M/s. Shruti Fastners Ltd., New Delhi V. DCIT, New Delhi

ITA 1945/DEL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4274 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 22-09-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Unexplained cash credit; Additional evidence; Question of law; Tangible material; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NOS. 1945 & 1946/DEL/2013 ASSESSMENT YEARS: 2003-04 & 2004-05 M/S SHRUTI FASTNERS LTD., VS. DCIT, CIRCLE 8(1), 1666-B, GOVINDPURI EXTENSION, NEW DELHI MALL ROAD, KALKAJI, NEW DELHI 110019 (PAN: AAACS2175H) (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. RAKESH GUPTA, ADV. & SH. SOMIL AGGARWAL, ADV. REVENUE BY : SHRI NK BANSAL, SR. DR DATE OF HEARING : 22-09-2016 DATE OF ORDER : ..-10-2016 ORDER PER H.S. SIDHU, J.M. THE ASSESSEE HAS FILED THESE TWO APPEALS AGAINST T HE SEPARATE ORDERS BOTH DATED 30.1.2013 OF THE LD. CIT(A)-XI, N EW DELHI PERTAINING TO ASSESSMENT YEARS 2003-04 & 2004-05. S INCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, THEREFORE, TH E SAME ARE BEING CONSOLIDATED BY THIS COMMON ORDER FOR THE SAKE OF C ONVENIENCE, BY DEALING WITH ITA NO. 1945/DEL/2013 (AY 2003-04). 2 2. THE FOLLOWING GROUNDS RAISED IN ITA NO. 1945/DEL /2013:- 1. THAT THE ID. CIT(A) HAD ERRED ON FACTS AND UNDER THE LAW IN NOT ADMITTING THE ADDITIONAL EVIDENCE AS FILED BEFORE HER. 2. THAT THE PROVISIONS OF SECTION 147/148 OF THE I. T. ACT WERE NOT APPLICABLE TO THE FACTS OF ASSESSEE'S CASE AND THEREFORE, THE ISSUE OF NOTICE U/S 147/148 WAS ILLEGAL AND CONSEQUENTLY, THE IMPUGNED ASSESSMENT ORDER AS PASSED U/S 147/143(3) IS UNLAWFUL AND UNJUST AND THEREFORE THE SAME DESERVED TO BE ANNULLED/CANCELLE D. 3. THAT WITHOUT PREJUDICE TO GROUND NO.2 ABOVE, NO JUSTIFICATION SUBSISTED ON THE PART OF THE LD. AO I N MAKING AN ADDITIONS AGGREGATING AT RS.83,15,000/- U/S 68 O F THE I.T. ACT ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CRE DITS AND THE SAME OUGHT TO HAVE BEEN DELETED BY THE LD. CIT(A) KEEPING IN VIEW THE SUBMISSIONS MADE BEFORE HER SUPPORTED BY DOCUMENTARY EVIDENCE AND ALSO IN VIEW OF THE JUDICIAL PRONOUNCEMENTS. 4. THAT WITHOUT PREJUDICE TO GROUND NO. 3 ABOVE, TH E ADDITIONS AGGREGATING AT RS.83,15,000/- TOWARDS THE ASSESSABLE INCOME OF THE ASSESSEE ARE VERY EXCESSIV E. VARIOUS OBSERVATIONS MADE BY THE AUTHORITIES BELOW IN THEIR RESPECTIVE ORDERS ARE EITHER INCORRECT OR UNT ENABLE. DETAILED WRITTEN SUBMISSIONS ALONGWITH THE PAPER BO OK AS 3 FILED BEFORE THE LD. CIT(A) AND THE ARGUMENTS ADVAN CED BY THE COUNSEL HAD NOT BEEN APPRECIATED PROPERLY OR HAD BEEN IGNORED. 5. THAT THE INTEREST AS LEVIED U/S 234 IS ILLEGAL A ND AT ANY RATE, WITHOUT PREJUDICE VERY EXCESSIVE. 6. THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, AMEND/MODIFY THE GROUNDS OF APPEAL. 3. THE FOLLOWING GROUNDS RAISED IN ITA NO. 1946/DE L/2013:- 1. THAT THE PROVISIONS OF SECTION 147/148 OF THE I. T. ACT WERE NOT APPLICABLE TO THE FACTS OF ASSESSEE'S CASE AND THEREFORE, THE ISSUE OF NOTICE U/S 147/148 WAS ILLEGAL AND CONSEQUENTLY, THE IMPUGNED ASSESSMENT ORDER AS PASSED U/S 147/143(3) IS UNLAWFUL & UNJUST AND THER EFORE THE SAME DESERVED TO BE ANNULLED/CANCELLED. 2. THAT WITHOUT PREJUDICE TO GROUND NO.1 ABOVE, NO JUSTIFICATION SUBSISTED ON THE PART OF THE LD. AO I N MAKING AN, ADDITIONS AGGREGATING AT RS.11,00,000/- U/S 68 OF THE I.T. ACT ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDITS AND THE SAME OUGHT TO HAVE BEEN DELETED BY THE LD. CIT(A) KEEPING IN VIEW THE SUBMISSIONS MADE BEF ORE HER SUPPORTED BY DOCUMENTARY EVIDENCE AND ALSO IN V IEW OF THE JUDICIAL PRONOUNCEMENTS. 4 3. THAT WITHOUT PREJUDICE TO GROUND NO. 2 ABOVE, TH E ADDITIONS AGGREGATING AT RS.11,00,000/- TOWARDS THE ASSESSABLE INCOME OF THE ASSESSEE ARE VERY EXCESSIV E. VARIOUS OBSERVATIONS MADE BY THE AUTHORITIES BELOW IN THEIR RESPECTIVE ORDERS ARE EITHER INCORRECT OR UNT ENABLE. DETAILED WRITTEN SUBMISSIONS ALONGWITH THE PAPER BO OK AS FILED BEFORE THE LD. CIT(A) AND THE ARGUMENTS ADVAN CED BY THE COUNSEL HAD NOT BEEN APPRECIATED PROPERLY OR HAD BEEN IGNORED. 4. THAT THE INTEREST AS LEVIED U/S 234 IS ILLEGAL A ND AT ANY RATE, WITHOUT PREJUDICE VERY EXCESSIVE. 5. THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, AMEND/MODIFY THE GROUNDS OF APPEAL. 4. THE BRIEF FACTS OF THE CASE ARE THAT A NOTICE U/ S. 148 OF THE INCOME TAX ACT, 1961 WAS ISSUED TO M/S SHRUTI FASTN ERS LTD ON 22.3.2010 AFTER RECORDING REASONS FOR ISSUE OF NOT ICE, AS REQUIRED BY SECTION 143(2) OF THE ACT. THE NECESSARY APPROVA L AS REQUIRED BY SECTION 151 OF THE ACT WAS OBTAINED BEFORE ISSUE OF THE NOTICE. THE ASSESSEE FILED A LETTER STATING THAT THE ORIGINAL R ETURN OF INCOME FILED AT A TOTAL INCOME OF RS. 14,10,933/- BE TREATED AS RETURNED FILED IN COMPLIANCE WITH NOTICE ISSUED U/S. 148 OF THE ACT. IN RESPONSE TO THE NOTICE U/S. 142(1) OF THE ACT, THE ASSESEES DIREC TOR ATTENDED THE HEARING FROM TIME TO TIME. IN THIS CASE INFORMATION WAS RECEIVED FROM THE DIRECTORATE OF INVESTIGATION (INV.-I), NEW DELHI THAT THE 5 ASSESSEE HAS RECEIVED AN ACCOMMODATION ENTRY OF RS. 5.82 CRORES INTO ITS BANK ACCOUNT FROM DIFFERENT COMPANIES/ CO NCERNS DURING THE FINANCIAL YEAR 2002-03 RELEVANT TO ASSESSMENT YEAR 2003-04 SO AS TO INTRODUCE ITS UNACCOUNTED MONEY INTO ITS ACCOUNT. THEREAFTER, CONSIDERING THE REPLY OF THE ASSESSEE, AO PASSED AN ORDER U/S. 147/143(3) OF THE I.T. ACT, 1961 ON 30.11.2010 ASS ESSING THE TOTAL INCOME OF RS. 97,25,933/-. 5. AGAINST THE ORDER OF THE LD. AO, ASSESSEE APPEAL ED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 30.1.2013 HAS DISMISSED THE APPEAL OF THE ASSESSEEE. 6. AGGRIEVED WITH THE AFORESAID ORDER OF THE LD. C IT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. LD. COUNSEL FOR THE ASSESSEE HAS ONLY ARGUED THE LEGAL GROUND RAISED VIDE GROUND NO. 2 STATING THAT THE PROVI SIONS OF SECTION 147/148 OF THE I.T. ACT WERE NOT APPLICABLE TO THE FACTS OF THE ASSESSEES CASE AND THEREFORE, THE ISSUE OF NOTICE U/S. 147/148 WAS ILLEGAL AND CONSEQUENTLY, THE IMPUGNED ASSESSMENT ORDER AS PASSED U/S. 147/143(3) IS UNLAWFUL AND UNJUST AND THEREFOR E THE SAME DESERVED TO BE ANNULLED / CANCELLED. IN SUPPORT OF HIS CONTENTION HE FILED THE VARIOUS PAPER BOOKS ENCLOSING THEREWITH T HE ASSESSMENT AND APPELLATE RECORDS AND A COMPILATION OF VARIOUS CASE LAWS HAVING PAGES 1 TO 208. HE FURTHER STATED THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN FRAMING THE IMP UGNED ASSESSMENT ORDER WITHOUT ASSUMING JURISDICTION U/S. 147 AND TH AT TOO WITHOUT 6 COMPLYING WITH THE MANDATORY CONDITIONS AS PRESCRIB ED UNDER SECTION 147 TO 151 OF THE I.T. ACT, 1961 AND THE REASONS RE CORDED ARE INVALID AND CONTRARY TO LAW AND FACTS. HE FURTHER DRAW OUR ATTENTION TOWARDS THE COPY OF REASONS FOR REOPENING THE CASE U/S. 148 AND STATED THAT NO PROPER REASONS WERE RECORDED; NO NEXUS BETWEEN T HE MATERIALS RELIED UPON AND THE BELIEF FORMED FOR ESCAPEMENT OF INCOME; NO APPLICATION OF MIND; NO PROPER SATISFACTION WAS REC ORDED BEFORE ISSUE OF NOTICE U/S. 148; NO INDEPENDENT CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME. IT WAS FURTHER STATED THAT THE CASE WAS REOPENED ONLY ON THE BASIS OF INVESTIGATION WING IN FORMATION WHICH SUFFERS WITH SERIOUS DEBILITY AND LACKS DEFINITENES S, WITHOUT DESCRIBING THE BASIC ASPECTS OF ALLEGED TRANSACTION AND IN TH E ABSENCE OF THE SAME, WHOLE ACTION OF THE AO GETS VITIATED. TO SU PPORT HIS CONTENTION HE SUBMITTED THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ITAT DECISION DATE D 09.1.2015 IN THE CASE OF G&G PHARMA INDIA LIMITED VS. ITO PASSED IN ITA NO. 3149/DEL/2013 (AY 2003-04) IN WHICH THE JUDICIAL M EMBER IS THE AUTHOR. HE FURTHER STATED THAT THE ABOVE DECISION OF THE ITAT DATED 9.1.2015 HAS BEEN UPHELD BY THE HONBLE JURISDICTIO NAL HIGH COURT IN ITS DECISION DATED 08.10.2015 IN ITA NO. 545/2015 I N THE CASE OF PR. CIT-4 VS. G&G PHARMA INDIA LTD. IN THIS BEHALF, HE FILED THE COPY OF THE ORDER DATED 9.1.2015 OF THE ITAT, DELHI BENCH P ASSED IN THE CASE OF G&G PHARMA INDIA LTD VS. ITO (SUPRA). IN THIS R EGARD, HE FILED THE COPIES OF THE AFORESAID DECISIONS BEFORE THE TRIBUN AL. IN VIEW OF THE 7 ABOVE, HE REQUESTED THAT BY FOLLOWING THE AFORESAID PRECEDENTS THE REASSESSMENT PROCEEDINGS OF THE AO MAY BE QUASHED B Y ACCEPTING THE APPEAL FILED BY THE ASSESSEE. 8. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS P ASSED BY THE AUTHORITIES BELOW AND STATED THAT THE AO HAS PROPER LY RECORDED THE REASONS FOR REOPENING BY DUE APPLICATION OF MIND, H ENCE, THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES AND THE CASE LAWS CITED BY THE ASSESSEE S COUNSEL. FOR THE SAKE OF CLARITY, WE WOULD LIKE TO REPRODUCE TH E REASONS RECORDED FOR REOPENING THE CASE AS UNDER:- INFORMATION FROM THE OFFICE OF THE DIT(INV.)-I, NE W DELHI HAS BEEN RECEIVED THAT THE ASSESSEE M/S SHRUTI FAST NERS LTD. HAS RECEIVED AN ACCOMMODATION ENTRY OF RS. 5.8 2 CRORES. INTO ITS BANK ACCOUNT FROM DIFFERENT COMPAN IES / CONCERNS DURING THE FINANCIAL YEAR 2002-03 RELEVANT TO ASSESSMENT YEAR 2003-04 SO AS TO INTRODUCE ITS UNACCOUNTED MONEY INTO ITS ACCOUNTS. IN VIEW OF THE ABOVE FACTS, I HAVE REASON TO BELIEVE THAT THE INCO ME OF RS. 5.892 CRORES HAS ESCAPED ASSESSMENT IN THE HAND S OF THE ASSESSEE IN TERMS OF SECTION 147 OF THE I.T. AC T FOR THE ASSESSMENT YEAR 2003-04. 8 ACCORDINGLY, NOTICE U/S. 148 OF THE I.T. ACT IS ISS UED TO THE ASSESSEE. 9.1 ON GOING THROUGH THE ABOVE REASONS RECORDED BY THE AO, WE ARE OF THE VIEW THAT AO HAS NOT APPLIED HIS MIND SO AS TO COME TO AN INDEPENDENT CONCLUSION THAT HE HAS REASON TO BELIEV E THAT INCOME HAS ESCAPED DURING THE YEAR. IN OUR VIEW THE REASON S ARE VAGUE AND ARE NOT BASED ON ANY TANGIBLE MATERIAL AS WELL AS A RE NOT ACCEPTABLE IN THE EYES OF LAW. THE AO HAS MECHANICALLY ISSUED NOTICE U/S. 148 OF THE ACT, ON THE BASIS OF INFORMATION ALLEGEDLY R ECEIVED BY HIM FROM THE DIRECTORATE OF INCOME TAX (INVESTIGATION)-I, NE W DELHI. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESE NT CASE AND THE CASE LAW APPLICABLE IN THE CASE OF THE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT THE REOPENING IN THE CASE OF T HE ASSESSEE FOR THE ASSTT. YEAR IN DISPUTE IS BAD IN LAW AND DESERV ES TO BE QUASHED. OUR VIEW IS SUPPORTED BY THE FOLLOWING JUDGMENTS/DE CISIONS:- (A) PR. CIT VS. G&G PHARMA INDIA LTD. IN ITA NO. 545/2015 DATED 8.10.2015 OF THE DELHI HIGH COURT WHEREIN THE HONBLE COURT HAS ADJUDICATED THE ISSUE AS UNDER:- 12. IN THE PRESENT CASE, AFTER SETTING OUT FOUR ENTRIES, STATED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON A SINGLE DATE I.E. 10TH FEBRUARY 2003, FROM FOUR ENTITIES WHICH WERE TERMED AS 9 ACCOMMODATION ENTRIES, WHICH INFORMATION WAS GIVEN TO HIM BY THE DIRECTORATE OF INVESTIGATION, THE AO STATED: 'I HAVE ALSO PERUSED VARIOUS MATERIALS AND REPORT FROM INVESTIGATION WING AND ON THAT BASIS IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK ACCOUNT BY WAY OF ABOVE ACCOMMODATION ENTRIES.' THE ABOVE CONCLUSION IS UNHELPFUL IN UNDERSTANDING WHETHER THE AO APPLIED HIS MIND TO THE MATERIALS THAT HE TALKS ABOUT PARTICULARLY SINCE HE DID NOT DESCRIBE WHAT THOSE MATERIALS WERE. ONCE THE DATE ON WHICH THE SO CALLED ACCOMMODATION ENTRIES WERE PROVIDED IS KNOWN, IT WOULD NOT HAVE BEEN DIFFICULT FOR THE AO, IF HE HAD IN FACT UNDERTAKEN THE EXERCISE, TO MAKE A REFERENCE TO THE MANNER IN WHICH THOSE VERY ENTRIES WERE PROVIDED IN THE ACCOUNTS OF THE ASSESSEE, WHICH MUST HAVE BEEN TENDERED ALONG WITH THE RETURN, WHICH WAS FILED ON 14TH NOVEMBER 2004 AND WAS PROCESSED UNDER SECTION 143(3) OF THE ACT. WITHOUT FORMING A PRIMA FACIE OPINION, ON THE BASIS OF SUCH MATERIAL, IT WAS NOT POSSIBLE FOR THE AO TO HAVE SIMPLY CONCLUDED: 'IT IS EVIDENT THA T THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN 10 UNACCOUNTED MONEY IN ITS BANK BY WAY OF ACCOMMODATION ENTRIES'. IN THE CONSIDERED VIEW OF THE COURT, IN LIGHT OF THE LAW EXPLAINED WITH SUFFICIENT CLARITY BY THE SUPREME COURT IN THE DECISIONS DISCUSSED HEREINBEFORE, THE BASIC REQUIREMENT THAT THE AO MUST APPLY HIS MIND TO THE MATERIALS IN ORDER TO HAVE REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT IS MISSING IN THE PRESENT CASE. 13. MR. SAWHNEY TOOK THE COURT THROUGH THE ORDER OF THE CIT(A) TO SHOW HOW THE CIT (A) DISCUSSED THE MATERIALS PRODUCED DURING THE HEARING OF THE APPEAL. THE COURT WOULD LIKE TO OBSERVE THAT THIS I S IN THE NATURE OF A POST MORTEM EXERCISE AFTER THE EVENT OF REOPENING OF THE ASSESSMENT HAS TAKEN PLACE. WHILE THE CIT MAY HAVE PROCEEDED ON THE BASIS THAT THE REOPENING OF THE ASSESSMENT WAS VALID, THIS DOES NOT SATISFY THE REQUIREMENT OF LAW THAT PRIOR TO THE REOPENING OF THE ASSESSMENT, THE AO HAS TO, APPLYING HIS MIND TO THE MATERIALS, CONCLUDE THAT HE HAS REASON TO BELIEVE THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. UNLESS THAT BASIC JURISDICTIONAL REQUIREMENT IS SATISFIED A 11 POST MORTEM EXERCISE OF ANALYSING MATERIALS PRODUCED SUBSEQUENT TO THE REOPENING WILL NOT RESCUE AN INHERENTLY DEFECTIVE REOPENING ORDER FROM INVALIDITY . 14. IN THE CIRCUMSTANCES, THE CONCLUSION REACHED BY THE ITAT CANNOT BE SAID TO BE ERRONEOUS. NO SUBSTANTIAL QUESTION OF LAW ARISES. 15. THE APPEAL IS DISMISSED. (B) SIGNATURE HOTELS (P)_ LTD. VS. ITO AND ANOTHER REPORTED IN 338 ITR 51 (DEL) HAS UNDER SIMILAR CIRCUMSTANCES AS FOLLOWS:- FOR THE A.Y. 2003-04, THE RETURN OF INCOME OF THE ASSESSEE COMPANY WAS ACCEPTED U/S.143(1) OF THE INCOME-TAX ACT, 1961 AND WAS NOT SELECTED FOR SCRUT INY. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE U /S.148 WHICH WAS OBJECTED BY THE ASSESSEE. THE ASSESSING OFFICER REJECTED THE OBJECTIONS. THE ASSESSEE COMPA NY FILED WRIT PETITION AND CHALLENGED THE NOTICE AND T HE ORDER ON OBJECTIONS. THE DELHI HIGH COURT ALLOWED THE WRIT PETITION AND HELD AS UNDER: (I) SECTION 147 OF THE INCOME-TAX ACT, 1961, IS WI DE BUT NOT PLENARY. THE ASSESSING OFFICER MUST HAVE REASO N TO 12 BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THIS IS MANDATORY AND THE REASON TO BELIEVE ARE REQUIRED TO BE RECORDED IN WRITING BY THE ASSESSING OFFICER. (II) A NOTICE U/S.148 CAN BE QUASHED IF THE BELIEF IS NOT BONA FIDE, OR ONE BASED ON VAGUE, IRRELEVANT AND NO N- SPECIFIC INFORMATION. THE BASIS OF THE BELIEF SHOUL D BE DISCERNIBLE FROM THE MATERIAL ON RECORD, WHICH WAS AVAILABLE WITH THE ASSESSING OFFICER, WHEN HE RECOR DED THE REASONS. THERE SHOULD BE A LINK BETWEEN THE REA SONS AND THE EVIDENCE/MATERIAL AVAILABLE WITH THE ASSESS ING OFFICER. (III) THE REASSESSMENT PROCEEDINGS WERE INITIATED O N THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME-TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS.5 LAKHS DURING F.Y . 2002-03 AS STATED IN THE ANNEXURE. ACCORDING TO THE INFORMATION, THE AMOUNT RECEIVED FROM A COMPANY, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. THE REASONS DID NOT S ATISFY THE REQUIREMENTS OF SECTION 147 OF THE ACT. THERE W AS NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEPT THE ANNEXURE. THE ANNEXURE COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR 13 ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMEN T OF INCOME. THE ANNEXURE WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. (IV) FURTHER, THE ASSESSING OFFICER DID NOT APPLY H IS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATION. THERE WAS NO DISPUTE T HAT THE COMPANY, S, HAD A PAID UP CAPITAL OF RS.90 LAKH S AND WAS INCORPORATED ON JANUARY 4, 1989, AND WAS ALSO ALLOTTED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER 2001. THUS, IT COULD NOT BE HELD TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WERE NOT VALID AND WER E LIABLE TO THE QUASHED. 10. IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE AFORESAID ISSUE IN DISPUTE IS EXACTLY THE SIMILAR A ND IDENTICAL TO THE ISSUE INVOLVED IN THE PRESENT APPEAL AND IS SQUAREL Y COVERED BY THE AFORESAID DECISIONS OF THE HONBLE HIGH COURT OF DE LHI IN THE CASE OF G&G PHARMA (SUPRA) & SIGNATURES HOTELS (P) LTD. (SU PRA). HENCE, RESPECTFULLY FOLLOWING THE ABOVE PRECEDENTS IN THE CASE OF PR. CIT-4 VS. G&G PHARMA INDIA LTD. (SUPRA) AND SIGNATURE HOT ELS (P) LTD. VS. ITO, WE DECIDE THE LEGAL ISSUE IN DISPUTE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE AND ACCORDINGLY QUASH THE REASS ESSMENT PROCEEDINGS AND ALLOW THE LEGAL GROUND NO. 2 RAISED BY THE ASSESSEE 14 IN ITS APPEAL. SINCE WE HAVE QUASHED THE REASSESS MENT PROCEEDINGS, AS AFORESAID, THE OTHER ISSUES ARE NOT BEING DEALT WITH. 11. AS REGARDS THE ITA NO. 1946/DEL/2013 (AY 2004-0 5) IS CONCERNED, FOLLOWING THE CONSISTENT VIEW, AS TAKEN IN ITA NO. 1945/DEL/2013 (AY 2003-04), AS AFORESAID, THE ITA N O. 1946/DEL/2013 (AY 2004-05) ALSO STANDS ALLOWED. 12. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/10/2016. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 07/10/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES