M/s. N.D. Constructions, Pune V. Income-tax Officer, Ward - 9(3), Pune

ITA 2068/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5069 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 01-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Reopening of assessment; Bogus purchase; Principle of natural justice; Reason to believe
• Section: 69C; 40A(3); 143(3); 133A; 133(6); 131; 148

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 2068 /P U N/201 7 / ASSESS MENT YEAR : 20 09 - 10 M/S. N.D. CONSTRUCTIONS, N.B. ARCADE, PRADHIKARAN ROAD, AKURDI, PUNE 411035 . / APPELLANT PAN: AA GFN6366A VS. THE INCOME TAX OFFICER, WARD 9 (3), PUNE . / RESPONDENT / APPELL ANT BY : SHRI KISHOR PHADKE / RESPONDENT BY : SHRI M.K. VERMA / DATE OF HEARING : 2 7 . 12 .201 8 / DATE OF PRONOUNCEMENT: 06 . 0 2 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSES SEE IS AGAINST ORDER OF CIT (A) - 9 , PUNE , DATED 21 . 06 .201 7 RELATING TO ASSESSMENT YEAR 20 09 - 10 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT (A) - 9, PUNE ERRED IN LAW AND ON FACTS IN CONFIRMING THE ASSUMPTION OF JURISDICTION BY THE LEARNED AO U/S 147 OF THE ITA, 1961 FOR ESCAPEMENT OF INCOME ON ACCOUNT OF ALLEGED HAWALA PURCHASES FROM ITA NO. 2068 /P U N/201 7 M/S. N.D. CONSTRUCTIONS 2 M/S K.R.C. TRADING COMPANY. THE LEARNED CIT(A) AS WELL AS THE LEARNED AO OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAS NOT MADE ANY PURCHASE FROM M/S K.R.C. TRADING COMPANY IN A.Y. 2009 - 10. 2. THE LEARNED CIT(A) - 9 ERRED IN LAW AND ON FACTS BY NOT APPRECIATING THE FACTS THAT THE LEARNED AO HA S NOT EXTENDED COPIES OF THE FOLLOWING PAPERS TO THE APPELLANT, DESPITE SPECIFIC REQUESTS - A) PAPERS / INCRIMINATING MATERIAL IMPOUNDED DURING THE SURVEY B) STATEMENT OF MR. MUKESH MITTAL C) OTHER RELATED / CONNECTED PAPERS, ETC. 3. THE LEARNED CIT(A) - 9 ERRED IN LAW AND ON FACTS BY CONFIRMING THE ADDITION MADE BY THE LEARNED AO WITHOUT PROVIDING OPPORTUNITY TO CROSS EXAMINE VARIOUS INTERROGATED PERSONS DURING THE COURSE OF SURVEY IN M/S JAPTECH INDUSTRY'S CASE. 4. THE LEARNED CIT(A) - 9, PUNE ERRED IN LAW AND ON FACTS BY CONFIRMING THE ADDITION MADE BY THE LEARNED AO ON ACCOUNT OF DISALLOWANCE OF GENUINE PURCHASES OF RS.64,05,286/ - ON MERE CONJECTURES / ASSUMPTIONS AS TO HAWALA / BOGUS PURCHASES. 5. THE LEARNED CIT(A) - 9 ERRED IN LAW AND ON FACTS IN SUSTAIN ING THE ADDITION MADE BY THE LEARNED AO WITHOUT CONSIDERING LEDGER EXTRACTS OF M/S SHRUTI TRADING CORPORATION, WEIGH BRIDGE RECEIPTS, BANK STATEMENTS REFLECTING THE PAYMENTS MADE TO M/S SHRUTI TRADING CORPORATION BY ACCOUNT PAYEE CHEQUES ETC.; WHICH SUBSTA NTIATE THE FACT THAT SAID ALLEGED HAWALA PURCHASES ARE IN FACT, GENUINE AND BONAFIDE. 6. THE LEARNED CIT(A) - 9, PUNE ERRED IN LAW AND ON FACTS BY FURTHER ENHANCING THE ADDITION ALREADY MADE BY THE LEARNED AO, BY RS.21,85,470/ - WITHOUT ISSUING A PROPER SHOW CAUSE NOTICE AS PRESCRIBED U/S 251 OF THE ITA, 1961 AND THEREBY PASSED AN ORDER IN VIOLATION TO THE PRINCIPAL OF NATURAL JUSTICE . 3. THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEAL AGAINST ASSUMPTION OF JURISDICTION UNDER SECTION 147 OF THE ACT FOR ES CAPEMENT OF INCOME ON ACCOUNT OF ALLEGED HAWALA PURCHASES FROM M/S. KRC TRADING COMPANY P. LTD. (IN SHORT KRC). THE ASSESSEE IS AGGRIEVED BY THE ORDERS OF AUTHORITIES BELOW ON THE GROUND THAT IT HAD NOT MADE ANY PURCHASES FROM KRC DURING THE FINANCIAL Y EAR AND MAKING AN ADDITION OF 64 LAKHS AND ENHANCEMENT MADE BY CIT(A) AT 21,85,470/ - WITHOUT ISSUING PROPER SHOW CAUSE NOTICE UNDER SECTION 251 OF THE ACT . THE NEXT ISSUE WHICH IS RAISED IS AGAINST DISALLOWANCE OF GENUINE PURCHASES OF 64,05,286/ - ON MERE CONJECTURES AND ASSUMPTION. ITA NO. 2068 /P U N/201 7 M/S. N.D. CONSTRUCTIONS 3 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME AT NIL. SURVEY ACTION UNDER SECTION 133A OF THE ACT WAS CONDUCTED IN THE CASE OF M/S. JAPTECH INDUSTRIES, BHOSARI ON 26.11.2012. DURING THE COURSE OF SURVEY ACTION, IT WAS SEEN THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD MADE PURCHASES OF STEEL FROM M/S. SHRUTI TRADING CORPORATION (IN SHORT STC) , WHICH WAS SISTER CONCERN OF M/S. JAPTECH INDUSTRIES. I N VIEW THEREOF, THE ASSESSING OFFICER RECORDED REASONS FOR REOPENING THE ASSESSMENT AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE FILED A LETTER STATING THAT RETURN OF INCOME ORIGINALLY FILED MAY BE TREATED AS FILED IN RESPONSE TO NOTICE IS SUED UNDER SECTION 148 OF THE ACT. THE ASSESSEE SOUGHT REASONS FOR REOPENING THE ASSESSMENT, WHICH WERE PROVIDED TO ASSESSEE AND IT RAISED OBJECTIONS FOR ISSUE OF NOTICE. THE OBJECTIONS WERE DISPOSED OF BY SPEAKING ORDER BY THE ASSESSING OFFICER AND THER EAFTER, ASSESSMENT PROCEEDINGS WERE TAKEN UP. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD MADE PURCHASES OF STEEL FROM STC AND IN THIS REGARD INFORMATION WAS CALLED FOR FROM STC UNDER SECTION 133(6) OF THE ACT. IN REPLY, THE LEDGER EXTRACT WAS FILE D BY THE SAID CONCERN, WHEREIN SALES WERE SHOWN TO THE ASSESSEE AT 42,19,816/ - . THE ASSESSEE WAS ASKED TO PRODUCE COPIES OF PURCHASE BILLS, DELIVERY CHALLANS , WEIGHING DETAILS AND OTHERS, ETC. FURTHER, DURING SU RVEY ON M/S. JAPTECH INDUSTRIES, STATEMENT OF SHRI MUKESH MITTAL, HUSBAND OF SMT. POONAM MUKESH MITTAL, PROP RIETARY OF STC WAS RECORDED UNDER SECTION 131 OF THE ACT. IT WAS NOTED THAT THE TRADING CONCERN STC WAS RUNNING BUSINESS ACTIVITY OF TRADING IN STEEL FROM THE PREMISES OF M/S. JAPTECH INDUSTRIES AND THE PURCHASE AND SALE BILLS ALONG WITH DOCUMENTARY EVIDE NCE WERE VERIFIED. ON VERIFICATION, IT IS NOTED THAT PURCHASE BILLS SUPPLIED BY KRC TO STC FOR VARIOUS YEARS WERE BARE BILLS WITHOUT ANY GOODS RECEIVED NOTE (GRN), ITA NO. 2068 /P U N/201 7 M/S. N.D. CONSTRUCTIONS 4 PURCHASE ORDER, DELIVERY CHALLANS, WEIGHMENT DETAILS, ETC. HENCE, IT WAS OBSERVED THAT PUR CHASES SHOWN BY STC IN THE NAME OF KRC WERE BOGUS PURCHASES SINCE THE BILLS DID NOT ESTABLISH THE DELIVERY OF MATERIAL AND ALSO THE NAME OF KRC WAS IN THE LIST OF HAWALA DEALERS ISSUED BY THE SALES TAX DEPARTMENT. THE ASSESSEE WAS PROMOTER, BUILDER AND DE VELOPER. THE ASSESSEE FILED COPIES OF PURCHASE BILLS AND LEDGER EXTRACTS OF STC. HOWEVER, HE WAS UNABLE TO PROVIDE DETAILS OF PURCHASE ORDERS, DELIVERY CHALLANS WEIGHMENT DETAILS, ETC. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF TRANSACTIONS MADE WITH STC AND IN VIEW THEREOF, IT WAS HELD THAT PURCHASE OF MATERIAL AMOUNTING TO 42,19,816/ - MADE FROM STC WERE BOGUS PURCHASES AND WERE DISALLOWED UNDER SECTION 69C OF THE ACT. AN ALTERNATE OBSERVATION WAS MADE BY THE ASSESSING OFFICER THAT IF THE ASSESSEE TOOK THE STAND THAT QUANTITATIVE DETAILS OF PURCHASES AND CONSUMPTION OF RAW MATERIALS MATCHES, THEN CASH PURCHASES WERE LIABLE TO BE DISALLOWED UNDER SECTION 40A(3) OF THE ACT. 5. BEFORE THE CIT(A), FIRST GROUND OF APPEAL WHICH WAS AGAINST ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER UNDER SECTION 147 OF THE ACT FOR ESCAPEMENT OF INCOME. THE ASSESSEE POINTED OUT THAT REASONS WERE RECORDED BELIEVING ESCAPEMENT OF INCOME, WHEREIN HAWALA PARTY WAS STATED SPE CIFICALLY TO BE KRC. THE CASE OF ASSESSEE WAS THAT THE ASSESSING OFFICER HAD IN THE REASONS RECORDED ALLEGED THE ASSESSEE TO HAVE MADE PURCHASES FROM KRC AND ON THAT BASIS, BELIEF WAS FORMED THAT INCOME HAD ESCAPED ASSESSMENT. IT WAS FURTHER POINTED OUT BY THE ASSESSEE BEFORE THE CIT(A) THAT THE ASSESSEE HAD NOT MADE ANY PURCHASES FROM KRC AND THIS FACT WAS COMMUNICATED TO THE ASSESSING OFFICER ON TWO OCCASIONS WHEN OBJECTIONS WERE RAISED CHALLENGING THE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT A ND SECONDLY, DURING THE COURSE ITA NO. 2068 /P U N/201 7 M/S. N.D. CONSTRUCTIONS 5 OF HEARING OF 147 ASSESSMENT PROCEEDINGS. HE THEN, REFERRED TO THE ORDER OF ASSESSING OFFICER AND POINTED OUT THE DIFFERENCE IN FACTUAL OBSERVATIONS BETWEEN THE TWO DOCUMENTS I.E. REASONS RECORDED ON 01.04.2013 AND ORDER PAS SED DEALING WITH OBJECTIONS TO 148 NOTICE. THE ASSESSEE PLACED RELIANCE ON DIFFERENT DECISIONS OF JURISDICTIONAL HIGH COURT AND STRESSED THAT MAKING PROPOSITION OF ALLEGED HAWALA PURCHASES FROM KRC IN THE REASONS RECORDED FOR REOPENING ASSESSMENT WERE COM PLETELY DIFFERENT PROPOSITIONS THAN MAKING ALLEGED HAWALA PURCHASES FROM STC. THE ASSESSEE ALSO FILED ELABORATE SUBMISSIONS ON MERITS OF ADDITIONS MADE IN THE HANDS OF ASSESSEE. THE CIT(A) HOWEVER, DID NOT ACCEPT THE PLEA OF ASSESSEE AND POINTED OUT THAT IN VIEW OF WIDESPREAD WEB OF HAWALA TRANSACTIONS, PLEA OF ASSESSEE COULD NOT BE ACCEPTED. FURTHER, THE ASSESSING OFFICER HAD SUFFICIENT MATERIAL / INFORMATION TO FORM REASON TO BELIEVE FOR REOPENING THE ASSESSMENT ON THE BASIS OF INFORMATION RECEIVED FRO M INVESTIGATION WING , WHICH REVEALED THAT STC HAD MADE PURCHASES FROM HAWALA DEALERS AND FURTHER HAD SHOWN SALES TO THE ASSESSEE. HE WAS OF THE VIEW THAT EXPRESSION HAS REASON TO BELIEVE WAS WIDER THAN IS SATISFIED. AS PER CIT(A), THE ASSESSING OFFIC ER HAD SUFFICIENT MATERIAL IN THE FORM OF ADITS REPORT TO FORM BELIEF THAT THE ASSESSEES INCOME HAD ESCAPED ASSESSMENT. THEN, HE DEALT WITH THE ISSUE ON MERITS. THE CIT(A) ALSO ENHANCED THE ADDITION IN THE HANDS OF ASSESSEE OBSERVING THAT TOTAL PURCHAS ES FROM THE SAID PARTY AMOUNTED TO 64,05,286/ - , OUT OF WHICH THE ASSESSING OFFICER HAD ONLY DOUBTED PURCHASES OF 42,19,816/ - . THUS, HE DISALLOWED DIFFERENTIAL PURCHASES OF 21,85,470/ - . 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). ITA NO. 2068 /P U N/201 7 M/S. N.D. CONSTRUCTIONS 6 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO REASONS RECORDED FOR REOPENING THE ASSESSMENT, WHICH ARE PLACED AT PAGES 2 AND 3 OF PAPER BOOK, WHEREIN IT IS CATEGORICALLY MENTIONED THAT THE ASSESSEE HAD MADE HAWALA PURCHASES OF 42,19 ,816/ - FROM KRC. HE FURTHER REFERRED TO THE ORDER DISPOSING OF OBJECTIONS FOR ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT, WHEREIN IT HAS ALSO BEEN MENTIONED THAT PURCHASE BILLS SUPPLIED BY KRC TO STC FOR VARIOUS YEARS WERE BARE BILLS. THEREFORE, IT IS CLEAR THAT PURCHASES SHOWN BY STC IN THE NAME OF KRC ARE BOGUS PURCHASES. OUR ATTENTION WAS INVITED TO OBJECTIONS RAISED BY ASSESSEE TO REASONS RECORDED UNDER SECTION 147 OF THE ACT, WHEREIN IT WAS CATEGORICALLY POINTED OUT THAT THE ASSESSEE HAD MADE N O TRANSACTIONS WITH KRC OR M/S. JAPTECH INDUSTRIES AND HE HAD SOUGHT COPIES OF ALLEGED INCRIMINATING MATERIAL FOR FILING THE REPLY. SO, THE ASSESSING OFFICER DISPOSING OF OBJECTIONS WHICH ARE PLACED AT PAGES 4 AND 5 OF PAPER BOOK HAD ENLARGED THE SCOPE OF RE - ASSESSMENT AND HAD STATED ON VERIFICATION OF BARE BILLS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT REASONS HAVE TO BE READ AS SACROSANCT. IN THIS REGARD, HE PLACED RELIANCE ON THE DECISION OF JURISDICTIONAL HIGH COURT IN HI NDUSTAN LEVER LTD. VS. R.B. WADKAR (2004) 268 ITR 332 (BOM). HE FURTHER POINTED OUT THAT RELIANCE OF CIT(A) ON THE DECISION OF APEX COURT IN KALYANJI MAVJI & CO. VS. CIT (1976) 102 ITR 287 (SC), WHEREIN RE - ASSESSMENT PROCEEDINGS WERE UPHELD AS IN THE ORIG INAL ASSESSMENT, THE INCOME LIABLE TO TAX HAD ESCAPED ASSESSMENT DUE TO OVERSIGHT, INADVERTENT OR MISTAKE COMMITTED BY ASSESSING OFFICER. HE STRESSED THAT ASSUMPTION OF JURISDICTION IN THE HANDS OF ASSESSEE WAS NOT CORRECT. HE THEN, REFERRED TO ISSUE ON MERITS AND ALSO POINTED OUT THAT IN THE ABSENCE OF ANY ENHANCEMENT NOTICE ISSUED BY THE CIT(A), ENTIRE PURCHASES FROM STC COULD NOT BE ADDED IN THE HANDS OF ASSESSEE. ITA NO. 2068 /P U N/201 7 M/S. N.D. CONSTRUCTIONS 7 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF CIT(A). 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE PRELIMINARY ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST REOPENING OF ASSESSMENT UNDER SECTION 147 / 148 OF THE ACT. THE ASSESSEE WAS BUILDER AND DEVELOPER AND WAS ENGAGED IN CONSTRUCTION OF ONGOING PROJECT. THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING NIL INCOME DURING THE YEAR UNDER CONSIDERATION ON 29.10.2009 . SURVEY ACTION UNDER SECTION 133A OF THE ACT WAS CONDUCTED ON THE PREMISES OF M/S. JAPTECH INDUSTRIES. STATEMENT OF SHRI MUKESH MITTAL, PROPRIETOR OF M/S. JAPTECH INDUSTRIES WAS RECORDED. HE ALSO MADE CERTAIN STATEMENTS IN RESPECT OF SOLE PROPRIETARY OF HIS WIFE I.E. SMT. POONAM MUKESH MITTAL . IT WAS NOTED THAT STC HAS MADE CERTAIN PURCHASES FROM KRC WHI CH WAS DECLARED TO BE HAWALA DEALER IN VIEW OF INVESTIGATION BY THE SALES TAX DEPARTMENT. THE ASSESSING OFFICER RECEIVED INFORMATION FROM INVESTIGATION WING AND HE RECORDED REASONS FOR REOPENING THE ASSESSMENT. THE COPY OF REASONS ARE PLACED AT PAGE 3 OF PAPER BOOK AND READ AS UNDER: - ORDER SHEET DATE: 01.04.2013 THE ASSESSEE FIRM IS BUILDER & DEVELOPERS. A SURVEY ACTION U/S 133A IN THE CASE OF JAPTECH INDUSTRIES, BHOSARI, PUNE WAS CARRIED OUT ON 26.11.2012 BY THE DDIT(INV) UNIT - 1(3), PUNE. IT WAS S EEN DURING THE COURSE OF SURVEY ACTION THAT M/S. N.D. CONSTRUCTIONS MADE HAWALA PURCHASES OF RS.42,19,816/ - FROM M/S. K.R.C. TRADING COMPANY. THE DDIT(INV) UNIT - 1(3), PUNE VIDE CONFIDENTIAL LETTER NO.PN/DDIT(INV)U - 1(3).SURVEYJAPTECH/INTIMATION/885/12 - 13 D ATED 07.02.2013 ALONG WITH COPIES OF STATEMENT RECORDED ON 26.11.2012 OF SHRI MUKESH MITTAL AND LEDGER EXTRACTS. ON GOING THROUGH THE DETAILS FORWARDED BY THE DDIT IT IS SEEN THAT THE ASSESSEE HAS MADE HAWALA TRANSACTION IN RESPECT OF PURCHASE OF RAW MATE RIAL AMOUNTING TO RS.42,19,816/ - . THEREFORE, I HAVE REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX AMOUNTING TO RS.42,19,816/ - HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF 147 OF THE I.T. ACT, 1961. ISSUE NOTICE U/S. 148. SD/ - INCOME TAX OFFIC ER. ITA NO. 2068 /P U N/201 7 M/S. N.D. CONSTRUCTIONS 8 10. THE PERUSAL OF SAID REASONS RECORDED FOR REOPENING THE ASSESSMENT UNDER SECTION 147 / 148 OF THE ACT SHOW THAT THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT M/S. N.D. CONSTRUCTIONS I.E. ASSESSEE BEFORE US HAD MADE HAWALA PURCHASES OF 42,19,816/ - FROM KRC AND HENCE, THE CASE OF ESCAPEMENT OF INCOME. THE ASSESSEE FILED OBJECTIONS TO THE SAID REASONS RECORDED, WHICH ARE PLACED AT PAGES 41 AND 42 OF PAPER BOOK AND IN THAT IT CLEARLY POINTED OUT THAT IT HAD MADE NO TRANSACTIONS WITH KRC OR JAPTECH INDUSTRIES. THE ASSESSING OFFICER VIDE ORDER DISPOSING OF OBJECTIONS FOR ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT HAS ENLARGED THE SCOPE OF REASONS RECORDED FOR REOPENING THE ASSESSMENT AND HAS POINTED OUT THAT PURCHASE BILLS SUPPLIED BY KRC TO STC FOR VARIOUS YEARS WERE BARE BILLS WITHOUT ANY GOO DS RECEIVED NOTE (GRN), ETC. THE PURCHASES SHOWN BY STC IN THE NAME OF KRC ARE BOGUS PURCHASES. M/S. N.B. BHONDVE DEVELOPERS IS ONE OF THE PURCHASERS FROM M/S. STC. DURING THE YEAR UNDER CONSI DERATION, M/S. N.B. BHONDVE DEVELOPERS HAS MADE PURCHASES OF 42,19,816/ - FROM STC. 11. THE ANALYSIS OF ABOVE SAID CLEARLY REFLECTS T HAT AS AGAINST ORIGINAL REASONS RECORDED FOR REOPENING THE ASSESSMENT, WHEREIN THE ASSESSEE WAS HELD TO HAVE MADE HAWAL A PURCHASES OF 42,19,816/ - FROM KRC. THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PURCHASES FROM STC, WHO IN TURN, HAD PURCHASED FROM KRC. ANOTHER POINT TO BE NOTED IS THAT FIGURE OF BOGUS PURCHASES TO BE 42,19,816/ - AS AGAINST TOTAL PURCHASES MADE BY ASSESSEE FROM STC OF 64,05,286/ - . 12. THE ISSUE WHICH ARISES IS WHETHER IN VIEW OF SUCH DISCREPANCY IN THE REASONS RECORDED FOR REOPENING THE ASSESSMENT, CAN THE CONSEQUENT ORDER ITA NO. 2068 /P U N/201 7 M/S. N.D. CONSTRUCTIONS 9 PASSED BY ASSESSING OFFICER BE HELD TO BE WITHIN F RAMEWORK OF LAW. KEEPING IN MIND THE TOTAL FACTS AND CIRCUMSTANCES, IT IS CASE OF MAKING ALLEGED HAWALA PURCHASES FROM KRC AS RECORDED IN THE REASONS FOR REOPENING THE ASSESSMENT, IS COMPLETELY DIFFERENT PROPOSITION THAN HOLDING THE ASSESSEE TO HAVE MADE THE AFORESAID HAWALA PURCHASES FROM STC. WHERE THE ISSUE MENTIONED IN THE REASONS RECORDED FOR REOPENING THE ASSESSMENT IS AT VARIANCE WITH THE ADDITION MADE IN THE HANDS OF ASSESSEE, THEN IT CANNOT BE SAID TO BE CASE OF MERE DISCREPANCY IN THE NAME. 1 3. ANOTHER ASPECT OF THE ISSUE IS THAT FIGURE OF PURCHASES WHICH ALSO VARY AS IN THE REASONS RECORDED AS AGAINST ACTUAL PURCHASES MADE BY ASSESSEE FROM STC. THE CIT(A) HAS ENHANCED THE INCOME IN THE HANDS OF ASSESSEE ON TOTAL PURCHASES MADE DURING THE YEA R. IT IS ANOTHER ASPECT THAT THE CIT(A) BEFORE MAKING ENHANCEMENT HAS NOT GIVEN PROPER ENHANCEMENT NOTICE TO THE ASSESSEE UNDER SECTION 251 OF THE ACT. 14. THE HONBLE BOMBAY HIGH COURT IN HINDUSTAN LEVER LTD. VS. R.B. WADKAR (SUPRA) HAD HELD THAT FOR THE PURPOSE OF EXAMINING THE JURISDICTION TO REOPEN A COMPLETED ASSESSMENT ONE IS ONLY CONCERNED WITH THE REASONS RECORDED AT THE TIME OF ISSUING NOTICE UNDER SECTION 148 OF THE ACT. THESE REASONS CANNOT BE SUPPLEMENTED / IMPROVED UPON LATER. THE SAID PR OPOSITION HAS BEEN APPLIED BY JURISDICTIONAL HIGH COURT IN THE CASE OF N DT SYSTEMS VS. ITO REPORTED IN 363 ITR 603 (BOM) AND RE - ASSESSMENT HAS BEEN HELD TO BE INVALID. FOLLOWING THE SAME PARITY OF REASONING, I HOLD THAT RE - ASSESSMENT PROCEEDINGS INITIATED IN THE CASE OF ASSESSEE SUFFERS FROM INFIRMITY FOR NOT RECORDING CORRECT REASONS FOR REOPENING THE ASSESSMENT AND HENCE, ITA NO. 2068 /P U N/201 7 M/S. N.D. CONSTRUCTIONS 10 RE - ASSESSMENT ORDER PASSED UNDER SECTION 147/148 OF THE ACT DOES NOT STAND IN LAW. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS , ALLOWED. 1 5 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 6 TH DAY OF FEBRUARY , 201 9 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 6 TH FEBRUARY , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RES PONDENT; 3. ( ) / THE CIT(A) - 9 , PUNE ; 4. THE PR. CIT - 5 , PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE