I.T.O., Ward-1(2), Aligarh V. Smt. Meenakshi Devi, Aligarh

ITA 464/AGR/2011

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0428 (ITAT-AGRA)
• Duration Of Justice: 7 year(s) 5 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-01-2013
• Assessment Year: 1999-2000
• Appeal Filed On: 14-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: WASEEAM ARS HAD
• Keywords: Reopening of assessment; Depreciation; Principle of natural justice; Competent authority; Assessment record; Reason to believe
• Section: 234B; 143(1); 147; 131; 68; 145; 27; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NOS.463, 464 & 465/AGR/2011 ASSESSMENT YEARS: 1998-99, 1999-2000 & 2000-01 RES PECTIVELY INCOME TAX OFFICER (AO), VS. SMT. MEENAKSHI DEVI , WARD 1(2), ALIGARH. PROP. M/S MEENAKSHI TRADE RS, ALIGARH. (PAN: AATPD 1320 R). ITA NOS.09, 10 & 11/AGR/2012 ASSESSMENT YEARS: 1998-99, 1999-2000 & 2000-01 RES PECTIVELY SMT. MEENAKSHI DEVI, VS. INCOME TAX OFFICER (AO) , PROP. M/S MEENAKSHI TRADERS, WARD 1(2), ALIGAR H. MAHAVIR GANJ, ALIGARH. (PAN: AATPD 1320 R). (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI WASEEAM ARSHAD, SR. D.R. ASSESSEE BY : SHRI ANURAG SINHA, ADVOCATE DATE OF HEARING : 28.01.2013 DATE OF PRONOUNCEMENT OF ORDER : 08.03.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THESE ARE CROSS APPEALS FILED BY THE REVENUE AND A SSESSEE AGAINST THREE DIFFERENT ORDERS, ALL DATED 13.05.2011, PASSED BY T HE LD. CIT(A)-I, AGRA FOR THE ASSESSMENT YEARS 1998-99, 1999-2000 & 2000-01 RESPE CTIVELY. ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 2 ITA NOS.463, 464 & 465/AGR/2011 APPEALS BY REVENU E 2. THE REVENUE HAS RAISED ONE EFFECTIVE GROUND OF A PPEAL IN ALL THE APPEALS THAT THE ORDER OF CIT(A) ERRED IN REDUCING THE RATE FOR ESTIMATION OF COMMISSION INCOME FROM 0.5% TO 0.1%. ITA NOS.09, 10 & 11/AGR/2012 APPEALS BY THE ASSES SEE 3. THE LEARNED REPRESENTATIVES SUBMITTED THAT COMMO N GROUNDS OF APPEALS RAISED IN ALL THESE APPEALS ARE BASED ON IDENTICAL FACTS. IN THE LIGHT OF THEIR SUBMISSIONS WE PROCEED TO DECIDE THESE APPEALS BY T HIS COMMON ORDER CONSIDERING FACTS OF THE CASE FOR AY 98-99.THE GROUNDS RAISED B Y THE ASSESSEE IN ITA NO.09/AGR/2012 IN AY 98-99 IS REPRODUCED AS UNDER :- 1. BECAUSE, THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD . AO ERRED IN ISSUING NOTICE UNDER SECTION 148 OF THE I. T. ACT, ON THE BASIS OF REASONS RECORDED WHICH ARE NO REASONS IN THE EYES OF LAW. 2. BECAUSE , IN THE OVERALL VIEW OF THE MATTER LD. CIT(A) ERRE D IN HOLDING IN PARA 5.4 NOTICE UNDER SECTION 148 TO BE VALID IN LAW HAVING BEEN ISSUED ON ACCOUNT OF ALLEGED LOW RATE OF COMMISSIO N AND NON MENTION OF DETAIL OF TURNOVER IN THE RETURN, BOTH OF WHICH PER -SE DO NOT LEAD TO HAVE REASONS LEADING TO FORMATION OF BELIEF REGARDING ES CAPEMENT OF INCOME. 3. BECAUSE , THE LD. CIT(A) HAS FAILED TO CONSIDER THE SPIRIT OF THE JUDGEMENT OF THE HONBLE APEX COURT IN THE CASES OF ACIT VS. RAJESH JAVERY STOCK BROKERS (P) LIMITED (2007) 161 TAXMAN 316 (S.C.) AND RAYMOND WOOLEN MILLS LIMITED (1999) 236 ITR 34 (S.C . ) IGNORING THE FACT ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 3 THAT IN NONE OF THE DECISIONS HONBLE SUPREME COURT HAS GIVEN BLANKET POWER TO REVENUE TO ISSUE NOTICE UNDER SECTION 148 FOR WHATEVER REASONS AS HELD BY HE LD CIT(A). 4. BECAUSE , ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. AO ERRED IN REJECTING THE PROFIT SHOWN IN THE REGULA R BOOKS OF ACCOUNTS, WHICH WERE PRODUCED BEFORE THE LD. AO . PROVISION OF SECTION 145(3) HAS WRONGLY BEEN INVOKED. 5. BECAUSE , ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE NO ADVERSE INFERENCE CAN BE VALIDLY DRAWN EVEN IF NO R EPLY WAS RECEIVED IN COMPLIANCE TO SUMMONS ISSUED UNDER SECTION 131 OF T HE ACT. LD CIT(A) HAS ARBITRARILY HELD DECISIONS OF HONBLE ALLAHABAD HIGH COURT TO BE NOT RELEVANT TO THE ISSUE UNDER CONSIDERATION. 6. BECAUSE , WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) ERRED IN ESTIMATING AND APPLYING THE RATE OF RS.1/- PER THOU SAND PLACING RELIANCE TO THE DECISION BY THE HONBLE ITAT, AGRA BENCH IN ITA NO.355/AGRA/2004 IGNORING THE FACTS OF THE CASE AS BORNE OUT OF APPE LLATE ORDER ITSELF. IN ANY VIEW OF THE MATTER THE APPLICATION OF RATE @ RE.1/- PER THOUSAND IS HIGHLY EXCESSIVE AND AGAINST THE FACTS OF THE CASE. 7. BECAUSE , WITHOUT PREJUDICE TO THE ABOVE, IN ANY VIEW OF TH E MATTER THE LD CIT(A) OUGHT TO HAVE TAKEN INTO CONSIDERATION THAT IN AP PELLANTS OWN CASE IN A.Y. 2001-2002 THE HONBLE ITAT APPROVE D THE BOOKS WHEREIN THE RATE SHOWN WAS .20 PAISA PER THOUSAND. 8. BECAUSE , ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN ANY VIEW OF THE MATER THE ASSESSMENT ORDER DATED 15 .12.2006 IS BAD ON FACT AND IN LAW. 9. BECAUSE , THE APPELLANT DENIES LEVY OF INTEREST UNDER SECTION 234B. 10. BECAUSE , THE ORDER APPEALED AGAINST IS CONTRARY TO THE FAC TS, LAW AND PRINCIPLES OF NATURAL JUSTICE. THE APPELLANT RESERVES HIS RIGHT TO ADD, DELETE, MODIFY, ALTER OR SUBSTITUTE ANY OR ALL THE GROUNDS OF APPEAL. ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 4 4. IT IS RELEVANT TO NOTE THAT THE TOTAL AMOUNT DEP OSITED IN BANK ACCOUNT FOR DIFFERENT YEARS ARE AS UNDER :- A.Y. 1998-99 - RS.25,31,96,401/- A.Y. 1999-2000 - RS.27,28,93,893/- A.Y. 2000-01 - RS.34,71,02,418/- 5. THE ASSESSEE RAISED AS MANY AS 10 GROUNDS OF APP EAL WHICH IS NOT IN ACCORDANCE WITH RULE 8 OF INCOME TAX (APPELLATE TRI BUNAL) RULES, 1963. THE RULE 8 REQUIRES THAT THE GROUNDS OF APPEAL WITHOUT ANY ARGUMENT OR NARRATION, SUCH GROUNDS SHALL BE NUMBERED CONSECUTIVELY. IF GROUND S OF APPEAL ARE NOT FOUND IN ACCORDANCE WITH RULE, SUCH APPEALS ARE LIABLE TO BE DISMISSED. HOWEVER, THESE APPEALS HAVE BEEN HEARD AND KEEPING IN VIEW THE PRI NCIPLE OF NATURAL JUSTICE, WE CONSIDER THE FOLLOWING EFFECTIVE GROUNDS RAISED :- I) THE FIRST EFFECTIVE GROUND IS IN RESPECT OF CHAL LENGING NOTICE ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER), EXCEPT IN A.Y. 2000-2001. IN THIS A.Y. 2000-2001 THE MATTER WAS SENT BACK TO THE FILE OF THE A.O. BY I.T.A.T. II) THE SECOND EFFECTIVE GROUND OF APPEAL IS IN RES PECT OF REJECTION OF BOOKS OF ACCOUNT UNDER SECTION 145(3) OF THE ACT. ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 5 III) THE THIRD EFFECTIVE GROUND OF APPEAL IS IN RES PECT OF EXCESSIVE ESTIMATION OF INCOME. IV) THE FOURTH EFFECTIVE GROUND OF APPEAL IS IN RES PECT OF CHARGING OF INTEREST UNDER SECTION 234B OF THE ACT. 6. THE BRIEF FACTS OF THE CASE ARE THAT THE A.O. IS SUED NOTICE UNDER SECTION 148 (FOR A.Y. 1998-99 TO 1999-2000) OF THE ACT AFTER RE CORDING THE REASONS IN THIS CASE, ASSESSMENT WERE REOPENED U/S. 147 AFTER RECORDING O F REASONS TO BELIEVE BY THE A.O. THAT THE ASSESSEE DID NOT DECLARE ITS TURNOVER IN THE RETURN OF INCOME WHICH WAS FOUND FROM HER BANK ACCOUNT BEING MAINTAINED WI TH SYNDICATE BANK. AS PER THIS BANK ACCOUNT, TOTAL AMOUNT OF RS.16,22,44,276/ - WAS FOUND DEPOSITED IN THE ACCOUNT OF THE ASSESSEE. THE ASSESSEE IS IN THE BUS INESS STATED TO BE OF DRAFT DISCOUNTING AND EARNED COMMISSION BY THIS ACTIVITY DURING THE YEAR UNDER APPEAL. IN THE RETURN OF INCOME, THE ASSESSEE HAS SHOWN ONL Y THE AMOUNT OF COMMISSION RECEIVED AT RS.4,54,129/- WITHOUT SHOWING THE TOTAL AMOUNT OF THE DRAFT DISCOUNTED BY HER AND DECLARING THE RATE OF COMMISSION BEING C HARGED BY HER. IN THE RETURN OF INCOME, AFTER SHOWING DRAFT DISCOUNTING COMMISSION AT RS.4,54,129/- AND INTEREST ON FDR AT RS.1,99,114/- AND FURTHER CLAIMING DEDUCT ION FOR EXPENSES AT RS.5,25,143/- NET INCOME OF RS.1,28,100/- WAS DECLA RED BY THE ASSESSEE . ON THE ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 6 BASIS OF THE PAST ASSESSMENT ORDERS, PARTICULARLY F OR THE A.Y. 2000-01 AND 2001-02, WHICH WAS A SUBJECT MATTER OF APPEAL BEFORE THE CIT (A)-II, AGRA, A NET DRAFT COMMISSION AT THE RATE OF 4% WAS CONFIRMED BY LD. C IT(A)-II, AGRA. BASED ON THIS FINDING AND HAVING NOTICED FROM THE RETURN OF INCOME OF THE APPELLANT THAT SHE HAS NOT DISCLOSED THE TOTAL AMOUNT OF DRAFTS DISCOU NTED AND THE RATE OF COMMISSION CHARGED BY HER AND THUS, NOT GIVING BASIS OF THE CO MPUTATION OF COMMISSION DECLARED BY HER. THE A.O. HAS RECORDED THE REASON TO BELIEVE THAT THE COMMISSION INCOME SHOWN BY THE APPELLANT IS AT LOWER SIDE BY T HE AMOUNT OF RS.5,20,873/- AND HENCE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT TO THIS EXTENT AND, THEREFORE, PROCEEDING UNDER SECTION 147 OF THE ACT WAS STARTED BY THE A.O. BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT DATED 30.03.2005. 7. THE A.O. REJECTED THE BOOKS OF ACCOUNT INVOKING SECTION 145(3) OF THE ACT, BECAUSE THE ASSESSEE FAILED TO ESTABLISH CORRECTNES S OF BOOKS OF ACCOUNT, DURING ASSESSMENT PROCEEDINGS. AFTER REJECTING BOOKS OF A CCOUNT, THE A.O. ESTIMATED INCOME APPLYING NET PROFIT RATE OF 0.5% ON GROSS RE CEIPTS OF RS.25,31,96,401/- OF WHICH CALCULATION COMES TO RS.12,65,982/- IN ADDITI ON TO INTEREST INCOME OF RS.1,99,114/- SHOWN BY THE ASSESSEE. THE TOTAL INC OME WAS DETERMINED AT RS.14,65,100/- ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 7 8. THE CIT(A) CONFIRMED THE ACTION OF THE A.O. IN R ESPECT OF REOPENING OF COMPLETED ASSESSMENT UNDER SECTION 147 OF THE ACT A S UNDER :- (PARA NOS.5.3 TO 5.12, PAGE NOS.5 TO 12) 5.3 WITH REGARD TO EXAMINING THE VALIDITY OF NOTIC E ISSUED BY THE AO UNDER SECTION 148, I HAVE CONSIDERED THE ABOVE A RGUMENTS TAKEN BY THE LD. AR IN THE WRITTEN SUBMISSION AND ALSO GO NE THROUGH THE ASSESSMENT ORDER IN WHICH DETAILS OF REASONS RECORD ED ARE GIVEN. THE ASSESSMENT RECORD WAS NOT MADE AVAILABLE BY THE PRE SENT ITO-1(2), ALIGARH DESPITE ASKING HIM SEVERAL TIMES. HOWEVER, THE CASE WAS DISCUSSED WITH THE AO, SHRI M.M. LAL WHO PASSED THE ASSESSMENT ORDER AND IS PRESENTLY POSTED IN AGRA AS DCIT (HQ). AFTER GOING THROUGH THE ASSESSMENT ORDER AND DISCUSSING WITH AO WHO PASSED THE ASSESSMENT ORDER, I FIND THAT THE AO HAS SPECIFICAL LY RECORDED IN THE NOTE PREPARED BY HIM FOR RECORDING THE REASON TO BE LIEVE THAT NO BASIS FOR COMPUTATION OF COMMISSION EARNED BY THE APPELLA NT WAS DECLARED IN THE RETURN OF INCOME BECAUSE SHE DID NOT DECLARE THE TOTAL AMOUNT OF DRAFT DISCOUNTED BY HER. WHEN THE AO DISCOVERED THE AMOUNT DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT FROM 01.04.1997 TO 31.03.1998 WAS TOTALING TO RS.16,22,44,276/- AND HE FOUND AFTER APPLYING THE NET RATE OF 0.4% THAT THE DRAFT COMMIS SION WAS COMING TO ABOUT RS. 6,48,977/- WHICH WAS MUCH MORE THAN WHAT WAS DECLARED BY THE APPELLANT IN THE RETURN OF INCOME, HE RECORDED THE NOTE FOR REASON TO BELIEVE AND ISSUED NOTICE UNDER SECTION 148 TO R EOPEN THE PROCEEDING UNDER SECTION 147 AS DISCUSSED IN PARA 2 OF PAGE NO.1 OF THE ASSESSMENT ORDER AND ALSO IN PARA 3 OF THIS ORD ER. IN HIS WRITTEN SUBMISSION, THE LD. AR HAS TAKEN AN ARGUMENT THAT I F THE COMMISSION EARNED ON THIS TURNOVER HAS NOT BEEN SHOWN THEN HOW THE AO HAS CALCULATED THAT THIS YEAR DISCLOSED COMMISSION IS 0 .07% ON TOTAL TURNOVER AS AGAINST 0.4% SUSTAINED BY THE CIT(A). ON GOING THROUGH THE DETAILS AS DISCUSSED IN THE ASSESSMENT ORDER ON PAGE NO.1 WHILE GIVING THE DETAILS OF REASON RECORDED, I FIND THAT SUCH DOUBT RAISED BY THE LD. AR ON THE REASON RECORDED BY THE AO IS NOT JUSTIFIED BECAUSE THE RATE OF 0.07% AS NET RATE OF DRAFT COMMISSION T AKEN BY THE AO STATING THAT AS DECLARED BY THE ASSESSEE (APPELLANT ) WAS NOT BASED ON HER RETURN OF INCOME BUT THIS RATE WAS COMPUTED BY HIM ON THE BASIS OF THE AMOUNT OF TOTAL DRAFT DISCOVERED BY HIM FROM TH E BANK ACCOUNT OF THE APPELLANT AND THEN WORKING OUT THE RATE OF DRAF T COMMISSION BY ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 8 TAKING THE NET INCOME DECLARED BY THE APPELLANT IN THE RETURN OF INCOME AT RS.1,28,100/- AS SHOWN BELOW:- 1,28,100/16,22,44,276 = 0.00078 APPROX.0.07% 5.4. IN VIEW OF THE ABOVE DETAILS, IT IS CLEAR THAT THE AO HAS FOUND THE LOW RATE OF DRAFT COMMISSION SHOWN BY THE APPEL LANT ON THE BASIS OF THE DETAILS COLLECTED BY HIM AND NOT AS DISCLOSE D BY THE APPELLANT IN THE RETURN OF INCOME. EVEN THE LD. AR HAS NOT CLEAR LY STATED IN THE WRITTEN SUBMISSION WHETHER ANY TURNOVER OF TOTAL AM OUNT OF DRAFT DISCOUNTED BY THE APPELLANT WAS DECLARED IN THE RET URN OF INCOME OR NOT AND THE BASIS OF EARNING OF COMMISSION, GIVING THE RATE OF DRAFT DISCOUNTING COMMISSION BEING CHARGED BY THE APPELLA NT WAS DISCLOSED IN THE RETURN OF INCOME OR NOT. THEREFORE, I FIND T HAT THE REASON RECORDED BY THE AO WITH REGARD TO DISCLOSURE OF A V ERY LOW RATE OF COMMISSION BY THE APPELLANT IN HER RETURN WAS BASED ON INFORMATION COLLECTED BY HIM. AFTER COLLECTING THE DETAILS OF T OTAL AMOUNT OF DRAFT DEPOSITED IN HER BANK ACCOUNT AND THE AMOUNT OF RAT E OF COMMISSION UPHELD BY THE CIT(A)-II AGRA IN SIMILAR CASES THE N OTE ON REASON TO BELIEVE FOR ESCAPEMENT OF INCOME TO TAX WAS RECORDE D BY THE AO WITH REGARD TO RATE OF COMMISSION OF 0.4% UPHELD BY CIT( A)-II, AGRA, THE MAIN OBJECTION OF THE LD. AR IS THAT THIS RATE WAS NOT CONCLUSIVE RATE WHICH COULD BE APPLIED IN THE CASE OF THE APPELLANT TO SHOW THAT SHE HAS DECLARED A LOWER AMOUNT OF COMMISSION. THERE MA Y BE DISPUTE ON THE RATE OF DRAFT DISCOUNTING COMMISSION TO BE APPL IED TO COMPUTE THE CORRECT AMOUNT OF COMMISSION BEING EARNED BY THE AP PELLANT, HOWEVER, THE FACT IS THAT THE APPELLANT HERSELF HAS NOT DECLARED THE BASIS FOR DECLARING THE AMOUNT OF DRAFT DISCOUNTING COMMISSION IN HER RETURN OF INCOME, BY NOT DISCLOSING THE TOTAL AMOUN T OF DRAFTS DISCOUNTED BY HER AND THE RATE OF DRAFTS DISCOUNTIN G COMMISSION CHARGED BY HER. IN ABSENCE OF THESE DETAILS IN THE RETURN OF INCOME OF THE APPELLANT, WHICH WAS ONLY PROCESSED UNDER SECTI ON 143(1)(A) AND HENCE, ON INFORMATION WITH REGARD TO EARNING OF DRA FTS DISCOUNTING COMMISSION WAS AVAILABLE ON THE RECORD, WHICH COULD HAVE BEEN COLLECTED, IF A SCRUTINY ASSESSMENT HAD BEEN COMPLE TED IN THE CASE OF THE APPELLANT. UNDER THESE CIRCUMSTANCES, WHEN THE AO CAME TO KNOW THE TOTAL AMOUNT OF DRAFTS DEPOSITED IN THE BANK AC COUNT OF THE APPELLANT AND AFTER APPLYING A REASONABLE ESTIMATED RATE OF COMMISSION AS UPHELD BY THE FIRST APPELLATE AUTHORI TY, IT WAS QUITE ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 9 LEGITIMATE FOR AN AO TO CONCLUDE THAT THE APPELLANT HAS DECLARED LOW AMOUNT OF DRAFT DISCOUNTING COMMISSION AS COMPARED TO WHAT IS PREVALENT IN THE MARKET AS IT WAS FOUND BY HIM ON T HE BASIS OF DECISION TAKEN BY THE APPELLANT AUTHORITY. THEREFORE, I FIND THAT THE LD. AR IS NOT JUSTIFIED IN SAYING THAT THE AO INVOKED PROVISI ON OF SECTION 148 OF THE ACT BY EMPLOYING VARIOUS COMBINATIONS ALL COUPL ED WITH SUSPICION AND SURMISES. 5.5 HIS RELIANCE ON THE DECISION OF AGRA BENCH OF H ONBLE ITAT IN THE CASE REPORTED IN (2007) 108 ITD 115(AGRA) STATI NG THAT MERE DEPOSIT OF AN AMOUNT ALONE IN THE BANK ACCOUNT CANN OT GIVE AN INFERENCE THAT THIS WAS LIABLE TO BE TAXED AS INCOM E AND ASSESSEE HAS NOT DISCLOSED THE SAME AND THEREFORE, IT HAS ESCAPE D ASSESSMENT, IS FOUND TO BE MISPLACED BECAUSE IN THE PRESENT CASE, THE AO HAS NOT TAKEN THE AMOUNT OF DEPOSITS IN THE BANK ACCOUNT AM OUNTING TO RS.16,22,44,276/- AS INCOME OF THE APPELLANT WHICH HAS ESCAPED ASSESSMENT BUT THIS AMOUNT HAS BEEN TAKEN BY HIM AS THAT TOTAL AMOUNT OF DRAFTS WHICH WAS DISCOUNTED BY THE APPELL ANT BUT NOT DISCLOSED IN THE RETURN OF INCOME. THIS AMOUNT WAS FOUND TO BE DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT AND THEN AFTER APPLYING A REASONABLE RATE OF DRAFT DISCOUNTING COMMISSION A S IT WAS AVAILABLE WITH HIM ON THE BASIS OF A DECISION OF THE FIRST AP PELLATE AUTHORITY, THE AO COMPUTED AMOUNT OF COMMISSION WHICH WAS MUCH MOR E THAN THE INCOME DECLARED BY THE APPELLANT AND THEREFORE, THE AO WAS FOUND TO BE JUSTIFIED IN RECORDING HIS REASON TO BELIEVE FOR ESCAPEMENT OF THE INCOME OF THE APPELLANT ON THE BASIS OF COMPUTATION MADE BY HIM, AS I HAVE ALREADY DISCUSSED IN PARA NO.3, OF THIS ORDER. 5.6 RELIANCE OF THE LD. AR ON THE SECOND CASE LAW R EFERRED BY HIM OF HONBLE RAJASTHAN HIGH COURT REPORTED IN (2007) 295 ITR 129 (RAJ) IS ALSO FOUND TO BE MISPLACED BECAUSE IN THIS CASE, THE REASON RECORDED BY THE AO IS NOT MERELY ON THE BASIS OF HI S OPINION. EVEN THE APPELLANT HAS NOT DISCLOSED THE BASIS OF EARNING OF COMMISSION BY PROVIDING REQUISITE DETAILS AS I HAVE ALREADY DISCU SSED IN PREVIOUS PARAS OF THIS ORDER. IN ABSENCE OF SUCH DETAILS IN RETURN OF INCOME OF APPELLANT AND AFTER COLLECTING ALL INFORMATION WITH REGARD TO TOTAL AMOUNT OF DRAFTS DISCOUNTED BY APPELLANT ON THE BAS IS OF AMOUNT DEPOSITED IN HER BANK AMOUNT, THE AO WAS JUSTIFIED IN COMPUTING THE TAXABLE AMOUNT OF COMMISSION WHICH WAS SUPPOSED TO HAVE BEEN EARNED ON THE BASIS OF A REASONABLE AMOUNT OF DRAFT DISCOUNTING ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 10 COMMISSION RATE AVAILABLE WITH HIM BASED ON A DECIS ION OF THE FIRST APPELLANT AUTHORITY. IN CASE OF RAMOND WOLLEN MIL LS LTD. VS. ITO (1999) 236 ITR 34 (SC), IT HAS BEEN HELD THAT IN DE TERMINING WHETHER COMMENCING OF REASSESSMENT PROCEEDING WAS VALID, IT HAS ONLY TO BE SEEN WHETHER THERE WAS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT COULD REOPEN THE CASE. THE SUF FICIENCY OR CORRECTNESS OF THE MATERIAL WAS NOT A THING TO BE C ONSIDERED AT THIS STAGE. BASED ON THIS DECISION, IT CAN BE SEEN THAT AO WAS JUSTIFIED IN REOPENING THE ASSESSMENT OF THE APPELLANT UNDER SEC TION 147 BECAUSE PRIMA-FACIE AFTER COLLECTING THE AMOUNT OF TURNOVER OF TOTAL AMOUNT OF DRAFT DISCOUNTED BY THE APPELLANT, HE FOUND THAT CO MMISSION DISCLOSED BY THE APPELLANT WAS AT LOWER SIDE. HOWEVER, THE C ORRECT AMOUNT OF SUPPRESSION OF COMMISSION BY THE APPELLANT WAS NOT A THING TO BE CONSIDERED AT THE TIME OF REOPENING OF THE ASSESSME NT BY ARGUING THAT RATE OF COMMISSION OF 0.4% WAS NOT A CONCLUSIVE RAT E. EVEN, THE LD. AR IN THE CASE OF APPELLANT HERSELF FOR THE A.Y. 20 00-01 HAS RELIED ON THE DECISION OF HONBLE ITAT, AGRA IN THE CASE OF S MT. PUSHPA DEVI VS. ACIT IN ITA NO.355/AGR/2004 DATED 16.12.2005 IN WHICH THE RATE OF COMMISSION CONFIRMED BY THE HONBLE ITAT AGRA IS 0.1% (RS.1/- PER THOUSAND) AFTER OBSERVING THAT IN THE AREA OF A LIGARH, THE PREVALENT RATE FOR CHARGING OF DRAFT DISCOUNTING CO MMISSION IS RS.1 TO 1.5/- PER THOUSAND. WITH THESE DETAILS ALSO, IT IS VERY CLEAR THAT EVEN IF IT IS ARGUED THAT THE RATE OF 0.4% APPLIED BY THE A O WHILE RECORDING THE REASON TO BELIEF FOR ESCAPEMENT OF INCOME WAS N OT CORRECT, IT CAN BE SEEN THAT THE RATE OF 0.07 COMPUTED BY THE AO ON THE BASIS OF COMMISSION INCOME DECLARED BY THE APPELLANT WAS ALS O VERY MUCH AT LOWER SIDE COMPARED TO THE RATE OF COMMISSION PREVA LENT IN AREA OF ALIGARH WHERE SHE WAS DOING THE BUSINESS OF DRAFT D ISCOUNTING. AS PER CLAUSE (B) OF EXPLANATION 2 TO SECTION 147, WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMEN T HAS BEEN MADE AND IT IS NOTICED BY THE AO THAT THE ASSESSEE HAS U NDERSTATED THE INCOME IT SHALL BE DEEMED TO BE A CASE WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT I FIND THAT THE CASE OF THE APPELLANT IS FULLY COVERED BY THIS PROVISION BECAUSE IN CASE OF THE AP PELLANT, THE RETURN OF INCOME FILED WAS NOT SCRUTINIZED AND EVEN AFTER APPLYING THE PREVALENT RATE OF DRAFT DISCOUNTING IN ALIGARH AS H ELD BY THE HONBLE ITAT, AGRA IN CASE OF SMT. PUSHPA DEVI VS. ACIT (SU PRA) AS REASONABLE RATE, IT CAN BE SEEN THAT THE INCOME OF APPELLANT IS UNDERSTATED. ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 11 5.7. IN A RECENT JUDGMENT, THE HONBLE SUPREME COUR T, IN CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. (20 07) 161 TAXMAN 316 (SC) HAS ANALYZED THE SCOPE OF NEWLY INSERTED S ECTION 147 OF THE IT ACT 1961 W.E.F. 1.4.89. THE RELEVANT PORTION OF THIS DECISION IS REPRODUCED AS UNDER:- THE SCOPE AND EFFECT OF SECTION 147 AS SUBSTITUTED WITH EFFECT FROM 1.04.89 AS ALSO SECTION 148 TO 152 ARE SUBSTAN TIALLY DIFFERENT FROM THE PROVISIONS AS THEY STOOD PRIOR T O SUCH SUBSTATION. UNDER THE OLD PROVISIONS OF SECTION 147 , SEPARATE CLAUSES (A) AND (B) LAID DOWN THE CIRCUMSTANCES UND ER WHICH INCOME ESCAPING ASSESSMENT FOR THE PAST ASSESSMENT YEARS COULD BE ASSESSED OR REASSESSED. TO CONFER JURISDIC TION UNDER SECTION 147(A) TWO CONDITIONS WERE REQUIRED TO BE S ATISFIED FIRSTLY THE AO MUST HAVE REASON TO BELIEVE THAT INC OME PROFITS OR GAINS CHARGEABLE TO INCOME TAX HAVE ESCAPED ASSESSM ENT, AND SECONDLY HE MUST ALSO HAVE REASON TO BELIEVE THAT S UCH ESCAPEMENT HAS OCCURRED BY REASON OF EITHER (I) OMI SSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY OR TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT OF THAT YEAR. BOTH THESE CONDITIONS WERE CONDITIONS PRECEDENT TO BE SA TISFIED BEFORE THE AO COULD HAVE JURISDICTION TO ISSUE NOTI CE UNDER SECTION 148 READ WITH SECTION 147(A). BUT UNDER TH E SUBSTITUTED SECTION 147 EXISTENCE OF ONLY THE FIRST CONDITION S UFFICES. IN OTHER WORDS IF THE AO FOR WHATEVER REASON HAS REASO N TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IT CONFERS JURIS DICTION TO REOPEN THE ASSESSMENT. IT IS HOWEVER TO BE NOTED T HAT BOTH THE CONDITIONS MUST BE FULFILLED IF THE CASE FALLS WITH IN THE AMBIT OF THE PROVISO TO SECTION 147. THE CASE AT HAND IS CO VERED BY THE MAIN PROVISION AND NOT THE PROVISO. 5.8 IN VIEW OF THE ABOVE DECISION, IT IS CLEAR THAT THE SUPREME COURT HAS HELD CLEARLY THAT UNDER THE SUBSTITUTED SECTION 147 APPLICABLE W.E.F. 01.04.1989, EXISTENCE OF ONLY THE FIRST COND ITION SUFFICES TO REOPEN THE ASSESSMENT, WHICH IS FURTHER EXPLAINED B Y THE HONBLE SUPREME COURT THAT IN OTHER WORD, IF THE AO FOR WHATEVER REASON HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMEN T, IT CONFERS JURISDICTION TO REOPEN THE ASSESSMENT, IF THE ASSES SMENT IS BEING REOPENED UNDER THE MAIN PROVISIONS OF SECTION 147 A ND NOT IN PROVISO FOR WHICH BOTH CONDITIONS ARE REQUIRED TO BE SATISF IED. IN THE PRESENT ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 12 CASE ALSO, THE ASSESSMENT WAS REOPENED UNDER THE MA IN PROVISIONS OF THE SECTION 147 BECAUSE NO ASSESSMENT ORDER U/S 143 (3) WAS PASSED EARLIER ON THE BASIS OF THE RETURN OF INCOME FILED BY THE APPELLANT AND HENCE ONLY FIRST CONDITION IS REQUIRED TO BE SATISF IED. IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. (SUP RA) , THE CASE WAS REOPENED ON THE BASIS OF REVENUE AUDIT OBJECTIO N. IN THE PRESENT CASE, THE AO HAS REOPENED THE CASE OF THE APPELLANT AFTER COLLECTING INFORMATION FROM HER BANK ACCOUNT WITH SYNDICATE BA NK ABOUT THE DEPOSITS OF TOTAL AMOUNT OF DRAFT WHICH WAS NOT DEC LARED BY HER IN THE RETURN OF INCOME AND WHEN HE APPLIED A RATE OF COMM ISSION WHICH WAS HELD TO BE A REASONABLE RATE BY THE FIRST APPELLATE AUTHORITY, HE FOUND THAT THE COMMISSION INCOME DECLARED BY THE APPELLAN T WAS AT LOWER SIDE. THEREFORE, IN VIEW OF THE DECISION OF CIT VS . RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA), THE AO IS VERY MUC H JUSTIFIED BECAUSE THE RETURN OF THE APPELLANT WAS NOT SCRUTINIZED AND IT WAS ONLY ACCEPTED U/S 143(1)(A) WHICH IS NOT AN ASSESSMENT O RDER AS HELD BY THE HONBLE SUPREME COURT IN THIS CASE LAW ITSELF. THE PRINCIPLE LAID DOWN BY THE HONBLE SUPREME COURT FOR REOPENING OF THE ASSESSMENT U/S 147 IN CASE OF ACIT VS. RAJESH JHAVERI STOCK BR OKERS (P) LTD (SUPRA) IS FOUND TO BE VERY MUCH APPROPRIATE IN THE PRESENT CASE ALSO BECAUSE THE SUPREME COURT HAS HELD IN THIS DECISION THAT IF THE AO FOR WHATEVER REASON (HERE THE REASON WITH THE AO IS THA T HE GOT INFORMATION OF DRAFTS AMOUNT DEPOSITED IN BANK ACCO UNT OF THE APPELLANT WHICH WAS NOT DECLARED BY HER IN THE RETU RN OF INCOME AND AFTER APPLYING A REASONABLE RATE OF COMMISSION AS U PHELD BY FIRST APPELLATE AUTHORITY, HE FOUND THAT COMMISSION INCOM E DECLARED BY THE APPELLANT WAS AT LOWER SIDE) HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, IT CONFERS JURISDICTION TO REOP EN THE ASSESSMENT. 5.9 IN THE ABOVE CITED CASE OF THE ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. (SUPRA) , THE HONBLE SUPREME COURT HAS ALSO ANALYZED THE TERM REASON TO BELIEVE AND THE RELEVANT PORTION OF THIS DECISION IS REPRODUCED AS UNDER :- SECTION 147 AUTHORIZES AND PERMITS THE ASSESSING O FFICER TO ASSESS OR REASSESS INCOME CHARGEABLE TO TAX IF HE H AS REASON TO BELIEVE THAT INCOME FOR ANY ASSESSMENT YEAR HAS ESC APED ASSESSMENT. THE WORD REASON IN THE PHRASE REASON TO BELIEVE WOULD MEAN CAUSE OR JUSTIFICATION . IF THE ASSESSING ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 13 OFFICER HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPO SE THAT INCOME HAD ESCAPED ASSESSMENT, IT CAN BE SAID TO HA VE REASON TO BELIEVE THAT AN INCOME HAD ESCAPED ASSESSMENT . THE EXPRESSION CANNOT BE READ TO MEAN THAT THE ASSESSIN G OFFICER SHOULD HAVE FINALLY ASCERTAINED THE FACT BY LEGAL E VIDENCE OR CONCLUSION. THE FUNCTION OF THE ASSESSING OFFICER IS TO ADMINISTER THE STATUTE WITH SOLICITUDE FOR THE PUBL IC EXCHEQUER WITH AN INBUILT IDEA OF FAIRNESS TO TAXPAYERS. 5.10 IN VIEW OF THE ABOVE DECISION OF THE HONBLE S UPREME COURT, I FIND THAT IN THE PRESENT CASE, THE AO HAS BOTH CAUSE AS WELL AS JUSTIFICATION FOR REOPENING THE CASE. IN THE PRESENT CASE, THE COLLECTION OF INFORMATION OF BANK DEPOSIT OF THE AP PELLANT HAS PROVIDED A CAUSE FOR REOPENING OF THE ASSESSMENT OF THE APPELLANT A FTER THE AO FOUND THAT AMOUNT OF TURNOVER OF DRAFT DISCOUNTED B Y APPELLANT WAS NOT DISCLOSED IN THE RETURN OF INCOME AND ALSO NO B ASIS FOR EARNING OF DRAFT DISCOUNTING COMMISSION WAS DECLARED BY HER BY GIVING THE RATE OF DRAFT DISCOUNTING COMMISSION CHARGED BY HER. WH EN HE APPLIED THE RATE OF COMMISSION WHICH WAS HELD TO BE A REASONABL E RATE OF COMMISSION BY THE FIRST APPELLANT AUTHORITY IN THE CASE OF THE APPELLANT FOR EARLIER YEARS, HE FOUND THAT THE COMMISSION DEC LARED BY THE APPELLANT WAS LESS THAN WHAT WAS COMPUTED BY THE AO . AND THEREFORE, SUCH COMPUTATION MADE BY HIM ON THE BASIS OF INFORM ATION AVAILABLE WITH HIM PROVIDED A JUSTIFICATION FOR REOPENING OF ASSESSMENT OF THE APPELLANT. THEREFORE, APPLYING THE PRINCIPLE LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) FOR REOPENING OF ASSESSMENT, SPECIFICALLY IN THOSE CASES IN WHICH THE RETURN FILED BY AN ASSESSEE WAS ONLY PROCESSED U/S 143(1)(A), I FIND THAT THE AO WAS FULLY JUSTIFIED I N REOPENING OF THE ASSESSMENT PROCEEDING OF APPELLANT U/S 147 AND HIS ACTION IS ALSO INCONSONANCE WITH THE PROVISIONS OF CLAUSE (B) OF E XPLANATION 2 OF SECTION 147 AS I HAVE ALREADY DISCUSSED IN PARA 5.6 . 5.11 WITH REGARD TO THE DECISION OF HONBLE MP HIGH COURT REFERRED BY THE LD. AR IN CASE OF THE ARJUN SING VS . DIT (SUPRA), I FIND THAT THIS CASE LAW WOULD ALSO NOT APPLY IN CASE OF THE APPELLANT BECAUSE THE REASON TO BELIEVE AS RECORDED BY THE AO IS BASED ON THE INFORMATION COLLECTED BY HIM FROM THE DEPOSITS MADE BY THE APPELLANT IN HER BANK ACCOUNT BEING MAINTAINED WITH SYNDICATE BANK AND IT HAS ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 14 ALSO BEEN SHOWN THAT THE AMOUNT OF COMMISSION DECLA RED BY THE APPELLANT WAS FOUND TO BE MUCH LESS THAN EVEN AFTER APPLYING THE RATE OF DRAFT DISCOUNTING COMMISSION BEING PREVALENT IN THE AREA OF ALIGARH WHERE THE APPELLANT WAS DOING BUSINESS AND THEREFOR E, IT CANNOT BE SAID THAT THE REASON TO BELIEVE OF THE AO WAS NOT B ASED ON RELEVANT MATERIALS AND IT WAS MERELY OPINION OR IPSE DIXIT BY THE OFFICER. THEREFORE, I FIND THAT THE ABOVE CASE LAW CITED BY THE LD. AR WOULD NOT APPLY IN THE PRESENT CASE. 5.12 IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED IN AFORESAID PARAGRAPHS AND RELYING ON THE DECISION S OF SUPREME COURT IN CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) AND M/S RAYMOND WOOLEN MILLS LTD. VS. INCOME-TAX OFFICE R & OTHERS (SUPRA) , I HOLD THAT THE AO HAS CORRECTLY RECORDED THE REASONS TO BELIEVE AND NOTICE ISSUED BY HIM U/S 148 DATED 30.3.2005 IS VALID NOTICE AND ACCORDINGLY THE GROUND NO.1 TAKEN BY THE APPELLANT IS DISMISSED. 9. THE CIT(A) CONFIRMED THE ACTION OF THE A.O. IN R ESPECT OF REJECTION OF THE BOOKS OF ACCOUNT AS UNDER.(PARAGRAPH NOS. 6.1 TO 6. 