M/s. V3S Infratech Ltd., New Delhi V. ACIT, New Delhi

ITA 3853/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3002 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2004-2005
• Appeal Filed On: 11-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SUNJAY KUMAR
• Keywords: Reopening of assessment; Search and seizure; Principle of natural justice; Difference of opinion; Accommodation entries; Assessment record; Condonation of delay; Change of opinion; Reassessment proceedings
• Section: 143(3); 153A; 147; 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SUDHANSHU SRIVASTAVA, JUDICIAL MEMB ER & SHRI O.P.KANT, ACCOUNTANT MEMBER ITA NO.-3853/DEL/2015 ( ASSESSMENT YEAR: 2004-05) V3S INFRATECH LTD. (FORMERLY KNOWN AS M/S. GAHOI BUILDWELL (P) LTD.) A-20, NARAINA INDUSTRIAL AREA, PHASE-I NEW DELHI PAN : AABCG9474A VS . ACIT CENTRAL CIRCLE -23, JHANDEWALAN NEW DELHI APPELLANT RESPONDENT ASSESSEE BY: SH. SUNJAY KUMAR, FCA REVENUE BY: SHRI RINKU SINGH, SR.DR ORDER PER SUDHANSHU SRIVASTAVA, J.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST OR DER DATED 06.01.2015 PASSED BY THE LD. CIT (APPEALS)-XXX, NEW DELHI FOR ASSESSMENT YEAR 2004-05. 2. AT THE OUTSET, THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THERE WAS A DELAY OF 13 DAYS IN FILING THIS AP PEAL. OUR ATTENTION WAS DRAWN TO THE DELAY-CONDONATION APPLIC ATION SUBMITTED IN THIS RESPECT WHEREIN IT HAS BEEN PLEAD ED THAT THE DATE OF HEARING 27.12.2018 DATE OF PRONOUNCEMENT 27.02.2019 2 ITA N O. 3853/DEL/2015 (V3S INFRATECH LTD.) DELAY OCCURRED ON ACCOUNT OF APPEAL PAPERS HAVING B EEN KEPT IN THE WRONG FILE. AN AFFIDAVIT HAS ALSO BEEN FILED BY THE ASSESSEE IN THIS REGARD. IT WAS PRAYED THAT THE DELAY WAS UNINT ENTIONAL AND THAT THERE WAS NO NEGLIGENCE ON THE PART OF THE ASS ESSEE IN FILING THE APPEAL BUT SINCE THE PAPERS COULD NOT BE TRACED DUE TO HAVING BEEN KEPT IN THE WRONG FILE, THE DELAY BE CONDONED. 3. THE LD. SR. DR OPPOSED THE CONDONATION OF DELAY AND SUBMITTED THAT THE APPEAL SHOULD BE DISMISSED AT TH E VERY THRESHOLD. 4. HAVING HEARD BOTH THE PARTIES, IT IS OUR CONSIDE RED OPINION THAT THE DELAY OF 13 DAYS DESERVES TO BE CONDONED A S THE ASSESSEE WOULD NOT STAND TO GAIN BY INTENTIONALLY DELAYING T HE FILING OF APPEAL. ACCORDINGLY, THE DELAY STANDS CONDONED. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED FOR THE YEAR UNDER CONSIDERATION DECLARING IN COME OF RS. 29,041/- ON 01.11.2004. THERE WAS A SEARCH AND SEIZ URE ACTION U/S 132(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO CALL THE ACT) ON 01.09.2005. ASSESSMENT WAS FRAMED U/S 153A/143(3) OF THE ACT ON 26.12.2007 AND THE INCOME WAS ASSESSE D AT RS. 3,96,76,291/- AFTER MAKING ADDITIONS ON ACCOUNT OF RECEIPT OF SHARE CAPITAL AND ESTIMATED COMMISSION PAID FOR ARR ANGING ACCOMMODATION ENTRIES. THE LD. CIT (APPEALS), VIDE ORDER DATED 3 ITA N O. 3853/DEL/2015 (V3S INFRATECH LTD.) 03.03.2010, DELETED THE ENTIRE ADDITION. THE ITAT I N ITA NO. 2701/DEL/2009, VIDE ORDER DATED 23.03.2011, UPHELD THE ORDER OF THE LD. CIT (APPEALS) AND, THUS, THE INCOME SHOWN I N THE ORIGINAL RETURN AT RS. 29,041/- STOOD RESTORED. 5.1 MEANWHILE ON 19.01.2009, A SECOND SEARCH WAS CA RRIED OUT U/S 132 OF THE ACT. IN COMPLIANCE TO THE NOTICE U/S 153A OF THE ACT, RETURN DECLARING INCOME OF RS. 29,041/- WAS AG AIN FILED ON 16.02.2010. THE ASSESSMENT WAS COMPLETED ON 30.12.2 010 AT AN INCOME OF RS. 4,31,76,291/- BY MAKING A FURTHER ADD ITION OF RS. 35 LAKHS TO THE INCOME ASSESSED EARLIER. THIS ADDITION WAS ALSO ON ACCOUNT OF SHARE CAPITAL. THE LD. CIT (APPEALS), VI DE ORDER DATED 21.01.2013, DELETED THE ADDITION. 5.2 IN BETWEEN, ON 30.03.2011 NOTICE U/S 148 WAS IS SUED AND IN RESPONSE THE ASSESSEE SUBMITTED THAT THE ORIGINAL R ETURN FILED ON 01.11.2004 BE TREATED AS THE RETURN FILED IN COMPLI ANCE TO NOTICE U/S 148. THE ASSESSEE ALSO REQUESTED FOR COPY OF RE ASONS RECORDED FOR REOPENING THE ASSESSMENT. THE REASONS WERE PROV IDED TO THE ASSESSEE. THE REASONS INTER ALIA MENTIONED THAT DUR ING THE COURSE OF SURVEY IN THE PREMISES OF ONE SHRI SK GUPTA, SEV ERAL LEDGER ACCOUNTS WERE FOUND TO BE MAINTAINED IN TALLY SOFTW ARE BESIDES OTHER DOCUMENTS AND ACCOUNTS. IT WAS ALSO STATED TH AT SHRI SK GUPTA HAD ADMITTED DURING THE SURVEY PROCEEDINGS TH AT HE USED TO 4 ITA N O. 3853/DEL/2015 (V3S INFRATECH LTD.) PROVIDE ACCOMMODATION ENTRIES TO VARIOUS PERONS/BEN EFICIARIES. IT WAS ALSO STATED IN THE REASONS THAT AS PER THE INFO RMATION RECEIVED FROM THE ACIT, CENTRAL CIRCLE -19, NEW DELHI, THE A SSESSEE WAS THE RECIPIENT OF RS. 20 LAKHS THROUGH THREE DIFFERENT C HEQUES FROM M/S CHANDERPRABHU FINANCIAL SERVICES AND M/S CHANDERPRA BHU FINANCE & SECURITIES LTD WHICH WERE COMPANIES FLOAT ED/CONTROLLED BY SHRI SK GUPTA. THE ASSESSEE OBJECTED TO THE VALI DITY OF INITIATION OF PROCEEDINGS U/S 147 OF THE ACT AND THE OBJECTION S WERE DISPOSED OF BY THE AO ON 12.09.2011. ON 01.11.2011, THE ASSE SSEE REQUESTED FOR INSPECTION OF ASSESSMENT RECORDS AND ALSO REQUESTED FOR BEING PROVIDED WITH THE COPIES OF THE RELEVANT DOCUMENTS WHICH WERE PROVIDED TO THE ASSESSEE THOUGH INSPECTION OF FILE WAS NOT ALLOWED. ON 13.12.2011, THE ASSESSEE DEMANDED AN OP PORTUNITY TO CROSS EXAMINE MR. S.K. GUPTA ON WHOSE STATEMENT THE REOPENING WAS SAID TO BE BASED. THE ASSESSMENT WAS COMPLETED U/S 143(3) / 153(A) / 147 OF THE ACT ON 29.11.2011 AT AN INCOME OF RS. 4,51,76,290/- AFTER MAKING A FURTHER ADDITION OF 20 LAKHS TO THE INCOME DETERMINED EARLIER VIDE ASSESSMENT ORDER U/S 153A/143(3) DATED 31.12.2010. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT (APPEALS) AND CHALLENGED THE ADD ITION ON MERITS AS WELL AS CHALLENGED THE INITIATION OF REASSESSMEN T PROCEEDINGS BUT THE LD. CIT(A), VIDE THE IMPUGNED ORDER, DISMIS SED THE 5 ITA N O. 3853/DEL/2015 (V3S INFRATECH LTD.) ASSESSEES APPEAL. NOW THE ASSESSEE IS BEFORE THE I TAT AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. BECAUSE LEARNED CIT (A) HAS ERRED IN LAW ON FA CTS IN SUSTAINING THE REOPENING OF ASSESSMENT MADE TWICE U /S 143(3)/153A AFTER THE LAPSE OF FOUR YEARS FROM THE END OF ASSESSMENT YEAR. WITHOUT PREJUDICE TO THE AFORESAID 2. BECAUSE LEARNED CIT (A) HAS ERRED IN LAW AND FAC TS IN NOT ADJUDICATING THE GROUND NO. 3.1 WHEREIN THE APP ELLANT HAS CHALLENGED THE ADOPTION OF EARLIER ASSESSED INC OME UNDER SECTION 153A VIDE ORDER DATED 31.12.2010 INST EAD OF RETURNED INCOME. 3. BECAUSE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS. 20,00,000 U NDER SECTION 68 ON ACCOUNT OF SHARE CAPITAL ISSUED PARTI CULARLY WHEN NO CONTRARY EVIDENCE OR INCRIMINATING MATERIAL WAS EVER CONFRONTED TO THE APPELLANT DURING REASSESSMEN T PROCEEDINGS AND VERY SAME TRANSACTION STOOD VERIFIE D AND ASSESSED TWICE. 4. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY T O THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 6.0 AT THE OUTSET, THE LD. AUTHORISED REPRESENTATIV E SUBMITTED THAT GROUND NO. 2 WAS NOT BEING PRESSED. ACCORDINGL Y, THIS GROUND STANDS DISMISSED AS NOT PRESSED. 7.0 THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T THE REOPENING IN THIS CASE WAS BAD IN LAW AS ALL THE RE LEVANT FACTS WERE 6 ITA N O. 3853/DEL/2015 (V3S INFRATECH LTD.) ALREADY BEFORE THE ASSESSING OFFICER DURING THE COU RSE OF EARLIER ASSESSMENT PROCEEDINGS AND FURTHER THE AO HAD DULY EXAMINED THE INCREASE IN SHARE CAPITAL AND HAD MADE AN ADDIT ION WHICH WAS DELETED BY THE LD. CIT (APPEALS) AND THE ORDER OF T HE LD. CIT (APPEALS) WAS UPHELD BY THE ITAT. HE DREW OUR ATTEN TION TO THE COPY OF REASONS SUPPLIED AND PLACED AT PAGE 24 OF T HE PAPER BOOK FILED BY THE ASSESSEE. IT WAS SUBMITTED THAT AS PER THE REASONS RECORDED, THE REOPENING WAS ENTIRELY BASED ON INFOR MATION RECEIVED FROM CENTRAL CIRCLE AS WELL AS THE STATEMENT OF SHR I S.K.GUPTA RECORDED DURING THE COURSE OF SURVEY IN SH. S.K.GUP TA GROUP OF CASES. IT WAS ALSO SUBMITTED THAT NO INCRIMINATING DOCUMENT PERTAINING TO THE ASSESSEE WAS FOUND DURING THE COU RSE OF SURVEY IN S.K. GUPTA GROUP OF CASES. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD SPECIFICALLY ASKED FOR CROSS EXAMINATI ON OF SH. S.K. GUPTA WHICH WAS NOT AFFORDED AND, THUS, THE REASSES SMENT BASED ON SUCH STATEMENT WAS BAD IN LAW. RELIANCE WAS PLAC ED ON THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF M /S. ANDAMAN TIMBER INDUSTRIES IN CIVIL APPEAL NO. 4228 OF 2006 AND IT WAS SUBMITTED THAT IN ABSENCE OF OPPORTUNITY OF CROSS-E XAMINATION BEING PROVIDED TO THE ASSESSEE, THE IMPUGNED ADDITI ON COULD NOT HAVE BEEN MADE. THE LD. AUTHORISED REPRESENTATIVE A LSO ARGUED AT LENGTH AND CONTENDED THAT THE REASSESSMENT IN THIS CASE WAS 7 ITA N O. 3853/DEL/2015 (V3S INFRATECH LTD.) BEYOND 4 YEARS AND, THEREFORE, IN ABSENCE OF ANY FR ESH MATERIAL HAVING COME IN POSSESSION OF THE ASSESSING OFFICER, THE REASSESSMENT PROCEEDINGS WERE BAD IN LAW. THE LD. A UTHORISED REPRESENTATIVE ALSO ARGUED THAT THE IMPUGNED ADDITI ON WAS WRONGLY MADE AND FURTHER CONFIRMED AS THE ASSESSEE WAS NOT CONFRONTED WITH ANY CONTRARY EVIDENCE OR INCRIMINAT ING MATERIAL PRIOR TO MAKING THE ADDITION. IT WAS ALSO SUBMITTED THAT THE IMPUGNED TRANSACTION PERTAINING TO SHARE CAPITAL AL READY STOOD VERIFIED AND ASSESSED TWICE AND, THEREFORE, NO ADDI TION CAN BE MADE ON THIS ACCOUNT AS THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR ITS ASSESSMENT. THE LD. AR ALSO CITED NUMEROUS JUDI CIAL PRECEDENTS IN SUPPORT OF HIS CONTENTION AND IT WAS PRAYED THAT THE REASSESSMENT BE QUASHED. 