SIKKIM FERRO ALLOYS LTD, MUMBAI V. DCIT CEN CIR 6 (OLD), MUMBAI

ITA 3245/MUM/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9214 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANPREET S DUGGAL
• Assessee Lawyers: R K SINGH; D C BOTHRA
• Keywords: Bogus purchase; Rejection of books of accounts; Principle of natural justice; Peak credit; Difference of opinion; Validity of assessment; Accommodation entries; Assessment record; Sham transactions; Reason to believe; Change of opinion; Reassessment proceedings; Set aside
• Section: 113; 13; 153; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA (AM) & SHRI AMARJIT SINGH (JM) ITA NOS.3968 & 3969/MUM/2016 (ASSESSMENT YEARS: 2007-08 & 2011-12) DCIT,CC-1(4) ROOM NO.902, 9 TH FLOOR OLD CGO BUILDING, M.K.ROAD CHURCHGATE, MUMBAI-400 020 VS. SIKKIM FERRO ALLOYS LIMITED 2 ND FLOOR, APSARA CINEMA BLDG DR.D.B.MARG, GRANT ROAD(E) MUMBAI-400 007 PAN/GIR NO. AAGCS8115B (REVENUE) : (ASSESSEE) & ITA NOS.3245&3246/MUM/2016 AND ITA NOS.2062&2063/MU M/2018 (ASSESSMENT YEARS: 2007-08,2010-11 & 2011-12) SIKKIM FERRO ALLOYS LIMITED 2 ND FLOOR, APSARA CINEMA BLDG DR.D.B.MARG, GRANT ROAD(E) MUMBAI-400 007 VS. DCIT,CC-1(4) ROOM NO.902, 9 TH FLOOR OLD CGO BUILDING, M.K.ROAD CHURCHGATE, MUMBAI-400 020 PAN/GIR NO. AAGCS8115B ( ASSESSEE ) : ( REVENUE ) ASSESSEE BY : SHRI D.C.BOTHRA & SHRI R. K. SINGH REVENUE BY : SHRI MANPREET S DUGGAL DATE OF HEARING : 28.05 .2021 DATE OF PRONOUNCEMENT : 11 .0 8 .2021 O R D E R PER SHAMIM YAHYA, A. M.: THESE CROSS APPEALS BY THE REVENUE AND THE ASSESSEE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS), MUMBAI (LD.CIT(A) FOR SHORT) PERTAIN TO THE RESPECTIVE AS SESSMENT YEARS. 2 SIKKIM FERRO ALLOYS LTD. 2. SINCE THE ISSUES ARE COMMON AND CONNECTED AND THE APPEALS WERE HEARD TOGETHER, THESE HAVE BEEN CONSOLIDATED AND DISPOSED OF BY THI S COMMON ORDER. 3. FIRST WE TAKE UP AY 2007-08, THE GROUNDS OF ASS ESSEE APPEAL READ AS UNDER:- 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(APPEALS) HAS ERRED IN RETAINING THE DISALLOWANCE @3.55% OF T HE ALLEGED BOGUS PURCHASES AND WORKING OUT AVERAGE GROSS PROFIT IN E RRONEOUS MANNER THEREFORE DISALLOWANCE RETAINED BY LD.CIT(APPEALS) BEING WRON G ON FACTS AND BAD IN LAW SAME MAY KINDLY BE DELETED. 4. THE GROUNDS OF APPEAL RAISED BY THE REVENUE R EAD AS UNDER: ( I) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN RESTRICTING THE ADDITION TO THE EXTENT OF AVERAG E G.P. OF THREE PREVIOUS YEARS AS AGAINST THE ADDITION OF RS.4,93,60,854/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF PEAK CREDIT OF BOGUS PURCHASES IGNORING THE FACT TH AT IN THE PROCESS OF PURCHASES FROM OPEN MARKET FROM ONE DEALER AND OBTAINING BILLS FRO M OTHER DEALER, THE DEPLOYMENT OF UNACCOUNTED MONEY IS INVOLVED WHICH WAS QUANTIFIED BY TAKING PEAK CREDIT.' (II) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING ADDITION OF RS.18,01,043/- BEING COMMIS SION @ 1% ON TOTAL BOGUS PURCHASES AMOUNTING TO RS.18,01,04,399/- IGNORING T HE FACT THAT FOR AVAILING BOGUS BILLS, THE ASSESSEE WOULD HAVE INCURRED COMMISSION AND THE SAME WAS CONFIRMED BY THE STATEMENTS OF VARIOUS PARTIES RECORDED DURING T HE SEARCH.' 5. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE BELO NGS TO M/S TIRUPATI GROUP OF COMPANIES. A SEARCH OPERATION U/S 132(1) OF THE ACT WAS CONDUCTED IN THE CASE OF TIRUPATI GROUP OF COMPANIES. THE AO NOTED THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING OF MATERIALS USED FOR STAIN LESS STEEL MELTING AND STAINLESS STEEL FINISHED PRODUCTS, FIAT PRODUCTS AND ROLLED PRODUCT S I.E. ROUND BAR, COILS, SHEETS, PLATES, BRIGHT BARS, WIRE RODS, BILLETS, ETC. FROM THE DETAILS OF PURCHASES MADE BY THE ASSESSEE, AO NOTED THAT, THE ASSESSEE HAS-MADE PURC HASES FROM THE FOLLOWING PARTIES WHICH ARE DECLARED AS HAWALA DEALERS BY THE SALES T AX DEPARTMENT: 1. AAKASH FERROMET PVT. LTD. 2. ADHUNIK STEEL CORPORATION 3. ARIHANT TRADING CO. 4. NEW STEEL (INDIA) 5. MOKSH TRADING CO. 3 SIKKIM FERRO ALLOYS LTD. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE LD. AR OF THE ASSESSEE COMPANY WAS ISSUED A SHOW CAUSE AND ASKED TO PROVE THE GENUINENESS OF THE TRANSACTIONS, ON ACCOUNT OF PURCHASES MADE, DURING THE YEAR UNDER CONSIDERATION ALONG WITH THE DOCUMENTARY EVIDENCE SUCH AS LEDGER CONFIR MATION, BILLS, LORRY RECEIPTS, DELIVERY CHALLANS, WEIGHING BRIDGE RECEIPTS, ETC. THE AO FURTHER NOTED THAT IN THE MEANWHILE, A SURVE Y ACTION WAS CONDUCTED ON THE ASSESSEE COMPANY ON 26.12.2012 BY THE INVESTIGA TION TEAM, MUMBAI. DURING THE COURSE OF SURVEY ACTION, IT WAS FOUND THAT, THE ASS ESSEE HAS MADE PURCHASES FROM THE ALLEGED PARTIES (WHO HAVE PROVIDED ACCOMMODATION EN TRIES WITHOUT ACTUAL DELIVERY OF GOODS). THE PURCHASES MADE FROM ALLEGED PARTIES ARE AS UNDER: F.Y. NAME OF CONCERNS FROM PURCHASES HAS BEEN MAD E AMOUNT (RS.) 2006-07 AAKASH FERROMET PVT. LTD. 5,58,60,854 2007-08 AAKASH FERROMET PVT. LTD. 12,25,900 2008-09 AAKASH FERROMET PVT. LTD. 1,24,66,864 2008-09 ADHUNIK STEEL CORPORATION 2,31,44,379 2008-09 ARIHANT TRADING COMPANY 1,36,76,530 2009-10 NEW STEEL (INDIA) 3,10,52,844 2009-10 ARIHANT TRADING CO 1,71,39,699 2010-11 MOKSH TRADING CO 92,04,193 TOTAL 18,01,04,399 6. UPON AO ENQUIRY IN THIS REGARD, ASSESSEE REFERR ED TO THE DETAILS GIVEN IN THE SURVEY AND RESPONSE THERETO. THE ASSESSEE ALSO STATED THAT STATEMENT GIVEN BY PROPRIETOR OF M/S. ARIHANT TRADING COMPANY WAS GENERAL IN NATURE THAT NO ADVERSE INFERENCE HAS BEEN GIVEN BY INVESTIGATION OFFICER. ASSESSEE ALSO DENIED THAT IT WAS AWARE OF AS TO 4 SIKKIM FERRO ALLOYS LTD. HOW INVESTIGATION WAS DONE BY SALES TAX DEPARTMENT. ASSESSEE FURTHER SUBMITTED THAT SINCE PURCHASES ARE FROM LOCAL, LORRY OWNERS NORMAL LY DO NOT GIVEN ANY LORRY RECEIPTS. ASSESSEE ALSO PLACED RELIANCE UPON CASE LAWS IN THI S REGARD. HOWEVER, THE AO WAS NOT SATISFIED. HE PROCEEDED TO ADD PEAK CREDIT INVO LVED IN THE TRANSACTIONS AND HELD AS UNDER:- A. UPON ANALYZING THE SUBMISSIONS AND DETAILS, IT WAS OBSERVED, DURING THE COURSE OF SURVEY AS WELL AS SCRUTINY PROCEEDING, THAT THE ASS ESSEE FAILED TO PRODUCE THE SUPPORTING DOCUMENTS I.E. PROPER DELIVERY' CHALLAN, TRANSPORT RECEIPT, GRNS, STOREKEEPER REGISTER OR ACKNOWLEDGEMENT OF RECEIVIN G GOODS FROM THE ABOVE SUBJECT. B. FURTHER, THE PAYMENT PATTERN SHOWS THAT THERE IS DELAYED PAYMENT TO THESE BOGUS PARTIES WHEN COMPARED TO THE PAYMENT TO OTHER PARTI ES. C. IT IS OBSERVED THAT THE PURCHASES ARE BOGUS AND TH E SALES ARE GENUINE AND THE ASSESSEE COMPANY HAS RESORTED TO CASH PURCHASES FROM UNDISCL OSED PARTIES FROM OPEN MARKET BUT THEY HAVE OBTAINED ACCOMMODATIONS ENTRIES FROM THESE ALLEGED PARTIES. D. AS THE ASSESSEE COMPANY WAS UNABLE TO SUBSTANTIATE THE PURCHASES MADE FROM ALLEGED 4 CONCERNS AS MENTIONED IN PARA 7.3, HENCE, THE PUR CHASES MADE FROM THESE PARTIES ARE PROVED TO BE NOT GENUINE. MOREOVER, THE ACTUAL PURC HASES MUST HAVE BEEN DONE FROM UNDISCLOSED PARTIES IN THE MARKET IN CASH AND THE T OTAL AMOUNT IN EACH YEAR REPRESENTS A CASH PURCHASES MADE BY THE ASSESSEE COMPANY. E. LOOKING TO THE FACTS OF THE ASSESSEE COMPANY'S C ASE, IT IS SEEN THAT, THE ASSESSEE HAS MADE CASH PURCHASES FROM OPEN MARKET AND TO ABSORB THESE TYPES OF TRANSACTIONS, THE ASSESSEE HAS TAKEN ONLY BILLS FROM THE ABOVE MENTIO NED HAWALA DEALERS WITHOUT TAKING ACTUALLY DELIVERY OF GOODS. BY DOING THIS, THE ASSE SSEE HAS INCORPORATED SHAM TRANSACTIONS IN THE BOOKS OF ACCOUNTS AS PURCHASES. TO CONCEAL THE ILLEGALITY OF THESE TYPES OF TRANSACTIONS, THE ASSESSEE HAS CONVERTED T HESE TRANSACTIONS INTO THE VALID / GENUINE TRANSACTIONS BY MAKING PAYMENT TO HAWALA DE ALERS THROUGH PROPER BANKING CHANNELS. HOWEVER, IT IS A COMMON SENSE, ONE CAN PA Y TO ANOTHER UPTO THE EXTENT OF CASH AVAILABLE WITH HIM. THE ASSESSEE IS NOT THE EX CEPTION FOR THE SAME. FOR FINDING THE INVOLVEMENT OF CASH IN THESE TYPES OF TRANSACTI ONS, I HEREBY APPLIED THE SCIENTIFICALLY PROVEN METHOD OF PEAK CREDIT BALANCE STANDING IN THE ACCOUNT OF THE BOGUS TRADERS AS CREDITORS, TO ESTIMATE THE APPROPR IATE AMOUNT OF BOGUS PURCHASES TAKEN BY THE ASSESSEE COMPANY FROM THE BOGUS HAWALA TRADERS MENTIONED SUPRA. F. THE PEAK CREDIT BALANCE METHOD IS ABOUT THE HIGH EST CREDIT BALANCE STANDING IN THE ACCOUNT OF THE CREDITOR WHEN THE BOGUS PURCHASES FR OM THE PARTY AND THE CHEQUE PAYMENT THEREOF IS ROUTED THROUGH THE BOOKS OF ACCO UNT AND NORMAL BANKING CHANNELS, IN A CIRCULAR MOTION, OVER AND OVER AGAIN, IN SUCH A MANNER THAT THE BOGUS PURCHASES ARE MADE FROM THE SAME PARTY REPEATEDLY AND THE PAY MENT THEREOF IS ALSO MADE TO THE R A SAME PARTY IN A GIVEN YEAR, SO AS TO SHOW A DISTORT ED AND EXAGGERATED PICTURE OF THE TOTAL AMOUNT OF PURCHASES TAKEN FROM THE BOGUS PART Y. IN SUCH A SCENARIO, TO AVOID THE EXAGGERATED AMOUNT OF TOTAL PURCHASES TAKEN FROM TH E BOGUS PARTY, A SCIENTIFIC METHOD OF PEAK CREDIT BALANCE IS APPLIED WHEREBY ONLY THE HIGHEST CREDIT BALANCE AS APPEARING IN THE ACCOUNT OF THE CREDITOR IS ONLY ADDED BACK T O THE INCOME OF ASSESSEE INVOKING THE PRINCIPLE OF NATURAL JUSTICE. 5 SIKKIM FERRO ALLOYS LTD. G. AFTER CAREFULLY GOING THROUGH THE ACCOUNTS OF SUND RY CREDITORS, THE PEAK CREDIT BALANCE IN THE ACCOUNTS OF THE BOGUS TRADERS CUM CR EDITORS FROM WHOM THE ASSESSEE HAS TAKEN BOGUS PURCHASE BILLS WAS WORKED OUT. THE BOGUS PURCHASE DURING THE YEAR UNDER CONSIDERATION FROM BILL PROVIDERS ISRS.5,58,6 0,854/- . H. FROM THE ABOVE FINDINGS AND ON THE BASIS OF SALES TAX DEPARTMENT (MAHARASHTRA) FINDINGS REGARDING THESE ALLEGED PARTIES, IT IS INF ERRED THAT THE ASSESSEE HAS RESORTED TO CASH PURCHASES IN THE OPEN MARKET, AND THE PAYMENTS WERE DONE THROUGH CHEQUES TO THE ALLEGED PARTIES, THE PEAK CREDIT BALANCE SHOWS THE CASH IN THE HANDS OF EACH ASSESSEE. HENCE, THE PEAK CREDIT IS ALSO CALCULATED . THE PEAK CREDIT IN THE CASE OF ASSESSEE COMPANY IS RS.4,93,60,854/-. HENCE, AN AMO UNT OF RS.4,93,60,854/- IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. THE PENAL TY PROCEEDINGS HAVE BEEN INITIATED U/S 271(L)(C) OF THE IT ACT, 1961, SEPARATELY FOR C ONCEALING THE PARTICULARS OF TOTAL INCOME AND FILING INACCURATE PARTICULARS OF INCOME. 7. THE AO FURTHER MADE UNACCOUNTED COMMISSION EXP ENSES ADDITION AS UNDER:- FROM THE STATEMENTS OF VARIOUS BOGUS PURCHASE BILLE RS AS MENTIONED ABOVE, IT IS SEEN THAT, THE ASSESSEE COMPANY HAS MADE BOGUS PURCHASES FROM / WITH THE HELP OF THESE PERSONS AND THEIR CONCERNS. IN RETURN OF WHICH, THE ASSESSEE COMPANY HAS PAID CERTAIN AMOUNT TO THEM AS COMMISSION / FEES. THIS FACT HAS BEEN CONFESSED BY THE ABOVE MENTIONED BOGUS BILLERS/ MEDIATORS IN THEIR RESPECT IVE STATEMENTS. THE ASSESSEE COMPANY HAS MADE TOTAL BOGUS PURCHASES OF RS. 18,01 ,04,399/- . 8.2. GENERALLY, AS PER THE MARKET PRACTICES THE BIL LERS / MEDIATORS ARE CHARGING COMMISSION /FEES RANGING BETWEEN 0.50% TO 2% OF THE TRANSACTION VALUE AS COMMISSION / FEES TO GIVE BOGUS BILLS / ACCOMMODATI ON ENTRIES. LOOKING TO THE PREVAILING MARKET RATE FOR THIS AND, AS THE PEAK CR EDIT IS WORKED OUT IN THE YEAR UNDER CONSIDERATION, I AM SATISFIED THAT THE ASSESSEE COM PANY HAS PAID COMMISSION / FEES AT THE RATE 1 % ON THE BOGUS PURCHASES AS UNACCOUNTED COMMISSION EXPENSES. CONSIDERING TO THIS, IN THE CASE OF ASSESSEE COMPAN Y, RS. 18,01,043/- (1% OF RS. 18,01,04,399/- /-) IS ADDED TO THE INCOME FOR THE Y EAR UNDER THE CONSIDERATION AS THE EXPENSES INCURRED OUT OF THE BOOKS. THE PENALTY PRO CEEDINGS HAVE BEEN INITIATED U/S 271(1) (C)OF THE I.T ACT, 1961 SEPARATELY. 8. AGAINST THIS ABOVE ORDER, ASSESSEE APPEALED BEF ORE LD.CIT(A). LD.CIT(A) REFERRED TO THE STATEMENTS DURING SURVEY, WHICH HE FOUND TO BE IN FAVOUR OF THE ASSESSEE. HE REFERRED TO HIS TEST CHECK IN THIS REGARD OF THE DO CUMENTS. HE ALSO NOTED THAT AO HAS NOT DISPUTED THE SALES, BUT HE OBSERVED THAT AO HAS REJECTED THE BOOKS OF ACCOUNTS. HE REFERRED THAT ASSESSEE HAS FURNISHED COPY OF BANK ACCOUNTS AND PAYMENTS TO SUSPICIOUS PARTIES. HE DID NOTE THAT THAT PAYMENTS MADE WHICH WERE MADE IN MULTIPLE OF 5 LACS, 10 LACS AND 20 LACS AND HE ALSO NOTED T HAT THE PAYMENTS MADE THROUGH 6 SIKKIM FERRO ALLOYS LTD. BANKING CHANNELS. HE NOTED THAT THIS ASPECT HAS BE EN DISMISSED BY THE AO AND NO INVESTIGATION HAS BEEN FOUND TO BE MADE IN THIS REG ARD AND NO EVIDENCE IS BROUGHT ON RECORD TO SHOW THAT THE MONEY WAS ROUTED BACK TO T HE ASSESSEE. THEREAFTER, LD.CIT(A) FOUND THAT WITHOUT DOUBTING CORRESPONDING SALES, CORRESPONDING PURCHASES SHOULD NOT BE DOUBTED, HE EXTENDED THIS TO THE FACT THAT CORRESPONDING PRODUCTION SHOULD ALSO NOT BE HELD TO BE BOGUS. HE REFERRED T O SEVERAL DECISIONS INCLUDING THAT OF JURISDICTIONAL HIGH COURT IN CASE OF NIKUNJ EXIM EN TERPRISES PVT.LTD. FINALLY HE SET ASIDE THE AOS ASSESSMENT OF PEAK CREDIT AND HELD THAT ADDITION SHOULD BE AVERAGE OF THREE YEARS GP @3.55%. HE ALSO PROCEEDED TO DELETE THE ADDITION ON COMMISSION EXPENSES CREDITED BY THE AO ON THE REASONING AS UND ER:- 4.2 IN GROUND NO.4, THE APPELLANT HAS CHALLENGED TH E ADDITION OF COMMISSION EXPENSES OF RS.18,01,043/-. AN THE IMPUGNED ORDER, THE AO NOTED THAT FOR AVAILING SUCH BOGUS BILLS, THE APPELLANT WOULD HAVE INCURRED COMMISSION EXPENSES @ 1% AND OBSERVED THAT THE FACT THAT SUCH TRANSACTIONS INVOL VED PAYMENT AND RECEIPT OF COMMISSION WAS CONFIRMED BY THE STATEMENTS OF VARIO US PARTIES RECORDED DURING THE SEARCH. CONSIDERING THAT THE RATE OF COMMISSION IN THIS TRADE RANGED FROM 0.5% TO 2.0%, THE AO ESTIMATED COMMISSION @1% ON THE TOTAL BOGUS PURCHASES OF RS. 18,01,04,399/-AND ADDED BACK AN AMOUNT OF 18,01,043 /-. IN APPEAL IT HAS BEEN ARGUED THAT THE SAID ADDITION IS BASED PURELY ON ESTIMATE WITHOUT ANY EVIDENCE OF ANY SUCH EXPENSE HAVING BEEN INCURRED BY THE APPELLANT. I HA VE CONSIDERED THE ISSUE AT HAND. AS IN THE PRECEDING GROUNDS IT HAS BEEN DECIDED THA T THE PURCHASES IS QUESTION HAVE NOT BEEN SHOWN TO BE BOGUS, THE ADDITION ON ACCOUNT OF ESTIMATED COMMISSION EXPENSES IS CONSEQUENTLY DELETED. 9. AGAINST THIS ORDER, ASSESSEE AND REVENUE APPEAL S ARE IN BEFORE US. WE HAVE HEARD BOTH PARTIES AND PERUSED THE RECORD. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT WITHOUT DOUBTING THE SALES PURCHASES CANNOT BE HELD TO BE BOGUS. HE FURTHER SUBMITTED THAT THIS ITAT IN THE CASE OF GROUP PARTY I.E AN IN DIVIDUAL KAMLESH MANOHAR KANURNGO IN ITA NO.3242,3243 & 3244/MUM/2016 AND OT HERS HAS ON SIMILAR FACTS DIRECTED THAT ADDITION SHOULD BE RESTRICTED TO 2% O F THE PURCHASES. HENCE, HE SUBMITTED THAT SIMILAR ORDER SHOULD BE PASSED IN THIS CASE. 7 SIKKIM FERRO ALLOYS LTD. 10. UPON CAREFUL CONSIDERATION, WE NOTE THAT AO HA S NOTED THAT ASSESEE HAS BEEN SHOWING HUGE AMOUNT OF BOGUS PURCHASES. HE ALSO REF ERRED TO VARIOUS FINDING IN THE SEARCH AND SURVEY ACTION. THE AO HAS NOTED THAT ASS ESSEE FAILED TO PRODUCE THE SUPPORTING DOCUMENTS I.E PROPER DELIVER CHALLANS, T RANSPORT RECEIPT, GRNS, STOREKEEPER REGISTER ETC. HE ALSO NOTED THAT PAYMEN T PATTERN SHOWS THAT THERE IS DELAY PAYMENT TO THESE BOGUS PARTIES WHEN COMPARED TO THE PAYMENT TO OTHER PARTIES. AO HAS FOUND THAT ASSESSEE HAS INDULGED IN SHAM TRAN SACTIONS, AND THE AO HAS MADE ADDITION PEAK CREDIT INVOLVED. HE HAS MENTIONED THA T BY MAKING BOGUS PAYMENT BY CHEQUE ASSESSEE HAS ROUTED THE MONEY BACK. HENCE, AO HAS MADE THE IMPUGNED ADDITIONS. LD.CIT(A) ON THE OTHER HAND HAS NOTED TH AT THOUGH AO HAS BY IMPLICATION REJECTED THE BOOKS OF ACCOUNTS, BUT HE HAS NOT DOU BTED THE SALES. HERE, WE NOTE THAT LD.CIT(A) HAS MISLED HIMSELF. WHEN, HE IS FINDING T HAT AO HAS REJECTED THE BOOKS OF ACCOUNT, THERE IS NO QUESTION OF HOLDING THAT AO HA S NOT DOUBTED THE SALES. MOREOVER, THERE IS NO EXAMINATION OF SALES AS SUCH. MOREOVER LD.CIT(A) HAS EVEN NOTED IN HIS ORDER THAT THE SO CALLED PAYMENTS TO THE SAID PARTI ES WERE IN ROUND FIGURES IN MULTIPLES OF 5 LACS,10 LACS, 15 LACS AND 20 LACS, AS NOTED AB OVE. HE HAS HELD THAT AO HAS NOT DONE FURTHER INVESTIGATION THAT THE MONEY IS ROUTED BACK. WE MAY GAINFULLY REFER TO THE OBSERVATION OF LD.CIT(A) IN THIS REGARD AS UNDE R:- THE APPELLANT HAS FURNISHED COPY OF ITS BANK ACCOUN T SHOWING THAT PAYMENTS TO THE SUSPECTED PARTIES WERE MADE THROUGH BANKING CHANNEL S E.G 18.09.2006 - RS.10,00,000/-TO AAKASH FERROMET; 28.09.2006 - RS.5 ,00,000/- TO AAKASH FERROMET; 08.02.2007 - RS.5,00,000/- TO AAKASH FERROMET; 13.0 2.2007 - RS.5,00,000/- TO AAKASH FERROMET ETC.{ FROM UNION BANK ACCOUNT}. SIMILARLY PAYMENTS ARE MADE FROMTHE ACCOUNT WITH SOUTH INDIAN BANK E.G. 06.02.2008 - RS .20,00,000/-AAKASH FERROMET; 07.02.2008 - RS.20,00,000/- AAKASH FERROMET; 08.02. 2008 -RS. 20,00,000/- AAKASH FERROMET; 12.02.2008 - RS.20,00,000/- AAKASH FERROM ET ETC. THUS THE FACT THAT PAYMENTS ARE MADE THROUGH BANKING CHANNELS IS EVIDE NT. HOWEVER, THOUGH THIS ASPECT HAS BEEN DISMISSED BY THE AO, NO FURTHER INVESTIGAT ION HAS BEEN FOUND TO BE MADE IN THIS REGARD AND NO EVIDENCE IS BROUGHT ON RECORD TO SHOW THAT THE MONEY WAS ROUTED BACK TO THE APPELLANT. AS SUCH IN THE FACE OF THESE FACTS, THE APPELLANTS ARGUMENTS HAVE CONSIDERABLE FORCE. 11. HERE, WE NOTE THAT ON THIS FACTS OF LD.CIT(A ) WAS OF THE OPINION THAT SOME MORE INVESTIGATION WAS REQUIRED. IN OUR CONSIDERED OPINI ON, THE SAME SHOULD HAVE BEEN 8 SIKKIM FERRO ALLOYS LTD. CONDUCTED BY THE LD.CIT(A) HIMSELF AS HIS POWERS AR E COTERMINOUS WITH THAT OF AO. IN THIS REGARD, WE NOTE THAT HONBLE SUPREME COURT IN THE CASE OF KAPOOR CHAND SHRIMAL 131 ITR 451 HAS HELD THAT IT IS THE DUTY OF THE APPELLATE AUTHORITY TO CORRECT THE ERRORS IN THE ORDERS OF THE AUTHORITIES BELOW A ND REMIT THE MATTER WITH OR WITHOUT DIRECTION, UNLESS PROHIBITED BY LAW. HERE, WE NOTE THAT EVEN AFTER NOTING THAT THE PAYMENTS ARE IN MULTIPLE OF LARGE AMOUNTS WITH NO R ELATIONSHIP WHATSOEVER WITH THE INVOICE VALUE, LD.CIT(A) HAS NOT MADE ANY FURTHER INVESTIGATION. MOREOVER, THE EXAMINATION OF THE BANK STATEMENT AND THE CONCERNED PARTY LEDGER ACCOUNT SHOWS THAT PAYMENTS HAVE A PATTERN OF HUGE PAYMENTS PERIODICAL LY AND AO ALSO HAS NOTED THAT TIME LAG BETWEEN PAYMENT IS NOT IN ACCORDANCE WITH WHAT IS THERE IN OTHER ACCOUNT. MOREOVER, THE EXAMINATION OF THE FINANCIALS OF THE ASSESSEE SHOWS THAT AGAINST AN ISSUED CAPITAL OF RS.5 CRORES, THERE IS SHARE PREMI UM ACCOUNT OF 57.6 CRORES. THE ASSESSEE COMPANY ALSO HAS RECEIVED RS.35.48 CRORES SHARE PREMIUM DURING THE YEAR ALSO. THERE ARE LOAN AND ADVANCES WITHOUT DETAIL O F RS.25.36 CRORES AND SUNDRY DEBTOR OF RS.24.45 CRORES. LD.CIT(A) HAS ALL THESE DOCUME NTS BEFORE HIM. THE CIRCULAR MOVEMENT NEEDED TO BE EXAMINED, WHEN THE ADDITION M ADE BY THE AO WAS IN TERM OF PEAK CREDIT. IT WAS INCUMBENT UPON LD.CIT(A) TO EXA MINE THIS ASPECT AND IN OUR CONSIDERED OPINION, THE LD.CIT(A) HAS ERRED IN OVER LOOKING THESE ASPECTS. AS REGARDS RELIANCE UPON THE DECISION OF KAMLESH KANURNGO CASE REFERRED ABOVE, WE FIND THAT THERE IS NO FINDING SUCH AS ONE GIVEN BY US HEREINA BOVE. MOREOVER, THE SAID CASE AND WAS OF AN INDIVIDUAL, BUT THIS IS A CASE OF CORPORA TE ASSESSEE. HENCE, RELIANCE UPON THE SAID CASE DOES NOT HELP THE CASE OF THE ASSESSEE. I N OUR CONSIDERED OPINION, THE INTEREST OF THE JUSTICE DEMANDS THAT THE ISSUE BE REMITTED T O THE FILE OF LD.CIT(A) TO EXAMINE THE ISSUE, WE NOTE THAT IN LIGHT OUR OBSERVATIONS H EREINABOVE. ACCORDINGLY, THE ISSUE IS REMITTED TO LD.CIT(A). NEEDLESS TO ADD, ASSESSEE SH OULD BE GRANTED ADEQUATE OPPORTUNITIES. 12. FOR AY 2010-11 AND 2011-12 ALSO, ON MERITS, T HE PARTIES ARE AGGRIEVED BY THE DISALLOWANCES OF BOGUS PURCHASES DONE BY THE AO AND LD.CIT(A) RESPECTIVELY. SINCE, 9 SIKKIM FERRO ALLOYS LTD. FACTS ARE IDENTICAL AND THE APPEALS WERE ARGUED BY REFERENCE TO AY 2007-08 ONLY, WE FIND THAT OUR ADJUDICATION FOR AY 2007-08 HEREINAB OVE APPLIES MUTATIS MUTANDIS AND HENCE, THE ISSUE OF ADDITION ON ACCOUNT OF BOGUS P URCHASES STANDS REMITTED TO THE FILE OF LD.CIT(A) FOR AY 2010-11 & AY 2011-12. 13. THE ASSESSEE FOR AY 2010-11 AND 2011-12 HAS R AISED A COMMON GROUND WHICH READS AS UNDER:- 1 . THAT ON FACTS OF THE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN UPHOLDING THE VALIDITY OF THE REASSESSMENT PROCEEDING INITIA TED BY THE LD. AO U/S.147 BY ISSUE OF NOTICE U/S. 148 MERELY ON CHANGE OF OPINION, ON WRONG FACTS AND IN UNLAWFUL MANNER. 14. THE ABOVE GROUND AS TO VALIDITY OF ASSESSMENT WAS ALSO RAISED BEFORE THE LD.CIT(A) FOR AY 2010-11 AND LD.CIT(A) HAS ADJUDICA TED THE ISSUE AS UNDER:- 8.2 I HAVE NOTED THAT IN THE CASE AT HAND, THE IN FORMATION WAS RECEIVED FROM DGIT (INVESTIGATION), MUMBAI THAT THE APPELLANT HAS TAKE N ACCOMMODATION ENTRIES FROM THREE PARTIES, THE DETAILS OF WHICH ARE TABULATED A S UNDER:- SR. NO. NAME OF THE PARTY HAWALA TIN HAWALA PAN AMOUNT (RS.) 1. NEW STEEL (INDIA) 27030085243V AGWPP5068K 3.10 CR. 2 APEX FERROMATE PVT. LTD. 27040739260V AAICAOG13Q 7.30 CR. 3. ARIHANT TRADING COMPANY 27G70GG8443V AVLPP4843Q 1.71 CR. TOTAL 12.11 CR 8.3 A PERUSAL OF THE ABOVE TABULAR DATA REVEALS THAT THE APPELLANT HAD TAKEN ACCOMMODATION ENTRIES TO THE TUNE OF RS. 12.11 CROR ES, DURING THE YEAR UNDER CONSIDERATION. I HAVE ALSO NOTED THAT THE AO HAS DU LY RECORDED THE REASON BEFORE 10 SIKKIM FERRO ALLOYS LTD. REOPENING THE CASE U/S 148 OF THE ACT, WHICH HAVE B EEN DULY REPRODUCED ON PAGE 2 OF THE ASSESSMENT ORDER. 8.4 THE APPELLANT HAS BEEN DULY PROVIDED WITH THE REASONS FOR REOPENING THE ASSESSMENT BY THE AO, VIDE LETTER DATED 11.02.2015. THE OBJECTIONS FILED BY THE AR VIDE LETTER DATED 26.03.15 HAS BEEN DISPOSED OF BY THE AO, VIDE A SPEAKING ORDER DATED 30.06.15. 8.5 THE SECTION 147 AUTHORIZES AND PERMITS THE AS SESSING OFFICER TO ASSESS OR REASSESS INCOME CHARGEABLE TO TAX IF HE HAS REASON TO BELIEVE THAT INCOME FOR ANY ASSESSMENT YEAR HAS ESCAPED ASSESSMENT. THE WORD 'R EASON' IN THE PHRASE 'REASON TO BELIEVE' WOULD MEAN CAUSE OR JUSTIFICATION. IF THE ASSESSING OFFICER HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAD ES CAPED ASSESSMENT, IT CAN BE SAID TO HAVE REASON TO BELIEVE THAT AN INCOME HAD ESCAPED A SSESSMENT. THE EXPRESSION CANNOT BE READ TO MEAN THAT THE ASSESSING OFFICER SHOULD H AVE FINALLY ASCERTAINED THE FACT BY LEGAL EVIDENCE OR CONCLUSION. THE FUNCTION OF THE A SSESSING OFFICER IS TO ADMINISTER THE STATUTE WITH SOLICITUDE FOR THE PUBLIC EXCHEQUE R WITH AN INBUILT IDEA OF FAIRNESS TO TAXPAYERS. 8.6 AT THE STAGE OF ISSUE OF NOTICE, THE ONLY Q UESTION IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COUL D HAVE FORMED A REQUISITE BELIEF. WHETHER THE MATERIALS WOULD CONCLUSIVELY PRO VE THE ESCAPEMENT IS NOT THE CONCERN AT THAT STAGE. AT THAT STAGE, THE FINAL OUT COME OF THE PROCEEDING IS NOT RELEVANT. IN OTHER WORDS, AT THE INITIATION STAGE W HAT IS REQUIRED IS 'REASON TO BELIEVE', BUT NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOM E. THIS IS SO BECAUSE THE FORMATION OF BELIEF BY THE ASSESSING OFFICER IS WITHIN THE RE ALM OF SUBJECTIVE SATISFACTION ITO V. SELECTED DALURBAND COAL CO. (P.) LTD. [1996] 21 7 I TR 597 (SC); RAYMOND WOOLLEN MILLS LTD. V. ITO [1999] 236 ITR 34 (SC). 8.7 THE HON'BLE APEX COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. (2007) (291 ITR 500) HAS CATEGORICALLY STATED THAT 'REASON TO BELIEVE' D OES NOT MEAN THAT THE REASON FOR RE-OPENING SHOULD HAVE BEEN FACTUALLY ASCERTAINED BY LEGAL EVIDENCE OR CONCLUSION BEFORE THE RE-OPENING OF AN ASSESSMENT. 8.8 ANY FRESH INFORMATION RECEIVED BY THE A.O. CA N ENTITLE HIM TO ISSUE NOTICE U/S.148, IF ON THE BASIS OF SUCH INFORMATION HE HAS PRIMA FACIE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. SO MUCH SO THAT IT W AS HELD BY THE HON'BLE SUPREME COURT IN CLAGGETTBRACHICO.LTD. VS CIT 177 ITR 409 (SC) THAT AN INFORMATION OBTAINED DURING ASSESSMENT PROCEEDINGS OF A SUBSEQU ENT YEAR CAN ALSO VALIDATE THE PROCEEDINGS INITIATED U/S.147 FOR EARLIER YEAR. SIM ILARLY, HON'BLE BOMBAY HIGH COURT IN THE CASE OF ANUSANDHAN INVESTMENTS LTD. VS. M.R .. SINGH, DCIT, 287 ITR 482 HELD THAT A NOTICE ISSUED U/S.148 BASED ON ASSESSMENT OF SUBSEQUENT ASSESSMENT YEAR IS VALID EVEN IF THE APPEAL IS PENDING FOR SUCH ASSESS MENT. 8.9 FURTHER, IT IS THE DUTY OF THE ASSESSEE TO DI SCLOSE FULL AND TRUE MATERIALS TO THE A.O. BUT FOR WHICH THE A.O. COULD INITIATE THE REAS SESSMENT PROCEEDINGS. IT HAS BEEN HELD BY THE HON'BLE SUPREME COURT IN SHRI KRISHNA P. LTD. 221 ITR 538, 549 THAT 11 SIKKIM FERRO ALLOYS LTD. EVERY DISCLOSURE IS NOT AND CANNOT BE TREATED TO BE A TRUE AND FULL DISCLOSURE. A DISCLOSURE MAY BE A FALSE ONE OR A TRUE ONE. IT MAY BE A FULL DISCLOSURE OR IT MAY NOT BE. THE HON'BLE SUPREME COURT HELD THAT A PARTIAL D ISCLOSURE MAY VERY OFTEN BE A MISLEADING ONE. THEREFORE, WHAT IS REQUIRED IS A FU LL AND TRUE DISCLOSURE OF ALL MATERIAL FACTS NECESSARY FOR MAKING ASSESSMENT FOR THAT YEAR . 8.10 THE HON'BLE SUPREME COURT IN THE CASE OF RAYMOND WOOLLEN MILLS LTD. VS. ITO 236 ITR 34, 35 (SC) HAS HELD THAT FOR DETERMINING WHETHER INITIATION OF REASSESSMENT PROCEEDINGS WAS VALID, IT HAS ONLY TO BE SEEN WHETH ER THERE WAS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT COULD REOPEN THE CASE. IT FURTHER HELD THAT THE SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THIS STAGE. 8.11 THE PRESENT CASE IS NOT ONE OF CHANGE OF OPI NION AS ALLEGED BY THE APPELLANT. QUESTION OF CHANGE OF OPINION ARISES WHEN THE AO FO RMS AN OPINION AND DECIDES NOT TO MAKE AN ADDITION AND HOLDS THAT THE APPELLANT WA S CORRECT IN HIS STAND. 8.12 THE SUPREME COURT IN MALEGAON ELECTRICITY CO. (P) LTD. VS. CIT (1970) 78 ITR 466 (SC) HAS OBSERVED, AS UNDER : IT IS TRUE THAT IF THE ITO HAD MADE SOME INVESTIGATION, P ARTICULARLY IF HE HAD LOOKED INTO THE PREVIOUS ASSESSMENT RECORDS, HE WOULD HAVE BEEN ABLE TO FIND OUT WHAT THE WRITTEN DOWN VALUE OF THE ASSETS SOLD WAS AND CONSE QUENTLY HE WOULD HAVE BEEN ABLE TO FIND OUT THE PRICE IN EXCESS OF THEIR WRITTEN DO WN VALUE REALIZED BY THE ASSESSEE. IT CAN BE SAID THAT THE ITO IF HE HAD BEEN DILIGENT CO ULD HAVE GOT ALL THE NECESSARY INFORMATION FROM HIS RECORDS. BUT THAT IS NOT THE S AME THING AS SAYING THAT THE ASSESSEE HAD PLACED BEFORE THE ITO TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR THE PURPOSE OF ASSESSMENT. THE LAW CASTS A DUTY ON THE ASSESSEE TO 'DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSME NT FOR THAT YEAR '. 8.13 WHEN THERE IS NO DISCUSSION ON THE ISSUE IN THE ASSESSMENT ORDER AND NO DETAILS WERE CALLED FOR BY THE AO OR FILED BY THE ASSESSEE ON THE ISSUE, NO FINDING EITHER POSITIVE OR NEGATIVE CAN BE SAID TO HAVE BEEN ARRIV ED AT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. HENCE, THERE IS NO QUESTION OF CHANGE OF OPINION AS HELD IN THE FOLLOWING JUDGEMENTS: 1. KALYANJI MAVJI& CO. VS. CIT 102 ITR 287 (SC) 2. ESSKAY ENGINEERING P. LTD. VS. CIT 247 ITR 818 3. ITO VS. PURUSHOTTAM DAS BANGUR&ANR. 224 ITR 362 (SC) 8.14 IN WRIT PETITION, NO.903G OF 2007, HONDA SIEL POWER PRODUCTS LTD. VS. CIT &ANR. DECISION DT. 14TH FEB. 2011 (REPORTED AT (2011) 52 DTR (DEL) 353-ED.) IT WAS HELD: '10 THE TERM 'FAILURE 1 ON THE PAN OF THE ASSESSEE IS NOT RESTRICTED ONLY TO THE IT RETURN AND THE COLUMNS OF THE IT RETURN OR THE TAX AUDIT REPORT. THIS IS THE FIRST STAGE. THE SAID EXPRESSION 'FAILURE TO FULLY AND TR ULY DISCLOSE MATERIAL FACTS' ALSO RELATE TO THE STAGE OF THE ASSESSMENT PROCEEDI NG, THE SECOND STAGE. THERE 12 SIKKIM FERRO ALLOYS LTD. CAN BE OMISSION AND FAILURE ON THE PART, OF THE ASS ESSEE TO DISCLOSE FULLY AND TRULY MATERIAL FACTS DURING-THE COURSE OF THE ASSES SMENT PROCEEDINGS. THIS CAN HAPPEN WHEN THE ASSESSEE DOES NOT DISCLOSE OR FURNI SH TO THE AO COMPLETE AND CORRECT INFORMATION AND DETAILS IT IS REQUIRED AND UNDER AN OBLIGATION TO DISCLOSE. BURDEN IS ON THE ASSESSEE TO MAKE FULL AN D THE TRUE DISCLOSURE. 8.1 5 FURTHER, IN THE CASE OF PIAGGIO VEHICLES P. LTD. YS. DCIT 290 ITR 377 (BOM) , THE HON'BLE JURISDICTIONAL HIGH COURT HELD THAT IN A CASE OF REOPENING AFTER 4 YEARS SUBSEQUENT TO SCRUTINY ASSESSMENTS, CONTRADICTION W AS DISCOVERED BETWEEN TAX AUDIT REPORT AND RETURN OF INCOME, IT WAS A CASE OF OMISS ION AND/OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL FACTS FOR COMPUTATION OF ITS INCOME. IT IS ALSO HELD BY HON'BLE SUPREME COURT IN THE FOLLOWING CASE S THAT FACTS WHICH COULD HAVE BEEN FOUND BY THE ITO BY FURTHER PROBING ARE COVERE D UNDER FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. 8.16 IN THE CASE OF COCA COLA INDIA VS. ACIT &ORS. (2009) 221 CTR 0225 : (2009) 1 7 DTR 0066 : (2009) 309 ITR 0194 : (2009) 1 77 TA XMAN 0103, THE HON'BLE PUNJAB & HARYANA HIGH COURT HAS HELD THAT NOTICE U/ S 147 SHOULD BE HELD AS BAD IN LAW, ONLY IF EXTRANEOUS OR ABSURD REASONS ARE RECOR DED BY THE AO. IT WAS FURTHER HELD BY THE HON'BLE COURT THAT WHETHER OR NOT THE MATERI AL SHOULD BE FINALLY TAKEN INTO ACCOUNT FOR REASSESSMENT IS A SEPARATE MATTER, WHIC H HAS TO BE DEALT WITH DURING THE COURSE OF REASSESSMENT PROCEEDINGS. THE RELEVANT PO RTION OF THE JUDGMENT IN THIS REGARD IS REPRODUCED AS UNDER: - 'OBJECTION OF COUNSEL FOR PETITIONER IS TWO FOLD : - (A) REFERENCE TO INAPPLICABLE PROVISION OFS. 92 AS IT STOOD PRIOR TO AMENDMENT W.E.F. 1 ST APRIL, 2002 AND (B) IRRELEVANCE OF ORDER OF THE TPO UNDER CHAPTER X PASSED IN RESPECT OF A SUBSEQUENT ASSESSMENT YEAR. APPLICABIL ITY OF S. 147 REQUIRES FORMATION OF OPINION THAT INCOME ESCAPED ASSESSMENT . THE SAID PROVISION IS NOT IN ANY MANNER CONTROLLED BY S. 92 NOR THERE IS ANY LIMIT TO CONSIDERATION OF ANY MATERIAL HAVING NEXUS WITH THE OPINION ON THE ISSUE OF ESCAPEMENT OF ASSESSMENT OF INCOME. INTERFERENCE WITH THE NOTICE FOR REASSESSMENT IS CALLED FOR ONLY WHERE EXTRANEOUS OR ABSURD REASONS ARE MAD E THE BASIS FOR OPINION PROPOSING TO REASSESS. APART FROM THE FACT THAT THE AO HAS GIVEN OTHER REASONS, IT CANNOT BE HELD THAT THE MATERIAL RELIED UPON BY THE AO FOR PROPOSING REASSESSMENT IS IRRELEVANT. WHETHER OR NO T THE SAID MATERIAL SHOULD BE FINALLY TAKEN INTO ACCOUNT FOR REASSESSMENT IS A MATTER WHICH HAS TO BE LEFT OPEN TO BE DECIDED BY THE AO AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE. IT CAN ONLY BE MENTIONED THAT HAVING REGA RD TO RELATIONSHIP OF THE PETITIONER TO ITS ASSOCIATE COMPANY, IT CANNOT BE C LAIMED THAT THE PRICE MENTIONED BY IT MUST BE ACCEPTED AS FINAL AND MAY N OT BE LOOKED AT BY THE AO. THERE IS NO INFIRMITY IN THE NOTICE PROPOSING REASS ESSMENT. THE AO WILL BE AT LIBERTY TO PASS AN APPROPRIATE ORDER OF ASSESSMENT, SUBJECT TO THE RIGHTS AND REMEDIES OF THE ASSESSEE. ORDER OF TPO CAN CERTAINL Y HAVE NEXUS FOR REACHING THE CONCLUSION THAT INCOME HAS BEEN INCORRECTLY ASS ESSED OR HAS ESCAPED ASSESSMENT. IN THE PRESENT CASE, THE SAID MATERIAL CAME TO THE NOTICE OF THE AO SUBSEQUENT TO THE ASSESSMENT. THERE IS NO GRIEVANCE THAT PROVISIONS OF SS. 148 13 SIKKIM FERRO ALLOYS LTD. TO 153 HAVE NOT BEEN FOLLOWED. IN SUCH A SITUATION, IT CANNOT BE HELD THAT THE NOTICE PROPOSING REASSESSMENT IS VITIATED MERELY BE CAUSE ONE OF THE REASONS REFERRED TO ORDER OF TPO. RAYMOND WOOLLEN MILLS LT D. VS. ITO &ORS. (1999) 152 CTR (SC) 418 : (1999) 236 ITR 34 (SC) AN D PHOOL CHAND BAJRANG LAL VS. ITO (1993) 113 CTR (SC) 436 : (1993) 203 IT R 456 (SC): AIR 1993 SC 2390 RELIED ON.' 8.17 IN VIEW OF THE ABOVE BINDING PRECEDENTS OF THE HON'BLE SUPREME COURT, 1 AM OF THE VIEW THAT THE AO HAD VALID REASONS TO INITIA TE REASSESSMENT PROCEEDINGS WHICH WERE DULY RECORDED AND COMMUNICATED TO THE APPELLAN T. THUS, THERE WAS NEW MATERIAL ON THE RECORD OF THE AO ON THE BASIS OF WHICH THE E ARLIER ASSESSMENT ORDER HAS BEEN RE-OPENED RIGHTLY BY THE AO U/S 147 OF THE ACT. 15. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEA L BEFORE US. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. NO SEPARATE ARGUMEN T WAS PLACED ORALLY BY LD. COUNSEL OF THE ASSESSEE ON THIS ISSUE. WE NOTE LD.C IT(A) HAS TAKEN A CORRECT VIEW OF THE MATTER. ON THE FACTS AND CIRCUMSTANCES, IT CANN OT BE SAID THAT REASSESSMENT IS A CHANGE OF OPINION HERE. IT IS TRITE THAT THERE HAS TO BE AN OPINION FIRST ONLY THEN THERE CAN BE ISSUE OF CHANGE OF OPINION. MOREOVER IT IS A LSO SETTLED LAW THAT AT THE TIME OF NOTICE ESCAPEMENT NEED NOT BE PROVED TO THE HILT. W E AGREE WITH LD.CIT(A) THAT AO HAD VALID REASON FOR REOPENING. THE CASE LAWS REFER RED BY LD.CIT(A) ALSO GERMANE. UPON CAREFUL CONSIDERATION, WE DO NOT FIND ANY INFI RMITY IN THE SAME. HENCE, WE UPHOLD THE SAME. 16. IN THE RESULT, ALL THESE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 11.08.2021 SD/- SD/- (AMARJIT SINGH) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI; DATED :. 11.08.2021 THIRUMALESH , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 14 SIKKIM FERRO ALLOYS LTD. 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT.REGISTRAR) ITAT, MUMBAI