Sapra Metal Co., Delhi V. ITO, New Delhi

ITA 2910/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6501 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-01-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 23-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: ANIL MALHOTRA
• Keywords: Bogus purchase; Search and seizure; Question of law; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 153A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 2910/DEL/2016 A.Y. : 2006-07 M/S SAPRA METAL CO. 3272, CHOWK BAHADURGARH ROAD, SADAR BAZAR, DELHI 110 006 (PAN: AAAFS0303E) VS. ITO, WARD 39(2) (KNOW KNOWN AS WARD 63(2), ROOM NO. 2109, BLOCK E-2, PRATYAAKSH KAR BHAWAN, CIVIC CENTRE, J.L. NEHRU MARG, NEW DELHI 110 002 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL MALHOTRA, CA DEPARTMENT BY : SHRI S.K. JAIN, SR. DR ORDER THE APPEAL FILED BY THE ASSESSEE EMANATE OUT OF TH E ORDER DATED 18.3.2016 PASSED BY THE LD. CIT(A)-20, NEW DELHI R ELEVANT TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED SO MANY GROUNDS, BUT O NLY ARGUED THE FOLLOWING LEGAL GROUND NO. 2 WHICH READ AS UNDER:- 2. THE LD. CIT(A)-20 HAS ERRED IN UPHOLDING THE REOPENING OF THE CASE U/S. 148/147 OF THE I.T. ACT. THE NOTICE U/S. 148/148 WAS ISSUED MERELY AT THE BEHEST OF INVESTIGATION WING. THE AO HAS NOT MADE ANY INDEPENDENT ENQUIRY. FURTHER THE REASONS RECORDED DID NOT INDICATE ANY INDEPENDENT APPLICATION OF MIND. THE PRINCIPLE OF NATURAL JUSTI CE HAVE BEEN VIOLATED. 3. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF I NCOME FOR THE AY 2006-07 WAS FILED ON 19.6.2006, DECLARING INCOME AT RS. NIL. THE SAME WAS PROCESSED U/S. 143(1) OF THE I.T. ACT ON 27.9.2 006. SUBSEQUENTLY A LETTER DATED 26.3.2013 WAS RECEIVED FROM THE OFFICE OF THE CHIEF COMMISSIONER OF INCOME TAX, DELHI-I, NEW DELHI THER EIN FORWARDING LETTER DATED 19.3.2013 RECEIVED FROM THE COMMISSIONER OF I NCOME TAX, CENTRAL 2 II, NEW DELHI ALONGWITH CD CONTAINING THE DETAILS OF THE ACCOMMODATION ENTRIES PROVIDED BY SH. RAKESH GUPTA, SH. VISHESH G UPTA, SH. NAVNEET JAIN AND SH. VAIBHAV JAIN WAS APPEARING. AFTER GOIN G THROUGH THE COMPLETE LIST AND INDENTIFYING THE PARTIES, AFTER R ECORDING THE REASONS, THE AO HAS MADE AN ADDITION OF RS.8,57,330/- ON AC COUNT OF BOGUS PURCHASE AND COMPLETED THE ASSESSMENT AT AN INCOME OF RS. 8,57,330/- U/S. 143(3)/147 OF THE I.T. ACT, 1961 VIDE HIS ORDE R DATED 07.3.2014. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE C AME IN APPEAL BEFORE THE LEARNED CIT(A), WHO VIDE IMPUGNED ORDER DATED 18.3.2016 HAS DISMISSED THE APPEAL OF THE ASSESSEE AND ACCORD INGLY ENHANCED THE ADDITION FROM RS. 8,57,331/- TO RS.10,33,083/-. 4. AGAINST THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, LD. COUNSEL HAS STATED T HAT EXACTLY SIMILAR REASONS RECORDED BY THE AO HAS BEEN STRUCK DOWN BY THE VARIOUS ORDERS OF THE ITAT, DELHI BENCHES. LD. COUNSEL OF THE AS SESSEE STATED THAT THE ISSUES INVOLVED IN THE PRESENT APPEAL IS SQUARELY C OVERED BY THE VARIOUS DECISIONS OF THE ITAT AND ENCLOSED COPIES THEREOF WITH THE SMALL PAPER BOOK CONTAINING PAGES 1 TO 94 HAVING THE COPY OF WR ITTEN SUBMISSIONS; REASONS FOR THE BELIEF RECORDED BEFORE INITIATING PROCEEDINGS U/S. 147/148; COPY OF JUDGMENT OF DELHI HIGH COURT IN T HE MATTER OF M/S SIGNATURE HOTEL PVT. LTD. VS. ITO WARD 8(4) AND AN R. 2011 338 ITR 51; COPY OF JUDGMENT OF DELHI HIGH COURT IN THE MATTER OF CIT-II VS. SFIL STOCK BROKING LTD. 325 ITR 285; COPY OF JUDGMENT IN THE MATTER OF SARTHAK SECURITIES CO. PVT. LTD VS. ITO, WARD 7(3) (2010) 329 ITR 110; COPY OF ORDER PASSED BY THE SMC-2, ITAT, NEW DELHI IN THE MATTER OF UNIQUE METAL INDUSTRIES VS. ITO IN ITA NO. 1372/DEL /2015; COPY OF JUDGMENT IN THE MATTER OF MAN MOHAN SADANI VS. CIT (2008) 304 ITR 52. HE STATED THAT THE ASSESSMENT IN THIS CASE WAS ALSO REOPENED ON THE SAME ALLEGATION. HE FURTHER SUBMITTED THAT THE FAC TS OF THE CASE ARE IDENTICAL AS NUMBER OF ASSESSMENTS WERE OPENED BY T HE SAME AO ON THE 3 BASIS OF THE SAME SET OF INFORMATION AND BY RECORDI NG SIMILAR REASONS. HE DRAW OUR ATTENTION TOWARDS THE PAGE NO. 9-23 VIDE PARA 7 TO 13 OF THE TRIBUNALS ORDER DATED 28.10.2015 WHEREIN, THE ISSU E OF REOPENING WAS HELD TO BE INVALID AND ACCORDINGLY THE SAME WAS QU ASHED. THEREFORE, HE REQUESTED THAT BY FOLLOWING THE SAID PRECEDENT, THE REOPENING PROCEEDINGS MAY BE QUASHED AND APPEAL OF THE ASSESSEE MAY BE AL LOWED. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER OF THE AUTHORITIES BELOW AND REQUESTED THAT THE SAME MAY BE UPHELD. 7. I HAVE HEARD THE BOTH PARTIES AND PERUSED AND C ONSIDERED THE RELEVANT RECORD AVAILABLE WITH US SPECIALLY THE IMPUGNED ORD ERS PASSED BY THE REVENUE AUTHORITIES AND THE COPY OF THE TRIBUNALS ORDER DATED 28.10.2015 PASSED IN THE CASE UNIQUE METAI INDUSTRI ES VS. ITO IN ITA NO. 1372/DEL/2015 AND THE DECISION OF THE DELHI HIGH CO URT IN THE CASE OF SIGNATURES HOTEL. IN MY VIEW, IT WILL BE RELEVANT TO REFER TO THE REASONS RECORDED BY THE AO WHICH READS AS UNDER:- SUBSEQUENTLY A LETTER BEARING F.NO. ADDL.OT(HQ)/(C OORD.)/ ACCOMMODATION ENTRY/2012-13/15016 DATED 26/03/2013 WAS RECEIVED FROM THE OFFICE OF THE CHIEF COMMISSIONER OF INCOME TAX, DELHI-1, NEW DELHI THEREIN FORWARDING LETTER TEARIN G F-NO. C1T(C)- II/2012-13/3898 TEED.19/03/2013 RECEIVED FROM THE C OMMISSIONER OF INCOME TAX, CENTRAL-II, NEW DELHI ALONG WITH A C D CONTAINING THE DETAILS OF ACCOMMODATION ENTRIES PROVIDE BY SHRI RA KESH GUPTA & SH. VISHESH GUPTA AND SH. NAVNEET JAIN & SH. VAIBHA V JAIN AND DIRECTING THIS OFFICE TO TAKE NECESSARY ACTION AS P ER SECTION 148 IN RESPECT ENTRIES PERTAINING TO A.Y. 2006-07, WHICH I N TIME BARRING ON 31/03/2013. THE INFORMATION PROVIDED BY THE GIT, GENTRAL-11, NE W-DELHI VIDE HIS LETTER DATED 19/03/2013 READS AS UNDER:- 4 'KINDLY FIND ENCLOSED HEREWITH LETTER DATED 13/03/2 013 OF ACIT, CENTRAL CIRCLE-10 DULY FORWARDED BY THE ADDL. C1T, CENTRAL RANGE- IV, ALONGWITH ITS ENCLOSURES ON THE SUBJECTION MEN TIONED ABOVE. 2. THE ASSESSMENT OF SEARCH AND SEIZURE CASES OF SH . RAKESH GUPTA, SH. SH. VISHVESH GUPTA, SH. NAVNEET JAIN & S H.VAIBHAV JAIN ARE UNDER PROCESS WITH ACIT, CENTRAL CIRCLE 10, DUR ING THE ASSESSMENT PROEEDING ULS 153A IN THE AFORESAID CASE S, DETAILS REGARDING ACCOMMODATION ENTRIES GIVEN BY THE ABOVE ENTRY. 3. THE LIST OF ACCOMMODATION A ENTRY RECIPIENTS HAS BEEN OBTAINED FROM SH. RAKESH GUPTA AND SH. VISHESH GUPTA. THE LI ST GIVES THE NAME OF THE FIRM WHICH HAS PROVIDED THE ACCOMMODATI ON ENTRY ALONG WITH THE NAME: AND ADDRESS OF THE RECIPIENTS OF ACCOMMODATION ENTRY. 4.SH. NAVNEET JAIN & SH. VAIBHAV JAIN HAS PROVIDED ACCOMMODATION ENTRY THROUGH THIRTY SEVEN PAPER ENTITIES. THE LIST OF THE FIRMS GIVING ACCOMMODATION ENTRY IS ENCLOSED' AS ANNEXURE-B. THE LIST OF ACCOMMODATION ENTRY RECIPIENTS, HAS BEEN OBTAINED F ROM SH. NAVNEET JAIN & SH. VAIBHAV JAIN. IT DOES NOT GIVE Y EAR WISE BIFURCATION. HARD COPY OF THE LIST IS ENCLOSED AS A NNEXURE-C, DULY SIGNED BY SH. VAIBHAV JAIN. THUS, THE FIRMS MENTION IN THE LIST 'B' HAVE PROVIDED ACCOMMODATION ENTRIES TO THE FIRMS ME NTIONED IN LIST 'C. THE SOFT COPY OF THE INFORMATION IN RESPECT TO ANNE XURE A, B - & C IS. ALSO ENCLOSED. THE INFORMATION OF ACCOMMODATION ENTRY INCLUDES A.Y . 2006-07 ALSO, WHICH IS A TIME BARRING YEAR FOR TAKING ACTIO N UNDER SECTION 148. THIS INFORMATION IS FORWARDED TO YOU FOR EARLY DISS EMINATION TO VARIOUS FIELD OFFICES IN DELHI (SOFT COPY ALSO ENCL OSED).' 5 ON EXAMINING THE LIST OF ACCOMMODATION ENTRIES PROV IDED BY SH. RAKESH GUPTA & SH. VISHESH GUPTA AND SH. NAVNEET JA IN & SH. VAIBHAV JAIN PERTAINING TO A.Y. 2006-07, IT IS NOTI CED THAT THE FOLLOWING ACCOMMODATION ENTRIES HAVE BEEN TAKEN BY THE ASSESSEE NAMELY:- SL.NO. ACCOMMODATION ENTRY PROVIDED BY NAME OF PARTY TO WHOM ACCOMMODATION ENTRY IS PROVIDED AMOUNT OF ACCOMMODATION ENTRY 1 SHREE SHYAM SAPRA METAL CO. RS. 8,57,331/ - SINCE SHRI RAKESH GUPTA & VISHESH GUPTA AND SH. NAV NEET JAIN & SH. VAIBHAV JAIN DURING THE COURSE OF ASSESSMENT PR OCEEDINGS UNDER SECTION153A OF I.T. ACT HAVE ADMITTED THAT TH EY HAVE GIVEN ACCOMMODATION ENTRIES TO THE PARTIES WHOSE LIST HAV E BEEN PROVIDED BY THEM TO THE ACIT, CENTRAL CIRCLE -10,NEW DELHI, THEREFORE, IT IS FAIR TO CONCLUDE THAT NAVEEN JAIN METAL UDYOG, WHOS E NAME IS APPEARING IN THE SAID LIST HAS TAKEN ACCOMMODATION ENTRIES FROM SHRI RAKESH GUPTA AND SHRI VISHESH GUPTA AND SHRI N AVNEET JAIN AND SH. VAIBHAV JAIN PERTAINING TO AY 2006-07. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE THA T INCOME CHARGEABLE TO TAX O M/S SAPRA METAL CO., AMOUNTING TO RS. 8,57,331/- FOR THE FY 2005-06 RELEVANT TO AY 2006- 07 HAS ESCAPED ASSESSMENT AND IT IS A FIT CASE FOR INITIA TION OF PROCEEDINGS U/S. 147 OF THE ACT. PROPOSAL IN THE PRESCRIBED FORM FOR THE AY 2006-07 (FY 2005-06) IS SUBMITTED HEREWITH FOR KIND CONSIDERATION AND NECES SARY APPROVAL U/S. 151(2) OF THE I.T. ACT, 1961 AS THE SAME IS GE TTING BARRED BY LIMITATION ON 31.3.2013. IF APPROVED, NOTICE U/S. 148 OF THE ACT MAY BE ISS UED. SD/- (VEENA RASTOGI) ITO, WARD 39(2), NEW DELHI 6 8. AFTER PERUSING THE AFORESAID REASONS, I FIND T HAT THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE ARE SIMILAR TO T HAT CASE OF UNIQUE METAL INDUSTRIES (SUPRA) AND SIGNATURES HOTEL, T HE LEGAL ISSUE OF REOPENING IN THE ASSESSEES APPEAL IS SQUARELY COV ERED BY THE ORDER DATED 28.10.2015 OF THIS BENCH PASSED IN THE CASE O F UNIQUE METAL INDUSTRIES VS. ITO IN ITA NO. 1372/DEL/2015 DATED 2 8.10.2015 AND DECISION OF THE HONBLE HIGH COURT IN THE CASE OF S IGNATURES HOTEL. THE TRIBUNAL IN THE CASE OF UNIQUE METAL HAS ADJUDICATE D THE LEGAL ISSUE AT PAGE NO. 9 TO 23 VIDE PARA NO. 7 TO 13 AS UNDER:- 7. I HAVE PERUSED THE ASSESSMENT ORDER, ORDER PASS ED BY THE LEARNED CIT(A) AS WELL AS THE PAPER BOOK. IT W ILL BE RELEVANT TO REFER TO THE REASONS RECORDED BY THE AS SESSING OFFICER AND THE APPROVAL OF THE JOINT COMMISSIONER OF INCOME TAX WHICH READS AS UNDER:- REASONS FOR THE BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT IN THE CASE OF M/S UNIQUE METAL IND FOR THE ASSESSMENT YEAR 2006-07 A LETTER BEARING F.NO. ADDL. CIT/(HQ)/(COORD.)/ACCOMMODATION ENTRY/2012-13/15016 DATED 26.03.2013 WAS RECEIVED FROM THE OFFICE OF TH E CHIEF COMMISSIONER OF I. TAX, DELHI-I, NEW DELHI HEREIN F ORWARDING LETTER BEARING F. NO. CIT -II/2012-13/3898 DATED 19.3.2013 RECEIVED FROM THE COMMISSIONER OF I. TAX, CENTRAL-I I, NEW DELHI ALONG WITH A CD CONTAINING THE DETAILS OF ACC OMMODATION ENTRIES PROVIDED BY SH. RAKESH GUPTA & SH. VISHESH GUPTA AND SH. NAVNEET JAIN & SH. VAIBHAV JAIN AND DIRECT THIS OFFICE TO TAKE NECESSARY ACTION AS PER SECTION 148 IN RESPECT OF ENTRIES PERTAINING TO A.Y. 2006-07, WHICH IS TIME B ARRING ON 31.03.2013. THE INFORMATION PROVIDED BY THE CIT, CENTRAL-II, NE W DELHI VIDE HIS LETTER DATED 19.03.2013 READS AS UNDER:- 7 KINDLY FIND ENCLOSED HEREWITH LETTER DATED 13.03.2 013 OF ACIT, CENTRAL CIRCLE-10 DULY FORWARDED BY THE ADDL. CIT, CENTRAL RANGE-IV, ALONG WITH ITS ENCLOSURES ON THE SUBJECT MENTIONED ABOVE. 2. THE ASSESSMENT OF SEARCH CASES OF SH. RAKESH GUP TA, SH. VISHESH GUPTA, SH. NAVNEET JAIN & SH. VAIBHAV J AIN ARE UNDER PROCESS WITH THE ACIT, CENTRAL CIRCLE-10. DU RING THE ASSESSMENT PROCEEDINGS U/S 153A IN THE AFORESAID CA SES, DETAILS REGARDING ACCOMMODATION ENTRIES GIVEN BY TH E ABOVE ENTRY PROVIDERS HAS BEEN OBTAINED BY THE AO. 3. THE LIST OF ACCOMMODATION ENTRY RECIPIENTS HAS B EEN OBTAINED FROM SH. RAKESH GUPTA AND SH. VISHESH GUPT A. HARD COPY OF THE LIST IS ENCLOSED AS ANNEXURE A, DU LY SIGNED BY SH. VISHESH GUPTA. THE LIST GIVES THE NAME OF T HE FIRM WHICH HAS PROVIDED THE ACCOMMODATION ENTRY ALONG WI TH THE NAME AND ADDRESS OF RECIPIENTS OF ACCOMMODATION ENT RY. 4. SH. NAVEEN JAIN & SH. VSAIBHAV JAIN HAS PROVIDED ACCOMMODATION ENTRY THROUGH THIRTY-SEVEN PAPER ENTI TIES. THE LIST OF THE FIRMS GIVING ACCOMMODATION ENTRY IS ENCLOSED AS ANNEXURE-B. THE LIST OF ACCOMMODATION ENTRY REC IPIENTS, HAS BEEN OBTAINED FROM SH. NAVNEET JAIN & SH. VAIBH AV JAIN. IT DOES NOT GIVE YEAR WISE BIFURCATION. HARD COPY OF THE LOST IS ENCLOSED AS ANNEXURE-C, DULY SIGNED BY SH. VAIBHAV JAIN. THUS, THE FIRMS MENTION IN THE LIST B HAVE PROVID ED ACCOMMODATION ENTRIES TO THE FIRMS MENTIONED IN LIS T C. 5. THE SOFT COPY OF THE INFORMATION IN RESPECT TO A NNEXURE A, B & C IS ALSO ENCLOSED. 