8.0 IN RESPONSE, THE LD. SR. DEPARTMENTAL REPRESENT ATIVE SUBMITTED THAT IT IS NOT THE ASSESSEES CASE THAT A LL THE INFORMATION WAS ALREADY IN POSSESSION OF THE AO AT THE TIME OF FIRST ASSESSMENT PROCEEDINGS BECAUSE THE DEPARTMENT HAD RECEIVED FRE SH INFORMATION ONLY SUBSEQUENT TO THE SURVEY IN THE PR EMISES OF SH. S.K. GUPTA WHICH WAS CONDUCTED ON 20.11.2007. IT WA S SUBMITTED THAT THE RECEIPT OF RS. 20,00,000/- AS SHARE CAPITA L FROM CHANDER PRABHU FINANCIAL SERVICES AND CHANDER PRABHU FINANC E & 8 ITA N O. 3853/DEL/2015 (V3S INFRATECH LTD.) SECURITIES LTD. WAS FRESH INFORMATION BEFORE THE AS SESSING OFFICER AND, THEREFORE, THE REOPENING WAS VALID IN LAW. IT WAS ALSO SUBMITTED BY THE LD. SR. DR THAT SH. S.K. GUPTA HAD ACCEPTED THAT CHANDER PRABHU FINANCIAL SERVICES WAS AN ENTRY OPERATING COMPANY THROUGH HIS GROUP OF COMPANIES AND, THEREFO RE, THE AO CANNOT BE HELD TO BE AT FAULT FOR INITIATING THE RE ASSESSMENT PROCEEDINGS. IT WAS ALSO SUBMITTED THAT FAILURE TO PROVIDE CROSS EXAMINATION WILL NOT INVALIDATE THE RE-ASSESSMENT P ROCEEDINGS. 9.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIAL ON RECORD. WE FIRST TAKE UP THE ASSESS EES PLEA THAT THE REASSESSMENT PROCEEDINGS CANNOT BE SUSTAINED AS THE REASSESSMENT WAS BASED ON THE STATEMENT OF SHRI SK GUPTA, WHO THE ASSESSEE WAS NOT ALLOWED THE OPPORTUNITY TO CRO SS EXAMINE. FROM THE PERUSAL OF THE REASONS RECORDED, IT IS VER Y MUCH EVIDENT THAT THE STATEMENT OF SHRI SK GUPTA WAS ONLY ONE OF THE FACTORS RESPONSIBLE FOR THE INITIATION OF REASSESSMENT PROC EEDINGS. APART FROM THE STATEMENT OF SHRI SK GUPTA, THE AO ALSO HA D INFORMATION WHICH HAD BEEN RECEIVED FROM THE CENTRAL CIRCLE THA T THE ASSESSEE WAS IN RECEIPT OF RS. 20 LAKHS FROM TWO CONCERNS NA MELY M/S CHANDERPRABHU FINANCIAL SERVICES AND M/S CHANDERPRA BHU FINANCE & SECURITIES LTD WHICH WERE COMPANIES FLOAT ED/CONTROLLED BY SHRI SK GUPTA. THE INFORMATION DULY MENTIONED TH E NAME OF 9 ITA N O. 3853/DEL/2015 (V3S INFRATECH LTD.) THE BANK AS WELL AS THE CHEQUE NUMBERS THROUGH WHIC H THE IMPUGNED TRANSACTION/S OF RS. 20 LAKHS HAD TAKEN PL ACE. THUS, IT CANNOT BE SAID THAT THE FOUNDATION FOR THE INITIATI ON OF RE- ASSESSMENT PROCEEDINGS WAS ONLY THE STATEMENT OF SH RI SK GUPTA. THE DEPARTMENT ALSO HAD OTHER CORROBORATIVE EVIDENC ES IN THIS REGARD. DURING THE SURVEY OPERATION UNDER SECTION 1 33A OF THE ACT AT THE PREMISES OF SHRI SK GUPTA, A LAPTOP WAS FOUN D THE CONTENT OF WHICH WAS MADE ANNEXURE A-14. THE SAID LAPTOP CO NTAINED LEDGER ACCOUNTS FROM F.Y. 2003-04 TO 2007-08. AT PA GES 739, 875-876 OF THE LEDGER FOR F.Y. 2003-04 THERE WAS AN ACCOUNT NAMELY LOAN JULY 03 TO JULY 04 PREMIUM IN THE NAM E OF ONE MR. SURESH GARG. SCANNED COPY OF THESE PAGES HAVE ALSO BEEN REPRODUCED IN THE ASSESSMENT ORDER IN PARA 2.3.3. A S PER THE NOTING IN THE SAID PREMIUM ACCOUNT, THESE IS AN ENT RY OF PREMIUM (COMMISSION) RECEIVED FROM MR. SURESH GARG ON ACCOU NT OF CHEQUE NO. 778923 DT. 30.8.2003 DRAWN ON FEDERAL BANK FROM CHANDER PRABHU IN FAVOUR OF THE ASSESSEE FOR RS. 15,000/-. SIMILARLY, THE LEDGER OF MR. SURESH GARG SHOWED THAT ON 28.9.2003 AND 29.9.2003, CASH OF RS. 10 LACS WAS RECEIVED AND CHE QUE WAS GIVEN TO M/S GAHOI BUILDWELL PVT. LTD. THROUGH CHANDER PR ABHU FINANCIAL SERVICES LTD. FOR RS. 10 LACS (TWO CHEQUE S OF RS 5 LACS EACH.). IT IS ALSO NOT THE CASE OF THE ASSESSEE THA T THE ASSESSEE WAS 10 ITA NO. 3853/DEL/2015 (V3S INFRATECH LTD.) NOT CONFRONTED WITH THE DOCUMENTS/ENTRIES AS FOUND IN THE LAP TOP FOUND IN THE PREMISES OF SHRI SK GUPTA. A PERUSAL O F THE ASSESSMENT ORDER SHOWS THAT THE ENTIRE STATEMENT OF SH. S. K. GUPTA, REPRODUCED IN THE ASSESSMENT ORDER ALONG WIT H THE EVIDENCES, WERE GIVEN TO THE ASSESSEE FOR REBUTTAL AS IS EVIDENT FROM PARA 1.3 OF THE ASSESSMENT ORDER ON 11 . 11 . 2011 . THUS, IT IS VERY MUCH APPARENT THAT THE STATEMENT OF SHRI SK GU PTA WAS NOT THE SOLE FOUNDATION FOR THE INITIATION OF RE-ASSESS MENT PROCEEDINGS AND, THEREFORE, WE ARE AFRAID THAT THE ASSESSEES R ELIANCE ON THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF M /S. ANDAMAN TIMBER INDUSTRIES (SUPRA) WILL NOT COME TO THE AID OF THE ASSESSEE ON THE FACTS OF THIS CASE. THE DEPARTMENT ALSO HAD SUFFICIENT CORROBORATIVE EVIDENCE/S AS FOUND IN THE LAP-TOP FO UND DURING THE COURSE OF SURVEY AT THE PREMISES OF SHRI SK GUPTA T O PROCEED AGAINST THE ASSESSEE BY ISSUING NOTICE U/S 148 OF T HE ACT. THEREFORE, WE ARE DISMISS THE ASSESSEES PLEA THAT THE RE- ASSESSMENT PROCEEDINGS STAND VITIATED AS THE ASSESS EE WAS DENIED THE OPPORTUNITY TO CROSS EXAMINE SHRI SK GUPTA. 9.1 THE ASSESSEE HAS ALSO CHALLENGED THE RE-OPENING ON THE GROUND THAT NO FRESH MATERIAL HAD COME INTO EXISTEN CE AND THE ISSUE OF SHARE CAPITAL HAD ALREADY BEEN EXAMINED IN THE EARLIER ASSESSMENT PROCEEDINGS. HOWEVER, THIS CONTENTION OF THE ASSESSEE 11 ITA NO. 3853/DEL/2015 (V3S INFRATECH LTD.) ALSO DOES NOT HOLD MUCH GROUND. THE HONBLE GUJARAT HIGH COURT, IN THE CASE OF YOGENDRA KUMAR GUPTA VS. ITO REPORTE D IN (2014) 366 ITR 186 (GUJ), HAS HELD ASSUMPTION OF JURISDICT ION U/S 147 OF THE ACT BY THE ITO BASED ON FRESH INFORMATION TO BE VALID. IN THIS CASE, THE ASSESSEE HAD FILED RETURN OF INCOME DECLA RING A CERTAIN INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE AO NOTICED THAT THE ASSESSEE HAD TAKEN LOANS AND ADVAN CES BUT SINCE THE LOANS AND ADVANCES WERE ENTERED THROUGH CHEQUES AND DRAFTS, THE AO ACCEPTED THE VALIDITY OF THESE TRANSACTIONS AND COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT. SUBSEQUENTLY, A SEARCH WAS CARRIED OUT IN THE PREMISES OF A THIRD PARTY IN COU RSE OF WHICH IT WAS FOUND OUT THAT THIS THIRD PARTY WAS RUNNING TWE NTY DUMMY COMPANIES WHICH PROVIDED ACCOMMODATION ENTRIES TO V ARIOUS BENEFICIARIES. THE LIST OF THE TWENTY DUMMY COMPANI ES INCLUDED THE NAME OF THE COMPANY FROM WHICH THE ASSESSEE HAD TAKEN LOANS/ADVANCES. ON THE BASIS OF THE SAID INVESTIGAT ION REPORT, THE AO TOOK THE VIEW THAT THE LOAN TRANSACTIONS WERE BO GUS AND RE- ASSESSMENT PROCEEDINGS WERE INITIATED. THE HONBLE GUJARAT HIGH COURT, ON ASSESSEES APPEAL, HELD THAT THE ASSUMPTI ON OF JURISDICTION ON THE PART OF THE AO WAS BASED ON FRE SH INFORMATION AND UPHELD THE VALIDITY OF THE RE-ASSESSMENT PROCEE DINGS. THE HONBLE APEX COURT SUBSEQUENTLY DISMISSED THE ASSES SEES SPECIAL 12 ITA NO. 3853/DEL/2015 (V3S INFRATECH LTD.) LEAVE PETITION. IN THE PRESENT CASE ALSO, THE RE-OP ENING WAS BASED ON INFORMATION COLLECTED DURING THE COURSE OF SURVE Y AT THE PREMISES OF A THIRD PARTY AND THIS, IN OUR CONSIDER ED OPINION, CONSTITUTES FRESH INFORMATION. THEREFORE, WE REJECT THE CONTENTION OF THE ASSESSEE THAT THE INFORMATION FROM THE INVES TIGATION WING COULD NOT BE TREATED AS FRESH MATERIAL FOR THE PURP OSE OF INITIATING RE-ASSESSMENT PROCEEDINGS. 9.2 THE LD. AR HAD ALSO ARGUED THAT THE ASSESSEE WA S NOT CONFRONTED WITH ANY INCRIMINATING MATERIAL OR CONTR ARY EVIDENCE WITH RESPECT TO THE IMPUGNED ADDITION. IN THIS REGA RD, WE HAVE PERUSED THE ASSESSMENT ORDER AND WE NOTE THAT THE E NTIRE EVIDENCE HAS BEEN REPRODUCED IN THE ASSESSMENT ORDER AND IT HAS BEEN STATED BY THE AO THAT THE SAME WAS GIVEN BY WAY OF SHOW CAUSE TO THE ASSESSEE FOR REBUTTAL. THE AO HAS ALSO MENTIONE D THAT THE ASSESSEE CHOSE NOT TO OFFER ITS COMMENTS ON THE SAM E. THEREFORE, THIS ARGUMENT OF THE LD. AR ALSO CANNOT BE ACCEPTED AND THE SAME IS REJECTED. 9.3 IT HAS ALSO BEEN ARGUED BY THE LD. AR THAT SINC E THE IMPUGNED TRANSACTION PERTAINING TO SHARE CAPITAL AL READY STOOD VERIFIED AND ASSESSED TWICE AND, THEREFORE, NO ADDI TION COULD HAVE BEEN MADE ON THIS ACCOUNT AS THERE WAS NO FAILURE O N THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERI AL FACTS NECESSARY 13 ITA NO. 3853/DEL/2015 (V3S INFRATECH LTD.) FOR ITS ASSESSMENT. HOWEVER, THE FACT REMAINS THAT ALTHOUGH THE ISSUE OF SHARE CAPITAL WAS EXAMINED BY THE AO ON EA RLIER TWO OCCASIONS, THIS TIME, FRESH INFORMATION, GATHERED D URING THE COURSE OF SURVEY PROCEEDINGS, ADDED AN ENTIRELY NEW DIMENS ION TO THE IMPUGNED TRANSACTION. THE AO SIMPLY COULD NOT BE EX PECTED TO PUT BLINKERS ON HIS EYES AND IGNORE THE INFORMATION JUS T FOR THE REASON THAT THE IMPUGNED TRANSACTION WAS A PART OF THE SHA RE CAPITAL WHICH HAD BEEN EXAMINED ON TWO EARLIER OCCASIONS. O NE MAY, AT THIS STAGE, REFER TO THE FULL BENCH JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. USHA INTERNATIONA L (2012) 348 ITR 485 (DEL FB). THE FULL BENCH WAS CONSTITUTED TO CONSIDER THE MEANING OF THE EXPRESSION CHANGE OF OPINION FOR PURPOSES OF SECTION 147 AND WHETHER, IN THE LIGHT OF THE JUDGM ENT IN THE CASE OF KELVINATOR REPORTED IN 256 ITR 1 (DEL FB) AND AS APPROVED BY THE HONBLE APEX COURT IN 320 ITR 521 (SC), IN A CA SE WHERE THE ASSESSEE HAS FURNISHED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT WITH REFERENCE TO THE INCOME AL LEGED TO HAVE ESCAPED ASSESSMENT, THE AO, EVEN WITHIN 4 YEARS FRO M THE END OF THE AY, COULD BE SAID TO HAVE FORMED AN OPINION AND TO HAVE NO JURISDICTION TO REOPEN THE ASSESSMENT EVEN THOUGH H E HAD NOT RAISED ANY QUERY WITH RESPECT TO THE ISSUE. HELD BY THE FULL BENCH: 14 ITA NO. 3853/DEL/2015 (V3S INFRATECH LTD.) (I) THE EXPRESSION CHANGE OF OPINION POSTULATES FORMATION OF OPINION AND THEN A CHANGE THEREOF. THE QUESTION OF CHANGE OF OPINION ARISE ONLY WHEN THE AO AT THE S. 143(3) STAGE FOR MS AN OPINION AND ACCEPTS THE ASSESSEES STAND. THERE IS A DIFFERENCE BETWEEN CHANGE OF OPINION AND FAILURE TO FORM AN OPINION . HOWEVER, FOR DETERMINING WHETHER OR NOT THERE IS CHANGE OF OPINION , THE FACT THAT THE ASSESSMENT ORDER IS SILENT IS NOT RELEVANT BECAUSE THE ASSESSEE HAS NO CONTROL OVER T HE WAY THE ORDER IS WRITTEN. THERE MAY ALSO BE CASES WHERE THO UGH THE AO HAS NOT RAISED A QUERY, THE ISSUE MAY BE SO APPAREN T AND OBVIOUS THAT TO SAY THAT THE AO HAS NOT FORMED AN O PINION WOULD BE CONTRARY AND OPPOSED TO NORMAL HUMAN CONDUCT; XXX 15. HERE WE MUST DRAW A DISTINCTION BETWEEN ERRONE OUS APPLICATION/ INTERPRETATION/UNDERSTANDING OF LAW AN D CASES WHERE FRESH OR NEW FACTUAL INFORMATION COMES TO THE KNOWLEDGE OF THE ASSESSING OFFICER SUBSEQUENT TO THE PASSING OF THE ASSESSMENT ORDER. IF NEW FACTS, MATERIAL OR INFORMA TION COMES TO THE KNOWLEDGE OF THE ASSESSING OFFICER, WHICH WAS N OT ON RECORD AND AVAILABLE AT THE TIME OF THE ASSESSMENT ORDER, THE PRINCIPLE OF 'CHANGE OF OPINION' WILL NOT APPLY. THE REASON IS T HAT 'OPINION' IS FORMED ON FACTS. 9.4 THEREFORE, OPINION' FORMED OR BASED ON WRONG A ND INCORRECT FACTS OR WHICH ARE BELIED AND UNTRUE DO NOT GET PRO TECTION AND COVER UNDER THE PRINCIPLE OF 'CHANGE OF OPINION'. FACTUAL INFORMATION OR MATERIAL WHICH WAS INCORRECT OR WAS NOT AVAILABLE W ITH THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT WOULD JU STIFY INITIATION OF 15 ITA NO. 3853/DEL/2015 (V3S INFRATECH LTD.) REASSESSMENT PROCEEDINGS. THE REQUIREMENT IN SUCH C ASES IS THAT THE INFORMATION OR MATERIAL AVAILABLE SHOULD RELATE TO MATERIAL FACTS. THE EXPRESSION MATERIAL FACTS' MEANS THOSE FACTS WHICH IF TAKEN INTO ACCOUNT WOULD HAVE AN ADVERSE AFFECT ON THE ASSESSE E BY A HIGHER ASSESSMENT OF INCOME THAN THE ONE ACTUALLY MADE. TH EY SHOULD BE PROXIMATE AND NOT HAVE REMOTE BEARING ON THE ASSESS MENT. THE OMISSION TO DISCLOSE MAY BE DELIBERATE OR INADVERTE NT. THE QUESTION OF CONCEALMENT IS NOT RELEVANT AND IS NOT A PRECONDITI ON WHICH CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. IN THE APPEA L BEFORE US, THE AO HAS RECORDED A CLEAR FINDING IN THE REASONS RECORD ED THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE F ULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. IT HAS BEEN CONTENDED BY THE LD. AR THAT THE AO HAS SIMPLY STATED THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL THE MATERIAL PARTICULA RS AND THE AO HAS NOT STATED AS TO WHICH MATERIAL THE ASSESSEE HAD FA ILED TO DISCLOSE AND, THEREFORE, THE RE-OPENING WAS BAD IN LAW. HOWE VER, THE CONTENTION OF THE LD. AR REGARDING FULL AND TRUE DI SCLOSURE HAS TO BE REJECTED IN TERMS OF EXPLANATION 1 TO SECTION 147 W HICH READS AS UNDER: 16 ITA NO. 3853/DEL/2015 (V3S INFRATECH LTD.) EXPLANATION 1.PRODUCTION BEFORE THE ASSESSING OFF ICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENC E COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY THE ASSESSING OFF ICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. 9.5 IN OUR CONSIDERED OPINION, ON THE FACTS OF THE PRESENT CASE, THE EXPLANATION SUPPORTS THE CASE OF THE REVENUE THAT M ERE SUBMISSION OF DOCUMENTS LIKE INCOME RETURNS, COPY OF PAN CARDS , COPY OF BANK STATEMENTS, CONFIRMATION FROM THE SHARE APPLICANTS ETC BY ITSELF WOULD NOT AMOUNT TO PROPER DISCLOSURE BY THE ASSESESSE AS THE VERY MATERIAL FACT THAT THE IMPUGNED TRANSACTION/S RELATED TO ACC OMMODATION ENTRIES WAS NOT DISCLOSED BY THE ASSESSEE. IN THE C ASE OF HONDA SIEL POWER PRODUCTS LIMITED V. DEPUTY COMMISSIONER OF IN COME TAX (2012) 340 ITR 0053, A DIVISION BENCH OF THE HONBL E DELHI HIGH COURT HELD AS UNDER: THE LAW POSTULATES A DUTY ON EVERY ASSESSEE TO DIS CLOSE FULLY AND TRULY ALL MATERIAL FACTS FOR ITS ASSESSMENT. TH E DISCLOSURE MUST BE FULL AND TRUE. MATERIAL FACTS ARE THOSE FACTS WHICH IF TAKEN INTO ACCOUNTS THEY WOULD HAVE AN ADVERSE EFFECT ON ASSESSEE BY THE HIG HER ASSESSMENT OF INCOME THAN THE ONE ACTUALLY MADE. TH EY SHOULD BE PROXIMATE AND NOT HAVE ANY REMOTE BEARING ON THE ASSESSMENT. 17 ITA NO. 3853/DEL/2015 (V3S INFRATECH LTD.) OMISSION TO DISCLOSE MAY BE DELIBERATE OR INADVERTE NT. THIS IS NOT RELEVANT, PROVIDED THERE IS OMISSION OR FAILURE ON THE PART OF THE ASSESSEE. THE LATTER CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. 9.6 IN THE LIGHT OF THE AFORESAID, IT HAS TO BE HE LD THAT THE REQUIREMENT OF FULL AND TRUE DISCLOSURE BY THE ASSE SSEE IS NOT SATISFIED IN THE PRESENT CASE. THE HONBLE DELHI HIGH COURT H AS OBSERVED IN THE CASE OF M/S OPG METALS & FINSEC LTD. VS. COMMISSION ER OF INCOME TAX & ANR. IN WRIT PETITION (CIVIL) NO. 8283/2010 T HAT FULL AND TRUE DISCLOSURE CANNOT BE GARBED OR HIDDEN BEHIND THE CE RVICES OF THE DOCUMENTARY MATERIAL. THE ASSESSEE MUST ACT WITH CA NDOUR AND THERE CANNOT BE SUPPRESSION OF FACTS. THE DISCLOSURE MUST BE TRUTHFUL AND FAIR IN ALL RESPECTS AND ASSESSEE WHO SEEKS THE BENEFIT OF THE PROVISO TO SECTION 147 MUST MAKE A FULL AND TRUE DISCLOSURE OF ALL PRIMARY FACTS. 9.7 IN VIEW OF THE ABOVE STATED JUDICIAL PRECEDENTS AND ON THE SPECIFIC FACTS OF THIS CASE, WE ARE UNABLE TO FIND OURSELVES IN AGREEMENT WITH THE AVERMENTS OF THE LD. AR. WE ALSO NOTE THAT THE JUDICIAL PRECEDENTS RELIED UPON BY THE LD. AR ALSO DO NOT COME TO THE RESCUE OF THE ASSESSEE AS THE FACTS IN THOSE CASES ARE ENTIRELY DISTINGUISHABLE FROM THE FACTS OF THE CASE. ACCORDI NGLY, WE UPHOLD THE VALIDITY OF THE RE-ASSESSMENT PROCEEDINGS. GROUND NOS. 1, 2, 3 AND 4 OF THE ASSESSEES APPEAL ARE, ACCORDINGLY, DISMISSE D. 18 ITA NO. 3853/DEL/2015 (V3S INFRATECH LTD.) 10. IN THE FINAL RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.02.2019. SD/- SD/- (O.P.KANT) (SUDHANS HU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 27.02.2019 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 12.02.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.02.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 27.02.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 27.02.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 27.02.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 19 ITA NO. 3853/DEL/2015 (V3S INFRATECH LTD.) THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER