Sarika Jain, Ludhiana V. ITO, Ludhiana

ITA 316/CHANDI/2012

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2574 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 12-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Reopening of assessment; Gift; Additional evidence; Tangible material; Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 131; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.RANO JAIN, ACCOUNTANT MEMBER ITA NO. 316/CHD/2012 ASSESSMENT YEAR: 2005-06 SMT. SARIKA JAIN, VS THE ITO, 27-A, TAGORE NAGAR, WARD VII(2), LUDHIANA. LUDHIANA. PAN: ABMPJ9153G & ITA NO. 317/CHD/2012 ASSESSMENT YEAR: 2005-06 SHRI VIKRAM JAIN & SONS, HUF, VS THE ITO, 27-A, TAGORE NAGAR, WARD VII(2), LUDHIANA. LUDHIANA. PAN: AAEHV1003J & ITA NO. 318/CHD/2012 ASSESSMENT YEAR: 2005-06 SMT. SANTOSH RANI JAIN, VS THE ITO, 27-A, TAGORE NAGAR, WARD VII(2), LUDHIANA. LUDHIANA. PAN: ABMPJ9155A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 12.01.2016 DATE OF PRONOUNCEMENT : 19.01.2016 O R D E R PER BHAVNESH SAINI,JM ALL THE APPEALS BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF LD. CIT(APPEALS)-II 2 LUDHIANA DATED 11.01.2012 FOR ASSESSMENT YEAR 2005-06. IN ALL THE APPEALS, THE ASSESSEE CHALLENG ED THE RE-OPENING OF THE ASSESSMENT UNDER SECTION 148 OF THE INCOME TAX ACT AND ADDITIONS OF RS. 21 LACS, RS . 46 LACS AND RS. 12 LACS RECEIVED FROM THE DONOR SHRI S UNIL DUGGAL AND SHRI GAURAV DUGGAL AND PARMOD DUGGAL RESPECTIVELY. 2. THE LD. REPRESENTATIVES OF BOTH THE PARTIES MAIN LY ARGUED IN THE CASE OF ASSESSEE SMT. SARIKA JAIN IN ITA 316/2012 AND SUBMITTED THAT FACTS ARE SAME IN THE REMAINING APPEALS. THEREFORE, FOR THE PURPOSE OF DISPOSAL OF ALL THE APPEALS, WE TAKE UP APPEAL OF ASSESSEE SMT. SARIKA JAIN AS UNDER. ITA 316/2012 : ( SMT. SARIKA JAIN ) 3. IN THIS CASE, THE ASSESSING OFFICER PASSED THE ORDER UNDER SECTION 143(3) READ WITH SECTION 148 OF THE INCOME TAX ACT DATED 30.12.2010. THE FACTS OF THE CASE ARE THAT IN THIS CASE, THE ORIGINAL ASSESSMENT FOR ASSESSMENT YEAR 2005-06 HAD BEEN REOPENED BY ISSUIN G OF NOTICE UNDER SECTION 148 AND AFTER RECORDING REA SONS, WHICH ARE REPRODUCED IN THE ASSESSMENT ORDER, ASSESSING OFFICER ISSUED NOTICE ON 30.03.2010. THE MAIN PURPOSE OF ISSUANCE OF NOTICE UNDER SECTION 14 8 WAS THAT THE ASSESSEE HAD RECEIVED A GIFT OF RS. 21 LACS FROM ONE SHRI SUNIL DUGGAL AND SHRI GAURAV DUGGAL A ND AS PER THE REASONS, IT WAS OBSERVED BY ASSESSING OF FICER 3 ON THE BASIS OF LETTER RECEIVED FROM DCIT, CENTRAL CIRCLE, LUDHIANA THAT ASSESSEE HAD RECEIVED A GIFT OF RS. 2 1 LACS FROM SHRI SUNIL DUGGAL AND SHRI GAURAV DUGGAL AND SINCE THEY DID NOT HAVE THE BLOOD RELATION WITH THE ASSESSEE AND NEITHER THERE WAS ANY OCCASION FOR THE GIFT, THEREFORE, THE ASSESSMENT WAS REOPENED TO BRING TO TAX A SUM OF RS. 21 LACS. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD CHALLENGED THE RE-OPENING OF THE ASSESSMENT UNDER SECTION 148 OF THE ACT AND ALSO ST ATED THAT THE PROCEEDINGS ARE BAD IN LAW BUT THE ASSESSI NG OFFICER STATED THAT THE GIFT WAS RECEIVED FOR LOVE AND AFFECTION BY THE DONEE, IS NOT TENABLE SINCE IT WAS RECEIVED FROM THE STRANGER AND THERE WAS NO SUCH OCCASION AND ACCORDINGLY MADE ADDITION ON ACCOUNT O F GIFT FROM UNDISCLOSED SOURCES UNDER SECTION 69A OF THE INCOME TAX ACT. 5. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED THAT ASSESSING OFFICER MADE THE WRONG ADDITION AND HAS NOT ACCEPTED THE GENUINE GIFT WHIC H IS CONFIRMED BY THE DONOR. COPY OF THE AFFIDAVIT WAS FILED AND SOURCE OF THE SAME WAS ALSO EXPLAINED. THE ADDITIONAL EVIDENCES WERE FORWARDED TO THE ASSESSIN G OFFICER FOR HIS COMMENTS IN WHICH ASSESSING OFFICER OBJECTED TO THE ADMISSION OF THE SAME AND ALSO EXPLAINED THAT THERE WAS VALID REASON FOR RE-OPENIN G OF 4 THE ASSESSMENT UNDER SECTION 148 OF THE INCOME TAX ACT. 6. THE LD. CIT(APPEALS), CONSIDERING THE MERIT, RECORD, SUBMISSIONS OF THE ASSESSEE AND REMAND REPO RT, NOTED THAT THE INFORMATION WAS RECEIVED FROM THE ASSESSING OFFICER, CENTRAL CIRCLE, LUDHIANA ABOUT G IFT RECEIVED BY THE ASSESSEE FROM SHRI SUNIL DUGGAL AND SHRI GAURAV DUGGAL AND AFTER RECORDING THE REASONS, ASSESSMENT WAS REOPENED UNDER SECTION 148 OF THE INCOME TAX ACT AND ADDITION WAS MADE IN THE ASSESSMENT ORDER. THE LD. CIT(APPEALS) DID NOT ACC EPT CONTENTION OF THE ASSESSEE THAT THERE WAS NO APPLIC ATION OF MIND OR THAT REASONS WERE RECORDED IN MECHANICAL MANNER. THE CONTENTION OF THE ASSESSEE THAT THERE WERE NO INCRIMINATING MATERIALS AVAILABLE AGAINST ASSESS EE, WAS ALSO NOT ACCEPTED. THE LD. CIT(APPEALS) HELD T HAT FOR THE PURPOSE OF RE-OPENING, THE ONLY REQUIREMENT IS THAT THERE SHOULD BE RELIABLE INFORMATION AND THE B ELIEF OF THE ASSESSING OFFICER THAT INCOME HAS ESCAPED ASSESSMENT AND AFTER CONSIDERING THE MATERIAL ON RECORD, LD. CIT(APPEALS) JUSTIFIED THE ACTION OF TH E ASSESSING OFFICER IN RE-OPENING OF THE ASSESSMENT A ND THIS GROUND OF APPEAL OF THE ASSESSEE WAS DISMISSED . THE LD. CIT(APPEALS), WITH REGARD TO ADDITION OF ME RIT ALSO CONSIDERED THE MATERIAL ON RECORD AND NOTED TH AT THE DONORS HAVE MADE SERIES OF GIFTS THEREFORE, SAM E COULD NOT BE SAID TO BE VOLUNTARY AND ACCORDINGLY, 5 CONFIRMED THE ADDITION ON MERIT AS WELL BY FOLLOWIN G THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF LAL CHAND KALRA VS CIT 22 CTR 135 AND UPHEL D THE ACTION OF THE ASSESSING OFFICER AND ACCORDINGLY , DISMISSED THE APPEAL OF THE ASSESSEE. 7. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND REFER RED TO PB-19 WHICH IS REASONS RECORDED UNDER SECTION 14 8 OF THE INCOME TAX ACT DATED 29.03.2010 AND SUBMITTED THAT THOUGH THE GIFT WAS RECEIVED FROM SHRI SUNIL D UGGAL ONLY DONOR, IN THE REASONS THE NAME OF TWO DONORS S HRI GAURAV DUGGAL AND SHRI SUNIL DUGGAL HAVE BEEN WRONG LY MENTIONED. HE HAS REFERRED TO PB-1 & 2 WHICH IS ACKNOWLEDGEMENT OF FILING OF THE RETURN AND COMPUTA TION OF INCOME FOR THE YEAR UNDER CONSIDERATION AND SUBMITTED THAT RETURN IS FILED ON 01.08.2005 AT RS. 1,46,513/- BUT IN THE REASONS, ASSESSING OFFICER HA S MENTIONED DATE OF FILING OF RETURN AS 19.05.2005 DECLARING INCOME OF RS. 75,533/-. THIS FACT IS ALS O INCORRECTLY MENTIONED IN THE REASONS. FURTHER, IN THE REASONS, IT IS STATED THAT THERE WAS A FAILURE ON T HE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MAT ERIAL FACTS. HE HAS SUBMITTED THAT THERE IS NO COLUMN IN THE RETURN OF INCOME DECLARING THE RECEIPT OF THE GIFT. HE HAS, THEREFORE, SUBMITTED THAT ASSESSING OFFICER HA S NOT APPLIED HIS MIND WHILE RECORDING THE REASONS FOR RE - 6 OPENING OF THE ASSESSMENT AND RECORDED INCORRECT FA CTS THEREIN. PB-3 TO 8 ARE THE AFFIDAVIT OF GIFT AND A FFIDAVIT OF THE DONOR WITH HIS DETAILS OF INCOME TAX RETURN FILED ALONGWITH CASH-FLOW STATEMENT AND PB-9 IS ASSESSMEN T ORDER DATED 15.11.2007 IN THE CASE OF DONOR SHRI SU NIL DUGGAL IN WHICH NO ADVERSE VIEW HAVE BEEN TAKEN EIT HER AGAINST THE DONOR OR THE DONEE. PB-12 IS A LETTER O F THE DCIT, CENTRAL CIRCLE, LUDHIANA UNDER SECTION 131 FO R APPEARANCE OF THE ASSESSEE. PB-13 IS REPLIES OF TH E ASSESSEE AUTHORIZING SHRI GAUTAM JAIN TO APPEAR BEF ORE DCIT, CENTRAL CIRCLE, LUDHIANA IN GROUP CASE AND OTHERS. HE HAS SUBMITTED THAT THE ASSESSING OFFICE R RECEIVED INFORMATION IN THIS CASE FOR RE-OPENING OF THE ASSESSMENT FROM DCIT, CENTRAL CIRCLE-V, LUDHIANA DA TED 05.03.2007 IN GROUP CASES IN WHICH NOTHING IS MENTIONED IF THERE IS ANY ESCAPEMENT OF INCOME FOR THE PURPOSE OF RE-OPENING OF THE ASSESSMENT. HE HAS SUBMITTED THAT IN THIS CASE, SEVERAL OTHER ASSESSEE S HAVE BEEN MENTIONED BUT NO ACTIONS HAVE BEEN TAKEN AGAINST ANY OF THEM BY THE ASSESSING OFFICER EXCEPT THE THREE ASSESSEES ABOVE. HE HAS SUBMITTED THAT IN TH IS INFORMATION, THERE IS NO MENTION OF RECEIPT OF ANY BOGUS GIFT. THERE IS NO NEXUS OF MATERIAL WITH THE REASO NS. IN THE CASE OF LAL CHAND KALRA (SUPRA), THE ISSUE WAS OF CREDIT WORTHINESS OF THE DONOR AND THE PRESENT ISSU E WITH REGARD TO RE-OPENING OF THE ASSESSMENT WAS NOT THERE. NO TANGIBLE MATERIAL WAS FOUND AGAINST THE ASSESSEE FOR RE-OPENING OF THE ASSESSMENT. NO EVID ENCE 7 WAS FOUND AGAINST DONOR ABOUT THEIR CREDIT WORTHINE SS AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THERE WAS NO MATERIAL BEFORE ASSESSING OFFICER TO FORM HI S BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. SIMILARLY, THERE WAS NO TANGIBLE MATER IAL FORWARDED BY DCIT, CENTRAL CIRCLE, LUDHIANA WHICH COULD BE BASIS OF RE-OPENING OF THE ASSESSMENT. THEREFORE, RE-OPENING OF THE ASSESSMENT IS WHOLLY UNJUSTIFIED. HE HAS FILED SEVERAL DECISIONS OF DIF FERENT HIGH COURTS AND OF THE DIFFERENT BENCHES OF THE TRI BUNAL IN SUPPORT OF HIS CONTENTION AND ALSO RELIED UPON DECISION OF THE HON'BLE GUJRAT HIGH COURT IN THE CA SE OF JAGAT JAYANTI LAL PARIKH VS DCIT 355 ITR 400 IN WHI CH IT WAS HELD THAT NO ASSESSMENT COULD BE REOPENED UNDER SECTION 148 UNLESS ASSESSING OFFICER FORMED H IS INDEPENDENT BELIEF TO HIS SUBJECTIVE SATISFACTION T HAT INCOME HAS ESCAPED ASSESSMENT. THE LD. COUNSEL FO R THE ASSESSEE ALSO ON MERIT SUBMITTED THAT ADDITION IS WHOLLY UNJUSTIFIED. 7(I) ON THE OTHER HAND, LD. DR RELIED UPON ORDERS O F THE AUTHORITIES BELOW AND SUBMITTED THAT PRIMA-FACI E DETAILS WERE AVAILABLE BEFORE ASSESSING OFFICER TO REOPEN THE ASSESSMENT. THE RE-OPENING OF THE ASSESSMENT I S DONE ON THE BASIS OF REPORT RECEIVED FROM DCIT, CEN TRAL CIRCLE, LUDHIANA DATED 05.03.2007 WHICH IS TANGIBLE MATERIAL BEFORE ASSESSING OFFICER FOR RE-OPENING OF THE ASSESSMENT. SUFFICIENCY OF THE MATERIAL IS NOT REQ UIRED 8 TO BE SEEN AT THE TIME OF RE-OPENING OF THE ASSESSM ENT. HE SUBMITTED THAT DECISION OF THE HIGH COURT WOULD AMOUNT TO INFORMATION, THEREFORE, RE-OPENING OF THE ASSESSMENT IS WHOLLY JUSTIFIED IN THE MATTER. THE LD. DR RELIED UPON DECISION OF HON'BLE SUPREME COURT IN TH E CASE OF RAJESH JHAVERI STOCK BROKER 291 ITR 500, DECISION OF HON'BLE SUPREME COURT IN THE CASE OF KALYANJI MAVJI & CO. 102 ITR 287, DECISION OF SUPRE ME COURT IN THE CASE OF RAYMOND P.LTD. 236 ITR 34, DECISION OF SUPREME COURT IN THE CASE OF PURUSHOTTA M DASS BANGAR 224 ITR 362, DECISION OF DELHI HIGH COU RT IN THE CASE OF RAJAT EXPORTS IMPORT (I) PVT. LTD. 3 41 ITR 135, DECISION OF SUPREME COURT IN THE CASE OF ALA FARMS 189 ITR 285 AND DECISION OF SUPREME COURT IN THE CASE OF SHARAD BHAI LAKHANI & ANR. 243 ITR 1. THE LD. DR ALSO SUBMITTED THAT ADDITION ON MERIT HAVE B EEN RIGHTLY MADE WHICH IS SUPPORTED BY SEVERAL DECISION S OF THE HON'BLE PUNJAB & HARYANA HIGH COURT. 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE VALIDI TY OF THE RE-ASSESSMENT PROCEEDINGS UNDER SECTION 148 OF THE ACT SHALL HAVE TO BE DECIDED ON THE BASIS OF RE ASONS RECORDED BY ASSESSING OFFICER UNDER SECTION 148 OF THE ACT. IN THIS CASE, ASSESSING OFFICER RECORDED THE REASONS FOR INITIATING PROCEEDINGS UNDER SECTION 14 8 OF THE INCOME TAX ACT ON 29.03.2010, COPY OF THE SAME IS FILED AT PAGE 19 OF THE PAPER BOOK. SAME IS REPRO DUCED 9 AS UNDER : REASONS FOR ISSUANCE OF NOTICE U/S 148 SMT. SARIKA JAIN, 27-A, TAGORE NAGAR, LUDHIANA ASST T. YEAR 2005-06 PAN - ABMPJ9153G THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR THE ASSTT YEAR 2005-06 ON 19.05.2005 DECLARING TOTAL INCOME O F RS. 75,533/- INFORMATION IN THE CASE HAS BEEN RECEIVED FRO M THE O/O THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE L UDHIANA VIDE LETTER NO. 998 DATED 05.03.2007 THAT SH. SUNIL DUGG AL 38-G, SARABA NAGAR HAD GIFTED AN AMOUNT OF RS. 21,00,000/- TO SM T. SARIKA JAIN. DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF DUGGAL GROUP OF CASES CONFIRMATION OF DONEES WERE FILED. FROM THE PERUSAL OF CONFIRMATION OF SH. GAUTAM JAIN BEFORE DCIT, CENTRE CIRCLE-V, LUDHI ANA DATED 28.02.2007 IT IS FOUND THAT THE DONOR SHRI GAURAV D UGGAL AND SH. SUNIL DUGGAL HAVE NO BLOOD RELATION WITH THE DONEE NOR THERE WAS ANY SPECIFIC OCCASION FOR MAKING SUCH HUGE GIFT. TH E GIFT WAS MADE ONLY FOR LOVE AND AFFECTION FOR THE DONEE. THE GIFT RECEIVED IS FROM TOTAL A STRANGER PERSON. HENCE, THE CASE OF THE DON EE IS DEARLY FOUND TO BE HIT BY M/S LAL CHAND KALRA VS. CIT REP ORTED AT 1981(1982)-220 CTR-135(P&H). IT IS ALSO CLEAR THAT ASSESSEE HAD INTRODUCED HER OWN UNDISCLOSED MONEY BY WAY OF ALLE GED GIFT TAKEN BY HER IN BOOKS OF ACCOUNTS. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS DETAILED ABOVE IT IS CLEAR THAT THE ENTIRE AMOUNT OF RS. 21, 00,000/- IS ASSESSEE'S OWN INCOME. I HAVE, THEREFORE, REASON TO BELIEVE THAT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DI SCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMEN T, AN AMOUNT OF RS. 21,00,000/- HAS ESCAPED INCOME FOR THE A.Y. 2005-06 . HENCE IT IS A FIT CASE FOR ISSUANCE OF NOTICE U/S 148 OF THE IOME TAX ACT, 1961. 10 ISSUE NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 F OR THE A.Y. 2005-06. DATED : 29.03.2010. SD/- ( MADAN LAL ) INCOME TAX OFFICER WARD VII(2), LUDHIANA 9. IT MAY BE NOTED HERE THAT IN THE REASONS RECORDE D ABOVE, THE ASSESSING OFFICER HAS MENTIONED THAT ASSESSEE FILED RETURN OF INCOME FOR ASSESSMENT YEAR UNDER APPEAL ON 19.05.2005 DECLARING TOTAL INCOME O F RS. 75,533/-. THIS FACT IS WHOLLY INCORRECT BECAUS E THE ASSESSEE FILED ACKNOWLEDGEMENT OF FILING OF THE RET URN OF INCOME AND COMPUTATION OF INCOME IN THE PAPER BOOK AND ACCORDING TO THE SAME, RETURN OF INCOME IS FILE D BY ASSESSEE ON 01.08.2005 DECLARING TOTAL INCOME OF RS . 1,46,513/-. THE COPY OF THE REASONS FILED IN THE P APER BOOK AT PAGE 19 AS REPRODUCED ABOVE, FIND MENTION T HE SIGNATURE OF THE ASSESSING OFFICER THEREON. HOWEVE R, ASSESSING OFFICER WHILE REPRODUCING THE REASONS IN THE ASSESSMENT ORDER HAS NOTED THE DIFFERENT REASONS WH ICH DID NOT MATCH WITH THE COPY OF THE REASONS FILED IN THE PAPER BOOK. THE ASSESSING OFFICER IN PARA 2.4 OF T HE ASSESSMENT ORDER HAS MENTIONED THIS REASON EXPLAINI NG THEREIN THAT WHILE RECORDING THE REASONS UNDER SECT ION 148, RETURNED INCOME AND DATE OF FILING OF THE RETU RN 11 WERE INADVERTENTLY MENTIONED AS RS. 75,533/- AND 19.05.2005 INSTEAD OF RS. 1,46,513/- AND 01.08.2005 RESPECTIVELY. THE OBSERVATIONS OF THE ASSESSING OF FICER IN THE ASSESSMENT ORDER CLEARLY PROVE THAT ASSESSIN G OFFICER HAS MENTIONED WRONG FACTS AND WRONG INFORMATION IN THE REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT. THUS, HE HAS NO AUTHORITY TO REFER INCORRECT REASONS IN THE BODY OF THE ASSESSMENT ORD ER. IT MAY BE NOTED WHEN ASSESSEE ASKED FOR DETAILS NOT ED IN REASONS INCORRECTLY, THE A.O. DID NOT PROVIDE ANY D ETAILS TO ASSESSEE. 9(I) IT MAY ALSO BE NOTED HERE THAT ACCORDING TO THE REASONS UNDER SECTION 148, THE ASSESSING OFFICER FO UND THAT DONOR SHRI GAURAV DUGGAL AND SHRI SUNIL DUGGAL HAVE NO BLOOD RELATION WITH THE DONEE BUT ACCORDING TO THE CASE OF THE REVENUE, THE ASSESSEE RECEIVED GIFT FROM ONLY DONOR SHRI SUNIL DUGGAL AND THIS FACT IS ALSO MENTIONED IN THE LETTER OF THE DCIT, CENTRAL CIRCLE DATED 05.03.2007. THEREFORE, THIS IS ALSO WRONG INFORMATION/FACT NOTED IN THE REASONS RECORDED FOR RE- OPENING OF THE ASSESSMENT. FURTHER, IT IS NOTED IN THE REASONS THAT ASSESSING OFFICER HAS REASON TO BELIEV E THAT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR ITS ASSESSMENT. HOWEVER, IT IS NOT CLARIFY AS TO H OW THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO D ISCLOSE FULLY AND TRULY ALL MATERIAL FACTS BECAUSE THERE IS NO 12 COLUMN IN THE RETURN OF INCOME TO DISCLOSE THE RECE IPT OF THE GIFTS. THESE FACTS CLEARLY PROVE THAT ASSESSIN G OFFICER RECORDED WRONG FACTS AND WRONG INFORMATION IN THE REASONS RECORDED UNDER SECTION 148 OF THE INCOM E TAX ACT FOR RE-OPENING OF THE ASSESSMENT AND WOULD PROVE THAT ASSESSING OFFICER HAS NOT APPLIED HIS INDEPENDENT MIND BEFORE RECORDING THE REASONS FOR R E- OPENING OF THE ASSESSMENT. THUS, THE ASSESSING OFF ICER HAS NOT FORMED HIS INDEPENDENT BELIEF TO HIS SUBJEC TIVE SATISFACTION THAT INCOME HAS ESCAPED ASSESSMENT. A. O. ADMITTED IN REASONS THAT GIFT WAS MADE ONLY FOR LOV E AND AFFECTION FOR THE DONEE. 9(II) THE COPY OF LETTER DATED 05.03.2007 ISSUED BY DCIT, CIRCLE-V LUDHIANA HAS BEEN PLACED ON RECORD PROVIDING INFORMATION TO THE ADDL. CIT RANGE-VII, LUDHIANA FROM THE REGULAR ASSESSMENT PROCEEDINGS OF THE CASES OF THE DONORS IN WHICH THE NAME AND ADDRE SS OF THE DONEE, THEIR PAN NUMBER AND AMOUNT OF GIFT H AVE BEEN MENTIONED. IT WAS STATED THAT CONFIRMATION FR OM THE DONEES HAVE BEEN PROVIDED. THE DONEES WERE SUMMONED FOR EXAMINATION AND SHRI GAUTAM JAIN ATTENDED ON BEHALF OF OTHERS AUTHORIZED BY THEM AND HE WAS EXAMINED REGARDING THE GIFTS IN WHICH HE HAS CONFIRMED HAVING ALREADY ISSUED THE CONFIRMATION IN SUPPORT OF THE AFORESAID GIFTS RECEIVED FROM THE DO NOR SHRI DUGGAL. IN THIS INFORMATION, IT WAS STATED TH AT SINCE THERE IS NO RELATIONSHIP OF DONOR AND THE DON EE 13 AND THERE WAS NO SPECIFIC OCCASION FOR MAKING GIFT, THEREFORE, CASE IS HIT BY JUDGEMENT OF HON'BLE PUNJ AB & HARYANA HIGH COURT IN THE CASE OF LAL CHAND KALRA (SUPRA). THIS LETTER WAS CONTAINING THE CONFIRMATI ONS OF THE DONEES. IT WOULD, THEREFORE, CLEARLY REVEAL THA T IN THIS INFORMATION WHICH IS SOLE BASIS OF RE-OPENING OF ASSESSMENT, NO INFORMATION WAS PROVIDED BY THE ASSESSING OFFICER OF THE DONORS ABOUT ANY BOGUS GIF T GIVEN BY THE DONORS TO THE DONEE. NO FURTHER INFORM ATION WAS PROVIDED TO PRIMA-FACIE EXPLAIN ANY ESCAPEMENT OF INCOME IN THE CASES OF DONOR OR THE DONEES. THE REFERENCE IS MADE OF THE STATEMENT OF SHRI GAUTAM J AIN RECORDED BY THE ASSESSING OFFICER OF THE DONOR, COP Y OF WHICH IS PLACED ON RECORD IN WHICH SHRI GAUTAM JAIN HAVE HIMSELF AND FOR OTHER ASSESSEES HAS CONFIRMED RECEIPT OF THE GIFT AND HE HAS EXPLAINED THAT SHRI SUNIL DUGGAL OR SHRI GAURAV DUGGAL ARE NOT RELATED BY BLO OD BUT THEY ARE HIS PERSONAL FRIENDS AND THE DONORS DE AL IN BUSINESS OF MANUFACTURING OF T-SHIRTS AND EXPORT BUSINESS. IT WAS ALSO EXPLAINED THAT GENUINE GIFTS HAVE BEEN GIVEN AND ALL THE DONEES ARE KNOWN TO THE DUGG AL FAMILY BECAUSE OF THEIR FRIENDSHIP. THEREFORE, FRO M THE STATEMENT OF SHRI GAUTAM JAIN ALSO, IT IS NOWHERE DISCLOSED WHETHER THERE WAS ANY ESCAPEMENT OF INCOM E IN THE CASES OF THE DONEES I.E. THE ASSESSEE AND OT HERS. MERE REFERENCE HAS BEEN MADE OF THE JUDGEMENT IN TH E CASE OF LAL CHAND KALRA (SUPRA). IN THE CASE OF L AL CHAND KALRA (SUPRA), THE TRIBUNAL DECIDED THE 14 GENUINENESS OF THE GIFT ON MERITS AGAINST THE ASSES SEE. THE REFERENCE TO THE HON'BLE HIGH COURT WAS MADE UNDER SECTION 256(1) AND THE ISSUE BEFORE THE HON'B LE HIGH COURT WAS WITH REGARD TO CREDIT WORTHINESS OF THE DONOR. IN THIS CASE, THERE WERE NO SATISFACTORY EVIDENCES ON RECORD TO PROVE THAT THE DONORS OWNED LAND MEASURING 40 ACRE AND 20 KILLAS OR THAT THEIR ANNUA L NET INCOME WAS IN-FACT RS. 30,000/- OR RS. 18,000/- AS ALLEGED BY THEM. THEREFORE, IT WAS HELD THAT DONOR S WERE NOT MEN OF MEANS. IT WAS ALSO FOUND THAT THE LAND BELONG TO THE DONORS, WERE BARANI AND THERE WAS NO EVIDENCE ON RECORD TO SHOW AS TO WHAT WAS THEIR INC OME. APART FROM THIS ISSUE OF CREDIT WORTHINESS OF THE D ONOR, THE OTHER ISSUE WAS THAT BOTH THE DONORS WERE STRAN GERS TO THE DONEES AND THERE WAS NO OCCASION TO MAKE A G IFT. REFERENCE WAS ANSWERED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. THEREFORE, THIS CASE WAS DE CIDED ON MERITS OF BOTH THESE TWO ISSUES AND WOULD NOT DE AL WITH THE RE-OPENING OF THE ASSESSMENT UNDER SECTION 148 OF THE INCOME TAX ACT. IN THE CASE OF ASSESSEE IN A PPEAL, NO INFORMATION OF CREDIT WORTHINESS OF DONOR IS AVAILABLE. THE ASSESSEE WAS NOT TOTALLY STRANGER T O DONOR. 10. IT IS ARGUED BEFORE US THAT GIFT DEED, AFFIDAVI T OF DONOR, HIS ACKNOWLEDGEMENT OF FILING OF THE RETURN WITH COMPUTATION OF INCOME WITH CASH-FLOW STATEMENTS WER E FILED BEFORE THE ASSESSING OFFICER OF THE DONORS ON WHICH 15 NO ADVERSE INFERENCE HAVE BEEN DRAWN BY THE ASSESSI NG OFFICER. THE STATEMENT OF LD. COUNSEL FOR THE ASSE SSEE IS CORROBORATED BY THE ASSESSMENT ORDER IN THE CASE OF THE DONOR SHRI SUNIL DUGGAL, COPY OF WHICH IS FILED AT PAGE 9 OF THE PAPER BOOK. IN THIS CASE, ASSESSMENT ORDER UNDER SECTION 144 EX-PARTE WAS PASSED ON 15.11.2007 AND T HE ISSUE OF GIFTS HAVE BEEN EXAMINED BY THE ASSESSING OFFICER OF THE DONOR AND NO ADVERSE INFERENCE HAVE BEEN DRAWN OF GIVING ANY BOGUS GIFT FOR CONSIDERATION. THE ASSESSING OFFICER OF THE DONOR ACCEPTED THE DECLARE D INCOME EVEN IN THE EX-PARTE ASSESSMENT ORDER. IT W OULD, THEREFORE, CLEARLY PROVE ON RECORD THAT DESPITE MAK ING SPECIFIC ENQUIRY WITH REGARD TO GENUINENESS OF THE GIFT EVEN IN THE CASE OF DONOR AND EXAMINING ONE OF THE DONEE SHRI GAUTAM JAIN, NO ADVERSE INFERENCE WAS DRAWN AGAINST THE TRANSACTION OF THE GIFTS. THEREF ORE, THERE WAS NO MATERIAL AVAILABLE WITH THE ASSESSING OFFICER OF THE DONORS TO GIVE ANY INFORMATION TO TH E ASSESSING OFFICER OF THE ASSESSEE TO MAKE OUT A CAS E OF ESCAPEMENT OF INCOME IN THE CASE OF THE ASSESSEE. T HIS FACT IS SUPPORTED BY THE NOTICE GIVEN BY THE ASSESS ING OFFICER OF THE DONOR TO THE ASSESSEE UNDER SECTION 131 OF THE ACT (PB-12) AND REPLY OF THE ASSESSEE AND OTHER S (PB-13) ETC. IT MAY ALSO BE NOTED HERE THAT EXCEPT THE PRESENT THREE ASSESSEES, THE NAMES OF OTHER DONEES HAVE BEEN MENTIONED IN THE LETTER DATED 05.03.2007 ISSUE D BY DCIT, CC-V, LUDHIANA WHICH IS THE BASIS OF RE-OPENI NG OF THE ASSESSMENT BUT NO ACTION HAVE BEEN TAKEN AGA INST 16 OTHER ASSESSEES BY THE CONCERNED ASSESSING OFFICER. NO REASONS HAVE BEEN EXPLAINED AS TO WHY NO ACTION HAV E BEEN TAKEN ON THE BASIS OF IDENTICAL FACTS IN THE C ASES OF OTHER DONEES/ASSESSEES. 11. HON'BLE GUJRAT HIGH COURT IN THE CASE OF INDUCTOTHERM (INDIA) P.LTD. VS M. GOPALAN, DCIT 356 ITR 481 HELD AS UNDER : THE POWER TO REOPEN AN ASSESSMENT IS AVAILABLE EITH ER IN A CASE WHERE A RETURN HAS BEEN ACCEPTED UNDER SECTION 143(1) OF THE INCOME-TAX ACT, 1961, OR A SCRUTINY ASSESSMENT HAS BEEN FRAMED UNDER SECTION 143(3) OF THE ACT. A COMMON REQUIREMENT IN BOTH CASES IS THAT THE ASSESSING OFFICER SHOULD HAVE REASON TO BELIEVE TH AT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT TH ERE SHOULD BE TANGIBLE MATERIAL TO COME TO THE CONCLUSI ON THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT REAS ONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. 12. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS SMT. PARAMJIT KAUR 311 ITR 38 HELD AS UND ER : HELD, THAT THE ASSESSING OFFICER HAD NOT EXAMINED T HE INFORMATION RECEIVED FROM THE SURVEY CIRCLE BEFORE RECORDING HIS OWN SATISFACTION OF ESCAPED INCOME AN D INITIATING REASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAD THUS ACTED ONLY ON THE BASIS OF SUSPICION AND I T COULD NOT BE SAID THAT IT WAS BASED ON BELIEF THAT THE IN COME CHARGEABLE TO TAX HAD ESCAPED INCOME. THE ASSESSING OFFICER HAD TO ACT ON THE BASIS OF 'REASONS TO BELI EVE' AND NOT ON 'REASONS TO SUSPECT'. THE TRIBUNAL RIGHTLY C ONCLUDED THAT THE ASSESSING OFFICER HAD FAILED TO INCORPORAT E THE 17 MATERIAL AND HIS SATISFACTION FOR REOPENING THE ASS ESSMENT AND THEREFORE THE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT FOR REASSESSMENT PROCEEDINGS WAS NOT VALID. 13. HON'BLE DELHI HIGH COURT IN THE CASE OF SIGNATU RE HOTELS P. LTD. VS ITO & ANOTHER 338 ITR 51 HELD AS UNDER : HELD, ALLOWING THE PETITION, THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMAT ION RECEIVED FROM THE DIRECTOR OF INCOME-TAX (INVESTIGA TION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS . 5 LAKHS DURING FINANCIAL YEAR 2002-03 AS STATED IN TH E 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 DID NOT SATISFY THE REQUIR EMENTS OF SECTION 147 OF THE ACT. THERE WAS NO REFERENCE T O ANY DOCUMENT OR STATEMENT, EXCEPT THE ANNEXURE. THE ANNEX URE COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNEXURE WAS NOT A POINTER AND DID N OT INDICATE ESCAPEMENT OF INCOME. FURTHER, THE ASSESSING OFFICER DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE TH E BASIS AND MATERIAL 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 ALLOTT ED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER, 2001. THUS, IT COULD NOT BE HELD TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WERE NOT VALID AND WERE LIABLE TO BE QUASHED 14. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS ATUL KUMAR SWAMI 362 ITR 693 HELD AS UNDER : 18 A VALID REOPENING OF ASSESSMENT HAS TO BE BASED ON LY ON TANGIBLE MATERIAL TO JUSTIFY THE CONCLUSION THAT TH ERE IS ESCAPEMENT OF INCOME. HELD ACCORDINGLY, DISMISSING THE APPEAL, THAT THE NOT E FORMING PART OF THE RETURN FILED FOR THE ASSESSMENT YEAR 199 9-2000 CLEARLY MENTIONED AND DESCRIBED THE NATURE OF THE R ECEIPT UNDER A NON-COMPETE AGREEMENT. THE REASONS FOR THE NOTICE UNDER SECTION 147 OF THE INCOME-TAX ACT, 1961, NOWHER E MENTIONED THAT THE REVENUE CAME UP WITH ANY OTHER FR ESH MATERIAL WARRANTING REOPENING OF ASSESSMENT. THEREFO RE, MERE CONCLUSION OF THE PROCEEDINGS UNDER SECTION 143(1) IPSO FACTO DID NOT PERMIT INVOCATION OF POWERS FOR REOPENING THE ASSESSMENT. 15. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS ORIENT CRAFT LTD. 354 ITR 536 HELD AS UNDER : HELD, DISMISSING THE APPEAL, THAT THE REASONS DISCLO SED THAT THE ASSESSING OFFICER REACHED THE BELIEF THAT THERE WAS ESCAPEMENT OF INCOME 'ON GOING THROUGH THE RETURN O F INCOME' FILED BY THE ASSESSEE AFTER HE ACCEPTED THE RETURN FONDER SECTION 143(1) WITHOUT SCRUTINY, AND NOTHING MORE. TH IS WAS NOTHING BUT A REVIEW OF THE EARLIER PROCEEDINGS AND AN ABUSE OF POWER BY THE ASSESSING OFFICER. THE REASONS RECO RDED BY THE ASSESSING OFFICER DID CONFIRM THE APPREHENSION ABOUT THE HARM THAT A LESS STRICT INTERPRETATION OF THE WORDS 'R EASON TO BELIEVE' VIS-A-VIS AN INTIMATION ISSUED UNDER SECTION 143(1) COULD CAUSE TO THE TAX REGIME. THERE WAS NOTHING IN T HE REASONS RECORDED TO SHOW THAT TANGIBLE MATERIAL HAD COME INTO THE POSSESSION OF THE ASSESSING OFFICER SUBSEQUENT TO THE ISSUE OF THE INTIMATION. THE NOTICE REFLECTED AN ARBITR ARY EXERCISE OF THE POWER CONFERRED UNDER SECTION 147. 16. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS ATLAS CYCLE INDUSTRIES 180 ITR 319 HELD A S UNDER : 19 HELD, (I) THAT THE TRIBUNAL WAS RIGHT IN CANCELING T HE RE- ASSESSMENT AS BOTH THE GROUNDS ON WHICH THE RE-ASSE SSMENT NOTICE WAS ISSUED WERE NOT FOUND TO EXIST, AND, THER EFORE, THE INCOME-TAX OFFICER DID NOT GET JURISDICTION TO MAKE A R E- ASSESSMENT. 17. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE DISCUSSION, IT IS CLEAR THAT INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER FROM THE DCIT, CC -V, LUDHIANA DATED 05.03.2007 WHICH DID NOT REVEAL ANY FACT OF ESCAPEMENT OF ANY INCOME. IT REFERS ONLY DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF LAL CHAND KALRA (SUPRA). THIS DID NOT SAY THAT ASSESSEE RECEIVED ANY BOGUS GIFT. THE REASONS DID NOT SATISFY REQUIREMENTS OF SECTION 147 OF THE INCOME T AX ACT. THERE IS NO REFERENCE TO ANY DOCUMENT OR STATEMENT EXCEPT REFERENCE TO THE JUDGEMENT OF HIGH COURT. THE SAME COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA-FACIE SHOWED OR ESTABLISHED NEX US OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME IN THE CASE OF THE ASSESSEE. THERE IS NOTHING IN THE REAS ONS RECORDED TO SHOW ANY TANGIBLE MATERIAL HAD COME INT O POSSESSION OF ASSESSING OFFICER SUBSEQUENT TO ISSUE OF INTIMATION. A VALID RE-OPENING OF ASSESSMENT HAS T O BE BASED ONLY ON TANGIBLE MATERIAL TO JUSTIFY THE CONC LUSION THAT THERE IS ESCAPEMENT OF INCOME. THE ASSESSING OFFICER RECORDED WRONG FACTS IN THE REASONS AS MENTIONED ABOVE AND THUS, HAS NOT APPLIED HIS MIND BEFORE FORMING BELIEF OF ESCAPEMENT OF INCOME. THE 20 INFORMATION DATED 05.03.2007 WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. 18. THE ASSESSING OFFICER DID NOT EXAMINE THE INFORMATION WHICH WAS NOTHING AND DID NOT SPEAK OF ESCAPEMENT OF INCOME BEFORE RECORDING HIS OWN SATISFACTION OF ESCAPED INCOME INITIATING RE-ASSESS MENT PROCEEDINGS. THUS, ASSESSING OFFICER ACTED ONLY ON THE BASIS OF SUSPICION AND SAME COULD NOT BE SAID THAT IT WAS BASED ON BELIEF THAT INCOME CHARGED TO TAX HAS ESCAPED ASSESSMENT. THE ASSESSING OFFICER DID NOT HAVE ANY REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED INCOME. THE ASSESSING OFFICER, THEREFORE, DID NOT VALIDLY ASSUMED JURISDICTION UNDER SECTION 147/ 148 OF THE INCOME TAX ACT FOR RE-OPENING OF THE ASSESSM ENT IN THE MATTER. WE, ACCORDINGLY, SET ASIDE THE ORDE RS OF AUTHORITIES BELOW AND QUASH THE RE-OPENING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE INCOME TAX ACT. RESULTANTLY, ALL ADDITIONS WOULD STAND DELETE D. IN VIEW OF THE ABOVE FINDINGS, THERE IS NO NEED TO DEC IDE THE ISSUE OF GIFT ON MERIT BECAUSE THE SAME IS LEFT WITH ACADEMIC DISCUSSION ONLY. 19. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ITA 317/2012 & ITA 318/2012 20. THE LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT ISSUES ARE SAME IN THESE APPEALS AS HAVE 21 BEEN CONSIDERED IN APPEAL NO. 316/2012 IN THE CASE OF SMT. SARIKA JAIN. BY FOLLOWING THE REASONS FOR DEC ISION IN THE CASE OF SMT. SARIKA JAIN (SUPRA) WE SET ASID E THE ORDERS OF AUTHORITIES BELOW ADDITION QUASH THE RE- OPENING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE INCOME TAX ACT. RESULTANTLY, ALL ADDITIONS ON MERI T WOULD STAND DELETED. THERE IS NO NEED TO DECIDE TH E ISSUES ON MERIT AS THE SAME IS LEFT WITH ACADEMIC DISCUSSION ONLY. BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. 21. IN THE RESULT, ALL APPEALS OF ASSESSEES ARE ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SSD/- SD/- (RANO JAIN ) (BHAVNE SH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 TH JANUARY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD