2 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 4.6 IN THE RESULT , THE APPEAL OF THE ASSESSEE IS ALLOWED PARTLY FOR STATISTICAL PURPOSE. THE DECISION IS PRONOUN C ED IN THE OPEN COURT ON 9 T H J U N E , 201 7 . S D / - S D / - ( I.C. SUDHIR ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 9 T H J U N E , 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