8) 6.1 THE NEXT TWO GROUNDS I.E. GROUND 2 & 3 TAKEN B Y THE APPELLANT ARE WITH REGARD TO CHALLENGING THE REJECTION OF BOO KS OF ACCOUNT BY APPLYING THE SECTION 145(3) OF THE AO. IN SUPPORT OF THESE GROUNDS, A WRITTEN SUBMISSION WAS FILED BY THE LD. AR VIDE HER LETTER DATED 13.04.2009, PUTTING FORTH HIS ARGUMENTS AGAINST REJ ECTION OF BOOKS OF ACCOUNT U/S 145(3) AND DISPUTING THE RATE OF COMMIS SION ADOPTED BY THE AO AS 0.5% CONTENDING THAT NO COMPARATIVE CASE HAS BEEN GIVEN BY THE AO ON THE ESTIMATION OF COMMISSION OF THE AP PELLANT AT A HIGHER RATE THAN THE RATE SHOWN BY THE APPELLANT. AGAINST THE REJECTION OF BOOKS OF ACCOUNT U/S 145(3), THE LD. A R HAS TAKEN FOLLOWING ARGUMENTS IN THE WRITTEN SUBMISSION:- IN THIS CONNECTION IT IS RESPECTFULLY SUBMITTED TH AT THE ASSESSING OFFICER WAS HIGHLY UNJUSTIFIED IN REJECTI NG THE BOOKS OF ACCOUNTS ONLY ON THE GROUND THAT PARTIES WITH WH OM APPELLANT HAD DEALING EIGHT YEARS BACK DID NOT RESP ONDED TO THE SUMMONS ISSUED BY THE ASSESSING OFFICER. WHILE REJ ECTING THE ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 15 BOOKS OF ACCOUNT THE ASSESSING OFFICER HAS NOT SPEL LED OUT AS TO WHICH CONDITION MENTIONED IN PROVISIONS OF SECTION 145 (3) IS ATTRACTED. IT IS SETTLED POSITION IN LAW THAT MERE LOW RATE OF PROFIT CANNOT BE A REASON FOR REJECTION OF ACCOUNTS . THE ASSESSING OFFICER HAS MENTIONED IN THE ASSESSME NT ORDER THAT THE SUMMONS ISSUED REMAINED UNCOMPLIED WITH. A PPELLANT RESPECTFULLY SUBMITS THAT APPELLANT CANNOT BE PENAL IZED FOR THAT MATTER. IT IS FURTHER SUBMITTED THAT WHILE ISSUING SUMMONS UNDER SECTION THE ASSESSING OFFICER REQUIRES ALL TH E POWER WHICH ARE VESTED IN A CIVIL COURT WHILE TRYING A SU IT. THESE POWERS INCLUDE ISSUANCE OF PROCLAMATIONS AND BAILAB LE AND NON-BAILABLE WARRANTS IF HE SATISFIED THAT THE WITN ESS IS AVOIDING THE SUMMONS OR NOT COMPLYING WITH THE SUMMONS ISSUE D TO HIM. THESE EXTRAORDINARY POWERS PROVIDED UNDER THE ACT A RE NOT DETRIMENTAL TO THE INTEREST OF THE ASSESSEE RATHER THESE POWERS ARE TO FACILITATE THE ASSESSEE IN DISCHARGING ITS B URDEN. WHENEVER A REQUEST IS MADE FOR EXERCISE OF SUCH POW ERS THE ASSESSING OFFICER IS DUTY BOUND TO EXERCISE SUCH PO WERS IN THE INTEREST OF JUSTICE. IT IS FURTHER SUBMITTED THAT IS STOOD UNDISPUTED BY THE ASSESSING OFFICER THAT FOR THE YEAR UNDER REVIEW BOOKS OF ACC OUNTS WERE PRODUCED BEFORE THE ASSESSING OFFICER, THE BOOKS OF ACCOUNT DO MENTION THE NAME AND PARTICULARS OF THE PERSONS WHO SE DRAFTS GOT DISCOUNTED THROUGH THE BANK ACCOUNT OF THE APPE LLANT. THE ASSESSING OFFICER HAS NOT BEEN ABLE TO PINPOINT ANY SPECIFIC MISTAKE/OMISSION OR SUPPRESSION IN THE BOOKS OF ACC OUNT AS WERE MAINTAINED BY THE APPELLANT. WHILE, APPLYING PROFIT RATE OF 0.5%, THE ASSESSING OFFICER HAS FAILED TO REFER ANY COMPARABLE CASE WHERE SUCH RATE HAS BEEN EITHER SHO WN OR APPLIED BY ANY APPELLATE AUTHORITY. IN SUCH CIRCUM STANCES THE ASSESSING OFFICER CANNOT BE HELD JUSTIFIED IN REJEC TING THE BOOKS OF ACCOUNT MERELY BECAUSE ACCORDING TO HIM PROFIT R ATE IS LOW. IT IS THEREFORE, REQUESTED THAT THE BOOKS OF ACCOUN TS MAY KINDLY BE DIRECTED TO BE ACCEPTED. 6.2 IN SUPPORT OF HIS ABOVE ARGUMENT, THE LD. AR H AS ALSO RELIED ON THE CASE LAW OF MUNNALAL MURLIDHAR VS. CIT REPORTED IN (1971) 79 ITR 540 (ALL.) AND NATHU RAM PREM CHAND VS. CIT REP ORTED IN ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 16 (1963) 49 ITR 561 (ALL) ARGUING THAT IF REQUEST IS MADE BY THE APPELLANT TO CALL FOR THE WITNESS, IT IS DUTY OF TH E AO TO ENFORCE THE WITNESS, THE APPELLANT CAN NO BE PENALIZED FOR NON APPEARANCE OF WITNESS. WITH REGARD TO THE RATE OF COMMISSION ADOP TED BY THE AO IN THE ASSESSMENT ORDER, IT WAS SUBMITTED BY THE LD. A R THAT A RATE OF 0.02% WAS ACCEPTED BY THE HONBLE ITAT, AGRA IN THE CASE OF APPELLANT IN HERSELF FOR AY 2001-02 AND HENCE THE S AME RATE MAY BE ADOPTED IN THIS YEAR ALSO. 6.3 THE ABOVE WRITTEN SUBMISSION WAS FORWARDED TO THE PRESENT AO CALLING FOR HIS REPORT ON THE ARGUMENTS TAKEN BY TH E LD. AR AGAINST THE ASSESSMENT ORDER. AT PRESENT, THIS CASE IS WITH INCOME TAX OFFICER, 1(2), ALIGARH. THE REPORT OF THE PRESENT AO HAS BEE N RECEIVED VIDE HIS LETTER DATED 08.07.2009. IN HIS REPORT THE AO HAS O NLY SUBMITTED THAT IT IS HUMBLY SUBMITTED THAT UNDERSIGNED IS FULLY RELYI NG ON THE OBSERVATIONS AND CONCLUSIONS DRAWN BY MY PREDECESSO R IN HIS ORDER DATED 15.12.2006. THE AO HAS FURTHER SUBMITTED THA T THE ISSUE OF DRAFT DISCOUNTING HAS BEEN WELL DISCUSSED IN THE AS SESSMENT ORDER AND HE HAS NOTHING MORE TO ADD TO THE FINDING AND HENCE THE CASE MAY BE DECIDED ON MERIT. ON THIS REMAND REPORT, A REJOIND ER OF THE APPELLANT HAS BEEN FILED BY THE LD. AR VIDE HIS LETTER DATED 13.10.2010 AND THE SAME IS REPRODUCED AS UNDER:- IN THE REMAND REPORT DATED 08.07.2009, THE AO HAS PREFERRED NOT TO CONTRADICT SUBMISSION OR ANY PART THEREOF FU RNISHED BY THE APPELLANT. THE AO HAS CHOSEN NOT TO SUMMON THE WITNESS BASED LOCALLY AT ALIGARH IGNORING THE SUBMISSION OF THE APPELLANT. 2. THERE, IS NO DENIAL TO THE OBJECTION OF THE APP ELLANT THAT CONDITIONS OF SECTION 147/148 ARE NOT SATISFIED AND NOTICE U/S 148 IS WITHOUT JURISDICTION. 3. IN THE REMAND PROCEEDINGS ALSO AO HAS NOT CITED ANY COMPARABLE CASE WHERE EXORBITANT RATE OF RS.5/- PER THOUSAND HAS EVER BEEN APPLIED AS AGAINST 20 PAISA PER THOUS AND ACCEPTED BY THE HONBLE ITAT IN ASSESSEES OWN CASE IN AY 2001-02. XEROX COPY OF THE ORDER SINCE REPORTED AS SMT. MEENAKSHI DEVI VS ACIT, CENTRAL CIRCLE, AGRA (2005) 96 TTJ 813(AGRA) IS FURNISHED HEREWITH FOR YOUR KIND CONSI DERATION. ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 17 4. APPELLANT FURNISHES HEREWITH XEROX COPY OF ITAT ORDER IN ITA 355/AGR/2004 FOR AY 1999-2000 WHEREIN VIDE O RDER DATED 16.12.2005, THE DIVISION BENCH OF THE HONBLE ITAT ON PAGE 3, PARA 7, APPLIED RATE OF RS.1, PER THOUSAND ON TURNOVER OF RS.10,76,71,629/-, WHERE ASSESSEE THEREIN, AS ME NTIONED IN PARA 3 OF THE ORDER APPELLANT HAS NOT EVEN PRODUCED BOOKS OF ACCOUNTS. 5. IN APPELLANTS CASE TURNOVER IS RS.25,31,96,401/ -, ACCEPTED HISTORY OF ASSESSEE IS 20 PAISA PER THOUSA ND AND BOOKS OF ACCOUNT HAVE BEEN MAINTAINED AND ADMITTEDLY PROD UCED BEFORE THE AO FOR VERIFICATION. THUS, IN THE TOTALI TY OF FACTS AND CIRCUMSTANCES OF THE CASE RETURNED INCOME MAY KINDL Y BE DIRECTED TO BE ACCEPTED. 6.4 AFTER CONSIDERING THE WRITTEN SUBMISSION FILED BY THE LD. AR IN SUPPORT OF THE ARGUMENT TAKEN IN APPEAL AS WELL AS THE REMAND REPORT AND THE REJOINDER, A FINAL HEARING WAS HELD ON 11.0 5.2011. DURING THE DISCUSSION, IT HAS BEEN AGAIN POINTED OUT BY THE LD . AR THAT NO COMPARABLE CASE HAS BEEN CITED BY THE AO EITHER IN THE ASSESSMENT ORDER OR IN THE REMAND REPORT TO JUSTIFY TAKING ENH ANCED RATE OF COMMISSION AS APPLIED IN THE ASSESSMENT ORDER AT 1. 5%. HOWEVER, FOR THE PURPOSE OF ESTIMATION OF THE COMMISSION IN SUCH CASES, LD. AR RELIED ON A DECISION OF HONBLE ITAT, AGRA IN THE C ASE OF SMT. PUSHPA DEVI VS. ACIT IN ITA NO.355/AGR/2004 DATED 16.12.20 05. 6.5 I HAVE CONSIDERED ALL THE FACTS BROUGHT BEFORE ME BY THE LD. AR IN HIS WRITTEN SUBMISSION WITH REGARD TO THE NATURE OF THE BUSINESS OF THE APPELLANT AND I HAVE ALSO GONE THROUGH THE ASSE SSMENT ORDER AND THE FACTS STATED IN THE ASSESSMENT ORDER AND THIS A PPEAL HAS BEEN DECIDED ON THE BASIS OF THE FACTS STATED IN THE ASS ESSMENT ORDER AND ALSO DISCUSSED IN THE WRITTEN SUBMISSION OF THE LD. AR BECAUSE THE ASSESSMENT RECORD WAS NOT MADE AVAILABLE TO ME BY T HE PRESENT AO ITO 1 (2), ALIGARH DESPITE ASKING HIM SEVERAL TIMES . THE CASE WAS ALSO DISCUSSED WITH THE AO SHRI M.M. LAL PRESENTLY POSTED IN AGRA AS DCIT (HQ), WHO PASSED THIS ORDER. AFTER TAKING INTO ACCOUNT ALL THE FACTS OF THE CASE, I FIND THAT THE APPELLANT WAS DO ING BUSINESS OF DISCOUNTING OF DRAFTS AND RECEIVING COMMISSION FOR PROVIDING THIS FACILITY. IN THIS TYPE OF BUSINESS, GENERALLY IT HA S BEEN FOUND THAT MANY ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 18 BUSINESSMEN COME TO THE PLACES IN AGRA AND NEARBY P LACES SUCH AS FIROZABAD, HATHRAS ETC. WITH BEARER BANK DRAFT IN T HEIR NAMES FOR PURCHASING OF GOODS. WHEN THEY COME, THEY DO NOT KN OW AS TO FROM WHICH SELLER THEY WILL PURCHASE THE GOODS. WHEN AN Y SALE IS FINALIZED, THESE BUSINESSMEN APPROACH SUCH PERSONS WHO ARE IN DRAFT DISCOUNTING BUSINESS AND THESE PERSONS DEPOSIT THES E BANK DRAFTS IN THEIR BANK ACCOUNT AFTER THESE DRAFTS ARE ENDORSED IN THEIR NAMES. THE ASSESSEE (APPELLANT) IS ALSO ENGAGED IN SIMILAR TYP E OF BUSINESS. AFTER DEPOSITING THESE DRAFTS, THE ASSESSEE (APPELLANT) E NCASHES THESE DRAFTS EITHER ON THE SAME DAY OR IMMEDIATELY THEREAFTER. T HE ASSESSEE (APPELLANT) WITHDRAWS THE MONEY FROM BANKS AND DISB URSES IT TO PERSONS WHO HAVE BROUGHT THE BANK DRAFTS. FOR SUCH SERVICES, CERTAIN AMOUNT OF COMMISSION IS CHARGED IN THIS TYPE OF BUS INESS BY THE PERSONS WHO DISCOUNT THE DRAFTS. HERE THE MAIN DISP UTE IS REGARDING APPLYING THE CORRECT RATE OF COMMISSION CHARGED BY THE APPELLANT. DURING THE COURSE OF THE ASSESSMENT PROCEEDING AS D ISCUSSED BY THE AO IN THE ASSESSMENT ORDER, THE APPELLANT FAILED TO SUBSTANTIATE THE RATE OF COMMISSION DECLARED AS CHARGED BY HER BECAU SE NO CONFIRMATION FROM THE PERSONS WHO HAVE AVAILED THE DRAFT DISCOUNTING FACILITY FROM THE APPELLANT COULD BE FILED AND ALSO 9 PERSONS WHOSE NAMES AND ADDRESSES WERE GIVEN BY THE APPELLANT FOR NECESSARY VERIFICATION ABOUT COMMISSION PAID BY THEM COULD NO T BE TRACED OUT AND THE SUMMONS SENT ON THE ADDRESSES GIVEN BY THE APPELLANT REMAINED UNCOMPLIED. SINCE NO CORROBORATIVE EVIDEN CE OR ANY CONFIRMATION COULD BE FILED BY THE APPELLANT TO SUP PORT HER CONTENTION OF EARNING OF DRAFT DISCOUNTING COMMISSION AT THE R ATE OF 20 PAISA PER THOUSAND, THE AO HAS RESORTED TO ESTIMATING THE COM MISSION INCOME OF THE APPELLANT AT THE RATE OF 0.5%. HOWEVER, IN THE ASSESSMENT ORDER, THE AO HAS NOT DISCUSSED ANY BASIS FOR APPLYING THE RATE OF 0.5% BY CITING ANY COMPARABLE CASE. DURING THE DISCUSSION WITH LD. AR, IT EMERGED THAT THE RATE OF COMMISSION BEING SHOWN BY THE APPELLANT IS QUITE LOW AND EVEN THE HONBLE ITAT, AGRA HAS ESTIM ATED COMMISSION IN SUCH TYPE OF BUSINESS AT A RATE HIGHER THAN WHAT IS BEING SHOWN BY THE APPELLANT. THEREFORE, THE LD. AR DURING THE DI SCUSSION OF APPEAL PROCEEDING RELIED ON A DECISION OF HONBLE ITAT AGR A IN THE CASE OF SMT. PUSHPA DEVI VS ACIT IN ORDER NO.355/AGR/04 DATED 16.12.2005 FOR APPLYING THE RATE OF COMMISSION IN THE CASE OF THE APPELLANT WHAT HAS BEEN ESTIMATED BY THE HONBLE ITAT, AGRA IN THA T CASE. ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 19 6.6 BEFORE ESTIMATING THE COMMISSION INCOME OF THE APPELLANT FROM DRAFT DISCOUNTING BUSINESS, THE AD HAS REJECTED THE BOOKS OF ACCOUNT OF THE APPELLANT U/S 145(3) GIVING HIS FINDING THAT THOUGH THE BOOKS OF ACCOUNT WERE PRODUCED BY THE APPELLANT BUT THE ENTR IES MADE IN BOOKS OF ACCOUNT COULD NOT BE SUBSTANTIATED BY PRODUCING THE NECESSARY EVIDENCE. THE RELEVANT PORTION OF HIS FINDING IS RE PRODUCED AS UNDER:- FU/KKZFJRH US VIUH YS[KK IQLRDSA HKH IZLRQR DH IJUR Q LR;KIU DS VHKKO ESA FU/KKZFJRH }KJK IZLRQR FD;S X;H YS[KK IQLRDKSA DKS LOHDKJ UGHA FD;K TK LDRKA BL IZDKJ FU/KKZFJRH }KJK IZLRQR DH X;H YS[K IQLRDKSA DKS VLO HD`R DJRSA GQ;S VK;DJ VF/KFU;E DH /KKJK 145 ( 3 ) DS IZKO/KKU FU/KKZFJRH DH VK; DKS VKADFYR DJUS DS FY;S YKXW FD;S TKRS GSA 6.7 IN HIS WRITTEN SUBMISSION, THE LD. AR HAS OPPO SED THE REJECTION OF BOOKS OF ACCOUNT AS DISCUSSED IN PARA NO.4.1. T HE ONLY CONTENTION OF THE LD. AR TAKEN FOR DISPUTING THE REJECTION OF BOOKS OF ACCOUNT IS THAT THE AD HAS NOT BEEN ABLE TO PINPOINT ANY SPECI FIC MISTAKE/OMISSION OR SUPPRESSION IN THE BOOKS OF ACC OUNT AS WERE MAINTAINED BY THE APPELLANT AND THE APPELLANT CANNO T BE PENALIZED FOR THE NON APPEARANCE OF THE WITNESS WHO WERE ASKED BY THE APPELLANT TO BE CALLED FOR VERIFICATION OF COMMISSION PAID BY TH EM. I HAVE CONSIDERED THE ARGUMENT TAKEN BY THE LD. AR AND FOR THIS PURPOSE, I MAY FIRST REPRODUCE THE PROVISION OF SECTION 145(3) AS UNDER:- 145(3) WHERE THE ASSESSING OFFICER IS NOT SATISFIED ABOUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE, OR WHERE THE METHOD OF ACCOUNTING PROVIDED IN SUB-SECT ION (1) OR ACCOUNTING STANDARDS AS NOTIFIED UNDER SUB-SECTION (2), HAVE NOT BEEN REGULARLY FOLLOWED BY THE ASSESSEE, THE AS SESSING OFFICER MAY MAKE AN ASSESSMENT IN THE MANNER PROVID ED IN SECTION 144. 6.8 AS PER THE ABOVE PROVISION, THE AO CAN REJECT THE BOOKS OF ACCOUNT, IF HE IS NOT SATISFIED ABOUT THE CORRECTNE SS OR COMPLETENESS OF THE ACCOUNT. THE CORRECTNESS OF THE BOOKS OF ACCOUN T CAN BE ESTABLISHED ONLY BY SHOWING SUPPORTING DOCUMENTARY EVIDENCE SUCH AS BILLS, VOUCHERS ETC. ISSUED BY THE ASSESSEE OR RECE IVED BY HIM FROM OUTSIDE PARTIES DURING THE COURSE OF BUSINESS OR GE TTING THE ENTRIES MADE IN BOOKS OF ACCOUNT VERIFIED FROM THE PERSONS IN WHOSE NAMES THESE ENTRIES ARE MADE. HOWEVER, DURING THE COURSE OF THE ASSESSMENT ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 20 PROCEEDING, IT IS VERY CLEARLY WRITTEN BY THE AO TH AT CORRECTNESS OF ENTRIES MADE IN THE BOOKS OF ACCOUNT OF THE APPELLA NT COULD NOT BE GOT VERIFIED. INSTEAD OF PRODUCING NECESSARY DOCUMENTA RY EVIDENCE IN FORM OF CONFIRMATIONS FROM THE PARTIES WHO WERE SHO WN TO HAVE PAID COMMISSION TO THE APPELLANT TO ESTABLISH THE CORREC TNESS OF RATE OF COMMISSION BEING CLAIMED BY THE APPELLANT, SHE TRIE D TO DISCHARGE HER ONUS ONLY BY GIVING NAMES AND ADDRESSES OF SUCH 9 P ERSONS. THE AO MADE HIS EFFORTS TO CALL THESE PERSONS BY SENDING S UMMONS BUT NO COMPLIANCE OF THESE SUMMONS WERE MADE. THE ARGUMEN T OF THE LD. AR IS THAT THE APPELLANT CAN NOT BE PENALIZED FOR N ON APPEARANCE OF THE WITNESS. HOWEVER, IT MAY BE NOTED THAT IT WAS THE PRIMARY RESPONSIBILITY OF THE APPELLANT TO ESTABLISH THE CO RRECTNESS OF THE ENTRIES MADE IN HER BOOKS OF ACCOUNT BY PRODUCING T HE NECESSARY SUPPORTING DOCUMENTARY EVIDENCE OR PRODUCING THE PE RSONS IN WHOSE NAMES ENTRIES WERE MADE IN THE BOOKS OF ACCOUNT. TH ESE PERSONS WERE WITNESS OF THE APPELLANT AND THE AO HAS ONLY SENT S UMMONS TO THESE PERSONS AS PER THE REQUEST OF THE APPELLANT TO FACI LITATE HER IN ESTABLISH THE CORRECTNESS OF THE BOOKS OF ACCOUNT. HOWEVER, IT WAS NOT THE RESPONSIBILITY OF THE AO TO ESTABLISH THE CORRECTNE SS OF BOOKS OF ACCOUNT PRODUCED BY THE APPELLANT. THE APPELLANT C ANNOT ESCAPE FROM HER RESPONSIBILITY TO ESTABLISH THE CORRECTNESS OF BOOKS OF ACCOUNT JUST BY SAYING THAT SHE CANNOT BE PENALIZED FOR NON APPE ARANCE OF WITNESS. EVEN IF SHE WAS NOT ABLE TO PRODUCE THOSE WITNESSES WHICH WAS HER RESPONSIBILITY, SHE WAS REQUIRED TO MAINTAIN SUCH B ILLS/VOUCHERS OR OBTAINING THE CONFIRMATION LETTERS FROM HER CLIENTS WHOSE DRAFTS WERE DISCOUNTED BY HER TO ESTABLISH THE RATE OF COMMISSI ON SHOWN BY HER. IN ABSENCE OF SUCH DOCUMENTARY EVIDENCE AND NON-APP EARANCE OF WITNESS, IN MY CONSIDERED OPINION, THE AO WAS CORRE CT IN REJECTING THE BOOKS OF ACCOUNT U/S 145(3) BECAUSE HE WAS NOT SATI SFIED ABOUT THE CORRECTNESS OF BOOKS OF ACCOUNT AS PRODUCED BY THE APPELLANT . EVEN DURING THE DISCUSSION OF APPEAL PROCEEDING, RELIANC E OF THE LD. AR ON THE DECISION OF HON'BLE ITAT, AGRA IN THE CASE OF SMT. PUSHPA DEVI VS. ACIT (SUPRA) SHOWS HIS AGREEMENT TO THE FACT THAT THE RATE OF COMMISSION SHOWN BY THE APPELLANT IS QUITE LOW. IN ALIGARH GENERALLY, RATE OF COMMISSION CHARGED BY DRAFT DISCOUNTING AGE NTS RANGES FROM RS.1 TO RS.1.5 PER THOUSAND WHICH IS INFACT THE NET COMMISSION AFTER PROVIDING FOR ALL EXPENSES TO BE INCURRED IN THESE TYPE OF BUSINESS. AFTER CONSIDERING ALL THESE FACTS OF THE NATURE OF THIS BUSINESS AND THE RATE OF COMMISSION BEING PREVALENT IN SUCH TYPE OF BUSINESS IN ALIGARH, THE HONBLE ITAT, AGRA IN CASE OF SMT. PUS HPA DEVI VS. ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 21 ACIT HAS HELD THAT THE APPLICATION OF RS.1/- PER TH OUSAND ON THE TOTAL DRAFT AMOUNT DISCOUNTING IS REASONABLE SUBJECT TO T HE CONDITION THAT NO DEDUCTION WILL BE ALLOWED FOR EXPENDITURE WHICH MEANS IN SUCH CASES, THE HONBLE ITAT, AGRA IS ALSO OF THE OPINIO N THAT NET COMMISSION OF RS.1/- PER THOUSAND (0.1%) IS A REASO NABLE AMOUNT FOR CHARGING OF COMMISSION. CONSIDERING THESE FACTS, IT IS CLEAR THAT RATE OF NET COMMISSION BEING SHOWN BY THE APPELLANT AT 4 0 PAISA PER THOUSAND WAS QUITE LOW AND SUCH LOW RATE COULD NOT BE SUBSTANTIATED BY HER BY PRODUCING NECESSARY DOCUMENTARY EVIDENCE OR BY PRODUCING THE WITNESSES AS DISCUSSED IN THIS PARA ABOVE. THE TWO CASE LAWS CITED BY THE LD. AR I.E. MUNNALAL MURLIDHAR VS CIT (SUPRA ) AND NATHU RAM PREM CHAND VS CIT (SUPRA) ARE NOT FOUND RELEVANT TO THE FACTS OF THIS CASE BECAUSE IN THESE TWO CASE LAWS THE ISSUE INVOL VED WAS NOT RELATING TO ESTABLISHING THE CORRECTNESS OF BOOKS O F ACCOUNT PRODUCED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDING AN D HENCE THESE TWO CASE LAWS WOULD NOT APPLY IN THE PRESENT CASE. THER EFORE, I CONFIRM THE DECISION OF THE AO FOR REJECTION OF BOOKS OF AC COUNT U/S 145(3) BECAUSE THE APPELLANT COULD NOT ESTABLISH THE CORRE CTNESS OF BOOKS OF ACCOUNT TO THE SATISFACTION OF AO AS REQUIRED UNDER THE PROVISIONS OF SECTION 145(3) AND ACCORDINGLY, GROUND NO.1 & 2 ARE DISMISSED. 10. THE CIT(A) IN PRINCIPLE CONFIRMED THE ORDER OF THE A.O. FOR ESTIMATION OF INCOME BUT REDUCED THE ESTIMATION. SINCE THE CIT(A ) HAS GIVEN PART RELIEF, THEREFORE, BOTH THE ASSESSEE AND THE REVENUE ARE IN APPEAL BEFORE US. THE RELEVANT FINDINGS OF THE CIT (A) ON MERIT ARE AS UNDER (PARA 7.1 TO 7.2) 7.1 AFTER FINDING THAT THE BOOKS OF ACCOUNT PRODUC ED BY APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDING WAS NOT MAINTAINED CORRECTLY AND THE RATE OF COMMISSION SHOWN BY THE A PPELLANT WAS QUITE LOW COMPARED TO THE RATE OF COMMISSION BEING CHARGE D BY THE PERSONS ENGAGED IN SUCH BUSINESS OF DRAFT DISCOUNTING IN AL IGARH AS DISCUSSED IN PREVIOUS PARA. I FIND THAT THE AO WAS CORRECT IN ESTIMATING THE COMMISSION INCOME OF THE APPELLANT. HOWEVER, THE Q UESTION TO BE DECIDED HERE IS WHAT WOULD BE REASONABLE RATE TO BE APPLIED FOR COMPUTING THE ESTIMATED AMOUNT OF THE COMMISSION IN COME OF THE APPELLANT. IN GROUND NO.3, THE APPELLANT HAS CONTE NDED THAT THE RATE ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 22 OF 0.5% (RS.5 PER THOUSAND) APPLIED BY THE AO IS HI GHLY EXCESSIVE AGAINST THE FACTS OF THE CASE. IN THIS REGARD, THE LD. AR DURING THE DISCUSSION OF APPEAL PROCEEDING HAS RELIED UPON THE DECISION OF HONBLE ITAT, AGRA IN CASE OF SMT. PUSHPA DEVI VS. ACIT (SUPRA) FOR APPLYING THE SAME RATE WHAT WAS ORDERED BY HON BLE IT AT, AGRA IN THAT CASE. THE AO HAS ALSO NOT DISCUSSED ANY COM PARABLE CASE IN THE ASSESSMENT ORDER TO SHOW THAT ANY PERSON INVOLV ED IN PROVIDING DRAFT DISCOUNTING FACILITY HAS CHARGED COMMISSION A T A RATE OF 0.5% BEFORE APPLYING THIS RATE IN CASE OF THE APPELLANT. IN ABSENCE OF ANY SUCH COMPARABLE CASE OR ANY OTHER SUPPORTING EVIDEN CE JUSTIFYING THE APPLICATION OF RATE OF 0.5% APPLIED BY THE AO IN TH E ASSESSMENT ORDER, I HAVE ALSO RELIED ON THE DECISION OF HON'BLE ITAT, AGRA IN CASE OF SMT. PUSHPA DEVI VS ACIT (SUPRA) AS BROUGHT BEFORE ME BY THE LD. AR. THIS DECISION IS ENCLOSED IN ANNEXURE A-1 OF THIS ORDER. IN THIS ORDER, THE HON'BLE ITAT, AGRA AS DISCUSSED THAT THE COMMISSION ON DRAFT DISCOUNTING PREVALENT IN THE MARKET OF ALIGAR H IS RS.1/- TO 1.5/- PER THOUSAND. AFTER NOTING THIS FACT, THE HONBLE ITAT, AGRA ALSO PERUSED ITS TWO PREVIOUS ORDERS ONE IN THE CASE OF NEERAJ KUMAR VS ACIT IN WHICH THE NET RATE OF RS.2/- PER THOUSAND S UBJECT TO DEDUCTION OF EXPENSES AT THE RATE OF 30% WAS UPHELD AND SECON D CASE OF SMT. MEENAKSHI VS ACIT (THE OWN CASE OF THE APPELLANT FO R AY 01-02) IN WHICH NP RATE OF 20 PAISA PER THOUSAND WAS UPHELD W ITHOUT ALLOWING ANY DEDUCTION. AFTER CONSIDERING THESE TWO PREVIOU S DECISIONS, THE HONBLE ITAT, AGRA HAS ALSO CONSIDERED THE PREVALEN T RATE OF COMMISSION IN ALIGARH AT RS.1/- TO 1.5/- PER THOUSA ND AND THEN IN THE CASE OF SMT. PUSHPA DEVI VS. ACIT (SUPRA) , IT WAS HELD BY THE HONBLE MEMBERS THAT APPLICATION OF RS.1/- PER THOU SAND ON THE AMOUNT OF TOTAL DAFT AMOUNT IS REASONABLE SUBJECT T O THE CONDITION THAT NO DEDUCTION WILL BE ALLOWED FOR EXPENSES. IN ITS SUBMISSION FILED BY THE LD. AR ON 21.5.2009, AS I HAVE DISCUSSED IN PAR A 4.1, INITIALLY HE PLACED RELIANCE ON THE ORDER PASSED BY HONBLE ITAT , AGRA IN CASE OF THE APPELLANT FOR ASSESSMENT ORDER 2001-02 IN WHICH THE RATE OF 0.02% (20 PAISA PER THOUSAND) WAS ACCEPTED BY THE HONBLE ITAT, AGRA. HOWEVER, LATER DURING THE DISCUSSION, THE LD. AR HI MSELF HAS AGREED THAT RATE OF 20 PAISA PER THOUSAND SHOWN BY THE APP ELLANT IS QUITE LOW LOOKING TO THE PREVALENT RATE IN ALIGARH BEING RS.1 /- TO 1.5/- PER THOUSAND AND FOR APPLICATION OF A REASONABLE RATE O F COMMISSION, HE PLACED HIS RELIANCE ON THE SUBSEQUENT DECISION OF T HE HONBLE ITAT, AGRA IN CASE OF SMT. PUSHPA DEVI VS. ACIT(SUPRA) AS I HAVE ALREADY ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 23 DISCUSSED ABOVE IN WHICH THE HON'BLE ITAT, AGRA HAS HELD THE RATE OF RS.1/- PER THOUSAND AS REASONABLE RATE. 7.2 CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE SO FAR DISCUSSED AND RESPECTFULLY FOLLOWING THE DECISION O F HONBLE ITAT, AGRA IN THE CASE OF SMT. PSHPA DEVI VS ACIT (SUPRA) I ALSO HOLD THAT A NET RATE OF COMMISSION OF 0.1 % (RS.1 PER THOUSAN D) .SHOULD BE APPLIED IN CASE OF THE APPELLANT FOR ESTIMATING THE COMMISSION INCOME INSTEAD OF APPLYING THE RATE OF 0.5% AS DECIDED BY THE AO IN THE ASSESSMENT ORDER. THEREFORE, THE TOTAL INCOME OF T HE APPELLANT AFTER APPLYING THE RATE OF COMMISSION AT 0.1%, WOULD BE C OMPUTED AS UNDER:- INTEREST ON FDRS RS.1,99,114/- (AS COMPUTED BY THE AO IN THE ASSESSMENT ORDER AND NOT DISPUTED DURING THE APPEAL) COMMISSION INCOME FROM DRAFT RS.2,53,196/- DISCOUNTING BUSINESS (APPLYING THE RATE OF 0.1 % ON THE TOTAL DRAFT 25,31,96,401/- -- --------------- RS.4,52,310/- LESS DEDUCTION U/S 80L 12,000/- ----------------- NET TAXABLE INCOME RS.4,40,310/- ACCORDINGLY, THE INCOME OF THE APPELLANT IS TO BE A SSESSED AT RS.4,40,310/- AS AGAINST RS.14,65,100/- ASSESSED BY THE AO IN ASSESSMENT ORDER. IN VIEW OF MY ABOVE DECISION GRO UND NO.3 IS PARTLY ALLOWED. 11. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF TH E PARTIES, PERUSED RECORDS AND GONE THROUGH THE JUDGMENTS CITED. THE LEGAL IS SUE TO BE EXAMINED IN THESE CASES PERTAINS TO SECTION 147 OF THE ACT. SECTION 147 OF THE ACT IS REPRODUCED AS UNDER:- ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 24 INCOME ESCAPING ASSESSMENT. 147. IF THE [ASSESSING] OFFICER [HAS REASON TO BELI EVE] THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, A SSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENT LY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RE COMPUTE THE L OSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY B E, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SE CTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR) : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSM ENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOU R YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEA BLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF TH E FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECT ION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS59 NECESSARY FOR HIS AS SESSMENT, FOR THAT ASSESSMENT YEAR: [ PROVIDED FURTHER THAT THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVING MATTERS WHI CH ARE THE SUBJECT- MATTER OF ANY APPEAL, REFERENCE OR REVISION, WHICH IS CHARGEABLE TO TAX AND HAS ESCAPED ASSESSMENT.] EXPLANATION 1.PRODUCTION BEFORE THE ASSESSING OFFI CER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COUL D WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY THE ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROV ISO. EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, TH E FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT, NAMELY : (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER P ERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PR EVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOM E-TAX ; ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 25 (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE A SSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAI MED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN ; (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSES SED ; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A R ATE ; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THIS ACT ; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANC E OR ANY OTHER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED.] (UNDER LINED BY US) 12. FURTHER TO EXAMINE THE ISSUE, WE WOULD LIKE TO REFER THE FOLLOWING JUDGMENTS AND ONE CBDT CIRCULAR DATED 31.10.1989 REGARDING TH E SCHEME OF THE ACT RELATED TO THE ISSUE :- (1) PHOOL CHAND BAJRANG LAL & ANR. VS. ITO & AN R. (1993) 113 CTR (SC) 436 : (1993) 203 ITR 456 (SC). IN THIS CASE S UBSEQUENT TO THE COMPLETION OF ORIGINAL ASSESSMENT, THERE WAS RECEIP T OF RELIABLE INFORMATION THAT ONE OF THE CREDITORS WAS A MERE NAME-LENDER. THE SUPREME COURT WENT ON TO OBSERVE THUS: IN THE PRESENT CASE, AS ALREADY NOTICED, THE ITO, AZAMGARH, SUBSEQUENT TO THE COMPLETION OF THE ORIGINAL ASSESS MENT PROCEEDINGS, ON MAKING AN ENQUIRY FROM THE JURISDICTION ITO AT C ALCUTTA, LEARNT THAT THE CALCUTTA COMPANY FROM WHOM THE ASSESSEE CL AIMED TO HAVE BORROWED THE LOAN OF RS.50,000 IN CASH HAD NOT REAL LY LENT ANY MONEY BUT ONLY ITS NAME TO COVER UP A BOGUS TRANSAC TION AND, AFTER RECORDING HIS SATISFACTION AS REQUIRED BY THE PROVI SIONS OF SECTION 147 OF THE ACT, PROPOSED TO REOPEN THE ASSESSMENT P ROCEEDINGS. THE ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 26 PRESENT IS THUS NOT A CASE WHERE THE ITO SOUGHT TO DRAW ANY FRESH INFERENCE WHICH COULD HAVE BEEN RAISED AT THE TIME OF THE ORIGINAL ASSESSMENT ON THE BASIS OF THE MATERIAL PLACED BEFO RE HIM BY THE ASSESSEE RELATING TO THE LOAN FROM THE CALCUTTA COM PANY AND WHICH HE FAILED TO DRAW AT THAT TIME. ACQUIRING FRESH IN FORMATION, SPECIFIC IN NATURE AND RELIABLE IN CHARACTER, RELATING TO TH E CONCLUDED ASSESSMENT WHICH GOES TO EXPOSE THE FALSITY OF THE STATEMENT MADE BY THE ASSESSEE AT THE TIME OF THE ORIGINAL ASSESSMENT IS DIFFERENT FOAM DRAWING A FRESH INFERENCE FROM THE SAME FACTS AND M ATERIAL WHICH WERE AVAILABLE WITH THE ITO AT THE TIME OF THE ORIG INAL ASSESSMENT PROCEEDINGS. THE TWO SITUATIONS ARE DISTINCT AND D IFFERENT. THUS, WHERE THE TRANSACTION ITSELF, ON THE BASIS OF SUBSE QUENT INFORMATION, IS FOUND TO BE A BOGUS TRANSACTION, THE MERE DISCLO SURE OF THAT TRANSACTION AT THE TIME OF ORIGINAL ASSESSMENT PROC EEDINGS CANNOT BE SAID TO BE A DISCLOSURE OF THE TRUE AND FULL FA CTS IN THE CASE AND THE ITO WOULD HAVE THE JURISDICTION TO REOPEN THE C ONCLUDED ASSESSMENT IN SUCH A CASE. IT IS CORRECT THAT THE ASSESSING AUTHORITY COULD HAVE DEFERRED THE COMPLETION OF THE ORIGINAL ASSESSMENT PROCEEDINGS FOR FURTHER ENQUIRY AND INVESTIGATION I NTO THE GENUINENESS OF THE LOAN TRANSACTION BUT IN OUR OPIN ION, HIS FAILURE TO DO SO AND COMPLETE THE ORIGINAL ASSESSMENT PROCEEDI NGS WOULD NOT TAKE AWAY HIS JURISDICTION TO ACT UNDER SECTION 147 OF THE ACT, ON RECEIPT OF THE INFORMATION SUBSEQUENTLY. THE SUBSE QUENT INFORMATION ON THE BASIS OF WHICH THE ITO ACQUIRED REASONS TO B ELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT ON ACCOUNT OF THE OMISSION OF THE ASSESSEE TO MAKE A FULL AND TRUE DI SCLOSURE OF THE PRIMARY FACTS WAS RELEVANT, RELIABLE AND SPECIFIC. IT WAS NOT AT ALL VAGUE OR NON-SPECIFIC. (2) IN DHANYA KUMAR JAIN VS. ASST. CIT (2006) 2 02 CTR (MP) 599 IT WAS HELD THAT SINCE, ASSESSEE HAD NOT MADE FULL AND TRU E DISCLOSURE OF ASSETS/INCOME AND THE LOWER AUTHORITIES HAD NOT BEEN SATISFIED WI TH THE EXPLANATION OFFERED BY THE ASSESSEE, REOPENING OF ASSESSMENT WAS JUSTIFIED ON THE FACTS OF THE CASE. CIRCULAR NO.549 DATED 31 ST OCTOBER, 1989 EXPLANATORY NOTES ON THE PROVISIONS OF THE DIRECT T AX LAWS (AMENDMENT) ACT, 1987 [AS AMENDED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1989]-PART II ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 27 REASSESSMEN SECIONS 147, 148, 149, 150, 151, 153(2) SIMPLIFICATION OF THE PROVISIONS RELATING TO ASSESS MENT OR REASSESSMENT OF INCOME ESCAPING ASSESSMENT (SECTION 147) DEEMED CASES OF INCOME ESCAPING ASSESSMENT (EXPL ANATION TO S.147) 7.3 UNDER THE OLD PROVISIONS OF EXPLANATION 1 T O SECTION 147, INCOME CHARGEABLE TO TAX WAS DEEMED TO HAVE ESCAPED ASSESS MENT IF IT HAD BEEN UNDER- ASSESSED OR ASSESSED AT TOO LOW A RATE OR IF ANY EX CESSIVE RELIEF OR LOSS OR DEPRECIATION ALLOWANCE HAD BEEN ALLOWED. THE NEW P ROVISIONS IN THIS RESPECT, AS CONTAINED IN EXPLANATION 2 TO NEW SECTION 147, A RE MORE ELABORATE AND COVER THOSE CASES WHERE ASSESSMENTS HAVE BEEN COMPLETED ( CALLED AS SCRUTINY CASES) AS WELL AS THOSE CASES WHERE NO ASSESSMENTS HAVE BE EN COMPLETED (CALLED AS NON-SCRUTINY CASES). THUS, THE NEW EXPLANATION 2 T O THE SECTION CLARIFIES THAT THE FOLLOWING SHALL BE DEEMED TO BE CASES OF INCOME ESCAPING ASSESSMENT : (I) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE, ALTHOUGH THE TOTAL INCOME IS ABOVE THE TAXABLE LIMIT. (II) WHERE A RETURN OF INCOME HAS BEEN FURNISHED , BUT NO ASSESSMENT HAS BEEN MADE (I.E. IN A NON-SCRUTINY CASE)-IF THE ASSESSEE IF FOUND TO HAVE UNDERSTATED HIS INCOME OR CLAIMED EXCESSIVE LOSS, DEDUCTION, A LLOWANCE OR RELIEF IN THE RETURN. (UNDERLINED BY US) (III) WHERE AN ASSESSMENT HAS BEEN MADE (I.E. IN A SCRUTINY CASE)-IF INCOME CHARGEABLE TO TAX HAS BEEN UNDER-ASSESSED OR ASSESS ED AT TOO LOW A RATE OR IF ANY EXCESSIVE RELIEF OR LOSS OR DEPRECIATION ALLOWA NCE OR ANY OTHER ALLOWANCE UNDER THIS ACT HAS BEEN ALLOWED. 