Charbuja Marmo (India) Pvt. Ltd., Delhi V. Pr.CIT- 2 , New Delhi

ITA 4749/DEL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0189 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 24-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Reopening of assessment; Unexplained cash credit; Unexplained expenditure; Depreciation; Search and seizure; Document seized; Principle of natural justice; Question of law; Tangible material; Accommodation entries; Competent authority; Assessment record; Capital receipt; Reason to believe; Documents seized; Reassessment proceedings; Borrowed satisfaction; Set aside; Capital Gains
• Section: 69C; 143(3); 142(1); 14A; 133(6); 143(1); 150(1); 201; 292BB; 143(2); 64; 113; 43; 48; 73; 72; 13; 147; 131; 68; 148; 263; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA.NO.4749/DEL./2019 ASSESSMENT YEAR 2010-2011 M/S. CHARBHUJA MARMO (INDIA) PVT. LTD., NEW DELHI 110 015. PAN AADCC5143L C/O. SHRI KAPIL GOEL, ADVOCATE, F-26/124, SECTOR-7, ROHINI, DELHI 110 085. VS THE PRINCIPAL COMMISSIONER OF INCOME TAX 2, ROOM NO.394, C.R. BUILDING, NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI KAPIL GOEL, ADVOCATE FOR REVENUE : MS. NIDHI SRIVASTAVA, CIT-DR DATE OF HEARING : 17.12.2019 DATE OF PRONOUNCEMENT : 31.12.2019 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX-2, NEW DELHI, DATED 22.03.2019 FOR THE A.Y. 2010-2011 UNDER SECTION 263 OF THE I.T. ACT, 1961. 2 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD . 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE COMPANY FILED ORIGINAL RETURN OF INCOME DECLARING I NCOME OF RS.5,34,420/- WHICH WAS PROCESSED UNDER SECTION 143 (1) OF THE I.T. ACT, 1961. THEREAFTER, A NOTICE UNDER SECT ION 148 WAS ISSUED ON 23.03.2016 CALLING UPON THE ASSESSEE TO FILE ITS RETURN OF INCOME AFTER RECORDING REASONS UNDER SECTION 147 AND OBTAINING NECESSARY APPROVAL UNDER SECTION 151 AS STATUTORILY REQUIRED. IN RESPONSE TO THE STATUTORY NOTICE AND QUESTIONNAIRE ISSUED BY THE A.O, THE ASSESSEE APP EARED FROM TIME TO TIME BEFORE THE A.O. AND FILED THE REQ UISITE DETAILS WHICH WERE EXAMINED AND TAKEN ON RECORD. TH E ORAL SUBMISSIONS OF THE ASSESSEE WERE ALSO CONSIDERED. T HE A.O. AFTER EXAMINING THE DETAILED EVIDENCES FILED BY ASS ESSEE, ACCEPTED THE RETURN OF INCOME VIDE ORDER UNDER SECT ION 147/143(3) DATED 05.12.2016. 3. THE PR. CIT, HOWEVER, ON EXAMINATION OF THE RECORD FOUND THAT RE-ASSESSMENT ORDER TO BE ERRONEO US AND PREJUDICIAL TO THE INTERESTS OF REVENUE BECAUSE IN THE YEAR 3 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. UNDER CONSIDERATION ASSESSEE HAS RECEIVED SHARE CAP ITAL / SHARE PREMIUM OF RS.70 LAKHS FROM FIVE PARTIES AND ALL THESE COMPANIES ARE MANAGED AND CONTROLLED BY SHRI S.K. J AIN AND SHRI VIRENDRA JAIN WHO WERE ENTRY OPERATORS AND RUNNING DUMMY COMPANIES. THE PR. CIT, THEREFORE, IS SUED SHOW CAUSE NOTICE UNDER SECTION 263 OF THE I.T. ACT , 1961, CALLING FOR EXPLANATION OF THE ASSESSEE. 3.1. THE ASSESSEE FILED WRITTEN SUBMISSIONS BEFORE THE LD. PR. CIT WHICH IS REPRODUCED IN THE IMPUGNED ORD ER IN WHICH IT IS EXPLAINED THAT ASSESSEE FILED NECESSARY DOCUMENTS TO PROVE THE GENUINENESS OF THE TRANSACTI ON ENTERED INTO RESPECT OF THE SHARE APPLICATION MONEY WHICH WERE PROVIDED TO THE A.O. ALONG WITH SUPPORTING DOC UMENTS. THE ASSESSEE PRODUCED ALL THE DOCUMENTARY EVIDENCES AND THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL NECESSARY FACTS FOR ASSESSMENT. SINCE A.O. HAS ACCEPTED THE GENUINENESS OF THE TRANSACTION AFT ER EXAMINING THE DOCUMENTARY EVIDENCES AND MATERIAL ON RECORD, THEREFORE, IT IS NOT A FIT CASE OF PROCEEDI NG UNDER SECTION 263 OF THE I.T. ACT, 1961. THE LD. PR. CIT, HOWEVER, 4 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. DID NOT ACCEPT THE CONTENTION OF ASSESSEE AND NOTED THAT DURING THE COURSE OF SEARCH IN THE CASE OF SHRI S.K . JAIN AND SHRI VIRENDRA JAIN VARIOUS INCRIMINATING DOCUMENTS WERE FOUND. THE A.O. CONSIDERED THE APPRAISAL REPORT, BU T, DID NOT EXAMINE THE RELEVANT SEIZED MATERIAL EVEN THOUG H THE ENTRIES IN THE SEIZED MATERIAL SHOWED THAT ASSESSEE COMPANY WAS ALSO ONE OF THE BENEFICIAL OF ACCOMMODA TION ENTRIES GIVEN BY THESE PERSONS. THE LD. PR. CIT, TH EREFORE, HELD THAT A.O. PASSED THE RE-ASSESSMENT ORDER WITHO UT VERIFICATION OF THE SEIZED MATERIAL. THE RE-ASSESSM ENT ORDER WAS SET-ASIDE AND A.O. WAS DIRECTED TO FRAME THE ASSESSMENT AFRESH BY CONDUCTING PROPER INQUIRIES AB OUT THE SOURCE OF INVESTMENT, BY AFFORDING REASONABLE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. 4. IN THE PRESENT APPEAL, THE ASSESSEE CHALLENGED THE ORDER UNDER SECTION 263 OF THE I.T. ACT ON SEVE RAL GROUNDS. LEARNED COUNSEL FOR THE ASSESSEE INITIALLY SUBMITTED THAT LD. PR. CIT HAS NO JURISDICTION TO U PSET THE RE-ASSESSMENT ORDER UNDER SECTION 263 OF THE I.T. A CT BECAUSE THE REOPENING OF THE ASSESSMENT ITSELF WAS INVALID 5 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. AND BAD IN LAW AND LIABLE TO BE QUASHED. HE HAS SUB MITTED THAT REASONS RECORDED ARE BASED ON BORROWED SATISFA CTION AND WITHOUT INDEPENDENT APPLICATION OF MIND WHICH I S VERIFIABLE FROM THE FACT THAT ON NUMBER OF PLACES I N THE REASONS RECORDED IT IS MENTIONED THAT SAME IS BASED ON MERE INVESTIGATION WING APPRAISAL REPORT WITHOUT AN YTHING MORE BROUGHT ON RECORD IN THE REASONS AND FURTHER V AGUE DESCRIPTION USED IN THE REASONS TO ADDRESS THE TRAN SACTION IN QUESTION BY SAYING THAT SHARE CAPITAL/PREMIUM/LO AN HAS ESCAPED ASSESSMENT VITIATES THAT SO PURPORTED BELIE F AND EVEN DETAILS OF INFORMATION RECEIVED, IF ANY, ARE N O WAY NARRATED OR DESCRIBED IN THE REASONS RECORDED EVEN --- FILING DETAILS ETC ARE MISSING IN THE REASONS. SINCE REOPE NING OF THE ASSESSMENT ITSELF IS INVALID UNDER SECTION 147 OF THE I.T. ACT, THEREFORE, SAME IS LIABLE TO BE QUASHED AND AS SUCH IN COLLATERAL PROCEEDINGS UNDER SECTION 263 OF THE I.T . ACT, THE LD. PR. CIT WOULD NOT ASSUME VALID JURISDICTION. HE HAS ALSO SUBMITTED THAT APPROVAL GRANTED BY ADDL. CIT AND PR . CIT ARE INVALID AND BAD IN LAW. LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT PROCEEDINGS UND ER 6 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. SECTION 147 ARE INVALID AND BAD IN LAW. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON SEVERAL DECISIONS, CO PIES OF WHICH ARE FILED IN THE PAPER BOOK. 5. ON THE OTHER HAND, LD. D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT A.O. HAS RECORDED THE REASONS AFTER GOING THROUGH THE APPRAI SAL REPORT AND THE DOCUMENTS, THEREFORE, REOPENING OF T HE ASSESSMENT IS JUSTIFIED. THE LD. D.R. ALSO SUBMITTE D THAT THE LD. PR. CIT ON GOING THROUGH THE RECORD CORRECTLY F OUND IT TO BE AN ASSESSMENT ERRONEOUS AS WELL AS PREJUDICIAL T O THE INTERESTS OF THE REVENUE BECAUSE A.O. HAS NOT EXAMI NED THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS WELL SETTLED LAW THAT SINCE RE-ASSESSMENT PROCEEDIN GS ARE INVALID AND BAD IN LAW, THEREFORE, SUCH PROCEEDINGS COULD NOT BE REVISED UNDER SECTION 263 OF THE I.T. ACT. I T IS ALSO WELL SETTLED LAW THAT VALIDITY OF THE RE-ASSESSMENT PROCEEDINGS ARE TO BE JUDGED ON THE BASIS OF THE RE ASONS RECORDED FOR REOPENING OF THE ASSESSMENT. IT IS ALS O SETTLED LAW THAT WHILE GRANTING SANCTION UNDER SECTION 151 OF THE 7 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. I.T. ACT TO THE REASONS AND REOPENING OF THE ASSESS MENT, THE COMPETENT AUTHORITY SHOULD APPLY THEIR MIND AND COU LD NOT GRANT SANCTION/APPROVAL IN A MECHANICAL MANNER. IN THIS CASE THE A.O. WHILE REOPENING THE ASSESSMENT HAS RE CORDED THE FOLLOWING REASONS FOR RE-ASSESSMENT UNDER SECTI ON 147/148 OF THE I.T. ACT, COPY OF WHICH IS FILED AT PB-3 OF THE PAPER BOOK WHICH READS AS UNDER : ANNEXURE-A REASONS RECORDED FOR INITIATING PROCEEDINGS U/S. 14 7 OF THE I.T. ACT, 1961 IN THE CASE OF M/S. CHARBHUJA MA RMO INDIA PVT. LTD., PAN AADCC5143L FOR A.Y. 2010-11. A SEARCH AND SEIZURE OPERATION U/S 132 OF I.T. ACT, 1961 WAS CONDUCTED AT THE BUSINESS AND RESIDENTIAL PREMISES OF S.K. JAIN GROUP OF COMPANIES, INCLUDING SHRI S.K. JAIN & SHRI VIRENDRA JAIN AND CONSIDERABLE INCREMENTING EVIDENCE IN FORM OF DOCUMENTS/MATERIAL WAS SEIZED. DURING THE COURSE OF POST SEARCH INVESTIGATION, IT EMERGED THAT SHRI S.K. JAIN AND S HRI VIRENDRA JAIN WERE ENGAGED IN THE BUSINESS OF 8 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. PROVIDING ACCOMMODATION ENTRIES IN LIEU OF CASH TO A LARGE NUMBER OF BENEFICIARIES THROUGH NUMEROUS DUMM Y COMPANIES, FLOATED AND CONTROLLED BY THEM. IN FACT , IT WAS UNEARTHED THAT SHRI S.K. JAIN AND SHRI VIRENDRA JAIN WERE PROVIDING ACCOMMODATION ENTRIES THROUGH MORE THAN 100 COMPANIES/PROPRIETARY CONCERNS/ PARTNERSHIP FIRMS. MODUS OPERANDI OF SUCH BOGUS COMPANIES, AS DISCUSSED IN THE REPORT, IS BRIEFLY PRESCRIBED AS FOLLOWS : CASH RECEIVED FROM THE RECIPIENT PARTIES FOR PROVI DING THE ACCOMMODATION ENTRIES WAS FIRST DEPOSITED IN TH E ACCOUNTS OF THESE DUMMY FIRMS/COMPANIES IN THE DISGUISE OF THE CASH RECEIVED AGAINST THE BOGUS SAL ES, DULY SHOWN IN THE BOOKS OF ACCOUNTS. FROM THERE, TH IS CASH WAS TRANSFERRED TO THE DIFFERENT PAPER COMPANI ES FLOATED BY SHRI S.K.JAIN AND SHRI VIRENDRA JAIN THR OUGH A COMPLEX TRAIL OF TRANSACTIONS, SO AS TO HIDE THE ACTUAL SOURCES OF FUNDS OF THE LAST SET OF RECIPIENT COMPA NIES OF SHRI S.K. JAIN AND SHRI VIRENDRA JAIN. 9 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. IN THIS WAY, THE RESERVES & SURPLUS AND THE CAPITAL ACCOUNT OF SPECIFIC SET OF COMPANIES ARE ENHANCED W ITH THE HELP OF THE UNEXPLAINED CASH RECEIVED BY S.K. J AIN AND SHRI VIRENDRA JAIN, WHICH ROUTED TO THESE COMPANIES THROUGH THEIR DUMMY FIRMS/COMPANIES. ONCE THE FUNDS WERE OF THESE COMPANIES HAVE BEEN ENHANCE D SUFFICIENTLY, ACCOMMODATION ENTRIES THROUGH RTGS/ CHEQUES IN THE SHAPE OF THE SHARE CAPITAL, SHARE PREMIUM, CAPITAL GAINS OR LOAN AS PER THE SPECIFIC REQUIREMENT OF THE RECIPIENT CLIENTS WERE PROVIDED THEM IN LIEU OF THE CASH RECEIVED FROM THEM. IN THIS WAY , THE CHAIN FOR PROVIDING AN ACCOMMODATION ENTRY GETS COMPLETED. AS PER THE REPORT, THE ASSESSEE COMPANY M/S CHARBHUJA MARMO INDIA PVT. LTD. HAD OBTAINED THE FOLLOWING ACCOMMODATION ENTRIES IN THE FORM OF SHAR E APPLICATION/SHARE PREMIUM/LOAN DURING THE F.Y. 200 9- 10 RELEVANT TO A.Y. 2010-2011 :- 10 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. FROM TO BANK CHEQUE NO. CHEQUE DATE AMOUNT THROUG H ANN EXUR E NO. PAGE NO. ZENITH HOLDINGS LTD., CHARBHUJA MARMO INDIA PVT. LTD., AXIS 310520 02.09.2009 10,00,000/- PREM GUPTA A-20 41 VICTORY SOFTWARE PVT. LTD., CHARBHUJA MARMO INDIA PVT. LTD., AXIS 310921 02.09.2009 20,00,000/- PREM GUPTA A-20 41 HUMTUM MARKETING PVT. LTD., CHARBHUJA MARMO INDIA PVT. LTD., AXIS 310802 02.09.2009 10,00,000/- PREM GUPTA A-20 41 SHEESH CAPITAL SERVICES PVT. LTD., CHARBHUJA MARMO INDIA PVT. LTD., AXIS 310338 09.10.2009 15,00,000/- PREM GUPTA A-18 BACK PAGE 38 APPORVA LEASING FINANCE & INVESTMENT PVT. LTD., CHARBHUJA MARMO INDIA PVT. LTD., AXIS 353409 09.10.2009 15,00,000/- PREM GUPTA A-18 BACK PAGE 38 IN THE APPRAISAL REPORT OF SH. SURENDRA KUMAR JAIN GROUP PREPARED BY THE UNIT OF INVESTIGATION WING, I T HAS BEEN ESTABLISHED THAT SH. SURENDRA KUMAR JAIN AND S H. VIRENDRA JAIN ARE KNOWN ENTRY PROVIDERS AND ARE THE ACTUAL CONTROLLERS OF MORE THAN 100 COMPANIES/ PROPRIETARY FIRMS/PARTNERSHIP FIRMS. THEY CONTROL T HESE ENTITIES THROUGH VARIOUS PERSONS BY APPOINTING THEM AS DIRECTORS/PARTNERS/PROPRIETORS APART FROM NOMINATIN G THEM AS AUTHORIZED SIGNATORIES FOR MAINTAINING THE BANK ACCOUNTS OF THESE ENTITIES BUT IN FACT ALL THESE PE RSONS ACT ONLY AS THEIR STOOGES. 11 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. IN VIEW OF THE ABOVE MENTIONED FACTS, IT IS CLEAR THAT THE UNDISCLOSED INCOME OF THESE BENEFICIARY COMPANY WHICH HAS BEEN INTRODUCED BY THEM IN THE FORM OF SHARE CAPITAL/PREMIUM/LOAN HAS ESCAPED TAXATION BECAUSE THE ASSESSEE HAS NOT DISCLOSED FUL LY AND TRULY ALL MATERIAL FACTS BEFORE THE A.O RESULTI NG IN UNDER ASSESSMENT OF INCOME OF RS. 70,00,000/-. HENC E, I HAVE REASONS TO BELIEVE THAT INCOME OF RS. 70,00, 000/- AS PER TABLE IN PRECEDING, PARAGRAPHS HAS ESCAPED ASSESSMENT IN THE CASE OF ASSESSEE RELEVANT TO AY 2010-11, WITHIN THE MEANING OF SECTION 147 OF THE I .T. ACT. 6.1. IN THIS CASE THE ADDL. COMMISSIONER OF INCOME TAX AND PR. CIT-2, NEW DELHI HAVE GRANTED APPROVAL TO THE REOPENING OF THE ASSESSMENT VIDE ORDER DATED 15.03. 2016, COPY OF WHICH IS FILED AT PAGE-2 OF THE PAPER BOOK. THE SAME READS AS UNDER : DATED : 15.03.2016 SD/- K. JAYANT) INCOME TAX OFFICER WARD 6(1), NEW DELHI. 12 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. WHETHER THE ADDL. COMMISSIONER, RANGE-6, NEW DELHI IS SATISFIED ON THE REASONS RECORDED BY THE I.T.O. THA T IT IS A FIT CASE FOR ISSUE OF NOTICE UNDER SECTION 148. YES SD/- DEV SARAN SINGH ADDL. COMMISSIONER OF INCOME TAX, RANGE-6, NEW DELHI. WHETHER THE PR. COMMISSIONER OF INCOME TAX, DELHI-2 , NEW DELHI IS SATISFIED ON THE REASONS RECORDED BY THE I .T.O. THAT IT IS A FIT CASE FOR ISSUE OF NOTICE UNDER SECTION 14 8. YES SD/- P.K. GUPTA, PR. COMMISSIONER OF INCOME TAX, DELHI-2, NEW DELHI. 6.2. THE ITAT, DELHI BENCH IN THE CASE OF M/S. SUPERSONIC TECHNOLOGIES PVT. LTD., DELHI VS. PCIT-8 , NEW DELHI REPORTED IN 69 ITR 585 (DELHI) IN THE PROCEED INGS UNDER SECTION 263 OF THE I.T. ACT HELD THAT SINCE RE- ASSESSMENT PROCEEDINGS ARE INVALID AND BAD IN LAW, THEREFORE, SUCH PROCEEDINGS COULD NOT BE REVISED UN DER SECTION 263 OF THE I.T. ACT. THE ORDER OF THE TRIBU NAL IS REPRODUCED AS UNDER : 13 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES G : DELHI BEFORE SHRI BHAVNESH SAINI, J.M. AND SHRI PRASHANT MAHARISHI, A.M. ITA.NO.2269/DEL./2017 ASSESSMENT YEAR 2007-2008 M/S. SUPERSONIC TECHNOLOGIES PVT. LTD., A- 104, PANCHAL COMPLEX, CHAND VIHAR, IP EXTENSION, DELHI 110 092. PAN AAICS6245A VS. THE PCIT-8, NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI VED JAIN, ADVOCATE & SHRI ASHISH CHADHA, C.A. FOR REVENUE : SHRI S.S.RANA, CIT - D.R. ITA.NO.2857/DEL./2017 ASSESSMENT YEAR 2007-2008 M/S. SPJ HOTELS PRIVATE LIMITED, NEW DELHI-110017 PAN AAKCS7722C C/O. KAPIL GOEL, ADVOCATE, F-26/124, SECTOR-7, ROHINI, DELHI 110 085. VS. THE PCIT-8, ROOM NO.297, CENTRAL REVENUE BUILDING, IP ESTATE, NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI KAPIL GOEL, ADVOCATE. FOR REVENUE : SHRI S.S.RANA, CIT - D.R. ITA.NO.2527/DEL./2017 ASSESSMENT YEAR 2007-2008 14 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. M/S. SHIV SAI INFRASTRUCTURE (P) LTD., NEW DELHI-110048. PAN AAJCS5095B C/O. M/S. RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI 110049. VS. THE PCIT, DELHI-8, NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI ASHWANI TANEJA & SHRI SOMIL AGARWAL, ADVOCATES FOR REVENUE : SHRI S.S.RANA, CIT - D.R. ITA.NO.3301/DEL./2017 ASSESSMENT YEAR 2009-2010 M/S. SUPERIOR BUILDWELL PRIVATE LIMITED, A-43, ALLAHABAD BANK, CGHS APARTMENTS, MAYUR VIHAR, PHASE-III, CHILLA REGULATOR, DELHI.PAN AALCS9413R VS. THE PCIT-8, NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI VED JAIN, ADVOCATE & SHRI ASHISH CHADDHA, C.A. FOR REVENUE : SHRI S.S.RANA, CIT - D.R. DATE OF HEARING : 15, 16 & 25.10.2018 DATE OF PRONOUNCEMENT : 10.12.2018 ORDER PER BHAVNESH SAINI, J.M. 15 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. THIS ORDER SHALL DISPOSE OF ALL THE APPEALS FILED BY DIFFERENT ASSESSEES CHALLENGING THE ORDERS UNDER SE CTION 263 OF THE I.T. ACT, 1961. SINCE ISSUE IS COMMON IN ALL THE APPEALS, THEREFORE, ALL APPEALS WERE HEARD TOGETHER AND ARE DECIDED THROUGH THIS COMMON CONSOLIDATED ORDER. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ITA.NO.2269/DEL./2017 M/S. SUPERSONIC TECHNOLOGIE S PVT. LTD., DELHI. 3. THE FACTS OF THE CASE ARE THAT ORIGINAL RETURN OF INCOME IN THIS CASE WAS FILED ON 20.10.2007 AT NIL INCOME. THE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, WAS ISSUED ON 25.03.2014 AFTER RECORDING THE REASONS AN D TAKING PRIOR APPROVAL FROM THE COMPETENT AUTHORITIES. THE ASSESSEE IN RESPONSE TO THE STATUTORY NOTICE VIDE LETTER DAT ED 10.04.2014 SUBMITTING THEREIN THAT THE ORIGINAL RET URN FILED MAY PLEASE BE TREATED AS RETURN FILED IN RESPONSE T O THE NOTICE UNDER SECTION 148 OF THE I.T. ACT AND ALSO REQUESTE D TO PROVIDE REASONS RECORDED, WHICH WERE DULY PROVIDED TO IT. THE 16 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ASSESSEE ALSO FILLED ITS OBJECTIONS WHICH WERE DISP OSED OFF. THE A.O. ISSUED STATUTORY NOTICE WHICH WERE COMPLIE D BY THE ASSESSEE AND FILED DETAILS AS CALLED FOR. THE A.O. AFTER DISCUSSING THE CASE WITH THE ASSESSEE, ACCEPTED THE RETURNED INCOME AND COMPLETED THE RE-ASSESSMENT ORDER UNDER SECTION 147/143(3) OF THE I.T. ACT, 1961, ON DATED 30.06.20 14. 3.1. THE LD. PR. CIT ON EXAMINING THE ASSESSMENT RECORD NOTICED THAT THOUGH THE ASSESSMENT WAS REOPE NED UNDER SECTION 148 OF THE I.T. ACT ON THE ALLEGATION OF ACCOMMODATION ENTRY TAKEN FROM SHRI S.K. JAIN GROUP OF CONCERNS WHO WERE SEARCHED ON 14.09.2010 BY THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT, SO ME OF THE A.OS DID NOT EXAMINE THE SEIZED MATERIAL IN THE FO RM OF CASH BOOK AND BOOKS CONTAINING THE DETAILS OF CHEQUES IS SUED BY SUCH CONCERNS SEIZED FROM THE PREMISES OF SHRI S.K. JAIN DURING THE COURSE OF SEARCH. THE INVESTIGATION WING , DELHI, FORWARDED THE HARD COPY OF APPRAISAL REPORT TO THE THEN COMMISSIONER, DELHI-III, WHICH WAS RECEIVED BY HIM ON 15.03.2013, THE RELEVANT SEIZED MATERIAL (CONTAININ G MANY THOUSANDS OF PAGES) WAS SCANNED AND SENT TO THE 17 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. COMMISSIONER OF INCOME TAX IN SOFT COPY. HOWEVER, W HILE COMPLETING THE ASSESSMENT UNDER SECTION 147 R.W.S. 143 OF THE I.T. ACT, THOUGH THE A.O. REFERRED THE APPRAISA L REPORT BUT DID NOT LOOK INTO THE RELEVANT SEIZED MATERIAL IN S OFT COPY. THIS WAS ONE OF THE CASE WHERE THE A.O. DID NOT EXA MINE THE SEIZED MATERIAL. ACCORDINGLY, A SHOW CAUSE NOTICE U NDER SECTION 263 OF THE I.T. ACT WAS ISSUED TO THE ASSES SEE ON 27.01.2017 WHICH IS REPRODUCED IN THE IMPUGNED ORDE R. IN THE SHOW CAUSE NOTICE IT IS STATED THAT THE CASE WA S REOPENED ON THE ALLEGATION OF ACCOMMODATION ENTRY OF RS.22 L AKHS ON ACCOUNT OF SHARE APPLICATION/CAPITAL RECEIVED FROM M/S. PELICAN FINANCE AND LEASING LTD., M/S. SINGHAL SECU RITIES PVT. LTD., M/S. HILLRIDGE INVESTMENTS LTD AND M/S. S.R. CABLES PVT. LTD., A CONCERN OF S.K. JAIN GROUP OF C ASES. SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 14. 09.2010 AT THE PREMISES OF SHRI SURENDER JAIN AND SHRI VIRE NDER JAIN. DURING THE COURSE OF SEARCH, CASH BOOK AND BANK BOO KS OF THE CONCERNS MANAGED BY SHRI S.K. JAIN GROUP WHEREIN DE TAILED OF DAY-TO-DAY RECEIPTS IN CASH AND CHEQUE FROM/TO D IFFERENT PERSONS/FIRMS/COMPANIES HAVE BEEN RECORDED, WERE SE IZED. 18 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ON PERUSAL OF THE RE-ASSESSMENT ORDER, IT IS NOTICE D THAT WHILE PASSING THE SAID ORDER, THE A.O. HAS FAILED TO CONS IDER THE RELEVANT SEIZED MATERIAL PERTAINING TO THE ASSESSEE -COMPANY WHICH IS MENTIONED IN THE ORDER. IT IS NOTED IN THE NOTICE UNDER SECTION 263 THAT THE AMOUNTS RECEIVED BY ASSE SSEE- COMPANY WERE ACCOMMODATION ENTRY IN LIEU OF CASH GI VEN BY THE ASSESSEE-COMPANY THROUGH SHRI MANOJ BANSAL. THE RELEVANT COPIES OF THE SEIZED MATERIAL RELATING TO THE ASSESSEE-COMPANY WERE GIVEN ALONG WITH SHOW CAUSE N OTICE OR DURING THE PROCEEDINGS UNDER SECTION 263 OF THE I.T. ACT. THE ASSESSEE-COMPANY SUBMITTED THAT THE A.O. HAS CONSIDERED THE SEIZED MATERIAL NOT ONLY AT THE TIME OF RE- ASSESSMENT BUT ALSO AT THE TIME OF RECORDING REASON S FOR RE- ASSESSMENT. THE LEARNED COUNSEL FOR THE ASSESSEE RE FERRED TO THE REASONS RECORDED BY THE A.O. WHEREIN THERE I S A MENTION OF ACCOMMODATION ENTRIES PROVIDED BY THE GR OUP OF SHRI S.K. JAIN WHO HAD FLOATED HUNDREDS OF BOGUS CO MPANIES TO PROVIDE ACCOMMODATION ENTRIES IN LIEU OF CASH. 3.2. THE ASSESSEE-COMPANY ALSO SUBMITTED THAT DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE-COMP ANY 19 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. WAS ASKED TO FURNISH INCOME TAX RETURNS, CONFIRMAT IONS, FINANCIALS AND BANK STATEMENTS, WHICH WERE DULY COM PLIED WITH BY THE ASSESSEE-COMPANY. THE ASSESSEE-COMPANY HAS PROVED THE CREDITWORTHINESS OF THE INVESTORS BEFORE A.O. INDEPENDENT NOTICES WERE ISSUED UNDER SECTION 133(6 ) OF THE I.T. ACT TO THE INVESTOR COMPANIES BY THE A.O. THE FACTS WERE EXAMINED BASED ON INFORMATION PROVIDED BY THE ASSES SEE- COMPANY. THE PROCEEDINGS UNDER SECTION 263 WOULD AM OUNT TO THE CONSIDERATION OF MATERIAL WHICH HAS ALREADY BEEN CONSIDERED BY THE A.O. DURING THE ASSESSMENT PROCEE DINGS UNDER SECTION 147 READ WITH SECTION 143 OF THE I.T. ACT, AND IF IN CASE THE DOCUMENTS ARE NOT AVAILABLE IN THE FILE S OF A.O, THEN, THERE IS ALSO NO SCOPE OF REVISION UNDER SECT ION 263 OF THE I.T. ACT. THE A.O. HAS NOT ISSUED NOTICE UNDER SECTION 143(2) OF THE I.T. ACT DURING THE RE-ASSESSMENT PRO CEEDINGS. THE ASSESSEE RELIED UPON SEVERAL DECISIONS IN SUPPO RT OF THE CONTENTION THAT REVISION PROCEEDINGS UNDER SECTION 263 MAY BE DROPPED. 3.3. THE LD. PR. CIT CONSIDERING THE SUBMISSIONS O F THE ASSESSEE AND MATERIAL ON RECORD NOTED IN HIS FINDIN GS THAT 20 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. THE SEIZED PAPERS CONTAINS VARIOUS ACCOMMODATION EN TRIES WERE PROVIDED BY SUCH COMPANIES TO VARIOUS BENEFICI ARIES. THE APPRAISAL REPORT WAS FORWARDED BY THE INVESTIGA TION WING IN THE MONTH OF MARCH, 2013 TO THEN CIT-III, D ELHI IN HARD COPY. THE SEIZED MATERIAL CONTAINED MANY THOUS AND PAGES. THE SEIZED MATERIAL CONTAINED CONSOLIDATED D AY-TO- DAY CASH TRANSACTIONS OF ALL SUCH SHELL COMPANIES W HEREIN THE OPENING AND CLOSING BALANCES OF CASH HAS BEEN MENTIONED. DURING THE COURSE OF SEARCH, THE ENTRY I N THE CASH BOOK WAS ADMITTED TO BE CASH AND BANK BALANCES. THE CASH IS SHOWN AS RECEIVED AGAINST THE NAMES OF MANY INTERMEDIARIES. AGAINST THE NAME OF SOME INTERMEDIA TERY CHEQUES HAVE BEEN SHOWN AS ISSUED BY SUCH COMPANIES TO VARIOUS BENEFICIARIES. THE DETAILS OF CHEQUES SUCH AS CHEQUE NUMBER, NAME OF THE BANK AND DATE, NAME OF THE ISSU ER COMPANY AND THE NAME OF BENEFICIARY IS MENTIONED IN THESE DETAILS. IT IS, THEREFORE, CLEAR THAT EVEN THOUGH T HE APPRAISAL REPORT HAS SUMMARIZED THE TRANSACTIONS OF THE CHEQU ES GIVEN BY THE SHELL COMPANIES TO THE VARIOUS BENEFICIARIES THROUGH INTERMEDIARIES IN THE TABULAR FORM, THE DETAILS OF CASH 21 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. RECEIVED FROM SUCH INTERMEDIARIES WERE NOT TABULATE D DUE TO VOLUMINOUS DATA OF DAY-TO-DAY CASH TRANSACTIONS APP EARING IN THE SEIZED MATERIAL. THEREFORE, ALL THE RELEVANT SEIZED MATERIAL FOUND FROM THE PREMISES OF SHRI S.K. JAIN GROUP WAS FORWARDED TO THE COMMISSIONER IN SOFT COPY AFTER SC ANNING. THE ASSESSEE-COMPANY IS ALSO SHOWN AS BENEFICIARY A S EVIDENT FROM THE SCANNED COPY OF THE SEIZED MATERIA L. AGAINST THESE ENTRIES, THE NAME OF ASSESSEE-COMPANY AND THE NAME OF SHRI MANOJ BANSAL (MEDIATOR) IS MENTIONED. ALL T HE CHEQUES WERE FOUND TO BE CREDITED IN THE BANK ACCOUNT OF TH E ASSESSEE-COMPANY. SEVERAL SCANNED COPIES ARE ATTACH ED FROM PAGES 9 TO 19 OF THE IMPUGNED ORDER. FROM PAGE S 20 TO 26 OF THE IMPUGNED ORDER, SUMMARY OF THE APPRAISAL REPORT, YEAR-WISE DETAILS OF ACCOMMODATION ENTRIES PROVIDED BY SHRI S.K. JAIN GROUP TO VARIOUS BENEFICIARY COMPANIES WE RE TABULATED FOR THE CHARGE OF CIT-8. THE A.O. HAS MAD E MENTIONED DETAILS/TABLE AS THE BASIS FOR REOPENING OF THE ASSESSMENT WHICH IS CLEAR FROM THE REASONS RECORDED FOR ISSUE OF NOTICE UNDER SECTION 148 OF THE I.T. ACT. FROM THE ENTRY NO.230, THE NAME OF THE ASSESSEE-COMPANY AN A MOUNT 22 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. OF RS.22 LAKHS HAVE BEEN MENTIONED. IT WOULD SHOWS THAT A.O. DID NOT VERIFY OR EXAMINE THE SEIZED MATERIAL RELATING TO THE ASSESSEE. THE LD. PR. CIT ALSO NOTED THAT AS TH ERE IS NO STATUTORY NOTICE UNDER SECTION 143(2) PRESCRIBED IN THE ACT AND ONLY NON-STATUTORY NOTICE IS PRESCRIBED, THE PU RPOSE OF WHICH IS TO INTIMATE THE ASSESSEE THAT THE CASE HAS BEEN SELECTED FOR SCRUTINY AND THE NOTICES ISSUED ON DAT ED 11.06.2014 AND 19.06.2014 CLEARLY PROVES THAT THE C ASE OF THE ASSESSEE HAS BEEN SELECTED FOR SCRUTINY, SUCH S HOW CAUSE NOTICES ARE NOTHING BUT NOTICE UNDER SECTION 143(2). OF THE I.T. ACT. IT IS ALSO NOTED BY THE LD. PR. CIT T HAT EVEN THOUGH NO FORMAL NOTICE UNDER SECTION 143(2) WAS IS SUED BY THE A.O, IN THE LETTERS DATED 11.06.2014 AND 19.06. 2014 IT WAS SPECIFICALLY MENTIONED THAT IN THE ABSENCE OF T HE REQUISITE DETAILS THE ASSESSMENT WOULD BE COMPLETED UNDER SECTION 144 OF THE I.T. ACT. THE A.O. HAS NOT EXAMI NED THIS ISSUE IN THE LIGHT OF SEIZED MATERIAL. THEREFORE, R E-ASSESSMENT ORDER WAS FOUND TO BE ERRONEOUS IN SO FAR AS PREJUD ICIAL TO THE INTERESTS OF THE REVENUE BECAUSE A.O. FAILED TO LOO K INTO THE SEIZED MATERIAL. THE ORDER WAS SET ASIDE AND RESTOR ED TO THE 23 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. FILE OF A.O. WITH A DIRECTION TO EXAMINE THE SEIZED MATERIAL AND CONFRONT THE SAME TO THE ASSESSEE AND PASS THE ORDER IN ACCORDANCE WITH LAW. 4. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. LEAR NED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THIS CAS E THE VALUE OF THE SHARE WAS RS.10/- WITH PREMIUM OF RS.5 0/- PER SHARE. NO BUSINESS WAS THERE IN THIS YEAR. HOWEVER, ASSESSEE PROVED THE IDENTITY OF THE INVESTORS, THEI R CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN THE MATTER, THEREFORE, NO ADDITION CAN BE MADE ON THE G ROUND THAT SHARES WERE ISSUED AT EXCESS PREMIUM. HE HAS RELIE D UPON THE DECISION OF HONBLE MADHYA PRADESH HIGH COURT I N THE CASE OF PR. CIT-(1), INDORE VS. CHAIN HOUSE INTERNA TIONAL (P.) LTD., (2018) 98 TAXMANN.COM 47 (M.P). HE HAS SUBMIT TED THAT NO CASH WAS APPEARING AGAINST THE NAME OF THE ASSES SEE IN THE SEIZED PAPER AND THAT ALL THE PAPERS AFTER SCAN NING WERE ATTACHED IN THE IMPUGNED ORDER AND DID NOT RELATE T O THE ASSESSEE. HE HAS SUBMITTED THAT ADMITTEDLY NO NOTIC E UNDER SECTION 143(2) HAVE BEEN ISSUED FOR COMPLETION OF T HE RE- 24 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ASSESSMENT PROCEEDINGS, THEREFORE, RE-ASSESSMENT OR DER DATED 30.06.2014 IS ILLEGAL AND BAD IN LAW. HE HAS SUBMITTED THAT IN PROCEEDINGS UNDER SECTION 263 OF THE I.T. A CT ONLY VALID RE-ASSESSMENT ORDER CAN BE REVISED WHICH SHOU LD BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. IT IS NOT NECESSARY TO RECORD ALL THE FACTS AND FINDINGS IN THE RE- ASSESSMENT ORDER. LD. PR. CIT CANNOT SIT OVER THE O RDER OF THE RE-ASSESSMENT PASSED BY THE A.O. THE A.O. HAS TAKEN ONE OF THE POSSIBLE VIEWS AS PER LAW. THEREFORE, THE RE-AS SESSMENT ORDER CANNOT BE REVISED UNDER SECTION 263 OF THE I. T. ACT. THERE IS A DIFFERENCE BETWEEN LACK OF ENQUIRY AND I NADEQUATE ENQUIRY. PB-11 IS REASONS RECORDED UNDER SECTIONS 1 47/148 OF THE I.T. ACT IN WHICH IT IS MENTIONED THAT INFORMATION/DOCUMENTS IN THE FORM OF CD, APPRAISAL REPORT ALONG WITH RELEVANT DETAILS HAS BEEN RECEIVED FROM THE O/O. CIT-III, NEW DELHI, DATED 28.03.2013 THAT THE ASSES SEE HAS RECEIVED AND IS A BENEFICIARY OF ACCOMMODATION ENTR IES PROVIDED BY THE GROUP OF SHRI SURENDRA KUMAR JAIN, SHRI RAKESH GUPTA, SHRI VISHESH GUPTA, SHRI NAVNEET JAIN AND SHRI VAIBHAV JAIN. THE ACCOMMODATION ENTRIES HAVE B EEN 25 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. PROVIDED TO VARIOUS ASSESSEES WHO WERE RE-ROUTING T HEIR UNACCOUNTED CASH THROUGH THESE ACCOMMODATION ENTRIE S. THEREFORE, ALL THE RELEVANT DETAILS WERE BEFORE A.O . AT THE TIME OF REOPENING OF THE ASSESSMENT. PB-17 TO 24 ARE THE INFORMATION CALLED BY THE A.O. FROM ALL INVESTOR CO MPANIES UNDER SECTION 133(6) OF THE I.T. ACT AT RE-ASSESSME NT STAGE. PB-25 IS OBJECTIONS FILED BY ASSESSEE FOR REOPENING OF THE ASSESSMENT UNDER SECTION 148. PB 26-27 IS QUERIES R AISED BY THE A.O. AT RE-ASSESSMENT STAGE ALONG WITH DOCUMENT S OF INVESTOR COMPANIES. PB-35 IS DETAILS OF SHARE APPLI CANT COMPANIES FILED. PB-36 IS OBJECTION DECIDED UNDER S ECTION 148 BY THE A.O. PB-37 TO 139 ARE REPLIES WITH DOCUMENTS FILED BY INVESTOR COMPANIES DIRECTLY TO THE A.O. UNDER SECTI ON 133(6) OF THE I.T. ACT. IF THE CD IS NOT CONSIDERED BY THE A.O. AT THE TIME OF RE-ASSESSMENT ORDER AS PER NOTICE UNDER SEC TION 263 OF THE I.T. ACT, THE RE-ASSESSMENT ORDER IS BAD IN LAW. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF I TAT, DELHI BENCH IN THE CASE OF M/S. NKG INFRASTRUCTURE LTD., NEW DELHI VS. PR. CIT, CIRCLE-3, NEW DELHI IN ITA.NO.3825 TO 3827/DEL./2018, DATED 05.09.2018, IN WHICH THE ISSU E WAS 26 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. VALIDITY OF PROCEEDINGS UNDER SECTION 147/148 OF TH E I.T. ACT. THE ASSESSEE SUBMITTED BEFORE THE TRIBUNAL THAT ASS ESSMENT ORDER IN THIS CASE IS BARRED BY LIMITATION IS NON-E ST IN THE EYE OF LAW. THEREFORE, THE PR. CIT CANNOT ASSUME JURISD ICTION UNDER SECTION 263 OF THE I.T. ACT TO REVISE SUCH AS SESSMENT ORDER WHICH IS NON-EST IN THE EYE OF LAW AND BEING BARRED BY LIMITATION. THE TRIBUNAL HELD THAT THE ORDER WHICH IS BARRED BY LIMITATION CANNOT BE REVISED UNDER SECTION 263 O F THE I.T. ACT BY THE PR. CIT. THE APPRAISAL REPORT WAS BASED ON CD AND IF SAME IS NOT CONSIDERED BY THE A.O, IT IS NON -APPLICATION OF MIND BY THE A.O. TO INITIATE RE-ASSESSMENT PROCE EDINGS UNDER SECTION 148 OF THE I.T. ACT. LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON DECISION OF THE HONBLE D ELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS. SOC IETY FOR WORLDWIDE INTERBANK FINANCIAL TELECOMMUNICATION (20 10) 323 ITR 249 (DEL.) IN WHICH IT WAS HELD THAT NOTICE UNDER SECTION 143(2) WAS SIMULTANEOUSLY ISSUED ON FILING OF THE RETURN OF INCOME, THEREFORE, IT IS BAD IN LAW AND I NVALID. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON DECISI ON OF HONBLE SUPREME COURT IN THE CASE OF ACIT & ANOTHER VS. 27 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. M/S. HOTEL BLUE MOON IN CIVIL APPEAL NO.1198 OF 201 0 ARISING OUT OF SLP (C) NO.22973 OF 2007, DATED 02.02.2010 I N WHICH IT WAS HELD THAT ISSUE OF NOTICE UNDER SECTION 143 (2) IS MANDATORY. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SUNBEAM AUTO LTD., (2011) 332 ITR 167 (DEL.) IN WHI CH IT WAS HELD THAT IF THE ITO ACTING IN ACCORDANCE WITH LAW , MAKES CERTAIN ASSESSMENT, THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCOR DING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABOR ATELY. LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON D ECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ITO VS. D.G . HOUSING PROJECTS LTD., (2012) 343 ITR 329 (DEL.) IN WHICH I T WAS HELD THAT THE A.O. IS BOTH INVESTIGATOR AND ADJUDICATOR . IF THE A.O. FAILS TO CONDUCT ENQUIRY, HE COMMITS ERROR AND THE WORD ERRONEOUS INCLUDES FAILURE TO MAKE THE ENQUIRY. I N CASES, WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF E NQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT T HE ORDER/INQUIRY MADE IS ERRONEOUS. AN ORDER IS NOT ER RONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE, UNLESS THE CIT 28 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. LEAR NED COUNSEL FOR THE ASSESSEE RELIED UPON DECISION OF HO NBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NEW DELHI T ELEVISION LTD., (2014) 360 ITR 44 (DEL.) IN WHICH IT WAS HELD THAT ONCE THE CLAIM WAS CONSIDERED AND EXAMINED BY THE A.O, COMMISSIONER CANNOT SET ASIDE THE ORDER WITHOUT REC ORDING CONTRARY FINDING. THIS WILL BE CONTRARY TO SECTION 263 OF THE I.T. ACT. THE CIT DID NOT MAKE ANY INVESTIGATION B Y EXAMINING THE INVESTORS. HE HAS RELIED UPON THE ORD ER OF ITAT, DELHI BENCH IN THE CASE OF TIRUPATI INFRAPROJ ECTS PVT. LTD., VS. PR. CIT, CENTRAL-II, NEW DELHI 2016-(5)-T MI-1290- ITAT-DELHI. HE HAS ALSO RELIED UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF GLOBUS INFOCOM LTD. , VS. CIT- IV, DELHI (2014) 369 ITR 14 (DEL.). LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO RELIED UPON THE JUDGMENT OF HONB LE DELHI HIGH COURT IN THE CASE OF PR. CIT-8 VS. SHRI JAI SH IV SHANKAR TRADERS PVT. LTD., 2015-(10)-TMI-1765-DELHI-HIGH CO URT IN WHICH IT WAS HELD THAT NO NOTICE UNDER SECTION 143 (2) OF THE I.T. ACT WAS ISSUED TO THE ASSESSEE AFTER 16.12.201 0, THE DATE ON WHICH THE ASSESSEE INFORMED THE A.O. THAT T HE RETURN 29 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ORIGINALLY FILED SHOULD BE TREATED AS RETURN FILED PURSUANT TO THE NOTICE UNDER SECTION 148 OF THE I.T. ACT. THERE FORE, THE SAME IS FATAL TO THE ORDER OF RE-ASSESSMENT. HE HA S SUBMITTED THAT ASSESSEE PRODUCED SUFFICIENT EVIDENC ES BEFORE A.O. TO PROVE IDENTITY OF THE INVESTORS, THEIR CRED ITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN THE MATTER. T HEREFORE, A.O. IN THE RE-ASSESSMENT ORDER CORRECTLY ACCEPTED THE EXPLANATION OF ASSESSEE. IN SUPPORT OF THE SAID CON TENTION, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON DECISI ONS OF HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. SOFTLINE CREATIONS P. LTD., (2016) 387 ITR 636 (DEL.) AND CI T VS. FAIR FINVEST LTD., (2013) 357 ITR 146 (DEL.). LEARNED CO UNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT SINCE RE-AS SESSMENT ORDER WAS BAD IN LAW BECAUSE NO NOTICE UNDER SECTIO N 143(2) HAVE BEEN ISSUED TO THE ASSESSEE AND THAT ASSESSEE PRODUCED SUFFICIENT EVIDENCES TO PROVE THE CONDITIO NS OF SECTION 68 OF THE I.T. ACT, THEREFORE, REVISION PRO CEEDINGS UNDER SECTION 263 OF THE I.T. ACT IN SUCH CIRCUMSTA NCES IS WHOLLY UNJUSTIFIED. 30 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 5. ON THE OTHER HAND, THE LD. D.R. RELIED UPON ORD ER OF THE LD. PR. CIT. HE HAS SUBMITTED THAT APPRAISAL REPORT WAS SENT TO THE A.O. PR. CIT NOTED THAT CREDITWORTH INESS WAS NOT CONSIDERED BY THE A.O. PB-11 IS REASONS RECORDE D UNDER SECTION 148 OF THE I.T. ACT WHICH IS THE STATEMENT OF THE A.O. THE DISPUTED QUESTION CANNOT BE RAISED FOR THE FIRS T TIME BEFORE THE TRIBUNAL. THE LD. D.R. RELIED UPON DECIS ION OF HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADD HA VS. CIT (2011) 337 ITR 399 (DEL.). THE LD. D.R. RELIED UPON ORDER OF ITAT, DELHI BENCH IN THE CASE OF M/S. SURYA JYOT I SOFTWARE PVT. LTD., VS. PR. CIT, NEW DELHI VIDE ITA.NO.2158/ DEL./2017, DATED 25.10.2017 REPORTED IN 2017-TIOL-1775-ITAT-DE L IN WHICH THE TRIBUNAL NOTED THAT ASSESSEE-COMPANY HAS RAISED THE ISSUE OF NO NOTICE HAS BEEN ISSUED UNDER SECTIO N 143(2) OR SERVED UPON ASSESSEE DURING THE COURSE OF RE-ASSESS MENT PROCEEDINGS. THE TRIBUNAL NOTED THAT ASSESSEE HAS N EITHER CHALLENGED THIS ISSUE AFTER PASSING OF THE RE-ASSES SMENT ORDER NOR HAS RAISED THIS ISSUE BEFORE PR. CIT DURI NG THE COURSE OF REVISIONARY PROCEEDINGS UNDER SECTION 263 OF THE I.T. ACT. THE ASSESSEE HAS RAISED SEVERAL LEGAL 31 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ISSUES/OBJECTIONS BEFORE PR. CIT CHALLENGING THE VA LIDITY OF THE RE-ASSESSMENT PROCEEDINGS. EVEN BEFORE THE TRIBUNAL AT THE TIME OF FILING OF THE APPEAL, THIS ISSUE HAS NEITHE R BEEN RAISED IN THE GROUNDS NOR HAS ANY ADDITIONAL GROUND BEEN R AISED SO THAT DEPARTMENT COULD HAVE GOT THE OPPORTUNITY TO O BJECT OR RESPOND TO SUCH A PLEA AFTER VERIFYING THE RECORD I N THIS REGARD. THEREFORE, REQUEST OF COUNSEL FOR ASSESSEE WAS REJECTED. IT IS ALSO NOTED THAT THE IMPUGNED ORDER DEMONSTRATED THAT THE ISSUE WAS NEITHER ENQUIRED IN TO NOR WAS VERIFIED BY THE A.O. THE LD. D.R. SIMILARLY R ELIED UPON DECISION OF ITAT, DELHI BENCH IN THE CASE OF SURYA FINANCIAL SERVICES LTD., VS. PCIT VIDE ITA.NO.2915/DEL./2017, DATED 08.01.2018 REPORTED IN 2018-TIOL-74-ITAT-DEL. THE L D. D.R. ALSO RELIED UPON DECISION OF ITAT, DELHI BENCH IN T HE CASE OF SHANKAR TRADEX PVT. LTD., DELHI VS. PR. CIT-8, NEW DELHI, VIDE ITA.NO.2999/DEL.2017 DATED 16.04.2018 IN WHICH SIMI LAR ISSUE WAS DECIDED AGAINST THE ASSESSEE. THE LD. D.R . SUBMITTED THAT A.O. HAS NOT TAKEN INTO CONSIDERATIO N THE MATERIAL SEIZED DURING SEARCH IN THE CASE OF SHRI S .K. JAIN. THEREFORE, EXPLANATION-2 TO SECTION 263 OF THE I.T. ACT IS 32 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. APPLICABLE IN THIS CASE. THE LD. D.R. RELIED UPON D ECISION OF HONBLE SUPREME COURT IN THE CASE OF DENIEL MERCHAN TS P. LTD., VS. ITO & ANOTHER IN SLP (C) NO.23976/2017 DA TED 29.11.2017 IN WHICH SLP HAVE BEEN DISMISSED WHERE A .O. DID NOT MAKE ANY PROPER ENQUIRY WHILE MAKING THE ASSESSMENT AND ACCEPTING THE EXPLANATION OF ASSESSE E IN SO FAR AS RECEIPT OF SHARE APPLICATION MONEY IS CONCER NED. THE LD. D.R. ALSO RELIED UPON DECISION OF HONBLE SUPRE ME COURT IN THE CASE OF RAJMANDIR ESTATES (P.) LTD., VS. PCI T (2017) 245 TAXMAN 127 (SC) AND OTHER DECISIONS ALSO ON THE SAM E PROPOSITION THAT IF A.O. DID NOT MAKE ANY ENQUIRY O N THE ISSUE, THE PROCEEDINGS UNDER SECTION 263 COULD BE I NITIATED. THE LD. D.R. SUBMITTED THAT NO OBJECTION WAS RAISED BEFORE A.O. REGARDING THE ISSUES RAISED IN THE PRESENT APP EAL. THE LD. D.R. RELIED UPON DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF MAF ACADEMY PVT. LTD., 361 ITR 258 AND NAVODYA CASTLE PVT. LTD., 367 ITR 306 WHICH IS CONF IRMED BY THE HON'BLE SUPREME COURT AS WELL. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSES SEE FILED 33 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ORIGINAL RETURN OF INCOME ON 20.10.2007. THE A.O. I SSUED NOTICE UNDER SECTION 148 OF THE I.T. ACT ON 25.03.2 014 AFTER RECORDING THE REASONS FOR REOPENING OF THE ASSESSME NT. THE COPY OF REASONS RECORDED UNDER SECTIONS 147/148 ARE FILED AT PAGE 11 OF THE PAPER BOOK. IN THE REASONS THE A.O. HAS MENTIONED THAT INFORMATION/DOCUMENTS IN THE FORM OF CD APPRAISAL REPORT ALONG WITH RELEVANT DETAILS HAVE B EEN RECEIVED FROM THE O/O. CIT-3, NEW DELHI THAT THE AS SESSEE HAS RECEIVED ACCOMMODATION ENTRIES PROVIDED BY SHRI S.K. JAIN GROUP OF CASES FOR A SUM OF RS.22 LAKHS. THE A .O. ACCORDINGLY FORMED AN OPINION THAT INCOME OF RS.22 LAKHS CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT IN THE ASS ESSMENT YEAR UNDER APPEAL. THE ASSESSEE IN RESPONSE TO THE SAID NOTICE FILED REPLY DATED 10.04.2014 SUBMITTING THER EIN THAT ORIGINAL RETURN FILED MAY BE TREATED AS RETURN FILE D IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE I.T. ACT AND REQUESTED FOR COPY OF THE REASONS WHICH WERE SUPPLI ED AND OBJECTIONS OF THE ASSESSEE HAVE BEEN DISPOSED OF SE PARATELY. THE A.O. IN THE RE-ASSESSMENT ORDER DID NOT MENTION IF HE HAS ISSUED ANY NOTICE UNDER SECTION 143(2) OF THE I.T. ACT UPON 34 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ASSESSEE BEFORE COMPLETION OF THE ASSESSMENT. THIS ISSUE WAS RAISED BEFORE LD. PR. CIT IN THE PROCEEDINGS UN DER SECTION 263 OF THE I.T. ACT THAT A.O. HAS NOT ISSUE D NOTICE UNDER SECTION 143(2) OF THE I.T. ACT AT RE-ASSESSME NT PROCEEDINGS. THE LD. PR. CIT MENTIONED IN THE IMPUG NED ORDER THAT ASSESSEE WAS INTIMATED BY NOTICES DATED 11.06. 2014 AND 19.06.2014 THAT IN THE ABSENCE OF REQUISITE DET AILS ASSESSMENT WOULD BE COMPLETED UNDER SECTION 144 OF THE I.T. ACT. THE LD. PR. CIT TREATED THE SAME NOTICES AS NO TICE ISSUED UNDER SECTION 143(2) OF THE I.T. ACT. THE LD. PR. C IT, HOWEVER, ADMITTED THAT NO FORMAL NOTICE UNDER SECTION 143(2) HAVE BEEN ISSUED TO THE ASSESSEE BEFORE COMPLETION OF TH E RE- ASSESSMENT PROCEEDINGS. THE HONBLE DELHI HIGH COUR T IN THE CASE OF CIT VS. CPR CAPITAL SERVICES LTD., (2011) 3 30 ITR 43 (DEL.) HELD AS UNDER : THE TRIBUNAL HELD THAT NO NOTICE UNDER SECTION 143 (2) OF THE INCOME-TAX ACT, 1961 WAS PREPARED AND SERVED UPON THE ASSESSEE. ON APPEAL: HELD, DISMISSING THE APPEAL, THAT MERE NOTING IN TH E ORDER SHEET WOULD NOT SUFFICE AND THE COPY OF THE N OTICE 35 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ISSUED UNDER SECTION 143(2) OF THE ACT WAS NOT AVAI LABLE ON RECORD. SINCE THE DEPARTMENT HAD FAILED TO PRODU CE THE COPY THE NOTICE UNDER SECTION 143(2) OF THE ACT THERE WAS NO OPTION BUT TO AGREE WITH THE FINDINGS OF THE TRIBUNAL THAT NO SUCH NOTICE WAS PREPARED AND SERVE D UPON THE ASSESSEE. IN THE ABSENCE OF THIS MANDATORY REQUIREMENT OF ISSUING STATUTORY NOTICE UNDER SECTI ON 143(2) OF THE ACT, THE TRIBUNAL HAD RIGHTLY QUASHE D THE ASSESSMENT AS NULL AND VOID. 6.1. THE HONBLE DELHI HIGH COURT IN THE CASE OF P R. CIT VS. SILVERLINE (2016) 383 ITR 455 (DEL.) HELD THAT ORDER OF RE- ASSESSMENT CANNOT BE PASSED WITHOUT NOTICE UNDER SE CTION 143(2) OF THE I.T. ACT. THE JURISDICTIONAL ERROR CA NNOT BE CURED BY SECTION 292BB OF THE I.T. ACT. IT IS, WELL SETT LED LAW THAT BEFORE PASSING THE RE-ASSESSMENT ORDER, A.O. SHALL HAVE TO PREPARE AND SERVE NOTICE UPON ASSESSEE UNDER SECTIO N 143(2) OF THE I.T. ACT. THE LD. PR. CIT, HOWEVER, OBSERVED THAT NO FORMAL NOTICE UNDER SECTION 143(2) HAVE BEEN ISSUED TO THE ASSESSEE. THEREFORE, THESE FACTS CLEARLY SHOW THAT BEFORE 36 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. FRAMING THE RE-ASSESSMENT ORDER UNDER SECTIONS 147/ 148 OF THE I.T. ACT, NO NOTICE UNDER SECTION 143(2) HAVE B EEN PREPARED, ISSUED AND SERVED UPON THE ASSESSEE. THER EFORE, RE-ASSESSMENT ORDER IS ILLEGAL, INVALID AND BAD IN LAW AND IS LIABLE TO BE SET ASIDE. IT IS WELL SETTLED LAW THAT ASSESSEE CAN CHALLENGE THE VALIDITY OF THE RE-ASSESSMENT PROCEED INGS IN THE COLLATERAL PROCEEDINGS (RELATING TO EXAMINATION OF VALIDITY OF ORDER PASSED) UNDER SECTION 263 OF THE I.T. ACT. WE RELY UPON THE ORDER OF ITAT, MUMBAI BENCH IN THE CASE OF WEST LIFE DEVELOPMENT LTD., VS. PCIT 49 ITR (TRIBU.) 406 IN W HICH IT WAS HELD ALLOWING THE APPEAL (I) THAT JURISDICTION ASPECT OF THE ORDER PASSED IN THE PRIMARY PROCEEDINGS CAN BE EXAMINED IN COLLATERAL PROCEEDINGS ALSO. THUS, THE ASSESSEE COULD BE PERMITTED TO CHALLENGE THE VALIDITY OF THE ORDER PASSED UNDER SECTION 263 ON THE GROUND THAT THE ASS ESSMENT ORDER WAS NON-EST. SINCE THE RE-ASSESSMENT ORDER I TSELF IS BAD IN LAW, THEREFORE, LEARNED COUNSEL FOR THE ASSE SSEE, RIGHTLY CONTENDED THAT THE SAME CANNOT BE REVISED U NDER SECTION 263 OF THE I.T. ACT. ONLY VALID RE-ASSESSME NT ORDER CAN BE REVISED UNDER SECTION 263 OF THE I.T. ACT. O N THIS 37 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. GROUND ITSELF THE PROCEEDINGS UNDER SECTION 263 OF THE I.T. ACT ARE BAD IN LAW AND LIABLE TO BE QUASHED. WE, ACCORD INGLY, SET ASIDE THE ORDER OF LD. PR. CIT PASSED UNDER SECTION 263 OF THE I.T. ACT AND QUASH THE SAME. IN VIEW OF THE ABO VE, THE REMAINING PLEA OF THE ASSESSEE ARE NOT REQUIRED TO BE ADJUDICATED. HOWEVER, WE MAY BRIEFLY NOTE THAT A.O. EXAMINED ENTIRE SEIZED MATERIAL AT THE TIME OF RECO RDING REASONS AND RE-ASSESSMENT STAGE. THE ASSESSEE PRODU CED SUFFICIENT EVIDENCES AT THE RE-ASSESSMENT PROCEEDIN GS TO PROVE THE IDENTITY OF THE CREDITORS, THEIR CREDITWO RTHINESS AND GENUINENESS OF THE TRANSACTION. THE A.O. ALSO MADE DIRECT ENQUIRY BY ISSUING SUMMONS UNDER SECTION 133(6) OF THE I.T. ACT TO THE INVESTORS WHO HAVE ALSO REPLIED DIRECTLY TO THE A.O. THEREFORE, A.O. RIGHTLY ACCEPTED THE CREDITS AS GEN UINE. IN VIEW OF THE ABOVE FINDING, THERE IS NO NEED TO GIVE A FINDING IN DETAIL ON MERITS. IN VIEW OF THE ABOVE, WE ALLOW TH E APPEAL OF ASSESSEE. 7. IN THE RESULT, ITA.NO.2269/DEL./2017 OF THE ASSESSEE IS ALLOWED. 38 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ITA.NO.2857/DEL./2017 M/S. SPJ HOTELS PVT. LTD., NEW DELHI 8. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. PR. CIT-8, NEW DELHI, DATED 22.03.2017, FOR THE A.Y. 2007-2008 UNDER SECTION 26 3 OF THE I.T. ACT, 1961. 9. BRIEFLY THE FACTS OF THE CASE ARE THAT IN THIS CASE SIMILAR INFORMATION ABOUT ENTRY OPERATORS AND THEIR BENEFICIARIES OF DELHI WAS RECEIVED FROM THE O/O. D IT, (INV.)-II, DELHI, ALONG WITH DETAILED REPORT GIVING WORKING OF ENTRY OPERATORS WITH A LIST OF BENEFICIARIES. AFTER MAKIN G INQUIRIES, THE ADDL. DIT, UNIT-VI OF INVESTIGATION IN HIS REPO RT HAS ESTABLISHED LARGE AMOUNT OF TAX EVASION IN THE TRAN SACTIONS BETWEEN ENTRY OPERATORS AND THE BENEFICIARIES. IT W AS REVEALED FROM THE LIST THAT THE ASSESSEE-COMPANY VI Z., M/S. SPJ HOTELS PRIVATE LIMITED DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL HAD TAKEN ACCOMMODATION ENTRIES FROM M/S. HILLRIDGE INVESTMEN TS LTD., 39 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. AND M/S. VOGUE LEASING & FINANCE PRIVATE LIMITED IN A SUM OF RS.5 LAKHS EACH ON 28.03.2017. THE A.O. REOPENED THE ASSESSMENT UNDER SECTION 148 OF THE I.T. ACT. NOTIC E UNDER SECTION 148 WAS ISSUED ON 25.03.2014 AFTER RECORDIN G THE REASONS AND TAKING PRIOR APPROVAL OF THE COMPETENT AUTHORITY. IN RESPONSE THERETO, ASSESSEE SUBMITTED A LETTER STATING THEREIN THAT IT WAS INCORPORATED ON 05.03.2 007 AND FILED FIRST RETURN OF INCOME FOR A.Y. 2008-2009 FOR THE PERIOD FROM 05.03.2007 TO 31.03.2008 DECLARING NIL INCOME. IT WAS, THEREFORE, SUBMITTED THAT NIL RETURN MAY BE TREATED AS RETURN HAVING BEEN FILED FOR A.Y. 2007-2008 UNDER APPEAL. THE ASSESSEE ASKED FOR COPY OF REASONS FOR REOPENING OF THE ASSESSMENT. THE ASSESSEE ATTENDED THE PROCEEDINGS B EFORE A.O. TIME TO TIME AND FILED DETAILS OF SHARE CAPITA L RECEIVED FROM 04 PARTIES IN A SUM OF RS.5 LAKHS EACH I.E., ( 1) M/S. HILLRIDGE INVESTMENTS LTD., (2) M/S. VOGUE LEASING & FINANCE PRIVATE LIMITED (3) M/S. PELICON FINANCE & LEASING LIMITED, AND (4) M/S. PITAMBARA SECURITIES PVT. LTD., A.O. D ISPOSED OF THE OBJECTIONS OF THE ASSESSEE. IT IS NOTED IN THE REASONS THAT HE HAS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX IN A 40 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. SUM OF RS.10 LAKHS ON ACCOUNT OF ACCOMMODATION ENTR IES HAS ESCAPED ASSESSMENT. THE A.O. AFTER CONSIDERING THE EVIDENCES AND MATERIAL ON RECORD MADE THE ADDITION OF RS.20 LAKHS IN RESPECT OF FOUR CORPORATE ENTITIES UNDER S ECTION 68 OF THE I.T. ACT AND MADE FURTHER ADDITION OF RS.40,000 /- ON ACCOUNT OF COMMISSION EXPENSES FOR TAKING ACCOMMODA TION ENTRIES. THE RE-ASSESSMENT ORDER UNDER SECTIONS 144 /148 DATED 18.03.2015 WAS PASSED ACCORDINGLY. 10. THE LD. PR. CIT CONSIDERED THE AFORESAID RE- ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND NOTED THAT INVESTIGATI ON WING HAS FORWARDED HARD COPY OF APPRAISAL REPORT TO SHOW THAT ASSESSEE RECEIVED ACCOMMODATION ENTRIES. HOWEVER, A .O. HAS TAKEN IT AT RS.10 LAKHS ONLY AS AGAINST RS.1 CRORE. SHOW CAUSE NOTICE UNDER SECTION 263 OF THE I.T. ACT WAS ISSUED STATING THEREIN THAT ASSESSEE HAS RECEIVED RS.50 LA KHS EACH AS ACCOMMODATION ENTRIES FROM HILLRIDGE INVESTMENTS LTD., AND M/S. VOGUE LEASING & FINANCE PRIVATE LIMITED. EXPLANATION OF ASSESSEE WAS CALLED FOR BECAUSE THE ASSESSMENT ORDER WAS ERRONEOUS IN SO FAR AS IT IS P REJUDICIAL 41 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. TO THE INTERESTS OF THE REVENUE BECAUSE THE A.O. HA S NOT EXAMINED THE SEIZED MATERIAL AND HAS FAILED TO TAX THE AMOUNT OF RS.1 CRORE AS UNEXPLAINED CREDIT IN THE B OOKS OF ACCOUNT OF THE ASSESSEE. THE ASSESSEE FILED REPLY I N WHICH IT WAS BRIEFLY EXPLAINED THAT THE A.O. IN THE REASONS FOR REOPENING OF THE ASSESSMENT RECORDED THAT THERE IS ESCAPEMENT OF INCOME OF RS.10 LAKHS. THEREFORE, ENT IRE PROCEEDINGS ARE BASED ON NON-APPLICATION OF MIND BY THE A.O. THE ASSESSEE REQUESTED FOR CROSS-EXAMINATION TO THE STATEMENT OF SHRI S.K. JAIN. THE PR. CIT NOTED THAT CORRECT AMOUNT OF ACCOMMODATION ENTRIES FROM BOTH THESE COM PANIES ARE RS.50 LAKHS EACH INSTEAD OF RS.5 LAKHS. THE LD. PR. CIT ALSO NOTED THAT A.O. FAILED TO CONSIDER THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE CASE OF SH RI S.K. JAIN, THEREFORE, A.O. PASSED THE RE-ASSESSMENT ORDE R WITHOUT PROPER VERIFICATION AND ENQUIRIES. THEREFORE, RE-AS SESSMENT ORDER WAS SET ASIDE AND A.O. WAS DIRECTED TO PASS T HE ORDER AFRESH AS PER LAW. 11. LEARNED COUNSEL FOR THE ASSESSEE REITERATED TH E SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERRED 42 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. TO PB-1 WHICH IS REASONS RECORDED FOR REOPENING OF THE ASSESSMENT IN WHICH A.O. FOUND THAT INCOME OF RS.10 LAKHS HAS ESCAPED ASSESSMENT. HOWEVER, THE LD. PR. CIT NO TED THAT AMOUNT IS RS.50 LAKHS EACH IN BOTH THE CASES, THERE FORE, ESCAPEMENT OF INCOME IS OF RS.1 CRORE. HE HAS, THER EFORE, SUBMITTED THAT REASONS RECORDED FOR REOPENING OF TH E ASSESSMENT ARE INVALID, INCORRECT AND NON-EXISTING. THEREFORE, RE-ASSESSMENT ORDER IS INVALID AND BAD IN LAW. HE H AS SUBMITTED THAT A.O. CONSIDERED THE SEIZED MATERIAL ON RECORD AND THAT IT IS A NON-APPLICATION OF MIND BY THE A.O . TO FRAME RE-ASSESSMENT ORDER. IN SUPPORT OF THIS CONTENTION, HE HAS RELIED UPON THE JUDGMENTS OF HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS. SUREN INTERNATIONAL (2013) 357 ITR 24 (DEL.), JUDGMENT OF DELHI HIGH COURT IN THE CASE OF PCIT VS . RMG POLYVINYL (I) LTD., (2017) 396 ITR 5 (DEL.) AND JUD GMENT OF DELHI HIGH COURT IN THE CASE OF SNG DEVELOPERS LTD. , (2018) 404 ITR 312 (DEL.). HE HAS SUBMITTED THAT SINCE RE- ASSESSMENT ORDER WAS INVALID AND BAD IN LAW, THEREF ORE, SAME CANNOT BE REVISED UNDER SECTION 263 OF THE I.T . ACT. NO CROSS-EXAMINATION HAVE BEEN ALLOWED TO THE STATEMEN T OF SHRI 43 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. S.K. JAIN, THEREFORE, RE-ASSESSMENT ORDER IS BAD IN LAW AND CANNOT BE REVIEWED. HE HAS, THEREFORE, SUBMITTED TH AT PROCEEDINGS UNDER SECTION 263 OF THE I.T. ACT MAY B E QUASHED. 12. ON THE OTHER HAND, LD. D.R. RELIED UPON THE OR DER OF THE LD. PR. CIT AND SUBMITTED THAT FIGURE IN THE REASONS IS WRONGLY MENTIONED. HE HAS FILED WRITTEN SUBMISSIONS AND RELIED UPON SOME JUDGMENTS AS RELIED IN CASE OF SUP ERSONIC TECHNOLOGIES PVT. LTD., (SUPRA). THEREFORE, LD. PR. CIT RIGHTLY CONSIDERED RE-ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS WEL L SETTLED LAW THAT VALIDITY OF RE-ASSESSMENT PROCEEDINGS IS T O BE JUDGED WITH REFERENCE TO THE REASONS RECORDED UNDER SECTIONS 147/148 OF THE I.T. ACT. IN THE PRESENT CASE, A.O. HAS RECORDED REASONS FOR REOPENING OF THE ASSESSMENT ON 25.03.2014, COPY OF WHICH IS FILED AT PAGE-1 OF PAP ER BOOK. SAME READS AS UNDER : 44 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. REASONS FOR ISSUE OF NOTICE U/S 148 OF THE I.T.ACT, 1961 IN THE CASE OF M/S. SPJ HOTELS (PV LIMITED, PAN AAKCS7722C FOR THE A.Y. 2007-08 - REG . 25.03.2014 : INFORMATION ABOUT ENTRY OPERATORS AND THEIR BENEFICIARIES OF DELHI HAS BEEN RECEIVED FROM THE O FFICE OF THE DIT .(INV.)-II, NEW DELHI VIDE LETTER F. NO. DLT(INV)-1 48/2011- 12/7539 DATED 21,03.2012 AND F. NO. DIT (INV)-II/U/ S 148/ 2012- 13/196 DATED 12.03.2013 ALONG WITH DETAILED REPORT GIVING WORKING OF ENTRY OPERATORS WITH A LIST OF BENEFICIARIES. AF TER MAKING INQUIRIES, THE ADDL. DIRECTORATE OF INCOME TAX, UNI T - VI OF INVESTIGATION, IN HIS REPORT HAS ESTABLISHED LARGE AMOUNT OF TAX EVASION IN THE TRANSACTIONS BETWEEN ENTRY OPERATORS AND THE BENEFICIARIES. IT IS REVEALED FROM THE LIST THAT TH E ASSESSEE COMPANY M/S. SPJ HOTELS (P) LIMITED (TERMED AS BENEFICIARY) DURING THE PREVIOUS YEAR 2006-2007 RELEVANT TO ASSESSMENT. YEA R 2007-2008 HAD TAKEN ACCOMMODATION ENTRIES TOTALING RS.L0,00,0 00/- FROM THE PERSONS/PARTIES (TERMED AS ENTRY OPERATORS). THESE ENTRIES HAVE BEEN INVESTIGATED BY THE INVESTIGATION WING AND FOU ND TO BE GIVEN 45 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. AS ACCOMMODATION ENTRIES FROM ENTITIES OPERATED AND CONTROLLED BY SURENDER KUMAR JAIN. THE DETAILS OF WHICH ARE MENTI ONED BELOW : BENEFICIARYS NAME AMOUNT (RS.) ENTRY PROVIDER CHEQUE/ P.O.NO. DATED M/S. SPJ HOTELS (P) LIMITED 5,00,000/- M/S. HILLRIDGE INVESTMENTS LIMITED. 011048 28.03.2007 M/S. SPJ HOTELS (P) LIMITED 5,00,000/ - M/S. VOGUE LEASING & FINANCE (P) LIMITED 011047 28.03.2007 I HAVE VERY CAREFULLY CONSIDERED THE AFORESAID PIEC E OF INFORMATION AND THE MODUS OPERANDI OF THE ENTRY OPE RATOR SURENDER KUMAR JAIN AND ITS CONTROLLED ENTITIES. I FIND THAT THE QUANTUM OF AMOUNT OF SUCH ENTRIES RECEIVED BY THE ASSESSEE COM PANY M/S. SPJ HOTELS (P) LIMITED AS PER DETAILS MENTIONED ABOVE I S RS.10,00,000/- . THESE ACCOMMODATION ENTRIES TAKEN BY M/S. SPJ HOT ELS (P) LIMITED ARE EARLIER IDENTIFIED AND EXAMINED BY THE INVESTIGATION WING TO ESTABLISH THAT ALL THESE ENTRY PROVIDING EN TITIES WERE TOOLS IN SURENDER KUMAR JAIN BUSINESS OF PROVIDING ACCOMM ODATION ENTRIES IN LIEU OF CASH/CHEQUES THROUGH WHICH HE HA D DRAWN A LONG 46 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. TRAIL OF BANK TRANSACTION TO IMPART A COLOR OF GENU INENESS ON THESE TRANSACTIONS. IN VIEW OF FACTS STATED HEREIN ABOVE, I AM OF THE C ONSIDERED OPINION & BELIEF THAT THE ASSESSEE COMPANY MANAGED THE ABOVE SAID TRANSACTIONS OF ACCOMMODATION ENTRIES OUT OF ITS IN COME FROM UNDISCLOSED SOURCES. IN THIS CASE, AS PER RECORDS A VAILABLE, THE ASSESSEE HAS NOT FILED ITS RETURN OF INCOME FOR THE A.Y. 2007-08. IN VIEW OF ABOVE, I HAVE REASON TO BELIEVE THAT INCOME OF RS.10,00,000/- HAS ESCAPED ASSESSMENT WITHIN THE ME ANINGS OF THE PROVISIONS OF SECTION 147 OF THE INCOME TAX ACT, 19 61. THEREFORE, A NOTICE U/S. 148 OF THE INCOME TAX ACT, 1961 IS REQU IRED TO BE ISSUED TO THE ASSESSEE COMPANY TO ASSESS THE INCOME ESCAPE D AS STATED HEREINABOVE. AS THE PERIOD TO REOPEN THE CASE EXCEE DS FOUR YEARS AND AS PER RECORDS NO SCRUTINY ASSESSMENT HAS BEEN DONE IN THIS CASE FOR THE A.Y. 2007-08, APPROVAL FROM THE ADDL. COMMISSIONER OF INCOME TAX, RANGE-9, NEW DELHI HAS BEEN OBTAINED VIDE LETTER DATED 25.03.2014 TO ISSUE NOTICE U/S.148, AS PER TH E PROVISIONS OF SECTION 151(2) OF THE I.T. ACT. THEREFORE ISSUE NOTICE U/S. 148 OF THE I.T. ACT. 47 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. SD/-VIRENDER KUMAR RATHEE ITO, WARD 9(2), NEW DELHI. 13.1. IN THE AFORESAID REASONS FOR REOPENING OF TH E ASSESSMENT, IT IS MENTIONED THAT ASSESSEE COMPANY R ECEIVED SHARE CAPITAL ON ACCOUNT OF ACCOMMODATION ENTRIES O F RS.5 LAKHS EACH FROM M/S. HILLRIDGE INVESTMENT PVT. LTD. , AND M/S. VOGUE LEASING & FINANCE PVT. LTD., BASED ON INFORMA TION AND SEIZED MATERIAL RECEIVED FROM INVESTIGATION WING. H OWEVER, THE ASSESSEE EXPLAINED BEFORE A.O. THAT AMOUNT IN Q UESTION IS RS.20 LAKHS FROM FOUR PARTIES. THE A.O. IN THE RE-A SSESSMENT ORDER MADE ADDITION OF RS.20 LAKHS ON ACCOUNT OF UNEXPLAINED CREDIT ON ACCOUNT OF ACCOMMODATION ENTR IES RECEIVED FROM FOUR PARTIES AND ALSO MADE ADDITION O F RS.40,000/- ON ACCOUNT OF COMMISSION PAID TO ENTRY OPERATORS. ON THE BASIS OF THE SAME MATERIAL, THE P R. CIT INITIATED THE PROCEEDINGS UNDER SECTION 263 OF THE I.T. ACT ON THE REASONS THAT AMOUNT IN QUESTION IS NOT RS.10 LA KHS RECEIVED FROM THESE TWO COMPANIES, BUT, IT IS RS.50 LAKHS EACH I.E., RS.1 CRORE. THUS, THE FACTS MENTIONED IN THE REASONS FOR REOPENING OF THE ASSESSMENT ARE INCORRECT AND N ON- 48 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. EXISTENT. THE HONBLE PUNJAB & HARYANA HIGH COURT I N THE CASE OF CIT VS. ATLAS CYCLE INDUSTRIES (1989) 180 I TR 319 (P & H) HELD AS UNDER : HELD (I) THAT THE TRIBUNAL WAS RIGHT IN CANCELLING THE REASSESSMENT AS BOTH THE GROUNDS ON WHICH THE REASSESSMENT NOTICE WAS ISSUED WERE NOT FOUND TO EX IST, AND, THEREFORE, THE INCOME-TAX OFFICER DID NOT GET JURISDICTION TO MAKE A REASSESSMENT. 13.2. SINCE THE FACTS ARE TOTALLY DIFFERENT AS A.O . HAD REASON TO BELIEVE THAT RS.10 LAKHS HAS ESCAPED ASSE SSMENT ON ACCOUNT OF RS.5 LAKHS RECEIVED FROM TWO COMPANIE S REFERRED TO ABOVE, WHICH WAS ULTIMATELY FOUND TO BE INCORRECT AND NON-EXISTENT, THEREFORE, THERE MAY NOT BE ANY A PPLICATION OF MIND ON THE PART OF THE A.O. TO PROCEED TO INITI ATE THE RE- ASSESSMENT PROCEEDINGS. THERE IS NO OTHER MATERIAL AVAILABLE ON RECORD EXCEPT THE INFORMATION RECEIVED FROM THE INVESTIGATION WING. THE A.O. ON THE BASIS OF THE IN FORMATION AND MATERIAL RECEIVED FROM INVESTIGATION WING HAS R ECORDED REASONS FOR REOPENING OF THE ASSESSMENT WHICH WAS ULTIMATELY FOUND TO BE INCORRECT AND NON-EXISTENT. IT IS WELL 49 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. SETTLED LAW THAT WHEN NO NEW MATERIAL OTHER THAN EX AMINED BY THE A.O ORIGINALLY FOUND ON RECORD FOR THE PURPO SE OF INITIATING THE RE-ASSESSMENT PROCEEDINGS, THE PROCE EDINGS UNDER SECTION 148 OF THE I.T. ACT WOULD BE INVALID AND BAD IN LAW. WE RELY UPON DECISION OF DELHI HIGH COURT IN T HE CASE OF ATUL KUMAR SWAMY 362 ITR 693, CONSULTING ENGINEERS SERVICES INDIA PVT. LTD., 378 ITR 318, NESTLE INDIA LTD., 384 ITR 334 AND PRIYADESH GUPTA 385 ITR 452. THE HONBL E DELHI HIGH COURT IN THE CASE OF SNG DEVELOPERS LTD., 404 ITR 312 HELD THAT WHEN A.O. INITIATED THE RE-ASSESSMENT PRO CEEDINGS WITHOUT APPLICATION OF MIND, SUCH PROCEEDINGS WOULD BE INVALID. A.O. IN THE PRESENT CASE HAS FAILED TO VER IFY THE INFORMATION RECEIVED FROM INVESTIGATION WING. THERE FORE, IT IS NON-APPLICATION OF MIND ON THE PART OF THE A.O. TO RECORD CORRECT FACTS IN THE REASONS FOR REOPENING OF THE A SSESSMENT. IN SUCH CIRCUMSTANCES, THE RE-ASSESSMENT ORDER COUL D NOT BE TREATED AS VALID AND IN ACCORDANCE WITH LAW. SINCE RE- ASSESSMENT PROCEEDINGS ARE INVALID AND BAD IN LAW, THEREFORE, SUCH PROCEEDINGS COULD NOT BE REVISED UN DER SECTION 263 OF THE I.T. ACT. FOLLOWING THE REASONS FOR DECISION 50 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. IN THE CASE OF M/S. SUPERSONIC TECHNOLOGIES PVT. LT D., (SUPRA), WE SET ASIDE THE ORDER PASSED BY THE LD. PR. CIT UN DER SECTION 263 OF THE I.T. ACT AND QUASH THE SAME. 14. IN THE RESULT, ITA.NO.2857/DEL./2017 OF THE ASSESSEE IS ALLOWED. ITA.NO.2527/DEL./2017 M/S. SHIV SAI INFRASTRUCTUR E (P) LTD., NEW DELHI. 15. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. PR. CIT-8, NEW DELHI, DATED 24.03.2017, FOR THE A.Y. 2007-2008 UNDER SECTION 26 3 OF THE I.T. ACT, 1961. 16. THE FACTS OF THE CASE ARE THAT NOTICE UNDER SE CTION 148, DATED 28.03.2014 WAS ISSUED TO THE ASSESSEE AF TER RECORDING THE REASONS AND OBTAINING APPROVAL OF CIT -3, NEW DELHI. IN COMPLIANCE TO THE NOTICE UNDER SECTION 14 8, THE ASSESSEE HAS FURNISHED RETURN ON 01.05.2014. THE AS SESSEE STATED BEFORE A.O. THAT THE INCOME DECLARED IN THE ITR UNDER SECTION 148 REMAIN THE SAME AS DECLARED IN THE ORIG INAL RETURN OF INCOME FILED UNDER SECTION 139 OF THE I.T . ACT DATED 51 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 30.10.2007. IT WAS FURTHER STATED THAT INCOME OF RS.33,79,596/- AS DECLARED IN THE RETURN OF INCOME UNDER SECTION 139 HAS BEEN ACCEPTED AND ASSESSED TO TAX U NDER SECTION 143(3) VIDE ORDER DATED 27.11.2009. THE A.O . AFTER CONSIDERING THE MATERIAL ON RECORD AND SUMMONS ISSU ED UNDER SECTION 131(1) OF THE I.T. ACT AND NOTICE UND ER SECTION 133(6) AND OTHER MATERIAL ON RECORD, ACCEPTED THE R ETURN OF INCOME AND PASSED THE RE-ASSESSMENT ORDER UNDER SEC TION 143(3) R.W.S. 147 OF THE I.T. ACT, DATED 30.03.2015 . 17. THE LD. PR. CIT FOUND THE SAID RE-ASSESSMENT O RDER TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO T HE INTERESTS OF THE REVENUE. IT IS NOTED THAT ASSESSMENT WAS REOPEN ED UNDER SECTION 148 ON THE ALLEGATION OF ACCOMMODATION ENTR IES TAKEN FROM SHRI S.K. JAIN GROUP OF CONCERNS WHO WERE SEAR CHED ON 14.09.2010 BY THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT. SOME OF THE ASSESSING OFFICERS DID NOT EXAMINE THE SEIZED MATERIAL IN THE FORM OF CASH BOOK AND TH E BOOKS CONTAINING THE DETAILS OF CHEQUES ISSUED BY SUCH CO NCERNS SEIZED FROM THE PREMISES OF SHRI S.K. JAIN. NOTICE UNDER SECTION 263 OF THE I.T. ACT WAS ISSUED TO THE ASSES SEE WHICH 52 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. IS REPRODUCED IN THE IMPUGNED ORDER IN WHICH IT IS NOTED THAT CASE WAS REOPENED ON THE BASIS OF THE ALLEGATION OF ACCOMMODATION ENTRY ON ACCOUNT OF SHARE CAPITAL/SHA RE PREMIUM/SHARE APPLICATION MONEY FROM M/S. HILLRIDGE INVESTMENTS LTD., AND M/S. VOGUE LEASING & FINANCE PVT. LTD., CONCERNS OF SHRI S.K. JAIN GROUP OF CASES. TH E A.O. ACCEPTED THE RETURN OF INCOME ON THE BASIS OF CONFI RMATIONS FROM THE SAID INVESTORS. THE EVIDENCES FOUND DURING THE COURSE OF SEARCH IN THE CASE OF SHRI S.K. JAIN GROU P OF CASES HAVE NOT BEEN EXAMINED BY THE A.O. REPLY OF THE ASS ESSEE WAS CALLED FOR IN WHICH THE ASSESSEE EXPLAINED THAT THE A.O. AFTER EXAMINING THE ENTIRE DETAILS AND DOCUMENTARY EVIDENCES ON RECORD AND MAKING DIRECT/INDEPENDENT ENQUIRY FRO M BOTH THE INVESTORS UNDER SECTIONS 131(1) AND 133(6) OF T HE I.T. ACT, COMPLETED THE ASSESSMENT PROCEEDINGS. THE ASSESSEE FILED ALL THE DOCUMENTARY EVIDENCES BEFORE A.O. I.E., CONFIRM ATION LETTERS FROM BOTH THE INVESTORS, COPY OF THEIR BANK ACCOUNTS, COPY OF ITR, COPY OF PAN, COPY OF AUDITED BALANCE S HEET, COPY OF MASTER DATA TAKEN FROM OFFICIAL WEBSITE OF MCA A ND ASSESSMENT ORDER UNDER SECTION 153C/153A IN THE CAS E OF 53 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. M/S. HILLRIDGE INVESTMENTS LTD., THE SEIZED PAPERS ARE ONLY ROUGH PAPERS AND NO DETAILS HAVE BEEN MENTIONED THE REIN. THE LD. PR. CIT HOWEVER, DID NOT ACCEPT THE CONTENT ION OF ASSESSEE AND NOTED THAT SEIZED DOCUMENTS RECOVERED DURING THE COURSE OF SEARCH IN THE CASE OF SHRI S.K. JAIN GROUP OF CASES HAVE NOT BEEN EXAMINED AND CONSIDERED BY THE A.O. WHILE FRAMING THE RE-ASSESSMENT ORDER. THE LD. PR. CIT ALSO NOTED THAT VERIFICATION OF THE SEIZED DOCUMENTS SHO WS THE AMOUNT IN QUESTION IS RS.2.20 CRORES BUT AS PER THE DETAILS GIVEN IN THE NOTICE UNDER SECTION 263 OF THE I.T. A CT, THE AMOUNT IS MENTIONED AS RS.2.90 CRORES. THE CONTENTI ON OF THE ASSESSEE THAT THE SEIZED MATERIAL DID NOT BELONG TO THE ASSESSEE WAS REJECTED. THE RE-ASSESSMENT ORDER WAS SET ASIDE AND RESTORED TO THE A.O. FOR PASSING THE ORDE R AFRESH AS PER LAW. 18. THE ASSESSEE IN THE PRESENT APPEAL HAS CHALLEN GED THE ORDER UNDER SECTION 263 OF THE IT. ACT. THE ASS ESSEE ALSO MOVED AN APPLICATION FOR ADMISSION OF THE FOLLOWING ADDITIONAL GROUND. 54 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT OUGHT NOT TO HAVE REVISED RE- ASSESSMENT ORDER UNDER SECTION 147/143(3) AS THE SAID RE-ASSESSMENT ORDER WAS VOID AND BAD IN LAW DUE TO ILLEGAL ASSUMPTION OF JURISDICTION. 18.1. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITT ED THAT ADDITIONAL GROUND IS LEGAL IN NATURE AND NO FR ESH FACTS ARE TO BE INVESTIGATED. THE ADDITIONAL GROUND GOES TO THE ROOT OF THE MATTER AND THEREFORE, PRAYED THAT THE SAME M AY BE ADMITTED FOR DISPOSAL OF THE APPEAL. LEARNED COUNSE L FOR THE ASSESSEE RELIED UPON THE DECISION OF HONBLE SUPREM E COURT IN THE CASE OF NTPC LIMITED VS. CIT (1998) 229 ITR 383 (SC) AND CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY (20 17) 397 ITR 344 (SC) AND DECISION OF HONBLE PUNJAB & HARYA NA HIGH COURT IN THE CASE OF VMT SPINNING CO. LTD., VS. CIT , LUDHIANA AND ANOTHER (2016) 389 ITR 326 (P & H). 19. ON THE OTHER HAND, LEARNED D.R. OBJECTED TO TH E ADMISSION OF ADDITIONAL GROUND OF APPEAL. 55 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 20. CONSIDERING THE FACTS OF THE CASE, WE ARE OF T HE VIEW THAT ADDITIONAL GROUND IS LEGAL IN NATURE AND GOES TO THE ROOT OF THE MATTER. THEREFORE THE SAME SHALL HAVE T O BE ADMITTED FOR THE PURPOSE OF DISPOSAL OF THE APPEAL. WE, ACCORDINGLY, ADMIT THE ADDITIONAL GROUND OF APPEAL. LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT RE-ASSESSME NT ORDER IN THIS CASE UNDER SECTION 143(3)/147 IS INVALID AN D BAD IN LAW AND AS SUCH, THE SAME COULD NOT BE REVISED UNDE R SECTION 263 OF THE I.T. ACT. HE HAS SUBMITTED THAT IN FACT SAID ISSUE CAN BE RAISED IN COLLATERAL PROCEEDINGS AS IS HELD IN THE FOLLOWING JUDICIAL DECISIONS. (I) CLASSIC FLOUR & FOOD PROCESSING P. LTD., VS. CI T, KOLKATA ITA.NO.764-766/KOL./2014, DATED 05.04.2017 OF ITAT KOLKATA BENCH. (II) KRISHAN KUMAR SARAF VS. CIT (2016) 46 ITR 387 (ITAT) (DELHI BENCH). (III) WESTLIFE DEVELOPMENT LTD., VS. PR. CIT (2016) 49 ITR 406 (ITAT) (MUMBAI BENCH). 20.1. LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO SEVERAL DOCUMENTS IN THE PAPER BOOK IN SUPPORT OF T HE CONTENTION THAT ENTIRE DOCUMENTARY EVIDENCES WERE F ILED BEFORE A.O. AT THE ORIGINAL ASSESSMENT STAGE AS WEL L AS IN THE 56 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. RE-ASSESSMENT PROCEEDINGS TO PROVE GENUINENESS OF T HE SHARE CAPITAL MONEY RECEIVED FROM THE INVESTORS. PB-45 IS CONFIRMATION OF M/S. HILLRIDGE INVESMENT LTD. PB-46 IS BANK STATEMENT. PB-49 IS ITR OF M/S. HILLRIDGE INVESMENT LTD. PB- 50 TO 53 ARE CONFIRMATION, BANK STATEMENT AND ITR O F M/S. VOGUE LEASING & FINANCE PVT. LTD. PB-307 IS ORDER S HEET OF THE A.O. ALL DOCUMENTARY EVIDENCES WERE FILED BEFOR E A.O. IN BOTH THE PROCEEDINGS. PB-68 IS COPY OF THE REASONS RECORDED UNDER SECTION 148 OF THE I.T. ACT IN WHICH THE AMOU NT OF RS.2.90 CRORES AS ACCOMMODATION ENTRIES HAVE BEEN MENTIONED INSTEAD OF RS.2.20 CRORES. PB-60 IS NOTIC E UNDER SECTION 148 DATED 28.03.2014. PB-57 IS ORIGINAL ASS ESSMENT ORDER UNDER SECTION 143(3) DATED 27.11.2009. HE HAS , THEREFORE, SUBMITTED THAT RE-ASSESSMENT DONE AFTER FOUR YEARS AND IN THE REASONS AS WELL AS IN THE NOTICE UNDER S ECTION 148 OF THE I.T. ACT, 1961, THE A.O. HAS NOT MENTIONED A NYTHING IF THERE WAS ANY FAILURE ON THE PART OF THE ASSESSEE T O DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS AT EVERY STAGE F OR THE PURPOSE OF ASSESSMENT AND RE-ASSESSMENT. THE ASSESS EE DECLARED SHARE APPLICATION MONEY RECEIVED FROM TWO PARTIES. 57 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. HOWEVER, IN THE REASONS NAME OF NONE OF PARTIES HAV E BEEN MENTIONED. IN THE ORIGINAL ASSESSMENT PROCEEDINGS A N AMOUNT OF RS.2.20 CRORES HAVE BEEN MENTIONED. THERE FORE, IN THE REASONS THE FACTS HAVE BEEN WRONGLY MENTIONED. ALL THE FACTS AVAILABLE ON RECORD WERE CONSIDERED IN THE RE - ASSESSMENT PROCEEDINGS, THEREFORE, NO NEW MATERIAL HAS BEEN BROUGHT ON RECORD FOR REOPENING OF THE ASSESSMENT. ALL INCORRECT AND NON-EXISTING FACTS HAVE BEEN MENTIONE D IN THE REASONS FOR REOPENING OF THE ASSESSMENT. THE AMOUNT IN QUESTION IS ALSO WRONGLY MENTIONED IN THE REASONS. IN THE BOOKS OF ACCOUNT OF ASSESSEE, ASSESSEE HAS SHOWN TO HAVE RECEIVED SHARE APPLICATION MONEY FROM TWO INVESTORS IN A SUM OF RS.2.20 CRORES AND NOT RS.2.90 CRORES. LEARN ED COUNSEL FOR THE ASSESSEE REFERRED TO VARIOUS REPLIE S FILED BEFORE A.O. AT ORIGINAL ASSESSMENT STAGE AS WELL AS IN THE RE- ASSESSMENT PROCEEDINGS IN WHICH IT WAS CLEARLY HIGH LIGHTED THAT THERE IS APPLICATION OF MIND FROM THE SIDE OF THE A.O. TO FRAME THE RE-ASSESSMENT ORDER. PB-300 AND 301 IS RE PORT OF THE INSPECTOR TO SHOW THAT NOTICE UNDER SECTION 133 (6) HAVE BEEN SERVED UPON M/S. VOGUE LEASING & FINANCE PVT. LTD. 58 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. PB-319 IS THE REPORT OF THE INVESTIGATION WING WHIC H CLARIFIES THAT SUMMONS UNDER SECTION 131 AND NOTICE UNDER SEC TION 133(6) HAVE BEEN ISSUED ON THE DIRECTORS OF THE ASS ESSEE- COMPANY WHICH HAVE BEEN COMPLIED WITH. NECESSARY EN QUIRY HAVE BEEN CONDUCTED BY THE INSPECTOR OF THE OFFICE WHO HAS SUBMITTED HIS REPORT WITHOUT POINTING-OUT ANY SPECI FIC DISCREPANCY. PB-310-317 IS ORDER SHEET. LEARNED COU NSEL FOR THE ASSESSEE RELIED UPON DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF HARYANA ACRYLIC MANUFACTURING COMPAN Y VS. CIT (2009) 308 ITR 38 (DEL.) IN WHICH IT WAS HELD A S UNDER : CONCLUSION : AO WHILE MAKING ASSESSMENT UNDER S. 143(3) HAVING MADE SPECIFIC QUERIES WITH REGARD TO SHARE APPLICAT ION MONEY IN RESPONSE TO WHICH ASSESSEE FURNISHED ALL RELEVANT DOCUMENTS AND AFTER CONSIDERING THIS MATER IAL, AO HAVING COMPLETED THE ASSESSMENT, IT COULD NOT BE SAID THAT INCOME ESCAPED ASSESSMENT ON ACCOUNT OF FAILURE ON THE PART OF ASSESSEE TO DISCLOSE FULLY A ND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT, HENCE 59 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. REOPENING OF ASSESSMENT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR WAS INVALID . 20.2. IN THE CASE OF WELL INTERTRADE (P) LTD., & A NOTHER VS. INCOME TAX OFFICER (2009) 308 ITR 22 (DEL.) (HC ), THE HONBLE DELHI HIGH COURT HAS HELD AS UNDER : CONCLUSION : ASSESSEE HAVING FULLY AND TRULY DISCLOSED ALL THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT AS REQU IRED BY THE A.O, THE PRECONDITION FOR INVOKING THE PROVI SO TO SECTION 147 WAS NOT SATISFIED AND THEREFORE, A.O. A CTED WHOLLY WITHOUT JURISDICTION IN ISSUING NOTICE UNDER SECTION 148 BEYOND THE FOUR YEAR PERIOD MENTIONED I N SECTION 147. 20.3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THERE IS TOTALLY NON-APPLICATION OF MIND BY THE A.O . WHILE FRAMING THE RE-ASSESSMENT ORDER, THEREFORE, RE-ASSE SSMENT IS ILLEGAL AND BAD IN LAW. IN SUPPORT OF HIS CONTENTIO N, HE HAS RELIED UPON DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. RMG POLYVINYL (2017) 396 ITR 5 (DEL.), PR. CIT VS. 60 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. MEENAKSHI OVERSEAS PVT. LTD., (2017) 99-CCH-28-DEL. -HC, PR. CIT VS. G & G PHARMA INDIA LTD., (2016) 384 ITR 147 (DEL.). HE HAS SUBMITTED THAT THERE IS NO APPROVAL FOR REOP ENING OF THE ASSESSMENT BY THE COMPETENT AUTHORITY. HE HAS SUBMITTED THAT ALL THE SEIZED PAPERS WERE CONSIDERE D BY THE A.O, THEREFORE, REOPENING OF THE ASSESSMENT WAS BAD IN LAW, ILLEGAL AND AS SUCH LD. PR. CIT SHOULD NOT ASSUME J URISDICTION UNDER SECTION 263 OF THE I.T. ACT. 21. ON THE OTHER HAND, LEARNED D.R. REITERATED THE SUBMISSIONS MADE IN THE CASE OF M/S. SUPERSONIC TECHNOLOGIES PVT. LTD., DELHI. IN ITA.NO.2269/DEL./ 2017 HEREINABOVE. THE LEARNED D.R. SUBMITTED THAT SEIZED MATERIAL WAS NOT CONSIDERED BY THE A.O. SUMMONS UND ER SECTION 131 WERE NOT COMPLIED WITH. ALL MATERIAL FA CTS WERE NOT DISCLOSED. A.O. TOOK THE FIGURE OF RS.2.90 CRO RES IN THE REASONS BASED ON INFORMATION RECEIVED FROM INVESTIG ATION WING. THEREFORE, LD. PR. CIT CORRECTLY INVOKED JURI SDICTION UNDER SECTION 263 OF THE I.T. ACT. ASSESSEE CANNOT CHALLENGE VALIDITY OF RE-ASSESSMENT PROCEEDINGS UNDER SECTION 263 OF THE I.T. ACT. 61 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 22. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS WEL L SETTLED THAT THE LD. PR. CIT WHILE EXERCISING POWER UNDER S ECTION 263 OF THE I.T. ACT COULD NOT REVISE THE ASSESSMENT ORD ER WHICH WAS ILLEGAL, BAD IN LAW AND NON-EST IN THE EYE OF L AW. THE ASSESSEE CAN CHALLENGE THE VALIDITY OF THE RE-ASSES SMENT ORDER REFERRED TO UNDER SECTION 263 OF THE I.T. ACT BEING NON- EST AND ILLEGAL. THE CASE LAWS RELIED UPON BY THE L EARNED COUNSEL FOR THE ASSESSEE ARE SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. IN THE PRESENT CASE, A.O. PASSED THE ORIGINAL ASSESSMENT ORDER UNDER SECTION 143(3) OF THE I.T. ACT, DATED 27.11.2009. THE A.O. HAS MENTIO NED IN THE ASSESSMENT ORDER THAT DETAILS HAVE BEEN FILED BY AS SESSEE AND AFTER DISCUSSION OF THE CASE RETURN OF INCOME H AVE BEEN ACCEPTED. THE ASSESSEE IN THIS CASE RECEIVED SHARE APPLICATION MONEY/PREMIUM FROM TWO PARTIES AND FILE D SEVERAL DOCUMENTS ON RECORD TO PROVE GENUINE CREDIT IN THE MATTER WHICH IS ACCEPTED BY THE A.O. THEREAFTER, RE - ASSESSMENT PROCEEDINGS WERE INITIATED UNDER SECTION 148 OF THE I.T. ACT. THE A.O. IN THE NOTICE UNDER SECTION 148 AS WELL 62 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. AS IN THE REASONS DID NOT MENTION IF THERE IS ANY F AILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY AL L MATERIAL FACTS NECESSARY FOR ASSESSMENT. THEREFORE, THE DECI SIONS OF HONBLE DELHI HIGH COURT RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THE CASES OF HARYANA ACRYLIC MANUFACTURING CO. VS. CIT & ANOTHER (SUPRA) AND WEL L INTERTRADE (P) LTD., AND ANOTHER (SUPRA), ARE SQUAR ELY APPLICABLE TO THE FACTS OF THE CASE. THEREFORE, TH E RE- ASSESSMENT DONE AFTER FOUR YEARS FROM THE END OF TH E RELEVANT ASSESSMENT YEAR WOULD BE BAD IN LAW UNLESS THE INCO ME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY THE REASON OF FAILURE ON THE PAR T OF THE ASSESSEE TO MAKE RETURN UNDER SECTION 139 OR IN RES PONSE TO NOTICE ISSUED UNDER SECTION 142(1) OR SECTION 148 O R TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR ASSESSMENT FOR THAT ASSESSMENT YEAR. IN THE ABSENCE OF ANY SUCH DETAILS MENTIONED IN THE REASONS OR NOTICE UND ER SECTION 148, THE RE-ASSESSMENT ORDER WOULD BE INVALID AND B AD IN LAW. FURTHER A.O. RECORDED INCORRECT FACTS IN THE R EASONS FOR REOPENING OF THE ASSESSMENT BECAUSE THE AMOUNT IN Q UESTION 63 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. IS RS.2.20 CRORES BUT A.O. HAS MENTIONED IN THE REA SONS THE AMOUNT OF RS.2.90 CRORES WHICH ESCAPED ASSESSMENT. FURTHER, NO NAMES OF THE PARTIES HAVE BEEN MENTIONE D IN REASONS UNDER SECTION 147 FROM WHOM THE AMOUNT IN Q UESTION HAVE BEEN RECEIVED BY THE ASSESSEE AS ACCOMMODATION ENTRY. ALL THE FACTS BROUGHT TO THE NOTICE OF THE A.O. BY THE INVESTIGATION WING HAVE BEEN CONSIDERED BY THE A.O. WHILE FRAMING THE RE-ASSESSMENT AND ACCEPTED THE RETURN O F INCOME. THEREFORE, THERE WAS NO NEW MATERIAL AVAILABLE ON R ECORD TO JUSTIFY REOPENING OF THE ASSESSMENT OR TO INVOKE JU RISDICTION UNDER SECTION 263 OF THE I.T. ACT, WHICH WOULD ALSO SHOW THAT THERE IS TOTALLY NON-APPLICATION OF MIND ON THE PAR T OF THE A.O. TO REOPEN THE ASSESSMENT IN THE MATTER. THESE FACTS ARE SUFFICIENT TO HOLD THAT REOPENING OF THE ASSESSMENT WAS BAD IN LAW, ILLEGAL AND NON-EST, THEREFORE, SUCH ORDER COULD NOT BE REVISED IN THE PROCEEDINGS UNDER SECTION 263 OF THE I.T. ACT. WE, ACCORDINGLY SET ASIDE THE ORDER OF THE LD. PR. CIT PASSED UNDER SECTION 263 OF THE I.T. ACT AND QUASH THE SAM E. IN THIS VIEW OF THE MATTER, THERE IS NO NEED TO DECIDE THE ISSUE ON MERIT. HOWEVER, WE MAY NOTE BRIEFLY THAT DOCUMENTAR Y 64 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. EVIDENCES WERE FILED BEFORE A.O. AT ORIGINAL ASSESS MENT STAGE AS WELL AS AT THE STAGE OF RE-ASSESSMENT TO PROVE G ENUINE CREDIT IN THE MATTER WHICH HAVE ACCEPTED BY THE A.O . AFTER CONSIDERING AND EXAMINING THE MATERIAL ON RECORD AN D CALLING EXPLANATION FROM THE INVESTORS UNDER SECTION 133(6) OF THE I.T. ACT. IN THIS VIEW OF THE MATTER, WE ALLOW THE APPEA L OF ASSESSEE. 24. IN THE RESULT, ITA.NO.2527/DEL./2017 OF THE ASSESSEE IS ALLOWED. ITA.NO.3301/DEL./2017 M/S. SUPERIOR BUILDWELL PVT . LTD., DELHI. 25. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. PR. CIT-8, NEW DELHI, DATED 17.03.2017, FOR THE A.Y. 2009-2010 UNDER SECTION 26 3 OF THE I.T. ACT, 1961. 26. BRIEFLY THE FACTS OF THE CASE ARE THAT ORIGINA L RETURN OF INCOME WAS FILED ON 18.09.2009 DECLARING NIL INC OME. ON THE BASIS OF INFORMATION RECEIVED FROM DIRECTORATE OF INVESTIGATION WING OF INCOME TAX DEPARTMENT, IT WAS NOTICED 65 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. THAT DURING THE COURSE OF SEARCH IN THE PREMISES OF SHRI SURENDRA KUMAR JAIN GROUP OF CASES, IT WAS FOUND TH AT ASSESSEE HAS OBTAINED AN ENTRY OF RS.2 CRORES BY WA Y OF SHARE CAPITAL/SHARE APPLICATION MONEY. THE ASSESSME NT WAS REOPENED UNDER SECTION 148 OF THE I.T. ACT, 1961. N OTICE UNDER SECTION 148 WAS ISSUED ON 18.10.2013. THE A.O. ISSU ED NOTICE UNDER SECTION 142(1) DATED 22.05.2014 AND TH E ASSESSEE IN REPLY THERETO, SUBMITTED THAT RETURN AL READY FILED MAY BE TREATED AS RETURN FILED PURSUANT TO NOTICE U NDER SECTION 148 OF THE I.T. ACT. THE A.O. ISSUED NOTICE UNDER SECTION 133(6) TO M/S. SUPERSONIC CONSTRUCTION LTD. , AND M/S. ORIENTAL BANK OF COMMERCE FOR RELEVANT INFORMATION AND VERIFICATION. THE ASSESSEE WAS ASKED TO FILE DETAIL S OF ADDITION TO SHARE CAPITAL WITH COMPLETE NAME, ADDRE SS, PAN AND THE AMOUNT RECEIVED. THE ASSESSEE SUBMITTED DES IRED DETAILS BEFORE A.O. AND ALSO FILED CONFIRMATIONS, A UDITED BANK STATEMENT, ITR AND RETURN OF ALLOTMENT FILED WITH R OC. THE A.O. VERIFIED THE IDENTITY, CREDITWORTHINESS AND GE NUINENESS OF THE TRANSACTION IN THE MATTER AND ACCORDINGLY AC CEPTED THE 66 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. RETURN OF INCOME VIDE ORDER UNDER SECTIONS 147/143( 3) OF THE I.T. ACT, 1961 DATED 30.06.2014. 26.1. THE LD. PR. CIT FOUND THE RE-ASSESSMENT ORDE R TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE BECAUSE INFORMATION WAS RECEIVED THAT ASSES SEE RECEIVED ACCOMMODATION ENTRY FROM SHRI S.K. JAIN GR OUP OF CONCERNS AND ALL THE SEIZED DOCUMENTS HAVE NOT BEEN VERIFIED BY THE A.O. SHOW CAUSE NOTICE WAS ISSUED TO THE ASS ESSEE SEEKING EXPLANATION OF CREDIT ENTRY OF RS.1 CRORES RECEIVED FROM SHALINI HOLDINGS LTD. THE ASSESSEE FILED DETAI LED REPLY WHICH IS REPRODUCED IN THE IMPUGNED ORDER IN WHICH THE ASSESSEE SUBMITTED THAT COMPLETE DETAILS WERE FILED BEFORE A.O. AND RECEIPT OF SHARE CAPITAL MONEY SUPPORTED B Y THE DOCUMENTS AND CONFIRMATIONS. THEREFORE, RE-ASSESSME NT ORDER IS NOT ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE IN TERESTS OF THE REVENUE. THE LD. PR. CIT NOTED THE SUBMISSIONS OF T HE ASSESSEE WHEREIN THE SHARES WERE ORIGINALLY ISSUED TO SHALINI HOLDINGS LTD ON 25.08.2008 WERE TRANSFERRED ON 25.0 3.2010 IN FAVOUR OF FRANK MERCHANTILE PRIVATE LIMITED. SEI ZED DOCUMENTS ARE REPRODUCED IN THE IMPUGNED ORDER. THE LD. PR. 67 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. CIT NOTED THAT AS AGAINST THE ENTRY IN THE NAME OF ASSESSEE, AN AMOUNT OF RS.2 CRORES HAVE BEEN MENTIONED. HOWEV ER, ON VERIFICATION OF THE SEIZED MATERIAL, IT WAS FOUND T HAT TOTAL AMOUNT OF RS.1 CRORE AS PER DETAILS GIVEN IN THE SH OW CAUSE NOTICE IS THERE AND NOT RS.2 CRORES. IT WOULD SHOW THAT A.O. DID NOT VERIFY AND EXAMINE THE SEIZED MATERIAL RELA TING TO ASSESSEE AND ACCEPTED THE EXPLANATION OF ASSESSEE W ITHOUT EXAMINING THE SEIZED PAPER. THE LD. PR. CIT, THEREF ORE, FOUND THAT THE SEIZED DOCUMENTS HAVE NOT BEEN EXAMINED AN D VERIFIED BY THE A.O. THEREFORE, RE-ASSESSMENT ORDER WAS SET ASIDE AND MATTER WAS RESTORED TO THE A.O. FOR PASSI NG THE ORDER AFRESH AS PER PROVISIONS OF LAW. 27. THE ASSESSEE IN THE PRESENT APPEAL CHALLENGED THE ORDER UNDER SECTION 263 OF THE I.T. ACT AS WELL AS FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL GROUNDS WHI CH READS AS UNDER : 7.(A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED PR. CIT HAS ERRED, BOTH ON FACTS AND IN LAW, IN HOLDING THAT THE LEGALITY OF ORIGINAL ASSESSMENT PROCEEDINGS COULD NOT BE 68 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. CHALLENGED IN THE 263 PROCEEDINGS, DISREGARDING THE VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY THE ASSESSEE IN THIS REGARD. 7.(B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED PR. CIT HAS ERRED BOTH ON FACTS AND IN LAW IN IGNORING THE FACT THAT THE ORDER OF THE AO REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT, WITHOUT COMPLYING WITH THE STATUTORY CONDITIONS AND THE PROCEDURE PRESCRIBED UNDER THE LAW, IS BAD AND LIABLE TO BE QUASHED, AND THUS, THE SAME COULD NOT HAVE BEEN REVISED UNDER SECTION 263 OF THE ACT. 7.(C) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED PR. CIT HAS ERRED BOTH ON FACTS AND IN LAW IN IGNORING THE FACT THAT THE ORDER OF THE AO PASSED ON THE BASIS OF REASONS RECORDED FOR REOPENING OF THE ASSESSMENT, WHICH ARE INCORRECT ON FACTS AND BAD IN LAW, 69 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. IS ILLEGAL AND LIABLE TO BE QUASHED, AND THUS, THE SAME COULD NOT HAVE BEEN REVISED UNDER SECTION 263 OF THE ACT. 7.(D) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED PR. CIT HAS ERRED BOTH ON FACTS AND IN LAW, IN ASSESSING THE JURISDICTION UNDER SECTION 263 OF THE ACT, DESPITE THE FACT THAT THE ORIGINAL ASSESSMENT HAVING BEEN MADE WITHOUT ISSUING OF STATUTORY NOTICE UNDER SECTION 143(2) OF THE ACT, BEING ITSELF ILLEGAL, THE SAME COULD NOT BE REVISED UNDER SECTION 263 OF THE ACT. 27.1. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT IT IS LEGAL GROUND AND GOES TO THE ROOT OF THE MATTER AND WITHOUT FURTHER INVESTIGATION, SAME MAY BE ADMITTED FOR DIS POSAL OF THE APPEAL. 28. LEARNED D.R. HOWEVER, OBJECTED TO THE ADMISSIO N OF THE ADDITIONAL GROUND OF APPEAL AND SUBMITTED TH AT NO 70 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. SUCH GROUND WAS TAKEN IN THE ORIGINAL PROCEEDINGS A ND THAT SUCH GROUND CANNOT BE TAKEN IN THE PRESENT APPEAL. 29. SIMILAR ISSUE WAS CONSIDERED BY US IN THE ABOV E GROUP OF APPEAL IN THE CASE OF M/S. SHIV SAI INFRAS TRUCTURE (P) LTD., (SUPRA) AND ADDITIONAL GROUND HAVE BEEN ADMIT TED. FOLLOWING THE REASONS FOR DECISION OF THE SAME, WE ADMIT THE ADDITIONAL GROUNDS OF APPEAL FOR THE PURPOSE OF DIS POSAL OF THE APPEAL. 30. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATE D THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND SUBMITTED THAT NO NOTICE UNDER SECTION 143(2) HAVE BEEN ISSUED IN THE CASE OF ASSESSEE. COPY OF THE ORDER S HEET OF THE A.O. IS FILED AT PAGE 279 OF THE PAPER BOOK TO SHOW THAT NO NOTICE UNDER SECTION 143(2) HAVE BEEN ISSUED. HE HA S REFERRED TO PB-20 WHICH IS REASONS FOR REOPENING OF THE ASSESSMENT IN WHICH A.O. HAS MENTIONED WRONG FACTS OF TAKING ACCOMMODATION ENTRY OF RS.2 CRORES. HOWEVER, ASSESSEE HAS RECEIVED SHARE CAPITAL/PREMIUM OF RS.1 CRORE ONLY IN ASSESSMENT YEAR UNDER APPEAL. NO NAME OF TH E PERSON FROM WHOM ASSESSEE RECEIVED RS.2 CRORES HAVE BEEN 71 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. MENTIONED IN THE REASONS. THE SHOW CAUSE NOTICE UND ER SECTION 263 HAVE BEEN ISSUED FOR A LESSER AMOUNT OF RS. 1 CRORE. IF REASONS WERE INCORRECT FOR REOPENING OF T HE ASSESSMENT, THEN, RE-ASSESSMENT PROCEEDINGS WOULD B E INVALID AND NON-EST, THEREFORE, LD. PR. CIT HAS NO POWER TO REVIEW THE SAME UNDER SECTION 263 OF THE I.T. ACT. LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO SEVERAL REPLIE S FILED BEFORE A.O. TO SHOW ALL DOCUMENTARY EVIDENCES WERE EXAMINED BY THE A.O. AT RE-ASSESSMENT PROCEEDINGS. THERE IS NO CO-RELATION OF THE SEIZED DOCUMENTS WITH THE ASS ESSEE. SINCE THE A.O. RECORDED INCORRECT REASONS FOR REOPE NING OF THE ASSESSMENT AND THAT NO NOTICE UNDER SECTION 143(3) HAVE BEEN ISSUED, THEREFORE, RE-ASSESSMENT ORDER IS INVA LID AND AS SUCH, SAME CANNOT BE REVISED UNDER SECTION 263 OF T HE I.T. ACT. A.O. MADE ENQUIRY OF ALL THE DOCUMENTS BUT LD. PR. CIT DID NOT MAKE ANY ENQUIRY ON THE DOCUMENTARY EVIDENC ES ON RECORD. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SAME AS HAVE BEEN CONSIDERED AND DECIDED I N THE CASES OF M/S. SUPERSONIC TECHNOLOGIES PVT. LTD., M/ S. SPJ 72 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. HOTELS PRIVATE LIMITED AND M/S. SHIV SAI INFRASTRUC TURE (P( LTD., NEW DELHI (SUPRA). 31. ON THE OTHER HAND, LEARNED D.R. REITERATED THE SUBMISSIONS ALREADY MADE IN THE CASE OF M/S. SUPERS ONIC TECHNOLOGIES PVT. LTD., (SUPRA) AND ALSO SUBMITTED THAT NO GROUND WAS TAKEN IN ORIGINAL PROCEEDINGS FOR ILLEGA LITY IN THE RE-ASSESSMENT PROCEEDINGS. THE ISSUE OF NOTICE UNDE R SECTION 143(2) IS A DISPUTED QUESTION AND NOT RELEVANT IN T HE PRESENT PROCEEDINGS. SEIZED PAPERS ARE NOT CONSIDERED AND E XAMINED BY THE A.O. THE AMOUNT IN QUESTION IS RS.1 CRORE ON LY. THEREFORE, THE ORDER OF THE A.O. IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. HE HAS , THEREFORE, SUBMITTED THAT ORDER UNDER SECTION 263 MAY BE CONFI RMED. 32. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ISSUE IS SAME AS HAVE BEEN CONSIDERED IN THE ABOVE THREE CASES VIZ., M/S. SUPERSONIC TECHNOLOGIES PVT. LTD., M/S. SPJ HOTELS PRIVATE LTD., AND M/S. SHIV SAI INFRASTRUCTU RE (P) LTD., (SUPRA). IN THE PRESENT CASE, NO NOTICE UNDER SECTI ON 143(2) HAVE BEEN ISSUED FOR COMPLETION OF THE RE-ASSESSMEN T PROCEEDINGS AND THAT INCORRECT FACTS HAVE BEEN RECO RDED IN 73 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. THE REASONS FOR REOPENING OF THE ASSESSMENT. THEREF ORE, THE RE-ASSESSMENT PROCEEDINGS ARE INVALID, BAD IN LAW A ND NON- EST AND AS SUCH, LIABLE TO BE QUASHED. WE, THEREFOR E, FOLLOWING THE REASONS FOR DECISION IN THE CASES OF M/S. SUPERSONIC TECHNOLOGIES PVT. LTD., M/S. SPJ HOTEL P RIVATE LTD., AND M/S. SHIV SAI INFRASTRUCTURE (P) LTD., (S UPRA), SET ASIDE THE IMPUGNED ORDER OF THE LD. PR. CIT PASSED UNDER SECTION 263 OF THE I.T. ACT AND QUASH THE SAME. ACC ORDINGLY, APPEAL OF THE ASSESSEE IS ALLOWED. 33. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. 34. TO SUM-UP, ALL THE APPEALS OF THE ASSESSEES AR E ALLOWED. 6.3. SAME VIEW HAVE BEEN TAKEN BY ITAT, DELHI E- BENCH IN THE CASE OF M/S. NKG INFRASTRUCTURE LTD., NEW DELHI VS., PR. CIT, CIRCLE-3, NEW DELHI IN ITA.NOS. 3825 TO 3827/DEL./2018 DATED 05.09.2018 [PB-11]. FURTHER SA ME VIEW HAVE BEEN TAKEN BY ITAT, KOLKATA BENCH IN THE CASE OF M/S. ROZELLE SALES & SERVICES PVT. LTD., VS., ACIT, CENTRAL 74 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. CIRCLE-1(1), KOLKATA IN ITA.NO.2030/KOL./2018, DATE D 30.08.2019 [PB-35]. 6.4. THE ITAT, SMC DELHI BENCH IN THE CASE OF AGRO HA FINCAP LTD., NEW DELHI VS., ITO, WARD-1(4), NEW DEL HI, IN ITA.NO.1063/DEL./2019, DATED 17.10.2019 CONSIDERING THE IDENTICAL ISSUE AND APPROVAL OF THE LD. PR. CIT ABO UT HIS SATISFACTION HELD AS UNDER : IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1063/DEL/2019 ASSESSMENT YEAR: 2010-11 AGROHA FINCAP LTD., RAJ KUMAR & ASSOCIATES, CAS, L-7A (LGF), SOUTH EXTENSION PART-II, NEW DELHI. PAN: AAACA8075G VS. ITO, WARD-1(4), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJ KUMAR, CA REVENUE BY : SHRI S.L. ANURAGI, SR.DR DATE OF HEARING : 13.08.2019 DATE OF PRONOUNCEMENT : 17.10.2019 75 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 19 TH DECEMBER, 2018 OF THE CIT(A)-1, NEW DELHI, RELATING TO ASSESSMENT YEAR 2010-11. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASS ESSEE IS A COMPANY AND HAD FILED ITS RETURN OF INCOME ON 12 TH OCTOBER, 2010 DECLARING THE TOTAL INCOME AT RS.9,912/-. THE ASSESSING OFFICER RECEIVED INFORMATION BASED ON THE SEARCH AND SEIZURE OPERATION CONDUCTED U/S 132 OF THE IT A CT, 1961 IN THE CASE OF SHRI SURENDRA KUMAR JAIN GROUP OF CA SES ON 14 TH SEPTEMBER, 2010 THAT SHRI SURENDRA KUMAR JAIN, THR OUGH A LARGE NUMBER OF DUMMY COMPANIES FLOATED BY HIM PR OVIDED ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES. IN THE LIST OF BENEFICIARIES SO OBTAINED, THE NAME OF THE ASSESSEE ALSO APPEARS. HE NOTICED THE MODUS OPERANDI OF THE JAIN BROTHERS WAS THAT THEY HAVE RECEIVED CASH FROM THE VARIOUS BENEFICIARIES WHICH WERE DEPOSITED IN THE BANK ACCO UNTS OF VARIOUS ENTITIES AS CASH RECEIVED AGAINST SALES AND WERE IMMEDIATELY TRANSFERRED TO VARIOUS DUMMY COMPANIES OF JAIN 76 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. BROTHERS. THE MONEY IS THEN ROUTED THROUGH A MAZE OF TRANSACTIONS THROUGH A WEB OF DUMMY CONCERNS MANAGE D BY JAIN BROTHERS. SUBSEQUENTLY, CHEQUES WERE GIVEN TO THE BENEFICIARIES IN LIEU OF CASH GIVEN INITIALLY FROM THE ACCOUNT OF THE CONCERNS WHICH IS AT THE LAST STEP OF MONEY TRA IL AND IN THIS PROCESS, JAIN BROTHERS USED TO EARN A CERTAIN PERCENTAGE OF COMMISSION. HE ALSO REFERRED TO THE ASSESSMENT ORDER IN CASE OF S.K. JAIN WHEREIN THE ASSESSING OFFICER HAD APPLIED THE COMMISSION @ 1.8% ON ACCOUNT OF ACCOMMODATION E NTRIES PROVIDED BY THEM. THE ORDER OF THE ASSESSING OFFIC ER WAS CONFIRMED BY THE CIT(A) AND THE TRIBUNAL HAD ALSO A PPROVED THE FACT THAT SHRI S.K. JAIN AND SHRI V.K. JAIN ARE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES. IN VIEW OF THE AB OVE, THE ASSESSING OFFICER REOPENED THE CASE OF THE ASSESSEE U/S 147/148 OF THE ACT AFTER RECORDING SATISFACTION AND PRIOR APPROVAL U/S 151(1) OF THE ACT BY THE PCIT, DELHI-1 . IN RESPONSE TO NOTICE U/S 148, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 TH MARCH, 2017 DECLARING AN INCOME OF RS.9,912/-. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBSTAN TIATE THE 77 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. AMOUNT OF RS.20 LAKHS RECEIVED BY HIM TOWARDS 20000 SHARES OF RS.10/- EACH AT A PREMIUM OF RS.90/- PER SHARE. REJECTING VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE, THE ASSESSING OFFICER HELD THAT THE ASSES SEE FAILED TO DISCHARGE THE ONUS CAST ON IT TO PROVE THE IDENT ITY AND CAPACITY OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION AND MADE AN ADDITION OF RS.20 LACS TO T HE TOTAL INCOME U/S 68 OF THE IT ACT. SIMILARLY, THE ASSESS ING OFFICER ALSO MADE ADDITION OF RS.36,000/- BEING COMMISSION @ 1.8% FOR ARRANGING THE ACCOMMODATION ENTRIES. THUS, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT AT A TOT AL INCOME OF RS.20,45,912/- AS AGAINST THE RETURNED INCOME OF RS.9,912/-. 3. BEFORE THE CIT(A), THE ASSESSEE, APART FROM C HALLENGING THE ADDITION ON MERIT, CHALLENGED THE VALIDITY OF T HE REASSESSMENT PROCEEDINGS. HOWEVER, THE LD.CIT(A) W AS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESS EE AND UPHELD THE ACTION OF THE ASSESSING OFFICER IN MAKIN G THE ADDITION OF RS.20,36,000/- AND ALSO UPHELD THE VALI DITY OF THE REASSESSMENT PROCEEDINGS. 78 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOL LOWING GROUNDS:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES INITI ATION OF PROCEEDINGS UNDER SECTION L47/148 ARE WITHOUT JURISDICTION, ON BORROWED SATISFACTION, WITHOUT APP LICATION OF MIND, UNWARRANTED, MECHANICAL AND UNSUSTAINABLE IN LAW AND ON MERITS. 2. THAT THE LD. A.O., SINCE FAILED IN ADJUDICATI NG ALL OBJECTIONS AGAINST REOPENING PROCEEDINGS, PROPERLY, AS PER LAW AND IN TOTALITY AND AS PER THE DIRECTIONS OF HO NBLE SUPREME COURT IN THE CASE OF G.K.N. DRIVE SHAFTS, H ENCE CONSEQUENTIAL PROCEEDINGS AND IMPUGNED ASSTT. IS IL LEGAL AND WITHOUT JURISDICTION. 3. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE APPROVAL UNDER SECTION L51 IS FATALLY DEFECTIVE, ME CHANICAL AND WITHOUT APPLICATION OF MIND WHICH MAKES THE WHO LE PROCEEDINGS WITHOUT JURISDICTION, ILLEGAL AND UNWAR RANTED. 79 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 4. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE LD. A.O, ERRED IN LAW AND ON MERITS IN MAKING ADDITION OF RS,20,00,000 UNDER SECTION 68 OF THE I.T. ACT. 4.1 THAT UNDER THE FACTS AND CIRCUMSTANCES, ADD ITION OF RS. 20,00,000 UNDER SECTION 68 FOR THE SHARE CAP ITAL / SHARE PREMIUM RECEIVED FROM UTSAV SECURITIES (P) LT D. BY HOLDING THE SAME AS RECEIVED FROM ALLEGED ENTRY OPE RATOR IS ILLEGAL AND UNSUSTAINABLE IN LAW AS WELL AS ON M ERITS. 4.2. THAT THE FINDINGS OF A.O. ARE UNSUSTAINABL E FOR ADDITION OF RS.20,00,000 IN THE ABSENCE OF PROVIDIN G THE COPIES OF ALL MATERIALS USED AGAINST THE ASSESSEE A ND BY NOT PROVIDING CROSS-EXAMINATION OF PERSONS WHOSE STATEMENTS HAVE BEEN RELIED UPON, THUS NO PROPER AN D REASONABLE OPPORTUNITY OF HEARING HAS BEEN ALLOWED AND PRINCIPLES OF NATURAL JUSTICE IS GROSSLY VIOLATED W HICH MAKES THE IMPUGNED ASSTT. UNSUSTAINABLE IN LAW. 5. THAT THE LD. A.O. ERRED IN MAKING ADDITION O F RS.36,000 AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C FOR ALLEGED COMMISSION EXPENSES @1.8 PERCENT OF 80 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. RS.20,00,000, THE AMT. OF TOTAL SALE CONSIDERATION RECEIVED OF BOTH THE SHARES, ALTHOUGH THERE IS NO MATERIAL A ND EVIDENCE FOR THE SAME. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE INITIATION OF REASSESSMENT PROCEEDINGS WAS MADE IN A MECHANICAL MANNER, ON BORROWED SATISFACTION AND WIT HOUT APPLICATION OF MIND. REFERRING TO THE COPY OF THE REASONS SUPPLIED BY THE ASSESSING OFFICER, COPY OF WHICH IS PLACED AT PAGE 225 OF THE PAPER BOOK, HE SUBMITTED THAT THE I NITIATION IS PURELY ON THE BASIS OF THE REPORT RECEIVED FROM THE INVESTIGATION WING AND THE ASSESSING OFFICER BEFORE INITIATING THE REASSESSMENT PROCEEDINGS HAD NOT CONDUCTED ANY INQUIRY EVEN TO KNOW AND UNDERSTAND THAT THE INFORMATION AS PER THE INVESTIGATION REPORT IS PRIMA FACIE CORRECT. HE SUB MITTED THAT AT THE TIME OF INITIATION OF PROCEEDINGS, THE ASSES SING OFFICER WAS NOT HAVING EVEN THE MATERIAL BEFORE HIM ON THE BASIS OF WHICH THE INVESTIGATION WING HAD SENT ITS REPORT. THE ASSESSING OFFICER ASSUMED AND WORKED ONLY ON THE SATISFACTION OF THE INVESTIGATION WING. RELYING ON THE FOLLOWING DECISIONS, HE SUBMITTED THAT WHEN THE PRO CEEDINGS 81 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. WERE INITIATED MECHANICALLY AND ON BORROWED SATISFA CTION AND WITHOUT APPLICATION OF MIND, SUCH REASSESSMENT PROCEEDINGS ARE A NULLITY:- I. PR. CIT VS. RMG POLYVINYL (I) LTD., 396 ITR 5 (DEL) ; II. PR. CIT VS. MEENAKSHI OVERSEAS (P) LTD., 395 ITR 67 7 (DEL); III. PR. CIT VS. G AND G PHARMA INDIA LTD., 384 ITR (201 6) (DELHI) 147; AND IV. SARTHAK SECURITIES CO. (P) LTD., 329 ITR 110 (DEL). 6. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBM ITTED THAT THE ASSESSEE FILED OBJECTIONS AGAINST THE REOPENING VIDE LETTER DATED 16 TH AUGUST, 2017, COPY OF WHICH IS PLACED AT PAGE 6 TO 7 OF THE PAPER BOOK. REFERRING TO PAGE 8 TO 10, HE DREW THE ATTENTION OF THE BENCH TO THE DISPOSAL OF THE OBJEC TIONS BY THE ASSESSING OFFICER. HE SUBMITTED THAT VIDE PARA 2 O F THE OBJECTION LETTER DATED 16 TH AUGUST, 2017, IT WAS REQUESTED THAT TO FILE COMPLETE OBJECTIONS, THE MATERIALS RELIED U PON BY THE INVESTIGATION WING FOR SENDING THE REPORT TO THE AS SESSING OFFICER AND SUCH OTHER MATERIAL INCLUDING THE STATE MENT OF 82 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. PERSONS RECORDED AT THE BACK OF THE ASSESSEE SHOULD BE SUPPLIED. HOWEVER, THE ASSESSING OFFICER HAD NOT P ROVIDED ANY OF THESE DOCUMENTS ON THE GROUND THAT THE RELEV ANT MATERIAL IS INTERNAL DOCUMENTS OF THE DEPARTMENT AN D CANNOT BE SHARED. HE ACCORDINGLY SUBMITTED THAT THE ASSESS ING OFFICER BY NOT PROVIDING THE ABOVE DOCUMENTS HAS N OT DISPOSED OF THE OBJECTIONS FULLY AS PER THE LAW LAI D DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVES HAFT. REFERRING TO THE FOLLOWING DECISIONS, HE SUBMITTED THAT INCOMPLETE DISPOSAL OF OBJECTIONS MAKES THE ASSESSM ENT INVALID. I. SABH INFRASTRUCTURE LTD. VS. ACIT, 398 ITR 198; II. PR. CIT VS. TUPPERWARE INDIA (P) LTD., 127 DTR 161 (DEL); III. SCAN HOLDING (P) LTD. VS. ACIT, 402 ITR 290 (DEL); & IV. GOA STATE COPR. BANK LTD. VS. ACIT 7 ORS., (2017) 2 95 CTR (BOM) 369. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE APPROVAL U/S 151 IS IN A MECHANICAL MANNER AND WITH OUT APPLICATION OF MIND. THEREFORE, IT IS FATALLY DEFE CTIVE. HE 83 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. SUBMITTED THAT THE PCIT WHILE GIVING APPROVAL HAS S IMPLY MENTIONED: I AM SATISFIED THAT IT IS A FIT CASE FO R ISSUE OF NOTICE U/S 148 OF THE IT ACT. REFERRING TO THE DEC ISIONS OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF PCIT VS. NC CABLES LTD., 391 ITR 11 (DEL) AND UNITED ELECTRICAL COMPAN Y PVT. LTD. VS. CIT & ORS, 258 ITR 317 AND THE DECISION OF THE HON'BLE M.P. HIGH COURT IN THE CASE OF CIT VS. S. GOYANKA L IME & CHEMICAL LTD. (2015) 56 TAXMANN.COM 390, HE SUBMITT ED THAT THE COURTS HAVE UNEQUIVOCALLY HELD THAT WHERE THE SATISFACTION HAS BEEN GIVEN IN A MECHANICAL MANNER AND WITHOUT APPLICATION OF MIND FOR ISSUING NOTICE U/S 148, SUCH REOPENING OF ASSESSMENT IS INVALID. HE SUBMITTED T HAT THE HON'BLE SUPREME COURT HAS DISMISSED THE SLP FILED B Y THE REVENUE AGAINST THE DECISION OF THE HON'BLE MP HIGH COURT IN THE CASE OF GOYANKA LIME & CHEMICAL LTD. (SUPRA). 8. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, HE SUBMITTED THAT TO SUBSTANTIATE THE IDENTITY AND CRE DIT WORTHINESS OF THE SHARE APPLICANT AND THE GENUINENE SS OF THE TRANSACTION, THE ASSESSEE HAS FILED THE AUDITED FIN ANCIAL STATEMENT, INCOME-TAX RETURN, COPY OF BANK STATEMEN T, COPY 84 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. AND CONFIRMATION OF UTSAV SECURITIES PVT. LTD. THE ASSESSEE ALSO FILED FORM NO.2 FILED WITH ROC DATED 29 TH JUNE, 2010, A COPY OF FORM NO.2 FILED BEFORE ROC INTIMATING THE I SSUE OF 20000 SHARES TO UTSAV SECURITIES PVT. LTD. AT A PRE MIUM OF RS.90/- PER SHARE. HE SUBMITTED THAT THE BALANCE S HEET OF UTSAV SECURITIES PVT. LTD. SHOWS ITS SHARE CAPITAL AT RS.1.26 CRORES AND THE RESERVES AND SURPLUS AT RS.8.66 CROR E. HE SUBMITTED THAT UTSAV SECURITIES PVT. LTD. HAS AN IN VESTMENT OF RS.8.92 CRORE AND CURRENT ASSETS, LOANS AND ADVANCE S OF RS.1.14 CRORE. HE SUBMITTED THAT THE SMALLNESS OF THE INCOME CANNOT BE A REASON FOR NOT ACCEPTING THE CREDIT WOR THINESS OF THE SAID COMPANY. RELYING ON VARIOUS DECISIONS, HE SUBMITTED THAT WHEN THE ASSESSEE HAS DISCHARGED ITS ONUS BY PROVING THE IDENTITY AND CREDIT WORTHINESS OF TH E INVESTOR AND THE GENUINENESS OF THE TRANSACTION, NO ADDITION U/S 68 CAN BE MADE. THE LD. COUNSEL FURTHER SUBMITTED THA T THE ASSESSEE WAS NEVER PROVIDED WITH THE PHOTO COPY OF PAGE NO.2 OF DIARY OF SHRI S.K. JAIN AND SHRI V.K. JAIN CLAIMED TO HAVE BEEN SEIZED ON SEARCH AT THE RESIDENCE OF SHRI JAIN. DESPITE SPECIFICALLY ASKING THE ASSESSING OF FICER TO 85 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. PROVIDE THE DOCUMENTS RELIED BY THE DEPARTMENT FOR MAKING THE ADDITION AND ASKING TO GIVE OPPORTUNITY TO CROS S EXAMINE, THE SAME WERE NEVER PROVIDED. RELYING ON VARIOUS D ECISIONS, HE SUBMITTED THAT SINCE THE ADDITION IS BASED PUREL Y ON PRESUMPTIONS AND SURMISES AND THE RELEVANT MATERIAL S WERE NOT PROVIDED TO THE ASSESSEE, THEREFORE, THE ADDITI ON SO MADE IS NOT SUSTAINABLE. SO FAR AS THE ADDITION OF RS.3 6,000/- BEING THE COMMISSION FOR GETTING THE ACCOMMODATION ENTRY IS CONCERNED, HE SUBMITTED THAT IT IS AN ESTIMATED ADD ITION AND THERE IS NO BASIS OR MATERIAL OR INFORMATION BASED ON WHICH SUCH ADDITION COULD HAVE BEEN MADE. HE ACCORDINGLY SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING O FFICER AND UPHELD BY THE CIT(A) SHOULD BE DELETED. 9. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT THE ASSESSING OFFICER, IN THE INSTANT CASE, HAS DULY AP PLIED HIS MIND AND HAS MADE A THOROUGH ANALYSIS OF THE DOCUME NTS AND AFTER ANALYZING THE DOCUMENTS HAS RECORDED HIS SATISFACTION AND REOPENED THE ASSESSMENT. THE LD. ADDL. CIT HAD PERUSED THE NOTE AND HAD RECORDED HIS SATISFACT ION THAT INCOME PERTAINING TO ASSESSMENT YEAR 2010-11 HAS ES CAPED 86 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ASSESSMENT AND, HENCE, THE CASE IS REQUIRED TO BE R EOPENED U/S 147. THE PR. CIT HAD GIVEN HIS SATISFACTION U/ S 151 SEPARATELY AS MENTIONED AT PAGE 5 OF THE PAPER BOOK FILED BY THE LD. COUNSEL FOR THE ASSESSEE. THE ASSESSING OF FICER, IN THE INSTANT CASE, HAS DISPOSED OF THE OBJECTIONS BY PASSING A SPEAKING ORDER, THEREFORE, IT IS WRONG TO SAY THAT THE ASSESSMENT WAS REOPENED IN A MECHANICAL MANNER AND THE APPROVING AUTHORITIES HAVE GIVEN THE APPROVAL IN A MECHANICAL MANNER WITHOUT DUE APPLICATION OF MIND. HE SUBMITTED THAT THE REASSESSMENT PROCEEDINGS WERE NO T INITIATED IN A MECHANICAL MANNER OR ON BORROWED SAT ISFACTION AND WITHOUT APPLICATION OF MIND SINCE THE PERUSAL O F THE REASONS RECORDED CLEARLY SHOW THAT THERE IS A THORO UGH APPLICATION OF MIND BY THE ASSESSING OFFICER AND TH E APPROVING AUTHORITIES HAVE ALSO GIVEN VALID REASONS FOR REOPENING OF THE CASE. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, THE LD. DR SUBMITTED THAT S.K. JAIN GROU P OF CASES ARE KNOWN TO BE ACCOMMODATION ENTRY PROVIDERS AND T HE ASSESSEE, IN THE INSTANT CASE, HAS OBTAINED THE ACCOMMODATION ENTRY OF RS.20 LACS AND HAS FAILED TO 87 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. DISCHARGE THE ONUS CAST ON IT BY PROVING THE IDENTI TY AND CAPACITY OF THE LOAN CREDITOR AND THE GENUINENESS O F THE LOAN TRANSACTION. THEREFORE, THE LD.CIT(A) WAS FULLY JU STIFIED IN SUSTAINING THE ADDITION OF RS.20 LACS MADE BY THE A SSESSING OFFICER AND ALSO THE ADDITION OF RS.36,000/- ADDED BY THE ASSESSING OFFICER BEING COMMISSION FOR THE ACCOMMOD ATION ENTRIES. HE ACCORDINGLY SUBMITTED THAT BOTH FACTUA LLY AND LEGALLY THE LD.CIT(A) HAS PASSED A REASONED ORDER A ND, THEREFORE, THE SAME SHOULD BE UPHELD AND THE GROUND S RAISED BY THE ASSESSEE SHOULD BE DISMISSED. 10. I HAVE CONSIDERED THE ARGUMENTS OF BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED VARIOUS DECISIONS CITED BEFORE US. AT THE OUTSET, I DEEM IT PROPER TO ADJUDICATE THE LEGAL GR OUND RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF THE REA SSESSMENT PROCEEDINGS IN ABSENCE OF PROPER APPROVAL GIVEN U/S 151 OF THE IT ACT. A PERUSAL OF THE COPY OF APPROVAL GIVE N U/S 151, COPY OF WHICH IS PLACED AT PAGE 13 OF THE PAPER BOO K, SHOWS THAT THE ADDL. CIT, WHILE GIVING APPROVAL HAS SIMPL Y 88 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. MENTIONED: YES. I AM SATISFIED THAT IT IS A FIT CA SE FOR REOPENING OF ASSESSMENT U/S 148. SIMILARLY, THE PC IT, WHILE GIVING APPROVAL HAS ALSO SIMPLY MENTIONED: I AM SA TISFIED THAT IT IS A FIT CASE FOR ISSUE OF NOTICE U/S 148 O F THE IT ACT. FROM THE ABOVE, IT IS CLEAR THAT NONE OF THE SUPERVISORY AUTHORITIES HAVE APPLIED THEIR MIND. I FIND, THE H ON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. N.C. CABLES LTD. , 391 ITR 11(DEL), HAS OBSERVED AS UNDER:- 'REASSESSMENT-ISSUANCE OF NOTICE-SANCTION FOR ISSUE OF NOTICE-ASSESSEE HAD IN ITS RETURN FOR A Y 2001-02 CLAIMED THAT SUM OF RS. 1 CRORE WAS RECEIVED TOWARD S SHARE APPLICATION AMOUNTS AND A FURTHER SUM OF THIR TY FIVE LAKHS WAS CREDITED TO IT AS AN ADVANCE TOWARDS LOAN-ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3)- HOWEVER, PURSUANT TO REASSESSMENT NOTICE, WHICH WAS DROPPED DUE TO TECHNICAL REASONS, AND LATER NOTICE WAS ISSUED AND ASSESSMENTS WERE TAKEN UP AFRESH-AFTER CONSIDERING SUBMISSIONS OF ASSESSEE AND DOCUMENTS PRODUCED IN REASSESSMENT PROCEEDINGS, AO ADDED BACK A SUM OF RS.1,35,00,000-CIT(A) HELD AGAINST ASSESSE E 89 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ON LEGALITY OF REASSESSMENT NOTICE BUT ALLOWED ASSESSEE'S APPEAL ON MERITS HOLDING THAT AO DID NOT CONDUCT APPROPRIATE ENQUIRY TO CONCLUDE THAT SHARE INCLUSION AND ADVANCES RECEIVED WERE FROM BOGUS ENTITIES-TRIBUNAL ALLOWED ASSESSEE'S APPEAL ON MERI TS- REVENUE APPEALED AGAINST APPELLATE ORDER ON MERITS- ASSESSEE'S CROSS APPEAL WAS ON CORRECTNESS OF REOPE NING OF ASSESSMENT- TRIBUNAL UPHELD ASSESSEE'S CROSS- OBJECTIONS AND DISMISSED REVENUE'S APPEAL HOLDING T HAT THERE WAS NO PROPER APPLICATION OF MIND BY CONCERNE D SANCTIONING AUTHORITY U/S SECTION 151 AS A PRE- CONDITION FOR ISSUING NOTICE U/S 147/148-HELD, SECTION 151 STIPULATES THAT CIT (A), WHO WAS COMPETENT AUTHORITY TO AUTHORIZE REASSESSMENT NOTICE, HAD TO APPLY HIS MIND AND FORM OPINION- MERE APPENDING OF EXPRESSION 'APPROVED' SAYS NOTHING-IT WAS NOT AS IF CIT (A) HAD TO RECORD ELABORATE REASONS FOR AGREEING WI TH NOTING PUT UP-AT SAME TIME, SATISFACTION HAD TO BE RECORDED OF GIVEN CASE WHICH COULD BE REFLECTED IN BRIEFEST POSSIBLE MANNER- IN PRESENT CASE, EXERCISE 90 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. APPEARS TO HAVE BEEN RITUALISTIC AND FORMAL RATHER THAN MEANINGFUL, WHICH WAS RATIONALE FOR SAFEGUARD OF APPROVAL BY HIGHER RANKING OFFICER-REVENUE'S APPEAL DISMISSED.' 11. SIMILAR VIEW HAS BEEN TAKEN BY THE COORDINAT E BENCHES OF THE TRIBUNAL IN A NUMBER OF CASES WHERE IT HAS BEEN HELD THAT MERELY GIVING APPROVAL BY MENTIONING , YES. I AM SATISFIED THAT IT IS A FIT CASE FOR REOPENING OF ASSESSMENT IS NOT A VALID APPROVAL. ACCORDINGLY THE REASSESSM ENT PROCEEDINGS HAVE BEEN QUASHED. SINCE, IN THE INSTA NT CASE, BOTH THE SUPERIOR AUTHORITIES HAVE MERELY GIVEN THE IR APPROVAL IN A MECHANICAL MANNER WITHOUT INDEPENDENT APPLICAT ION OF MIND, THEREFORE, RESPECTFULLY FOLLOWING THE DECISIO N OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF N.C. CABLE S (SUPRA), I HOLD THAT THE REASSESSMENT PROCEEDINGS ARE BAD IN LAW. ACCORDINGLY, THE SAME IS QUASHED. SINCE THE REASSESSMENT PROCEEDINGS HAVE BEEN QUASHED, THE SUBSEQUENT ORDER PASSED BY THE ASSESSING OFFICER BE COMES BAD IN LAW AND ACCORDINGLY THE SAME IS QUASHED. SI NCE THE ASSESSEE SUCCEEDS ON THE LEGAL GROUNDS, THE GROUNDS RAISED 91 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. BY THE ASSESSEE BECOME ACADEMIC AND, THEREFORE, ARE NOT BEING ADJUDICATED. 12. IN THE RESULT, THE APPEAL FILED BY THE AS SESSEE IS ALLOWED. 6.5. THE ITAT, SMC DELHI BENCH IN THE CASE OF MR. MUKESH CHAND GARG, NEW DELHI VS., ITO, WARD-49(3), NEW DELHI IN ITA.NO.794/DEL./2019 DATED 07.10.2019 TOOK SAME VIEW. THE FINDINGS OF THE TRIBUNAL ARE READS A S UNDER : IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER ITA NO.794/DEL/2019 ASSESSMENT YEAR: 2009-10 MUKESH CHAND GARG B-1/305, GROUND FLOOR, JANAK PURI, NEW DELHI-110058 PAN NO.AEYPG7826A VS ITO WARD- 49 (3) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. VED JAIN, ADVOCATE MS. SURBHI GOYAL, CA RESPONDENT BY SH. S. L. ANURAGI, SR. DR 92 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. DATE OF HEARING: 08/08/2019 DATE OF PRONOUNCEMENT: 07/10/2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 24.12.2018 OF THE CIT(A) -17, NEW DELHI RELATING TO A.Y.2009-10. 2. THE ASSESSEE IN ITS VARIOUS GROUNDS OF APPEAL HAS CHALLENGED THE ORDER OF THE LD. CIT(A) IN CONFIRMIN G THE ADDITION OF RS.4,25,810/- AND HAS ALSO CHALLENGED T HE VALIDITY OF PROCEEDINGS U/S. 147. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASS ESSEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 24.08. 2009 DECLARING TOTAL INCOME OF RS.5,49,980/-. SUBSEQUENT LY ON THE BASIS OF INFORMATION RECEIVED FROM PCIT OF THE INCO ME TAX (INVESTIGATION), AHEMDABAD THAT THE ASSESSEE HAD AV AILED CONTRIVED LOSS OF RS.4,39,342/- THROUGH BROKER BY C HANGING THE CLIENT CODES IN SALE AND PURCHASE ORDERS OF SEC URITIES, THE CASE OF THE ASSESSEE WAS REOPENED U/S. 147 AFTER RE CORDING 93 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. REASONS. IN RESPONSE TO NOTICE U/S. 148 THE ASSESSE E SUBMITTED THAT THE ORIGINAL RETURN FILED MAY BE TRE ATED AS RETURN FILED IN RESPONSE TO NOTICE U/S. 148. THE AS SESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDING S, CONCLUDED THAT THE ASSESSEE HAS PURCHASED EXEMPT LO NG TERM CAPITAL GAIN THROUGH BROKERS BY CHANGING CLIENT COD ES IN SALE AND PURCHASE ORDERS OF SECURITIES AND HAD CLAIMED T HE SAME AS EXEMPT. SINCE THE ASSESSEE HAS EARNED CAPITAL G AIN OF RS.4,39,342/- AND CLAIMED THE SAME AS LONG TERM CAP ITAL GAIN EXEMPT FROM TAX, THE ASSESSING OFFICER HELD TH E SAME TO BE NON GENUINE AND ACCORDINGLY MADE ADDITION OF RS.4,39,342/-. 4. IN APPEAL THE CIT(A), RELYING ON VARIOUS DECI SIONS, UPHELD THE ACTION OF THE ASSESSING OFFICER. AGGRIEV ED WITH SUCH ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO PAGE-12 OF THE PAPER BOOK DREW THE ATTENTION OF THE BENCH T O COLUMN NO.12 WHERE THE PCIT HAD SIMPLY MENTIONED 94 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. SATISFIED. REFERRING TO CLAUSE NO.11 OF THE FORM HE SUBMITTED THAT THE ADDITIONAL CIT HAS SIMPLY MENTIO NED YES, IT IS FIT CASE TO ISSUE NOTICE U/S. 148 OF T HE IT ACT. REFERRING TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PCIT VS. M/S. N. C. CABLES LIMITED REPO RTED IN 391 ITR 11 AND THE DECISION OF THE HONBLE M. P. HI GH COURT IN THE CASE OF CIT VS. S. GOENKA LIME AND CHEMICALS LIMITED REPORTED IN (2015) 56 TAXMAN.COM 390 AND VARIOUS OT HER DECISIONS FILED IN THE PAPER BOOK, HE SUBMITTED THA T THE COURTS HAVE HELD THAT THE REOPENING IS NOT SUSTAINABLE WHE RE APPROVAL / SANCTION GIVEN BY THE AUTHORITY IS WITHO UT RECORDING SATISFACTION. REFERRING TO VARIOUS OTHER DECISION HE SUBMITTED THAT THE ASSESSING OFFICER, NOT HAVING JU RISDICTION OVER THE ASSESSEE, CANNOT ISSUE NOTICE U/S. 148 OF THE IT ACT. THE ASSESSING OFFICER IN THE INSTANT CASE HAS NOT A PPLIED HIS MIND AND INITIATED ACTION U/S. 147 ON THE BASIS OF REPORT OF THE INVESTIGATION WING THEREFORE, THE REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER IS N OT SUSTAINABLE. 95 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 6. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PCIT VS. PAT COMMO DITY SERVICES PRIVATE LIMITED REPORTED IN (2019) 2 TMI 7 20 SUBMITTED THAT THE HONBLE HIGH COURT HAS DECIDED T HE ISSUE IN FAVOUR OF THE ASSESSEE AND THE APPEAL FILED BY T HE REVENUE HAS BEEN DISMISSED. HE ACCORDINGLY SUBMITTED THAT BOTH LEGALLY AND FACTUALLY THE ORDER OF THE CIT(A) IS NO T SUSTAINABLE. 7. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON T HE ORDER OF THE AO AND CIT(A). 8. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BE FORE ME. I FIND THE ASSESSING OFFICER, ON THE BASIS OF REPORT OF THE INVESTIGATION WING OF THE DEPARTMENT, REOPENED THE ASSESSMENT AND MADE ADDITION OF RS.4,39,342/- ON A CCOUNT OF CLIENT CODE MODIFICATION THROUGH BROKER WHICH HA S BEEN UPHELD BY THE CIT(A). IT IS THE SUBMISSION OF THE LD. COUNSEL 96 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. FOR THE ASSESSEE THAT THE REOPENING WAS MADE IN A MECHANICAL MANNER WITHOUT APPLICATION OF MIND BY TH E ASSESSING OFFICER AND ON BORROWED SATISFACTION. FUR THER THE APPROVING AUTHORITIES HAVE ALSO GIVEN THE APPROVAL IN A MECHANICAL MANNER AND THE ASSESSEE WAS NEVER GIVEN ANY OPPORTUNITY OF CROSS-EXAMINATION. IT IS ALSO HIS SU BMISSION THAT IN VIEW OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PCIT VS. PAT COMMODITY SERVICES PRIVATE LIMITED (SUPRA) THE ADDITION ON ACCOUNT OF CLIENT CODE MODI FICATION IS NOT SUSTAINABLE. 9. A PERUSAL OF THE PROFORMA FOR APPROVAL TO ISS UE OF NOTICE U/S. 148, COPY OF WHICH IS PLACED AT PAGE 12 OF THE PAPER BOOK SHOWS THAT AS PER CLAUSE 12 OF THE PROFORMA, T HE PCIT WHILE GIVING APPROVAL HAS SIMPLY MENTIONED SATISFIED. SIMILARLY AS PER CLAUSE 11, THE ADDL. CIT HAS SIMPLY MENTIONED YES, IT IS A FIT CASE TO ISSUE N OTICE U/S. 148 OF THE IT ACT, 1961. 9.1 THE HONBLE DELHI HIGH COURT IN THE CASE OF PCIT VS. N. C. CABLES LTD. (SUPRA) HAS HELD AS UNDER :- 97 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 11. SECTION 151 OF THE ACT CLEARLY STIPULATES T HAT THE CIT(A), WHO IS THE COMPETENT AUTHORITY TO AUTHORIZE THE REASSESSMENT NOTICE, HAS TO APPLY HIS MIND AND FORM AN OPINION. THE MERE APPENDING OF THE EXPRESSION 'APPROVED' SAYS NOTHING. IT IS NOT A S IF THE CIT (A) HAS TO RECORD ELABORATE REASONS FOR AGREEING WITH THE NOTING PUT UP. AT THE SAME TIME, SATISFACTION HAS TO BE RECORDED OF THE GIVEN CASE WHICH CAN BE REFLECTED IN THE BRIEFEST POSSIBLE MANNER. IN THE PRESENT CASE, THE EXERCISE APPEARS T O HAVE BEEN RITUALISTIC AND FORMAL RATHER THAN MEANINGFUL, WHICH IS THE RATIONALE FOR THE SAFEGUAR D OF AN APPROVAL BY A HIGHER RANKING OFFICER. FOR THE SE REASONS, THE COURT IS SATISFIED THAT THE FINDINGS B Y THE ITAT CANNOT BE DISTURBED. 9.2 THE HONBLE M. P. HIGH COURT IN THE CASE OF CIT VS. S. GOYANKA LIME & CHEMICALS LTD. (SUPRA) HAS HELD AS U NDER :- 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND WE FIND THAT WHILE ACCORDING SANCTION, THE JOINT 98 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. COMMISSIONER, INCOME TAX HAS ONLY RECORDED SO YES, I AM SATISFIED. IN THE CASE OF ARJUN SINGH (SUPRA), THE SAME QUESTION HAS BEEN CONSIDERED BY A COORDINATE BENCH OF THIS COURT AND THE FOLLOWING PRINCIPLES ARE LAID DOWN:- THE COMMISSIONER ACTED, OF COURSE, MECHANICALLY IN ORDER TO DISCHARGE HIS STATUTORY OBLIGATION PROPERLY IN THE MATTER OF RECORDING SANCTION AS HE MERELY WROTE ON THE FORMAT YES, I AM SATISFIED WHICH INDICATES AS IF HE WAS TO SIGN ONLY ON THE DOTTED LINE. EVEN OTHERWISE ALSO, THE EXERCISE IS SHOWN TO HAVE BEEN PERFORMED IN LESS THAN 24 HOURS OF TIME WHICH ALSO GOES TO INDICATE THAT THE COMMISSIONER DID NOT APPLY HIS MIND AT ALL WHILE GRANTING SANCTION. THE SATISFACTION HAS TO BE WITH OBJECTIVITY ON OBJECTIVE MATERIAL. 8. IF THE CASE IN HAND IS ANALYSED ON THE BASIS OF THE AFORESAID PRINCIPLE, THE MECHANICAL WAY OF RECORDING SATISFACTION BY THE JOINT COMMISSIONER, 99 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. WHICH ACCORDS SANCTION FOR ISSUING NOTICE UNDER SECTION 148, IS CLEARLY UNSUSTAINABLE AND WE FIND THAT ON SUCH CONSIDERATION BOTH THE APPELLATE AUTHORITIES HAVE INTERFERED INTO THE MATTER. IN DOI NG SO, NO ERROR HAS BEEN COMMITTED WARRANTING RECONSIDERATION. 9. AS FAR AS EXPLANATION TO SECTION 151, BROUGHT INTO FORCE BY FINANCE ACT, 2008 IS CONCERNED, THE SAME ONLY PERTAINS TO ISSUANCE OF NOTICE AND NOT WITH REGARD TO THE MANNER OF RECORDING SATISFACTION . THAT BEING SO, THE SAID AMENDED PROVISION DOES NOT HELP THE REVENUE. 10. IN VIEW OF THE CONCURRENT FINDINGS RECORDED BY THE LEARNED APPELLATE AUTHORITIES AND THE LAW LAID DOWN IN THE CASE OF ARJUN SINGH (SUPRA), WE SE E NO QUESTION OF LAW INVOLVED IN THE MATTER, WARRANTING RECONSIDERATION. 11. THE APPEALS ARE, THEREFORE, DISMISSED. 100 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 9.3 SINCE IN THE INSTANT CASE ALSO BOTH THE APPR OVING AUTHORITIES HAVE GIVEN THE APPROVAL IN A MECHANICAL MANNER, THEREFORE, IN THE LIGHT OF THE RATIO LAID DOWN BY T HE DECISIONS CITED (SUPRA) AND THE OTHER DECISIONS FILED IN THE CASE LAW COMPILATION, THE REASSESSMENT PROCEEDINGS IN MY OPI NION ARE NOT IN ACCORDANCE WITH LAW. THEREFORE, THE SAME IS LIABLE TO BE QUASHED. I, THEREFORE, QUASH THE REASSESSMENT PROCEEDINGS. 10. EVEN OTHERWISE ON MERIT ALSO, SO FAR AS THE ADDITION ON ACCOUNT OF CLIENT CODE MODIFICATION IS CONCERNED I FIND THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PAT COMMOD ITY SERVICES (SUPRA) HAS OBSERVED AS UNDER :- 3. THE RESPONDENT ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF PROVIDING COMMODITY SERVICES TO ITS CLIENTS. IN THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 20060 7, THE ASSESSING OFFICER NOTICED THAT THERE WERE INSTA NCES OF CLIENT CODE MODIFICATIONS. THE ASSESSING OFFICER BELIEVED THAT THE SAME WAS DONE TO INDULGE IN CIRCU LAR 101 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. TRADING TO PASS ON PROFITS OR LOSSES TO THE CLIENTS OF THE ASSESSEE COMPANY AS PER REQUIREMENTS. AFTER HEARING THE ASSESSEE, THE ASSESSING OFFICER MADE ADDITIONS IN THE INCOME OF THE ASSESSEE ON SUCH BASIS. THE ISSUE EVENTUALLY REACHED TO THE TRIBUNAL. THE TRIBUNAL DI D ACCEPT THE REVENUE'S THEORY OF MISUSE OF CLIENTS CO DE MODIFICATION FACILITY. HOWEVER, THE TRIBUNAL ACCEPT ED THE ASSESSEE'S EXPLANATION AND DISCARDED THE REVENUE'S THEORY THAT PROFIT OF THE ASSESSEE'S COMPANY WERE PASSED ON TO THE CLIENTS. IT WAS ALSO NOTICED THAT THE REVENUE HAS NOT CONTENDED THAT THE CLIENT CODE MODIFICATION FACILITY IS OFTEN MISUSED BY THE ASSES SEE TO PASS ON LOSSES TO THE INVESTORS, WHO MAY HAVE SIZAB LE PROFIT ARISING OUT OF COMMODITY TRADING AGAINST WHI CH SUCH LOSSES CAN BE SET OFF. THE REVENUE NORMALLY PO INTS OUT NUMBER OF SUCH INSTANCES OF CLIENT CODE MODIFICATIONS AS WELL AS NATURE OF ERRORS IN FILLIN G OF THE CLIENT CODE. AT ANY RATE, WHAT CAN BE TAXED IN THE HANDS OF THE PRESENT ASSESSEE IS THE INCOME ESCAPING ASSESSMENT. EVEN IF THE REVENUE'S THEORY OF THE 102 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ASSESSEE HAVING ENABLED THE CLIENTS TO CLAIM CONTRI VED LOSSES, THE REVENUE HAD TO BRING ON RECORD SOME EVIDENCE OF THE INCOME EARNED BY THE ASSESSEE IN TH E PROCESS, BE IT IN THE NATURE OF COMMISSION OR OTHER WISE. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS ADDE D THE ENTIRE AMOUNT OF DOUBTFUL TRANSACTIONS BY WAY OF ASSESSEE'S ADDITIONAL INCOME, WHICH IS WHOLLY IMPERMISSIBLE. WE DO NOT KNOW THE FATE OF THE INDIV IDUAL INVESTORS IN WHOSE CASES, THE REVENUE COULD HAVE QUESTIONED THE ARTIFICIAL LOSSES. BE THAT AS IT MAY , WE DO NOT THINK ENTERTAINING THESE APPEALS WOULD SERVE AN Y USEFUL PURPOSE. 4. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED . 11. RESPECTFULLY FOLLOWING THE DECISION OF HONB LE BOMBAY HIGH COURT CITED (SUPRA). I HOLD THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) O N ACCOUNT OF CLIENT CODES MODIFICATION IS NOT JUSTIFIED. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 103 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS ALLOWED. 6.6. THE ITAT, C-BENCH, DELHI IN THE CASE OF M/S. GANESH GANGA INVESTMENTS PVT. LTD., DELHI VS., ITO, WARD- 10(1), NEW DELHI IN ITA.NO.1579/DEL./2019, DATED 07.11.2019 ON AN IDENTICAL ISSUE HELD AS UNDER : IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES C: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA.NO.1579/DEL./2019 ASSESSMENT YEAR 2010-2011 M/S. GANESH GANGA INVESTMENTS PVT. LTD., A-52, TOP FLOOR, STREET NO.1, GURUNANAKPURA, LAXMI NAGAR, DELHI 110 092. PAN AAACG2710J VS., THE INCOME TAX OFFICER, WARD 10 (1), ROOM NO.206A, C.R. BUILDING, I.P. ESTATE, NEW DELHI. PIN 110 002. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI RAJ KUMAR, C.A. AND SHRI RAJEEV AHUJA, ADVOCATE SHRI SUMIT GOEL, C.A. FOR REVENUE : MS. PARMIT M. BISWAS, CIT - DR DATE OF HEARING : 10.10.2019 DATE OF PRONOUNCEMENT : 07.11.2019 104 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-4, NEW DELHI, D ATED 26.12.2018, FOR THE A.Y. 2010-2011. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE COMPANY FILED ITS RETURN OF INCOME ON 04.02.2011 FO R THE A.Y. 2010-2011 DECLARING LOSS OF RS.9,616/- WHICH WAS PR OCESSED UNDER SECTION 143(1) OF THE I.T. ACT, 1961. THE ASS ESSEE DECLARED INCOME FROM BROKERAGE AND COMMISSION, INTE REST ON LOAN AND PROFIT ON SALE OF INVESTMENT ALSO. 2.1. AN INFORMATION WAS RECEIVED FROM THE O/O. CIT , CENTRAL-2, NEW DELHI, VIDE LETTER DATED 14.02.2014 MENTIONING THEREIN THAT A SEARCH/SURVEY OPERATION U NDER SECTION 132/133A OF THE INCOME TAX ACT, 1961 WAS CONDUCTED BY THE INVESTIGATION WING AT THE BUSINESS AND RESIDENTIAL PREMISES OF SHRI HIMANSHU VERMA AND HIS GROUP ON 29.03.2012 WHEREIN AFTER INTENSIVE AND EXTENSIVE INQUIRY AND EXAMINATION OF DOCUMENTS SEIZED DURING THE COUR SE OF 105 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. SEARCH, IT HAS BEEN GATHERED THAT THE SAID PERSONS ARE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES TO THE PERSONS WHO WERE NAMED IN THE REPORT. DURING THE COURSE OF INQUIRY MADE BY THE INVESTIGATION WING, IT ALSO CAME TO THE NOTICE THAT SHRI HIMANSHU VERMA WAS ENGAGED IN THE BUSINES S OF PROVIDING ACCOMMODATION ENTRIES THROUGH CHEQUES/PO/ DD IN LIEU OF CASH TO LARGE NUMBER OF BENEFICIARY COMPANI ES THROUGH VARIOUS PAPER AND DUMMY COMPANIES FLOATED AND CONTR OLLED BY HIM. THE CASH RECEIVED FROM THE PARTIES FOR PROV IDING ACCOMMODATION ENTRIES WAS FIRST DEPOSITED IN THE AC COUNT OF THESE DUMMY FIRMS/COMPANIES IN THE GUISE OF CASH RE CEIVED AGAINST THE BOGUS SALES DULY SHOWN IN THE BOOKS OF ACCOUNT. ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD, T HE A.O. AFTER RECORDING REASONS FOR REOPENING OF THE ASSESS MENT, ISSUED NOTICE UNDER SECTION 148 TO THE ASSESSEE ON 31.03.2017 WHICH WAS SERVED UPON THE ASSESSEE. THE ASSESSEE OBJECTED TO THE REOPENING OF THE ASSESSMEN T AND REQUESTED TO PROVIDE COPY OF THE APPROVAL OF COMPET ENT AUTHORITY UNDER SECTION 151 OF THE I.T. ACT, 1961. THE ASSESSEE ALSO CONTENDED THAT WHATEVER MATERIAL WAS 106 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. COLLECTED AT THE BACK OF THE ASSESSEE WAS NOT CONFR ONTED AND REQUESTED TO SUPPLY STATEMENT OF SHRI HIMANSHU VERM A, REPORT AND DATA COMPLIED / RECEIVED FROM INVESTIGAT ION WING, REPORT AND DATA COMPLIED/RECEIVED BY ITO, WARD-10(1 ), NEW DELHI, DIARIES AND REGISTERS CONSIDERED AS INCRIMIN ATING MATERIAL SEIZED FROM SHRI HIMANSHU VERMA AND ANY OT HER DOCUMENTS WHICH DEPARTMENT WANTED TO RELY. IT WAS F URTHER SUBMITTED THAT PROCEEDINGS UNDER SECTION 147/148 OF THE I.T. ACT, CANNOT BE INVOKED FOR MAKING INQUIRY OR VERIFI CATION PURPOSES. THE ASSESSEE DENIED RECEIPT OF ANY ACCOMM ODATION ENTRY FROM ANY SUCH PERSON. THE A.O, HOWEVER, REJE CTED THE OBJECTIONS OF THE ASSESSEE AND PROCEEDED TO MAKE ASSESSMENT IN THE MATTER. THE A.O. NOTED THAT IN A SSESSMENT YEAR UNDER APPEAL, ASSESSEE HAS RECEIVED RS.11,05,0 0,000/- ON ACCOUNT OF SHARE CAPITAL AND SHARE PREMIUM FROM 38 PARTIES AS NOTICED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE SUMMARY OF THE SAME IS REPRODUCED IN THE ASSESSMENT ORDER. THE ASSESSEE WAS ASKED TO FILE CO MPLETE POSTAL ADDRESS, PAN AND OTHER DETAILS OF THESE 38 P ARTIES. THE A.O. ALSO ISSUED NOTICE UNDER SECTION 133(6) TO ALL 38 107 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. SHARE SUBSCRIBER COMPANIES AND ASKED FOR THE DETAIL S FROM THEM. THE A.O. RECEIVED REPLIES FROM 26 COMPANIES. IN 06 CASES, ALTHOUGH NOTICE ISSUED UNDER SECTION 133(6) OF THE I.T. ACT WERE ISSUED AS PER NEW NAME AS WELL AS OLD NAME OF THE COMPANY, BUT, THE SAME WERE RETURNED BACK UN-SERVED BY THE POSTAL AUTHORITIES. IN THE REMAINING 06 CASES, NO R EPLIES HAVE BEEN RECEIVED. THE A.O. NOTED THAT REPLIES RECEIVED FROM 26 PARTIES UNDER SECTION 133(6) HAVE BEEN ANALYSED AND THESE COMPANIES FURNISHED COPY OF THE ACKNOWLEDGMENT OF I TR, BALANCE SHEET AS ON 31.03.2010, P & L A/C, COPY OF THE BANK STATEMENT. THE A.O. HOWEVER, DID NOT ACCEPT THE REP LIES FILED BY THE 26 INVESTOR COMPANIES ON THE REASONS THAT RE PLIES HAVE BEEN RECEIVED IN BUNCH FOR SIMILAR STYLE OF EN VELOPES AND POSTED FROM THREE POST OFFICES. THE A.O. ALSO N OTED THAT NONE OF THE PARTIES EXPLAINED AS TO WHY HIGH PREMIU M WAS PAID AND PARTIES HAVE NOT EXPLAINED SOURCE OF THE I NVESTMENT. THE A.O. ALSO NOTED THAT 26 PARTIES FILED COPY OF T HE ITR, BALANCE SHEET, P & L A/C AND BANK STATEMENT, BUT, I T SHOWS THAT THEIR INCOME SHOWN IS VERY MEAGRE IN THE RETUR N OF INCOME. THE ASSESSEE WAS ASKED TO PRODUCE THE 108 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. PERSONS/PRINCIPAL OFFICERS OF THESE ENTITIES FOR VE RIFICATION. HOWEVER, ASSESSEE DID NOT PRODUCE THE SAME. THE A.O . ALSO ANALYSED THE STATEMENT OF SHRI HIMANSHU VERMA THROU GH WHOM AMOUNT HAVE BEEN RECEIVED AND THE A.O. ULTIMAT ELY REJECTED THE EXPLANATION OF ASSESSEE ON GENUINE SHA RE APPLICATION MONEY RECEIVED FROM 38 PARTIES AND MADE ADDITION OF RS.11.05 CRORES. THE A.O. FURTHER NOTED THAT ASSESSEE HAS PAID COMMISSION IN CASH FOR ARRANGING THESE ENTRIES, ON WHICH, ADDITION WAS MADE OF RS.22,10,00 0/- I.E., @ 2% OF THE AMOUNT IN QUESTION WHICH WAS ALSO ADDED TO THE RETURNED INCOME. 3. THE ASSESSEE CHALLENGED THE REOPENING OF THE ASSESSMENT AS WELL AS ADDITIONS ON MERIT BEFORE THE LD. CIT(A). IT WAS CONTENDED THAT ASSESSMENT FRAMED ON THE BASIS OF MATERIAL / DOCUMENTS / INFORMATION RECEIVE D FROM THIRD PARTY AND WITHOUT APPLICATION OF MIND BY THE A.O, THEREFORE, WHOLE ASSESSMENT IS INVALID AND BAD IN L AW. IT WAS FURTHER SUBMITTED THAT ASSESSEE HAS SHOWN ALL THE A MOUNTS IN HIS BOOKS OF ACCOUNT AND RETURN OF INCOME FILED WITH THE DEPARTMENT. THE A.O. HAS REOPENED THE ASSESSMENT BY 109 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. MENTIONING IN THE REASONS THAT ASSESSEE HAS RECEIVE D ENTRIES OF RS.2.45 CRORES WHICH FACT IS INCORRECT. THE INIT IATION OF RE- ASSESSMENT HAVE BEEN MADE MERELY ON THE BASIS OF INVESTIGATION WING REPORT WITHOUT APPLYING THE MIND . NO RIGHT OF CROSS-EXAMINATION HAVE BEEN PROVIDED TO THE ASSE SSEE TO THE STATEMENT OF SHRI HIMANSHU VERMA AND OTHERS. TH E ASSESSEE RELIED UPON THE FOLLOWING DECISIONS. 3.1. IN THE CASE OF PR. CIT VS., RMG POLYVINYL (I) LTD., 396 ITR 5 (DEL.) THE HONBLE DELHI HIGH COURT HELD AS UNDER: 'IN THE PRESENT CASE TOO, THE INFORMATION RECEIVED FROM THE INV. WING CANNOT BE SAID TO BE TANGIBLE MATERIAL PER SE WITHOUT A FURTHER ENQUIRY BEING UNDERTAKEN BY THE LEARNED ASSESSING OFFICER' 3.2. IN THE CASE OF PR. CIT VS., MEENAKSHI OVERSE AS (P) LTD., 395 ITR 677 (DEL.), THE HONBLE DELHI HIGH CO URT HELD AS UNDER : 'REASSESSMENT NOTICE CONDITION PRECEDENT RECORDING OF REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT MERE REPRODUCTION OF 110 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. INVESTIGATION REPORT IN REASONS RECORDED ABSENCE OF LINK BETWEEN TANGIBLE MATERIAL AND FORMATION OF CEDING ILLEGAL INCOME TAX ACT, 1961, SEC.147, 148' 3.3. IN THE CASE OF PR. CIT VS., G AND G PHARMA I NDIA LTD., [2016] 384 ITR 147 (DEL.), THE HONBLE DELHI HIGH COURT HELD AS UNDER : REASSESSMENT CONDITION PRECEDENT APPLICATION OF MIND BY ASSESSING OFFICER TO MATERIALS PRIOR TO FORMING REASON TO BELIEVE INCOME HAS ESCAPED ASSESSMENT - NO INDEPENDENT APPLICATION OF MIND TO INFORMATION RECEIVED FROM DIRECTORATE OF INVESTIGATION AND NO PRIMA FACIE OPINION FORMED- REASSESSMENT ORDER INVALID. 3.4. IN THE CASE OF SARTHAK SECURITIES CO. (P) LTD ., 329 ITR 110 (DEL.), THE HONBLE DELHI HIGH COURT HELD A S UNDER : NO INDEPENDENT APPLICATION OF MIND BY THE ASSESSING OFFICER BUT ACTING UNDER INFORMATION FROM INV. WING - NOTICE U/S. 147 TO BE QUASHED. 111 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 3.5. THE ASSESSEE ALSO SUBMITTED THAT ASSESSMENT I S BARRED BY TIME. THE ASSESSEE FURTHER SUBMITTED THAT APPROVAL UNDER SECTION 151 HAVE BEEN GRANTED IN A MOST MECHA NICAL MANNER WITHOUT APPLYING INDEPENDENT MIND BY THE PR. COMMISSIONER OF INCOME TAX. HE HAS SUBMITTED THAT P R. COMMISSIONER OF INCOME TAX HAS RECORDED IN THE APPR OVAL AS UNDER : FORM FOR RECORDING THE REASONS FOR INITIATING PROC EEDINGS U/S 147 AND FOR OBTAINING THE APPROVAL OF THE AD CIT/CI T/CBDT 1. NAME AND ADDRESS OF THE ASSESSEE M/S. GANESH GANGA INVESTMENT P. LTD., A-52, TOP FLOOR STREET NO.L, GURU NANAK PURA, LAXMI NAGAR, DELHI 110092 2. PAN AAACG2710J 3. STATUS COMPANY 4. WARD/CIRCLE WARD - 10(1) 5. ASSTT. YEAR IN RESPECT OF WHICH IT IS PROPOSED TO ISSUE NOTICE U/S 148 2010-11. 6. THE QUANTUM OF INCOME WHICH HAS ESCAPED ASSESSMENT RS.2,45,00,000/- 7. WHETHER THE PROVISIONS OF SECTION 112 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 147(A) OR 147(B) ARE APPLICABLE OR BOTH THE SECTIONS ARE APPLICABLE. 147(B) 8. WHETHER THE ASSESSMENT IS PROPOSED TO BE MADE FOR THE FIRST TIME. IF THE REPLY IS AFFIRMATIVE, PLEASE STATE (A) WHETHER ANY VOLUNTARY RETURN HAS ALREADY BEEN FILED. (B) IF SO, THE DATE OF FILING OF RETURN YES YES 04.02.2011 9. IF ANSWER TO ITEM 8 IS NEGATIVE, PLEASE STATE (A) INCOME ORIGINALLY ASSESSED NA (B) WHETHER IT IS A CASE OF UNDER ASSESSMENT, AT LOWER RATE, ASSESSMENT WHICH HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF OR ALLOWING EXCESS LOSS/DEPRECIATION. NO 10. WHETHER THE PROVISION OF SEC. 150(1) ARE APPLICABLE. IF THE REPLY IS IN AFFIRMATIVE THE RELEVANT FACTS MAY BE STATED AGAINST ITEM NO. 11 AND 8 MAY ALSO BE BROUGHT OUT THAT THE PROVISIONS OF SEC. 150(2) WOULD NOT STAND IN THE WAY OF INITIATING NO 113 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. PROCEEDINGS U/S. 147. 11. REASONS FOR THE BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT. AS PER ANNEXURE. SD/- H.K. SHARMA DATED: 29.03.2017. ITO, WARD-1 0(1), NEW DELHI. 12. WHETHER THE ADDL. COMMISSIONER OF I. TAX IS SATISFIED ON THE REASONS RECORDED BY THE ITO THAT IT IS A FIT CASE FOR THE ISSUE OF NOTICE U/S.148. IN VIEW OF THE FACTS NOTICE U/S.148 TO BE ISSUED. 13. WHETHER THE PR. COMMISSIONER OF I. TAX IS SATISFIED ON THE REASONS RECORDED BY THE ITO THAT IT IS A FIT CASE FOR THE ISSUE OF NOTICE U/S.148. YES I AM SATISFIED THAT IT IS A FIT CASE FOR ISSUE OF NOTICE U/S.148 OF THE I.T. ACT, 1961. SD/-S.K. MITTAL, PR. COMMISSIONER OF I. TAX, NEW DELHI. 3.6. THIS APPROVAL IS NOT VALID IN LAW BECAUSE IT WOULD SHOW THAT APPROVAL HAVE BEEN GRANTED WITHOUT APPLIC ATION OF MIND. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF UNITED ELECTRICAL CO. PVT. LTD., VS. COMMISSIONER O F INCOME 114 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. TAX 258 ITR 317 IN WHICH APPROVAL BY ADDL. COMMISSI ONER OF INCOME TAX UNDER SECTION 151 WAS GIVEN IN THE FOLLO WING TERMS YES I AM SATISFIED THAT IT IS A FIT CASE FOR ISSUE OF NOTICE UNDER SECTION 148 OF THE I.T. ACT. THE HON BLE DELHI HIGH COURT CONSIDERING THE SIMILARLY WORDED APPROVA L DID NOT APPROVE THE SAME AND HELD THAT IN THE PRESENT CASE , THERE HAS BEEN NO APPLICATION OF MIND BY ADDL. COMMISSION ER OF INCOME TAX BEFORE GRANTING THE APPROVAL. THE ASSES SEE ALSO RELIED UPON JUDGMENT OF HONBLE SUPREME COURT IN TH E CASE OF COMMISSIONER OF INCOME TAX VS., S. GOYANKA LIME & CHEMICAL LTD., [2015] 64 TAXMANN.COM 313 (SC) APPRO VING THE JUDGMENT OF HONBLE MADHYA PRADESH HIGH COURT I N THE CASE OF COMMISSIONER OF INCOME TAX, JABALPUR VS., S . GOYANKA LIME & CHEMICAL LTD., [2015] 56 TAXMANN.COM 390 (M.P.) IN WHICH THE DEPARTMENTAL SLP HAS BEEN DISMI SSED ON THE SAME REASON BECAUSE THE JOINT COMMISSIONER OF I NCOME TAX RECORDED SATISFACTION IN A MECHANICAL MANNER AN D WITHOUT APPLICATION OF MIND. THE ASSESSEE ALSO RELI ED UPON JUDGMENT OF HONBLE MADHYA PRADESH HIGH COURT IN TH E CASE OF ARJUN SINGH VS., ADIT [2000] 246 ITR 363 (M.P.) IN WHICH 115 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ALSO SIMILARLY WORDED SANCTION UNDER SECTION 148 WA S NOT FOUND VALID. THE ASSESSEE ALSO RELIED UPON JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF PR. COMMISS IONER OF INCOME TAX VS., N.C. CABLES LTD., [2017] 88 TAXMANN .COM 649 (DEL.) IN WHICH ALSO ON SIMILARLY WORDED SANCTION, IT WAS HELD THAT RE-ASSESSMENT WAS NOT VALID. THE ASSESSEE ALSO SUBMITTED THAT SINCE NO RIGHT OF CROSS-EXAMINATION HAVE BEEN ALLOWED TO THE STATEMENT OF SHRI HIMANSHU VERMA, TH EREFORE, SUCH STATEMENT CANNOT BE READ IN EVIDENCE AGAINST T HE ASSESSEE. HE HAS RELIED UPON JUDGMENT OF HONBLE SU PREME COURT IN THE CASE OF M/S. ANDAMAN TIMBER INDUSTRIES VS., COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II REPORTED IN 281 CTR 241. 4. THE LD. CIT(A), HOWEVER, DID NOT ACCEPT THE CONTENTION OF ASSESSEE AND CONFIRMED THE REOPENING OF THE ASSESSMENT. THE ASSESSEE ALSO MADE SUBMISSIONS ON M ERIT TO SHOW THAT ADDITION IS WHOLLY UNJUSTIFIED. HOWEVE R, THE LD. CIT(A) DID NOT ACCEPT THE CONTENTION OF ASSESSEE AN D UPHELD THE ADDITION ON MERIT AS WELL. THE APPEAL OF ASSESS EE WAS ACCORDINGLY DISMISSED. 116 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 5. THE ASSESSEE IN THE PRESENT APPEAL CHALLENGED T HE REOPENING OF THE ASSESSMENT UNDER SECTION 147/148 O F THE I.T. ACT, 1961, ON SEVERAL GROUNDS, ADDITION OF RS. 11.05 CRORES UNDER SECTION 68 OF THE I.T. ACT AND ADDITIO N OF RS.22,10,000/- ON ACCOUNT OF COMMISSION. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND REFERRED TO REASONS RECORDED IN THIS CASE FOR REOPE NING OF THE ASSESSMENT, COPY OF WHICH IS FILED AT PAGE-15 OF TH E PB. PB- 29 IS APPROVAL/SANCTION GRANTED BY THE PR. COMMISSI ONER OF INCOME TAX, NEW DELHI. PB-6 IS BALANCE-SHEET TO SHO W THAT IN PRECEDING ASSESSMENT YEAR THE SHARE CAPITAL WAS OF RS.3.01 CRORES AND IN ASSESSMENT YEAR IN INCREASED TO RS.14 .06 CRORES. THUS, ABOUT RS.11 CRORES HAVE INCREASED AND THIS FACT WAS ALSO DISCLOSED TO THE REVENUE DEPARTMENT. SUCH DETAILS ARE FILED IN THE RETURN OF INCOME. NO VERIFICATION COULD BE ALLOWED IN THE GARB OF PROCEEDINGS UNDER SECTION 14 8 OF THE INCOME TAX ACT, 1961. THE NAME OF M/S. MANAGEMENT SERVICES PVT. LTD., IN THE REASON FROM WHOM ALLEGED ENTRY 117 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. HAVE BEEN TAKEN BY THE ASSESSEE DO NOT FIGURE IN TH E APPELLATE ORDER BECAUSE SUCH PARTY DOES NOT EXIST. M/S. SHUBH PROPBUILD PVT. LTD., HAS BEEN MENTIONED IN TH E REASONS DO NOT BELONG TO SHRI HIMANSHU VERMA. IN ASSESSMENT ORDER NAME OF M/S. MANAGEMENT SERVICES PVT. LTD., DO NOT APPEAR. PB-13 OF THE ASSESSMENT ORDER REFERRED TO THE STATE MENT OF SHRI HIMANSHU VERMA IN WHICH NAME OF M/S. SHUBH PROPBUILD PVT. LTD., DOES NOT APPEAR. THE A.O, THER EFORE, RECORDED INCORRECT REASONS AND DID NOT APPLY HIS MI ND TO THE MATERIAL ON RECORD. THE A.O. HAS NOT GONE THROUGH T HE RECORD AND THE BALANCE COMPANY DO NOT BELONG TO THE ASSESS EE. THE STATEMENT OF SHRI HIMANSHU VERMA WAS NOT SUBJECTED TO CROSS-EXAMINATION ON BEHALF OF ASSESSEE, DESPITE MA KING A REQUEST TO THE A.O. [PB-19]. IN THE STATEMENT OF SH RI HIMANSHU VERMA FILED ON RECORD, NO SUCH COMPANIES H AVE BEEN MENTIONED, THEREFORE, NO ADVERSE INFERENCE COU LD BE DRAWN AGAINST THE ASSESSEE. THE ASSESSEE DID NOT RE CEIVE ANY NOTICE FOR PRODUCTION OF THE PARTIES BEFORE A.O . THERE IS NO EVIDENCE ON RECORD OF ANY PAYMENT OF COMMISSION PAID BY ASSESSEE FOR ARRANGING SHARE CAPITAL. LEARNED COUNS EL FOR THE 118 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ASSESSEE RELIED UPON ORDER OF THE ITAT, DELHI BENCH IN THE CASE OF PIONEER TOWN PLANNERS PVT. LTD., VS. DCIT ITA.NO.132/DEL./2018 DATED 06.08.2018 IN WHICH IN S IMILAR CIRCUMSTANCES THE RE-ASSESSMENT HAVE BEEN QUASHED W HICH CASE ALSO RELATES TO ENTRY PROVIDED BY SHRI HIMANSH U VERMA. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A.O. ISSUED NOTICES TO ALL THE PARTIES UNDER SECTION 133 (6) OF THE I.T. ACT. IN RESPONSE TO THE SAME, 26 PARTIES FILED REPLY SUPPORTED BY DOCUMENTARY EVIDENCES TO PROVE GENUINE SHARE APPLICATION MONEY HAVE BEEN RECEIVED. THE A.O. DID NOT TAKE HELP OF ANY HANDWRITING EXPORT BEFORE FORMING ANY O PINION. IF REPLIES WERE NOT IN ORDER, ASSESSEE SHOULD HAVE BEE N CONFRONTED WITH THE MATERIAL SO THAT ASSESSEE COULD REBUT THE SAME. THEREFORE, SUCH FACT COULD NOT BE TAKEN ADVER SELY AGAINST THE ASSESSEE. THE ASSESSEE NEVER RECEIVED N OTICE DATED 11.12.2017 FOR PRODUCTION OF THE PARTIES FOR EXAMINATION. IN REASONS 06 PARTIES ARE MENTIONED WH ICH BELONG TO SHRI HIMANSHU VERMA, BUT, IN HIS STATEMEN T HE SAYS 08 PARTIES, BUT, THE A.O. MADE ADDITION FOR 38 PARTIES. A.O. MADE THE ADDITION ONLY ON THE STATEMENT OF SHR I 119 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. HIMANSHU VERMA, BUT, THE PARTIES DID NOT BELONG TO HIM. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SIN CE APPROVAL IS NOT IN ACCORDANCE WITH LAW, THEREFORE, REOPENING OF THE ASSESSMENT IS BAD IN LAW AND RELIED UPON THE SAME JUDGMENTS AS WERE RELIED UPON BEFORE LD. CIT(A). HE HAS SUBMITTED THAT A.O. DID NOT APPLY HIS MIND TO THE R EASONS AND RECORDED INCORRECT FACTS AND APPROVAL IS ALSO G IVEN ON INCORRECT FACTS. THE INITIATION AND APPROVAL ON THE BASIS OF WRONG FACTS IS NOT LEGALLY VALID. HE HAS RELIED UPO N JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSI ONER OF INCOME TAX VS., KAMDHENU STEEL & ALLOYS LTD., 248 C TR 33 AND OTHER DECISIONS AS WAS RELIED UPON BEFORE THE A UTHORITIES BELOW. THE AMOUNT RECEIVED FROM 30 COMPANIES IS RS. 8.13 CRORES ONLY OUT OF TOTAL AMOUNT OF RS.11.05 CRORES. THEREFORE, THERE IS NO OTHER MATERIAL ON RECORD TO JUSTIFY THE ADDITION. HE HAS SUBMITTED THAT A.O. CANNOT ASK TO EXPLAIN SOURC E OF THE SOURCE. LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE , SUBMITTED THAT REOPENING OF THE ASSESSMENT IS INVAL ID AND NO ADDITION COULD BE MADE AGAINST THE ASSESSEE EVEN ON MERITS. 120 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 7. THE LD. D.R. ON THE OTHER HAND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT A.O. DEALT WITH THE OBJECTIONS OF THE ASSESSEE, BUT, FOR RE-AS SESSMENT PROCEEDINGS NO MANNER IS PROVIDED AS TO HOW SANCTIO N IS TO BE GRANTED. A.O. RECORDED DETAILS IN THE REASONS ON WHICH PR. COMMISSIONER OF INCOME TAX WAS SATISFIED. THEREFORE , REOPENING OF THE ASSESSMENT IS VALID BECAUSE INFORM ATION WAS RECEIVED FROM INVESTIGATION WING THAT ASSESSEE HAS RECEIVED ACCOMMODATION ENTRIES. THE NAME OF ASSESSE E WAS APPEARING. SUFFICIENCY OF REASONS IS NOT REQUIRED A T THIS STAGE OF FORMATION OF RE-ASSESSMENT PROCEEDINGS. THE A.O. CANNOT DO ANY ROVING ENQUIRY AT INITIAL STAGE. THE ASSESSE E FAILED TO PROVE CREDITWORTHINESS OF THE INVESTOR COMPANIES AS THEY WERE HAVING MEAGRE INCOME. THE ASSESSEE DID NOT PRO VE GENUINENESS OF THE TRANSACTION IN THE MATTER. THE A .O. MADE ENQUIRY FROM INVESTORS AND ASSESSEE DID NOT PRODUCE PARTIES BEFORE A.O. EVEN A PREMIUM HAVE BEEN CHARGED FOR AL LOTMENT OF SHARES FOR WHICH NO REASONS HAVE BEEN EXPLAINED. THE COMPANIES ARE HAVING MEAGRE INCOME ONLY. APART FROM STATEMENT OF SHRI HIMANSHU VERMA, THERE IS ENOUGH M ATERIAL 121 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. TO JUSTIFY THE ADDITION ON MERIT. THE ASSESSEE ALSO DID NOT PROVE IDENTITY AND CREDITWORTHINESS OF THE INVESTOR S EVEN IF NO CROSS-EXAMINATION TO THE STATEMENT OF SHRI HIMANSHU VERMA HAVE BEEN ALLOWED. THE LD. D.R. RELIED UPON JUDGMEN T OF HONBLE SUPREME COURT IN THE CASE OF RAYMOND WOOLLE N MILLS 236 ITR 34 (SC). HE HAS SUBMITTED THAT INFORMATION IS PRIMA FACIE RELEVANT AND THERE IS SUFFICIENT MATERIAL ON RECORD TO JUSTIFY THE INITIATION OF RE-ASSESSMENT PROCEEDINGS . THE ASSESSEE FAILED TO PROVE THAT NO NOTICE DATED 11.12 .2017 HAVE BEEN RECEIVED. THE LD. D.R. RELIED UPON THE FO LLOWING DECISIONS. 1. PCIT VS., PARAMOUNT COMMUNICATION (P.) LTD., 2017 - TIOL-253-SC-IT. 2. PCIT VS., PARAMOUNT COMMUNICATION (P.) LTD., [20 17] 392 ITR 444 (DEL.) (HC) 3. ARADHNA ESTATE (P.) LTD., VS. DCIT [2018] 91 TAXMANN.COM 119 (GUJARAT) (HC). 4. PUSHPAK BULLION (P.) LTD., VS. DCIT [2017] 85 TAXMANN.COM 84 (GUJARAT) (HC). 5. ANKIT FINANCIAL SERVICES LTD., VS. DCIT [2017] 78 TAXMANN.COM 58 (GUJARAT) (HC). 6. AASPAS MULTIMEDIA LTD., VS. DCIT [2017] 83 TAXMANN.COM 82 (GUJARAT) (HC). 122 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 7. ANKIT AGROCHEM (P.) LTD., VS. JCIT [2018] 89 TAXMANN.COM 45 (RAJASTHAN) (HC). 8. YOGENDRAKUMAR GUPTA VS., ITO [2014] 227 TAXMAN 3 74 (SC). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS WELL SETTLED LAW THAT VALIDITY OF RE-ASSESSMENT PRO CEEDINGS IS TO BE EXAMINED WITH REFERENCE TO THE REASONS RECORD ED FOR REOPENING OF THE ASSESSMENT. THE COUNSEL FOR ASSESS EE HAS FILED COPY OF THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AT PAGE-15 OF THE PAPER BOOK WHICH READS AS UNDER : M/S. GANESH GANGA INVESTMENTS PVT. LTD., PAN AAACG2710J A.Y. 2010-11 THE ASSESSEE FILED RETURN OF INCOME FOR THE A.Y. 2010-11 ON 04.02.2011 DECLARING LOSS OF RS.(-) 14,162/-. THE RETURN WAS PROCESSED U/S 143(1). INFORMATION WAS FORWARDED TO THIS OFFICE THROUGH THE ADDL.CIT, RANGE-10, NEW DELHI THAT SEARCH & SEIZURE ACTION WAS CONDUCTED BY INV. WING AT THE OF FICE OF SH. HIMANSHU VERMA WHERE VARIOUS INCRIMINATING 123 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. DOCUMENTS/MATERIALS WERE SEIZED DURING THE COURSE O F SEARCH. DURING THE POST SEARCH INVESTIGATION AND PERUSAL OF SEIZED DOCUMENTS IT WAS OBSERVED THAT SH . HIMANSHU VERMA WAS ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION - ' ENTRIES BY PROVIDING CHEQUES/PO/DD IN LIEU OF CASH TO A LARGE NUMBER OF BENEFICIARY COMPANIES THOROUGH VARIOUS PAPER AND DUMMY COMPANIES FLOATED AND CONTROLLED BY THEM. IT WAS ALSO EVIDENTLY ESTABLISHED BY THE INVESTIGATION WING THAT SH HIMANSHU VERMA IS KNOWN ENTRY PROVIDERS AND IS THE ACTUAL CONTROLLER OF MORE THAN 100 COMPANIES/PROPRIETARY FIRMS/PARTNERSHIP FIRMS. THEY CONTROL THESE ENTITIES THROUGH VARIOUS PERSONS BY APPOINTING THEM AS DIRECTORS/PARTNERS/PROPRIETORS APART FROM NOMINATING THEM AS AUTHORIZED SIGNATORIE S FOR MAINTAINING THE BANK ACCOUNTS OF THESE ENTITIES BUT IN FACT ALL THESE PERSONS ACT ONLY AS THEIR STOOGES . THE CASH RECEIVED FROM THE RECIPIENT PARTIES FOR PROVID ING THE ACCOMMODATION ENTRIES WAS FIRST DEPOSITED IN TH E ACCOUNTS OF THESE DUMMY FIRMS/COMPANIES IN THE 124 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. DISGUISE OF THE CASH RECEIVED AGAINST THE BOGUS SAL ES, DULY SHOWN IN THE BOOKS OF ACCOUNTS. FROM THERE, TH IS CASH WAS TRANSFERRED TO THE DIFFERENT PAPER COMPANI ES FLOATED BY SH. HIMANSHU VERMA THROUGH A COMPLEX TRAIL OF TRANSACTIONS, SO AS TO HIDE THE ACTUAL SOU RCES OF FUNDS OF THE LAST SET OF RECIPIENT COMPANIES OF SH. HIMANSHU VERMA IN THIS WAY, THE RESERVE & SURPLUSES AND THE CAPITAL ACCOUNT OF A SPECIFIC SET OF COMPANIES ARE ENHANCED WITH THE HELP OF THE UNEXPLAINED CASH RECEIVED BY HIMANSHU VERMA, WHICH IS ROUTED TO THES E COMPANIES THROUGH THEIR DUMMY FIRM/COMPANIES. ONCE THE FUNDS OF THESE COMPANIES HAVE BEEN ENHANCED SUFFICIENTLY, ACCOMMODATION ENTRIES THROUGH RTGS/ CHEQUE IN THE SHAPE OF THE SHARE CAPITAL, CAPITAL G AINS OR LOANS AS PER THE SPECIFIC REQUIREMENT OF THE REC IPIENT CLIENTS WERE PROVIDED TO THEM IN LIEU OF THE CASH RECEIVED FROM THEM. IN THIS WAY, THE CHAIN FOR PROV IDING AN ACCOMMODATION ENTRY GETS COMPLETED. 125 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. IT IS NOTICED FROM THE LIST OF ENTRIES THAT THE ASSESSEE M/S GANESH GANGA INVESTMENT P. LTD. HAS TAKEN FOLLOWING ACCOMMODATION ENTRIES DURING THE FINANCIAL YEAR 2009-10 :- S.NO. AMOUNT CONDUIT COMPANIES THROUGH WHICH CHEQUE ISSUED. 1. 4000000 SHUBH PROPBUILD P LTD., 2. 4000000 JAGUAR SOFTECH P. LTD., 3. 4000000 JOIN FASHION P. LTD., 4. 4500000 MANAGEMENT SERVICES P. LTD., 5. 4000000 GREENVISION CONSTRUCTION P. LTD., 6. 4000000 USK EXIM P. LTD., TOTAL 2,45,00,000/- ON THE BASIS OF THE REPORTS RECEIVED FROM THE INVESTIGATION WING, I HAVE DOWNLOADED THE RETURN FR OM THE ITD PORTAL AND VERIFIED THE RECORDS AND IT IS C LEAR THAT THE ASSESSEE COMPANY HAS NOT DISCLOSED FULLY A ND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSME NT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AS IT EMERG ES THAT TRANSACTIONS SHOWN IN THE RETURN ARE NOT GENUI NE. APART FROM THE ABOVE THE ASSESSEE COMPANY IS NOT DOING ANY REAL BUSINESS AND KEEPING IN VIEW THE HUG E INVESTMENTS, DISALLOWANCES U/S 14A READ WITH RULE 8 D ALSO APPLICABLE IN THE CASE. THE STATEMENT GIVEN BY 126 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. SHRI HIMANSHU VERMA ALSO ESTABLISHES THE LINK WITH THE SELF-CONFESSED 'ACCOMMODATION ENTRY PROVIDERS', WHOSE BUSINESS IS TO HELP ASSESSEES BRING BACK THEI R UNACCOUNTED MONEY INTO THEIR BOOKS OF ACCOUNT. THUS , THERE IS A DIRECT LINK BETWEEN THE INFORMATION/AVAI LABLE WITH THE DEPARTMENT AND THE INCOME ESCAPING ASSESSMENT. I HAVE, THEREFORE, REASONS TO BELIEVE THAT INCOME TO THE EXTENT OF RS.2,45,00,000/- HAS ESCAPED ASSESSMENT RELEVANT TO A.Y.2010-11. THUS, THE SAME IS TO BE BROUGHT TO TAX UNDER SECTION 147/148 OF THE I .T. ACT 1961. MOREOVER, AS THE CASE PERTAINS TO A PERIOD BEYOND FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR , FOR ISSUING THE NOTICE U/S 148, NECESSARY APPROVAL / SANCTION MAY KINDLY BE ACCORDED BY THE PR. COMMISSIONER OF INCOME TAX, DELHI-4, NEW DELHI IN V IEW OF THE AMENDED PROVISION OF SECTION 151 W.E.F 01.06.2015. SD/- H.K. SHARMA, DATED : 27.03.2017. ITO, WARD-10(1), NEW DELHI. 127 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 8.1. PB-29 IS THE SANCTION GRANTED BY PR. COMMISSI ONER OF INCOME TAX FOR REOPENING OF THE ASSESSMENT IN WH ICH IT IS MENTIONED AS UNDER : 13. WHETHER THE PR. COMMISSIONER OF I. TAX IS SATISFIED ON THE REASONS RECORDED BY THE ITO THAT IT IS A FIT CASE FOR THE ISSUE OF NOTICE U/S.148. YES I AM SATISFIED THAT IT IS A FIT CASE FOR ISSUE OF NOTICE U/S.148 OF THE I.T. ACT, 1961. SD/-S.K. MITTAL, PR. COMMISSIONER OF I. TAX, NEW DELHI. 8.2. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF UNITED ELECTRICALS COMPANY (SUPRA) IN WHICH THE ADDL. COMM ISSIONER OF INCOME TAX SIMILARLY RECORDED THE APPROVAL YES I AM SATISFIED THAT IT IS A FIT CASE FOR ISSUE OF NOTICE UNDER SECTION 148 OF THE I.T. ACT. IN THIS CASE THE HONBLE DELH I HIGH COURT HELD AS UNDER : ON A CAREFUL PERUSAL OF THE STATEMENT MADE BY V' IT WAS FOUND THAT FACTS MENTIONED IN REASONS WERE DE HORS THE FACTS AVAILABLE ON RECORD. IT WAS 128 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. EVIDENT THAT THE SAID STATEMENT WAS TOO GENERAL. IT DID NOT MENTION ANY NAME MUCH LESS THE NAME OF THE ASSESSEE. IT WAS NOT THE STAND OF THE REVENUE THAT A LIST OF THE CREDITORS, WHICH INCLUDED THE NAME OF THE ASSESSEES, WAS FURNISHED BY V' SUBSEQUENTLY AND THE SAME WAS FORWARDED TO THE ASSESSING OFFICER OF THE ASSESSEE. APPLYING THE AFORENOTED SETTLED PRINCIPLES GOVERNING AN ACTION UNDER SECTION 147, THERE COULD BE NO HESITATION IN HOLDING THAT THERE WAS NO INFORMATION ON RECORD WHICH COULD PROVIDE FOUNDATION FOR THE ASSESSING OFFICER'S BELIEF THAT THE ASSESSEES TRANSACTION WI TH V LTD. WAS NOT GENUINE AND ITS INCOME HAD ESCAPED ASSESSMENT ON THAT ACCOUNT. THEREFORE, THE IMPUGNED ACTION OF THE ASSESSING OFFICER COULD NOT BE SUSTAINED. EVEN THE ADDL COMMISSIONER HAD ACCORDED HIS APPROVAL FOR ACTION UNDER SECTION 147 MECHANICALLY. IF THE ADDL. COMMISSIONER HAD CARED TO GO THROUGH THE STATEMENT OF SAID V PERHAPS HE WOULD NOT HAVE GRANTED HIS APPROVAL, 129 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. WHICH IS MANDATORY IN TERMS OF PROVISO TO SUB- SECTION (1) OF SECTION 151 AS THE ACTION UNDER SECTION 147 WAS BEING INITIATED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE LEGISLATURE HAS PROVIDED CERTAIN SAFEGUARDS TO PREVENT ARBITRARY EXERCISE OF POWERS BY AN ASSESSING OFFICER PARTICULARLY AFTER A LAPSE OF SUBSTANTIAL TIME FROM COMPLETION OF ASSESSMENT. THE POWER VESTED IN THE COMMISSIONER TO GRANT OR NOT TO GRANT THE APPROVAL IS COUPLED WITH A DUTY. THE COMMISSIONER IS REQUIRED TO APPLY HIS MIND TO THE PROPOSAL PUT UP TO HIM FOR APPROVAL IN THE LIGH T OF THE MATERIAL RELIED UPON BY THE ASSESSING OFFICER. THE SAID POWER CANNOT BE EXERCISED CASUALLY AND IN A ROUTINE MANNER. IN THE INSTANT CASE, THERE HAD BEEN NO APPLICATION OF MIND BY THE ADDL. COMMISSIONER BEFORE GRANTING THE APPROVAL. THE PETITION WAS, THUS, ALLOWED AND IMPUGNED NOTICE WAS QUASHED. 130 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 8.3. THE HONBLE SUPREME COURT APPROVING THE JUDGMENT OF HONBLE MADHYA PRADESH HIGH COURT IN TH E CASE OF COMMISSIONER OF INCOME TAX, JABALPUR (MP) VS., S . GOYANKA LIME & CHEMICALS LTD., [2015] 46 TAXMANN.CO M 313 HELD AS UNDER : SLP DISMISSED AGAINST HIGH COURTS RULING THAT WHERE JOINT COMMISSIONER RECORDED SATISFACTION IN MECHANICAL MANNER AND WITHOUT APPLICATION OF MIND TO ACCORD SANCTION FOR ISSUING NOTICE UNDER SECTION 148, REOPENING OF ASSESSMENT WAS INVALID. 8.4. SIMILAR VIEW HAVE BEEN TAKEN BY HONBLE MADHY A PRADESH HIGH COURT IN THE CASE OF MR. ARJUN SINGH V S., ASST. DIRECTOR OF INCOME TAX [2000] 246 ITR 363 (MP) (SUP RA), COPY OF WHICH IS FILED AT PAGE-97 OF THE PAPER BOOK. THE ITAT, DELHI BENCH IN THE CASE OF M/S. PIONEER TOWN PLANNERS PVT . LTD., VS., DCIT (SUPRA) IN PARAS 7 TO 22 ON SIMILAR FACTS RELATING TO ENTRY PROVIDER SHRI HIMANSHU VERMA HELD AS UNDER : 131 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 7. APROPOS THESE LEGAL GROUNDS , WE HAVE HEARD TH E ARGUMENTS OF BOTH SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE TRIBUNAL. AS AGREED BY BOTH THE PARTIES, WE HAVE HEARD ARGUMENT OF BOTH THE SIDES ON THESE LEGAL GROUNDS OF THE ASSESSEE, WHEREIN THE ASSESSEE HAS CHALLENGED TO THE INITIATION OF REASSESSMENT PROCEEDINGS AND REOPENING OF ASSESSMENT U/S. 147/148 OF THE ACT. THE LD. AR SUBMITTED THAT THE IMPUGNED ORDER OF ASSESSMENT IS INVALID AND UNSUSTAINABLE IN LAW AS THE SAME HAS BEEN PASSED BY THE AO WITHOUT PROVIDING THE REASONABLE TIME OF FOUR WEEKS FOR TAKING REMEDY AGAINST THE ORDER OF DISPOSAL OF PRELIMINARY OBJECTION AGAINST THE INCORRECT ASSUMPTION OF JURISDICTION BY THE AO U/S. 147 OF THE ACT IN VIOLATION OF PRINCIPLES ENUNCIATED BY BOMBAY HIGH COURT IN THE CASE OF ASIAN PAINTS LTD. 296 ITR 90. HE FURTHER SUBMITTED THAT THE IMPUGNED ORDERS OF AUTHORITIES BELOW NEED BE SET ASIDE AS THE 132 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. REASSESSMENT PROCEEDINGS HAVE BEEN INITIATED WITHOUT OBTAINING A SUBJECTIVE SATISFACTION BY THE PR. CIT DELHI-7, NEW DELHI AS THE APPROVAL U/S 151 IS MECHANICAL AND WITHOUT APPLICATION OF MIND. 8. THE LD. AR VEHEMENTLY POINTED OUT THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE LD. AO IS BASED ON THE INFORMATION RECEIVED FROM INVESTIGATION WING AND THERE WAS NO MATERIAL BEFORE HIM TO SUBSTANTIATE THE ALLEGATION CONTAINED IN THE INFORMATION AND THEREFORE INITIATION OF PROCEEDINGS IS BAD IN LAW. HE ALSO CONTENDED THAT THE ORDER UNDER APPEAL IS BAD IN LAW AS THE ASSESSING OFFICER HAS PASSED THE ORDER OF ASSESSMENT U/S 143(3) R/W. S. 147 OF THE ACT WITHOUT ISSUING NOTICE U/S 143(2) OF THE IT ACT. 9. THE LD. AR DREW OUR ATTENTION TOWARDS COPY OF PROFORMA OF OBTAINING APPROVAL U/S. 151 OF THE ACT ALONG WITH REASONS RECORDED, WHICH ARE PLACED AT PGS. 16-18 OF THE ASSESSEES PAPER BOOK, SUBMITTED THAT IN COLUMN 12 ADDL. CIT HAS GRANTED 133 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. APPROVAL WITHOUT APPLICATION OF MIND BY WRITING ONLY YES, I AM SATISFIED. THE LD. AR SUBMITTED THAT AS PER DECISION OF HON MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. M/S. S. GOYANKA LIME AND CHEMICALS LTD. 231 TAXMAN 0073 (MP), WHERE THE JOINT COMMISSIONER RECORDED SATISFACTION IN MECHANICAL MANNER AND WITHOUT APPLICATION OF MIND TO ACCORD SANCTION FOR ISSUING NOTICE U/S. 148 OF THE ACT AND HAS ONLY RECORDED SO YES, I AM SATISFIED THEN, THE REOPENING ASSESSMENT HAS TO BE HELD AS INVALID. THE LD. AR ALSO PLACED RELIANCE ON THE DECISION OF ITAT, DELHI IN THE CASE OF ITO V S. VIRAT CREDIT & HOLDINGS PVT. LTD. IN ITA NO.89/DEL/2012 DATED 09.02.2018. THE LD. AR SUBMITTED THAT AS PER DECISION OF HON'BLE HIGH COURT OF BOMBAY IN WP (L) NO.3063/2017 IN THE CASE OF SMT. KALPANA SHANTILAL HARIA VS. ACIT DATED 22.12.2017, SANCTION FOR ISSUING A REOPENING NOTICE CANNOT BE MECHANICAL BUT HAS TO BE ON DUE APPLICATION OF MIND. SANCTION ACCORDED DESPITE 134 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. MENTION OF NON-EXISTENT SECTION IN THE NOTICE IS PRIMA FACIE EVIDENCE OF NON-APPLICATION OF MIND ON THE PART OF THE SANCTIONING AUTHORITY. THEIR LORDSHIP IN THIS JUDGMENT CATEGORICALLY HELD THAT SUCH DEFECT CANNOT BE CURED U/S. 292B OF THE ACT. 10. THE LD. AR PLACED RELIANCE ON THE DECISION OF HON'BLE HIGH COURT OF DELHI DATED 31.08.2017 IN WP(C) NO. 614/2014 IN THE CASE OF YUM RESTAURANTS ASIA PTE LTD. VS. DDIT IT WAS HELD THAT THE GLARING MISTAKES IN THE PROFORMA FOR APPROVAL IS THE VALID GROUND FOR QUASHING THE ASSESSMENT ON THE PREMISE OF NON-APPLICATION OF MIND BY ALL THE AUTHORITIES INVOLVED IN THE PROCESS OF RECORDING REASONS AND PROVIDING SATISFACTION/S. 151 OF THE ACT. FURTHER PLACED RELIANCE ON THE DECISION OF ITAT, MUMBAI IN THE CASE OF GTL LTD. VS. ACIT REPORTED IN 37 ITR (TRIB.) 0376 (MUM.), NOTICE U/S. 148 OF THE ACT DOES NOT MENTION THE FACT THAT THE SAME IS ISSUED AFTER THE SATISFACTION OF THE AUTHORITY U/S. 151 OF THE ACT, SUCH NON-MENTIONING 135 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. OF THIS FACT RENDERS THE CONSEQUENT ASSESSMENT INVALID IN LAW, RELIED ON THE JUDGMENT OF DSJ COMMUNICATION VS. DCIT 222 TAXMAN 129 (BOM.). 11. ON THE ISSUE OF VALIDITY OF REOPENING AND INITI ATION REASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT THE LD. AR ALSO POINTED OUT THAT AS PER RATIO OF THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF ASIAN PAINTS LTD. 296 ITR 90 (BOM), THE AO TO WAIT FOR FOUR WEEKS TO BEGIN ASSESSMENT AFTER DISPOSING OF THE OBJECTION AND NON-COMPLIANCE OF THE SAME RENDERS ASSESSMENT PROCEEDINGS VOID. HE SUBMITTED THAT IN THE PRESENT CASE THE OBJECTIONS OF THE ASSESSEE VIDE DATED 29.11.2016 FILED BEFORE THE AO WERE DISPOSED OF/DISMISSED BY THE AO BY THE ORDER DATED 12.12.2016 AND HE PASSED IMPUGNED REASSESSMENT ORDER U/S. 143(3) R/W S. 147 OF THE ACT ON 22.12.2016 WHICH IS CLEAR VIOLATION OF DIRECTIONS GIVEN BY HON'BLE HIGH COURT IN THE CASE OF ASIAN PAINTS (SUPRA) AND ON THIS COUNT ALSO REASSESSMENT PROCEEDINGS AND 136 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. CONSEQUENT ORDERS ARE VOID AND THUS, BAD IN LAW. THIS VIEW WAS AGAIN APPROVED BY HON'BLE HIGH COURT OF BOMBAY ITSELF IN THE SUBSEQUENT DECISION IN THE CASE OF ARONI COMMERCIALS LTD. VS. DCIT REPORTED IN 362 ITR 403 (BOM) AND FOLLOWED BY ITAT, BOMBAY IN THE CASE OF SHRI HIRACHAND KANUGA VS. DCIT IN ITA NO.4261 & 4262/2012 DATED 27.02.2015. 12. ON THESE SUBMISSIONS, THE LD. DR COULD NOT CONTROVERT THE FACTS THAT THE AO DISPOSED OF OBJECTIONS OF THE ASSESSEE BY WAY OF PASSING ORDER ON 12.12.2016 AND IMPUGNED REASSESSMENT ORDER U/S. 143(3) R/W S. 147 OF THE ACT WAS PASSED ONLY AFTER 10 DAYS OF DISPOSAL OF OBJECTIONS. THESE FACTS TRIGGER THE RATIO OF THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF ASIAN PAINTS (SUPRA), WHEREIN THEIR LORDSHIP DIRECTED THAT THE A O TO WAIT FOR FOUR WEEKS TO BEGIN ASSESSMENT AFTER DISPOSING OF THE OBJECTIONS OF THE ASSESSEE AND NON-COMPLIANCE THE SAME RENDERS ASSESSMENT 137 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. PROCEEDINGS VOID AND BAD IN LAW. PRESENT IMPUGNED REASSESSMENT ORDER CANNOT BE HELD SUSTAINABLE AND VALID AS THE AO HAS PASSED THE SAME IMMEDIATELY AFTER 10 DAYS OF DISPOSAL OF/DISMISSAL OF OBJECTION OF THE ASSESSEE WHICH IS CLEAR VIOLATION OF DIRECTION OF HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF ASIAN PAINTS (SUPRA) AND LEGAL CONTENTION OF THE ASSESSEE ON THIS ISSUE ARE FOUND TO BE ACCEPTABLE AND WE HOLD SO. 13. THE LD. AR DREW OUR ATTENTION TOWARDS REASONS RECORDED AND SUBMITTED THAT THERE IS NO DATE IN THE REASONS RECORDED WHICH SHOWS CASUAL APPROACH OF THE AO WHILE RECORDING THE REASONS. THE LD. AR SUBMITTED THAT AS PER DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF PCIT VS. MEENAKSHI OVERSEAS P. LTD. 395 ITR 677 (DEL) IF THE REASONS FAILED TO DEMONSTRATE THE LINK BETWEEN THE TANGIBLE MATERIAL AND FORMATION OF THE REASONS TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT THEN, IT WOULD AMOUNT TO BORROWED 138 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. SATISFACTION AND IT HAS TO BE PRESUMED THAT THERE I S NO INDEPENDENT APPLICATION OF MIND BY THE AO TO THE TANGIBLE MATERIAL WHICH FORMS THE BASIS OF THE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. THE LD. AR SUBMITTED THAT FROM THE THREE PAGES OF REASONS RECORDED, IT IS DISCERNABLE THAT IN FIRST FOUR PARAS THE AO HAS NOTED FACTS OF THE INFORMATION RECEIVED FROM DDIT (INVESTIGATION), FARIDABAD, IN PARA 6 MODUS OPERANDI OF ENTRY PROVIDERS HAS BEEN NOTED THEREAFTER, IN PARA 7 & 8, IT HAS BEEN ARISEN THAT EITHER DURING SURVEY OR POS T SURVEY PROCEEDINGS THE ASSESSEE COMPANY HAS NOT SUBMITTED SATISFACTORY EXPLANATION TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF SHARE CAPITAL/PREMIUM INTRODUCERS AND THUS, THE SAME IS FROM PAPER COMPANIES OF ENTRY OPERATOR AND THEN, HE RECORDED SATISFACTION THAT THE ASSESSEE COMPANY TAKEN BOGUS/ ACCOMMODATION ENTRIES. THE LD. AR VEHEMENTLY POINTED OUT THAT THEREAFTER IN LAST PARA 9 & 10, THE AO, WITHOUT 139 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. APPLYING MIND TO THE INFORMATION RECEIVED FROM THE INVESTIGATION WING, RECORDED THAT HE HAS REASON TO BELIEVE THAT THE AN INCOME HAS ESCAPED ASSESSMENT WHICH CLEARLY SHOWS THAT THE AO PROCEEDED TO INITIATE INITIATORY ASSESSMENT PROCEEDINGS AND REOPENING OF ASSESSMENT WITHOUT HAVING ANY VALID SATISFACTION ON THE BASIS OF BORROWED SATISFACTION AS THERE WAS NO INDEPENDENT APPLICATION OF MIND TO THE TANGIBLE MATERIAL RECEIVED FROM INVESTIGATION WING, WHICH COULD FORM THE BASIS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. 14. FURTHER PLACING RELIANCE ON THE DECISION OF HO N'BLE HIGH COURT OF DELHI IN THE CASE OF PCIT VS. G&G PHARMA INDIA LTD. REPORTED IN 384 ITR 147 (DEL), THE LD. AR SUBMITTED THAT REOPENING OF ASSESSMENT BY AN AO BASED ON THE INFORMATION RECEIVED FROM THE DIRECTOR OF INVESTIGATION WITHOUT MAKING ANY EFFORT TO DISCUSS THE MATERIALS ON THE BASIS ON WHICH HE FORMED A PRIMA FACIE OPINION THAT INCOME 140 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. HAD ESCAPED ASSESSMENT. THE COURT HELD THAT THE BASIC REQUIREMENT OF S. 147 OF THE ACT THAT AO SHOULD APPLY INDEPENDENT MIND IN ORDER TO FORM REASONS TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT HAD NOT BEEN FULFILLED. 15. THE LD. AR SUBMITTED THAT AS PER RATIO OF THE DECISION OF HON'BLE HIGH COURT OF DELHI IN THE CASE OF PCIT VS. RMG POLYVINYL (I) LTD. REPORTED IN 396 ITR 5 (DEL), WHERE INFORMATION WAS RECEIVED FROM INVESTIGATION WING THAT ASSESSEE WAS BENEFICIARY OF ACCOMMODATION ENTRIES BUT NO FURTHER INQUIRY WAS UNDERTAKEN BY AO, SAID INFORMATION COULD NOT BE SAID TO BE TANGIBLE MATERIAL AS PER SE AND, THUS , REASSESSMENT ON SAID BASIS WAS NOT JUSTIFIED. FINALLY, THE LD. AR SUBMITTED THAT THE IMPUGNED INITIATION OF REASSESSMENT PROCEEDINGS, NOTICE AND ALL CONSEQUENT PROCEEDINGS AND ORDERS ARE NOT VALID AND BAD IN LAW THEREFORE, THE SAME MAY KINDLY BE QUASHED. 141 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 16. REPLYING TO THE ABOVE, THE LD. DR SUBMITTED TH AT THE COPY OF PROFORMA FOR OBTAINING APPROVAL U/S. 151 OF THE ACT AND REASONS RECORDED BY THE AO ARE THE INTERNAL DEPARTMENTAL COMMUNICATION BETWEEN THE PCIT AND ACIT AND THE PCIT BEING ADMINISTRATIVE HEAD AND SENIOR TO THE ACIT HAS POWER TO PERUSE THE APPROVAL U/S. 151 OF THE ACT AND HIS SINGS THEREON DOES NOT MAKE THE SAME AS MECHANICAL AND WITHOUT APPLICATION OF MIND AND THE SAME CANNOT BE TERMED OR ALLEGED AS INVALID OR BAD IN LAW. THE LD. DR SUBMITTED THAT IN COLUMN 12 OF APPROVAL THE ACIT SHRI SARABJEET SINGH HAS GRANTED VALID APPROVAL BY NOTING THAT YES, I AM SATISFIED WHICH IS SUFFICIENT TO COMPLY WITH THE PROVISIONS OF S. 151 OF THE ACT. HE ALSO SUBMITTED THAT IF THERE IS ANY DEFECT THEREIN THE SAME IS RECTIFIABLE U/S. 292B OF THE ACT AND THUS, THE REASSESSMENT PROCEEDINGS AND ORDERS CANNOT BE CHALLENGED ON THIS COUNT. THE LD. DR FURTHER SUBMITTED THAT THE FORMAT/PROFORMA FOR GRANTING 142 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. APPROVAL U/S. 151 OF THE ACT HAS BEEN DESIGNED BY THE DEPARTMENT AND THERE IS NO ROLE OF AO IN FRAMING AND DESIGNING THE SAME AND THE ALLEGATION OF NON-APPLICATION OF MIND ON THE BASIS OF SUCH PROFORMA OR WORDS USED BY THE APPROVING AUTHORITY CANNOT BE MADE. 17. THE LD. DR SUBMITTED THAT THE TEAM OF REVENUE OFFICERS WORK UNDER THE SUPERVISION AND GUIDANCE OF PCIT AND THE DEPARTMENT IS VERY CAREFUL ABOUT THE COMPLIANCE OF THE PROVISION OF THE ACT AS WELL AS DIRECTIONS OF HON'BLE SUPREME COURT, HON'BLE HIGH COURT AND CBDT CIRCULARS AND ALSO TOWARDS WORKING OF THE REVENUE OFFICERS IN THE CASES OF INITIATION OF REASSESSMENT PROCEEDINGS AND FRAMING OF REASSESSMENT ORDERS. THE LD. DR SUBMITTED THAT THE PROFORMA OF APPROVAL U/S. 151 OF THE ACT IS BEING FOLLOWED ALL OVER INDIA AND THE ACIT APPLIED HIS MIND TO THE ALL MATERIAL PLACED BEFORE HIM BY THE AO PRIOR TO GRANTING APPROVAL U/S. 151 OF THE ACT IN COLUMN 12 OF THE PROFORMA. 143 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. THEREFORE, ALLEGATIONS MADE BY THE LD. AR ARE NOT SUSTAINABLE AND TENABLE AND THE SAME MAY KINDLY BE DISMISSED. 18. PLACING REJOINDER TO THE ABOVE, THE LD. AR SUB MITTED THAT IN THE REASONS PARA 6 THE INFORMATION OF DDIT (INVESTIGATION) HAS BEEN GIVEN AND REFERENCE OF VARIOUS ENTRY PROVIDERS SUCH AS SHRI HIMANSHU VERMA, SHRI PRAVEEN AGGARWAL ETC. WHO ARE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES THROUGH DUMMY COMPANIES WITH DUMMY DIRECTORS. THE LD. AR SUBMITTED THAT IN THE TABLE GIVEN IN PARA 3 IS TAKEN ALONG WITH PARA 6 OF THE REASONS RECORDED THEN, IT IS CLEAR THAT THE NAMES OF COMPANIES ARE 13 AND ABOVE NAMED TWO PERSONS AT SERIAL NO. 11 & 12 HAVE BEEN NOTED AND THERE IS NO NAME OF ENTRY PROVIDER IN THE OTHER 11 COLUMNS AND THERE IS NO LINK IN THE REASONS RECORDED WITH REGARD TO THESE 11 COMPANIES. THE LD. AR SUBMITTED THAT THESE FACTS CLEARLY SHOW THAT THE AO HAS ACTED ON SUSPICION ONLY AND NOT ON ANY 144 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. CREDIBLE INPUT AVAILABLE TO HIM THROUGH DDIT (INVESTIGATION) INFORMATION OR OTHERWISE ON THE BASIS OF ANY EXERCISE OR APPLICATION OF MIND BY HIMSELF. THEREFORE, THE REASSESSMENT PROCEEDINGS AND ALL CONSEQUENT ORDERS ARE NOT SUSTAINABLE AND BAD IN LAW. REITERATING HIS EARLIER ARGUMENTS, THE LD. AR VEHEMENTLY POINTED OUT THAT THE APPROVAL/SANCTION GIVEN IN PARA 12 OF THE PROFORMA IS NOT A VALID SANCTION AS PER RATIO OF TH E VARIOUS DECISIONS INCLUDING DECISION OF HON'BLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF S. GOYANKA LIME AND CHEMICALS LTD. (SUPRA), WHICH HAS BEEN UPHELD BY HON'BLE SUPREME COURT BY DISMISSING SLP OF THE REVENUE REPORTED IN 237 TAXMAN 378 (SC) THEREFORE, INITIATION OF REASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT, NOTICE U/S. 148 OF THE ACT, REASSESSMENT PROCEEDINGS AND ALL CONSEQUENT ORDERS MAY KINDLY BE QUASHED. 145 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 19. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS, FIRST OF ALL, WE MAY POINT OUT THAT FROM THE PROFORMA OF APPROVAL U/S. 151 OF THE ACT PLACED AT PGS. 16-17 OF THE ASSESSEE PAPER BOOK, IT IS CLEAR THAT IN COLUMN 12 THE ACIT HAS GRANTED APPROVAL FOR THE ISSUE OF NOTICE U/S. 148 OF THE AC T BY WRITING THAT YES, I AM SATISFIED WHICH IS NOT SUFFICIENT TO COMPLY WITH THE REQUIREMENT OF S. 151 OF THE ACT. AS PER RATIO OF THE DECISION OF HIGH COURT OF MADHYA PRADESH IN THE CASE OF CIT V. M/S. S. GOYANKA LIME AND CHEMICAL LTD. (SUPRA), WHERE THE JCIT/ACIT HAS ONLY RECORDED YES, I AM SATISFIED THEN, IT HAS TO BE HELD THAT THE APPROVI NG AUTHORITY HAS RECORDED SATISFACTION IN A MECHANICAL MANNER AND WITHOUT APPLICATION OF MIND TO ACCORD SANCTION FOR ISSUING NOTICE U/S. 148 OF THE ACT FOR REOPENING OF ASSESSMENT AND IN THIS SITUATION INITIATION OF REASSESSMENT PROCEEDINGS AND REOPENING OF ASSESSMENT HAS TO BE HELD AS INVALID AND BAD IN LAW. THEREFORE, WE ARE INCLINED 146 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. TO HOLD THAT THE REOPENING OF ASSESSMENT AND NOTICE U/S. 148 OF THE ACT ARE BAD IN LAW AND CONSEQUENTLY ALL SUBSEQUENT PROCEEDINGS IN PURSUANT THERETO ARE ALSO BAD IN LAW AND THE SAME CANNOT BE HELD AS VALID AND SUSTAINABLE. 20. SO FAR AS LEGAL CONTENTION OF THE LD. AR ON BE HALF OF THE ASSESSEE REGARDING NON-APPLICATION OF MIND BY THE AO, WHILE RECORDING REASONS FOR REOPENING OF ASSESSMENT, IS CONCERNED FROM CAREFUL PERUSAL AND READING OF THE THREE PAGES OF REASONS RECORDED, WE OBSERVE THAT IN FIRST FOUR PARAS THE AO HAS NOTED FACTS OF THE INFORMATION RECEIVED FROM DDIT (INVESTIGATION), FARIDABAD, FURTHER, IN PARA 6 MODUS OPERANDI OF ENTRY PROVIDERS HAS BEEN NOTED THEREAFTER, IN PARA 7 & 8, IT HAS BEEN ARISEN THAT EITHER DURING SURVEY OR POST SURVEY PROCEEDINGS THE ASSESSEE COMPANY HAS NOT SUBMITTED SATISFACTORY EXPLANATION TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF SHARE CAPITAL/PREMIUM INTRODUCERS AND THUS, THE SAME IS 147 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. FROM PAPER COMPANIES OF ENTRY OPERATOR AND THEN, HE RECORDED SATISFACTION THAT THE ASSESSEE COMPANY TAKEN BOGUS/ACCOMMODATION ENTRIES. THEREAFTER, THE AO IN LAST PARA 9 & 10, WITHOUT APPLYING MIND TO THE INFORMATION RECEIVED FROM THE INVESTIGATION WING STATES/WRITES THAT HE HAS REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT. THE TEXT AND WORDS USED BY THE AO IN THE REASONS RECORDED FOR REOPENING OF ASSESSMENT CLEARLY SHOW THAT THE AO PROCEEDED TO INITIATORY ASSESSMENT PROCEEDINGS AND REOPENING OF ASSESSMENT WITHOUT HAVING ANY VALID SATISFACTION AND ONLY ON THE BASIS OF BORROWED SATISFACTION AS THERE WAS NO INDEPENDENT APPLICATION OF MIND BY THE AO TO THE TANGIBLE MATERIAL RECEIVED FROM INVESTIGATION WING WHICH COULD FORM THE VALID BASIS AND REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. 21. IN VIEW OF DECISIONS OF HONBLE HIGH COURT OF DELHI IN THE CASES OF PCIT VS. MEENAKSHI OVERSAES 148 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. (SUPRA), PCIT VS. G&G PHARMA (I) LTD. (SUPRA) AND DECISION IN THE CASE OF PCIT VS. RMG POLYVINY (I) LTD. (SUPRA), WHERE INFORMATION WAS RECEIVED FROM INVESTIGATION WING THAT ASSESSEE WAS BENEFICIARY OF ACCOMMODATION ENTRIES BUT NO FURTHER INQUIRY WAS UNDERTAKEN BY AO, SAID INFORMATION COULD NOT BE SAID TO BE TANGIBLE MATERIAL PER SE AND, THUS, REASSESSMENT ON SAID BASIS WAS NOT JUSTIFIED. IN THE CASE OF MEENAKSHI OVERSEAS (SUPRA), THEIR LORDSHIP SPEAKING FOR THE HON'BLE JURISDICTIONAL HIGH COURT HELD THAT WHERE THE REASONS RECORDED BY THE AO FAILED TO DEMONSTRATE THE LINK BETWEEN THE TANGIBLE MATERIAL AND THE FORMATION OF THE REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT THEN, INDEED IT IS A BORROWED SATISFACTION AND THE CONCLUSION OF THE AO BASED ON REPRODUCTION OF CONCLUSION DRAWN IN THE INVESTIGATION REPORT CANNOT BE HELD AS VALID REASON TO BELIEVE AFTER APPLICATION OF MIND. IN THIS JUDGMENT THEIR LORDSHIP ALSO HELD THAT WHERE 149 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. NOTHING FROM THE REPORT OF INVESTIGATION WING IS SE T OUT TO ENABLE THE READER TO APPRECIATE HOW THE CONCLUSIONS FLOW THERE FROM THEN THERE IS NO INDEPENDENT APPLICATION OF MIND BY THE AO TO THE TANGIBLE MATERIAL WHICH FORM THE BASIS OF THE REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. 22. IN THE PRESENT CASE, AS WE HAVE NOTED ABOVE, T HE CONCLUSION RECORDED BY THE AO IN PARA 9 & 10 OF THE REASONS IS BASED ON THE INFORMATION RECEIVED FROM THE DIRECTOR OF INVESTIGATION WING AND THE AO WITHOUT MAKING ANY EFFORT TO EXAMINE AND DISCUSS THE MATERIAL RECEIVED FROM THE INVESTIGATION WING AND WITHOUT APPLICATION OF THE MIND TO THE SAME FORMED A REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. THIS SHOWS THAT THE AO PROCEEDED TO INITIATE REASSESSMENT PROCEEDINGS ON THE BASIS OF BORROWED SATISFACTION WITHOUT ANY APPLICATION OF MIND AND EXERCISE ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE 150 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. DEPARTMENT. THEREFORE, WE HAVE NO HESITATION TO HOLD THAT THE AO PROCEEDED TO INITIATE REASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT AND TO ISSUE NOTICE U/S. 148 OF THE ACT ON THE BASIS OF BORROWED SATISFACTION AND WITHOUT ANY APPLICATION OF MIND AND EXAMINATION OF THE SO CALLED MATERIAL AND INFORMATION RECEIVED FROM THE INVESTIGATION WING TO ESTABLISH ANY NEXUS, EVEN PRIMA FACIE, WITH THE SUCH INFORMATION. THEREFORE, IN OUR CONSIDERED OPINION THE INITIATION OF REASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT, NOTICE U/S. 148 OF THE ACT, REASSESSMENT PROCEEDINGS AND ALL CONSEQUENT PROCEEDING AND ORDERS, INCLUDING IMPUGNED REASSESSMENT AND FIRST APPELLATE ORDER, ARE BAD IN LAW AND THUS, NOT SUSTAINABLE AND WE HOLD SO. ACCORDINGLY, ON THE BASIS OF FOREGOING DISCUSSION, GROUNDS NO.2, 3, 4 AND ADDITIONAL GROUND OF THE ASSESSEE ARE ALLOWED AND IMPUGNED PROCEEDINGS, NOTICE U/S. 148 OF THE ACT AND ALL CONSEQUENT ORDERS ARE QUASHED. 151 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. 8.5. THE STATEMENT OF SHRI HIMANSHU VERMA IS ALSO FILED ON RECORD WHICH DID NOT FIND MENTION IF M/S. SHUBH PROPBUILD PVT. LTD., AS MENTIONED IN THE REASONS BE LONG TO SHRI HIMANSHU VERMA. THERE IS NO INVESTOR EXIST IN THE NAME OF M/S. MANAGEMENT SERVICES PVT. LTD., AND NO ADDIT ION IN RESPECT OF THE SAME COMPANY HAVE BEEN MADE BY THE A .O. THE A.O, THEREFORE, RECORDED INCORRECT FACTS IN THE REASONS FOR REOPENING OF THE ASSESSMENT. THUS THE SAME CANNOT B E APPROVED UNDER THE LAW. IT IS WELL SETTLED LAW IF W RONG FACTS AND WRONG REASONS ARE RECORDED FOR REOPENING OF THE ASSESSMENT, REOPENING OF THE ASSESSMENT WOULD BE IN VALID AND BAD IN LAW. WE RELY UPON JUDGMENT OF HONBLE PU NJAB & HARYANA HIGH COURT IN THE CASE OF ATLAS CYCLE INDUS TRIES 180 ITR 319 (P&H). IT IS WELL SETTLED LAW THAT NOTE ALR EADY FILED WITH RETURN DISCLOSING NATURE OF CAPITAL RECEIPT AN D NO OTHER TANGIBLE MATERIAL FOUND, THEREFORE, REOPENING OF TH E ASSESSMENT UNDER SECTION 148 WAS QUASHED. WE RELY U PON JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS., ATUL KUMAR SWAMI [2014] 362 ITR 693 (DEL.) AND JUDG MENT OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF KANP UR TEXEL 152 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. P. LTD., 406 ITR 353 (ALLD.). SIMILARLY, IN THE CASE OF CIT VS., VARDHAMAN INDUSTRIES [2014] 363 ITR 625 (RAJ.), THE HONBLE RAJASTHAN HIGH COURT HAS HELD THAT REASONS MUST BE BASED ON NEW AND TANGIBLE MATERIALS. NOTICE BASED ON DOCU MENTS ALREADY ON RECORD, 148 NOT VALID. IN THE INSTANT CASE UNDER APPEAL, THE A.O. HAS REPRODUCED THE INFORMATION REC EIVED FROM INVESTIGATION WING AND REPRODUCED THE SAME IN THE REASONS RECORDED UNDER SECTION 148 OF THE I.T. ACT. THIS INFORMATION SHOWS THAT ASSESSEE HAS RECEIVED THE AM OUNT OF CREDIT FROM 06 PARTIES, BUT, ONE OF THE PARTY I.E., M/S. MANAGEMENT SERVICES PVT. LTD., DO NOT EXIST AND THA T M/S. SHUBH PROPBUILD PVT. LTD., DO NOT BELONG TO SHRI HI MANSHU VERMA. IT, THEREFORE, APPEARS THAT A.O. HAS NOT GON E THROUGH THE DETAILS OF THE INFORMATION AND HAS NOT EVEN APP LIED HIS MIND AND MERELY CONCLUDED THAT HE HAS REASON TO BEL IEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN THE REASONS A.O. HAS RECORDED THAT ASSESSEE HAS RECEIVE D ACCOMMODATION ENTRY OF RS.2.45 CRORES, BUT, ULTIMAT ELY MADE AN ADDITION OF RS.11.05 CRORES WITHOUT BRINGING ANY MATERIAL AGAINST THE ASSESSEE. THE REASONS TO BELIEVE ARE, T HEREFORE, 153 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. NOT IN FACT REASONS, BUT, ONLY CONCLUSION OF THE A. O. IN THE CASE OF MEENAKSHI OVERSEAS PVT. LTD., (SUPRA), THE A.O. IN THE REASONS HAS EVEN MENTIONED THAT HE HAS GONE THROUGH THE INFORMATION RECEIVED WHICH IS LACKING IN THE PRESEN T CASE. THE A.O. BEING A QUASI-JUDICIAL AUTHORITY IS EXPECTED T O ARRIVE AT SUBJECTIVE SATISFACTION INDEPENDENTLY ON HIS OWN. T HE A.O. HOWEVER, MERELY REPEATED THE REPORT OF THE INVESTIG ATION WING IN THE REASONS AND FORMED HIS BELIEF THAT INCOME CH ARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHOUT ARRIVING AT H IS SATISFACTION. THUS, THERE IS NO INDEPENDENT APPLICA TION OF MIND BY THE A.O. TO THE REPORT OF INVESTIGATION WIN G TO FORM THE BASIS FOR RECORDING THE REASONS. THE REASONS RE CORDED BY THE A.O. ARE ALSO INCORRECT AS NOTED ABOVE. THE REA SONS FAILED TO DEMONSTRATE THE LINK BETWEEN THE ALLEGED TANGIBL E MATERIAL AND THE FORMATION OF REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE DECIS IONS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THE CASES OF PR. COMMISSIONER OF INCOME TAX VS., RMG PO LYVINYL (I) LTD., 396 ITR 5 (DEL.), PR. COMMISSIONER OF INC OME TAX VS., MEENAKSHI OVERSEAS (P) LTD., 395 ITR 677 (DEL.), PR . 154 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. COMMISSIONER OF INCOME TAX VS., G AND G PHARMA INDI A LTD., 384 ITR 147 (DEL.) AND SARTHAK SECURITIES CO. (P) L TD., 329 ITR 110 (DEL.), CLEARLY APPLY TO THE FACTS AND CIRC UMSTANCES OF THE CASE. LEARNED COUNSEL FOR THE ASSESSEE ALSO REL IED UPON ORDER OF ITAT, DELHI BENCH IN THE CASE OF PIONEER T OWN PLANNERS PVT. LTD., (SUPRA) IN WHICH ON IDENTICAL F ACTS REOPENING OF THE ASSESSMENT HAVE BEEN QUASHED. THE LD. D.R. RELIED UPON CERTAIN DECISIONS IN SUPPORT OF TH E CONTENTION THAT REOPENING OF THE ASSESSMENT IS JUSTIFIED, BUT, THE SAME ARE DISTINGUISHABLE ON FACTS OF THE PRESENT CASE. C ONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGH T OF ABOVE DISCUSSION AND DECISIONS REFERRED TO IN THE ORDER, WE ARE OF THE VIEW THAT REOPENING OF THE ASSESSMENT IS BAD IN LAW AND THAT SANCTION/APPROVAL GRANTED BY PR. COMMISSIONER OF INCOME TAX IS ALSO INVALID. WE MAY ALSO NOTE THAT V IDE ORDER SHEET DATED 23.08.2019 THE CASE WAS RE-FIXED FOR HE ARING BECAUSE THE LD. D.R. ARGUED THAT APPROVAL HAVE BEEN GRANTED BY COMMISSIONER OF INCOME TAX AFTER DUE DISCUSSION OF THE MATTER AND PERUSAL OF THE RELEVANT INFORMATION AND THEREAFTER APPROVAL IN PRESCRIBED PROFORMA SENT TO THE A.O. AN D HE HAS 155 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. MENTIONED THAT I AM SATISFIED. HOWEVER, NO RECORD W AS PRODUCED. THEREFORE, THIS CASE WAS RE-FIXED FOR FRE SH HEARING. HOWEVER, ON THE DATE OF HEARING NO SUCH RECORD HAVE BEEN PRODUCED FOR THE INSPECTION OF THE BENCH. THEREFORE , SATISFACTION RECORDED BY THE PR. COMMISSIONER OF IN COME TAX IS INVALID AND WITHOUT APPLICATION OF MIND. THEREFO RE, THE REOPENING OF THE ASSESSMENT IS INVALID AND BAD IN L AW AND CANNOT BE SUSTAINED IN LAW. WE, ACCORDINGLY, SET AS IDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE REOPE NING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE I.T. AC T, 1961. RESULTANTLY, ALL ADDITIONS STANDS DELETED. SINCE WE HAVE QUASHED THE REOPENING OF THE ASSESSMENT, THEREFORE, THERE IS NO NEED TO DECIDE THE ADDITION ON MERIT WHICH IS LE FT WITH ACADEMIC DISCUSSION ONLY. 9. IN THE RESULT, APPEAL OF ASSESSEE ALLOWED. 6.7. CONSIDERING THE ISSUE INVOLVED IN THE PRESENT APPEAL IN THE LIGHT OF ABOVE DECISIONS, IT IS CLEAR THAT THE ADDL. CIT AND LD. PR. CIT WHILE GRANTING APPROVAL F OR REOPENING OF THE ASSESSMENT UNDER SECTION 147/148 O F THE I.T. ACT MERELY STATED YES, WHICH WOULD SHOW THAT THEY 156 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. HAVE NOT APPLIED THEIR INDEPENDENT MIND AND MERELY ACCORDED SANCTION WITHOUT GOING THROUGH ANY MATERIA L ON RECORD. THE ISSUE IS THUS COVERED AGAINST THE REVEN UE BY THE AFORECITED DECISIONS IN WHICH EVEN ON MORE FACT S THE APPROVAL WAS NOT FOUND VALID. THEREFORE, THE ISSUE IS COVERED BY THE ABOVE DECISIONS OF THE TRIBUNAL IN WHICH EVE N ON BETTER FOOTING THE RE-ASSESSMENT ORDER WAS QUASHED AND ULTIMATELY IT WAS HELD THAT SUCH PROCEEDINGS COULD NOT BE REOPENED IN COLLATERAL PROCEEDINGS UNDER SECTION 26 3 OF THE I.T. ACT, 1961. THE LEARNED COUNSEL FOR THE ASSESSE E HAS POINTED-OUT SEVERAL INCONSISTENCIES IN THE REASONS WHICH ALSO SHOW THAT THE REASONS ARE RECORDED JUST BY REP RODUCING THE REPORT OF THE INVESTIGATION WING WITHOUT APPLIC ATION OF MIND. THE ISSUE IS, THEREFORE, COVERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE ORDERS OF THE TRIBUNAL. FOLLO WING THE SAME WE HOLD THAT REOPENING OF THE ASSESSMENT IN TH IS CASE IS INVALID, BAD IN LAW AND THEREFORE, SUCH RE-ASSES SMENT PROCEEDINGS COULD NOT BE REOPENED UNDER SECTION 263 OF THE I.T. ACT, 1961. IT MAY ALSO BE BRIEFLY NOTED THAT T HE A.O. IN THE REASONS RECORDED IN THE ASSESSMENT ORDER HAS 157 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. MENTIONED THAT ASSESSEE HAS RECEIVED ACCOMMODATION ENTRIES IN ASSESSMENT YEAR UNDER APPEAL FROM FIVE P ARTIES IN A SUM OF RS.70 LAKHS AND AFTER REOPENING OF THE ASS ESSMENT, A.O. CALLED FOR THE DETAILS AND DOCUMENTS FROM THE ASSESSEE AND WAS SATISFIED WITH THE EXPLANATION OF ASSESSEE, THEREFORE, THE OF PROCEEDINGS UNDER SECTION 263 OF THE I.T. ACT BY THE LD. PR. CIT COULD NOT HAVE SUBSTITUTED T HE VIEW TAKEN BY THE A.O. IN VIEW OF THESE FACTS AND CIRCUM STANCES, WE ARE OF THE VIEW THAT INITIATION OF PROCEEDINGS U NDER SECTION 263 OF THE I.T. ACT ARE NOT JUSTIFIED. THE SAME ARE BAD IN LAW AND INVALID. WE, ACCORDINGLY, SET ASIDE THE ORDER OF THE LD. PR. CIT PASSED UNDER SECTION 263 OF THE I.T. ACT AND QUASH THE SAME. RESULTANTLY, THE RE-ASSESSMENT ORDER DATED 05.12.2016 UNDER SECTION 147/143(3) OF THE I. T. ACT, 1961 BY THE A.O. IS RESTORED. APPEAL OF ASSESSEE IS ACCORDINGLY ALLOWED. 7. IN THE RESULT, APPEAL OF ASSESSEE ALLOWED. 158 ITA.NO.4749/DEL./2019 M/S. CHARBUJA MARMO (INDIA) PVT. LTD., DELHI. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (B.R.R. KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED31ST DECEMBER, 2019 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT B BENCH 6. GUARD FILE // BY ORDER // ASST. REGISTRAR : ITAT DELHI BENCHES : DELHI.