M/s. Neel Gagan Polymers & Marketing Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1938/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3533 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 10-06-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 29-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI NAROEM
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Peak credit; Question of law; Wrong claim; Difference of opinion; Accommodation entries; Reason to believe; Change of opinion; Reassessment proceedings; Capital Gains
• Section: 143(3); 142(1); 143(1); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F ; NEW DELHI BEFORE SHRI C.L. SETHI, JM AND SHRI A.K. GARODIA, A M I.T.A. NO.1938/DEL OF 2010 ASSESSMENT YEAR: 2002-03 M/S NEEL GAGAN POLYMERS & INCOME-TAX OFFICER, MARKETING P. LTD., VS WARD 13(2), NEW DELHI. 29, HEMKUNT COLONY, NEW DELHI. APPELLANT RESPONDENT APPELLANT BY: SHRI R.S. SINGHVI RESPONDENT BY: SMT. BANITA DEVI NAROEM, SR. DR ORDER PER C.L. SETHI, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 16.3.2010 PASSED BY THE LD. CIT(A) IN THE MATTER OF AN ASSESSMENT MADE BY THE AO U/S 144 READ WITH SECTION 147 OF THE INCOME -TAX ACT, 1961 (THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2002-03. 2. THE FIRST ISSUE RAISED BY THE ASSESSEE IS DIRECT ED AGAINST AOS ACTION IN INITIATING PROCEEDINGS U/S 147 OF THE ACT. THE ASSE SSEE HAS CONTENDED THAT THERE WAS NO MATERIAL OR EVIDENCE TO ENTERTAIN A BE LIEF U/S 147 OF THE ACT, AND THE JURISDICTION HAS BEEN ASSUMED BY THE AO ON MECH ANICAL BASIS, AND 2 WITHOUT APPLICATION OF MIND. IT HAS BEEN, THUS, CO NTENDED THAT THE ASSESSMENT ORDER MADE U/S 147 OF THE ACT IS INVALID , ILLEGAL AND BAD IN LAW. 3. RELEVANT FACTS RELATING TO THIS ISSUE RAISED BY THE ASSESSEE MAY BE SUMMARIZED AS UNDER:- IN THIS CASE, THE ASSESSEE FILED ITS RETURN OF INC OME ON 30.10.2002 DECLARING TOTAL INCOME AT RS.385/-. THE RETURN FIL ED BY THE ASSESSEE WAS PROCESSED U/S 143(1) VIDE INTIMATION DATED 22.2.200 3. REGULAR ASSESSMENT U/S 143(3) WAS MADE. SUBSEQUENTLY, THE AO RECEIVED AN INFORMATION FROM THE INVESTIGATION WING THAT ASSESSEE HAS AVAILED AC COMMODATION ENTRY IN RESPECT OF AMOUNT OF RS.5 LACS EACH ON 7 TH JULY, 2001 AND 20 TH AUGUST, 2001 FROM M/S DIPANTY OVERSEAS AND M/S ABHISHEK TEXTILES RESPECTIVELY. ON THE BASIS OF AFORESAID INFORMATION, THE AO RECORDED THE REASONS FOR REOPENING THE CASE U/S 147 OF THE ACT, AND ISSUED NOTICE U/S 148 ON 10.11.2006 AND SENT THE SAME BY REGISTERED POST TO THE ASSESSEE. THE N OTICE SO SENT BY THE AO WAS RECEIVED BACK UNSERVED. THE NOTICE WAS ULTIMAT ELY GOT SERVED THROUGH AFFIXTURE AT THE LAST KNOWN ADDRESS OF THE ASSESSEE COMPANY. THE NOTICE U/S 148 ISSUED BY THE AO WAS NOT COMPLIED WITH. THE AO THEN COLLECTED THE CURRENT ADDRESSES OF THE DIRECTORS OF THE ASSESSEE COMPANY FROM THE RECORDS OF THE ROC AS WELL AS THE RECORDS MAINTAINED BY THE BANKER OF THE ASSESSEE. THE AO, THEREAFTER, ISSUED NOTICE U/S 142(1) DATED 31.10.2007 TO THE 3 ASSESSEES ADDRESS AS WELL AS TO THE CURRENT ADDRES S OF THE DIRECTOR FIXING THE HEARING ON 7.11.2007. HOWEVER, NO RESPONSE WAS REC EIVED FROM THE ASSESSEE AND THE NOTICE SENT AT THE ASSESSEES LAST KNOWN AD DRESS RECEIVED BACK UNSERVED. THE AO, THEREAFTER, ISSUED SHOW CAUSE NO TICE TO THE ASSESSEE, AND AFTER EXAMINING AND VERIFYING THE VARIOUS EVIDENCE AND MATERIAL AVAILABLE ON RECORD, THE AO ULTIMATELY COMPLETED THE ASSESSMENT U/S 144/147 OF THE ACT ON 26.12.2007. 4. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BE FORE THE LEARNED CIT(A) WHERE THE ASSESSEE HAD TAKEN A GROUND THAT T HE AO HAS ERRED IN LAW AS WELL AS ON FACTS IN ASSUMING JURISDICTION U/S 14 7 OF THE ACT WHEN THERE WAS NO MATERIAL OR EVIDENCE TO ENTERTAIN THE BELIEF THAT ANY INCOME HAD ESCAPED ASSESSMENT. 5. AFTER HEARING THE ASSESSEE AND CONSIDERING THE F ACTS OF THE CASE, THE CIT(A) HAS TAKEN A VIEW THAT AO HAS RIGHTLY ASSUMED JURISDICTION U/S 147 OF THE ACT INASMUCH AS THE AO HAD SUFFICIENT MATERIAL TO ENTERTAIN A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. THIS ISSUE HAS BEEN DISCUSSED AND DELIBERATED UPON BY THE LEARNED CIT(A) IN DETAIL AFTER ANALYZING AND DELIBERATING U PON VARIOUS DECISIONS RENDERED ON THE ISSUE. 6. STILL AGGRIEVED, THE ASSESSEE HAS TAKEN THIS GRO UND BEFORE US. 4 7. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITT ED THAT FROM THE REASONS RECORDED BY THE AO BEFORE ISSUING NOTICE U/ S 148 OF THE ACT, IT IS NOT AT ALL DISCERNIBLE AS TO WHETHER THE AO HAD APPLIED HIS MIND TO THE INFORMATION RECEIVED AND INDEPENDENTLY ARRIVE AT A BELIEF THAT, ON THE BASIS OF MATERIAL WHICH HE HAD BEFORE HIM, INCOME HAD ESCAPE D ASSESSMENT. HE FURTHER SUBMITTED THAT THE REASONS RECORDED BY THE AO ARE NOT SUFFICIENT TO ASSUME JURISDICTION U/S 147 OF THE ACT. IN SUPPORT OF THE ASSESSEES CONTENTION, THE LEARNED COUNSEL FOR THE ASSESSEE HA S RELIED UPON A RECENT DECISION DATED 27.4.2010 OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT-III VS SFIL STOCK BROKING LTD. (ITA NO.1056/200 9). 8. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THERE WERE SUFFICIENT AND RELEVANT MATERIALS BEFORE THE AO TO ARRIVE OR TO ENTERTAIN A BELIEF THAT INCOME HAD ESCAPED ASSESSMENT WITHIN TH E MEANING OF SECTION 147 OF THE ACT. THE LEARNED DR FURTHER CONTENDED T HAT AO HAD INDEPENDENTLY APPLIED HIS MIND TO THE INFORMATION R ECEIVED FROM THE INVESTIGATION WING, AND HAD ACCORDINGLY ARRIVED AT A BELIEF ON THE BASIS OF MATERIAL AVAILABLE WITH THE AO THAT INCOME OF RS.10 LACS IN THE NATURE OF CREDIT AVAILED BY WAY OF ACCOMMODATION ENTRY HAD ES CAPED ASSESSMENT. THE LEARNED DR RELIED UPON THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF ACIT VS RAJESH ZHAVERI STOCK BROKER LTD., (2007) 291 ITR 500 (SC). 5 9. RIVAL CONTENTIONS OF BOTH THE PARTIES HAVE BEEN CONSIDERED, AND THE ORDERS OF THE AUTHORITIES BELOW HAVE BEEN CAREFULLY PERUSED. WE HAVE CAREFULLY PERUSED THE REASONS RECORDED BY THE AO BE FORE ISSUING THE NOTICE U/S 148 OF THE ACT. THE REASONS FOR INITIATING PRO CEEDINGS U/S147 OF THE ACT RECORDED BY THE AO ARE AS UNDER: REASONS FOR REOPENING THE CASE UNDER SECTION 147 OF THE IT ACT IN THE CASE OF M/S NEEL GAGAN POLYMERS & MARKETING PVT. LTD. FOR THE AY 2002- 03. ASSESSEE HAS FILED ITS RETURN OF INCOME ON 30.10.2002 DECLARING INCOME OF RS.385/-, WHICH WAS PROCESSED U/S 143(1) ON 22.2.2003. THE INVESTIGATION WING, NEW DELHI HAS SENT DETAILED INFORMATION. AS PER INFORMATION, THE ASSESSEE COMPANYS NAME APPEARS IN THE LIST OF BENEFICIARIES WHO HAS CIRCULATED ITS OWN UNEXPLAINED MONEY IN THE SHAPE OF SHARE CAPITAL/LOAN. THE ACCOMMODATING ENTRIES HAVE BEEN TAKEN IN LIEU OF CERTAIN PERCENTAGE OF COMMISSION BY THE ASSESSEE FROM THE ENTRY OPERATORS. DETAILS OF THE ENTRIES TAKEN ARE AS UNDER: AMOUNT DATE OF ENTRY NAME OF ENTRY GIVER --------- ---------------- ------------------- 5,00,000 7.7.2001 DIPANTY OVERSEAS 5,00,000 22.8.2001 ABHISHEK TEXTILES --------------------------------------------------- ---------- IN VIEW OF ABOVE, I HAVE REASON TO BELIEF THAT INCOME OF THE ASSESSEE TO THE EXTENT OF RS.10,00,000/- HAS ESCAPED ASSESSMENT. 6 ACCORDINGLY, PROCEEDINGS U/S 147 OF THE I.T. ACT ARE INITIATED FOR THE AY 2002-03. 10. IN THIS RESPECT, THE LEARNED COUNSEL FOR THE AS SESSEE HAS STRONGLY RELIED UPON THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS SFIL STOCK BROKING LTD. WHERE THE REASONS RECORDED BY TH E AO WERE AS UNDER: INFORMATION RECEIVED FROM DEPUTY DIRECTOR OF INCOME-TAX (INV) 107, SUSHANT LOK, GURGAON VIDE HIS LETTER NO. DDIT (INV)/02-03/271 DATED 17.3.2003 RECEIVED IN MY OFFICE ON 25.3.2009, THAT ONE OF MY ASSESSEE M/S SFIL STOCK BROKING LTD. HAD MADE BOGUS 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 28.2.98, 28.2.98 AND 1.3.98 RESPECTIVELY. HE HAS DIRECTED THE AO TO GET NOTICES ISSUED U/S 148. SUBSEQUENTLY, I HAVE BEEN DIRECTED BY THE ADDL. CIT, R-8, NEW DELHI VIDE HIS LETTER NO. ADDL. CIT R-8/2002-03/572 DATED 26.8.2003 TO INITIATE PROCEEDINGS U/S 148 IN RESPECT OF CASES PERTAINING TO THIS WARD. THUS, I HAVE SUFFICIENT INFORMATION IN MY POSSESSION TO ISSUE NOTICE U/S 148 IN THE CASE OF M/S SFIL STOCK BROKING LTD. ON THE BASIS OF REASONS RECORDED AS ABOVE. THE AFORESAID REASONS RECORDED IN THE CASE OF CIT V S SFIL STOCK BROKING LTD. HAS BEEN EXAMINED AND APPRECIATED BY THE HONB LE HIGH COURT AS UNDER: 9. IN THE PRESENT CASE, WE FIND THAT THE FIRST SENTENCE OF THE SO-CALLED REASONS RECORDED BY THE 7 AO IS MERE INFORMATION RECEIVED FROM THE DEPUTY DIRECTOR OF INCOME-TAX (INVESTIGATION). THE SECOND SENTENCE IS A DIRECTION GIVEN BY THE VERY SAME DEPUTY DIRECTOR OF INCOME-TAX (INVESTIGATION) TO ISSUE A NOTICE U/S 148 AND THE THIRD SENTENCE AGAIN COMPRISES OF A DIRECTION GIVEN BY THE ADDL. CIT TO INITIATE PROCEEDINGS U/S 148 IN RESPECT OF CASES PERTAINING 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 U/S 148 IN CASE OF M/S SFIL STOCK BROKING LTD. ON THE BASIS OF REASONS RECORDED AS ABOVE. 10. FROM THE ABOVE, IT IS CLEAR THAT THE AO REFERRED THE INFORMATION AND THE TWO DIRECTIONS AS REASONS ON THE BASIS OF WHICH HE WAS PROCEEDING TO ISSUE NOTICE U/S 148. WE ARE AFRAID THAT THESE CANNOT BE THE REASON FOR PROCEEDING U/S 147/148 OF THE SAID ACT. THE FIRST PART IS ONLY AN INFORMATION AND THE SECOND AND THE THIRD PARTS OF THE BEGINNING PARAGRAPH OF THE SOC-CALLED REASONS ARE MERE DIRECTIONS. FROM THE SO-CALLED REASONS, IT IS NOT 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 ARRIVED AT THE CORRECT CONCLUSION ON FACTS. THE LAW IS WELL SETTLED. THERE IS NO SUBSTANTIAL QUESTION OF LAW WHICH ARISES FOR OUR CONSIDERATION. 8 11. FROM THE ABOVE DECISION OF HONBLE HIGH COURT, IT IS CLEAR THAT FIRST PART OF THE REASONS WAS ONLY AN INFORMATION AND THE SECOND AND THIRD PART OF THE BEGINNING PARAGRAPH OF THE REASONS WERE MERE DI RECTIONS. FROM THE AFORESAID REASONS, THE HONBLE HIGH COURT HAS TAKEN A VIEW THAT IT WAS NOT AT ALL DISCERNIBLE AS TO WHETHER THE AO HAS APPLIED HI S MIND TO THE INFORMATION AND INDEPENDENTLY ARRIVE AT A BELIEF THAT, ON THE B ASIS OF MATERIAL, WHICH HE HAD BEFORE HIM, INCOME HAD ESCAPED ASSESSMENT. 12. IF WE COMPARE THE REASONS RECORDED BY THE AO IN THE CASE OF SFIL STOCK BROKING LTD., WITH THAT OF THE PRESENT CASE B EFORE US, WE FIND THAT THE AFORESAID DECISION OF HONBLE DELHI HIGH COURT WILL BE OF NO ASSISTANCE TO THE ASSESSEES CASE. IN THE PRESENT CASE, THE AO H AS MADE A REFERENCE TO THE DETAILED INFORMATION RECEIVED FROM THE INVESTIGATIO N WING, NEW DELHI. AS PER THIS INFORMATION, IT WAS NOTICED BY THE AO THAT THE ASSESSEES NAME WAS APPEARING IN THE LIST OF BENEFICIARIES, WHO HAS CIR CULATED ITS OWN UNEXPLAINED MONEY IN THE SHAPE OF SHARE CAPITAL/LOAN. THE AO HA S ALSO NOTED THE FACT THAT THE ACCOMMODATION ENTRIES WERE TAKEN IN LIEU OF CER TAIN PERCENTAGE OF COMMISSION BY THE ASSESSEE FROM THE ENTRY OPERATOR. THE DETAILS OF THE ENTRY HAVE ALSO BEEN REPRODUCED IN THE REASONS SO RECORDE D MENTIONING THE AMOUNT INVOLVED AND THE NAME OF THE ENTRY GIVER. THE PART ICULARS MENTIONED IN THE REASONS RECORDED ARE NOT FOUND TO BE UNTRUE. THE AO , THEREAFTER, IN VIEW OF 9 THE AFORESAID INFORMATION AND PARTICULARS HAD ARRIV ED AT A CONCLUSION THAT INCOME OF THE ASSESSEE TO THE EXTENT OF RS.10 LACS HAS ESCAPED ASSESSMENT. IN THE PRESENT CASE, THE AO HAS NOWHERE STATED IN T HE REASONS RECORDED THAT HE HAS BEEN DIRECTED TO ISSUE NOTICE U/S 148 OF THE ACT BY ANY AUTHORITY. IN THE CONCLUDING PARA OF THE REASONS RECORDED, THE AO HAS SPECIFICALLY AND CATEGORICALLY STATED THAT HE HAD REASON TO BELIEVE THAT THE INCOME OF THE ASSESSMENT TO THE EXTENT OF RS.10 LACS HAS ESCAPED ASSESSMENT THOUGH IN THE CASE CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE AO HAD MERELY STATED IN THE CONCLUDING PARA THAT HE HAD SUFFICIENT INFOR MATION IN HIS POSSESSION TO ISSUE NOTICE U/S 148 ON THE BASIS OF REASONS RECORD ED BY HIM. IN THAT CASE, IN THE REASONS RECORDED, THE AO HAS CATEGORICALLY STAT ED THAT HE WAS DIRECTED BY DEPUTY DIRECTOR OF INCOME-TAX (INVESTIGATION), GURG AON TO GET NOTICE ISSUED U/S 148. IN THAT CASE, THE AO FURTHER STATED THAT HE WAS ALSO DIRECTED BY THE ADDL. CIT, RANGE-8, NEW DELHI TO INITIATE PROCEEDIN GS U/S 148 IN RESPECT OF THE CASES PERTAINING TO HIS WARD BUT THAT IS NOT TH E SITUATION IN THE PRESENT CASE WHERE AO HAS ISSUED NOTICE U/S 147 AFTER APPLY ING HIS MIND INDEPENDENTLY TO THE INFORMATION RECEIVED FROM THE INVESTIGATION WING, AND NOT ON THE BASIS OF ANY DIRECTION GIVEN BY ANY OTHE R AUTHORITY. THEREFORE, THE DECISION RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE IS CLEARLY DISTINGUISHABLE ON FACTS AND WOULD BE OF NO HELP TO THE ASSESSEE. 10 13. IN THE CASE OF ACIT VS RAJESH ZHAVERI STOCK BRO KER (SUPRA), THE HONBLE SUPREME COURT HAS HELD AND OBSERVED THAT AT THE STAGE OF ISSUE OF NOTICE U/S 148 OF THE ACT, THE ONLY QUESTION IS WHE THER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FO RMED A REQUISITE BELIEF, AND WHETHER THE MATERIAL WOULD CONCLUSIVELY PROVE T HE ESCAPEMENT IS NOT THE CONCERN AT THAT STAGE. WHAT IS RELEVANT IS REASON TO BELIEVE, AND NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME. IN THE P RESENT CASE BEFORE US, THE AO HAS RELEVANT REASON TO BELIEVE THAT INCOME HAD E SCAPED ASSESSMENT IN THE LIGHT OF INFORMATION RECEIVED BY HIM FROM THE INVES TIGATION WING THAT ASSESSEE HAD RECEIVED ACCOMMODATION ENTRY TO THE EX TENT OF RS.10 LACS FROM TWO ENTRY PROVIDERS. THEREFORE, IN THE PRESENT CAS E, PROCEEDINGS INITIATED BY THE AO U/S 147 OF THE ACT ARE UNDOUBTEDLY VALID, AN D WITHIN JURISDICTION. THEREFORE, THIS POINT RAISED BY THE ASSESSEE IS REJ ECTED. 14. IN THE LIGHT OF THE VIEW WE HAVE TAKEN ABOVE, W E ARE IN FULL AGREEMENT WITH THE CONCLUSION AND FINDINGS ARRIVED AT BY THE LEARNED CIT(A), WHICH ARE BEING REPRODUCED AS UNDER: 2.6.4. IN THIS CASE, THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE OFFICE OF DIT(INV), NEW DELHI. THE AO HAS RECORDED THE REASONS IN WRITING ON AN ORDER SHEET, WHICH IS A PRIMARY REQUIREMENT OF LAW. NOW THE QUESTION BEFORE ME IS THAT AS TO WHETHER ON THE BASIS OF FACTS OF THIS CASE, THE AO HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED 11 ASSESSMENT OR THERE WAS CHANGE IN OPINION OR THAT THE REASONS SO RECORDED WERE MALAFIDE. IT IS NOT DISPUTED THAT INVESTIGATION WING OF THE DEPARTMENT CARRIED OUT CERTAIN INVESTIGATION DURING THE COURSE OF WHICH IT CAME TO LIGHT THAT THE APPELLANT COMPANY RECEIVED ACCOMMODATION ENTRIES FROM M/S DIPANTY OVERSEAS AND M/S ABHISHEK TEXTILES DURING THE YEAR UNDER CONSIDERATION CONSEQUENT T WHICH THE AO HAS FORMED REASON TO BELIEVE IN WRITING BEFORE ISSUING NOTICE U/S 148 OF THE ACT. I HAVE REFERRED TO VARIOUS DECISIONS OF SUPREME COURT WHEREIN IT HAS BEEN SPECIFICALLY LAID DOWN THAT POWER TO REOPEN AN ASSESSMENT BY THE AO IS SUBJECT TO CONDITION THAT HE HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. IT IS ALSO ESTABLISHED FROM JUDICIAL PRINCIPLES LAID DOWN BY HONBLE SUPREME COURT THAT FORMATION OF BELIEF NEED NOT BE SUFFICIENT FOR MAKING ASSESSMENT OR REASSESSMENT. THE ASSESSING OFFICER SHOULD NEITHER ACT ARBITRARILY NOR SHOULD HE PRETEND OF HAVING A REASONABLE BELIEF FOR REOPENING AN ASSESSMENT. REOPENING IS ALSO NOT VALID IF THERE I S NO LIVE LINK OR NEXUS BETWEEN MATERIAL RELIED UPON AND THE PERCEPTION OF BELIEF. IN THIS CASE, A S MENTIONED ABOVE, THE INVESTIGATION WING OF THE DEPARTMENT SENT INTIMATION REGARDING THE APPELLANTS HAVING TAKEN ACCOMMODATION ENTRIES IN THE GARB OF SHARE APPLICATION MONEY FROM TWO CONCERNS M/S DIPANTY OVERSEAS AND ABHISHEK TEXTILES WHICH MEANS THAT THERE IS A DIRECT NEXUS BETWEEN THESE MATERIAL AVAILABLE AND BELIEF OF THE AO. HAD THERE BEEN NO INVESTIGATION, THESE EVIDENCES AND INFORMATION COULD HAVE NEVER COME INTO THE POSSESSION OF ASSESSING OFFICER. IN MY CONSIDERED VIEW, ON THESE NEW FACTS OF THIS CASE AND AS SEQUEL TO INVESTIGATION CARRIED OUT BY INVESTIGATION WING OF THE DEPAR5TMENT, ANY REASONABLE PERSON WOULD BELIEVE THAT THE APPELLANT HAS TAKEN ACCOMMODATION ENTRIES. 12 TAKING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THIS CASE INTO CONSIDERATION AND IN LIGHT OF THE LEGAL PRINCIPLES LAID DOWN BY HONBLE SUPREME COURT REFERRED TO ELSEWHERE IN THIS ORDER, I AM OF THE CONSIDERED VIEW THAT AO HAS NOT COMMITTED ANY ERROR IN FACTS AND IN LAW WHILE ISSUING THE NOTICE U/S 147/148 AND IS JUSTIFIED IN FORMING BELIEF THAT THE INCOME OF THE APPELLANT HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. AS MENTIONED EARLIER ALSO, THERE IS ALSO NO CHANGE OF OPINION INVOLVED IN THE INSTANT CASE AS THERE IS NO ORDER PASSED U/S 143(3) OF THE ACT EARLIER AND INSTEAD, THE DEPARTMENT PROCESSED THE ORIGINAL RETURN FILED U/S 143(1). HENCE, RESORTING TO THE PROVISIONS OF SECTION 147/148 IS WELL JUSTIFIED BY THE AO. REFERENCE CAN BE MADE TO THE CASE LAW OF AMBICA STEELS LTD. VS DCIT, 305 ITR 49 (ITAT-DELHI) WHERE THE JURISDICTIONAL ITAT CONSIDERED THE VALIDITY OF REASSESSMENT PROCEEDINGS INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING AND IT WAS HELD THAT THE INTIMATION OF REASSESSMENT PROCEEDINGS WAS VALID. OTHERWISE ALSO, IN THE CASE OF ITO VS BIJU PATNAIK (1991) 188 ITR 247, THE APEX COURT HAS SOUNDED THE NOTE OF CAUTION THAT AT THE STAGE OF NOTICE U/S 147/148 OF THE ACT, THE COURT IS NOT TO GO INTO THE MERITS OF THE CONTROVERSY WHETHER A PARTICULAR INCOME IS TAXABLE OR NOT. TAKING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THIS CAS E INTO CONSIDERATION, I HOLD REOPENING THE CASE OF THE APPELLANT FOR RE-ASSESSMENT AS VALID AND ACCORDINGLY, THIS GROUND OF APPEAL IS DISMISSED. 15. THE ASSESSEE HAS ALSO TAKEN A GROUND THAT THERE WAS NO VALID SERVICE OF NOTICE ISSUED U/S 148 OF THE ACT BY THE AO. 13 16. DURING THE COURSE OF HEARING OF THIS APPEAL, NO SPECIFIC ARGUMENTS OTHER THAN THE ARGUMENTS CONTENDED BEFORE THE CIT(A ) HAS BEEN MADE BEFORE US. THIS ISSUE HAS BEEN CONSIDERED AND DECIDED UPON BY THE LEARNED CIT(A) AFTER CONSIDERING THE FACTS OF THE CASE, THE EVIDEN CE OF SERVICE OF NOTICE UPON THE ASSESSEE, AND AFTER CONSIDERING THE ASSESSEES OBJECTION AS WELL AS THE REMAND REPORT SUBMITTED BY THE AO. FROM THE MATERIA L AVAILABLE ON RECORD, WE FIND THAT THE NOTICE U/S 148 OF THE ACT WAS ISSU ED BY THE AO AT THE LAST KNOWN ADDRESS OF THE COMPANY BUT THAT WAS RECEIVED BACK UNSERVED. THEREAFTER, THE AO DEPUTED THE INSPECTOR TO SERVE T HE NOTICE PERSONALLY AT THE KNOWN ADDRESS OF THE ASSESSEE COMPANY. THE AO HAD T AKEN ALL POSSIBLE EFFORTS TO SERVE THE NOTICE PERSONALLY ON THE ASSES SEE COMPANY. WHEN ASSESSEE COULD NOT BE FOUND AT ITS REGISTERED ADDRE SS DESPITE DUE DILIGENCE, THE NOTICE WAS SERVED THROUGH AFFIXTURE AT THE REGI STERED ADDRESS OF THE ASSESSEES COMPANY. IT IS NOT THE CASE OF THE ASSE SSEE THAT THE ADDRESS AT WHICH THE NOTICE WAS SENT OR AFFIXED WAS NOT THE RE GISTERED ADDRESS OF THE ASSESSEE COMPANY. THEREFORE, IT IS CLEAR THAT THE A O HAS VALIDLY SERVED THE NOTICE UPON THE ASSESSEE AS PER THE PROCEDURE LAID DOWN IN SECTION 282(1) OF THE ACT. THE CIT(A) HAS RIGHTLY TAKEN NOTE OF THE F ACT THAT THE REGISTERED ADDRESS OF THE ASSESSEE COMPANY WAS 32, CHURCH ROAD , JUNG PURA, NEW DELHI AT WHICH THE AO SENT NOTICE U/S 148 ON 14.11. 2006 BY REGISTERED POST, 14 WHICH WAS RECEIVED BACK WITH POSTAL REMARKS NO SUC H PERSON. THE AO THEN ENQUIRED FROM THE ROC REGARDING THE LATEST ADD RESS OF THE ASSESSEE COMPANY. CONSEQUENT TO WHICH, THE AO COULD KNOWN T HE WHEREABOUTS OF THE DIRECTORS. THE REGISTERED ADDRESS OF THE ASSESS EE COMPANY MENTIONED IN THE ROC RECORD WAS 32, CHURCH ROAD, JUNG PURA, NEW DELHI, AT WHICH ADDRESS THE AO ULTIMATELY SERVED THE NOTICE BY AFFI XTURE BY COMPLYING ALL THE LEGAL FORMALITIES REQUIRED UNDER THE LAW. THE A O ALSO SERVED NOTICE U/S 148 ON ITS DIRECTOR SHRI KAPIL RASTOGI IN WHICH CAS E THE NOTICE WAS NOT RECEIVED BACK BY THE DEPARTMENT, AND THIS FACT HAS BEEN TAKEN NOTE OF BY THE LEARNED CIT(A) WHILE TAKING A VIEW THAT AO HAS SERV ED THE NOTICE ISSUED U/S 148 ON THE ASSESSEE COMPANY. WE, THEREFORE, UPHOLD THE ORDER OF CIT(A) IN HOLDING THAT THE AO HAS SERVED THE NOTICE U/S 148 O F THE ACT ON THE ASSESSEE AS PER LAW. 17. THE NEXT ISSUE RAISED BY THE ASSESSEE IS THAT L EARNED CIT(A) HAS ERRED IN CONVERTING THE PROTECTIVE ADDITION OF RS.36,05,2 33/- MADE BY THE AO INTO THE SUBSTANTIVE ADDITION ON ACCOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT TO THE EXTENT OF RS.16,55,000/- AND THE PEAK CREDIT IN THE BANK ACCOUNT OF RS.19,50,233/-. 15 18. BEFORE DEALING WITH THIS GROUND, WE WOULD LIKE TO TAKE NOTE OF SOME OTHER ADDITIONS MADE BY THE AO IN THE ASSESSMENT BU T HAS BEEN DELETED BY THE LEARNED CIT(A). 19. IN THE ASSESSMENT, THE AO MADE AN ADDITION OF R S.1,23,110/-, BEING COMMISSION @ 2.5% OF THE TOTAL CREDITS IN THE BANK ACCOUNT OF THE ASSESSEE COMPANY IN THE RELEVANT PERIOD. IT WAS FOUND BY TH E AO THAT THE TOTAL CREDIT IN THE BANK ACCOUNT OF THE ASSESSEE COMPANY HAS BEE N WORKED OUT AT RS.54,95,640/-. HE FURTHER NOTICED THAT THERE WAS INCREASE IN THE SHARE CAPITAL/SHARE APPLICATION MONEY TO THE EXTENT OF RS .5,71,244/-, WHICH WAS CONSIDERED BY HIM SEPARATELY. THEREFORE, THE TOTAL NET CREDIT WAS WORKED OUT BY THE AO AT RS.49,24,396/-. AO HAD TAKEN A VIEW T HAT ALL THESE CREDITS WERE UTILIZED FOR THE PURPOSE OF ADJUSTMENT OR ACCO MMODATION ENTRIES. HE, THEREFORE, WORKED OUT THE COMMISSION OF 2.5% ON RS. 49,24,396/- AND MADE THE ADDITION OF RS.1,23,110/-. HOWEVER, ON APPEAL, THE LEARNED CIT(A) HAD DELETED THIS ADDITION BY OBSERVING THAT THERE WAS N O MATERIAL OR FINDING IN SUPPORT OF ACCOMMODATION ENTRY UTILIZED BY THE ASSE SSEE AND, THEREFORE, IT WAS NOT OPEN TO THE AO TO CONTEMPLATE ANY COMMISSIO N INCOME. THE CIT(A) HAS TAKEN A VIEW THAT THE ADDITION MADE BY T HE AO IS WITHOUT ANY BASIS, AND ANY SUCH LIKE ADHOC ADDITION CANNOT BE S USTAINED IN THE EYES OF LAW. THE CIT(A) FURTHER OBSERVED THAT THERE WAS NO EVIDENCE ON THE BASIS OF 16 WHICH IT COULD BE SAID THAT ASSESSEE INDULGED IN PR OVIDING ACCOMMODATION ENTRY. THE CIT(A), THEREFORE, DIRECTED THE AO TO DE LETE THE ADDITION AS THE SAME IS NOT BASED ON ANY DOCUMENTARY EVIDENCE. 20. THE NEXT ADDITION ON ACCOUNT OF RECEIPT OF SHAR E CAPITAL TO THE EXTENT OF RS.5,71,244/- WAS MADE BY THE AO. THE AO NOTED THAT ASSESSEE HAD RECEIVED SHARE CAPITAL OFRS.4 LACS, RS.1,55,000/- A ND RS.20,000 FROM SMT. SUDHA GUPTA, SMT. MANISHA GUPTA AND SHRI SANDEEP GU PTA, WHICH THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN. HOWEVER, ON AN APPEAL, THE LEARNED CIT(A) DELETED THE ADDITION, AS HE FOUND, DURING TH E COURSE OF REMAND PROCEEDINGS, THAT THE VERIFICATION OF THE SHARE CAP ITAL WAS MADE AND THE CONCERNED PARTIES HAD CONFIRMED OF HAVING MADE INVE STMENT IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY, AND ALL THESE PART IES WERE ALLOTTED PAN BY THE DEPARTMENT, AND WERE FILING THEIR INCOME TAX RE TURNS. THE CIT(A) OBSERVED THAT HE DID NOT SEE ANY JUSTIFICATION ON T HE PART OF THE AO TO MAKE ANY ADDITION ON ACCOUNT OF SHARE CAPITAL MONEY RECE IVED FROM PARTIES I.E. SMT. SUDHA GUPTA, SMT. MANISHA GUPTA AND SHRI SANDE EP GUPTA SPECIALLY WHEN THE DEPARTMENT HAS BEEN PROVIDED WITH PAN AND OTHER DOCUMENTARY EVIDENCES TO PROVE THE IDENTITY OF THE SHAREHOLDERS . THUS, THE LEARNED CIT(A), THEREFORE, DIRECTED THE AO TO DELETE THE AD DITION OF RS.5,71,244/-. 17 21. IN THE COURSE OF HEARING OF THIS APPEAL, IT HAS NOT BEEN POINTED OUT BY THE LEARNED DR THAT THE REVENUE IS IN APPEAL AGAINS T THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS.1,23,110/-, BEING COMMI SSION OF ACCOMMODATION ENTRY AND OF RS.5,71,244/-, BEING SHARE CAPITAL. 22. NOW, WE COME TO THE ISSUE RAISED IN THIS APPEAL REGARDING THE PROTECTIVE ADDITION OF RS.36,05,233/- MADE BY THE A O, WHICH HAS BEEN UPHELD BY THE LEARNED CIT(A) ON SUBSTANTIVE BASIS. IN THE ASSESSMENT, THE AO MADE PROTECTIVE ADDITION OF RS.36,05,233/- BY OB SERVING AS UNDER: PROTECTIVE ADDITION : AS HELD ABOVE, THE ASSESSEE COMPANY IS ENGAGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES. THE COMMISSION INCOME EARNED FROM THE ACTIVITY OF ADJUSTMENT/ACCOMMODATION ENTRIES HAS, THEREFORE, BEEN ASSESSED SUBSTANTIVELY IN ITS HANDS. THE BANK STATEMENT OF THE ASSESSEE COMPANY SHOWS CASH DEPOSITS ON VARIOUS DATES TOTALING RS.16,55,000/-. THE BANK STATEMENT ALSO SHOWS DEPOSITS BY CHEQUES/CLEARING AND THE PEAK OF CREDITS STAND AT RS.19,50,233/- (AS ON 11.7.2001). SINCE THE DEPOSITS/CREDITS IN THE BANK ACCOUNT REMAIN UNEXPLAINED, THE TOTAL OF THE CASH DEPOSITS OF RS.16,55,000/- AND THE PEAK CREDIT OF RS.19,50,233/- (I.E. AN AMOUNT OF RS.36,05,233/-) IS ASSESSED AS INCOME OF THE ASSESSEE ON PROTECTIVE BASIS. FROM THE SAID OBSERVATION OF THE AO, IT IS, THUS, S EEN THAT ADDITION OF RS.36,05,233/- CONSISTING OF THE FOLLOWING AMOUNTS: 18 1. RS.16,55,000/-, BEING CASH DEPOSIT IN THE BANK 2. RS.19,55,233/-, BEING THE PEAK CREDIT OF DEPOSITS B Y CHEQUES OR CLEARING IN THE BANK ACCOUNT. THE AO HAS OBSERVED THAT THE ASSESSEE COMPANY WAS E NGAGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRY AND THE COMMISSION INCOME EARNED FROM THE ACTIVITY OF ADJUSTMENT IN ACCOMMODATION ENTRY H AS BEEN ASSESSED SUBSTANTIVELY IN ASSESSEES HANDS. HE, THEREFORE, MADE THE ADDITION OF RS.36,05,233/- ON PROTECTIVE BASIS. 23. ON AN APPEAL, A REMAND REPORT WAS CALLED FOR FR OM THE AO, WHICH HAS BEEN REPRODUCED BY THE LEARNED CIT(A) AT PARA 5.3 O F HIS ORDER. 24. THE COPY OF THE REMAND REPORT WAS FORWARDED TO THE ASSESSEE COMPANY. THE CIT(A) THEN CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE. THE CIT(A) OBSERVED THAT ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM THREE PERSONS, NAMELY, SUDHA GU PTA, MANISHA GUPTA AND SANDEEP GUPTA HAS ALREADY BEEN DELETED BY HIM. THE CIT(A) FURTHER OBSERVED THAT IN THE LIGHT OF THE DECISION OF DELHI HIGH COURT AND HONBLE APEX COURT MENTIONED IN HIS ORDER, ALL ADDITIONS AS TO THE SOURCE OF MONEY REPRESENTING THE SHARE CAPITAL IS TO BE MADE IN THE HANDS OF THE INVESTOR, AND, THEREFORE, THE ASSESSEE COMPANY CANNOT ESCAPE AS IT WAS WORKING ONLY AS A CONDUIT FOR OTHERS. THE CIT(A) FURTHER HELD THAT F AILURE TO EXPLAIN THE CREDIT 19 ENTRIES IN THE BANK ACCOUNT MUST RESULT IN ADDITION ON SUBSTANTIVE BASIS. HE, THEREFORE, CONVERTED THE ADDITION FROM PROTECTIVE B ASIS TO SUBSTANTIVE BASIS. 25. HENCE, THE ASSESSEE IS IN APPEAL AGAINST THIS P ART OF THE LEARNED CIT(A)S ORDER IN CONVERTING THE PROTECTIVE ADDITIO N TO SUBSTANTIVE ADDITION. 26. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFUL LY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 27. IN THE INSTANT CASE, THE AO HAS COMPLETED THE A SSESSMENT U/S 147 OF THE ACT AFTER RECORDING THE REASONS REQUIRED U/S 14 8 OF THE ACT. IN THE REASONS, THE AO HAS REFERRED TO THE INFORMATION REC EIVED FROM INVESTIGATION WING ABOUT THE ACCOMMODATION ENTRY OF RS.10 LACS AV AILED FROM TWO PARTIES. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS, THE AO OBTAINED BANK STATEMENT OF THE ASSESSEE COMPANY FROM THE STATE BA NK OF INDIA, DEFENCE COLONY, NEW DELHI ALONG WITH THE COPIES OF THE ACCO UNT OPENING FORM AND OTHER ACCOMPANYING DOCUMENTS. THE BANK ACCOUNT OF T HE ASSESSEE WAS EXAMINED AND VERIFIED BY THE AO, AND HE FOUND THAT THE TOTAL DEPOSIT IN THE BANK ACCOUNT WAS TO THE EXTENT OF RS.54,95,640/-. THE AO, THEN, WORKED OUT THE PEAK CREDIT AT RS.19,50,233/-. THE AO ALSO NOT ICED THAT THERE WAS CASH DEPOSITS ON VARIOUS DATES TOTALING TO RS.16,55,000/ -. THE AO ALREADY MADE THE ADDITION ON ACCOUNT OF COMMISSION INCOME EARNED FROM ACTIVITY OF MAKING ADJUSTMENT OF MONEY OR PROVIDING ACCOMMODATI ON ENTRIES. 20 HOWEVER, THE CIT(A) HAS DELETED THE ADDITION ON ACC OUNT OF COMMISSION INCOME BY OBSERVING THAT THERE IS NO EVIDENCE BROUG HT ON RECORD THAT THE ASSESSEE WAS ENGAGED IN THE ACTIVITY OF PROVIDING A CCOMMODATION ENTRIES. ONCE LEARNED CIT(A) HAS DELETED THE ADDITION ON ACC OUNT OF COMMISSION INCOME AGAINST WHICH THE DEPARTMENT HAS NOT FILED A NY APPEAL, IT IS NOT JUSTIFIABLE ON HIS PART TO SAY THAT THE DEPOSIT IN THE BANK ACCOUNT ARE UNEXPLAINED MONEY OF THE ASSESSEE COMPANY SO AS TO MAKE THE ADDITION OF THE SAME ON SUBSTANTIVE BASIS. IT IS NOT IN DISPUT E THAT IN THE LIGHT OF EXPLANATION 3 TO SECTION 147 OF THE ACT INSERTED BY THE FINANCE (NO.2) ACT, 2009 W.E.F. 1.4.89, THE AO MAY ASSESS OR RE-ASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED ASSESSMENT, AND SUCH I SSUE COME TO THE NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS U/S 1 47 OF THE ACT, IN THE REASONS RECORDED UNDER SUB SECTION (2) OF SECTION 1 48 OF THE ACT. HOWEVER, IN THE PRESENT CASE, THE AO WAS NOT OF THE VIEW THA T THE INCOME OF RS.36,05,233/- HAS ESCAPED ASSESSMENT IN THE LIGHT OF ANY MATERIAL COMING TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF PROCEEDING S U/S 147 OF THE ACT. THERE IS NO MATERIAL ON RECORD TO SHOW AND ESTABLIS H THAT THE ASSESSEE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRY IN RESPECT OF ALL CREDITS MADE IN THE BANK EXCEPT THE TWO ENTRIES REFERRED IN THE REA SONS RECORDED U/S 148 OF THE ACT. THE CIT(A) HAS HIMSELF TAKEN A VIEW THAT THERE WAS NO MATERIAL 21 AVAILABLE ON RECORD TO PROVE AND ESTABLISH THAT THE ASSESSEE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRY AND HE HAS THUS DELET ED THE ADDITION OF RS.1,23,110/-, BEING COMMISSION @ 2.5% ON TOTAL CRE DIT IN THE BANK ACCOUNT OF THE ASSESSEE COMPANY. WHEN THERE IS NO MATERIAL TO SAY THAT ASSESSEE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRY IN RESPECT OF CREDIT ENTRIES IN THE BANK ACCOUNT, IT WAS NOT AT ALL JUSTIFIED ON THE PA RT OF THE LEARNED CIT(A) TO CONVERT THE PROTECTIVE ADDITION OF RS.36,05,233/- I NTO THE SUBSTANTIVE ADDITION IN RESPECT OF THE PEAK CREDIT OF TOTAL CRE DITS AND CASH MONEY DEPOSITED IN THE BANK ACCOUNT. THE MATTER COULD HA VE ONLY BEEN RESTRICTED TO THE SUM OF RS.10 LACS, BEING CREDIT REFERRED TO IN THE REASONS RECORDED BY THE AO U/S 148 OF THE ACT. WE, THEREFORE, DELETE THE T OTAL ADDITION OF RS.36,05,233/-, AND RESTRICT THE MATTER ONLY TO THE EXTENT OF RS.10 LACS, BEING THE ALLEGED ACCOMMODATION ENTRY REFERRED TO IN THE REASONS RECORDED BY THE AO. HOWEVER, AS NO DETAILED ENQUIRY OR INVESTIGATI ON HAS EITHER BEEN MADE BY THE AO OR BY THE CIT(A) IN RESPECT OF TWO ENTRIE S AGGREGATING TO RS.10 LACS, WE RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR HIS FRESH ADJUDICATION IN SO FAR AS THE SUM OF RS.10 LACS ON ACCOUNT OF THE ALLEGED ACCOMMODATION ENTRY IS CONCERNED, BUT NOT WITH REGA RD TO THE PEAK CREDIT ON TOTAL DEPOSITS OR CASH DEPOSITS MADE IN THE ASSESSE ES BANK ACCOUNT. THEREFORE, THIS ISSUE OF RS.36,05,233/- IS REDUCED TO RS.10 LACS, WHICH HAS 22 BEEN RESTORED BACK TO THE FILE OF THE AO FOR HIS FR ESH ADJUDICATION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AO SHALL PROVIDE THE DETAILS OF INFORMATION RECEIVED F ROM INVESTIGATION WING TO THE ASSESSEE INCLUDING ANY STATEMENT MADE BY ANY PE RSON IN RESPECT OF THE AFORESAID ENTRIES AGGREGATING TO RS.10 LACS. THE A O SHALL PROVIDE OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE RE SPECTIVE PERSONS SO THAT THE TRUE AND CORRECT AFFAIRS MAY BE BROUGHT ON RECO RD AND THE ISSUE WITH REGARD TO THE AMOUNT OF RS.10 LACS ON ACCOUNT OF AL LEGED ACCOMMODATION ENTRY MAY BE DECIDED IN ITS RIGHT AND CORRECT PERSP ECTIVE. THE AO SHALL BE AT LIBERTY TO DECIDE WHETHER ANY COMMISSION INCOME ON THE AMOUNT OF RS. 10 LACS IS ASSESSABLE IN THE ASSESSEES HANDS. THE AO SHALL COMPLY ALL THE PRINCIPLES OF NATURAL JUSTICE WHILE DECIDING THE IS SUE REGARDING AMOUNT OF RS.10 LACS AFRESH. WE ORDER ACCORDINGLY. 28. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED TO BE PARTLY ALLOWED FOR A STATISTICAL PURPOSE. 29. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 23 RD JULY, 2010. (A.K. GARODIA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD JULY, 2010 VIJAY 23 COPY TO: 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT(A)-XVI, NEW DELHI. 5. DR ASSISTANT REGISTRAR