Rakesh Kumar Chawla (HUF), New Delhi V. DCIT, New Delhi

ITA 2796/DEL/2011

• Counselvise Citation: 279620114 RSA 2011
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 09-04-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 31-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRISELLA GANGEIT
• Keywords: Reassessment proceedings
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI J.S. REDDY ITA NO. 2796/DEL/2011 A.YR. 2001-02 RAKESH KUMAR CHAWLA (HUF), VS. DCIT, CIR. 25(1), 44/52, PUNJABI BAGH (WEST), NEW DELHI. NEW DELHI. PAN: AAAHR4251A ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI R.S. SINGHVI FCA RESPONDENT BY : MS. PRISELLA GANGEIT SR. DR O R D E R PER R.P. TOLANI, J.M: : THIS IS ASSESSEES APPEAL AGAINST CIT(A)S ORDER DATED 13-10-2010 RELATING TO A.Y. 2001-02. VARIOUS GROUNDS ARE RAISE D, WHICH IN EFFECT TAKE FOLLOWING TWO GROUNDS: (I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND UNDER THE LAW, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING VALIDITY OF PROCEEDINGS U/ S 148 INITIATED MERELY ON THE BASIS OF GENERAL C D FROM DIT INV.- I, NEW DELHI. (II) THAT EVEN ON MERITS, ORDERS OF THE LOWER AUTHORITIE S IN RESPECT OF ADDITION OF RS. 9,16,390/- IS NOT SUSTAINABLE IN TH E ABSENCE OF ANY 2 EVIDENCE OR FINDING THAT THESE BANKING TRANSACTIONS REPRESENT UNDISCLOSED INCOME OF THE ASSESSEE. 2. LD. COUNSEL FOR THE ASSESSEE AT THE OUT SET CONT ENDS THAT THE ISSUE ABOUT VALIDITY OF JURISDICTION IS COVERED IN FAVOUR OF THE ASSESSEE BY ITAT JUDGMENT IN THE CASE OF SURENDER KUMAR CHAWLA VS. D CIT (ITA NO. 5385/DEL/2010 ORDER DATED 30-11-2011), WHICH IS ON IDENTICAL FACTS AND CIRCUMSTANCES. THE REASONS FOR REOPENING, THE ASSES SING OFFICER AND THE CIT(A) ARE SAME IN THE CASE OF ASSESSEE AND IN THE SAID CASE OF SURENDER KUMAR CHAWLA. THE ITAT AFTER CONSIDERING VARIOUS JU DGMENTS INCLUDING HONBLE DELHI HIGH COURTS JUDGMENT IN THE CASE OF SIGNATURE HOTELS PVT. LTD. VS. ITO 60 DTR 30, HELD AS UNDER: 7. FROM THE PERUSAL OF THE REASONS, IT NOWHERE REV EALS THE BASIS OF FORMATION OF OPINION. LD. AO HAS MADE A RE FERENCE TO THE INFORMATION ALLEGED TO BE CONTAINED IN THE CD. THEREAFTER, HE OBSERVED THAT ASSESSEE HAS TAKEN ACCOMMODATION ENTR IES FROM 9 PERSONS. HE HAS GIVEN CHEQUE NUMBER AND THE DATE. H E OBSERVED THAT AMOUNTS HAVE BEEN CREDITED IN THE ACCOUNTS WIT H INDIAN OVERSEAS BANK, PUNJABI BAGH. THEREAFTER, HE HAS NOT MADE ANY REFERENCE REGARDING NATURE OF THE ENTRIES OR HOW HE BELIEVED THAT THESE ARE BOGUS ENTRIES TAKEN BY THE ASSESSEE. HE A HS NOT MADE REFERENCE TO ANY MATERIAL. SOME WHAT OF THE SIMILAR REASONS WERE RECORDED BY THE ASSESSING OFFICER IN THE CASE OF SI GNATURE HOTEL, WHICH WERE TERMED BY THE HONBLE HIGH COURT AS VAGUE NOT DISCLOSING ANY EVIDENCE ESTABLISHING NEXUS OR L IVE LINK BETWEEN THE INFORMATION AS WELL AS ESCAPEMENT OF IN COME. THE OBSERVATION OF THE HONBLE HIGH COURT INCLUDING THE REASONS RECORDED IN PARAGRAPH 12 TO 15 OF THE JUDGMENT READ AS UNDER:- 12. IN THESE CIRCUMSTANCES, WE ARE EXAMINING THE REASONS GIVEN BY THE AO IN THE PROFORMA SEEKING PERMISSION/ APPROVAL OF THE CIT AND 3 WHETHER THE SAME SATISFY THE PRECONDITIONS MENTIONED IN S. 147 OF THE ACT. 13. ANNEXURE ATTACHED TO THE SAID PROFORMA PLACED ON RECORD OF THE PETITION READS AS UNDER: BENEFICIARYS NAME VALUE OF ENTRY TAKEN INSTRUMENT NUMBER BY WHICH ENTRY TAKEN DATE ON WHICH ENTRY TAKEN SIGNATURE HOTELS (P) LTD. 5,00,000 AC NO. 21060 9 TH OCT. 2002. NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT BANK FROM WHICH ENTRY GIVEN BRANCH OF ENTRY GIVING BANK ACCOUNT NUMBER ENTRY GIVING ACCOUNT SWETY STONE PV SBP DG 50106 14. THE FIRST SENTENCE OF THE REASONS STATES THAT INFORMATION HAD BEEN RECEIVED FROM DIRECTOR OF IT (INV.) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS. 5 LACS DURING FINANCIAL YEAR 2002-03 AS PER THE DETAILS GIVEN IN ANNEXURE. THE SAID ANNEXURE, REPRODUCED ABOVE, RELATES TO A CHEQUE RECEIVED BY THE PETITIONER ON 9 TH OCTOBER, 2002 FROM SWETU STONE PV FROM THE BANK AND THE ACCOUNT NUMBER MENTIONED THEREIN. THE LAST SENTENCE RECORDS THAT AS PER THE INFORMATION, THE AMOUNT RECEIVED WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. 15. THE AFORESAID REASONS DO NOT SATISFY THE REQUIREMENTS OF S. 147 OF THE ACT. THE REASONS AND THE INFORMATION REFERRED TO IS EXTREMELY SCANTY AND VAGUE. THERE IS NO REFERENCE TO ANY DOCUMENT OR 4 STATEMENT, EXCEPT ANNEXURE, WHICH HA BEEN QUOTED ABOVE. ANNEXURE CANNOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWS OR ESTABLISHES NEXUS OR LINK WHICH DISCLOSES ESCAPEMENT OF INCOME. ANNEXURE IS NOT A POINTER AND DOES NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, IT IS APPARENT THAT THE AO DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATION. THE AO ACCEPTED THE PLEA ON THE BASIS OF VAGUE INFORMATION IN A MECHANICAL MANNER. THE CIT ALSO ACTED ON THE SAME BASIS BY MECHANICALLY GIVING HIS APPROVAL. THE REASONS RECORDED REFLECT THAT THE AO DID NOT INDEPENDENTLY APPLY HIS MIND TO THE INFORMATION RECEIVED FROM THE DIRECTOR OF IT (INV.) AND ARRIVE AT A BELIEF WHETHER OR NOT ANY INCOME HAD ESCAPED ASSESSMENT. 8. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTAN CES, WE ARE OF THE VIEW THAT THE FACTS OF THE CASE IN HAND ARE IDENTICAL TO THE FACTS OF SIGNATURE HOTEL. THEREFORE, RESPECTFUL LY FOLLOWING THE JUDGMENT OF HONBLE DELHI HIGH COURT, WE ARRIVE AT A CONCLUSION THAT AO FAILED TO BRING JUSTIFIABLE REASONS FOR RE OPENING OF THE ASSESSMENT. ACCORDINGLY, WE ALLOW THIS GROUND OF AP PEAL RAISED BY THE ASSESSEE AND QUASH THE ASSTT. ORDER. 2.1. SINCE FACTS AND CIRCUMSTANCES ARE SAME, THE IT AT ORDER IN THE CASE OF SURENDER KUMAR CHAWLA HUF (SUPRA) IS SQUARE LY APPLICABLE TO THIS CASE TO THE EFFECT THAT REOPENING OF ASSESSMEN T IS BAD IN LAW. 3. LD. DR SUPPORTED THE ORDER OF LOWER AUTHORITIES. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT HAS NOT BEEN DISPU TED THAT THE REASONS RECORDED IN THE CASE OF SURENDER KUMAR CHAWLA HUF ( SUPRA) AND 5 ASSESSEE ARE SAME. ASSESSING OFFICER AND CIT(A) ARE ALSO SAME AND THE ORDERS WERE PASSED ON SIMILAR LINES. IN VIE W OF T4H SIMILARITY OF FACTS AND CIRCUMSTANCES, RESPECTFULLY FOLLOWING ITA T JUDGMENT WE HOLD THAT THERE BEING NO JUSTIFIABLE REASONS FOR REOPENI NG OF THE ASSESSMENT, THE REASSESSMENT PROCEEDINGS ARE QUASHED. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 14-11-2012. SD/- SD/- ( J.S. REDDY ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14-11-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 6