M/s. Neptune Promoters Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 341/DEL/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6720 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 22-12-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 16-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Keywords: Reopening of assessment; Unexplained cash credit; Search and seizure; Opportunity of being heard; Principle of natural justice; Question of law; Tangible material; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 143(3); 142(1); 133A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC-II : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 341/DEL/2015 ASSESSMENT YEAR: 2005-06 M/S NEPTUNE PROMOTERS PVT. LTD. VS. ITO, WARD 13(2 ) 10, GOLE MARKET, NEW DELHI NEW DELHI 110 001 (PAN: AAACN2491D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SALIL AGARWAL, ADV. & SH. SHAILESH GUPTA, ADV. REVENUE BY : SH. F.R. MEENA, SR. DR ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 28.11.2014 OF THE LD. CIT(A)-6, NEW DELHI PERTAIN ING TO ASSESSMENT YEAR 2005-06 AND RAISED THE FOLLOWING GR OUNDS:- 1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACT S IN SUSTAINING AN ASSESSMENT UNDER SECTION 143(3)/147 O F THE ACT AT AN INCOME OF RS.44, 82, 092/- AS AGAINST RETURNED LOSS OF RS. 15,018/-, AND THAT TOO WITHOUT GIVING ANY FAIR AND PROPER OPPORTUNITY OF BEING HEARD TO T HE APPELLANT COMPANY, THEREBY, VIOLATING THE PRINCIPLE S OF NATURAL JUSTICE. 2 2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH IN LAW AND ON FACT S IN SUSTAINING THE INITIATION OF THE PROCEEDINGS UNDER SECTION 147 OF THE ACT AND, FURTHER COMPLETION OF ASSESSMEN T UNDER SECTION 143(3)/147 OF THE ACT WITHOUT SATISFY ING THE STATUTORY PRE-CONDITIONS FOR INITIATION OF THE PROCEEDINGS AND, COMPLETION OF ASSESSMENT UNDER THE ACT. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW AND ON FACTS IN SUSTAINING THE INITIATION OF PROCEEDINGS ULS 147 OF THE ACT ON THE BASIS OF INFORMATION RECEIVED FROM DIT (INVESTIGATION) MECHANICALLY AND WITHOUT INDEPENDEN T APPLICATION OF MIND. 3.1 THAT FURTHER, THE REASONS RECORDED WERE MERE REASONS TO SUSPECT AND WERE JUST TO MAKE FISHING AN D ROVING ENQUIRIES, AS NO INDEPENDENT ENQUIRY WAS CONDUCTED BY THE ASSESSING OFFICER BEFORE ISSUING S UCH NOTICE UNDER SECTION 148 AND AS SUCH THE PROCEEDING INITIATED UNDER SECTION 148 WAS A MERE PRETENCE. 4 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH IN LAW AND ON FACT S IN SUSTAINING AN ADDITION OF RS.45,00,000/- AS ALLEGED 3 ACCOMMODATION ENTRY RECEIVED FROM SH. S.K. GUPTA, A ND HELD TO BE UNEXPLAINED CASH CREDIT ULS 68 OF THE AC T. 4.1 THAT IN DOING SO, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS COMPLETELY IGNORED AND OVERLOOKED ALL THE NECESSARY DOCUMENTS WHICH WERE F ILED BEFORE HIM EXPLAINING THE FACT THAT THE APPELLANT COMPANY HAS SOLD ITS SHAREHOLDING IN VARIOUS COMPAN IES AND AS A RESULT RECEIVED RS. 45,00,000/-- FROM M/S PASSION CHIT COMPANY PVT. LTD, WHICH WAS DULY REFLE CTED IN THE APPELLANT COMPANY'S BANK ACCOUNT. 4.2 THAT FURTHER THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) IGNORED THE BASIC FACT THAT NO AMOUNT WAS EVER RECEIVED FROM SH. S.K. GUPTA (THE ALLEGED ACCOMMODATION ENTRY OPERATOR), RATHER RS. 45,00,000 /- WAS RECEIVED FROM M/S PASSION CHITS COMPANY PVT. LT D. AND ALL NECESSARY DETAILS REGARDING THE SAID TRANSA CTIONS WERE FILED BEFORE LEARNED ITO AND CIT (A), WHICH WE RE TOTALLY IGNORED BY THE BOTH THE LOWER AUTHORITIES, THUS, ADDITION SO MADE AND SUSTAINED WAS CLEARLY BASED ON SUSPICIONS AND SURMISES AND IS LIABLE TO BE DELETED AS SUCH. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW AND ON FACTS BY FAILING TO APPRECIATE THE BASIC FACT THAT THERE COULD BE NO DOUBLE 4 TAXATION OF THE SAME SUM ONCE AS SALE CONSIDERATION ON SALE OF SHARES TO MIS PASSION CHITS COMPANY PRIVATE , LTD. AND AGAIN AS UNDISCLOSED INCOME RECEIVED FROM MIS PASSION CHITS COMPANY PRIVATE LTD. THIS ADDITION IS IN DISREGARD OF THE JUDGMENT OF APEX COURT IN THE CASE OF LAXMIPAT SINGHANIA VS CIT REPORTED IN 72 ITR 291 AN D THEREFORE, UNSUSTAINABLE. 6. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), SOLELY BASED HIS ORDER ON STATEMENT MADE BY SH. D.N. TANEJA ON 07.01.2009, WHEREIN HE SPECIFICA LLY SURRENDERED RS. 45,00,000/- ON BEHALF OF APPELLANT COMPANY, IGNORING AND OVERLOOKING THE BASIC FACT TH AT SH. D.N.TANEJA WAS NEVER A DIRECTOR IN THE APPELLAN T COMPANY AND NOR HE HAD ANY SHAREHOLDING IN THE APPELLANT COMPANY, AND THUS, THE SURRENDER MADE BY HIM ON BEHALF OF APPELLANT COMPANY CANNOT BE RELIED UPO N, AS HE IS NOT AWARE OF THE FACTS OF THE APPELLANT COMPA NY. 7 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FURTHER RELIED ON A STATEMENT OF SH. S.K. GUPTA DATED 05.01.2009, WHICH STATEMENT WAS NEVER PROVIDE D TO THE APPELLANT COMPANY FOR REBUTTAL AND FURTHER N O OPPORTUNITY WAS GIVEN TO CROSS EXAMINE THE ALLEGED ENTRY OPERATOR. THUS, HIS STATEMENT SHOULD BE EXCLUDED 5 ALTOGETHER AND FURTHER ADDITION MADE ON THE BASIS O F HIS STATEMENT IS LIABLE TO BE DELETED AS SUCH. 8 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINI NG ADDITIONS IN THE HANDS OF ASSESSEE COMPANY BY MEREL Y RELYING ON THE ORDER OF ASSESSMENT PASSED BY LEARNE D AO AND NOT GIVING ANY INDEPENDENT FINDING OF HIS OWN A ND AS SUCH THE APPEAL SO DECIDED BY LEARNED CIT (A) IS WI TH TOTAL NON APPLICATION OF MIND AND ALSO WITHOUT GIVI NG ANY FAIR AND PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT COMPANY., THEREBY, VIOLATING THE PRINCIPL ES OF NATURAL JUSTICE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E ORIGINALLY FILED THE RETURN ON 21.11.2005 DECLARING LOSS OF RS. 15,0 18/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE I.T. ACT, 1961. IN THIS CASE INFORMATION WAS RECEIVED FROM THE DIRECTORATE OF IN COME TAX (INVESTIGATION) THAT THE ASSESSEE COMPANY WAS A BEN EFICIARY OF ACCOMMODATION ENTRIES OF RS. 45 LACS THROUGH ONE SH . D.N. TANEJA. SH. TANEJA IN HIS STATEMENT RECORDED ON 07.01.2009 OFFERED THE TRANSACTION DONE MR. S.K. GUPTA COMPANY M/S PASSION CHITS P LTD., WHO IS A KNOWN ENTRY OPERATOR, WHO HAD ADMITTED BEF ORE THE INVESTIGATION WING THAT HE WAS OPERATING AS AN ENTR Y OPERATOR & VARIOUS COMPANIES FLOATED BY HIM WERE ALSO USED FOR THIS PURPOSE. ON THE BASIS OF THIS INFORMATION, PROCEEDINGS U/S 1 47 OF THE I.T. ACT 6 WERE INITIATED AFTER RECORDING REASONS THERE FOR AN D ACCORDINGLY A NOTICE U/S 148 WAS ISSUED ON 12.03.2012. A NOTICE U/S 142(1) OF THE I.T. ACT, 1961 WAS ISSUED ON 25.09.2012 FIXING THE CASE FOR 20.11.2012. IN RESPONSE TO THE SAME, THE A.R. OF T HE ASSESSEE APPEARED FROM TIME TO TIME. DURING THE COURSE OF AS SESSMENT PROCEEDING ASSESSEE WAS ASKED TO SUBMIT THE NATURE OF ACCOMMODATION ENTRY TO M/S PASSION CHITS P LTD. AND IN RESPONSE OF THE CLAIM ASSESSEE SUBMITTED EVIDENCE/ PROOF IN SU PPORT OF RECEIVED RS. 45,00,000/- ON 12.07.2004. IN RESPONSE TO LETT ER DATED 02.01.2013 ASSESSEE FILED A REPLY WHEREIN THE ASSES SEE WERE ASKED TO ADDUCE EVIDENCE REGARDING RECEIPT OF RS. 45,00,0 00/- ON 09.07.2004 THROUGH SH. D.N. TANJA (PASSION CHITS P LTD.). A SHOW CAUSE LETTER DATED 30.01.2013 ISSUED TO THE ASSESSE E REQUESTED SPECIFICALLY ASKED THE TRANSACTION THROUGH SH. D.N. TANEJA (PASSION CHITS) AND REQUIRED TO PROVE THIS CREDIT AS PER NOR MS LAID DOWN U/S 68 OF THE I.T. ACT, 1961 AND THE CASE FIXED FOR 11. 02.2013. IN RESPONSE TO THIS, NO BODY ATTENDED NOR ANY REPLY WA S SUBMITTED. FINAL OPPORTUNITY ISSUED THROUGH A SHOW CAUSE LETTE R DATED 15.02.2013 FIXING THE CASE FOR 22.02.2013. IN RESPO NSE TO THIS, NO BODY ATTENDED NOR ANY REPLY WAS SUBMITTED. THEREFOR E, IN THE ABSENCE OF ANY REPLY RECEIPT FROM THE ASSESSEE, AO COMPLETED THE ASSESSMENT ON THE BASIS OF MATERIAL ON RECORD AVAIL ABLE AND THE INFORMATION RECEIVED FROM THE DIRECTORATE OF INCOME TAX (INVESTIGATION). HENCE AO HELD THAT THE RECEIPT OF A SUM OF 7 RS. 45,00,000/- CREDITED IN THE BOOKS OF THE ASSESS EE ON 09.07.2004 HELD TO BE IN THE NATURE OF AN ACCOMMODATION ENTRY & TREATED AS UNEXPLAINED & BROUGHT TO TAX U/S 68 OF THE LT. ACT, 1961 VIDE HIS ORDER DATED 01.3.2013 BY ASSESSING THE INCOME OF TH E ASSESSEE AT RS. 44,84,982/- U/S. 147/143(3) OF THE I.T. ACT, 19 61. 3. AGAINST THE ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A) WHO VIDE HIS IMPUGNED ORDER DA TED 28.11.2014 HAS DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED WITH THE AFORESAID ORDER OF THE LD. C IT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LD. COUNSEL OF THE ASSESSEE HAS FILED THE PAPER BOOK CONTAINING PAGES 1 TO 119 ATTACHING THEREWITH THE COPY OF RETU RN OF INCOME ALOGNWITH FINANCIAL STATEMENTS FOR THE YEAR ENDED O N 31.3.2005; COPY OF NOTICE UNDER SECTION 148 DATED 12.3.2012; C OPY OF REPLY TO AO DATED 16.4.2012; COPY OF REASONS RECORDED PROVID ED BY AO; COPY OF REPLY TO AO DATED 11.5.2012 CONTAINING OBJECTION S TO REOPENING OF ASSESSMENT; COPY OF DOCUMENTARY EVIDENCES FILED BEF ORE AO IN ORDER TO ESTABLISH THE SALE OF SHARE HOLDING IN VARIOUS COMPANIES TO M/S PASSION CHITS PVT. LTD; AND COPY OF WRITTEN SUBMIS SION FILED BEFORE CIT(A). HE STATED THAT LD. CIT(A) HAS ERRED IN SUS TAINING THE INITIATION OF THE PROCEEDINGS UNDER SECTION 147 OF THE I.T. ACT AND, FURTHER COMPLETION OF ASSESSMENT UNDER SECTION 143( 3)/147 OF THE 8 ACT WITHOUT SATISFYING THE STATUTORY PRE-CONDITIONS FOR INITIATION OF THE PROCEEDINGS AND, COMPLETION OF ASSESSMENT UNDER THE ACT. HE FURTHER STATED THAT LD. CIT(A) ALSO ERRED IN SUSTAINING THE INITIATION OF PROCEEDINGS U/S. 147 OF THE I.T. ACT ON THE BASIS O F INFORMATION RECEIVED FROM DIT(INV.) MECHANICALLY AND WITHOUT IN DEPENDENT APPLICATION OF MIND. HE FURTHER STATED THAT THE RE ASONS RECORDED WERE MERE REASONS TO SUSPECT AND WERE JUST TO MAKE FISHING AND ROVING ENQUIRIES, AS NO INDEPENDENT ENQUIRY WAS CON DUCTED BY THE AO BEFORE ISSUING SUCH NOTICE U/S. 148 OF THE I.T. ACT AND AS SUCH THE PROCEEDING INITIATED UNDER SECTION 148 WAS A MERE P RETENCE. TO SUPPORT HIS CONTENTION HE SUBMITTED THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE I TAT DECISION DATED 09.1.2015 IN THE CASE OF G&G PHARMA INDIA LIM ITED VS. ITO PASSED IN ITA NO. 3149/DEL/2013 (AY 2003-04) IN WHI CH THE JUDICIAL MEMBER IS THE AUTHOR. HE FURTHER STATED THAT THE ABOVE DECISION OF THE ITAT DATED 9.1.2015 HAS BEEN UPHELD BY THE HON BLE JURISDICTIONAL HIGH COURT IN ITS DECISION DATED 08. 10.2015 IN ITA NO. 545/2015 IN THE CASE OF PR. CIT-4 VS. G&G PHARMA IN DIA LTD. IN THIS REGARD, HE FILED THE COPIES OF THE AFORESAID DECISI ONS BEFORE THE TRIBUNAL. IN VIEW OF THE ABOVE, HE REQUESTED THAT BY FOLLOWING THE AFORESAID PRECEDENTS THE REASSESSMEN T PROCEEDINGS OF THE AO MAY BE QUASHED BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE. 9 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER PA SSED BY THE AUTHORITIES BELOW AND STATED THAT THE AO HAS PROPER LY RECORDED THE REASONS FOR REOPENING BY DUE APPLICATION OF MIND, H ENCE, THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES AND THE CASE LAW CITED BY THE ASSESSEE S COUNSEL ON THE ISSUE IN DISPUTE. IN MY VIEW, IT IS VERY M UCH NECESSARY TO REPRODUCE THE REASONS RECORDED BY THE AO BEFORE IS SUE OF NOTICE TO THE ASSESSEE U/S. 148 OF THE I.T. ACT, 1961 WHIC H IS REPRODUCED HEREUNDER:- REASONS FOR THE BEUEF THAT INCOME HAS ESCAPED ASSESSMENT IN THE, CASE OF M/S NEPTUNE PROMOTERS PVT, LTD. FOR A.Y.2005-06 PUC IS A PROPOSAL FOR REOPENING THE CASE U/S 147 OF THE IT ACT FOR THE A .Y. 2005-06 IN THE PRESCRIBED PERF ORMA. M/S NEPTUNE PROMOTERS PVT. LTD ,3374, HAUZ QAZI, DELHI, IS ASSESSED TO TAX WITH WARD 13(2), NEW DELH I THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 DECLARING LOSS OF RS 15018/ -. SURVEY U/S 133A OF THE INCOME TAX ACT, 1961 WAS EARLIER CARRIED OUT BY THE INVESTIGATION WING ON 20 06- 10 2007 IN THE CASE OF SH. S.K. GUPTA WHO IS AN ACCOMMODATION ENTRIES PROVIDER AND IT WAS NOTICED T HAT HAD ASSESSEE HAD PROVIDED ACCOMMODATION ENTRIES TO A LARGE NUMBER OF BENEFICIARIES. ON THE BASIS OF THE IMPOUNDED MATERIAL IN THE CASE OF MR. S.K. GUPTA AN D ON THE BASIS OF FURTHER INQUIRES IT HAS BEEN NOTICE D THAT HE INTER ALIA PROVIDED ACCOMMODATION ENTRIES OF RS 45 LAKHS TO THE COMPANY M/S NEPTUNE PROMOTERS PVT. LTD . HAVING PAN, AAACN 24910 . DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS IN THE TANEJA GROUP OF CASES, THE MAIN CONTROLLING PE RSON OF THE GROUP MR. D.N. TANEJA IN HIS STATEMENT RECOR DED ON 07-01-2009 OFFERED THE ENTIRE (TRANSACTIONS) DON E WITH MR. S.K. GUPTA'S COMPANIES AMOUNTING TO RS 6.2 3 CRORES AS ADDITIONAL INCOME THE RESPECTIVE FINANCIA L YEARS AND IN RESPECTIVE COMPANIES OF HIS GROUP (THE RE ARE 15 SUCH COMPANIES INCLUDES M/S NEPTUNE PROMOTERS PVT. LTD) IN WHICH ACCOMMODATION ENTRIES OF RS 45 LAKHS FOR A.Y. 2005-06 HAVE BEEN OFFERED AS ADDITIONAL INCOME BY MR D.N. TANEJA IN-HIS ABOVE MENTIONED STATEMENT TABULATED AS BELOW. S.NO. DATE NAME AMOUNT NAME OF THE OTHER COMPANY 1 09.7.2004 NEPTUNE PROMOTERS PVT. LTD. 20,000,00 PASSION CHITS 2 09.7.2004 NEPTUNE PROMOTERS PVT. LTD. 10,000,00 PASSION CHITS 3 09.7.2004 NEPTUNE PROMOTERS 15,000,00 PASSION 11 PVT. LTD. CHITS IN STATEMENT OF MR S.K. GUPTA REPORTED ON 05.01.200 9 DURING THE COURSE OF SURVEY U/S. 133A OF THE INCOME TAX ACT, IN THE CASE OF M/S OMNI FARMS PVT. LTD. IN WHI CH HE HAS ADMITTED REGARDING PROVIDING OF ACCOMMODATIO N ENTRIES TO VARIOUS GROUP INCLUDING TANEJA GROUP. COPY OF LEDGER ACCOUNT LOAN JULY, 03 TO JULY, 04 TANEJA JI WHICH INCLUDES ACCOMMODATION ENTRIES OF RS. 45 LAKHS PROVIDED BY THE COMPANIES OF MR. SK GUPTA TO THE ASSESSEE WAS EXTRACTED BY THE INVESTIGATION WING FROM THE BACK UP FILES OF ONE OF THE LAPTOPS IMPOUNDED DURING THE COURSE OF SURVEY IN TH E CASE OF MR. SK GUPTA ON 20.11.2007. EXTRACTS OF PAGES OF APPRAISAL REPORT IN TOI GROUP EXPLAINS THE MODUS OPERANDI IN RESPECT OF PROVIDING OF ACCOMMODATION ENTRIES BY MR. S.K. GUPTA THROUGH VARIOUS GROUP OF HIS COMPANIES. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT INCOME TO THE EXTENT OF RS 45 LAKHS HAS ESCAPED ASSESSMENT . THEREFORE, PROCEEDINGS U/S 147 OF THE ACT IS PROPOSED TO BE INITIATED FOR A.Y. 2005-06. SINCE FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR I.E. A.Y. 2005-66 APPROVAL OF THE ADDL. CLT, RANGE -13 , NEW DELHI IS SOLICITED U /S 151(2) OF THE ACT. SUBMITTED PLEASE FOR KIND DIRECT ION AND APPROVAL. 12 SD/- INCOME TAX OFFICER, WARD -13(2) , NEW DELHI ADDL. CIT, RANGE-13 , NEW DELHI 8. AFTER GOING THROUGH THE REASONS RECORDED BY THE AO, AS AFORESAID, I AM OF THE VIEW THAT AO HAS NOT APPLIED HIS MIND SO AS TO COME TO AN INDEPENDENT CONCLUSION THAT HE HAS RE ASON TO BELIEVE THAT INCOME HAS ESCAPED DURING THE YEAR. IN MY VIEW THE REASONS ARE VAGUE AND ARE NOT BASED ON ANY TANGIBLE MATERIAL AS WELL AS ARE NOT ACCEPTABLE IN THE EYES OF LAW. THE AO HAS MECHANICALLY ISSUED NOTICE U/S. 148 OF THE I.T. ACT , 1961 ON THE BASIS OF INFORMATION ALLEGEDLY RECEIVED BY HIM FROM THE DIRECTORATE OF INCOME TAX (INV.), NEW DELHI. KEEPI NG IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CAS E AND THE CASE LAW APPLICABLE IN THE CASE OF THE ASSESSEE, I AM OF THE CONSIDERED VIEW THAT THE REOPENING IN THE CASE OF THE ASSESSEE FOR THE ASSTT. YEAR IN DISPUTE IS BAD IN LAW AND DESERVES TO BE QU ASHED. MY VIEW IS FULLY SUPPORTED BY THE FOLLOWING JUDGMENT/D ECISION:- PR. CIT VS. G&G PHARMA INDIA LTD. IN ITA NO. 545/2015 DATED 8.10.2015 OF THE DELHI HIGH COURT WHEREIN THE HONBLE COURT HAS ADJUDICATED THE ISSUE AS UNDER:- 13 12. IN THE PRESENT CASE, AFTER SETTING OUT FOUR EN TRIES, STATED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON A S INGLE DATE I.E. 10TH FEBRUARY 2003, FROM FOUR ENTITIES WH ICH WERE TERMED AS ACCOMMODATION ENTRIES, WHICH INFORMATION WAS GIVEN TO HIM BY THE DIRECTORATE OF INVESTIGATION, THE AO STATED: 'I HAVE ALSO PERUSED VARIOUS MATERIALS AND REPORT FROM INVESTIGATION WING AND ON THAT BASIS IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK ACCOUNT BY WAY OF ABOVE ACCOMMODATION ENTRIES.' THE ABOVE CONCLUSION IS UNHELPFUL IN UNDERSTANDING WHET HER THE AO APPLIED HIS MIND TO THE MATERIALS THAT HE TA LKS ABOUT PARTICULARLY SINCE HE DID NOT DESCRIBE WHAT T HOSE MATERIALS WERE. ONCE THE DATE ON WHICH THE SO CALLE D ACCOMMODATION ENTRIES WERE PROVIDED IS KNOWN, IT WO ULD NOT HAVE BEEN DIFFICULT FOR THE AO, IF HE HAD IN FA CT UNDERTAKEN THE EXERCISE, TO MAKE A REFERENCE TO THE MANNER IN WHICH THOSE VERY ENTRIES WERE PROVIDED IN THE ACCOUNTS OF THE ASSESSEE, WHICH MUST HAVE BEEN TEND ERED ALONG WITH THE RETURN, WHICH WAS FILED ON 14TH NOVE MBER 2004 AND WAS PROCESSED UNDER SECTION 143(3) OF THE ACT. WITHOUT FORMING A PRIMA FACIE OPINION, ON THE BASIS OF SUCH MATERIAL, IT WAS NOT POSSIBLE FOR THE AO TO HA VE SIMPLY CONCLUDED: 'IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BAN K BY WAY OF ACCOMMODATION ENTRIES'. IN THE CONSIDERED VI EW OF 14 THE COURT, IN LIGHT OF THE LAW EXPLAINED WITH SUFFI CIENT CLARITY BY THE SUPREME COURT IN THE DECISIONS DISCU SSED HEREINBEFORE, THE BASIC REQUIREMENT THAT THE AO MUS T APPLY HIS MIND TO THE MATERIALS IN ORDER TO HAVE RE ASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT IS MISSING IN THE PRESENT CASE. 13. MR. SAWHNEY TOOK THE COURT THROUGH THE ORDER OF THE CIT(A) TO SHOW HOW THE CIT (A) DISCUSSED THE MATERI ALS PRODUCED DURING THE HEARING OF THE APPEAL. THE COUR T WOULD LIKE TO OBSERVE THAT THIS IS IN THE NATURE OF A POST MORTEM EXERCISE AFTER THE EVENT OF REOPENING OF THE ASSESSMENT HAS TAKEN PLACE. WHILE THE CIT MAY HAVE PROCEEDED ON THE BASIS THAT THE REOPENING OF THE ASSESSMENT WAS VALID, THIS DOES NOT SATISFY THE REQUIREMENT OF LAW THAT PRIOR TO THE REOPENING OF T HE ASSESSMENT, THE AO HAS TO, APPLYING HIS MIND TO THE MATERIALS, CONCLUDE THAT HE HAS REASON TO BELIEVE T HAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. UNLE SS THAT BASIC JURISDICTIONAL REQUIREMENT IS SATISFIED A POST MORTEM EXERCISE OF ANALYSING MATERIALS PRODUCED SUBSEQUENT TO THE REOPENING WILL NOT RESCUE AN INHE RENTLY DEFECTIVE REOPENING ORDER FROM INVALIDITY . 14. IN THE CIRCUMSTANCES, THE CONCLUSION REACHED BY THE ITAT CANNOT BE SAID TO BE ERRONEOUS. NO SUBSTANTIAL QUESTION OF LAW ARISES. 15 15. THE APPEAL IS DISMISSED. 9. IN VIEW OF ABOVE, I AM OF THE CONSIDERED VIEW TH AT THE AFORESAID ISSUE IN DISPUTE IS EXACTLY THE SIMILAR A ND IDENTICAL TO THE ISSUE INVOLVED IN THE PRESENT APPEAL AND IS SQU ARELY COVERED BY THE AFORESAID DECISION OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF G&G PHARMA (SUPRA). HENCE, RESPECTFULLY FO LLOWING THE ABOVE PRECEDENT IN THE CASE OF PR. CIT-4 VS. G&G PH ARMA INDIA LTD. (SUPRA) I DECIDE THE LEGAL ISSUE IN DISPUTE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE AND ACCORDINGLY QU ASH THE REASSESSMENT PROCEEDINGS AND ALLOW THE LEGAL ISSUE. SINCE I HAVE ALREADY QUASHED THE REASSESSMENT PROCEEDINGS, AS AF ORESAID, THE OTHER ISSUES ARE NOT BEING DEALT WITH BEING ACADEMI C IN NATURE. 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 02-02-2017. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED : 02-02-2017 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.