6. THE INFORMATION OF ACCOMMODATION ENTRY INCLUDES A.Y. 2006-07 ALSO, WHICH IS A TIME BARRING YEAR FOR TAKI NG ACTION U/S 148. 8 7. THE INFORMATION IS FORWARDED TO YOU FOR EARLY DISSEMINATION TO VARIOUS FIELD OFFICERS IN DELHI (S OFT COPY ALSO ENCLOSED). ON EXAMINING THE LIST OF ACCOMMODATION ENTRIES PROV IDED BY SH. RAKESH GUPTA & SH. VISHESH GUPTA DN SH. NAVNEET JAI N & SH. VAIBHAV JAIN PERTAINING TO A.Y. 2006-07, IT IS NOTE D THAT THE FOLLOWING ACCOMMODATION ENTRIES HAVE BEEN TAKEN BY THE ASSESSEE NAMELY M/S UNIQUE METAL INDUSTRIES:- SL. NO. ACCOMMODATION ENTRY PROVIDED BY NAME OF PARTY TO WHOM ACCOMMODATION ENTRY IS PROVIDED AMOUNT OF ACCOMMODATION ENTRY 1 SHREE SHYAM TRADING CO. M/S UNIQUE METAL INDUSTRIES RS.2,44,399/- 2 VISHNU TRADING CO. M/S UNIQUE METAL INDUSTRIES RS .8,12,542/- 3 SHREE BANKEYBIHARI M/S UNIQUE METAL INDUSTRIES RS.3,28,368/- TOTAL AMOUNT OF ENTRIES= RS.13,85,309/- SINCE SH. RAKEH GUPTA & SH. VISHESH GUPTA DN SH. NA VNEET JAIN & SH. VAIBHAV JAIN DURING THE COURSE OF ASSESSMENT PR OCEEDINGS U/S 153A OF I. TAX ACT HAVE ADMITTED THAT THEY HAVE GIV EN ACCOMMODATION ENTRIES TO THE PARTIES WHOSE LISTS HA VE BEEN PROVIDED BY THEM TO THE ACIT, CENTRAL CIRCLE-10, NE W DELHI, THEREFORE, IT IS FAIR TO CONCLUDE THAT M/S UNIQUE M ETAL INDUSTRIES WHOSE NAME IS APPEARING IN THE SAID LIST, HAS TAKEN ACCOMMODATION ENTRIES FROM SH. RAKEH GUPTA & SH. VISHESH GUPTA DN SH. NAVNEET JAIN & SH. VAIBHAV JAIN PERTAINING TO A.Y. 2006-07. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE THA T INCOME CHARGEABLE TO TAX OF M/S UNIQUE METAL INDUSTRIES AM OUNTING TO 9 RS.13,85,309/-FOR THE F.Y. 2005-06 RELEVANT TO A.Y. 2006-07 HAS ESCAPED ASSESSMENT AND IT IS A FIT CASE FOR INITIAT ION OF PROCEEDINGS U/S 147 OF THE ACT. PROPOSAL IN THE PRESCRIBED FORM FOR THE A.Y. 2006-0 7 (F.Y. 2005-06) IS SUBMITTED HEREWITH FOR KIND CONSIDERATION AND NE CESSARY APPROVAL U/S 2006-07 (F.Y. 2005-06) IS SUBMITTED HEREWITH FO R KIND CONSIDERATION AND NECESSARY APPROVAL U/S 151(2) OF THE I. TAX ACT, 1961 AS THE SAME IS GETTING BARRED BY LIMITATION ON 31/3/2013. IF APPROVED, NOTICE U/S 148 OF THE ACT MAY BE ISSU ED. SD/- 28.3.2013 (PAWANKUMARVASHIST) INCOME TAX OFFICER WARD-39(3), NEW DELHI JOINT CIT, RANGE-39, N.DELHI FOR THE REASONS RECORDED BY THE AO, ITO WARD 39(3 ), IT IS A FIT CASE FOR ISSUE OF NOTICE U/S 148 OF THE I.T. SC T, 1961. ACCORDINGLY NECESSARY APPROVAL FOR REOPENING THE ABOVE CASE FOR A.Y. 2006-07 IS HEREBY GIVEN S PER THE PROVISION OF SECTION 151(2) OF I.T. ACT, 1961. ITO, WARD 39(3) SD/- 28.3.2013 (VIJAY BABUVASANTA) JT. COMMISSION OF INCOME TAX RANGE-39, NEW DELHI 8. ON GOING THROUGH THE ABOVE REASONS IT IS EVID ENT THAT THIS ASSESSMENT HAS BEEN REOPENED ON THE BASIS OF THE LE TTER RECEIVED FROM THE LD. CIT, CENTRAL-2, NEW DELHI WITH THE DIR ECTION TO TAKE NECESSARY ACTION AS PER SECTION 148 OF THE ACT . AS PER THIS, 10 ACCOMMODATION ENTRIES WERE OBTAINED BY VARIOUS PERS ONS FROM SH. RAKESH GUPTA AND SH. VISHESH GUPTA AS WELL AS SH. N AVNEET JAIN AND SH. VAIBHAV JAIN. COPY OF THIS LIST WAS FORWAR DED IN A CD TO THE ASSESSING OFFICER. THUS THIS LIST CONTAINED THE NA ME OF THE ASSESSEE. THE ASSESSING OFFICER REOPENED THE ASSESS MENT ON THE BASIS OF THIS INFORMATION. THE BASIS GIVEN BY THE ASSESSING OFFICER IN THE REASONS IS THAT THESE PERSONS HAVE ADMITTED THAT THEY HAVE GIVEN ACCOMMODATION ENTRIES TO THE PARTIES WHOSE LI STS HAVE BEEN PROVIDED BY THEM. FROM THE ABOVE FACTS IT IS APPAR ENT THAT THE ASSESSING OFFICER AT THAT POINT OF TIME WHEN HE REC ORDED THE REASONS WAS NOT HAVING THE COPY OF THE STATEMENT OR ANY OTHER MATERIAL IN WHICH THESE PEOPLE HAVE ALLEGED TO HAVE PROVIDED ACCOMMODATION ENTRIES TO THE ASSESSEE. THIS POSITI ON GETS ALSO CORROBORATED FROM THE FACTS STATED BY THE ASSESSING OFFICER HIMSELF IN THE REASSESSMENT ORDER IN PARA 3 PAGE 5 WHICH RE AD AS UNDER:- HERE IT IS PERTINENT TO MENTION THAT IN THE INTERV ENING PERIOD, THIS OFFICE HAD CONVERSATIONS WITH THE ACIT, CENTRA L CIRCLE-10, NEW DELHI FROM WHOM VIDE THIS OFFICES LETTER DATED 23.07.2013, 02.09.2013, 14.10.2013, 06.11.2013, 22.11.2013, 09.12.2013 & 24.12.2013 AND VIDE JOINT CIT, RANGE-39, NEW DELHIS LETTER DATED 16.12.2013, THE FOLLOWING DETAILS/DOCUMENTS WERE SOUGHT:- I) COPIES OF THE STATEMENTS RECORDED OF SH. RAKEH GUPT A & SH. VISHESH GUPTA DN SH. NAVNEET JAIN & SH. VAIBHAV JAI N IN SEARCH/POST SEARCH/ASSESSMENT PROCEEDINGS. 11 II) SOFT COPIES OF THE TATEMENTS RECORDED OF SH. RAKEH GUPTA & SH. VISHESH GUPTA DN SH. NAVNEET JAIN & SH. VAIBHAV JAI N IN SEARCH/POST SEARCH/ASSESSMENT PROCEEDINGS.\ III) HARD COPY OF ASSESSMENT ORDERS PASSED IN THESE CASE S FOR A.Y. 2006-7 IV) SOFT COPY OF ASSESSMENT ORDERS PASSED IN THESE CASE S FOR A.Y. 2006-07 V) ANY OTHER DETAIL/DOCUMENT YOU MAY DEEM FIT THAT NEE D TO BE CONFRONTED WITH THE PARTIES WHOSE CASES HAVE BEEN R EOPENED U/S 148 OF I. TAX ACT. 4. IN RESPONSE TO THESE LETTERS, THE ACIT, CENTRAL CIRCLE-10, NEW DELHI VIDE HIS LETTER DATED 20.12.2013, RECEIVED BY THIS OFFICE ON 27.12.2013, FORWARDED HIS REPLY ALONG WITH SUPPORTI NG DOCUMENTS, WHICH WERE RUNNING INTO 92 PAGES. AFTER GOING THRO UGH THE REPLY FORWARDED BY THE ACIT, CENTRAL CIRCLE-10, NEW DELHI AND THE ANNEXURE ENCLOSED THEREIN, THIS OFFICE WAS OF THE V IEW THAT THE PURCHASE BILLS PROVIDED BY THE 11 FIRMS/CONCERS CON TROLLED AND MANAGED BY SH. RAKESH GUPTA AND SH. VISHESHGUPT OR THEIR FAMILY MEMBERS IS NOTHING BUT BOGUS PURCHASE BILLS/ACCOMMO DATION BILLS. 9. THE ABOVE FACTS STATED BY THE ASSESSING OFFICER MAKES IT ABUNDANTLY CLEAR THAT AT THE TIME OF FORMATION OF T HE BELIEF TO REOPEN ASSESSMENT THE ASSESSING OFFICER WAS NOT HAV ING THE ABOVE SAID INFORMATION. ONLY THAT HE WAS HAVING THE LETT ER ALONG WITH LIST WHICH WAS FORWARDED BY THE CIT, CENTRAL-2, NEW DELH I. 10. THE ABOVE OBSERVATION OF THE ASSESSING OFFICER ALSO SHOWS THAT IT WAS LETTER DATED 20.12.2013 RECEIVED BY HIM ON 27.12.2013 ON THE BASIS OF WHICH THE ASSESSING OFFICER COULD M AKE A VIEW THAT THE PURCHASE BILLS PROVIDED BY THESE PERSONS OR THE IR FAMILY MEMBERS IS NOTHING BUT BOGUS PURCHASE BILLS. AT TH E TIME OF 12 RECORDING OF THE REASONS THE ASSESSING OFFICER APPA RENTLY WAS NOT HAVING ANY IDEA ABOUT THE NATURE OF THE TRANSACTION S ENTERED INTO BY THE ASSESSEE. IN THE REASONS RECORDED THERE IS NO MENTION ABOUT THE NATURE OF THE TRANSACTIONS. AS PER PROVISION O F SECTION 147 AN ASSESSMENT CAN BE REOPENED IF THE ASSESSING OFFICER HAS REASONS TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT. THE REASONS TO BELIEVE HAS TO BE THAT OF THE ASSESS ING OFFICER AND FURTHER THERE HAVE TO BE APPLICATION OF MIND BY THE ASSESSING OFFICER THOUGH THE REASONS TO BELIEVE DOES NOT MEAN THAT TH E ASSESSING OFFICER SHOULD HAVE FINALLY ASCERTAINED THE FACT TH AT INCOME HAS ESCAPED ASSESSMENT BUT AT THE SAME TIME, IT ALSO ME ANS THAT THE ASSESSING OFFICER IS REQUIRED TO EXAMINE THE FACTS ON THE BASIS OF THE INFORMATION AND SATISFY HIMSELF THAT THE TAXABL E INCOME HAS ESCAPED ASSESSMENT. IN THE PRESENT CASE, ON GOING THROUGH THE REASONS IT IS QUITE EVIDENT THAT THE ASSESSING OFFI CER WAS ALSO NOT AWARE OF THE NATURE OF THE ACCOMMODATION ENTRIES. IN THE REASONS RECORDED HE HAS SIMPLY MENTIONED THE NAME OF THE PA RTY AND THE AMOUNT AND NOWHERE HAS STATED THE NATURE OF SUCH EN TRY. THIS ALSO SHOWS THAT THE ASSESSING OFFICER HAS MADE NO EFFORT TO LOOK INTO THE RETURN OF THE ASSESSEE WHICH WAS AVAILABLE WITH HIM . THIS FACT GETS FURTHER SUPPORTED FROM THE SHEET APPENDED TO THE RE ASONS AND QUOTED ON PAGE 4 OF THE ASSESSMENT ORDER WHEREBY AG AINST ITEM NO. 7, WHETHER THE ASSESSMENT IS PROPOSED TO BE MAD E FOR THE FIRST TIME, THE ASSESSING OFFICER HAS STATED YES, AND I N COLUMN NO. 7(A), WHETHER ANY VOLUNTARY RETURN HAD ALREADY BEEN FILED AND IN COLUMN 13 NO. 8 (B), DATE OF FILING THE SAID RETURN NA HAS BEEN STATED. THUS THIS IS A CLEAR CASE OF NON-APPLICATION OF MIND BY THE ASSESSING OFFICER. IT MAY ALSO BE RELEVANT THAT ON PAGE 2 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HIMSELF HAS STATED THA T IN THIS CASE THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION W AS FILED WITH THIS WARD ON 27.09.2006. THESE FACTS CLEARLY DEMONSTRAT E THAT THE RETURN WAS WITH THE SAME WARD AND AT THE TIME OF RE CORDING OF THE REASONS FOR REOPENING THE ASSESSMENT, THE ASSESSING OFFICER HAS NOT LOOKED AT THE RETURN AND IN A MECHANICAL WAY, ON RE CEIPT OF THE LETTER FROM THE CIT, CENTRAL-2, NEW DELHI THE ASSES SMENT HAS BEEN REOPENED. IT IS A SETTLED POSITION OF LAW THAT T HERE MUST BE MATERIAL FOR FORMATION OF A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. FURTHER REASONS REFERRED TO MUST DISCL OSE PROCESS OF REASONING BY WHICH THE ASSESSING OFFICER HOLDS REAS ON TO BELIEVE. THERE MUST BE NEXUS BETWEEN SUCH MATERIAL AND BELIE F. FURTHER AND MOST IMPORTANTLY THE REASONS REFERRED TO MUST S HOW APPLICATION OF MIND BY THE ASSESSING OFFICER. IT IS ALSO A SET TLED LAW THAT THE VALIDITY OF THE INITIATION OF THE REASSESSMENT PROC EEDING IS TO BE JUDGED WITH REFERENCE TO THE MATERIAL AVAILABLE WIT H THE ASSESSING OFFICER AT THE POINT OF TIME OF THE ISSUE OF NOTICE UNDER SECTION 148. IN THE PRESENT CASE, AS IS EVIDENT FROM THE ASSESSM ENT ORDER, THE ASSESSING OFFICER WAS HAVING NOTHING EXCEPT THE LIS T PROVIDED BY THE CIT, CENTRAL-2, NEW DELHI ABOUT THE LIST OF ACCOMMO DATION ENTRIES. BEYOND THAT HE WAS NOT HAVING THE COPIES OF THE STA TEMENT OF ANY OF THESE PERSONS. HE WAS NOT HAVING COPY OF THE AS SESSMENT ORDERS 14 AND OTHER DETAILS OR DOCUMENT WHICH WOULD HAVE ENAB LED THE ASSESSING OFFICER TO APPLY HIS MIND AND FORM A BELI EF THAT INCOME HAS ESCAPED ASSESSMENT. IN FACT THIS INFORMATION W AS NOT WITH THE ASSESSING OFFICER TILL FAG END OF THE REASSESSMENT PROCEEDINGS, A FACT ADMITTED BY THE ASSESSING OFFICER HIMSELF IN T HE ASSESSMENT ORDER. THE JUDGMENT RELIED UPON BY THE LEARNED AR ALSO SUPPORTS THE CASE OF THE ASSESSEE. IN THE CASE OF SARTHAK S ECURITIES PVT. LTD. VS. ITO (2009) 329 ITR 110 THE HONBLE JURISDICTION AL DELHI HIGH COURT HAS HELD THAT UNDER THE CIRCUMSTANCES NARRATE D HEREINABOVE THE REOPENING CANNOT BE SAID TO BE A VALID REOPENIN G. THE HONBLE COURT HAS HELD AS UNDER:- IN THE CASE AT HAND, AS IS EVINCIBLE, THE AO WAS A WARE OF THE EXISTENCE OF FOUR COMPANIES WITH WHOM THE ASSES SEE HAD ENTERED INTO TRANSACTION. BOTH THE ORDERS CLEAR LY EXPOSIT THAT THE AO WAS MADE AWARE OF THE SITUATION BY THE INVESTIGATION WING AND THERE IS NO MENTION THAT THE SE COMPANIES ARE FICTITIOUS COMPANIES. NEITHER THE REA SONS IN THE INITIAL NOTICE NOR THE COMMUNICATION PROVIDING REASONS REMOTELY INDICATE INDEPENDENT APPLICATION OF MIND. TRUE IT IS, AT THAT STAGE, IT IS NOT NECESSARY TO HAVE THE ESTA BLISHED FACT OF ESCAPEMENT OF INCOME BUT WHAT IS NECESSARY IS TH AT THERE IS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON C OULD HAVE FORMED THE REQUISITE BELIEF. TO ELABORATE, THE CONCLUSIVE PROOF IS NOT GERMANE AT THIS STAGE BUT T HE FORMATION OF BELIEF MUST BE ON THE BASE OR FOUNDATI ON OR PLATFORM OF PRUDENCE WHICH A REASONABLE PERSON IS R EQUIRED TO APPLY. AS IS MANIFEST FROM THE PERUSAL OF THE SU PPLY OF REASONS AND THE ORDER OF REJECTION OF OBJECTIONS, T HE NAMES OF THE COMPANIES WERE AVAILABLE WITH THE AUTHORITY. THEIR 15 EXISTENCE IS NOT DISPUTED. WHAT IS MENTIONED IS THA T THESE COMPANIES WERE USED AS CONDUITS. THE SAME HAS NOT B EEN REFERRED TO WHILE PASSING THE ORDER OF REJECTION. T HE ASSESSEE IN HIS OBJECTIONS HAD CLEARLY STATED THAT THE COMPANIES HAD BANK ACCOUNTS AND PAYMENTS WERE MADE TO THE ASSESSEE COMPANY THROUGH BANKING CHANNEL. THE IDENTITY OF THE COMPANIES WAS NOT DISPUTED. UNDER T HESE CIRCUMSTANCES, IT WOULD NOT BE APPROPRIATE TO REQUI RE THE ASSESSEE TO GO THROUGH THE ENTIRE GAMUT OF PROCEEDI NGS. IT IS TOTALLY UNWARRANTED. RESULTANTLY, THE INITIATION OF PROCEEDINGS UNDER S. 147 AND ISSUANCE OF NOTICE UND ER S. 148 ARE HEREBY QUASHED. 11. SIMILARLY IN SIGNATURE HOTELS (P) LTD. VS. ITO (2011) 338 ITR 51 (DEL) THE HONBLE COURT HAS ALSO QUASHED THE REO PENING OF THE ASSESSMENT ON THE GROUND THAT THE AO DID NOT INDEPE NDENTLY APPLY HIS MIND TO THE INFORMATION RECEIVED FROM THE DIREC TOR OF INCOME TAX (INV.). THE RELEVANT OBSERVATION OF THE COURT READS AS UNDER:- THE FIRST SENTENCE OF THE REASONS STATES THAT INFO RMATION HAD BEEN RECEIVED FROM DIRECTOR OF IT (INV.) THAT T HE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS. 5 LACS DURING FINANCIAL YEAR 2002-03 AS PER THE DETAILS GI VEN IN ANNEXURE. THE SAID ANNEXURE RELATES TO A CHEQUE REC EIVED BY THE PETITIONER ON 9TH OCT., 2002 FROM SS LTD. FR OM THE BANK AND THE ACCOUNT NUMBER MENTIONED THEREIN. THE LAST SENTENCE RECORDS THAT AS PER THE INFORMATION, THE A MOUNT RECEIVED WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. THE AFORESAID REASONS DO NOT SATISFY THE REQUIREMENTS OF S. 147. THE REASONS AND THE INFORMATION REFERRED TO IS EXTREMELY SCANTY AND VAG UE. THERE IS NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEP T 16 ANNEXURE. ANNEXURE CANNOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWS OR ESTABLISHES NEXU S OR LINK WHICH DISCLOSES ESCAPEMENT OF INCOME. ANNEXURE IS N OT A POINTER AND DOES NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, IT IS APPARENT THAT THE AO DID NOT APPLY H IS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND M ATERIAL OF THE INFORMATION. THE AO ACCEPTED THE PLEA ON THE BASIS OF VAGUE INFORMATION IN A MECHANICAL MANNER. THE CIT A LSO 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 REC EIVED FROM THE DIRECTOR OF IT (INV.) AND ARRIVE AT A BELI EF WHETHER OR NOT ANY INCOME HAD ESCAPED ASSESSMENT. COMPANY S S LTD. HAD APPLIED FOR AND WAS ALLOTTED SHARES IN THE PETITIONER COMPANY ON PAYMENT BY CHEQUE OF RS. 5 LACS. SS LTD. IS AN INCORPORATED COMPANY AND THE PETITIONER HAS PLEADED AND STATED THAT THE SAID COMPANY HAS A PAID-UP CAPITAL OF RS. 90 LACS. THE COMPANY WAS INCORPORATED ON 4TH JAN., 198 9 AND WAS ALSO ALLOTTED PAN IN SEPTEMBER, 2001. THE FACTS INDICATED ABOVE DO NOT SHOW THAT SS LTD. IS A NON-E XISTING AND A FICTITIOUS ENTITY/PERSON. FOR THE REASONS STA TED ABOVE, WRIT OF CERTIORARI IS ISSUED QUASHING THE PROCEEDIN GS UNDER S. 148 12. IN THE CASE OF CIT VS. SFIL STOCKBROKING CO. (2 010) 325 ITR 285 (DEL) ALSO THE HONBLE HIGH COURT HAS QUASHED T HE REOPENING PROCEEDINGS ON THE GROUND THAT FROM THE REASONS IT IS NOT DISCERNIBLE AS TO WHETHER THE AO HAS APPLIED HIS MI ND TO THE INFORMATION AND INDEPENDENTLY ARRIVED AT A BELIEF T HAT INCOME HAS ESCAPED ASSESSMENT. THE HONBLE COURT HAS HELD AS UNDER:- 17 THE FIRST SENTENCE OF THE SO-CALLED REASONS RECORD ED BY THE AO IS MERE INFORMATION RECEIVED FROM THE DY. DIRECT OR OF IT (INV.). THE SECOND SENTENCE IS A DIRECTION GIVEN BY THE VERY SAME DY. DIRECTOR TO ISSUE A NOTICE UNDER S. 148 AN D THE THIRD SENTENCE AGAIN COMPRISES OF A DIRECTION GIVEN BY THE ADDL. CIT TO INITIATE PROCEEDINGS UNDER S. 148 IN R ESPECT OF CASES PERTAINING TO THE RELEVANT WARD. THESE THREE SENTENCE ARE FOLLOWED BY THE FOLLOWING SENTENCE, WHICH IS TH E CONCLUDING PORTION OF THE SO-CALLED REASONS : 'THUS , I HAVE SUFFICIENT INFORMATION IN MY POSSESSION TO ISSUE NO TICE UNDER S. 148 IN THE CASE OF M/S SFIL STOCK BROKING LTD. O N THE BASIS OF REASONS RECORDED AS ABOVE.' FROM THE ABOVE , IT IS CLEAR THAT THE AO REFERRED TO THE INFORMATION AND T HE TWO DIRECTIONS AS 'REASONS' ON THE BASIS OF WHICH HE WA S PROCEEDING TO ISSUE NOTICE UNDER S. 148. THESE CANN OT BE THE REASONS FOR PROCEEDING UNDER S. 147/148. THE FIRST PART IS ONLY AN INFORMATION AND THE SECOND AND THE THIRD PA RTS OF THE BEGINNING PARA OF THE SO-CALLED REASONS ARE MER E DIRECTIONS. FROM THE SO-CALLED REASONS, IT IS NOT A T ALL DISCERNIBLE AS TO WHETHER THE AO HAD APPLIED HIS MI ND TO THE INFORMATION AND INDEPENDENTLY ARRIVED AT A BELIEF T HAT, ON THE BASIS OF THE MATERIAL WHICH HE HAD BEFORE HIM, INCOME HAD ESCAPED ASSESSMENT. CONSEQUENTLY, THE TRIBUNAL HAS ARRIVED AT THE CORRECT CONCLUSION ON FACTS. THERE I S NO SUBSTANTIAL QUESTION OF LAW WHICH ARISES FOR CONSID ERATION. 13. IN VIEW OF THE ABOVE DISCUSSED FACTS OF THE P RESENT CASE, THE REOPENING OF THE ASSESSMENT IS WITHOUT APPLICATION OF MIND AND EXAMINATION OF THE FACTS AND ACCORDINGLY THE RE OPENING IS HELD TO BE INVALID AND ACCORDINGLY THE SAME IS QUAS HED. ACCORDINGLY THE REOPENING IS HELD TO BE BAD IN LAW AND GROUND NOS.2 AND 3 ARE ALLOWED. 18 8.1 I ALSO FIND THAT THE HONBLE DELHI HIGH COURT I N THE CASE OF SIGNATURE HOTELS (P)_ LTD. VS. ITO AND ANOTHER REPO RTED IN 338 ITR 51 (DEL) HAS UNDER SIMILAR CIRCUMSTANCES HAS HELD AS F OLLOWS:- FOR THE A.Y. 2003-04, THE RETURN OF INCOME OF THE ASSESSEE COMPANY WAS ACCEPTED U/S.143(1) OF THE INC OME- TAX ACT, 1961 AND WAS NOT SELECTED FOR SCRUTINY. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE U /S.148 WHICH WAS OBJECTED BY THE ASSESSEE. THE ASSESSING O FFICER REJECTED THE OBJECTIONS. THE ASSESSEE COMPANY FILED WRIT PETITION AND CHALLENGED THE NOTICE AND THE ORDER ON OBJECTIONS. THE DELHI HIGH COURT ALLOWED THE WRIT PETITION AND HELD AS UNDER: (I) SECTION 147 OF THE INCOME-TAX ACT, 1961, IS WI DE BUT NOT PLENARY. THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMEN T. THIS IS MANDATORY AND THE REASON TO BELIEVE ARE REQUIR ED TO BE RECORDED IN WRITING BY THE ASSESSING OFFICER. (II) A NOTICE U/S.148 CAN BE QUASHED IF THE BELIEF IS NOT BONA FIDE, OR ONE BASED ON VAGUE, IRRELEVANT AND NON-SPE CIFIC INFORMATION. THE BASIS OF THE BELIEF SHOULD BE DISC ERNIBLE FROM THE MATERIAL ON RECORD, WHICH WAS AVAILABLE WITH TH E ASSESSING OFFICER, WHEN HE RECORDED THE REASONS. THERE SHOULD BE A LINK 19 BETWEEN THE REASONS AND THE EVIDENCE/MATERIAL AVAIL ABLE WITH THE ASSESSING OFFICER. (III) THE REASSESSMENT PROCEEDINGS WERE INITIATED O N THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME -TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS.5 LAKHS DURING F.Y. 2002-03 AS STAT ED IN THE ANNEXURE. ACCORDING TO THE INFORMATION, THE AMOUNT RECEIVED FROM A COMPANY, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. THE REASONS D ID NOT SATISFY THE REQUIREMENTS OF SECTION 147 OF THE ACT. THERE WAS NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEPT T HE ANNEXURE. THE ANNEXURE COULD NOT BE REGARDED AS A M ATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNE XURE WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF IN COME. (IV) FURTHER, THE ASSESSING OFFICER DID NOT APPLY H IS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERI AL OF THE INFORMATION. THERE WAS NO DISPUTE THAT THE COMPANY, S, HAD A PAID UP CAPITAL OF RS.90 LAKHS AND WAS INCORPORATED ON JANUARY 4, 1989, AND WAS ALSO ALLOTTED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER 2001. THUS, IT COULD NOT BE HEL D TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WER E NOT VALID AND WERE LIABLE TO THE QUASHED. 20 9. IN VIEW OF ABOVE, I AM OF THE CONSIDERED VIEW TH AT THE AFORESAID ISSUE IN DISPUTE IS EXACTLY THE SIMILAR AND IDENTIC AL TO THE ISSUE INVOLVED IN THE PRESENT APPEAL AND IS SQUARELY COVERED BY THE A FORESAID DECISIONS OF THE HONBLE HIGH COURT OF DELHI SIGNATURES HOTELS ( P) LTD. (SUPRA) AND ITAT, DELHI DECISION IN UNIQUE METAL INDUSTRIES VS. ITO. HENCE, RESPECTFULLY FOLLOWING THE ABOVE PRECEDENTS IN THE CASE OF SIGNATURE HOTELS (P) LTD. VS. ITO AND UNIQUE METAL INDUSTRIES VS. ITO, I DECIDE THE LEGAL ISSUE IN DISPUTE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE AND ACCORDINGLY QUASH THE REASSESSMENT PROCEEDINGS AND ALLOW THE LEGAL GROUND NO. 2 RAISED BY THE ASSESSEE IN ITS APPEAL. SINCE I HAVE QUASHED THE REASSESSMENT PROCEEDINGS, AS AFORESAID, THE OTH ER ISSUES ARE NOT BEING DEALT WITH. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.03.2017. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 09/3/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES