Varinder Pal Singh, Rampur V. ITO, W-4, Khanna

ITA 481/CHANDI/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7809 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Reopening of assessment; Onus to prove; Reason to believe; Reassessment proceedings
• Section: 147; 68; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC , CHANDIGARH . . , BEFORE SHRI N.K. SAINI, VICE PRESIDENT ./ ITA NO.481/CHD/2018 / ASSESSMENT YEAR : 2009-10 VARINDER PAL SINGH, HOUSE NO.145, PURANA AWAS COLONY, RAMPUR (U.P.) THE I.T.O., WARD-4, KHANNA. ./PAN NO: CSAPS9671P /APPELLANT /RESPONDENT /ASSESSEE BY : S/SHRI SUDHIR SEHGAL, ADV. & ASHOK GOYAL, CA ! / REVENUE BY : SHRI MANJIT SINGH, SR.DR ' # $ /DATE OF HEARING : 12.03.2019 %&'( $ /DATE OF PRONOUNCEMENT: 24.04.2019 /ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 19.2.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, LUDHIANA (IN SHORT CIT(A)). 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: 1. THAT THE ORDER UNDER APPEAL IS EXCESSIVE, UNJUS T, CONTRARY TO FACTS AND IS AGAINST LAW. 2. THAT INITIATION OF PROCEEDINGS UNDER SECTION 147 A ND ISSUANCE OF NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 BY THE INCOME TAX OFFICER, WARD-5, KHANNA IS BAD OF LAW AND WITHOUT JURISDICTION AS THE APPELLANTS WAS HAVING ITS JURISDICTION WITH INCOME T AX OFFICER WARD-1(2) RAMPUR (U.P) AND THE JURISDICTION S WAS GOT TRANSFERRED TO KHANNA WITHOUT AFFORDING ANY OPPORTUNITY TO THE APPELLANTS THUS THE ORDER BELOW M ERITS TO BE QUASHED ON THIS SCORE ALONE AS THE SAME HAS B EEN PASSED WITHOUT JURISDICTION. FURTHER TO BE MENTIONE D THAT THE ASSESSMENT ORDER PASSED BY INCOME TAX OFFICER WARD-4, KHANNA IS ALSO BAD IN LAW AS EXPLAINED ABOVE ITA NO.481/CHD/2018 A.Y.2009-10 2 SINCE INCOME TAX OFFICER WARD-5, KHANNA HAD NO JURISDICTION. THUS HE COULD NOT HAVE TRANSFERRED THE FILE THE INCOME TAX OFFICER WARD-4, KHANNA. THUS THE IMPUGNED ORDER MERITS TO BE QUASHED ON THIS SCORE. 3. THE IMPUGNED ORDER MERITS TO BE QUASHED ON THE GROUNDS THAT THE ASSESSING OFFICER HAD WRONGLY ISSUED NOTIC E UNDER SECTION 147 ON THE ASSUMPTION THAT THE CASH DEPOSITS MADE BY THE APPELLANTS CONSTITUTED UNDISCL OSED INCOME OF THE APPELLANTS WHICH HAS NOT BEEN PROVED B Y THE ASSESSING OFFICER. SINCE IT IS AN ADMITTED FACT T HAT NO ADDITION HAVE BEEN MADE ON THE BASIS OF THE REASONS RECORDED FOR RE-OPENING THE ASSESSMENT UNDE R SECTION 148 OF THE INCOME TAX ACT, THUS THE ADDITIO N COULD NOT BE MADE ON A GROUND WHICH WAS NEVER THE BASIS OF THE RE-OPENING OF THE CASE. 4. THE AUTHORITIES BELOW OUGHT TO HAVE CONSIDERED TH E PLEA OF THE APPELLANTS THAT THE ADDITION OF RS.17,25,135/- MADE BY THEM IS UNJUSTIFIED AS THE SAME DID NOT PER TAIN TO THE ASSESSMENT YEAR FOR WHICH THE ASSESSMENT PROCEEDINGS WERE RE-OPENED. SINCE THE SAME PERTAINED TO THE EARLIER ASSESSMENT YEAR FOR WHICH BALANCE-SHEET WAS PRODUCED IN WHICH THE CLOSING BALANCE OF THIS AMOUNT WAS DULY REFLECTED THUS THE AUTHORITIES BELOW HAVE GONE BEYOND THE JURISDICTION TO MAKE THE ADDITI ON OF THE ABOVE MENTIONED AMOUNT WHEN THE SAME WAS NOT A SUBJECT MATTER OF THE RELEVANT ASSESSMENT YEAR . 5. THE AUTHORITIES BELOW HAVE OTHERWISE ERRED IN MA KING AN ADDITION OF AN AMOUNT OF RS.17,25,135/- WHICH WAS THE OPENING BALANCE ON THE GROUNDS THAT THE APPELLANTS COULD NOT PROVIDE PROPER EXPLANATION FOR THE SAME. THE APPELLANTS HAD PROVIDED THE PROPER EXPLANATION OF THE AMOUNT WHICH WAS SHOWN AS OPENING BALANCE AND HAD FULLY DISCHARGED THE ONUS TO PROVE THE GENUINENESS OF ALL THE TRANSACTIONS MADE BY THEM. SINCE THE APPELLANTS HAD DISCHARGED THEIR ONU S THUS THE AUTHORITIES BELOW COULD NOT HAVE MADE ANY ADDITION IN THE INCOME RETURNED BY THE APPELLANT. 3. GROUND NO.1 IS GENERAL IN NATURE AND GROUND NO.2 WAS NOT PRESSED, SO THESE GROUNDS DO NOT REQUIRE ANY CO MMENTS ON OUR PARTS. 4. VIDE GROUND NO.3, THE ASSESSEE HAS CHALLENGED TH E JURISDICTIONAL OF THE A.O. FOR REOPENING OF ASSESSM ENT U/S 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ) BY ISSUING THE NOTICE U/S 148 OF THE ACT VIDE GROUND N OS.4 ITA NO.481/CHD/2018 A.Y.2009-10 3 AND 5, THE ASSESSEE HAS CHALLENGED THE SUSTENANCE O F ADDITION OF RS.17,25,135/-, WHICH WAS THE OPENING C ASH IN HAND. 5. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE A. O. RECEIVED AIR INFORMATION THAT THE ASSESSEE HAD DEPOSITED/MADE INVESTMENT OF RS.1,06,29,400/- IN HI S SAVING BANK ACCOUNT MAINTAINED WITH ORIENTAL BANK O F COMMERCE, DORAHA ON VARIOUS DATES. ON THE BASIS OF INFORMATION, THE A.O. REOPENED THE CASE U/S 148 OF THE ACT AFTER RECORDING THE REASONS U/S 147 OF THE ACT. IN RESPONSE, THE ASSESSEE FILED RETURN OF INCOME ON 9.5.2016 DEC LARING AN INCOME OF RS.1,44,270/-. THE A.O. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, ASKED THE ASSESSEE TO FURNI SH DOCUMENTARY EVIDENCE AND SOURCE WITH RESPECT TO CAS H DEPOSITED IN ORIENTAL BANK OF COMMERCE, DORAHA AMOU NTING TO RS.1,06,29,400/-. IN RESPONSE, THE ASSESSEE FURN ISHED CASH FLOW STATEMENT AS UNDER: ALSO CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE FOR THE F.Y. 2008-09 RELEVANT TO THE A.Y. 2009-10 IS AS UN DER:- PARTICULARS AMOUNT(RS.) CASH BROUGHT FORWARD 17,25,135/- RECEIPTS SALES 83,04,728/- TOTAL CASH WITHDRAWAL FROM BANK 86,20,000/- TOTAL RS. 1,86,49,863/- PAYMENTS TOTAL CASH DEPOSITED IN BANK 1,06,29,400/- CAPITAL WITHDRAWALS 36,000/- EXPENSES 1,63,334/- SUNDRY CREDITORS 78,09,722/- TOTAL RS. 1,86,38.456/- CLOSING CASH IN HAND 11,407/- ITA NO.481/CHD/2018 A.Y.2009-10 4 6. THE A.O. ASKED THE ASSESSEE ABOUT THE SOURCE OF CASH BROUGHT FORWARD AMOUNTING TO RS.17,25,135/-. IN RES PONSE, THE ASSESSEE EXPLAINED AS UNDER: DATE PARTICULARS DEBIT CREDIT 16.10.2007 BY AMOUNT OUT PERSONAL SAVING 850000 BY AMOUNT FROM FATHER 350000 BY AMOUNT FROM SURINDER SINGH 250000 BY AMOUNT FROM VARINDER SINGH 200000 31.03.2008 BY NET PROFIT 75135 TOTAL RS. 1725135 ALSO AS PER BALANCE SHEET AS ON 31.03.2008 THE ASS ESSEE HAS SHOWN CASH IN HAND OF RS.17,25,135/- ON THE ASSET SIDE. 7. THE A.O. AFTER CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE OBSERVED THAT THE ASSESSEE HAD SHOWN NET P ROFIT OF RS.75,135/- FOR THE YEAR ENDING ON 31.3.2008 I.E. T HE PRECEDING YEAR, WHILE THE CASH IN HAND WAS OF RS.17,25,135/-. HE MADE THE ADDITION OF THE OPENING CASH IN HAND OF RS.17,25,135/- IN THE HANDS OF THE ASSES SEE. 8. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE CIT(A) AND CHALLENGED THE JURISDICTION FOR REOPENIN G BY THE A.O. AND SUBMITTED THAT THE ASSESSEE PRODUCED THE B OOKS OF ACCOUNT ALONGWITH VOUCHERS, SALE AND PURCHASE BILLS BEFORE THE A.O. AND ALSO EXPLAINED THE CASH DEPOSITED AMOU NTING TO RS.1,06,29,400/- IN SAVING BANK ACCOUNT AND THAT THE A.O. WAS FULLY SATISFIED IN REGARD TO THE SOURCES A ND DEPOSITS OF CASH IN THE SAVING BANK ACCOUNT. THE LD .CIT(A), HOWEVER, WAS NOT SATISFIED FROM THE REPLY OF THE AS SESSEE AND SUSTAINED THE ACTION OF THE A.O. IN REOPENING T HE ASSESSMENT WHILE OBSERVING AS UNDER: ITA NO.481/CHD/2018 A.Y.2009-10 5 5.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHILE REOPENING THE ASSESSMENT IN THE CASE OF THE ASSESSEE. I HAVE ALSO CONSIDERED WRITTEN SUBMISSIONS FILED BY THE ASSESSEE THROUGH HIS LEARNED AR VIDE LETTER DATED NIL ON THE ISSUE UNDER REFERENCE. I HAVE FURTHER CONSIDERED VARIOUS JUDICI AL PRONOUNCEMENTS RELIED UPON BY THE LEARNED AR OF THE ASSESSEE AS WELL AS OTHER MATERIAL PLACED BY HIM ON RECORD. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS I AM OF THE OPINION THAT AS THERE WERE HUGE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE, THE ASSESSING OFFICER WAS HAVING PRIMA FACIE REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. I AM ALSO OF THE OPINION THAT AT THE TIME OF REOPENING OF ASSESSMENT , THE ASSESSING OFFICER HAS NOT TO PROVE BEYOND DOUBT THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT BUT IF CIRCUMSTANTIAL EVIDENCE IN HIS POSSESSION PRIMA FACIE INDICATE THAT THE INCOME SHOWN BY THE ASSESSEE IN HIS RETURN IS NOT COMMENSURATE WITH THE EVIDENCE IN HIS POSSESSION THEN HE CAN FORM A BELIEF THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT WHICH IN FACT IS THE CASE OF THE ASSESSEE. AS THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE CANNOT BE SAID TO BE PRIMA FACIE EXPLAINED, THE ASSESSING OFFICER CAN EASILY FORM A BELIEF THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LEARNED AR OF THE ASSESSEE HAVE ALTOGETHER DISTINGUISHABLE FACTS FROM THE FACTS OF THE CASE OF THE ASSESSEE AND HAS NO APPLICATION IN THE CASE OF THE ASSESSEE. UNDER SUCH CIRCUMSTANCES, THE ACTION OF THE ASSESSING OFFICER IN REOPENING THE ASSESSMENT IN THE CASE OF THE ASSESSE E ON THE BASIS OF EVIDENCE IN HIS POSSESSION CANNOT B E SAID TO BE UNJUSTIFIED. HAVING SAID SO, THE ACTION OF THE ASSESSING OFFICER IN REOPENING THE ASSESSMENT I N THE CASE OF THE ASSESSEE IS, THEREFORE, UPHELD. IN THE RESULT, THE GROUNDS NO. 1, 2, 3 AND 4 OF APPEAL TAK EN BY THE ASSESSEE ARE DISMISSED. 9. AS REGARDS TO THE MERITS OF THE CASE, THE ASSESS EE SUBMITTED THAT THE ASSESSEE FURNISHED DETAILED CAPI TAL ACCOUNT HAVING OPENING BALANCE AS ON 1.4.2008 AMOUN TING TO RS.17,25,135/-, WHICH WAS DISCLOSED IN THE BALAN CE SHEET AS ON 31.3.2008. IT WAS ALSO STATED THAT NO A DDITION WAS MADE ON THE BASIS OF THE REASONS RECORDED FOR REOPENING THE ASSESSMENT U/S 148 OF THE ACT AND THA T THE ITA NO.481/CHD/2018 A.Y.2009-10 6 ASSESSEE FURNISHED THE EXPLANATION OF THE OPENING B ALANCE WITH EVIDENCES, THE SAID AMOUNT WAS THE CLOSING BAL ANCE AS ON 31.3.2008, RELATING TO THE PRECEDING YEAR RELEVA NT TO THE ASSESSMENT YEAR 2008-09, SO THERE WAS NO REASON TO TREAT THE SAME AS UNEXPLAINED FOR THE YEAR UNDER CONSIDER ATION. IT WAS ALSO SUBMITTED THAT THE A.O. AT THE MOST COU LD HAVE EXAMINED THE AVAILABILITY OF CASH BALANCE AS ON 1.4 .2008 FROM THE BALANCE SHEET AS ON 31.3.2008 INSTEAD OF A DDING THE OPENING BALANCE OF CASH AS UNEXPLAINED. THE REL IANCE WAS PLACED ON THE FOLLOWING CASH LAWS: 1. ACIT VS. N. SASIKALA (2006) 151 TAXMAN- ITAT 42 & 43 (I.T.A.T. CHENNAI BENCH A). 2. CIT VS. USHA STUD AGRICULTURAL FARMS LTD.(2009) 183 TAXMAN 277. 3. DY.CIT, CENTRAL CIRCLE-1, KANPUR VS. SHRI SATISH CHANDRA PANDEY, ITA NO NO.525/LKW/2010. 4. DCIT, CC-3, HYDERABAD VS. R.A. ALAGAR RAJA, BENGALURU, ITA NO.1139/HYD/2013 5. ASSISTANT COMMISSIONER OF INCOME TAX VS. SMT.N.SASIKALA, ITA NO.435/MDS/1997 REPORTED IN (2005) 92 TTJ 1196. 6. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4, HYDERABAD VS. SHRI MADHUSUDAN SONTHALIA, HYDERABAD, ITA NO.644/HYD/ 2012. 10. HOWEVER, THE LD.CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE SUSTAINED THE ADDITION BY OBSERVING IN PARA 6.2 OF THE IMPUGNED ORDER AS UNDE R: 6.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHIL E MAKING THE IMPUGNED ADDITION, I HAVE ALSO CONSIDERED WRITTE N SUBMISSIONS FILED BY THE ASSESSEE THROUGH HIS LEARNED A LL VIDE LETTER DATED NIL ON THE ISSUE UNDER REFERENCE. I HAVE FURTHER CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS R ELIED UPON BY THE LEARNED AR OF THE ASSESSEE AS WELL AS OT HER MATERIAL PLACED BY HIM ON RECORD. ON CAREFUL CONSIDER ATION OF ITA NO.481/CHD/2018 A.Y.2009-10 7 THE ASSESSMENT ORDER, IT HAS BEEN NOTICED THAT THE AS SESSING OFFICER HAS MADE THE IMPUGNED ADDITION AS THE ASSESSE E COULD NOT EXPLAIN THE SOURCE OF CASH DEPOSITS TO THE EXTENT OF ADDITION MADE IN HIS SAVING BANK ACCOUNT MAINTAINED BY H IM WITH OBC, DORAHA TO HIS SATISFACTION. THE ASSESSING OF FICER WAS ALSO OF THE OPINION THAT THE ASSESSEE ALSO COULD N OT PROVE THE SOURCE OF OPENING CASH IN HAND BY PROVING THE C REDIT WORTHINESS OF HIS FATHER AND TWO OTHER PERSONS FROM WHOM HE STATED TO HAVE RECEIVED HUGE AMOUNTS IN CASH. O N THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE HAS SUBM ITTED THAT THE OPENING CASH IN HAND CANNOT BE ADDED IN TH E YEAR UNDER CONSIDERATION AS THE SAME PERTAINS TO EARLIER A SSESSMENT YEAR. IT HAS ALSO BEEN SUBMITTED THAT THE ASSESSING OFFICER HAS INCORRECTLY APPLIED THE PROVISIONS OF SECTION 68 OF THE ACT AS BANK ACCOUNT OF THE ASSESSEE CANNOT BE TREATED AS PART O F BOOKS OF ACCOUNT OF THE ASSESSEE. ON CAREFUL CONSIDERATION O F THE RIVAL CONTENTIONS, I DO NOT FIND ANY FORCE IN THE CONTENT IONS OF THE ASSESSEE. I AM OF THE OPINION THAT THE ASSESSEE FAI LED TO PROVE THE SOURCE OF OPENING CASH IN HAND BY PROVING THE C REDIT WORTHINESS OF HIS FATHER, SH.SURINDER PAL SINGH AND SH.VEER VARINDER PAL SINGH SHAHI EVEN DURING APPELLATE PROCEEDINGS. NO DOCUMENTARY EVIDENCE TO PROVE THE CREDITWORTHINESS OF THESE PERSONS HAS BEEN PRODUCED EVEN DURING APPELLATE PROCEEDINGS APART FROM THE DOCUMENTS WHICH HAVE ALREADY BEEN CONSIDERED BY THE ASSESSING OFFICE R. AS THE ASSESSEE HAD ABSOLUTELY FAILED TO PROVE THE CREDITWO RTHINESS AS WELL AS GENUINENESS OF TRANSACTION IN THE CASE OF H IS FATHER AS WELL AS IN THE CASES OF SH. SURINDER PAL SINGH AND S H. VEER VARINDER PAL SINGH SHAHI WITH ACCEPTABLE DOCUMENTAR Y EVIDENCE, THE OPENING CASH IN HAND SHOWN BY THE ASS ESSEE CANNOT BE SAID TO BE EXPLAINED. IN OTHER WORDS, THE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE TO THE EXTENT OF OPENING CASH IN HAND WHICH WERE EXPLAINED BY THE ASS ESSEE WITH OPENING CASH IN HAND CANNOT BE SAID TO BE EXPLAI NED. HOWEVER, I AM OF THE OPINION THAT THE ASSESSING OFF ICER SHOULD HAVE MADE THE ADDITION UNDER SECTION 69A OF THE ACT INSTEAD OF SECTION 68. THE MISTAKE OF THE ASSESSING OFFICER IS CORRECTED ACCORDINGLY. THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LEARNED AR OF THE ASSESSEE HAVE ALTOGETHER DISTINGUI SHABLE FACTS FROM THE FACTS OF THE CASE OF THE ASSESSEE AN D HAS NO APPLICATION IN HIS CASE. UNDER SUCH CIRCUMSTANCES, T HE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITI ON OF RS. 17,25,135/- IN THIS CASE ON ACCOUNT OF UNEXPLAINE D CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE MAINTA INED BY HIM WITH OBC, DORAHA CANNOT BE SAID TO BE UNJUSTIFIE D. HAVING SAID SO, THE ADDITION OF RS. 17,25,135/- MADE BY TH E ASSESSING OFFICER IN THIS CASE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED BY HIM WIT H OBC, DORAHA IS, THEREFORE, UPHELD. IN THE RESULT, THE GRO UNDS NO.5 AND 6 OF APPEAL TAKEN BY THE ASSESSEE ARE ALSO DISMISSED. ITA NO.481/CHD/2018 A.Y.2009-10 8 11. NOW THE ASSESSEE HAS COME IN APPEAL. THE LD. C OUNSEL FOR ASSESSEE SUBMITTED THAT THE A.O. ACTED ONLY ON THE BASIS OF THE INFORMATION RECEIVED FROM THE INVESTIGATION WING AND DID NOT APPLY HIS OWN MIND. THEREFORE, THE REOPENIN G WAS NOT JUSTIFIED. IT WAS FURTHER SUBMITTED THAT THE A. O. DOUBTED THE OPENING CASH IN HAND AND DID NOT MAKE A NY ADDITION ON THE BASIS OF THE REASON RECORDED FOR RE OPENING THE ASSESSMENT. IT WAS ALSO STATED THAT THE CLOSING CASH IN HAND PERTAINING TO THE PRECEDING YEAR WAS ACCEPTED BY THE A.O., SO THERE WAS NO REASON TO DOUBT THE OPENING C ASH IN HAND AND MAKING THE ADDITION FOR THE YEAR UNDER CONSIDERATION. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAW: SIGNATURE HOTELS P. LTD. VS. ITO & ANOTHER (2011) 338 ITR 51(DELHI) 12. IN HIS RIVAL SUBMISSION, THE LD. SR.DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND F URTHER SUBMITTED THAT SPECIFIC INFORMATION WAS IN THE POSS ESSION OF THE A.O. ON THE BASIS OF WHICH THE REASONS WERE REC ORDED BEFORE ISSUING THE NOTICE U/S 148 OF THE ACT. IT WA S FURTHER SUBMITTED THAT THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME, SO THERE WAS A LIVE LINK BETWEEN THE REASON S RECORDED AND THE ESCAPED INCOME. AS SUCH, THE A.O. WAS JUSTIFIED IN REOPENING THE ASSESSMENT. IT WAS ALSO SUBMITTED THAT THE ASSESSEE COULD NOT SATISFY THE A.O. WITH R EGARD TO THE OPENING CASH IN HAND. THEREFORE, THE ADDITION W AS RIGHTLY MADE BY THE A.O. AND SUSTAINED BY THE LD.CI T(A). ITA NO.481/CHD/2018 A.Y.2009-10 9 13. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN TH E PRESENT CASE, IT IS AN ADMITTED FACT THAT THE A.O. ISSUED N OTICE U/S 148 OF THE ACT ONLY ON THE BASIS OF THE INFORMATION RECEIVED. THE A.O. MENTIONED THAT THE ASSESSEE HAD DEPOSITED A SUM OF RS.1,06,29,400/- IN HIS SAVING BANK ACCOUNT. HOW EVER, NO ADDITION WAS MADE FOR THE SAID AMOUNT AND THE EXPLANATION OF THE ASSESSEE WAS ACCEPTED. THE A.O. MADE THE ADDITION OF RS.17,25,135/- WHICH WAS OPENING CA SH IN HAND BROUGHT FORWARD FROM THE PRECEDING YEAR. IN MY OPINION, WHEN THE CLOSING BALANCE AS ON 31.3.2008 I .E. THE PRECEDING YEAR WAS CONSIDERED TO BE GENUINE AND COR RECT, THEN THERE WAS NO REASON TO DOUBT THE SAME BALANCE TAKEN BY THE ASSESSEE ON 01.04.2008 AS OPENING CASH IN HA ND FOR THE YEAR UNDER CONSIDERATION. IN THAT VIEW OF THE M ATTER, THE ADDITION MADE BY THE A.O. AND SUSTAINED BY THE LD.C IT(A) DESERVES TO BE DELETED. MOREOVER, THE ASSESSMENT WA S REOPENED BY THE A.O. ON THE BASIS OF THE INFORMATIO N RECEIVED FROM INVESTIGATION WING. 14. ON A SIMILAR ISSUE, THE HON'BLE DELHI HIGH COU RT IN THE CASE OF SIGNATURE HOTELS PVT. LTD. VS. I.T.O. & ANOTHER (SUPRA) HELD AS UNDER: THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME-TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS.5 LAKHS DURING FINANCIAL YEAR 2002-03 AS STATED IN THE ANNEXURE. ACCORDING TO THE INFORMATION, THE AMOUNT RECEIVED FROM A COMPANY, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. THE REASONS DID NOT SATISFY THE REQUIREMENTS OF SECTION 147 OF THE ACT. THERE WAS ITA NO.481/CHD/2018 A.Y.2009-10 10 NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEPT THE ANNEXURE. THE ANNEXURE COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNEXURE WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, THE ASSESSING OFFICER DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATION. THERE WAS NO DISPUTE THAT THE COMPANY, S, HAD A PAID-UP CAPITAL OF RS.90 LAKHS AND WAS INCORPORATED ON JANUARY 4, 1989, AND WAS ALSO ALLOTTED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER, 2001. THUS, IT COULD NOT BE HELD TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WERE NOT VALID AND WERE LIABLE TO BE QUASHED. 15. IN THE PRESENT CASE ALSO, THE A.O. ACTED UPON T HE INFORMATION AND RECORDED THE REASONS THAT THE ASSES SEE HAD DEPOSITED A SUM OF RS.1,06,29,400/- IN HIS SAVING B ANK ACCOUNT. HOWEVER, NO ADDITION WAS MADE FOR THE SAID AMOUNT AND THE EXPLANATION GIVEN BY THE ASSESSEE WA S ACCEPTED, WHICH SHOWS THAT THE A.O. ONLY ACTED UPON THE INFORMATION RECEIVED BY HIM AND DID NOT APPLY HIS O WN MIND. THEREFORE, BY KEEPING IN VIEW THE RATIO LAID DOWN BY THE HON'BLE DELHI HIGH COURT IN THE AFORESAID REFER RED TO DECISION, THE RE-ASSESSMENT PROCEEDINGS WERE NOT VA LID AND WERE LIABLE TO BE QUASHED. VIEWED FROM ANY ANGLE, T HE ADDITION MADE BY THE A.O. AND SUSTAINED BY THE CIT( A) WAS NOT JUSTIFIED AND ACCORDINGLY, THE SAME IS DELETED. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.04.2019. SD/- (N.K.SAINI) VICE PRESIDENT '# /DATED: 24 TH APRIL, 2019 ITA NO.481/CHD/2018 A.Y.2009-10 11 * * &) *+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $ 0 , 123/4 / DR, ITAT, CHANDIGARH 6. /3 5# / GUARD FILE &) ' / BY ORDER, ! / ASSISTANT REGISTRAR