Arpit Goel, New Delhi V. ITO, New Delhi

ITA 350/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5850 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 23-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHOK GAUTAM
• Keywords: Reopening of assessment; Business income; Salary income; Competent authority; Reason to believe; Reassessment proceedings
• Section: 142(1); 69A; 48; 13; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI G.S. PANNU, VICE PRESIDENT AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NOS.349 TO 351/DEL/2017 ASSESSMENT YEARS : 2009-10 TO 2011-12 ARPIT GOEL, OFFICE NO.205, 4262/3, ANSARI ROAD, DARYA GANJ, NEW DELHI-110002. PAN-ARCPG8663J VS ITO, WARD-30(2), NEW DELHI. APPELLANT RESPONDENT APPELLANT BY NONE (HEARING NOTICE RETURNED BACK) RESPONDENT BY SH. ASHOK GAUTAM, SR. DR DATE OF HEARING 01.04.2021 DATE OF PRONOUNCEMENT 28 . 04.2021 ORDER PER KUL BHARAT, JM : THESE APPEALS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2009- 10 TO 2011-12 ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-16, NEW DELHI ALL DATED 02.11.2016. 2. ALL THESE APPEALS HAVE IDENTICAL GROUNDS OF APPEAL. THE REFORE, ALL ARE TAKEN UP TOGETHER AND ARE BEING DISPOSED OF BY WAY OF A CONSO LIDATED ORDER. FIRST WE TAKE UP ITA NO.349/DEL/2017 [ASSESSMENT YEAR 2009- 10] WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) WAS INCORRECT AND UNJUSTIFIED IN: A) HOLDING THAT ACTION U/S 147 HAS BEEN LEGALLY AND RIGHTLY TAKEN BY THE A.O. ITA NOS.349 TO 351/DEL/2017 2 B) HOLDING THAT ACTION U/S 147 BY THE A.O. WAS VALID AN D NOT VOID. C) HOLDING THAT ADDITION OF RS. 9,14,800/- AND 2,01,500/- HAS BEEN RIGHTLY AND CORRECTLY MADE BY THE A.O. U/S 69A. D) HOLDING THAT THE ASSESSEE HAD NOT BEEN ABLE TO SATISFACTORILY EXPLAIN THE DEPOSIT IN THE BANK ACCO UNTS BY THE ASSESSEE WITH ICICI BANK AND IN THE PUNJAB NATIONAL BAN K. E) DISMISSING THE GROUNDS TAKEN BY THE ASSESSEE REGARDING INVALIDITY AND ILLEGALITY OF ACTION U/S 147/1 48 AND THEREBY HOLDING THAT THE A.O. HAD ENOUGH REASONABLE AND ACTIONABLE INFORMATION TO ARRIVE AT A PARTICULAR DECI SION. F) DISMISSING THE APPEAL OF THE ASSESSEE. G) DISMISSING THE GROUND NO. 4 OF THE ASSESSEE. H) HOLDING THAT THE ASSESSEE HAD EARNED INCOME OF RS . 88,000/- FROM SALARY. 3. AT THE TIME OF HEARING, NO ONE APPEARED ON BEHALF OF TH E ASSESSEE. A NOTICE SENT THROUGH SPEED POST IS RETURNED BACK WITH THE REMARKS NO SUCH PERSON IN THE GIVEN ADDRESS. UNDER THESE FACTS, T HE APPEALS WERE TAKEN UP FOR HEARING IN THE ABSENCE OF THE ASSESSEE. 4. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT THE CASE OF THE ASSESSEE WAS RE-OPENED BY ISSUING NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 (THE ACT) WHICH WAS DULY SERVED ON THE ASS ESSEE. IN RESPONSE THERETO, LD.AR FOR THE ASSESSEE APPEARED BEFOR E THE ASSESSING OFFICER AND WAS PROVIDED COPY OF THE REASONS RECORDED. T HE REASONS FOR RE-OPENING WAS SUPPLIED TO THE ASSESSEE AFTER HAVING FILED THE RETURN AS ITA NOS.349 TO 351/DEL/2017 3 DIRECTED BY THE ASSESSING OFFICER. THE ASSESSEE HAD FILED R ETURN DECLARING LOSS OF RS.10,117/-. THEREAFTER, A NOTICE U/S 143 (2) AND 142(1) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. IN RESPONSE THERETO, LD.AR FOR THE ASSESSEE ATTENDED THE PROCEEDIN GS FROM TIME TO TIME. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER NOT ICED THAT AS PER P&L A/C, THE TOTAL SALES OF RS.1,83,000/- WAS DECL ARED BY THE ASSESSEE FOR FINANCIAL YEAR 2008-09 FOR WHICH NET LOSS OF RS.10,117/- WAS CLAIMED. HOWEVER, IT WAS OBSERVED AS PER THE BANK S TATEMENT OF THE ICICI, DARIYAGANJ, NEW DELHI THAT A TOTAL CREDIT OF RS.9,1 4,800/- WAS APPEARING FOR THE FINANCIAL YEAR 2008-09. THEREFORE, THE A SSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSITS. THE ASSESSEE WAS ALSO ASKED TO RECONCILE THE MIS-MATCH IN THE SALES DECLARED BY THE ASSESSEE AND CREDIT MADE IN THE BANKS. IN RESP ONSE TO THE SAID QUERY, THE ASSESSEE FILED DETAILED LETTER. IT WAS STATED B EFORE THE ASSESSING OFFICER THAT RS.1,00,000/- WAS INTRODUCED AS CAPIT AL WHICH CANNOT BE TAXED. IT WAS FURTHER STATED THAT RS.1,00,000 /- WAS TRANSFERRED FROM THE PUNJAB NATIONAL BANK OUT OF HIS ACCO UNT IN RESPECT OF THE CHEQUE RECEIVED AGAINST SALES OF RS.1,83,000/-. IT W AS STATED THAT THE ASSESSEE DECLARED AN AMOUNT OF RS.1,83,000/- AS SALES . IT WAS STATED IN RESPECT OF AMOUNT OF RS.1,72,000/- THAT IT CANNO T BE TAXED AS UNDISCLOSED RECEIPT AS THE SALES HAS BEEN BOOKED IN THE NEXT YEAR I.E. ASSESSMENT YEAR 2010-11. IN RESPECT OF CASH DEPOSITS AMOUNTING TO RS.4,59,800/-, IT WAS STATED THAT IT CANNOT BE TAXED AS T HE SOURCE OF AMOUNT CREDIT IN THE BANK WAS RE-DEPOSITED IN CASH OUT OF HIS CASH WITHDRAWALS FROM THE BANK. HOWEVER, THIS EXPLANATION OF TH E ASSESSEE ITA NOS.349 TO 351/DEL/2017 4 WAS NOT FOUND ACCEPTABLE TO THE ASSESSING OFFICER, ON THE GROUND THAT THE ASSESSEE COULD NOT SUPPORT HIS CONTENTION WITH DOCUMEN TARY EVIDENCES. UNDER SUCH CIRCUMSTANCES, THE ASSESSING OFFICER MADE ADDIT ION OF RS.9,14,800/- U/S 69A OF THE ACT. THE ASSESSING OFFICER ALSO OBSERVED THAT THERE WAS TOTAL CREDIT OF RS.2,01,617/- THAT CONSTI TUTED CASH DEPOSITS OF RS.2,01,500/- AND CREDIT OF INTEREST OF RS.117/- THEREON. HOWEVER, THIS TRANSACTION HAD NOT BEEN DISCLOSED BY THE ASSESSEE IN HIS ACCOUNTS AS WELL AS IN THE RETURN FILED. HENCE, THE ASSES SING OFFICER MADE ADDITION OF RS.2,01,617/-. FINALLY, THE ASSESSING OFFICER MADE ADDITION IN RESPECT OF THE SALARY INCOME OF RS.88,000/- WHICH THE ASSESSEE HIMSELF HAD ADMITTED. HENCE, THE ASSESSING OFFICER ASSESSED THE INCOME AT RS.12,04,420/- AS AGAINST LOSS OF RS.10,117/- CLAIMED BY THE ASSESSEE, IN HIS RETURN OF INCOME SO FILED. 5. AGGRIEVED AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE LD.CIT (A). 6. BEFORE LD.CIT(A), THE ASSESSEE HAD TAKEN GROUNDS AGAIN ST LEGALITY OF RE-OPENING AS WELL AS HE ALSO CHALLENGED THE ADDITION ON MERIT. LD.CIT(A) ON BOTH ACCOUNTS, REJECTED THE APPEAL OF THE AS SESSEE AND CONFIRMED THE FINDINGS OF THE ASSESSING OFFICER. 7. AGGRIEVED AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFO RE THIS TRIBUNAL. 8. GROUND OF APPEAL NOS. 1(A), 1(B) AND 1(E) ARE ON LEGALITY OF THE ACTION U/S 147 OF THE ACT. AS NO ONE APPEARED ON BEHA LF OF THE ASSESSEE, ITA NOS.349 TO 351/DEL/2017 5 THEREFORE, WE PROCEED ON THE BASIS OF THE SUBMISSIONS MAD E BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW. 9. LD. SR. DR, SH. ASHOK GAUTAM SUPPORTED THE ORDERS OF AUTHORITIES BELOW. HE SUBMITTED THAT THERE IS NO ILLEGALITY IN THE ORD ERS OF THE AUTHORITIES BELOW. THE LAW IS CLEAR ON THE ISSUE OF RE-OPEN ING. THE ASSESSING OFFICER WAS SATISFIED AFTER HAVING RECEIVED THE INFOR MATION OF CASH DEPOSIT IN THE BANK ACCOUNTS OF THE ASSESSEE THAT THE INCOME HAS ESCAPED ASSESSMENT. HE RELIED ON THE ORDER OF LD.CIT(A). 