ACIT 20(2), MUMBAI V. PRAKASH K SHAH, MUMBAI

ITA 1962/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7788 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 29-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Assessee Lawyers: SANJAY R PARIKH
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; Tangible material; Difference of opinion; Accommodation entries; Bogus loan; Change of opinion; Reassessment proceedings
• Section: 143(3); 133(6); 68; 148

Judgement Text

C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 1962 / MUM/2016 ( / ASSESSMENT YEAR: 2009 - 10 ) ACIT 20(2) R.NO. 217, 2 ND FLOOR , PIRAMAL CHAMBERS, LALBAUG, PA R E L, MUMBAI 400012 / V. SHRI. PRAKASH K. SHAH, PROP. NIMIT IMPEX, 234/26, 2 ND FLOOR, OM NIWAS, R.A KIDWAI ROAD, WADALA, MUMBAI - 400031 ./ PAN : AAKPS5648G ( / APPELLANT ) .. ( / RESPONDENT ) REVENUE BY : SHRI. RAJAT MITTAL ASSESSEE BY: SHRI. SANJAY. R. PARIKH / DATE OF HEARING : 20 .12.2017 / DATE OF PRONOUNCEMENT : 22 .12.2017 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER TH IS APPEAL, FILED BY THE REVENUE , BEING ITA NO. 1962/MUM/2016 FOR ASSESSMENT YEAR 2009 - 10 IS DIRECTED AGAINST THE APPELLATE ORDER DATED 12.01.2016 PASSED BY LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 3 2 , MUMBAI (HEREINAFTER CALLED THE CIT(A)) FOR ASSESSMENT YEAR 2009 - 10 , APPELLATE PROCEEDINGS HAD ARISEN BEFORE LEARNED CIT(A) FROM THE ASSES SMENT ORDER DATED 31 - 10 - 2014 PASSED BY LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO) U/S 143(3) R.W.S 147 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED THE ACT). 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN THE MEMO OF APPEAL FILED WIT H THE INCOME - TAX APPELLATE TRIBUNAL, MUMBAI (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER: - (1) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ANNULLING THE NOTICE U/S 148 ISSUED BY THE A.O. WITHOUT APPRECIATI NG THE FACT THAT THE INFORMATION HAS BEEN RECEIVED I.T.A. NO. 1962/ MUM/2016 2 FROM INVESTIGATION WING ON THE BASIS OF WHICH THE ASSESSING OFFICER RE - OPENED THE ASSESSMENT CONSIDERING THE FACT THAT THE LOAN PAID BY MR.MANOJ LAIN, PROPRIETOR OF M/S. MERIDIAN GEMS TO VARIOUS PARTIES AR E ONLY ACCOMMODATION ENTRIES AND THUS THE LOAN PAID BY MR. MANOJ LAIN ARE NON - GENUINE. (2) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ANNULLING THE NOTICE U/S 148 ISSUED BY THE A.O. IGNORING THE FACT THAT THE ASS ESSEE HAS TAKEN BOGUS LOAN OF RS.30,00,0 00/ - AND IS SHOWN TO HAVE PAID INTEREST OF RS.4,38,411/ - BOTH OF WHICH ARE NON GENUINE AS HAS BEEN HELD BY THE INVESTIGATION WING . 3) THE APPELLAN T PRAYS THAT THE ORDER OF THE CI T (A) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. (4). THE APPEL LANT CRAVES LEAVE TO AMEND OR AL TER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS IN THE BUSINESS OF TRADING IN IRON & STEEL . T HE ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y . 2009 - 10 ON 21.09.2009 DECLARING TOTAL LOSS OF RS. 7,62,302/ - , WHICH RETURN OF INCOME WAS SCRUTINISE D BY REVENUE U/S. 143(3) R.W.S 143(2) WHICH PROCEEDINGS CULMINA TED INTO AN ASSESSMENT ORDER U/S. 143(3) DATED 29.12.2011 WHEREIN THE INCOME ASSESSED BY REVENUE WAS RS. 96,11,080/ - AS AGAINST RETURN ED LOSS OF RS. 7,62,302/ - . S UBSEQUENTLY INFORMATION WAS RECEIVED BY THE A.O FROM DGIT(INV . ) ,MUMBAI THAT ASSESSEE HAD OB TAINED UNSECURED LOAN OF RS. 70,00,000/ - FROM M/S. MERIDIAN GEMS WHICH WAS BOGUS AND HENCE THE CASE WAS REOPENED BY THE AO U/S. 147 BY ISSUE OF NOTICE U/S. 148 DATED 30.03.2014 WHICH WAS DULY SERVED ON ASSESSEE BY REVENUE ON 30 - 03 - 2014. THE SAID REOPENING OF CONCLUDED ASSESSMENT U/S 147 WAS DONE BY THE REVENUE WITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. THE ASSESSEE FILED LOAN CONFIRMATION LETTER FROM MERIDIAN GEMS , COPY OF P ROFIT & L OSS ACCOUNT FOR RELEVANT FINANCIAL YEAR , BANK STATEMENT SHOWING BANK ENTRY OF RS. 3 0,00,000/ - . THE AFFIDAVIT OF SHRI MANOJ JAIN , P ROPRIETOR OF MERIDIAN GEMS WAS ALSO FILED WHICH SHOWS THAT HE HAS GIVEN A N UNSECURED LOA N OF RS. 30,00,000/ - DURING THE FINANCIAL YEAR 2008 - 09 RELEVANT TO THE IMPUG NED A.Y AND SH. MANOJ JAIN ALSO CONFIRMED TO HAVE RECEIVED INTEREST OF RS. 4,38,411/ - FROM M/S NIMIT IMPEX (PROPERIETOR SHRI PRAKASH SHAH) I.E. THE ASSESSEE . IT IS PERTINENT TO MENTION HERE THAT THE ASSESSEE RECEIVED LOAN OF RS. 40,00,000/ - FROM MERIDIAN G EMS DURING THE PRECEDING YEAR. THE A.O REJECTED THE CONTENTION S OF THE ASSESSEE IN THE LIGHT I.T.A. NO. 1962/ MUM/2016 3 OF THE STATEMENT MADE BEFORE THE DGIT (INV.),MUMBAI BY SHRI MANOJ JAIN, P ROPRIETOR OF MERIDIAN GEMS WHEREIN HE STATED THAT THESE LOANS PAID BY HIM TO VARIOUS PARTIE S ARE BOGUS LOANS AND ARE MERELY ACCOMMODATION ENTRIES WHICH ARE NOT GENUINE. THE AO OBSERVED THAT THE ASSESSEE HAS TAKEN LOAN OF RS. 40,00,000/ - IN THE FINANCIAL YEAR 2007 - 08 RELEVANT TO AY 2008 - 09 FOR WHICH REQUISITE ADDITIONS SHALL BE MADE IN THE AY 200 8 - 09 IN AN ASSESSMENT ORDER TO BE FRAMED U/S 143(3) R.W.S. 147 FOR AY 2008 - 09 . THUS, THE AO HELD THAT THESE LOANS OF RS. 30,00,000/ - RAISED BY THE ASSESSEE DURING THE IMPUGNED ASSESSMENT YEAR ARE BOGUS AND INTEREST OF RS. 4,38,411/ - PAID BY THE ASSESSEE TO SH. MANOJ JAIN PROP. MERIDIAN IMPEX IS ALSO BOGUS , WHICH WAS BROUGHT TO TAX BY THE A.O. VIDE ASSESSMENT ORDER DATED 31 - 10 - 2014 PASSED U/S 143(3) R.W.S. 147. THE A.O RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT V . INDEPEND ENT MEDIA PRIVATE LTD. (2012)210 TAXMAN 14 ( DELHI ) WHILE MAKING BOTH THE ADDITIONS TO THE INCO ME OF THE ASSESSEE IN THE ASSESSMENT ORDER. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT - A WHO HELD THAT REOPENING WAS NOT VALID U/S 147 OF THE 1961 ACT AND HENCE REOPENING OF THE CONCLUDED ASSESSMENT U/S 147 WAS QUASHED BY LEARNED CIT - A VIDE APPELLATE ORDER DATED 12 - 01 - 2016 . THE LEARNED CIT(A) DID NOT DEAL WITH THE ISSUE IN APPEAL BEFORE HIM ON MERITS . IT WAS OBSERVED BY LEARNE D CIT(A) WHILE QUASHING THE PROCEEDINGS U/S 147 OF THE 1961 ACT THAT THE A.O HAS MADE INQUIRIES U/S. 133(6) DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 143(2) AND IT IS ONLY AFTER MAKING THE INQUIRIES U/S. 133(6) , THE LOAN GRANT ED BY SH. MANOJ JAIN OF MERIDIAN GEMS TO THE ASSESSEE WAS ACCEPTED AS GENUINE BY THE A.O ., AS CO NFIRMATION AND OTHER DETAILS WERE ALSO SUBMITTED BY THE ASSESSEE DURING THE COURSE OF ORIG INAL ASSESSMENT PROCEEDINGS AND NOW IT IS A CASE OF MERE CHANGE OF OPI NION WHICH IS NOT PERMISSIBLE . THE LEARNED CIT(A) OBSERVED THAT IT IS MERELY CHANGE IN OPINION OF THE AO IN REOPENING OF THE CONCLUDED ASSESSMENT U/S 147 AND HENCE PROCEEDINGS U/S. 147 WAS SET ASIDE /QUASHED BY LEARNED CIT - A. SINCE THE PROCEEDINGS WERE QU ASHED ON AFORESAID LEGAL GROUND, THE LEARNED CIT(A) DID NOT DEALT WITH THE ISSUE S IN APPEAL ON MERITS. 5. AGGRIEVED REVENUE HAS COME IN AN APPEAL BEFORE THE TRIBUNAL. I.T.A. NO. 1962/ MUM/2016 4 THE LD. DR SUBMITTED THAT THE REOPENING OF CONCLUDED ASSESSMENT U/S 147 WAS JUSTIFIED AS THE INFORMATION WAS RECEIVED BY AO FROM DGIT (INV) , MUMBAI THAT THE PROPRIETARY CONCERN OF SH MANOJ JAIN NAMELY MERIDIAN GEMS WHO IS PART OF BHANWARLAL JAIN GROUP H AS ONLY GIVEN ACCOMMODATION ENTRIES OF BOGUS UNSECURED LOAN S AND ADVANCES TO THE ASSESSEE . B ASED UPON THE AFORESAID INFORMATION , THE CASE WAS REOPENED BY REVENUE U/S 147 BY ISSUANCE OF NOTICE DATED 30 - 03 - 2014 U/S 148. T HE LD. DR SUBMITTED THAT THE REOPENING WAS DONE WITHIN FOUR YEARS FROM THE END OF THE A.Y AND ALTHOUGH NOTIC ES U/S. 133(6) WERE ISSUED IN THE ORIGINAL ASSESSMENT PROCEEDINGS BY THE AO TO THE SAID PARTY AND CONFIRMATIONS AND BANK STATEMENTS HAS ALSO BEEN FILED BY THE SAID PARTY MERIDIAN GEMS BEFORE THE AO ALONG WITH THE COPY OF INCOME TAX RETURN AND AUDITED ACCO UNTS OF THE M/S. MERIDIAN GEMS DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 143(2), BUT IT IS BECAUSE OF THE INCRIMINATING TANGIBLE AND MATERIAL INFORMATION RECEIVED FROM THE DGIT(INV) ,MUMBAI WHEREIN IT WAS FOUND THAT THE SAID CO NCERN IS PART OF BHANWARLAL JAIN AND IT IS ADMITTED BEFORE DGIT(INV) IN STATEMENT RECORDED OF THE LENDER THAT THESE LOANS ARE BOGUS ACCOMMODATION ENTRIES, THAT THE REOPENING OF CONCLUDED ASSESSMENT U/S 147 WAS DONE , AND HENCE REOPENING OF THE CONCLUDED ASS ESSMENT WAS JUSTIFIED IN VIEW OF FRESH TANGIBLE AND INCRIMINATING MATERIAL COMING INTO THE POSSESSION OF REVENUE. T HE LD. DR RELIED UPON THE ORDER OF THE A.O . PASSED U/S 143(3) R.W.S. 147 . THE LEARNED DR SUBMITTED THAT THE LD. CIT - A HAS ERRED IN QUASHING THE NOTICE ISSUED U/S. 148 . THE LD. DR RELY ON DECISION OF HO NBLE HIGH COURT OF GUJARAT IN PEASS INDUSTRIAL ENGINEER S P. LTD V. DCIT ( 2016 ) 73 TAXMAN.COM 185 (GUJ) WHEREIN THE REOPENING BASED ON THE INFORMATION RECEIVED FROM INVESTIGATION WING WAS HELD TO BE VALID . THE LEARNED DR RELIED UPON THE RE - AS SESSMENT ORDER OF THE AO .I T WAS ALSO SUBMITTED BY LEARNED DR THAT REOPENING HAS BEEN DONE BY REVENUE WITHIN FOUR YEA RS FROM THE END OF ASSESSMENT YEAR AND HENCE PROVISO TO SECTION 147 IS NOT APPLICABLE. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND SUBMITTED THAT THE ASSESSEE ASKED FOR INCRIMINATING STATEMENT AS WELL CROSS EXAMINATION OF THE LENDER WHO HAVE GIVE N STATEMENT BEFORE INVESTIGATION WING OF REVENUE BUT THE SAME WAS NOT PROVIDED BY THE A.O TO THE ASSESSEE AND CROSS EXAMINATION WAS ALSO ASKED FOR WHICH WAS ALSO NOT PROVIDED BY REVENUE TO THE ASSESSEE I.T.A. NO. 1962/ MUM/2016 5 AND HENCE PRINCIPLES OF NATURAL JUSTICE ARE VITIATED . O UR ATTENTION WAS DRAWN TO PAGE NO. 37 OF THE PAPER BOOK WHEREIN THE LETTER DATED 01.10.2014 WHICH IS STATED TO BE FILE D BY THE ASSESSEE WITH THE A.O DURING THE COURSE OF REASSESSMENT PROCEEDINGS IS PLACED ON RECORD WHEREIN THE ASSESSEE SOUGHT FOR STATEME NT OF THE LENDER AS WELL CROSS EXAMINATION OF THE LENDER FROM THE REVENUE . IT WAS SUBMITTED THAT LEARNED C IT - A HAS ONLY DECIDED LEGAL GROUND WHEREIN REOPENING OF THE CONCLUDED ASSESSMENT U/S 147 WAS QUASHED BY LEARNED CIT(A). O UR ATTENTION WAS ALSO DRAWN T O AN AFFIDAVIT WHICH IS PLACED IN PAPER BOOK / PAGE NO. 39 GIVEN BY SHRI. MANOJ JAIN , PROPRIETOR OF MERIDIAN GEMS CONFIR MING THE TRANSACTION OF LOAN GRANTED TO THE ASSESSEE AS WELL INTEREST RECEIVED FROM THE ASSESSEE. T HE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IF THE REOPENING OF THE CONCLUDED ASSESSMENT U/S 147 IS HELD TO BE VALID KEEPING IN VIEW FACTUAL MATRIX OF THE CASE , THEN IN THAT CASE THE MATTER CAN BE SET ASIDE TO THE FILE OF LEARNED CIT - A WHO CAN DECIDE T HE ISSUE ON MERITS AFTER FURNISHING OF THE COPY OF THE RELIED UPON INCRIMINATING STATEMENT AND AFTER PROVIDING CROSS EXAMINATION TO THE ASSESSEE OF THE LENDER WHO HAVE GIVEN INCRIMINATING STATEMENT AGAINST THE ASSESSE. THE LEARNED COUNSEL FOR THE ASSESSE E RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF PRINCIPAL CIT V. MEENAKSHI OVERSEAS P. LTD. ( 2017 ) 82 TAXMAN.COM 300 (DELHI) WHEREIN IN THE CASE WHERE INFORMATION WAS RECEIVED FROM INVESTIGATION WING BY THE AO AND THE REOPENING WAS DON E BY THE AO BASED ON SUCH INCRIMINATING INFORMATION WITHOUT INDEPENDENT APPLICATION OF MIND BY THE AO TO ESTABLISH LIVE LINK OF THE TANGIBLE MATERIAL AND FORMATION OF REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, THE HONBLE COURT HAS HELD REOPENI NG TO BE BAD IN LAW . 6 . WE HAVE CONSIDER ED RIVAL CONTENTION S AND PERUSED THE MATERIAL ON RECORD INCLUDING CITED CASE LAWS AND ORDERS OF THE AUTHORITIES BELOW . W E HAVE OBSERVED THAT ASSESSEE IS CARRYING ON THE BUSINESS OF TRADING IN IRON & STEEL UND ER THE NAME AND STYLE OF NIMIT IMPEX . T HE ASSESSEE FILED RETURN OF INCOME FOR AY 2009 - 10 ON 21.09.2009 DECLARING TOTAL LOSS OF RS. 7,62,302/ - AND R EVENUE FRAMED ASSESSMENT U/S. 143(3) VIDE ASSESSMENT ORDERS DATED 29.12.2011 COMPUTING INCOME OF RS.96,11,080/ - A GAINST THE RETURN LOSS OF RS.7 ,62,302/ - . S UBSEQUENTLY INFORMATION WAS RECEIVED BY THE A.O FROM DGIT (INV) , MUMBAI THAT ASSESSEE HAS RECEIVED UNSECURED LOANS OF RS. 70,00,000/ - FROM M/S. MERIDIAN GEMS WHICH WERE BOGUS AS ADMITTED BY THE I.T.A. NO. 1962/ MUM/2016 6 LENDERS BEFORE DGI T(INV.). MUMBAI WHICH LED TO THE REOPENING OF CONCLUDED ASSESSMENT U/S 147 WHEREIN NOTICE U/S . 148 DATED 30.03.2014 WAS ISSUED BY THE AO WHICH WAS DULY SERVED ON 30.03.2014 . THE REOPENING OF THE CONCLUDED ASSESSMENT WAS DONE BY THE AO U/S. 147 WITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR AND HENCE PROVISO TO SECTION 147 IS NOT APPLICABLE. I T IS ALSO OBSERVED THAT WHILE FRAMING OF THE ORIGINAL ASSESSMENT U/S 143(3) , THE A.O ISSUED NOTICES U/S. 133(6) TO SAID M/S. MERIDIAN GEMS AND THE SAME WAS DU LY REPLIED BY THE SAID CONCERNS ALONG WITH BANK STATEMENT EVIDENCING THE GRANT OF LOAN OF RS. 30,00,000/ - DURING THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR, CONFIRMATION FROM THE LENDER, INCOME TAX RETURN AS WELL AS AUDIT ED ACCOUNTS OF M/S. MERIDIAN GEMS WERE DULY SUBMITTED . IT IS PERTINENT TO MENTION HERE THAT RS. 40,00,000/ - WAS RECEIVED BY THE ASSESSEE FROM THE SAID LENDER MERIDIAN GEMS IN THE PRECEDING YEAR. HOWEVER , TANGIBLE AND MATERIAL INCRIMINATING INFORMATION WA S RECEIVED BY THE A.O FROM THE DGIT(INV) WHICH IS BASED UPON STATEMENT GIVEN BY LENDER BEFORE THE DGIT(INV.) , MUMBAI THAT T HE Y HAVE PROVIDED ACCOMMODATION ENTRY TO THE ASSESSEE BY WAY OF BOGUS UNSECURED LOANS TO THE TUNE OF RS.70,00,000/ - , OUT OF WHICH RS. 30,00,000/ - WERE GIVEN DURING THE IMPUGNED ASSESSMENT YEAR WHILE RS. 40,00,000/ - WAS GIVEN IN THE PRECEDING YEAR. B ASED UPON THE SAID INCRIMINATING TANGIBLE AND MATERIAL INFORMATION IN POSSESSION OF THE REVENUE, CONCLUDED ASSESSMENT OF THE ASSESSEE WAS REOPENED BY THE AO U/S. 147 AND THE REOPENING HAS BEEN DONE WITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR . S INCE REOPENING IS DONE WITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR , PROVISO TO SECTION 147 IS NOT APPLICABLE. THUS, CLEARLY IT IS NOT THE CASE OF CHANGE OF OPINION BY THE AO RATHER IT IS BASED ON NEW INCRIMINATING MATERIAL IN POSSESSION OF THE AO THAT REOPENING OF CONCLUDED ASSESSMENT U/S 147 WAS INITIATED . THE R EVENUE H AS RIGHTLY RELIED UPON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PEASS INDUSTRIAL ENGINEERS P. LTD (SU PR A) BECAUSE THE INFORMATION THAT LOANS ARE BOGUS AND WERE MERELY ACCOMMODATION ENTRIES ATTRACT DEEMING FICTION OF SECTION 68 AND THIS NEW INCRIMINATING INFORMATION HAS LIVE LINK WITH FORMATION OF REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT AND IT CANNOT BE CLASSIFIED AS MERE CHANGE OF OPINION . IT IS NOT NECESSARY AT THE STAGE OF INITIATION OF PROCEEDINGS FOR REOPENING OF CONCLUDED ASSESSMENT U/ S 147 THAT ESCAPEMENT OF INCOME IS TO BE PROVED CONCLUSIVELY BY A COGENT EVIDENCES , WHILE WHAT IS REQUIRED IS I.T.A. NO. 1962/ MUM/2016 7 FORMATION OF A BELIEF BASED ON INCRIMINATING MATERIAL IN POSSESSION OF THE REVENUE THAT THERE IS PRIMA - FACIE AN ESCAPEMENT OF INCOME. I N OUR CONSI DER ED VIEW , REOPENING OF THE CONCLUDED ASSESSMENT U/S 147 WAS VALID IN THE INSTANT CASE AS THE SAME WAS BASED UPON TANGIBLE AND MATERIAL INCRIMINATING INFORMATION RECEIVED BY THE A.O THAT LOANS GRANTED BY MERIDIAN GEMS WERE BOGUS AND WERE MERELY ACCOMMOD ATION ENTRIES WHEREIN THE ASSESSEES OWN MONEY IS CIRCUITOUSLY ROUTED THROUGH BACK INTO ITS PROPRIETARY CONCERN NIMIX IMPEX IN THE FORM OF UNSECURED LOANS FROM MERIDIAN IMPEX WHICH PRIMA - FACIE ATTRACTS DEEMING FICTION CREATED BY SECTION 68. THE ABOVE INFO RMATION RECEIVED BY AO FROM DGIT(INV.) WAS IN - TURN BASED UPON STATEMENT OF THE LENDERS WHEREIN IT IS ADMITTED BY LENDERS BEFORE INVESTIGATION WING OF REVENUE THAT THEY HAVE PROVIDED BOGUS ACCOMMODATION ENTRIES BY WAY OF LOANS TO THE ASSESSEE TO THE TUNE OF RS. 70,0 0 ,000/ - . T HUS UNDER THE SE CIRCUMSTANCES AND KEEPING IN VIEW ENTIRE FACTUAL MATRIX OF THE CASE , IT CANNOT BE SAID THAT THE REOPENING OF CONCLUDED ASSESSMENT U/S 147 WAS INVALID , MORE - SO REOPENING WAS DONE WITHIN FOUR YEARS FROM THE END OF ASS ESSMENT AND PROVISO TO SECTION 147 IS NOT ATTRACTED . THUS , WE SET ASIDE THE APPELLATE ORDER OF LEARNED CIT - A WHEREIN LEARNED CIT(A) ADJUDICATED THE APPEAL ONLY ON LEGAL GROUNDS OF RE - OPENING BY HOLDING THAT THAT REOPENING OF THE CONCLUDED ASSESSMENT BY REVENUE IN THE INSTANT CASE U/S. 147 WAS NOT VALID WHILE WE VIDE THIS ORDER HOLDS THAT REOPENING OF THE CONCLUDED ASSESSMENT IN THE INSTANT CASE U/S 147 WAS VALID IN LAW . W E HAVE OBSERVED THAT LEARNED CIT - A HAD NOT ADJUDICATED THE ISSUES IN APPEAL ON MERITS. WE HAVE ALSO OBSERVED THAT ASSESSEE ASKED FOR THE STATEMENT OF THE LENDER INCRIMINATING ASSESSEE AND ALSO SOUGHT CROSS EXAMINATION OF SAID LENDER WHO HAS GIVEN THE INCRIMINATING STATEMENT AGAINST THE ASSESSEE , WHICH WAS DENIED TO THE ASSESSEE . WE HAVE ALSO OBSERVED THAT THE SAID LENDER MERIDIAN GEMS IS PART OF BHANWARLAL JAIN GROUP OF CONCERNS. WE ARE RESTORING THE MATTER BACK TO FILE OF LEARNED CIT(A) WITH DIRECTIONS TO ADJUDICATE THE APPEALS ON MERITS . THE REVENUE IS DIRECTED TO PROVIDE TO THE ASSESSEE COPY OF RELIED UPON INCRIMINATING STATEMENT AS WELL OTHER INCRIMINATING MATERIAL IN ITS POSSESSION ON WHICH IT INTEND TO RELY AND ALSO TO ALLOW ASSESSEE TO CROSS EXAMINATION THE LENDER WHO HAS GIVEN INCRIMINATING STATEMENT AGAINST THE ASSESSEE BE FORE PREJUDICING ASSESSEE , IF THE REVENUE WISH TO RELY ON THE SAID INCRIMINATING STATEMENT OR ANY OTHER INCRIMINATING MATERIAL IN ITS POSSESSION . NEEDLESS TO SAY THAT THE LEARNED I.T.A. NO. 1962/ MUM/2016 8 CIT(A) HAS WIDE POWERS WHICH ARE CO - TERMINUS WITH THE POWERS OF THE AO , INTE R - ALIA, INCLUDING POWER TO DIRECT AO TO CONDUCT NECESSARY ENQUIRIES, EXAMINATIONS AND VERIFICATIONS ETC. . NEEDLESS ALSO TO SAY THAT LEARNED CIT(A) SHALL PROVIDE PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE ADJUDICATING THE ISSUE O N MERITS IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW. THE LEARNED CIT(A) IS DIRECTED TO ADMIT ADDITIONAL EVIDENCES IF FILED BY THE ASSESSEE IN ACCORDANCE WITH RULE 46A OF INCOME - TAX RULES, 1962 IN ORDER TO ADVANCE SUBSTANTIAL JU STICE. WE ORDER ACCORDINGLY. 7 . THUS APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND MATTER IS RESTORED BACK TO THE FILE OF LEARNED CIT - A FOR FRESH ADJUDICATION OF THE ISSUES IN THIS APPEAL ON MERITS IN ACCORDANCE WITH OUR ABOVE DIRECTIONS . ORDER PRONOUNCED IN THE OPEN COURT ON 2 2 .12.2017 2 2 .12.2017 S D / - S D / - ( JOGINDER SINGH ) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 2 2 .12.2017 NISHANT VERMA SR. PRIVATE SECRETARY COPY TO 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) CONCERNED, MUMBAI 4 . THE CIT - CONCERNED, MUMBAI 5 . THE DR BENCH, E 6 . MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI