Appeal details
Counselvise Citation
[2017] 130 COUNSELVISE.COM (IT) 9442 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 3 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
17-01-2017
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
SMC
Next Hearing Date
05-12-2016
Assessment Year
2007-2008
Appeal Filed On
28-09-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NOS. 2151 TO 2153/AHD/2012 / ASSESSMENT YEAR : 2006-07 TO 2008-09 INCOME-TAX OFFICER, WARD-1, ANAND VS MEHEBOOBBHAI YUSUFBHAI VOHRA, PROP. OF M/S. M.Y. KELAWALA, MUNICIPAL SHOPPING CENTRE, JUNA DADAR, ANAND PAN : ABDPV 2155 R / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI G.C. DAXINI, SR DR ASSESSEE(S) BY : NONE DATE OF HEARING : 0 5/12/2016 DATE OF PRONOUNCEMENT IN COURT : 17/01/20 17 / O R D E R THESE THREE APPEALS BY THE REVENUE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF LD. CIT(A)-IV, BARODA OF EVEN DATED 04.07.2012 FOR ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09. 2. AT THE TIME OF HEARING, NONE APPEARED FOR THE A SSESSEE DESPITE SERVICE OF THE NOTICE; THEREFORE, THESE APPEALS ARE DECIDED EX-PARTE QUA THE ASSESSEE, AFTER CAREFULLY PURSING THE MATERIAL AVAILABLE ON R ECORD ALONG WITH THE CONTENTIONS AND CITATIONS ADVANCED BY THE LD. DR. 3. THE SOLE COMMON GROUND RAISED IN ALL THESE APPEA LS READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN SETTING-ASIDE THE REASSESSMENT ORDER HOLDING THE SAME AS BAD IN LAW, WITHOUT CONSIDERING THE EXPLANATION 3 T O SECTION 147 INSERTED BY THE FINANCE ACT, 2009 W.E.F. 01.04.1989, WHICH GIVE S A WIDER SCOPE TO SECTION 147 OF THE ACT. 4. BRIEF FACTS ARE THAT THE ASSESSEES ASSESSMENTS WERE REOPENED FOR THE THREE YEARS IN QUESTION U/S 147 ON THE BASIS OF FOL LOWING COMMON REASONS:- SMC-ITA NOS. 2151 TO 2153/AHD/2012 ITO VS. SHRI MEHEBOOBBHAI YUSUFBHAI VOHRA AYS : 2006-07 TO 2008-09 2 IN THIS CASE, THERE IS INFORMATION WITH THE DEPART MENT THAT AT JUNA DADAR ANAND, ASSESSEE POSSESSES A SHOP, ANOTHER SHOP A/C HALL IS SITUATED NEAR INDIRA STATUE. HE OWNS VEHICLES, GODOWNS AND OTHER ASSETS. THEREFORE, IT IS BELIEVED THAT THE INCOME CHARGEABL E TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SEC. 147 OF IT ACT . I AM SATISFIED THAT THIS IS FIT CASE FOR ISSUANCE OF NOTICE U/S 148 OF THE A CT. 4.1 DURING THE COURSE OF REASSESSMENT, THE ASSESSEE CONTENDED THAT (I) THE ASSESSEE IS A KACHCHA AARATIA IN BANANA AND , ON TRADITIONAL LINES, THE BUSINESS HAS BEEN CONDUCTED AS PER PAST YEARS; (II) THE ASSESSEE RECEIVES ONLY COMMISSION FOR FACI LITATING THE SALE OF THIS AGRICULTURAL PRODUCE BETWEEN FARMERS AND THE ULTIMA TE BUYERS; (III) THE VALUE OF GOODS PURCHASED FROM VARIOUS FAR MERS FOR HIS PRINCIPALS AND VALUE OF SUCH BANANA MENTIONED IN MEMO PREPARED AND GIVEN TO PRINCIPAL IS SAME AND EQUAL AND THE ASSESSEE WAS CH ARGING SEPARATELY THE AMOUNT OF COMMISSION IN EACH BILL. THIS ESTABL ISHES THAT THE ASSESSEE IS WORKING AS COMMISSION AGENT; (IV) THE TRANSACTION IS NOT THAT OF SALE AND PURCHA SE, ASSESSEE IS RIGHTLY DEBITING THE PARTIES FROM WHOM FUNDS ARE TO COME AN D CREDITING THE PARTIES TO WHOM PAYMENTS ARE TO BE MADE. IN FACT T HIS CLEARLY ESTABLISHES THAT THE ASSESSEE IS SIMPLY AN AGENT. THE RELATIONSHIP BETWEEN FARMERS AND PRINCIPALS IS THAT OF DEBTORS A ND CREDITORS; (V) THE ASSESSEE HAS NO DOMAIN OVER THE GOODS PROCU RED FOR PRINCIPALS. THE ASSESSEE HAS NO INSURABLE INTEREST IN GOODS. TH E ASSESSEE CANNOT PLEDGE THE GOODS SINCE THE OWNERSHIP DOES NOT VEST IN THE HANDS OF ASSESSEE. THUS PRESUMPTION THAT THE ASSESSEE IS A P ACCA ARHATIA IS NOT CORRECT. SINCE THE ASSESSEE IS SIMPLY AN AGENT WITH NO DOMAIN OVER THE GOODS, THE TURNOVER IN HANDS OF ASSESSEE IS ONLY TH E COMMISSION AMOUNT AND NOT THE VALUE OF GOODS PROCURED FOR PRIN CIPAL. THE AMOUNT OF COMMISSION BEING LESS THAN THE LIMITS OF SECTION 44AB OF SMC-ITA NOS. 2151 TO 2153/AHD/2012 ITO VS. SHRI MEHEBOOBBHAI YUSUFBHAI VOHRA AYS : 2006-07 TO 2008-09 3 THE ACT, THE ASSESSEE WAS NEVER UNDER OBLIGATION TO GET ACCOUNTS AUDITED. 4.2 THE LD. ASSESSING OFFICER HELD THAT THE ASSESSE E TO BE A PACCA ARAHATIA AND LIABLE FOR GETTING ITS ACCOUNTS AUDITED U/S 44A B OF THE ACT AND REJECTED THE ASSESSEES BOOKS OF ACCOUNTS. THE PROFITS OF T HE ASSESSEE WERE ESTIMATED AT A HIGH FIGURE AT RS.7,49,480/-. 5. AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL, WHERE THE VALIDITY OF REASSESSMENT AND ADDITION ON MERIT, BOTH WERE CHALL ENGED. THE LD. CIT(A) HELD THAT:- (I) THE REASONS ARE VAGUE AND GENERAL IN NATURE AND DO NOT POINT OUT ANY SPECIFIC INSTANCE OF ESCAPEMENT OF INCOME; (II) THE REASONS RECORDED AND THE ADDITIONS MADE ARE TOT ALLY DIFFERENT; (III) NO PROPER REASONS WERE RECORDED TO FORM A BELIEF IN TERMS OF SECTION 147 FOR ESCAPEMENT OF INCOME BY FOLLOWING OBSERVATI ONS:- 9. FROM THE ABOVE IT CAN BE SEEN THAT THE CASE OF APPELLANT FOR THE ABOVE ASSESSMENT YEARS INCLUDING THE ASSESSMENT YEAR UNDE R CONSIDERATION WAS REOPENED U/S 147 OF THE IT ACT IN VIEW OF THE FACT THAT THERE WAS INFORMATION WITH THE DEPARTMENT THAT AT JUNA DADAR ANAND, THE A PPELLANT POSSESSES A SHOP AND HIS ANOTHER SHOP A/C HALL IS SITUATED NEAR INDIRA STATUE AND HE ALSO OWNS VEHICLES, GODOWNS AND OTHER ASSETS. HOWEVER, N O ANY ADDITION HAS BEEN MADE BY THE AO IN THE ORDER U/S 143(3) RWS. 147 OF THE ACT FOR THE YEAR UNDER CONSIDERATION ON THE BASIS ON WHICH THESE REA SONS HAVE BEEN RECORDED BY HIM. RATHER, THE AO HAS NOT DISCUSSED EVEN THE R EASONS AS RECORDED ABOVE IN THE ASSESSMENT ORDER U/S 143(3) RWS 147 OF THE I T ACT. THE ISSUES DISCUSSED AND THE ADDITION MADE BY THE AO IN SUCH O RDER U/S 143(3) RWS 147 OF THE ACT ARE DIFFERENT FROM THE REASONS WHICH WER E RECORDED BY HIM AND IN VIEW OF WHICH THE ASSESSMENT IN QUESTION WAS REOPEN ED BY HIM. THE AO HAS FINALLY MADE THE ADDITION OF RS.7,49,480/- BY ESTIM ATING THE NET PROFIT OF THE APPELLANT @ 5% ON THE BASIS THAT HE IS A PACCA ARHA TIA AND HE WAS SUPPOSED TO MAINTAIN ALL THE BOOKS OF ACCOUNTS AS APPLICABLE FOR PURCHASE AND SALES OF BOOKS AND ALSO HE WAS SUPPOSED TO GET HIS BOOKS OF ACCOUNTS AUDITED. THUS THE REASONS RECORDED FOR REOPENING THE CASE AND THE BAS IS ON WHICH THE ADDITION WAS MADE ARE DIFFERENT AND THEREFORE THE ENTIRE ASS ESSMENT U/S 143(3) RWS 147 FOR THE YEAR UNDER CONSIDERATION IS VOID AB INI TIO IN VIEW OF FOLLOWING DECISIONS OF HON'BLE COURTS. SMC-ITA NOS. 2151 TO 2153/AHD/2012 ITO VS. SHRI MEHEBOOBBHAI YUSUFBHAI VOHRA AYS : 2006-07 TO 2008-09 4 1. CIT VS. JET AIRWAYS (I) LTD., 331 ITR 236 (BOM.) 2. RANBAXY LABORATORIES LTD. VS. CIT, 60 DTR 77 (DEL.) 3. CIT VS. MAJOR DEEPAK MEHTA-IN ITA NO.04 OF 2 006 (CHHATISGARH) 10. THE ABOVE THREE HIGH COURTS NAMELY BOMBAY HIGH COURT, DELHI HIGH COURT AND MP HIGH-COURT HAVE HELD THAT IF AFTER ISS UING NOTICE U/S 148, THE AO HAS ACCEPTED THE CONTENTION OF THE ASSESSEE AND HOLDS THAT THE INCOME FOR WHICH HE HAS INITIALLY FORMED A REASON TO BELIEVE A S HAVING ESCAPED ASSESSMENT HAS NOT ACTUALLY ESCAPED ASSESSMENT, THE N IT IS NOT OPEN TO HIM TO INDEPENDENTLY ASSESS SOME OTHER INCOME. AS PER THE DECISION OF THE HON'BLE COURTS IF THE AO WANTS TO DO SO, A FRESH NOTICE U/S 148 WOULD BE NECESSARY, THE REGALITY OF WHICH WOULD BE TESTED IN THE EVENT OF A CHALLENGE BY THE ASSESSEE. THE COURTS HAVE ALSO DISCUSSED THE AMENDM ENT MADE U/S 147 VIDE FINANCE ACT NO.2 OF 2009 BY INSERTING EXPLANATION W ITH RETROSPECTIVE EFFECT FROM 01-04-1989 AND HAVE HELD THAT EVEN AFTER THIS AMENDMENT, FOR ASSESSING ANY OTHER INCOME WHICH HAS ESCAPED ASSESSMENT AND H AS COME TO THE NOTICE OF THE AO DURING THE COURSE OF REASSESSMENT PROCEEDING S, THE ASSESSMENT OF INCOME REGARDING WHOSE ESCAPEMENT ORIGINAL REASON T O BELIEVE U/S 147 HAS BEEN FORMED, IS A MUST. IN VIEW OF THE DECISIONS OF ABOVE HON'BLE COURTS, THE PRESENT ASSESSMENT ORDER U/S 143(3) RWS 147 OF THE IT ACT FOR THE YEAR UNDER CONSIDERATION CANNOT BE UPHELD ACCORDINGLY, THE ADD ITIONAL GROUNDS OF THE APPELLANT IS ACCEPTED AND THE ABOVE ADDITION OF RS. 7,49,480/- IS DELETED 6. AGGRIEVED, THE REVENUE IS NOW IN APPEAL BEFORE T HE TRIBUNAL. 7. THE LD. DR CONTENDS THAT THE ASSESSING OFFICER R ECORDED THE REASONS ON THE BASIS OF INFORMATION IN POSSESSION OF THE DE PARTMENT. THUS, THE REASONS WERE RECORDED ON THE BASIS OF PROPER INFORM ATION AND THE ASSESSEE COOPERATED IN REASSESSMENT PROCEEDINGS. THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THE REASSESSMENT TO BE BAD IN LAW. RELIANCE IS PLACED ON THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. M/S. MOOKAMBIKA DEVELOPERS IN ITA NO.374 OF 2014 IN WHIC H RELIANCE HAS BEEN PLACED ON ANOTHER JUDGMENT OF HONBLE KARNATAKA HIG H COURT IN THE CASE OF SHRI N. GOVINDARAJU VS. ITO IN ITA NO.504 OF 2013. THE HONBLE KARNATAKA HIGH COURT IN THE CASE SHRI N. GOVINDARAJU (SUPRA) HAS HELD AS UNDER:- 24. FROM A PLAIN READING OF SECTION 147 OF THE ACT IT IS CLEAR THAT ITS LATTER PART PROVIDES THAT 'ANY OTHER INCOME' CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH HAS COME TO THE NOTICE OF THE ASSESSING OFFICER SMC-ITA NOS. 2151 TO 2153/AHD/2012 ITO VS. SHRI MEHEBOOBBHAI YUSUFBHAI VOHRA AYS : 2006-07 TO 2008-09 5 SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS, CAN ALSO BE TAXED. THE SAID TWO PARTS OF THE SECTION HAVING BEEN JOINED BY THE WORD S 'AND ALSO', WHAT WE HAVE TO NOW CONSIDER IS WHETHER 'AND ALSO' WOULD BE CONJ UNCTIVE, OR THE SECOND PART HAS TO BE TREATED AS INDEPENDENT OF THE FIRST PART. IF WE TREAT IT AS CONJUNCTIVE, THEN CERTAINLY IF THE REASON TO BELIEV E IS THERE FOR A PARTICULAR GROUND OR ISSUE WITH REGARD TO ESCAPED INCOME WHICH HAS TO BE ASSESSED OR REASSESSED, AND SUCH GROUND IS NOT FOUND OR DOES NO T SURVIVE, THEN THE ASSESSMENT OR REASSESSMENT OF 'ANY OTHER INCOME' WH ICH IS CHARGEABLE TO TAX AND HAS ESCAPED ASSESSMENT, CANNOT BE MADE. 25. CHAPTER XIV OF THE ACT DEALS WITH THE 'PROCEDUR E FOR ASSESSMENT'. IT PROVIDES FOR FILING OF RETURN OF INCOME (S.139), SE LF ASSESSMENT (S.140 A), ASSESSMENT (S.143), BEST JUDGMENT ASSESSMENT (S.144 ) AND ALSO FOR INCOME ESCAPING ASSESSMENT (S.147). THE PURPOSE OF THESE P ROVISIONS IS TO BRING TO TAX THE ENTIRE TAXABLE INCOME OF THE ASSESSEE AND I N DOING SO, WHERE THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT SOME I NCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, HE MAY ASSESS OR REASSESS S UCH INCOME. SINCE THE PURPOSE IS TO TAX ALL SUCH INCOME WHICH HAS ESCAPED ASSESSMENT, IN OUR VIEW, BESIDES 'SUCH INCOME' FOR WHICH HE HAS REASON TO BE LIEVE TO HAVE ESCAPED ASSESSMENT, IT WOULD BE OPEN TO THE ASSESSING OFFIC ER TO ALSO INDEPENDENTLY ASSESS OR REASSESS ANY OTHER INCOME WHICH DOES NOT FORM THE SUBJECT MATTER OF NOTICE. 27. WHILE INTERPRETING THE PROVISIONS OF SECTION 14 7, DIFFERENT HIGH COURTS HAVE HELD DIFFERENTLY, I.E., SOME HAVE HELD THAT TH E SECOND PART OF SECTION 147 IS TO BE READ IN CONJUNCTION WITH THE FIRST PART, A ND SOME HAVE HELD THAT THE SECOND PART IS TO BE READ INDEPENDENTLY. TO CLARIFY THE SAME, IN THE YEAR 1989, THE LEGISLATURE BROUGHT IN SUITABLE AMENDMENTS IN S ECTIONS 147 AND 148 OF THE ACT, WHICH WAS WITH THE OBJECT TO ENHANCE THE P OWER OF THE ASSESSING OFFICER, AND NOT TO HELP THE ASSESSEE. EXPLANATION 3 WAS INSERTED IN SECTION 147 BY FINANCE (NO.2) ACT, 2009 WITH EFFECT FROM 1. 4.1989. BY THE SAID EXPLANATION, WHICH IS MERELY CLARIFICATORY IN NATUR E, IT HAS BEEN CLEARLY PROVIDED THAT THE ASSESSING OFFICER MAY ASSESS OR R EASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED ASSESSMENT, AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEE DINGS, NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAD NOT BEEN INCLUD ED IN THE REASONS RECORDED UNDER SUBSECTION (2) OF SECTION 148. INSERTION OF T HIS EXPLANATION CANNOT BE BUT FOR THE BENEFIT OF THE REVENUE, AND NOT THE ASS ESSEE. 28. IN THIS BACKGROUND, IF WE READ SECTION 147 IT W OULD BE CLEAR THAT IN THE PHRASE 'AND ALSO' WHICH JOINS THE FIRST AND SECOND PARTS OF THE SECTION, 'AND' IS CONJUNCTIVE WHICH IS TO JOIN THE FIRST PART WITH THE SECOND PART, BUT 'ALSO' IS FOR THE SECOND PART AND WOULD BE DISJUNCTIVE. IT SE GREGATES THE FIRST PART FROM SMC-ITA NOS. 2151 TO 2153/AHD/2012 ITO VS. SHRI MEHEBOOBBHAI YUSUFBHAI VOHRA AYS : 2006-07 TO 2008-09 6 THE SECOND. THUS, WHEN WE READ THE FULL SECTION, TH E PHRASE 'AND ALSO' CANNOT BE SAID TO BE CONJUNCTIVE. 7.1 FURTHER RELIANCE WAS PLACED ON THE JUDGMENTS OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF MAJINDER SINGH KANG VS. C IT, (2012) CIT 344 ITR 358, RAJASTHAN HIGH COURT IN THE CASES OF CIT VS AT LAS CYCLE INDUSTRIES, (1989) 180 ITR 319 AND CIT VS SHRI RAM SINGH, (2008 ) 306 ITR 343 AND THE CIRCULAR NO.5 OF 2010 ISSUED BY THE CENTRAL BOARD O F DIRECT TAXES (CBDT) AFTER THE AMENDMENT OF 2009, PROVIDED FOR THE 'EXPL ANATORY NOTES TO THE PROVISIONS OF FINANCE (NO.2) ACT, 2009' BY WHICH EX PLANATION 3 TO SECTION 147 OF THE ACT HAD BEEN INSERTED WITH EFFECT FROM 1 .4.1989. 7.2 THE HONBLE KARNATAKA HIGH COURT IN THE CASE SH RI N. GOVINDARAJU (SUPRA) HAS ALSO HELD AS UNDER:- IN THE PRESENT CASE, INSERTION OF EXPLANATION 3 TO SECTION 147 DOES NOT IN ANY MANNER OVERRIDE THE MAIN SECTION AND HAS BEEN A DDED WITH NO OTHER PURPOSE THAN TO EXPLAIN OR CLARIFY THE MAIN SECTION SO AS TO ALSO BRING IN 'ANY OTHER INCOME' (OF THE SECOND PART OF SECTION 147) W ITHIN THE AMBIT OF TAX, WHICH MAY HAVE ESCAPED ASSESSMENT, AND COMES TO THE NOTICE OF THE ASSESSING OFFICER SUBSEQUENTLY DURING THE COURSE OF THE PROCE EDINGS. CIRCULAR 5 OF 2010 ISSUED BY THE CBDT (ALREADY REPRODUCED ABOVE) ALSO MAKES THIS POSITION CLEAR. IN OUR VIEW, THERE IS NO CONFLICT BETWEEN TH E MAIN SECTION 147 AND ITS EXPLANATION 3. THIS EXPLANATION HAS BEEN INSERTED O NLY TO CLARIFY THE MAIN SECTION AND NOT CURTAIL ITS SCOPE. INSERTION OF EXP LANATION 3 IS THUS CLARIFICATORY AND IS FOR THE BENEFIT OF THE REVENUE AND NOT THE ASSESSEE. IF THERE IS AMBIGUITY IN THE MAIN PROVISION OF THE ENACTMENT, IT CAN BE CLARIFIED BY INSERTION OF AN EXPLANATION TO THE SAI D SECTION OF THE ACT. SAME HAS BEEN DONE IN THE PRESENT CASE. SECTION 147 OF T HE ACT WAS INTERPRETED DIFFERENTLY BY DIFFERENT HIGH COURTS, I.E., WHETHER THE SECOND PART OF THE SECTION WAS INDEPENDENT OF THE FIRST PART, OR NOT. TO CLARIFY THE SAME, EXPLANATION 3 WAS INSERTED BY WHICH IT HAS BEEN CLA RIFIED THAT THE ASSESSING OFFICER CAN ASSESS THE INCOME IN RESPECT OF ANY ISS UE WHICH HAS ESCAPED ASSESSMENT AND ALSO 'ANY OTHER INCOME' (OF THE SECO ND PART OF SECTION 147) WHICH COMES TO HIS NOTICE SUBSEQUENTLY DURING THE C OURSE OF THE PROCEEDINGS UNDER THE SECTION. AFTER THE INSERTION OF EXPLANATI ON 3 TO SECTION 147 IT IS CLEAR THAT THE USE OF THE PHRASE 'AND ALSO' BETWEEN THE FIRST AND THE SECOND PARTS OF THE SECTION IS NOT CONJUNCTIVE AND ASSESSM ENT OF 'ANY OTHER INCOME' (OF THE SECOND PART) CAN BE MADE INDEPENDENT OF THE FIRST PART (RELATING TO SMC-ITA NOS. 2151 TO 2153/AHD/2012 ITO VS. SHRI MEHEBOOBBHAI YUSUFBHAI VOHRA AYS : 2006-07 TO 2008-09 7 'SUCH INCOME' FOR WHICH REASONS ARE GIVEN IN NOTICE UNDER SECTION 148), NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE ('A NY OTHER INCOME') HAVE NOT BEEN GIVEN IN THE REASONS RECORDED UNDER SECTIO N 148(2) OF THE ACT. WE ARE THUS IN AGREEMENT WITH THE VIEW TAKEN BY THE PU NJAB & HARYANA HIGH COURT IN THE CASES OF MAJINDER SINGH KANG AND MEHAK FINVEST (SUPRA). CONSIDERING THE PROVISION OF SECTION 147 AS WELL AS ITS EXPLANATION 3, AND ALSO KEEPING IN VIEW THAT SECTION 147 IS FOR TH E BENEFIT OF THE REVENUE AND NOT THE ASSESSEE AND IS AIMED AT GARNERING THE ESCAPED INCOME OF THE ASSESSEE [VIZ. SUN ENGINEERING (SUPRA)] AND ALSO KE EPING IN VIEW THAT IT IS THE CONSTITUTIONAL OBLIGATION OF EVERY ASSESSEE TO DISCLOSE HIS TOTAL INCOME ON WHICH IT IS TO PAY TAX, WE ARE OF THE CLEAR OPINION THAT THE TWO PARTS OF SECTION 147 (ONE RELATING TO 'SUCH INCOME' AND THE OTHER TO 'ANY OTHER INCOME') ARE TO BE READ INDEPENDENTLY. THE PHRASE 'SUCH INCOME' USE D IN THE FIRST PART OF SECTION 147 IS WITH REGARD TO WHICH REASONS HAVE BE EN RECORDED UNDER SECTION 148(2) OF THE ACT, AND THE PHRASE 'ANY OTHER INCOME ' USED IN THE SECOND PART OF THE SECTION IS WITH REGARD TO WHERE NO REASONS H AVE BEEN RECORDED BEFORE ISSUING NOTICE AND HAS COME TO THE NOTICE OF THE AS SESSING OFFICER SUBSEQUENTLY DURING THE COURSE OF THE PROCEEDINGS, WHICH CAN BE ASSESSED INDEPENDENT OF THE FIRST PART, EVEN WHEN NO ADDITIO N CAN BE MADE WITH REGARD TO 'SUCH INCOME', BUT THE NOTICE ON THE BASIS OF WH ICH PROCEEDINGS HAVE COMMENCED, IS FOUND TO BE VALID. WITH THESE OBSERVATIONS, THE REOPENING OF ASSESSME NT IN THE CASE OF SRI N. GOVNDARAJU WAS UPHELD WHICH WAS FOLLOWED IN THE CASE OF M/S. MOOKAMBIKA DEVELOPERS (SUPRA). THE LD. DR ALSO CON TENDS THAT THE REASSESSMENT BEING VALID SHOULD BE UPHELD. 8. I HAVE HEARD THE LD. DR, PERUSED THE MATERIAL AV AILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. T HE REASONS RECORDED FOR REOPENING OF ASSESSMENTS HAVE BEEN REPRODUCED ABOVE . THERE IS NO MENTION OF WHAT TYPE OF INFORMATION THE DEPARTMENT HAD ABOUT THE ASSESSEES SHOP AND ANOTHER SHOP A/C HALL ALONG WIT H VEHICLES, GODOWNS AND OTHER ASSETS. NEITHER THE NATURE/SOURCE OF INF ORMATION NOR ANY SPECIFIC ALLEGATION IS MENTIONED. MERE POSSESSION OF ASSETS BY ITSELF DOES NOT CONSTITUTE A BELIEF THAT INCOME OF THE YEARS IN QUE STION HAD ESCAPED ASSESSMENT. THUS, THE REASSESSMENT PROCEEDINGS ARE BASED ON PRESUMPTION AND SUSPICION AND NOT ON THE BASIS OF ANY SPECIFIC INSTANCE OF ESCAPEMENT OF INCOME. THE HONBLE SUPREME COURT IN THE CASE OF C IT VS KELVINATOR OF SMC-ITA NOS. 2151 TO 2153/AHD/2012 ITO VS. SHRI MEHEBOOBBHAI YUSUFBHAI VOHRA AYS : 2006-07 TO 2008-09 8 INDIA LTD, 320 ITR 561 (SC) HAS HELD THAT THE REASO NS MUST BE SPECIFIC, SHOULD HAVE OBJECTIVE AND A LIVE CONNECTION WITH TH E ESCAPED INCOME AND THERE SHOULD BE A PROPER FORM OF BELIEF. IN MY CO NSIDERED VIEW, LOOKING AT THE GENERAL AND NON-SPECIFIC NATURE OF REASONS ON T HE BASIS WHEREOF THE ASSESSMENTS HAVE BEEN REOPENED CANNOT BE HELD AS A VALID BASIS FOR REOPENING. THE REASONS UTTERLY LACK IN TERMS OF OB JECTIVE, APPLICATION OF MIND AND SPECIFIC INSTANCE; AND, IN MY CONSIDERED V IEW, A REASONABLE BELIEF ON THIS BASIS OF REASONS CANNOT BE FORMED SO AS TO ISSUE NOTICE U/S 148 OF THE ACT. THE HONBLE SUPREME COURT JUDGMENT (SUPRA) HA S BEEN PRONOUNCED AFTER THE AMENDMENT IN SECTION 147/148; THEREFORE, THE RELIANCE ON THIS EXPLANATION/AMENDMENT SO AS TO MAKING THE CASE IN F AVOUR OF THE REVENUE CANNOT BE ACCEDED. IN MY CONSIDERED VIEW, THE LD. CIT(A) ARRIVED AT A PROPER VIEW, RELYING ON APPROPRIATE JUDGMENTS WHICH ARE REINFORCED BY THE HONBLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA LTD. IN VIEW THEREOF, THE LD. CIT(A)S HOLDING THE REASSESSMENTS TO BE BAD IN LAW IS UPHELD AND THUS, THE REVENUES APPEALS ARE DISMISSE D. 9. IN THE RESULT, ALL APPEALS FILED BY THE REVENUE ARE DISMISSED. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 17/01/2017 *BIJU T., SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD
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