10. WE HAVE HEARD LD. SR. DR AND PERUSED THE MATERIA L AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT LD.CIT(A) HAS GIVEN A DETAILED FINDING ON THE ISSUE OF RE-OPENING BY OBSERVING AS UNDER:- I HAVE CONSIDERED ALL THE FACTS AND CIRCUMSTANCES O F THE EASE WITH REGARD TO REOPENING U/S 147, THE ADDITIONAL GROUND RA ISED BY THE APPELLANT IS A LEGAL ONE AND IT DOES NOT REQUIRE ANY F URTHER ENQUIRY OR INVESTIGATION. THE ADDITIONAL GROUND, ALSO GOES TO TH E ROOT OF THE ASSESSMENT AND DETERMINATION OF THE TAX LIABILITY OF THE APPELLANT. THEREFORE, THE SAME IS BEING ADMITTED AND ADJUDICATED AS U NDER:- FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT THERE ARE UMPTEENTH NUMBER OF JUDICIAL PRONOUNCEMENTS ON THE ISSUE OF REO PENING OF ASSESSMENT U/S 147. EACH SET OF FACTS AND CIRCUMS TANCES PRESENT BEFORE ASSESSING OFFICER A NEW CHALLENGE. THER E COULD BE SIMILARITY AND CIRCUMSTANCES BUT THERE ARE HARDLY ANY CIRCUMSTANCES WHICH ARE IDENTICAL. THEREFORE, THE CONC LUSION HAS TO BE DERIVED ON THE BASIS OF FACTS AND CIRCUMS TANCES OF THE CASE IN HAND. ITA NOS.349 TO 351/DEL/2017 6 THE WORDS HAS REASON TO BELIEVE ARE STRONGER THAN T HE WORDS IS SATISFIED. IN OTHER WORDS THE AO MUST FOR M AN OBJECTIVE AND PRIMA FACIE OPINION HIMSELF ON THE BASI S OF EXPRESSED STATEMENT OR REASONS OR DEFINITE/RELEVANT ( AND NOT VAGUE) MATERIAL IN HIS POSSESSION. TO PUT IT DIFFERENTL Y, THE WORDS REASON TO BELIEVE SUGGESTS THAT THE BELIEF MUST BE THAT OF AN HONEST AND REASONABLE PERSON BASED UPON REASONABLE GROUNDS AND THAT THE AO MAY ACT ON DIRECT OR CIRCUMSTANTIAL EVIDENCE BUT NOT ON MERE SUSPICION, GOS SIP OR RUMOUR. THE AO WOULD BE ACTING WITHOUT JURISDICTION IF THE REASONS FOR HIS BELIEF THAT THE CONDITIONS ARE SATIS FIED DOES NOT EXIST OR IS NOT MATERIAL- OR RELEVANT TO THE BELIEF RE QUIRED BY THE SECTION -SHEO NATH SINGH V. AAC (1971) 82 1TR 147 (SC). IF THE AO HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOS E THAT INCOME HAS ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE REASON TO BELIEVE THAT AN INCOME HAS ESCAPED ASSESS MENT. THE SAID EXPRESSION CANNOT BE READ TO MEAN THAT THE AO SHOULD HAVE FINALLY ASCERTAINED THE FACT BY LEGAL EVIDE NCE OR CONCLUSION. THE FUNCTION OF THE AO IS TO ADMINISTER T HE STATUTE WITH SOLICITUDE FOR THE PUBLIC EXCHEQUER WITH AN IN-BU ILT IDEA OF FAIRNESS TO TAXPAYERS CIT VS RAJESH JHAVERI STOCK B ROKERS (P) LTD. (2007) 161 TAXMAN 316 (SC). IN DETERMINING WHETHER COMMENCEMENT OF REASSESSMENT P ROCEEDINGS IS VALID, THE COURT HAS ONLY TO SEE WHETHER THERE IS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT OPENED THE EASE. THE SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THIS STATE. RAYMOND WOOLLEN MILLS LTD V I TO (1999) 236 ITR 34 (SC). GREEN ARTS (P) LTD V ITO (2005) 257 IT R 639 (DELHI. THE ASSESSEE CANNOT CHALLENGE SUFFICIENCY OF BELIEF - I TO VS LAKHMANI MEWAL DAS (1976) 103 ITR 437 (SC), WHAT IS TH E ULTIMATE RESULT OF ENQUIRY IS NOT MATERIAL FOR DECIDING THE J URISDICTION OF THE AO TO REOPEN ASSESSMENT, EVEN IF IT IS FOUND ULTIMATE LY THAT THERE ITA NOS.349 TO 351/DEL/2017 7 HAS BEEN NO ESCAPEMENT OF INCOME - MAHASUKHRAM MADA N LAI V CAT (1955) 28 ITR 299 (PAT.). IN THE PRESENT CASE THE SPECIFIC INFORMATION SPECI FIC TO THE ACCOUNT NUMBER IN A PARTICULAR BANK WERE RECEIVED, A CTED UPON, FURTHER INVESTIGATED AND THEN SENT TO THE ASSESSING OFFICER, ASSESSING OFFICER APPLIED HIS OWN MIND AND ON THE BA SIS OF INFORMATION AVAILABLE ON RECORD, NOT TO FORGET THAT T HE APPELLANT HAS FAILED TO FILE 'HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR, CAME TO A CONCLUSION THAT THE INCOME OF RS.9,14,800/- HA S ESCAPED ASSESSMENT. THE ASSESSING OFFICER IS NOT SUPPOSE TO ARRIVE AT THE FINAL CONCLUSION. HE IS SUPPOSED TO REACH AT A REASONA BLE BELIEF, WHICH A PRUDENT MAN WILL ARRIVE AT, THAT THE INCOME H AS ESCAPED ASSESSMENT. IT HAS TO BE A PRIMA FACIE CASE REGARDING ESCAPEMENT OF INCOME. THE ASSESSING OFFICER IS NOT PASSING THE FIN AL JUDGEMENT. IN THE CASE IN HAND THERE IS NO TWO OPINION THAT THE A SSESSEE HAD BANK ACCOUNT IN WHICH SUBSTANTIAL CASH WAS BEING DEPOSITED FROM VARIOUS PARTS OF THE COUNTRY. IT IS ALSO A FACT THAT THE ASSE SSEE HAD NOT DISCLOSED THIS ACCOUNT TO THE DEPARTMENT AND ALSO NOT F ILED HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR. THE ASSE SSING OFFICER HAS RECORDED ALL THIS IN HIS REASONS AND THEN HE TOO K THE APPROVAL OF THE COMPETENT AUTHORITY AS PROVIDED IN THE ACT. EVER YTHING IS IN ORDER. THE SATISFACTION AND THE REASON HAS TO BE THAT OF ASSESSING OFFICER, NOT OF ANYBODY ELSE. IN MY HUMBLE OPINION, THE ASSESSING OFFICER HAD ENOUGH REASONABLE AND ACTIONABLE INFORMAT ION TO ARRIVE AT A PARTICULAR DECISION. THEREFORE, THE GROUND CHALLENGING R EOPENING U/S 147 IS DISMISSED. 11. WE DO NOT FIND ANY INFIRMITY IN THE FINDING OF LD.CIT(A) AS THE ASSESSEE HAS NOT SUPPORTED HIS SUBMISSIONS BY FILING ANY C ONTRARY EVIDENCES. HENCE, GROUND OF APPEAL NOS. 1(A), 1(B) AND 1(E) R AISED BY THE ASSESSEE ARE DISMISSED. ITA NOS.349 TO 351/DEL/2017 8 12. GROUND OF APPEAL NOS. 1(C) & 1(D) RAISED BY THE ASSESS EE ARE AGAINST THE SUSTAINING OF ADDITION OF RS.9,14,800/- AND 2,01,500/-. 13. LD. SR. DR IN THIS REGARD HAS RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 14. WE HAVE HEARD LD.SR.DR AND PERUSED THE MATERIAL AV AILABLE ON RECORD. BEFORE LD.CIT(A), IT WAS STATED BY THE ASSESSEE T HAT HE WAS ENGAGED IN COMPUTER SPARE PARTS BUSINESS. THE SPARE P ARTS WERE SOLD THROUGHOUT THE COUNTRY. IT WAS STATED THAT MODUS OPERANDI WAS THAT CASH OR CHEQUE WAS DEPOSITED BY BUYERS IN THE ASSESSE ES ACCOUNTS HELD IN ICICI BANK LOCATED IN DIFFERENT PARTS OF THE COUNTRY. I T WAS ALSO SUBMITTED THAT ON VARIOUS OCCASIONS ON THE SAME DAY, S UCH CASH AND CHEQUES WERE DEPOSITED AT STATIONS SITUATED IN DIFFERENT S TATES WHERE IT WAS NOT PRACTICALLY POSSIBLE THAT A SINGLE PERSON TO GO A ND DEPOSIT IN THE SAME DAY. IT WAS SUBMITTED THAT HAVING RECEIVED THE INF ORMATION OF DEPOSITS, SUCH CASH WAS WITHDRAWN IMMEDIATELY AND USED IN THE PURCHASE OF GOODS. GOODS THEREAFTER, DISPATCHED TO SUCH BUYERS. IN RESPECT OF CREDITS IN PNB ACCOUNT, SIMILAR EXPLANATION WAS O FFERED BY THE ASSESSEE. LD.CIT(A) REJECTED THE SAME BY OBSERVING AS UNDER:- I HAVE CONSIDERED ALL FACTS AND CIRCUMSTANCES OF THE CASE. THERE IS NO DENYING THE FACT THAT THE APPELLANT WAS MAINTAINI NG A BANK ACCOUNT' IN ICICI BANK LTD. DARYA GANJ ,NEW DELHI, IN W HICH THERE WERE CASH DEPOSITS AMOUNTING TO RS.9,14,800/- AND PUNJAB NATIONAL BANK, NEW DELHI, HAVING CASH DEPOSITS AMOUNTIN G TO RS.2,01,500/-. IT IS ALSO A FACT THAT IN THESE ACCOUNTS T HE CASH HAD BEEN DEPOSITED. IT IS ALSO A FACT THAT THE APPELLANT HA D NOT DISCLOSED ITA NOS.349 TO 351/DEL/2017 9 THESE ACCOUNTS TO THE DEPARTMENT NOR HAD HE DISCLOSE D THE BUSINESS CARRIED ON BY HIM OUTSIDE THE BOOKS OF ACCOUNTS. THE ACTION INITIATED BY THE DEPARTMENT WAS NOT BASED ON SOME HEARSAY OR MERE SUSPICION. THE ACTION TAKEN BY THE DEPARTMENT WAS BAS ED ON CONCRETE INFORMATION PASSED ON TO INVESTIGATION WIN G AND THEN EVENTUALLY TO THE ASSESSING OFFICER FROM FINANCIAL INT ELLIGENCE UNIT. THE INFORMATION PASSED ON WITH RESPECT TO DEPOSITS IN BANK ACCOUNT IS ALSO NOT VAGUE IT WAS CONCRETE AND CORRECT TO THE EXTENT OF NOT ONLY ACCOUNT NUMBER, BUT ALSO THE QUANTUM OF CASH DEPOSITS. DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT HAS CLAIMED THE CASH DEPOSITS TO BE THE PROCEEDS OF SALE OF COMPUTERS AND COMPUTER PARTS. HOWEVER, IT REMAINED JUST A CONTENT ION NOT SUPPORTED BY ANY PIECE OF EVIDENCE. THE APPELLANT HAS SINGULARLY FAILED TO EXPLAIN SATISFACTORILY THE AMOUNT OF DEPOSI TS IN HIS- BANK ACCOUNTS. THE ACTION OF THE APPELLANT IS SQUARELY COV ERED UNDER THE MISCHIEF OF SECTION 69A WHICH IS REPRODUCED AS UNDER:- 'SEC. 69A:- UNEXPLAINED MONEY:- WHERE IN ANY FINANCIAL YEAR THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY* BULLION* JEWELLERY OR OTHER VALUABLE ARTICLE AND SUCH MONEY, BULLION, JEWELLERY OR VALUABLE ARTICLE IS NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY MAINTAINED BY HIM FOR AN Y SOURCE OF INCOME AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF ACQUISITION OF THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE, OR THE EXPLANATION OFFERED BY HIM IS N OT, IN THE OPINION OF THE AO SATISFACTORY, THE MONEY AND THE VA LUE OF THE BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE MAY DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR.' AS DISCUSSED ABOVE, THE APPELLANT HAS TRIED TO EXPLAI N THE DEPOSITS IN CASH BY SAYING THAT IT WAS THE PROCEEDS OF SALE OF COMPUTERS AND COMPUTER PARTS. HOWEVER, IN THE ABSENC E OF ANY CONCRETE, COGENT AND RELIABLE EVIDENCE, THE CONTENTION OF THE ITA NOS.349 TO 351/DEL/2017 10 APPELLANT IS REJECTED. THE ACTION OF THE ASSESSING O FFICER IS CONFIRMED. 15. WE DO NOT SEE ANY INFIRMITY INTO THE FINDINGS OF THE LD.CIT(A) AS THE ASSESSEE HAD ONLY MADE A BALD STATEMENT WITHOUT GIVING ANY SUPPORTIVE EVIDENCES REGARDING HIS BUSINESS. NO DETAIL IS FURNISHED BY THE ASSESSEE REGARDING WHOM SPARE PARTS AS CLAIMED BY THE ASSESSEE WERE SUPPLIED AND THE COMPLETE DETAILS OF PARTIES TO WHOM HE SUPPLIED CO MPUTER PARTS. IN THE ABSENCE OF SUCH MATERIAL EVIDENCES, WE DO NOT SEE ANY REASON TO INTERFERE IN THE FINDINGS OF THE AUTHORITIES BELOW. THEREFORE , GROUND OF APPEAL NOS. 1(C) & 1(D) RAISED BY THE ASSESSEE ARE REJECT ED AND SAME ARE DISMISSED. 16. GROUND OF APPEAL NOS. 1(F) & 1(G) RAISED BY THE ASSESSE E ARE GENERAL IN NATURE AND NEED NO ADJUDICATION. 17. NOW, COMING TO GROUND OF APPEAL NO.1(H) RAISED BY THE ASSESSEE RELATED TO ADDITION MADE IN RESPECT OF THE SALARY INCOME. 18. LD. SR. DR SUBMITTED THAT BEFORE THE ASSESSING OFFIC ER, THE ASSESSEE HIMSELF HAD ADDED THE FACTUM OF HAVING EARNED TH E SALARY INCOME. THEREFORE, THE ASSESSING OFFICER WAS JUSTIFIED IN MAK ING THIS ADDITION. 19. WE HAVE HEARD LD. SR. DR AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE FIND THAT THE ASSESSING OFFICER HAS CATEGORICA LLY RECORDED THAT IN THE STATEMENT OATH DATED 27.02.2014, THE ASSESS EE HIMSELF THAT PRIOR TO START BUSINESS, HE WAS WORKING WITH M/S. OLDY GOLD Y COMPUTERS ITA NOS.349 TO 351/DEL/2017 11 ON A MONTHLY SALARY OF RS.8,000/- PER MONTH. HOWEVER, IN THE RETURN OF INCOME AND THE YEAR UNDER CONSIDERATION, NO SALARY INCO ME WAS DISCLOSED FOR THE PERIOD FROM 01.04.2008 TO 28.02.2009. 20. WE FIND THAT THE ASSESSING OFFICER DID NOT MAKE ANY INQ UIRY FROM THE EMPLOYER OF THE ASSESSEE WHETHER HE HAD ACTUALLY R ECEIVED THE SALARY. MERELY, OFFER MADE BY THE ASSESSEE IN OUR CONSIDERED VIEW , OUGHT NOT TO HAVE BEEN TAKEN AS A CONCLUSIVE EVIDENCE OF EARNING SALARY INCOME BY THE ASSESSEE. THEREFORE, IN THE ABSENCE OF ANY CONCLUSIVE EV IDENCE THAT THE ASSESSEE INFACT HAD EARNED SALARY FROM M/S. OLDY GOLDY COM PUTERS, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TAKING THE ADDITION AND MAKING THE ADDITION ON ACCOUNT OF EARNING OF SALARY INCOME. MOREOVER, IF IT IS PRESUMED THAT THE ASSESSEE HAD EARNED SALARY INCOME IN THAT EVENT, THE ASSESSING OFFICER SHOULD HAVE ACCEPTED SOURCE OF DEPOSIT M ADE IN BANK ACCOUNT. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELE TE THIS ADDITION. THUS, GROUND OF APPEAL NO.1(H) RAISED BY THE ASSE SSEE IS ALLOWED. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 22. NOW, WE TAKE UP ITA NOS.350 & 351/DEL/2017 FILED BY THE ASSESSEE RELATING TO ASSESSMENT YEARS 2010-11 & 2011- 12 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL :- ITA NO.350/DEL/2017 [ASSESSMENT YEAR 2010-11] 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) WAS INCORRECT AND UNJUSTIFIED IN: ITA NOS.349 TO 351/DEL/2017 12 A) HOLDING THAT ACTION U/S 147 HAS BEEN LEGALLY AND RI GHTLY TAKEN BY THE A.O. B) HOLDING THAT ACTION U/S 147 BY THE A.O. WAS VALID AND NOT VOID. C) HOLDING THAT ADDITION OF RS.2,75,56,790/- AND 79,100/- HA S BEEN RIGHTLY AND CORRECTLY MADE BY THE A.O. U/S 69A. D) HOLDING THAT THE ASSESSEE HAD NOT BEEN ABLE TO SA TISFACTORILY EXPLAIN THE DEPOSIT IN THE BANK ACCOUNT BY THE ASSESS EE WITH ICICI BANK AND IN THE PUNJAB NATIONAL BANK. E) DISMISSING THE GROUNDS TAKEN BY THE ASSESSEE INV ALIDITY AND ILLEGALITY OF ACTION U/S 147/148 AND THEREBY HOLDING TH AT THE A.O. HAD ENOUGH REASONABLE AND ACTIONABLE INFORMATION T O ARRIVE AT A PARTICULAR DECISION. F) DISMISSING THE APPEAL OF THE ASSESSEE. ITA NO.351/DEL/2017 [ASSESSMENT YEAR 2011-12] 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) WAS INCORRECT AND UNJUSTIFIED IN: A) HOLDING THAT ACTION U/S 147 HAS BEEN LEGALLY AND RI GHTLY TAKEN BY THE A.O. B) HOLDING THAT ACTION U/S 147 BY THE A.O. WAS VALID AND NOT VOID. C) HOLDING THAT ADDITION OF RS.21,57,160/- AND 1,89,202/- H AS BEEN RIGHTLY AND CORRECTLY MADE BY THE A.O. U/S 69A. D) HOLDING THAT THE ASSESSEE HAD NOT BEEN ABLE TO SA TISFACTORILY EXPLAIN THE DEPOSIT IN THE BANK ACCOUNTS BY THE ASSES SEE WITH ICICI BANK AND IN THE PUNJAB NATIONAL BANK. ITA NOS.349 TO 351/DEL/2017 13 E) DISMISSING THE GROUNDS TAKEN BY THE ASSESSEE REG ARDING INVALIDITY AND ILLEGALITY OF ACTION U/S 147/148 AND TH EREBY HOLDING THAT THE A.O. HAD ENOUGH REASONABLE AND ACTION ABLE INFORMATION TO ARRIVE AT A PARTICULAR DECISION. F) DISMISSING THE APPEAL OF THE ASSESSEE. G) ASSESSING THE ASSESSEE ON ACCOUNT OF INCOME FROM SALARY OF RS.1,75,000/- AS AGAINST DECLARED SALARY INCOME OF RS.95,000/- ONLY. 23. SINCE THE FACTS AND THE GROUNDS ARE IDENTICAL AS IN I TA NO.349/DEL/2017 AND LD. SR. DR ADOPTED THE SAME ARGUM ENTS AS IN ITA NO.349/DEL/2017. IN ITA NO.349/DEL/2017, WE HAVE REJECTE D THE GROUNDS OF APPEAL BY OBSERVING AS UNDER:- 10. WE HAVE HEARD LD. SR. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF T HE AUTHORITIES BELOW. WE FIND THAT LD.CIT(A) HAS GIVEN A DETAILED FIN DING IN THE ISSUE OF RE-OPENING BY OBSERVING AS UNDER:- I HAVE CONSIDERED ALL THE FACTS AND CIRCUMSTANCES OF THE EASE WITH REGARD TO REOPENING U/S 147, THE ADDITIONAL GROU ND RAISED BY THE APPELLANT IS A LEGAL ONE AND IT DOES NOT REQUIRE ANY FURTHER ENQUIRY OR INVESTIGATION. THE ADDITIONAL G ROUND, ALSO GOES TO THE ROOT OF THE ASSESSMENT AND DETERMIN ATION OF THE TAX LIABILITY OF THE APPELLANT. THEREFORE, THE SAME IS BEING ADMITTED AND ADJUDICATED AS UNDER:- FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT THERE ARE UMPTEENTH NUMBER OF JUDICIAL PRONOUNCEMENTS ON THE ISSUE OF REOPENING OF ASSESSMENT U/S 147. EACH SET O F FACTS AND CIRCUMSTANCES PRESENT BEFORE ASSESSING OFFICER A NEW CHALLENGE. THERE COULD BE SIMILARITY AND ITA NOS.349 TO 351/DEL/2017 14 CIRCUMSTANCES BUT THERE ARE HARDLY ANY CIRCUMSTANCE S WHICH ARE IDENTICAL. THEREFORE, THE CONCLUSION HAS TO B E DERIVED ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE IN HAND. THE WORDS HAS REASON TO BELIEVE ARE STRONGER THAN THE WORDS IS SATISFIED. IN OTHER WORDS THE AO MUST FORM AN OBJECTIVE AND PRIMA FACIE OPINION HIMSELF ON THE BASIS OF EXPRESSED STATEMENT OR REASONS OR DEFINITE/RELEVANT (AND NOT VAGUE) MATERIAL IN HIS POSSESSION. TO PUT IT DIFFERENTLY, THE WORDS REASON T O BELIEVE SUGGESTS THAT THE BELIEF MUST BE THAT OF A N HONEST AND REASONABLE PERSON BASED UPON REASONABLE GROUNDS AND THAT THE AO MAY ACT ON DIRECT OR CIRCUMSTANTIAL EVIDENCE BUT NOT ON MERE SUSPICION, GOSSIP OR RUMOUR. THE AO WOULD BE ACTING WITHOUT JURISDICTION IF THE REASONS FOR HIS BELIEF THAT THE CONDITIONS ARE SATISFIED DOES NOT EXIST OR IS NOT MA TERIAL- OR RELEVANT TO THE BELIEF REQUIRED BY THE SECTION -SH EO NATH SINGH V. AAC (1971) 82 1TR 147 (SC). IF THE AO HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAS ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE REASON TO BELIEVE THAT AN INCOME HAS ESCAPED ASSESSMENT. THE SAID EXPRESSION CANNOT BE READ TO MEAN THAT THE AO SHOULD HAVE FINALLY ASCERTAINED THE FACT BY LEGAL EVIDENCE OR CONCLUSION. THE FUNCTION OF T HE AO IS TO ADMINISTER THE STATUTE WITH SOLICITUDE FOR T HE PUBLIC EXCHEQUER WITH AN IN-BUILT IDEA OF FAIRNESS T O TAXPAYERS CIT VS RAJESH JHAVERI STOCK BROKERS (P) LT D. (2007) 161 TAXMAN 316 (SC). IN DETERMINING WHETHER COMMENCEMENT OF REASSESSMENT PROCEEDINGS IS VALID, THE COURT HAS ONLY TO SEE WHETH ER THERE IS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE ITA NOS.349 TO 351/DEL/2017 15 DEPARTMENT OPENED THE EASE. THE SUFFICIENCY OR CORRE CTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THIS STATE. RAYMOND WOOLLEN MILLS LTD V ITO (1999) 236 ITR 34 (SC). GREEN ARTS (P) LTD V ITO (2005) 257 ITR 639 (DELHI. THE ASSESSEE CANNOT CHALLENGE SUFFICIENCY OF BELIEF - ITO V S LAKHMANI MEWAL DAS (1976) 103 ITR 437 (SC), WHAT IS TH E ULTIMATE RESULT OF ENQUIRY IS NOT MATERIAL FOR DECIDIN G THE JURISDICTION OF THE AO TO REOPEN ASSESSMENT, EVEN IF IT IS FOUND ULTIMATELY THAT THERE HAS BEEN NO ESCAPEMENT OF INCO ME - MAHASUKHRAM MADAN LAI V CAT (1955) 28 ITR 299 (PAT.). IN THE PRESENT CASE THE SPECIFIC INFORMATION SPECIF IC TO THE ACCOUNT NUMBER IN A PARTICULAR BANK WERE RECEIV ED, ACTED UPON, FURTHER INVESTIGATED AND THEN SENT TO THE ASSE SSING OFFICER, ASSESSING OFFICER APPLIED HIS OWN MIND AND ON THE BASIS OF INFORMATION AVAILABLE ON RECORD, NOT TO FORG ET THAT THE APPELLANT HAS FAILED TO FILE 'HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR, CAME TO A CONCLUSION THAT TH E INCOME OF RS.9,14,800/- HAS ESCAPED ASSESSMENT. THE ASSESSING OFFICER IS NOT SUPPOSE TO ARRIVE AT THE F INAL CONCLUSION. HE IS SUPPOSED TO REACH AT A REASONABLE BE LIEF, WHICH A PRUDENT MAN WILL ARRIVE AT, THAT THE INCOME H AS ESCAPED ASSESSMENT. IT HAS TO BE A PRIMA FACIE CASE R EGARDING ESCAPEMENT OF INCOME. THE ASSESSING OFFICER IS NOT P ASSING THE FINAL JUDGEMENT. IN THE CASE IN HAND THERE IS NO TWO OPINION THAT THE ASSESSEE HAD BANK ACCOUNT IN WHICH SUBSTANTIAL CASH WAS BEING DEPOSITED FROM VARIOUS PAR TS OF THE COUNTRY. IT IS ALSO A FACT THAT THE ASSESSEE HAD NOT DISCLOSED THIS ACCOUNT TO THE DEPARTMENT AND ALSO NOT FILED HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR. TH E ASSESSING OFFICER HAS RECORDED ALL THIS IN HIS REASON S AND THEN HE TOOK THE APPROVAL OF THE COMPETENT AUTHORITY AS PROVIDED IN THE ACT. EVERYTHING IS IN ORDER. THE SAT ISFACTION ITA NOS.349 TO 351/DEL/2017 16 AND THE REASON HAS TO BE THAT OF ASSESSING OFFICER, NOT OF ANYBODY ELSE. IN MY HUMBLE OPINION, THE ASSESSING OFFI CER HAD ENOUGH REASONABLE AND ACTIONABLE INFORMATION TO ARR IVE AT A PARTICULAR DECISION. THEREFORE, THE GROUND CHALLENGI NG REOPENING U/S 147 IS DISMISSED. 11. WE DO NOT FIND ANY INFIRMITY IN THE FINDING OF LD .CIT(A) AS THE ASSESSEE HAS NOT SUPPORTED HIS SUBMISSIONS BY FILING ANY CONTRARY EVIDENCES. HENCE, GROUND OF APPEAL NOS. 1(A), 1(B) AND 1 (E) RAISED BY THE ASSESSEE ARE DISMISSED. 24. THEREFORE, TAKING THE CONSISTENCE VIEW, GROUNDS OF APP EAL NO.1(A), 1(B) & 1(E) RAISED BY THE ASSESSEE IN ITA NOS. 350 & 351/D EL/2017 ARE REJECTED. 25. NOW COMING TO GROUND OF APPEAL NOS. 1(C) & 1(D) RAISED BY THE ASSESSEE IN ITA NOS. 350 & 351/DEL/2017 RELATING TO ASS ESSMENT YEARS 2010-11 TO 2011-12. 26. LD. SR. DR ADOPTED THE SAME ARGUMENTS AS IN ITA NO.349/DEL/2017 WHEREIN WE CONFIRMED THE ACTION OF THE AU THORITIES BELOW BY HOLDING AS UNDER:- 15. WE DO NOT SEE ANY INFIRMITY INTO THE FINDINGS OF THE LD.CIT(A) AS THE ASSESSEE HAD ONLY MADE A BALD STATEMENT WITHOU T GIVING ANY SUPPORTIVE EVIDENCES REGARDING HIS BUSINESS. NO DETAIL IS FURNISHED BY THE ASSESSEE REGARDING WHOM SPARE PART S AS CLAIMED BY THE ASSESSEE WERE SUPPLIED AND THE COMPLETE DETAI LS OF PARTIES TO WHOM HE SUPPLIED COMPUTER PARTS. IN THE ABSENCE OF SUCH MATERIAL EVIDENCES, WE DO NOT SEE ANY REASON TO INTERFERE IN THE FINDINGS OF THE AUTHORITIES BELOW. THEREFORE, GROUND OF APPEAL NOS . 1(C) & 1(D) RAISED BY THE ASSESSEE ARE REJECTED AND SAME ARE DISMI SSED. ITA NOS.349 TO 351/DEL/2017 17 27. TAKING THE CONSISTENT VIEW, GROUNDS OF APPEAL NOS.1(C) & 1(D) RAISED BY THE ASSESSEE IN ITA NOS. 350 & 351/DEL/2017 ARE DISMISSED. 28. GROUND NO.1(F) RAISED BY THE ASSESSEE IN ITA NOS. 350 & 351/DEL/2017 IS GENERAL IN NATURE AND NEEDS NOT ADJUDICA TION IN BOTH THE APPEALS. THUS, GROUND NO.1(F) IS DISMISSED IN BOTH THE APPEALS. 29. NOW, COMING TO GROUND OF APPEAL NO.1(G) IN ITA NO. 350/D EL/2017 RAISED BY THE ASSESSEE WHEREIN THE ASSESSEE HAS CHALLEN GED THE ACTION OF THE ASSESSING OFFICER RAISING THE SALARY INCOME OF RS.1,75,000 /- AS AGAINST RS.95,000/- CLAIMED BY THE ASSESSEE. 30. LD. SR. DR HAS ADOPTED THE SAME ARGUMENTS WHERE IN EH ASSESSING OFFICER HAS MADE ADDITION ON ACCOUNT OF UNDISCLOSED SALARY ON THE BASIS OF STATEMENT ON OATH DATED 27.01.2014. 31. THE FACTS IN BRIEF ARE IDENTICAL AS IN ITA NO.349/DEL/201 7 EXCEPT THAT IN ITA NO.349/DEL/2017 (SUPRA) THE ASSESSEE HAS NOT DISCLOSED THE SALARY INCOME BUT IN THE CURRENT YEAR, THE ASSESSEE HA S DISCLOSED SALARY INCOME AT RS.80,000/- IN THE STATEMENT OF OATH. THE ASSESSEE HAD S TATED THAT HE HAD RECEIVED INCOME @ 75,000/- PER MONTH. 32. CONSIDERING THE FACTS AVAILABLE ON RECORD AND IN VIEW O F THE FACTS THAT THE ASSESSING OFFICER HAS NOT MADE ANY INQUIRY FROM T HE EMPLOYER OF THE ASSESSEE TO ASCERTAIN THE FACTUM OF RECEIPT OF SALAR Y INCOME. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO DELETE THIS AD DITION. THUS, GROUND OF APPEAL NO.1(G) RAISED IN ITA NO.350/DEL/2017 IS ALLOWED. ITA NOS.349 TO 351/DEL/2017 18 33. IN THE RESULT, THE APPEALS OF THE ASSESSEE IN ITA NO S. 349 & 351/DEL/2017 ARE PARTLY ALLOWED AND APPEAL OF THE ASSESS EE IN ITA NO.350/DEL/2017 IS DISMISSED. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIRTUAL HE ARING IN THE PRESENCE OF BOTH THE PARTIES ON 28 TH APRIL, 2021. SD/- SD/- (G.S. PANNU) (KUL BHARAT) VICE PRESIDENT JUDICIAL MEMBER * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI