M/s. Cambhoj Brothers (P) Ltd., New Delhi V. ITO, New Delhi

ITA 2806/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7923 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-05-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 07-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Gift; Principle of natural justice; Difference of opinion; Accommodation entries; Change of opinion; Reassessment proceedings
• Section: 142(1); 147; 68; 148

Judgement Text

1 ITA N OS. 2806 & 2793/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI L. P. SAHU, ACCOUNTA NT MEMBER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.-2806/DEL/2012 (A.Y 2002-03) CAMBHOJ BROTHERS (P) LTD. B-217, YOZNA VIHAR NEW DELHI AAACC5649Q (APPELLANT) VS ITO WARD-3(2), C. R. BUILDING NEW DELHI (RESPONDENT) I.T.A .NO.-2793/DEL/2012 (A.Y 2002-03) ITO WARD-3(2), C. R. BUILDING NEW DELHI (APPELLANT) VS CAMBHOJ BROTHERS (P) LTD. B-217, YOZNA VIHAR NEW DELHI AAACC5649Q (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THESE ARE TWO APPEALS PLACED BEFORE THIS BENCH FOR THE ASSESSMENT YEAR 2002-03. ITA 2806/DEL/2012 IS FILE D BY THE ASSESSEE AND ITA NO. 2793/DEL/2012 IS FILED BY THE REVENUE APPELLANT BY SH. V. P. GUPTA, ADV RESPONDENT BY MS. ANIMA BARNWAL, SR. DR DATE OF HEARING 09.05.2016 DATE OF PRONOUNCEMENT 12.05.2016 2 ITA N OS. 2806 & 2793/DEL/2012 AGAINST THE ORDER DATED 30/03/2012 PASSED BY CIT(A) IV, NEW DELHI. 2. DURING THE COURSE OF HEARING, THE ASSESSEE POIN TED OUT THAT THE ASSESSEES APPEAL IS IN RESPECT OF LEGAL ISSUE THAT THE RE- ASSESSMENT PROCEEDING U/S 148 AND 147 IS BAD IN LAW AND THIS MAIN ISSUE SHOULD BE DECIDED FIRST. THEREFORE, THE GROUNDS OF APPEAL ARE AS FOLLOWS:- ITA NO. 2806/DEL/2012 1. THAT THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A PPEALS)-VI, NEW DELHI, DATED 30/3/2012, IS WRONG ON FACTS AND BAD IN LAW I N RESPECT OF THE ISSUES IN THE PRESENT APPEAL; 2. THAT THE COMMISSIONER (APPEALS) FAILED TO APPREC IATE THAT THE PROVISIONS OF SECTION 147 OF THE CT WERE NOT APPLICABLE AND THE R EASSESSMENT PROCEEDINGS WERE VOID, ILLEGAL AND INVALID; 3. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS)- E RRED IN HOLDING THAT THE INITIATION OF THE REASSESSMENT PROCEEDINGS U/S 148 OF THE CT WAS VALID. HE FAILED TO APPRECIATE THAT THE ASSESSING OFFICER HAD NO JURISDICTION, COMPETENCE AND/OR AUTHORITY TO INITIATE THE REASSES SMENT PROCEEDINGS; 4. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS)- F AILED TO APPRECIATE THAT THERE WAS NO NEW/FRESH INFORMATION/MATERIAL IN THE POSSESSION OF THE ASSESSING OFFICER JUSTIFYING THAT THE INCOME LIABL E TO TAX HAS ESCAPED ASSESSMENT; 5. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) FA ILED TO APPRECIATE THAT WAS NO REASON JUSTIFYING THE REOPENING OF THE ASSES SMENT. 6. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) FA ILED TO APPRECIATE THAT THERE WAS NO FAILURE TO DISCLOSE FULLY AND TRULY AL L THE MATERIAL FACTS. 3 ITA N OS. 2806 & 2793/DEL/2012 7. THAT THE COMMISSIONER (APPEALS) FAILED TO APPREC IATED THAT IT WAS A CASE OF CHANGE OF OPINION; 8. THAT THE COMMISSIONER (APPEALS) FAILED TO APPREC IATE THAT SAID NOTICE U/S 148 OF THE ACT WAS ILLEGAL BEING ISSUED WITHOUT THE REQUISITE APPROVAL U/S 151 OF THE ACT. THE APPROVAL ACCORDED U/S 151 OF T HE ACT, IF ANY, WAS ALSO ILLEGAL; 9. THAT THE CONCLUSIONS AND INFERENCES OF THE ASSES SING OFFICER AND/OR COMMISSIONER (APPEALS) ARE BASED ON SUSPICIONS, CON JECTURES, SURMISES AND EXTRANEOUS AND IRRELEVANT CONSIDERATIONS; 10. THAT THE RELIEFS PRAYED FOR MAY KINDLY BE ALLOW ED AND THE ORDERS(S) OF THE ASSESSING OFFICER AND/ OR COMMISSIONER A9APPEALS) M AY KINDLY BE QUASHED, SET ASIDE, ANNULLED OR MODIFIED; 11. THAT THE AFORESAID GROUNDS OF APPEAL ARE WITHOU T PREJUDICE TO EACH OTHER. 3. THE ASSESSEE IS A COMPANY CARRYING ON BUSINESS O F SUB- BROKING AND DEALING IN SHARES & SECURITIES. RETURN OF INCOME FOR ASSESSMENT YEAR 2002-03 WAS DULY FILED BY THE APPEL LANT DECLARING INCOME OF RS. 8840/-. SUBSEQUENTLY, NOTICE U/S 148 OF THE ACT DATED 30.03.2009 (WRONGLY MENTIONED IN THE ASSESSME NT ORDER AS 30.03.2008) WAS ISSUED IN THE CASE OF THE ASSESSEE COMPANY. 4. THE ASSESSEE FILED A LETTER DATED 27.04.2009 WIT H THE ASSESSING OFFICER STATING THEREIN THAT THERE WAS NO ESCAPEMENT OF INCOME ATTRACTING REOPENING OF ASSESSMENT. IT WAS A LSO STATED THAT THERE HAS BEEN NO FAILURE ON THE PART OF THE ASSESS EE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR AS SESSMENT, FURTHER. 4 ITA N OS. 2806 & 2793/DEL/2012 IT WAS SUBMITTED THAT ITS RETURN OF INCOME EARLIER FILED AS PER SECTION 139(1) OF THE ACT MAY BE TREATED AS RETURN FILED IN COMPLIANCE TO THE NOTICE. THE ASSESSEE ALSO REQUEST ED THE ASSESSING OFFICER TO SUPPLY A COPY OF REASON RECORDED UNDER S ECTION 148(2) OF THE ACT TO ENABLE IT TO MAKE ITS SUBMISSIONS REGARD TO VALIDITY OF REOPENING OF ASSESSMENT. 5. THE ASSESSING OFFICER PROVIDED A COPY OF REASON RECORDED BY HIM TO THE REPRESENTATIVE OF THE ASSESSEE COMPANY O N 08.05.2009. ASSESSEE ON GOING THROUGH THE REASONS OBSERVED THAT SAME WAS GENERAL IN NATURE. THERE WAS NO SPECIFIC REFERENCE ANYWHERE TO THE FACT THAT INCOME IN THE CASE OF ASSESSEE HAS ESCAPE D ASSESSMENT. THERE WERE REFERENCES TO STATEMENTS RECORDED AND AF FIDAVITS SUBMITTED BY SOME OF THE PERSONS IN THE REASON RECO DED DURING THE COURSE OF INVESTIGATION CARRIED OUT IN A GENERAL MA NNER BY DIRECTORATE OF INCOME TAX (INVESTIGATION), NEW DELH I. ACCORDINGLY, THE ASSESSEE VIDE ITS LETTER DATED 21.05.2009 REQUE STED THE ASSESSING OFFICER TO PROVIDE FOR COPIES OF STATEMEN TS AND AFFIDAVITS ALONG WITH REPORT RECEIVED BY THE ASSESSING OFFICER TO ENABLE ASSESSEE COMPANY TO APPRECIATE REFERENCE THEREIN TO THE CASE OF THE ASSESSEE AND MAKE ITS SUBMISSIONS IN REGARD TO VALI DITY OF REASSESSMENT PROCEEDINGS INITIATED IN ITS CASE. THE ASSESSEES ALSO SPECIFICALLY REQUESTED THE ASSESSING OFFICER TO MAK E AVAILABLE A COPY OF PROPOSAL PUT-UP FOR APPROVAL OF REOPENING T HE ASSESSMENT AND COPY OF APPROVAL OF JOINT COMMISSIONER OF INCOM E TAX. IT WAS NOT APPARENT FROM THE REASONS THAT NECESSARY APPROV AL HAD BEEN SOUGHT. COPY OF REASON IS GIVEN IN THE PAPER BOOK O N PAGES 13 TO 5 ITA N OS. 2806 & 2793/DEL/2012 15. COPY OF LETTER DATED 21.05.2008 OF THE ASSESSEE COMPANY IS ON PAGES 16 TO 17. 6. PURSUANT TO THE REQUEST MADE TO THE ASSESSING OF FICER VIDE LETTER DATED 21 05 2009 FOR SUBMITTING THE COPIES O F DOCUMENTS, THE ASSESSING OFFICER PROVIDED THE COPES OF THE SOME OF THE DOCUMENTS TO THE REPRESENTATIVE OF THE COMPANY ON 10.07.2009. COPIES OF SOME OF THE DOCUMENTS, HOWEVER, WERE NOR PROVIDED I N SPITE OF REPEATED REQUEST BY THE REPRESENTATIVE OF THE ASSES SE COMPANY TO THE ASSESSING OFFICER. THE ASSESSING OFFICER WITHOU T PROVIDING COPY OF REMAINING DOCUMENTS, ISSUED NOTICES UNDER SECTIO N 142(1) AND 143(2) OF THE ACT DATED 01.09.2009 REQUIRING THE PR ESENCE OF THE ASSESSEE IN CONNECTION WITH ASSESSMENT PROCEEDINGS BEFORE HIM ON 10 09.2009 AND ALSO SUBMIT CERTAIN DOCUMENTS. THE A SSESSEE IN RESPONSE TO THE NOTICE AGAIN VIDE ITS LETTER DATED 10.09.2008 REQUESTED ASSESSING OFFICER TO PROVIDE THE COPIES O F THE REMAINING DOCUMENTS SO AS TO ENABLE THE ASSESSEE COMPANY TO S UBMIT ITS OBJECTIONS REGARDING THE VALIDITY OF THE PROCEEDING S U/S -147 OF THE ACT. THEREAFTER THE ASSESSING OFFICER MADE AVAILABL E COPY OF STATEMENT OF ONE MORE PERSON, NAMELY SHRI TRILOK CH AND BANSAL. COPY OF LETTER DATED 10.09.2009 IS GIVEN IN THE PAP ER BOOK ON PAGES ON 38-41. COPY OF THE STATEMENT OF TRILOK CHAND BAN SAL IS GIVEN IN THE PAPER BOOK ON PAGES 42-47. 7. THE ASSESSEE COMPANY ON GOING THROUGH THE STATEM ENTS / AFFIDAVITS OF THE PERSONS NAMED ABOVE READ WITH THE REASONS RECORDED BY THE ASSESSING OFFICER SUBMITTED A LETTE R DATED 6 ITA N OS. 2806 & 2793/DEL/2012 07.10.2009 TO THE ASSESSING OFFICER WHEREIN IT WAS STRONGLY SUBMITTED THAT PARAS 1-5 OF THE REASONS RECORDED CONTAIN ONLY THE FACTS REGARDING THE MODUS OPERANDI OF THE ENTRY PROVIDERS AND THESE FACTS WERE NOT RELEVANT TO THE ASSESSEE COMPANY. FU RTHER THERE WAS NO REFERENCE TO THE CASE OF THE ASSESSEE COMPAN Y. PARA 6 CONTAIN DETAILS OF ENTRIES STATED TO HAVE CO ME TO THE ASSESSEE COMPANY FROM M/S. S.J. CAPITA! LIMITED, BU T THE COPIES OF THE STATEMENTS OF SHRI MAHESH GARG AS WEL L AS SHRI TRILOK CHAND BANSAL DO NOT HAVE ANY REFERENCE TO TH E NAME OF M/S S.J. CAPITAL LIMITED. ACCORDINGLY THE REASON S RECORDED ARE NOT BASES ON THE STATEMENTS OF SHRI MANISH GARG AND SHRI TRILOK CHAND BANSAL. THERE WAS NO OTHER MATERI AL MADE AVAILABLE TO THE ASSESSEE ON THE BASIS OF WHICH THE REASON CAN BE SAID TO HAVE BEEN RECORDED. REASONS HAVE BEEN RECORDED IN A ROUTINE MANNER ON T HE BASIS OF INVESTIGATION MADE BY THE ADDL. DIRECTOR O F INCOME TAX (INV.) UNIT-1. NEW DELHI AND THERE WAS NO APPLI CATION OF MIND BY THE ASSESSING OFFICER, WHICH IS AS MANDATOR Y REQUIREMENT. REASONS HAVE BEEN RECORDED WITHOUT REFERENCE TO THE FACTS AND THE RETURN OF INCOME FILED BY THE ASSESSEE COMP ANY AND THEREFORE ALLEGATION FOR ESCAPEMENT OF INCOME COULD NOT BE LEVIED. 7 ITA N OS. 2806 & 2793/DEL/2012 THERE WAS NO BASIS OR REASON FOR ARRIVING AT THE CO NCLUSION THAT THERE WAS ESCAPEMENT OF INCOME. JUST ON THE BA SIS OF CREDIT ENTRIES APPEARING IN THE BANK ACCOUNT IT CAN BE SAID THAT THERE WAS ESCAPEMENT OF INCOME. REASONS RECORDED BY THE ASSESSING OFFICER ALSO DO N OT BEAR ANY DATE. STATEMENTS OF SHRI MAHESH GARG AND S HRI TRILOK CHAND BANSAL WERE RECORDED IN 2003 WHEREAS T HE NOTICE HAS BEEN ISSUED TO THE ASSESSEE COMPANY ON 30.03.20 09. ACCORDINGLY, IT CAN BE SAID THAT THE ASSESSING OFFI CER WAS NOT CONFIDENT ABOUT THE CORRECTNESS OF THE ALLEGATION O F THE ESCAPEMENT OF INCOME IN THE CASE OF THE ASSESSEE ON THE BASIS OF THE AVAILABLE MATERIAL AND THEREFORE, THE NOTICE HAD NOT BEEN ISSUED EARLIER. SAME HAD BEEN ISSUED ONLY ON 30.03. 2009 AS THE LIMITATION OF TIME WAS EXPIRING ON 31.03.2009. COPY PROPOSAL PUT UP TO THE JT. COMMISSIONER OF INC OME TAX FOR APPROVAL FOR REOPENING OF ASSESSMENT AND HIS APPROV AL HAVE NOT BEEN PROVIDED TO THE ASSESSEE COMPANY AND THERE FORE, IT APPEARS THAT NOTICE HAS BEEN ISSUED WITHOUT APPROVA L OF JCIT AND/OR IT IS NOT KNOWN TO THE ASSESSEE WHETHER APPR OVAL HAD BEEN GRANTED BY THE JCIT AFTER CONSIDERING THE FACT S OF THE CASE OF THE ASSESSEE. IN CONCLUSION, REOPENING OF ASSESSMENT IN THE CASE OF THE ASSESSEE COMPANY WAS NOT LEGALLY VALID. THEREFORE, THE ASSESSING OFFICER WAS REQUESTED TO DROP THE PROCEED INGS. REFERENCE IN THE AFORESAID LETTER WAS ALSO SPECIFIC ALLY MADE BY 8 ITA N OS. 2806 & 2793/DEL/2012 THE ASSESSEE COMPANY TO THE DECISION OF SUPREME COU RT IN THE CASE OF GKN DRIVE-SHAFT INDIA LIMITED VS. CIT, 259 ITR 19 (SC) IN ACCORDANCE WITH WHICH DECISION THE ASSESSING OFF ICER WAS REQUIRED TO FIRSTLY DISPOSE OF OBJECTIONS OF THE AS SESSEE COMPANY BY PASSING A SPEAKING ORDER BEFORE PROCEEDI NGS FURTHER IN REGARD TO THE ASSESSMENT. A COPY OF THE ABOVE REFERRED LETTER DATED 07.10.2009 IS GIVEN IN THE PR OPER BOOK ON PAGES 48-55. 8. THE ASSESSING OFFICER FURTHER PASSED AN ORDER DA TED 28/10/2009 ON OBJECTIONS FILED BY THE ASSESSEE COMP ANY IN REGARD TO THE REOPENING OF ASSESSMENT IN THE AFORES AID ORDER HE HAS HOWEVER, NOT SPECIFICALLY DISCUSSED AND APPRECI ATED THE CONTENTIONS OF THE ASSESSEE COMPANY MADE VIDE DATED 07.10.2009 WITHOUT GIVING ANY SPECIFIC INFORMATION HE MENTIONED IN THE ORDER THAT CASE WAS REOPENED AFTER RECORDING THE REASONS AND AFTER TAKING NECESSARY APP-OVAL FROM THE SUPERI OR AUTHORITY. ACCORDING, IT IS EVIDENT THAT HE HAS NO SPECIFIC AP PROVAL ON RECORD, OTHERWISE HE OUGHT TO HAVE MENTIONED SPECIF IC DETAILS REGARDING THE APPROVAL AND ALSO WOULD HAVE MADE AVA ILABLE COPY OF THE SAME TO THE ASSESSEE COMPANY. HE HAS ALSO NO T SPECIFICALLY DEALT WITH OTHER OBJECTIONS RAISED BY THE ASSESSEE COMPANY IN HIS AFORESAID ORDER. THE ASSESSEE COMPANY HAS FILED A SEPARATE APPEAL BEFORE THE CIT(A) VI, N DELHI AGAINST THE AF ORESAID ORDER, WHICH HAS BEEN LISTED AS APPEAL NO. 130/09-10. 9 ITA N OS. 2806 & 2793/DEL/2012 9. THE ASSESSING OFFICER THEREAFTER ISSUED ANOTHER NOTICE TO THE ASSESSEE COMPANY REQUIRING CERTAIN DETAILS. DETAILS AS REQUIRED BY THE ASSESSING OFFICER WERE DULY SUBMITTED VIDE L ETTER DATED 09.11.009. A COPY OF EACH OF NOTICE ISSUED BY THE A SSESSING OFFICER DATED 03 11 2009 AND REPLY TO THE SAME BY T HE ASSESSEE COMPANY DATED 09.11.2009 ARE GIVEN IN THE PAPER BOO K ON PAGES 60-75. THE ASSESSING OFFICER FURTHER ASKED FOR COPY OF BANK ACCOUNT LEDGER IN THE BOOKS OF THE ASSESSEE COMPANY . SAME WAS GIVEN VIDE LETTER DATED 16.1 1.2009. COPIES OF THE AFORESAID LETTER WITH THE ENCLOSURES ARE GIVEN IN THE PAPER BOOK ON PAGES 76-80. 10. THE ASSESSING OFFICER ALSO ASKED THE ASSESSEE C OMPANY TO EXPLAIN THE TRANSACTIONS WITH M/S S J CAPITAL LIMIT ED, WHICH HAVE BEEN REFERRED TO IN THE REASONS RECORDED. THE ASSES SEE COMPANY VIDE ITS LETTER DATED 25/11/2009 EXPLAINED TO THE A SSESSING OFFICER THAT THE TRANSACTIONS WITH M/S S.J. CAPITAL LIMITED , HAVING THE MEMBERSHIP OF DELHI STOCK EXCHANGE, WERE RELATING T O THE SHARE TRADING UNDERTAKEN BY THE ASSESSEE COMPANY THROUGH THEM. COPY OF LEDGER ACCOUNT OF M/S S.J. CAPITAL LIMITED IN TH E BOOKS OF THE ASSESSEE COMPANY ALONG WITH THE COPIES OF BILLS AND CONTRACT NOTES REGARDING THE SHARE TRADING TRANSACTIONS WERE SUBMI TTED TO THE ASSESSING OFFICER. A COPY OF THE AFORESAID LETTER A LONG WITH COPIES OF LEDGERS ACCOUNTS AND COPIES OF BILLS AND CONTRACT N OTES ARE GIVEN IN THE PAPER BOOK ON PAGES 81-163. 11. THE ASSESSING OFFICER HAD NOT APPRECIATED THE N ATURE OF TRANSACTIONS AND GENUINENESS THEREOF. HE, HAS MENTI ONED IN THE 10 ITA NOS. 2806 & 2793/DEL/2012 ASSESSMENT ORDER, NOTED ON 25 11 2009 THAT SHRI TRI LOK CHAND BANSAL HAD STATED IN THE STATEMENT RECORDED BEFORE ADDL. DIT (INV) THAT ENTRIES WERE PROVIDED AGAINST CASH PAYMENTS. T HE REPRESENTATIVE OF THE ASSESSEE COMPANY SPECIFICALLY REQUESTED HIRN DURING THE COURSE OF HEARING TO MAKE AVAILABLE SHRI TRILOK CHAND BANSAL AND ALSO SHRI MAHESH GARG FOR CRESS EXAMINAT ION BY THE ASSESSEE COMPANY IN CASE THE ASSESSING OFFICER IS R ELYING UPON THEIR STATEMENTS IN REGARD TO THE ENTRIES UNDER REF ERENCE. IT WAS ALSO SUBMITTED THAT IN THEIR STATEMENTS THERE IS NO SPECIFIC REFERENCE TO THE EFFECT THAT THE ENTRIES BETWEEN M/ S S.J. CAPITAL LIMITED WERE NOT RELATING TO GENUINE TRANSACTIONS. THE ASSESSING OFFICER HOWEVER HAD NOT TAKEN NOTE OF THE REQUEST O F THE REPRESENTATIVE OF THE ASSESSEE COMPANY AND CONTRARY TO THE REQUEST HE HAS RECORDED IN THE ASSESSMENT ORDER THA T THE REPRESENTATIVE OF THE ASSESSEE COMPANY WAS NOT ABLE TO PRODUCE SHRI TRILOK CHAND BANSAL IN SUPPORT OF ITS CONTENTI ONS. THE ASSESSING OFFICER, ACCORDINGLY, MADE ADDITIONS OF R S. 34,50.000/- AND ALSO FOR RS. 17250/- AS DEEMED COMMISSION, AGGR EGATING TO RS. 34.67,250/- IN THE ASSESSMENT ORDER DATED 24-12 -2009. 12. THE ASSESSEE COMPANY HAS FILED APPEAL BEFORE TH E CIT(A). EACH OF THE GROUNDS OF APPEAL ARE BEING DISCUSSED H EREIN AFTER 13. THE CIT (A) HELD THAT THE REASSESSMENT PROCEEDI NGS ARE IN CONSONANCE WITH SECTION 148 OF THE INCOME-TAX ACT A ND REJECTED THE CONTENTION OF THE ASSESSEE ON THAT GROUND, BUT PART LY ALLOWED THE APPEAL ON MERIT. 11 ITA NOS. 2806 & 2793/DEL/2012 14. THE LD. AR SUBMITTED THAT THE ASSESSEE HAD CATE GORICALLY SUBMITTED BEFORE THE ASSESSING OFFICER THAT NOTICE ISSUED UNDER SECTION 148 OF THE ACT IN THE CASE OF THE ASSESSEE HAD BEEN INVALID AS SAME WAS ISSUED ON THE BASIS OF VAGUE IN FORMATION STATED TO BE RECEIVED BY THE ASSESSING OFFICER FROM INVESTIGATION WING. THE ASSESSING OFFICER HAD NOT PROPERLY ADJUDI CATED AND DEALT WITH THE CONTENTIONS OF THE ASSESSEE VIDE HIS ORDER DATED 28-10-2009 AND / OR VIDE THE IMPUGNED ORDER DATED 2 4-12-2009 AND, THEREFORE, ORDER OF ASSESSMENT IS NOT VALID AN D SUSTAINABLE UNDER LAW. FURTHER, ADDITION UNDER SECTION 68 OF TH E ACT HAS ALSO BEEN MADE WITHOUT THE EVIDENCE AND EXPLANATIONS IN RESPECT OF ENTRIES UNDER REFERENCE SUBMITTED BY THE ASSESSEE B EFORE THE ASSESSING OFFICER VIDE ITS LETTER DATED 25-11-2009. FURTHER, ADDITIONS HAD BEEN MADE ON THE BASIS OF THE STATEME NTS OF SHRI MAHESH GARG AND SHRI TRILOK CHAND BANSAL STATED TO HAVE BEEN GIVEN BEFORE THE ADDL. DIRECTOR OF INVESTIGATION, W ITHOUT PROVIDING THE OPPORTUNITY TO THE ASSESSEE COMPANY FOR CROSS E XAMINATION OF ABOVE MENTIONED PERSONS. THEREFORE LD.AR SUBMITT ED THAT THE PRINCIPLES OF NATURAL JUSTICE WERE NOT FOLLOWED BY THE ASSESSING OFFICER. 15. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAD RECORDED REASONS FOR ISSUING NOTICE UNDER SECTION 1 48 OF THE ACT. THE ASSESSING OFFICER IN THE REASONS RECORDED, IN P ARA-1 REFERS TO THE INVESTIGATION MADE BY DIRECTORATE OF INVESTIGAT ION, DELHI NEW 12 ITA NOS. 2806 & 2793/DEL/2012 DELHI INTO ACCOMMODATION ENTRIES GIVEN BY ENTRIES O PERATORS AND COPY OF REPORT RECEIVED BY CIT. DELHI-1, N W DELHI WHICH WAS SUBSEQUENTLY FORWARDED ON 13.0,0.2006 TO THE ASSESS ING OFFICER. IT IS ALSO SUBMITTED THAT INVESTIGATIONS HAD COMMENCED ON THE BASIS OF SURVEY IN THE CASE OF M/S GURCHARAN JEWELLERS. I N PARAS 2 TO 4 MODUS OPERANDI ADOPTED BY THE ENTRY PROVIDERS HAS B EEN DISCUSSED. PARA 5 OF THE REASONS RECORDED BY THE AS SESSING OFFICER STATES THAT INVESTIGATION CARRIED OUT BY DIT, INVES TIGATION. NEW DELHI HAS ASSAILED GENUINENESS OF TRANSACTIONS, WHE THER SHOWN BY BENEFICIARIES AS INFLOW OF SHARE CAPITAL OR RECEIPT OF GIFTS OR CONSIDERATION FOR SALE PURCHASE. IT HAS ALSO DEAL T WITH A BODY BLOW TO THE CREDIT WORTHINESS OF THE PERSONS PROVID ING THE CREDIT ENTRIES. PARA -6 REFERS TO FOUR CREDIT ENTRIES STAT ED TO BE IN BANK ACCOUNT OF THE ASSESSEE. THERE IS NO REFERENCE, HOW EVER, OF ANY DOCUMENT / INFORMATION ON THE BASIS OF WHICH THE IN FORMATION HAS BEEN RECEIVED BY THE ASSESSING OFFICER IN RESPECT O F ENTRIES. FURTHER THERE IS REFERENCE TO THE STATEMENTS AND AF FIDAVIT OF SHRI MAHESH GARG, SHRI VINOD GARG, SHRI TRILOK CHAND BAN SAL AND SHRI DEEPAK KUMAR CHANG:A GIVEN BEFORE ADDL. DIT, INVEST IGATION. UNIT I, NEW DELHI, IN ALL THE PARAGRAPHS MENTIONED ABOVE THERE IS NO SPECIFIC REFERENCE TO ANY DOCUMENT OR INFORMATION O N THE BASIS OF WHICH IT COULD BE ALLEGED THAT THE ENTRIES WERE REC EIVED BY THE ASSESSEE COMPANY AND SAME WERE BOGUS. COPIES OF AFF IDAVIT AND STATEMENTS MADE AVAILABLE BY THE ASSESSING OFFICER TO THE ASSESSEE COMPANY ALSO HAVE NO REFERENCE TO THE TRANSACTIONS WITH THE ASSESSEE COMPANY. THERE IS NO AVERMENT TO THE EFFEC T THAT ENTRIES 13 ITA NOS. 2806 & 2793/DEL/2012 IN THE BOOKS OF ASSESSEE COMPANY AND ARE GENUINE EN TRIES. COPY OF REPORT OF THE DIT (INV.) HAS NOT BEEN MADE AVAILABL E TO THE ASSESSEE AND, THEREFORE, ASSESSEE WAS NOT IN A POSITION TO M AKE ANY COMMENTS AT THE RELEVANT POINT. THE LD. AR FURTHER SUBMITTED THAT THERE WAS NO MATERIAL AVAILABLE WITH THE ASSESSING OFFICER ON THE BASIS OF WHICH IT COULD BE ALLEGED THAT ENTRIES UND ER REFERENCE WERE BOGUS ENTRIES. THEREFORE, IN THE FACTS OF THE ASSES SEE NO BELIEF COULD BE FORMED TO THE EFFECT THAT INCOME IN THE CA SE OF THE ASSESSEE HAS ESCAPED ASSESSMENT. ACCORDINGLY, THE C ONCLUSION OF THE ASSESSING OFFICER IF THE REASONS RECORDED BY HI M TO THE EFFECT THAT AMOUNT OF RS. 34,50,000/- REPRESENTS INCOME OF THE APPEAL AND CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT, IS NOT SUPPORTED BY ANY INFORMATION / MATERIAL ON RECORD. 16. THE LD. AR FURTHER SUBMITTED THAT AS PER THE SE TTLED LEGAL POSITION, THE ASSESSING OFFICER IS REQUIRED TO FORM HIS VIEW AND RECORD THE REASONS FOR ISSUING THE NOTICE. HE HAS N EITHER MADE ANY INVESTIGATION HIMSELF IN REGARD TO THE TRANSACTIONS NOR HAS HE RECORDED HIS SATISFACTION THAT THE ENTRIES ARE BOGU S. 17. THE LD. AR SUBMITTED THAT NO REASONS WERE RECOR DED AS PER THE STATUTE AND THERE WAS NEW MATERIAL AVAILABLE BE FORE THE ASSESSING OFFICER FOR REASSESSMENT. HENCE, IN LIGH T OF DELHI HIGH COURT DECISION IN CASE OF PRINCIPAL CIT VS. G & G P HARMA INDIA LTD AS WELL AS VARIOUS OTHER CASE LAWS SUBMITTED BEFORE THE BENCH. THE 14 ITA NOS. 2806 & 2793/DEL/2012 REASONS HAVE TO BE SUFFICIENT AND JUST. IN LIGHT OF THIS, THE REASSESSMENT PROCEEDINGS ARE NOT JUST AND VALID. 18. THE LD. DR SUBMITTED THAT AS PER THE DECISION I N CASE OF NOVA PROMOTERS. THE CONTENTIONS OF THE ASSESSEE ARE NOT APPLICABLE IN THIS CASE AND THE CASE IS FULLY COVERED BY NOVA PRO MOTERS. 19. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH THE PARTIES, THE SUBMISSIONS MADE BY THE A.R THAT THERE WAS NO N EW MATERIAL GIVEN ARE PRODUCED BEFORE THE ASSESSING OFFICER TO START RE- ASSESSMENT PROCEEDINGS IS RIGHT WHILE GOING THROUGH THE REASONS ANNEXED TO THE PAPER BOOK. THERE WAS NO MENTION OF A SUPERIOR AUTHORITY IN THE ASSESSMENT ORDER AS WELL AS IN THE ORDER FOR REJECTING THE ASSESSEES OBJECTIONS RELATED TO RE-O PENING. THUS, THE ASSESSING OFFICER PRIMA FACIE HAS NOT ACTED UPON AS PER THE STATUTE. AS RELATES TO NOVA PROMOTERS THOUGH THE SUBMISSIONS MADE BY DR RELATED TO NOVA PROMOTERS. THE SAID JUDGMENT WAS N OT PRODUCED BEFORE THIS BENCH AND WAS NOT PROPERLY JUSTIFIED HO W IT IS APPLICABLE IN THE PRESENT CASE. WHILE GOING THROUGH NOVA PROMO TERS, THE BASIC DIFFERENCE THAT THE REASONS WERE PROVIDED TO THE AS SESSEE IN THAT PARTICULAR CASE ALONG WITH ALL THE DOCUMENTS. BUT I N PRESENT CASE BEFORE US, THE TEST OF GIVING REASONS TO THE ASSESS EE AND THE DOCUMENTS IS MISSING. THEREFORE, NOVA PROMOTERS WI LL NOT APPLY IN THE PRESENT CASE. 15 ITA NOS. 2806 & 2793/DEL/2012 20. IN RESULT, THE ASSESSEES APPEAL IS ALLOWED AND REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MAY, 2016. SD/- SD/- ( L. P. SAHU) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 12/05/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON /05/2016 PS 2. DRAFT PLACED BEFORE AUTHOR /05/2016 PS 16 ITA NOS. 2806 & 2793/DEL/2012 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 2 .05.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 1 2 .05.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.