13. FROM THE ABOVE DISCUSSIONS AND THE MATERIAL WE NOTICED THAT PRIOR TO THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, REOPENING CO ULD BE DONE UNDER TWO ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 28 CONDITIONS, VIZ., IF (A) THE ITO HAD REASON TO BELI EVE THAT, BY REASON OF THE OMISSION OR FAILURE ON THE PART OF AN ASSESSEE TO MAKE A RET URN UNDER SECTION 139 FOR ANY ASSESSMENT YEAR TO THE ITO OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT YEAR, INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT FOR THAT YEAR, OR (B ) THE ITO HAD IN CO NSEQUENCE OF INFORMATION IN HIS POSSESSION REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR. THE FULFILLMENT OF THE SAI D CONDITIONS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BAC K ASSESSMENT, BUT IN SECTION 147 WITH EFFECT FROM 01.04.1989 THOSE CONDITIONS ARE GI VEN A GO-BY AND ONLY ONE CONDITION HAS REMAINED, VIZ., WHERE THE ASSESSING O FFICER HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, THE SECTION CON FERS JURISDICTION TO REOPEN THE ASSESSMENT. THEREFORE, POST 01.04.1989, POWER TO RE -OPEN IS MUCH WIDER. AFTER CONSIDERING ABOVE DISCUSSIONS, THE ISSUE IS DECIDED AS UNDER:- 14. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE A.O. AND SUBMITTED THAT THE ASSESSEE HAS FAILED TO ESTAB LISH ABOUT THE NATURE OF TRANSACTIONS. THE BASIS OF COMMISSION IS NOT KNOWN . THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS PRIM A FACIE CONCEALED THE FACTS OF THE TRANSACTIONS. HE FURTHER SUBMITTED THAT THE AS SESSEE WAS DOING ILLEGAL BUSINESS, THEREFORE, EXPENDITURES ARE NOT ALLOWABLE. THE LD. AUTHORISED REPRESENTATIVE, ON ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 29 THE OTHER HAND, MADE HIS SUBMISSION ON THE BASIS OF WRITTEN SUBMISSIONS WHICH WERE MADE BEFORE THE CIT(A). 15. AS REGARDS GROUND RELATED TO REOPENING OF COMPL ETED ASSESSMENT OF ASSESSEES APPEAL, THE MAIN SUBMISSION OF THE ASSES SEE IS THAT THERE ARE NO REASONS FOR REOPENING THE ASSESSMENT IN THE EYES OF LAW. O N PERUSAL OF REASONS RECORDED, WE NOTICED THAT THE MAIN REASON IS THAT THE ASSESSE E DEPOSITED IN BANK ACCOUNT RS.16,22,44,276/- AS PER REASONS RECORDED BUT IN AS SESSMENT THIS AMOUNT IS RS.25,31,96,401/-, WHICH WAS NOT SHOWN IN THE RETUR N OF INCOME. WHEN THERE ARE DEPOSITS IN THE BANK, THE BURDEN IS ON THE ASSESSEE TO EXPLAIN THE SOURCE OF THOSE DEPOSITS. IF THE ASSESSEE FAILS TO EXPLAIN SOURCES OF DEPOSITS, THE SAME IS LIABLE TO BE ADDED UNDER SECTION 68 OR OTHER RELEVANT PROVISI ONS OF THE ACT. THE ASSESSEE FILED RETURN OF INCOME DECLARING INCOME OF ONLY RS. 1,28,100/-. THE DETAILS OF WHICH ARE AS UNDER :- GROSS COMMISSION RS.4,54,129/- INTEREST FROM FD RS.1,99,114/- RS.6,53,243/- LESS EXPENSES RS.5,25,143 RS.1,28,100/- 16. THE ORIGINAL RETURN FILED WAS PROCESSED UNDER S ECTION 143(1) OF THE ACT. THE INCOME DECLARED IN THE RETURN FILED AND DEPOSITS IN THE BANK WERE A PRIMA FACIE ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 30 EVIDENCE AND MATERIAL THAT THERE IS ESCAPEMENT OF I NCOME. THE EXPLANATION OF THE ASSESSEE WAS THAT BUSINESS OF THE ASSESSEE WAS DISC OUNTING OF DRAFTS. IT IS RELEVANT TO NOTE THAT PRIMA FACIE THE BUSINESS OF THE ASSESS EE IS AGAINST PUBLIC POLICY AND AGAINST RELEVANT LAWS RELATED TO FINANCIAL TRANSACT IONS IN INDIA. WHETHER THE ASSESSEE OBTAINED NECESSARY LICENSE IN THIS REGARD IS NOT ON RECORD. THE A.O. IN ORDER TO VERIFY THE DEPOSITS IN THE BANK ISSUED SUM MONS UNDER SECTION 131 OF THE ACT TO SOME OF THE PARTIES, BUT THE ASSESSEE AS WE LL AS THOSE PARTIES FAILED TO COMPLY THOSE SUMMONS. THE SUBMISSIONS OF THE ASSES SEE THAT THE ASSESSEE IS CHARGING ONLY COMMISSION OF DRAFT DISCOUNTING, BUT FAILED TO SUBSTANTIATE THE BASIS OF COMMISSION CHARGES. AS STATED ABOVE THAT AFTER THE AMENDMENT IN SECTION 147 OF THE ACT W.E.F. 01.04.1989, POWER TO REOPEN IS MU CH WIDER. THE ONLY CONDITION FOR ACTION IS THAT THE A.O. SHOULD HAVE REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. SUCH BELIEF CAN BE REACHED IN ANY MANN ER AND IS NOT QUALIFIED BY A PRECONDITION OF FAITH AND TRUE DISCLOSURE OF MATERI AL FACT BY AN ASSESSEE TO CONTEMPLATE IN THE PRE-AMENDED SECTION. IN THE CAS E UNDER CONSIDERATION, APPARENTLY THE ASSESSEE DID NOT DISCLOSE THE DETAIL S OF RS.16,22,44,276/- DEPOSITED IN BANK ACCOUNT IN THE RETURN OF INCOME FILED. IN THE CASE UNDER CONSIDERATION, THE A.O. HAS REOPENED THE CASE OF THE ASSESSEE AFTER CO LLECTING INFORMATION FROM HER BANK ACCOUNT WITH SYNDICATE BANK ABOUT THE DEPOSITS OF TOTAL AMOUNT OF DRAFT WHICH WAS NOT DECLARED BY HER IN THE RETURN OF INCO ME. THE A.O. FOUND THAT THE ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 31 COMMISSION INCOME DECLARED BY THE ASSESSEE WAS AT L OWER SIDE. IN THE INSTANT CASE, THE BELIEF OF THE A.O. WAS AN HONEST AND REASONABLE BELIEF ON THE BASIS OF THE MATERIAL WHICH HE HAD COLLECTED FROM THE BANK. IF SUCH CASES ARE NOT FIT FOR REOPENING, THEN SECTION 147 WILL BE REDUNDANT. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT THE REASONS RECORDED FOR REOPENING OF ASS ESSMENT ARE REASONS IN THE EYES OF LAW. 17. THE LD. AUTHORISED REPRESENTATIVE IN SUPPORT OF HIS CONTENTION RELIED UPON AN ORDER OF I.T.A.T., AGRA BENCH IN THE CASE OF SA RAF GRAMODYOG SANSTAN VS. ITO, 108 ITD 115 (AGRA) WHICH DOES NOT HELP TO THE ASSES SEE AS THE CASE UNDER CONSIDERATION IS NOT A SIMPLE DEPOSITS IN BANK. DE POSITS IN BANK ACCOUNT UNDER UNUSUAL TRANSACTIONS ARE NOT RELATED TO APPROVED BU SINESS TRANSACTIONS AND THAT TOO DID NOT DISCLOSE IN THE RETURN OF INCOME. 18. AS REGARDS CONTENTION OF LD. AUTHORISED REPRESE NTATIVE THAT IN EARLIER YEAR THE ASSESSEE CARRIED OUT SIMILAR NATURE OF BUSINESS , THIS CONTENTION ALSO DOES NOT HELP TO THE ASSESSEE AS NEITHER PRINCIPLE OF RES JU DI-CATA NOR THE RULE OF ESTOPPELS IS APPLICABLE TO ASSESSMENT PROCEEDINGS PARTICULARLY U NDER THE CIRCUMSTANCES WHERE BUSINESS ACTIVITIES OF THE ASSESSEE WAS UNUSUAL AND CASE IS REOPENED UNDER SECTION 147 OF THE ACT. ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 32 19. THE LD. AUTHORISED REPRESENTATIVE OBJECTED TO T HE SECOND LIMB OF REASON RECORDED THAT THIS YEAR OF DISCLOSURE RATE OF 0.07% AS AGAINST 0.4% SUSTAINED BY THE CIT(A) IN A.Y. 2000-2001 & 2001-02. THERE ARE NO R EASONS. THE LD. AUTHORISED REPRESENTATIVE RELIED UPON A JUDGMENT OF HONBLE RA JASTHAN HIGH COURT IN THE CASE OF YAKUB ALI GOPAL SINGH & PARTY VS. DCIT & AN OTHER REPORTED IN 295 ITR 129 (RAJ), DASS FRIENDS BUILDERS P. LTD. VS. DCIT, 280 ITR 77 (ALL.) AND ARJUN SINGH & ANOTHER VS. ASSISTANT DIRECTOR OF INCOME TA X (INVESTIGATION) AND OTHERS, 246 ITR 363 (M.P.). THESE JUDGEMENTS ALSO DO NOT H ELP TO THE ASSESSEE AS THESE ARE DISTINGUISHABLE ON FACTS, THOSE CASES HAVE BEEN DECIDED BY THE COURTS CONSIDERING FACTS OF RESPECTIVE CASES WHICH ARE NOT SIMILAR TO THE FACTS OF THE CASE UNDER CONSIDERATION. CLAUSE (BA)(C) OF EXPLANATION 2 OF SECTION 147 PROVIDES THAT INCOME CHARGEABLE TO TAX HAS BEEN UNDER-ASSESSED OR SUCH INCOME HAS BEEN ASSESSED TOO LOW A RATE. IN THE REASONS RECORDED, THE A.O. CAME OUT WITH A PRIMA FACIE CASE THAT INCOME OF THE ASSESSEE HAS BEEN ASS ESSED AT TOO LOW RATE. THE CIT(A) HAS MADE DETAILED DISCUSSION IN THIS REGARD IN HIS ORDER. FURTHER, IN THE CASE UNDER CONSIDERATION, THE REASONS RECORDED SHOW S THAT APART FROM DEPOSITS IN BANK ACCOUNT WHICH WERE NOT SHOWN IN RETURN OF INCO ME FILED BY THE ASSESSEE. SIMULTANEOUSLY, IT IS ALSO NOTICED THAT THE RELEVAN T MATERIAL THE BASIS ON WHICH THE ASSESSEE DECLARED INCOME IN RETURN OF INCOME ARE NO T AVAILABLE IN THE RETURN. THE COMPLETE AND TRUE FACTS FOR DETERMINATION OF INCOME WERE ALSO NOT FOUND IN RETURN ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 33 OF INCOME FILED BY THE ASSESSEE. THE LD. AUTHORISE D REPRESENTATIVE MISUNDERSTOOD THE REASONS RECORDED BY THE A.O. IT IS THE CASE O F THE A.O. THAT EVEN APPLYING VARIOUS RATES OF COMMISSION THE INCOME DECLARED BY THE ASSESSEE WAS UNDER ASSESSED. FURTHER, THE INCOME DECLARED COULD NOT FI ND SUPPORTED BY MATERIAL. THE REASONS RECORDED ARE THAT THE ASSESSEES CASE IS A CASE OF ESCAPEMENT OF ASSESSMENT AS TRUE AND CORRECT DETAILS WERE NOT FOUND IN THE R ETURN OF INCOME FILED BY THE ASSESSEE PARTICULARLY IN RESPECT OF AMOUNT OF RS.1 6,22,44,276/- (RS.25,31,96,401/) DEPOSITED IN BANK. WE NOTICE THAT THE REASONS RECO RDED ARE REQUIRED TO BE READ AS WHOLE AND NOT IN PIECEMEAL. IN THE LIGHT OF ABOVE DISCUSSION, FIRST EFFECTIVE GROUND OF APPEAL OF THE ASSESSEE RELATED TO REOPENING OF C OMPLETED ASSESSMENT IS REJECTED AND ORDER OF THE CIT(A) ON THE ISSUE IS CONFIRMED. 20. THE SECOND EFFECTIVE GROUND OF APPEAL IS IN RES PECT OF REJECTION OF BOOKS OF ACCOUNT. THE ADMITTED FACTS OF THE CASE ARE THAT T HE HUGE AMOUNT DEPOSITED IN BANK COULD NOT BE EXPLAINED BY THE ASSESSEE. THE D EPOSITORS TO WHOM SUMMONS WERE ISSUED REMAINED NOT COMPLIED. THE ASSESSEE FA ILED TO EXPLAIN SATISFACTORILY THE BASIS ON WHICH THE INCOME WAS ACCOUNTED FOR. T HE CASE FOR A.Y. 2000-2001 WAS EX-PARTE AND UNDER THE CIRCUMSTANCES, THE MATTE R WAS SENT BACK ON ASSURANCE THAT THE ASSESSEE WILL CO-OPERATE IN ASSESSMENT PRO CEEDINGS. THE A.O. ASKED THE ASSESSEE TO PRODUCE THE BASIS OF CHARGING OF COMMIS SION AND PRODUCE THE PARTIES. ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 34 THE A.O. ISSUED SUMMONS TO SEVEN PARTIES IN A.Y. 20 00-01 BUT THE SAME WERE RETURNED BACK. THE A.O. BROUGHT THIS FACT TO THE N OTICE OF THE ASSESSEE AND ASKED TO PRODUCE PARTIES. THE ASSESSEE EXPRESSED INABILITY TO PRODUCE THE PARTIES. THE A.O. NOTICED THAT BOOKS OF ACCOUNT PRODUCED COULD NOT BE VERIFIED AS THE ASSESSEE DID NOT PRODUCE SUPPORTING DOCUMENTS, VOUCHERS AND OTHE R MATERIALS. THE LD. AUTHORISED REPRESENTATIVE INSTEAD OF MAKING SUBMISS IONS, CONSIDERING THE FACTS OF THE CASE, HE ARGUED ACADEMICALLY ON THE BASIS OF WR ITTEN SUBMISSIONS FILED BEFORE THE CIT(A). RUNNING BUSINESS WITHOUT RELEVANT LICE NSE FROM COMPETENT AUTHORITY IS AGAINST PUBLIC POLICY AND INDIAN LAWS. THE ASSE SSEE FAILED TO EXPLAIN WHAT WAS THE BASIS AND CRITERIA OF CHARGING COMMISSION. WE, THEREFORE, FIND THAT THE A.O. HAS RIGHTLY REJECTED THE BOOKS OF ACCOUNT FOR WANT OF VERIFICATION AS THE ASSESSEE HAS FAILED TO FURNISH EVIDENCES IN THIS REGARD. SO FAR THE JUDGMENTS ON WHICH THE LD. AUTHORISED REPRESENTATIVE RELIED UPON ARE CONCE RNED, THOSE JUDGMENTS ARE DISTINGUISHABLE ON FACTS. THE FACTS OF THOSE JUDGE MENTS ARE NOT SIMILAR TO THE FACTS OF THE CASE UNDER CONSIDERATION. THE CIT(A) MADE A DETAILED DISCUSSION IN HIS ORDER AND FOR THE SAKE OF CONVENIENCE THE SAME IS R EPRODUCED ABOVE IN THIS ORDER. THE ASSESSEE FAILED TO POINT OUT ANY CONTRARY MATER IAL NOR THE SAME IS AVAILABLE ON RECORD. IN THE LIGHT OF THESE FACTS AND ABOVE DISC USSION, WE CONFIRM THE ORDER OF CIT(A) ON THE ISSUE. ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 35 21. THE THIRD EFFECTIVE GROUND OF ASSESSEES APPEAL IS IN RESPECT OF EXCESSIVE ESTIMATION OF INCOME. THIS IS COMMON GROUND OF APP EAL. THE REVENUE IS ALSO IN APPEAL. THE A.O. NOTICED THAT THE ASSESSEE SHOWN P ROFIT RATE OF 0.5%. THE A.O. AFTER REJECTING BOOKS OF ACCOUNT APPLIED 0.5% PROFI T RATE WHICH WAS RESTRICTED BY THE CIT(A) AT 0.1%. THE A.O. APPLIED 0.5% RATE OF PROFIT AFTER CONSIDERING FACTS OF THE RELEVANT YEAR AND ON THE BASIS OF MATERIAL ON R ECORD. THE CIT(A) IN PRINCIPLE AGREED WITH THE A.O. IN RESPECT OF ESTIMATION OF IN COME BUT ON ACCOUNT OF REASONABLENESS AND CONSIDERING SOME CASES, RESTRICT ED IT TO 0.1%. NOW THE QUESTION TO BE EXAMINED BY US IS WHETHER UNDER THE FACTS AND CIRCUMSTANCES THE INCOME ESTIMATED BY THE REVENUE AUTHORITIES IS REAS ONABLE OR NOT. BEFORE COMING TO THE ISSUE, WE WOULD LIKE TO STATE AT THE COST OF REPETITION THAT RS.25,31,96,401/-, RS.27,28,93,893/- & RS.34,71,02,418/- FOR ASSESSMEN T YEARS 1998-99, 1999-2000 & 2000-01 RESPECTIVELY WERE DEPOSITED IN BANK BY TH E ASSESSEE. THE ASSESSEE HAS FAILED TO EXPLAIN THE SAME. THE A.O. CONSIDERED TH E TURNOVER OF RS.25,31,96,401/- A.Y. 1998-99. AS STATED ABOVE THAT AMOUNT DEPOSITE D IN BANK ACCOUNT REMAINED UNEXPLAINED, SECTION 68 OF THE ACT IS CLEARLY APPLI CABLE. AT THIS JUNCTURE, WE ARE AWARE OF OUR POWER THAT WE CANNOT ENHANCE THE ADDIT IONS. AS REGARDS ACCEPTANCE OF RETURNS OF EARLIER YEARS BY REVENUE, WE MAY STAT E THAT AFTER ALL ONE DAY A CORRECT AND TRUE NATURE OF TRANSACTION HAS TO BE ASCERTAINE D AND REQUIRED TO BE PUT ON RECORD. IN THIS REGARD, WE MAY REFER A JUDGMENT OF THE HONBLE APEX COURT IN THE ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 36 CASE OF CIT VS. BRITISH PAINTS INDIA LTD., 188 ITR 44 (SC) WHEREIN IT HAS BEEN HELD THAT THE A.O. IS JUSTIFIED UNDER SECTION 145 OF THE ACT TO REJECT THE BOOKS OF ACCOUNT AND DETERMINE THE CORRECT PROFIT IF ORDINARY PRINCI PLE OF ACCOUNTING ARE NOT FOLLOWED. IN THAT CASE THE ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF PAINTS CONTENDED THAT IT IS ITS CONSISTENT PRACTICE TO VALUE THE GOODS IN PROGRESS AND FINISHED GOODS EXCLUSIVELY ON THE COST OF RAW MATERIAL AND BY TOTALLY EXCLUDING OVERHEAD EXPENDITURES. THE A.O. HELD THA T THERE WAS NO JUSTIFICATION FOR THE ASSESSEE TO VARY FROM THE REGULAR ACCOUNTING PR INCIPLE OF VALUING STOCK AT EITHER COST (RAW MATERIAL + DIRECT EXPENDITURE) OR MARKET PRICE WHICHEVER WAS LOWER. THE QUESTION BEFORE THE COURT WAS WHETHER THE A.O. COUL D REJECT CONSISTENT PRACTICE OF THE ASSESSEE IN VALUING STOCK IN EXCESS OF HIS POWE R UNDER SECTION 145 OF THE ACT. THE COURT HELD THAT IT IS THE DUTY OF THE A.O. TO C ONSIDER WHETHER BOOKS OF ACCOUNTS DISCLOSED THE TRUE STATEMENT OF ACCOUNTS FROM WHICH THE CORRECT INCOME CAN BE DERIVED. 22. IN THE CASE UNDER CONSIDERATION, THE A.O. HAS A PPLIED 0.5% RATE OF PROFIT. THE CIT(A) HAS REDUCED IT TO 0.1%. IN A.Y. 2001-02 , THE I.T.A.T. HAS DECIDED THE CASE OF THE ASSESSEE AFTER CONSIDERING FACTS OF THA T YEAR. IN THE A.Y. 2001-02 THE I.T.A.T. HAS ACCEPTED BOOKS OF ACCOUNT BUT IN THE A .Y. 2000-01 THE MATTER WAS SENT BACK TO THE FILE OF A.O. THUS, IT IS CLEAR TH AT EACH YEAR IS SEPARATE YEAR AND ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 37 EACH YEAR IS TO BE DECIDED CONSIDERING THE FACTS OF THAT YEAR. THE CONTENTION OF THE ASSESSEE THAT THE ORDER OF I.T.A.T. FOR A.Y. 2001-0 2 IS TO BE FOLLOWED IN THESE APPEALS IS NOT ACCEPTABLE BECAUSE THE I.T.A.T. ITSE LF IN A.Y. 2000-01 HAS SENT BACK THE MATTER TO THE FILE OF A.O. THE PECULIAR FACTS NOTICED BY US IN THESE CASES ARE THAT THE A.O. DISCOVERED THAT THE AMOUNTS OF RS.25 ,31,96,401/-, RS.27,28,93,893/- & RS.34,71,02,418/- FOR ASSESSMENT YEARS 1998-99, 1 999-2000 & 2000-01 RESPECTIVELY WERE DEPOSITED IN BANK ACCOUNT BY THE ASSESSEE. THE SOURCE OF THE SAID HUGE CASH DEPOSITS WERE NOT EXPLAINED BY THE A SSESSEE BY A SINGLE DOCUMENT, EVIDENCE OR BY ANY CONVINCING REASONS. IT IS RELEV ANT TO NOTE THAT PRESENTLY THE COUNTRY IS BURNING BY CIRCULATION OF BLACK MONEY. THE HUGE UNEXPLAINED DEPOSIT APPARENTLY IS A PART OF THAT CIRCULATION. UNDER TH E FACTS AND CIRCUMSTANCES, THE CONTENTIONS MADE AND THE DECISIONS RELIED IN RESPEC T OF APPLYING RATE OF PROFIT DO NOT HELP TO THE ASSESSEE. THE ADDITION OF ENTIRE G ROSS AMOUNT IS WARRANTED FOR WANT OF EVIDENCE BUT THE A.O. HIMSELF HAS APPLIED 0.5% R ATE OF PROFIT. THEREFORE, CONSIDERING OUR POWER, WE HAVE NO ALTERNATIVE BUT T O CONFIRM THE ORDERS OF A.O. THUS, THE ORDERS OF CIT(A) ON THE ISSUE ARE SET ASI DE AND THE ORDERS OF THE A.O. FOR THE ASSESSMENT YEARS 1998-99 TO 2000-01 ARE CONFIRM ED ON THE ISSUE. 23. THE FOURTH ISSUE PERTAINS TO CHARGING OF INTERE ST UNDER SECTION 234B OF THE ACT WHICH IS CONSEQUENTIAL. THE A.O. IS DIRECTED A CCORDINGLY. ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 38 24. BEFORE PARTING FROM THE MATTER, WE WOULD LIKE T O EXERCISE OUR POWER LAID DOWN BY THE APEX COURT IN THE CASE OF KAPUR CHAND SHRIMAL VS. CIT, 131 ITR 451 (SC). THE COURT HELD AS UNDER:- IT IS WELL KNOWN THAT AN APPELLATE AUTHORITY HAS TH E JURISDICTION AS WELL AS THE DUTY TO CORRECT ALL ERRORS IN THE PR OCEEDING UNDER APPEAL AND TO ISSUE, IF NECESSARY, APPROPRIATE DIRE CTIONS TO THE AUTHORITY AGAINST WHOSE DECISION THE APPEAL IS PREF ERRED TO DISPOSE OF THE WHOLE OR ANY PART OF THE MATTER AFRESH, UNLESS FORBIDDEN FROM THE DOING SO BY STATUTE. 25. IT IS TO NOTE IN INDIA MOST OF THE BUSINESS ACT IVITIES, CIRCULATION OF MONEY AND OTHER FINANCIAL ACTIVITIES ARE ADMINISTRATED THROUG H INCOME TAX ACT, PROVIDING EXEMPTION IN TAX, INCENTIVES, ALLOWANCES AND DALLIA NCES OF EXPENSE, LABOUR AND OTHER WELFARE ACTIVITIES ETC. IN THE CASE UNDER CO NSIDERATION, THE ASSESSEE IS RUNNING AN UNUSUAL BUSINESS ACTIVITY NOT IN ACCORDANCE WITH INDIAN LAWS APPEARS TO BE WITH COLLUSION WITH THE DEPARTMENT. THAT IS THE REASON T HAT THE CIT(A) HAS TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD . THE RELEVANT OBSERVATIONS OF THE CIT(A) ARE REPRODUCED AS UNDER:- I HAVE CONSIDERED ALL THE FACTS BROUGHT BEFORE ME BY THE LD. AR IN HIS WRITTEN SUBMISSION WITH REGARD TO THE NAT URE OF THE BUSINESS OF THE APPELLANT AND I HAVE ALSO GONE THROUGH THE A SSESSMENT ORDER AND THE FACTS STATED IN THE ASSESSMENT ORDER AND TH IS APPEAL HAS BEEN DECIDED ON THE BASIS OF THE FACTS STATED IN THE ASS ESSMENT ORDER AND ALSO DISCUSSED IN THE WRITTEN SUBMISSION OF THE LD. AR BECAUSE THE ASSESSMENT RECORD WAS NOT MADE AVAILABLE TO ME BY T HE PRESENT AO ITO 1 (2), ALIGARH DESPITE ASKING HIM SEVERAL TIMES . ITA NOS.463, 464 & 465/AGR/2011 & 09, 10 & 11/AGR/2012 A.YS. 1998-99, 1999-2000& 2000-01 39 26. AS PER THE LAW LAID DOWN BY THE APEX COURT IN T HE CASE OF KAPUR CHAND SHRIMAL VS. CIT, 131 ITR 451 (SC) AND PARTICULARLY UNDER THE CIRCUMSTANCES OF THE COUNTRY HAVING LARGE CIRCULATION OF BLACK MONEY, WE DIRECT THE A.O. TO TAKE ALL POSSIBLE ACTIONS IN ACCORDANCE WITH LAW IN SUCH CAS ES KEEPING IN VIEW OUR ABOVE DISCUSSIONS. THE REGISTRY IS DIRECTED TO SEND A COP Y OF THIS ORDER TO THE CCIT TO ADMINISTRATE PROCEEDINGS OF SUCH CASES. 27. IN THE RESULT, APPEALS OF THE ASSESSEE ARE DISM ISSED AND APPEALS OF THE REVENUE ARE ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY