Guru Kirpa Shuttering Pvt. Ltd, Gurgoan V. PCIT , Gurgaon

ITA 4819/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1522 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Fair market value; Difference of opinion; Accommodation entries; Reason to believe; Change of opinion; Set aside; Capital Gains
• Section: 13; 147; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH FRIDAY-C NEW DELHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT & SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.4819/DEL/2019 ASSESSMENT YEAR 2009-10 M/S GURU KRIPA SHUTTERING PVT. LTD. NM-4&5, 3 RD FLOOR, OLD DLF COLONY GURGAON, VS. PRINCIPAL COMMISSIONER OF INCOME TAX, HSIIDC BUILDING, VANIYA NIKUNJ, UDYOG VIHAR PHASE-V, GURGAON TAN/PAN: AACCG9340C (APPELLANT) (RESPONDENT) APPELLANT BY: SH. AJAY WADHWA, ADVOCATE & MS. RAGINI HANDA, ADVOCATE RESPONDENT BY: MS. SUNITA SINGH, CIT-DR DATE OF HEARING: 04 12 2020 DATE OF PRONOUNCEMENT: 11 12 2020 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSE E, AGAINST IMPUGNED ORDER DATED 30.03.2019, PASSED BY THE LD. PR. COMMISSIONER OF INCOME TAX, GURGAON, IN REVISIO NARY JURISDICTION U/S 263 OF THE INCOME TAX ACT, 1961 (I N SHORT, THE ACT) FOR ASSESSMENT YEAR 2009-10. ITA NO.4819/DEL/2019 2 2. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS CHALL ENGED THE ORDER OF LD. PR. CIT PASSED U/S 263 OF THE ACT SETTING ASIDE THE ASSESSMENT ORDER PASSED U/S 147/148 OF TH E ACT BY THE ASSESSING OFFICER AND DIRECTING TO PASS FRESH A SSESSMENT ORDER. 3. THE FACTS, IN BRIEF ARE THAT THE ASSESSEE HAS FI LED ITS RETURN OF INCOME OF RS.1,43,911/- ON 24.09.2009. TH EREAFTER, THE ASSESSEES CASE WAS REOPENED VIDE NOTICE DATED 30.03.2016 U/S 148 OF THE ACT, ON THE FOLLOWING REASONS RECORDED :- 2. FURTHER INFORMATION HAS BEEN RECEIVED FROM THE INVESTIGATION WING, UNIT-2(1). NEW DELHI THAT A SEA RCH & SEIZURE OPERATION WAS CARRIED OUT ON 18.11.2015 IN THE CASES OF SHRI PRADEEP KUMAR JINDAT GROUP OF COMPANI ES AND SHRI SAJJAN KUMAR JAIN GROUP OF COMPANIES WHO H AD TAKEN ACCOMMODATION ENTRIES IN THE FORM OF BOGUS SH ARE PREMIUM BESIDES OTHER ACCOMMODATION ENTRIES OF LONG TERM CAPITAL GAINS AND SHARE FORFEITURE FROM FRONT COMPANIES OF SHRI PRADEEP KUMAR JINDAL, SUBSEQUENTL Y, A SURVEY WAS CARRIED OUT ON 01,.02.2016 AT 116, R.K.COMPLEX, MAHENDRU ENCLAVE, G.T.KARNAL ROAD, DELHI I WHICH WAS FOUND TO BE A SECRET OFFICE OF SHRI PRADE EP KUMAR JINDAL, WHERE RECORD AND DATA RELATED TO ACCOMMODATION ENTRIES OF VARIOUS NATURE WAS FOUND RECORDED IN HIS IAPTOP AND COMPUTERS. / THE DOCUMENTS/DIGITAL DATA IMPOUNDED/SEIZED DURING SEAR CH ITA NO.4819/DEL/2019 3 AND SURVEYS AND THE SUBMISSION OF SHRI PRADEEP KUMA R JINDAL AND DUMMY DIRECTORS OF HIS FRONT COMPANIES H AS ESTABLISHED BEYOND DOUBT THAT SHRI PRADEEP KUMAR JI NDAL PROVIDES BOGUS ENTRIES TO VARIOUS BUSINESS ENTITIES AND INDIVIDUALS BY ACCEPTING CASH FROM THEM IN LIEU OF SUCH ACCOMMODATION ENTRIES AND THUS ABETS TAX EVASION BY WAY OF CHANNELING UNDISCLOSED INCOME INTO THEIR BOOKS O F ACCOUNTS. THE DETAILED ANALYSIS OF DIGITAL DATA AND ANNEXURES/SEIZED/IMPOUNDED AS DISCUSSED ABOVE REVEALED THAT SHRI PRADEEP KUMAR JINDAL HAS A NEXUS OF IARGE NUMBER OF COMPANIES RUN/CONTROLLED/MANAGED BY HIM THROUGH HIS DUMMY DIRECTORS, INTERMEDIARIES AND CLIENTS SEEKING ACCOMMODATION ENTRIES. THE DIGITAL DATA IMPOUNDED DURING THE COURSE OF SURVEY PROCEEDINGS A T THE SECRET OFFICE PREMISES OF SHRI PRADEEP KUMAR JINDAL AT 116, R.K.COMPIEX, MAHENDRU ENCLAVE, G.T KAMA! ROAD, DELHI ON 01.02.2016 WAS ANALYZED. FROM THE ANALYSIS OF THE DIGITAL DATA, ACCOMMODATION ENTRIES AND THEIR RESPECTIVE BENEFICIARIES WERE IDENTIFIED AS UNDER:- NAME OF THE BENEFICIARY ADDRESS OF THE BENEFICIARY PAN NAME OF THE ACCOMMODATION ENTRY FROM COMPANY OF PRADEEP KUMAR JINDAL DATE AMOUNT GURU KRIPA SHUTTERING PVT. LTD. 938, SEC- 15, PART-II GURGAON- 122001 AACCG9340C SHARE PREMIUM/ APPLICATION EUPHORIA CAPITAL PRIVATE LIMITED 01.04.2008 10.00,000 GURU KRIPA SHUTTERING PVT. LTD. 938, SEC- 15. PART-LL, GURGAON- 122001. AACCG934QC SHARE PREMIUM/ APPLICATION EUPHORIA CAPITAL PRIVATE LIMITED 10.06,2008 10,00,000 ITA NO.4819/DEL/2019 4 2. HOWEVER, FROM THE AST RECORDS, IT HAS BEEN VERIFIED THAT THE ASSESSEE COMPANY HAS SHOWN ISSUE, SUBSCRIB ED AND PAID UP' SHARE CAPITAL AT RS.17,30,000/- AND SECURITIES PREMIUM ACCOUNT' AT RS.65,20,000/- AS AGA INST ISSUE, SUBSCRIBED PAID UP SHARE CAPITAL AT RS,9,10, 000/- AND SECURITIES PREMIUM ACCOUNT AT RS.32,40,000/- IN THE IMMEDIATELY PRECEDING YEAR, RESPECTIVELY. THUS, IT IS CLEARLY EVIDENT FROM THE RECORDS THAT THE ASSESSEE COMPANY HAS INTRODUCED BOGUS SHARE PREMIUM/APPLICATION THROUGH M/S EUPHORIIA CAPITAL PRIVATE LIMITED OUT OF UNDISCLOSE D INCOME IN THE GARB OF SHARE PREMIUM/APPLICATION AS FOUND IN THE IMPOUNDED BOOKS OF SHRI PRADEEP KUMAR JINDAL DURING THE SURVEY PROCEEDINGS 3. FROM THE ABOVE, IT IS CLEARLY ESTABLISHED THAT M/S GURU KIRPA SHUTTERING PVT. LTD. HAS TAKEN THE ACCOMMODATION ENTRIES OF BOGUS SHARE PREMIUM/APPLICATION FROM SHRI PRADEEP KUMAR JINDAL THROUGH HIS COMPANY M/S EUPHORIA CAPITAL PRIVATE LI MITED AMOUNTING TO RS.20,00,000/-, (RS. 10,00,000 ON 01.04,2008 AND RS.10,00,000 ON 10.06.2008) AS DISCUSSED ABOVE. 4. THEREFORE, I HAVE REASONS TO BELIEVE THAT THE INCOM E CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT TO THE EXT ENT OF RS.20,00,000/- FOR THE ASSESSMENT YEAR 2009-10 WITHI N THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 19 61. ITA NO.4819/DEL/2019 5 4. THEREAFTER, THE ASSESSEE FILED OBJECTIONS TO PR OCEEDINGS U/S 147/148 VIDE LETTER DATED 30.05.2016, WHEREIN, THE ASSESSEE SUBMITTED THAT THE ASSESSEE DID NOT RECEIV E ANY MONEY FROM M/S EUPHORIA CAPITAL PRIVATE LIMITED AS ALLEGED IN THE REASONS RECORDED FOR SUMS AGGREGAT ING OF RS.20 LAKHS. THE ASSESSEE ALSO PRODUCED ITS BANK ST ATEMENT AND BOOKS OF ACCOUNTS TO SHOW THAT THERE WAS NO CRE DIT ENTRY FROM M/S EUPHORIA CAPITAL PRIVATE LIMITED AND IT DI D NOT ENTER ANY SUCH TRANSACTIONS WITH THE SAID COMPANY. SINCE, REOPENING U/S 147 WAS ONLY ON THE BASIS OF INFORMAT ION RECEIVED FROM INVESTIGATION WING AND THERE IS NO SU CH ENTRY IN THE BANK ACCOUNT OF THE ASSESSEE, THEN SUCH REASON S RECORDED ITSELF CANNOT BE BASIS OF REOPENING OF AS SESSMENT. THEREAFTER, THE ASSESSEE FURTHER VIDE REPLY DATED 1 4.07.2016 REITERATED THAT THERE IS NO SUCH CREDIT AMOUNT FROM THE SAID COMPANY IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AN D THE COPY OF BANK ACCOUNT AND BOOKS OF ACCOUNTS WERE DUL Y FILED. IT WAS ALSO POINTED OUT THAT THERE WAS NO FRESH INC REASE IN THE SHARE CAPITAL DURING THE YEAR AND THERE WAS NO CRED IT IN THE BOOKS OF ACCOUNT. 5. THE LD. ASSESSING OFFICER AFTER EXAMINING THE RECORD AND THE FINANCIAL STATEMENTS GIVEN IN THE AUDITED BALAN CE SHEET AND THE BANK STATEMENT, NOTED THAT THERE IS ONLY ON E ENTRY OF RS.10 LAKHS ON 24.01.2009 WHICH WAS FROM M/S GANNON DUNKERLY AND COMPANY LTD. AND NO MONEY HAS COME FROM M/S EUPHORIA CAPITAL PRIVATE LIMITED. THE RELEVANT FINDING IN THE ASSESSMENT ORDER DATED 29.09.2016 READS AS UNDE R:- ITA NO.4819/DEL/2019 6 4. ON PERUSAL OF THE BANK ACCOUNT OF THE ASSESSEE COMPANY, ONLY ONE ENTRY OF RS.10,00,000/- WAS FOUND CREDITED IN THE BANK ACCOUNT, WHICH WAS RECEIVED FROM ONE M/S GANNON DUNKERLY & CO. LTD. ON 24.01.2009. NO FURTHER ENTRY OF RS.10 LAKHS WAS FOUND. ACCORDINGLY, THE RETURN OF INCOME OF THE ASSESSEE IS ACCEPTED. 6. THEREAFTER, THE PR. CIT IN HIS REVISIONARY JURIS DICTION U/S 263 OF THE ACT HAS FIRSTLY, NOTED EXACTLY THE SAME REASONS RECORDED WHICH WAS RECORDED BY THE ASSESSING OFFIC ER FOR REOPENING THE CASE U/S 147 AND OBSERVED THAT THE AS SESSING OFFICER HAD NEITHER CALLED FOR THE INFORMATION FROM THE INVESTIGATION WING, SO AS TO VERIFY THE PREMIUM OF RS. 20 LAKHS FROM M/S EUPHORIA CAPITAL PRIVATE LIMITED NOR EXAMINED THAT SHARE PREMIUM OF RS.32.80 LAKHS AS DE CLARED IN THE BALANCE SHEET. THUS, HE OBSERVED THAT ASSESS MENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL IN THE INTEREST OF THE REVENUE. I N RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE FILED A VERY DE TAILED REPLY, A COPY OF WHICH HAS BEEN INCORPORATED IN THE IMPUGN ED PCITS ORDER. BESIDES CHALLENGING THE ASSESSMENT OR DER ITSELF ON THE GROUND THAT REASONS RECORDED WERE NOT VALI D OR WAS NOT IN ACCORDANCE WITH LAW, THE ASSESSEE SUBMITTED THAT THE AO HAS DULY VERIFIED AND EXAMINED THE RECORDS ABOUT THE ALLOTMENT OF SHARES AND PREMIUM. THE RELEVANT PORTI ON OF THE REPLY BY THE ASSESSEE BEFORE THE PR. CIT IS REPRODU CED AS UNDER:- ITA NO.4819/DEL/2019 7 FURTHER TO OUR SUBMISSIONS DATED 14.12 2017 WE WOU LD LIKE TO INFORM TO YOUR GOOD OFFICE THAT DURING THE YEAR, ASSESSEE HAS ALLOTTED SHARES OF RS. 8,10,000/- AT A PREMIUM OF RS. 32,80,000/- THE COMPLETE DETAILS OF ALLOTMENT ALONG WITH FORM-2 WAS SUBMITTED BEFORE ASSESSING OFFICER AND THE AO DULY VERIFIED THE TRANSACTIONS OF ALLOTMENT WITH BANK STATEMENT. THE AO WAS DULY SATISFIED THAT THERE WAS NO AMOUNT RECEIVE D FROM M/S. EUPORIA CAPITAL PRIVATE LIMITED DURING TH E YEAR AND PASSED THE ORDER ACCORDINGLY. IT WOULD NOT BE F AIR TO ALLEGE THE AO THAT HE HAS NOT VERIFIED THE DETAILS O F ALLOTMENT OF SHARES INCLUDING THE PREMIUM OF RS, 32,80,000/-. SINCE THERE WAS NO TRANSACTION WITH M/S EUPORIA CAP ITAL PRIVATE LIMITED AND/OR NO AMOUNT WAS RECEIVED FROM THE SAID PARTY, THE REASON TO REOPEN THE CASE AND THE A O HAD NO SPECIFIC INFORMATION ON RECORD, AO WAS CONVINCED THAT NO FURTHER INVESTIGATION WAS REQUIRED IN THE ABSENC E OF THE CREDIT OF ENTRIES AS REPORTED BY THE INVESTIGAT ION WING. IN VIEW OF THE VARIOUS COURT DECISIONS. PRIMA FACIE THE CASE WAS WRONGLY RE-OPENED U/S 147/148, AS SUCH THE AO PASSED THE ORDER. IF ANY ADDITION IS MADE ON THIS ACCOUNT, IT WILL BE MAINLY DUE TO CHANGE OF OPINION M THE PART OF DEPARTMENT. 7. HOWEVER, THE PR. CIT HAS SET-ASIDE THE ORDER OF THE AO TO PASS A FRESH ASSESSMENT ORDER AFTER OBSERVING AS UN DER:- ITA NO.4819/DEL/2019 8 THE REPLY OF THE ASSESSEE HAS BEEN GONE THROUGH CAREFULLY. THE ASSESSEE DID NOT FURNISH IN DETAIL O F A PERSON FROM WHOM THE SHARE. THE ASSESSEE RECEIVED SHARE PREMIUM NOR FURNISHED ANY EXPLANATION REGARDING THE IDENTITY, THE SOURCE OF INVESTMENT AND CREDITWORTHI NESS OF THE SUBSCRIBERS. HE ALSO DID NOT FURNISH ANY DOCUME NTS IN SUPPORT OF THE FAIR MARKET VALUE ADOPTED BY THE COM PANY AND RECEIVED HUGE PREMIUM DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. HAS ALSO NOT EXAMIN ED THE ABOVE ISSUES AND ACCEPTED THE SAME AS DECLARED BY THE ASSESSEE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONFIRMED VIEW THAT THE A.O. BY NOT PURSUE D THE INQURIES TO THEIR LOGICAL END AND HAS MADE THE ORDE R ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REV ENUE. HENCE, THE SAME DESERVES TO BE REVISED U/S 263 OF T HE I.T. ACT, 1961. THEREFORE, THE SAID ORDER PASSED BY THE ASSESSING OFFICER IS SET ASIDE ON THIS PARTICULAR IS SUE ONLY. THE ASSESSING OFFICER IS DIRECTED TO PASS FRESH ASSE SSMENT ORDER AFTER MAKING THROUGH AND DETAILED INQUIRIES O N THIS PARTICULAR ISSUE ONLY. THE ASSESSING OFFICER SHOULD PASS A SPEAKING ORDER AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 8. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE, MR. AJAY WADHWA AFTER EXPLAINING THE ENTIRE FACTS AND BACKGR OUND OF THE CASE, SUBMITTED THAT THE VERY PREMISE OF LD. PC IT TO EXERCISE HIS REVISIONARY JURISDICTION U/S 263 WAS B ASED ON THE ITA NO.4819/DEL/2019 9 SAME INFORMATION ON THE BASIS OF WHICH THE ASSESSEE S CASE WAS REOPENED U/S 147 ON THE REASONS RECORDED BY T HE AO. HE POINTED OUT THAT THE ASSESSEE HAS RAISED FOLLOWI NG TWO ADDITIONAL GROUNDS OF APPEAL:- THAT THE LD. PCIT HAS ERRED IN LAW IN SEEKING TO R EVISE THE ORDER UNDER SECTION 147 WITHOUT CONSIDERING THE FAC T THAT REOPENING UNDER SECTION 147 ITSELF WAS INCORRECT AN D HENCE WAS INVALID. HENCE, AGAINST AN INVALID REOPENING, N O 263 IS PERMISSIBLE. THAT THE LD. PCIT HAS ERRED IN LAW IN SEEKING TO R EVISE THE ORDER UNDER SECTION 147 WITHOUT CONSIDERING THAT WH ILE MAKING ADDITIONS UNDER SECTION 147, OTHER ADDITIONS ON THE BASIS OF WHICH THE FOUNDATIONAL ADDITION IS MADE BY THE LD. ASSESSING OFFICER AND AS THE ADDITION ON THE BASIS O F WHICH THE ASSESSMENT WAS REOPENED DOES NOT EXIST, IT IS N OT OPEN TO MAKE OTHER ADDITIONS. 9. HE SUBMITTED THAT, FIRST OF ALL, THE REASONS REC ORDED BY THE AO, TO ACQUIRE JURISDICTION TO REOPEN THE ASSES SMENT U/S 147 OF THE ACT ITSELF WAS BAD IN LAW, BECAUSE THE S AME WAS BASED ON ALLEGED ACCOMMODATION ENTRY WHEN NO SUCH A MOUNT HAVE BEEN RECEIVED BY THE ASSESSEE COMPANY. BASED O N SUCH ERRONEOUS FACTS, THE REASONS ITSELF WAS INVALID AND THEREFORE, THE ENTIRE PROCEEDINGS U/S 147/148 WAS VOID-AB-INITIO; AND ACCORDINGLY NO VALID JURISDICTION U/S 263 COULD HAV E BEEN ASSUMED ON SUCH INVALID ORDER. HE FURTHER SUBMITTED THAT THE REASONS WERE RECORDED ONLY ON THE GROUND THAT THE A SSESSEE ITA NO.4819/DEL/2019 10 COMPANY HAS TAKEN ACCOMMODATION ENTRY OF BOGUS SHAR E PREMIUM/APPLICATION FOR SUMS SEGREGATING TO RS.20 L AKHS RECEIVED FROM M/S EUPHORIA CAPITAL PRIVATE LIMITED FOR TWO AMOUNTS OF RS.10 LAKHS EACH ON 01.04.2008 AND 10.06 .2008. ONCE, IT WAS PROVEN ON RECORD BEFORE THE AO THAT NO SUCH AMOUNT HAS BEEN CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE OR IN THE BOOKS OF ACCOUNT FROM THE SAID C OMPANY, THEN THE ENTIRE FOUNDATION OF THE REOPENING FAILS. THERE IS ONLY ONE ENTRY OF RS.10 LAKHS WHICH WAS FROM A DIFFERENT PARTY. THEREFORE, THE VERY BASIS ON WHICH THE REASONS WERE RECORDED BASED ON SUCH ALLEGED INFORMATION WAS FOUND TO BE I NCORRECT AND THEREFORE, THE AO HAD RIGHTLY ACCEPTED THE RETU RN OF INCOME OF THE ASSESSEE. HE FURTHER DREW OUR ATTENTI ON TO THE REPLY BEFORE THE AO ALONG WITH VARIOUS DOCUMENTS FI LED IN THE COURSE OF ASSESSMENT PROCEEDINGS TO SHOW THAT, AO H AS DULY EXAMINED THIS ISSUE AND ACCEPTED THE ASSESSEES CON TENTION. ONCE THE VERY BASIS ON WHICH REASONS WERE RECORDED WERE FOUND TO BE FACTUALLY INCORRECT, THEN THE AO COULD NOT HAVE TRAVELLED BEYOND THE REASONS TO MAKE ANY FURTHER AD DITION FOR WHICH NO SUCH MATERIAL OR INFORMATION HAS COME ON R ECORD. NOR HE HAS RECORDED HIS SATISFACTION OR REASON TO BELIEVE ON ANY OTHER ISSUE. ONCE, THE LD. PR. CIT IN HIS REVIS IONARY JURISDICTION NOW CANNOT GO BEYOND THE REASONS RECOR DED FOR WHICH THE CASE WAS REOPENED U/S 147 AND SAY THAT TH E AO SHOULD HAVE ENQUIRED OTHER THINGS ALSO. ONCE, THE R EOPENING IS ONLY ON ALLEGED ESCAPEMENT OF RS.20 LAKHS, WHICH THE AO HAS VERIFIED AND FOUND THAT THIS AMOUNT WAS NOT REC EIVED ITA NO.4819/DEL/2019 11 FROM THAT PARTY, THEN LD. PR. CIT CANNOT TRAVEL BEY OND THE REASONS RECORDED. NO ERROR HAS BEEN FOUND OR HIGHLI GHTED BY THE LD. PR. CIT IN THE ORDER OF THE AO. 10. ALTERNATIVELY, HE SUBMITTED THAT EVEN ON OTHE R POINTS ON WHICH THE LD. PR. CIT HAS MADE OBSERVATIONS, THE AS SESSEE HAS FILED ALL THE DETAILS AND EVIDENCES BEFORE THE AO, WHICH WERE DULY EXAMINED, WHICH IS EVIDENT FROM THE VARIO US REPLIES AND DOCUMENTS FILED BEFORE THE AO AS PLACED IN THE PAPER BOOK. ONCE, THE AO HAS APPLIED HIS MIND AND CALLED FOR THE RECORD FROM THE ASSESSEE EVEN ON THE POINTS WHICH H AS BEEN RAISED BY THE PCIT, THEN IT CANNOT BE SAID THAT EIT HER HE HAS NOT CARRIED OUT ANY ENQUIRY OR HAS NOT APPLIED HIS MIND. 11. ON THE OTHER HAND, THE LD. CIT-DR STRONGLY RE LIED UPON THE OBSERVATIONS OF THE LD. PR. CIT AS INCORPORATED ABOVE AND POINTED OUT THAT IN THE SET-ASIDE PROCEEDINGS IN PU RSUANCE TO ORDER PASSED U/S 263 OF THE ACT, THE ASSESSEE DID N OT PARTICIPATE AND DID NOT PROVIDE ANY DETAILS, THEREF ORE, THE AO HAS PASSED AN EX-PARTE ORDER AND MATTER STILL PENDI NG BEFORE THE LD. CIT (A). IF THE ASSESSEE CLAIMS THAT THE AS SESSEE HAS NOT RECEIVED ANY AMOUNT FROM THE SAID PARTY AND ON THE OTHER ISSUE ALSO, THE ASSESSEE CAN GET IT VERIFIED AND SU BSTANTIATE ITS CASE BEFORE THE LD. CIT (A). 10. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED T HE RELEVANT MATERIAL PLACED ON RECORD AND THE OBSERVAT IONS OF THE LD. PR. CIT. AS STATED ABOVE, THE ASSESSEE CASE WA S REOPENED U/S 147/148 OF THE ACT ON THE BASIS OF INFORMATION RECEIVED ITA NO.4819/DEL/2019 12 FROM INVESTIGATION WING THAT THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRY OF RS.20 LAKHS AS THE PER REASO NS INCORPORATED ABOVE FROM M/S EUPHORIA CAPITAL PRIVAT E LIMITED. SINCE, THE CASE WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING, ON TH E PARTICULAR AMOUNT FORM A PARTICULAR PARTY, THE ASSE SSEE HAS RAISED OBJECTION BEFORE THE AO POINTING OUT THAT IT HAS NOT RECEIVED ANY MONEY FROM THE SAID ENTITY NOR THERE I S SUCH AMOUNT CREDITED IN THE BANK ACCOUNT OR BOOKS OF ACC OUNT OF THE ASSESSEE FROM THE SAID PARTY. THIS FACT WAS REI TERATED BEFORE THE AO ALONG WITH COPY OF BANK STATEMENTS AN D BOOKS OF ACCOUNTS. THE LD. AO ON EXAMINATION OF THE BANK ACCOUNT AND BOOKS OF ACCOUNTS HAS CATEGORICALLY NOTED THAT, FIRSTLY , ONLY AMOUNT OF RS.10 LAKHS WAS FOUND CREDITED IN TH E BANK ACCOUNT WHICH WAS RECEIVED FROM M/S GANNON DUNKERLY AND COMPANY LTD. ON 24.01.2009; SECONDLY , THERE IS NO SUCH ENTRY AS MENTIONED IN THE INVESTIGATION REPORT OR I NFORMATION; AND LASTLY , IS NO OTHER ENTRY OF RS.10 LAKHS FOUND. IN VIEW O F THE FACTUAL VERIFICATION, THE AO ACCEPTED THE RETUR N INCOME IN ORDER DATED 29.09.2016 PASSED U/S 147/148 OF THE AC T. NOW, LD. PR. CIT IN HIS REVISIONARY JURISDICTION U/S 263 OF THE ACT BASED ON SAME INFORMATION WHICH HAS BEEN INCORPORAT ED IN REASONS RECORDED HAS SOUGHT TO DRAW ADVERSE INFEREN CE BY OBSERVING THAT AO HAS NOT VERIFIED THE SHARE PREMIU M OF RS. 20 LAKHS FROM EUPHORIA CAPITAL PRIVATE LIMITED AND THEREFORE, ORDER OF THE AO IS ERRONEOUS INSOFAR AS PREJUDICIAL IN THE INTEREST OF THE REVENUE. ITA NO.4819/DEL/2019 13 11. ONCE, THE VERY BASIS FOR REASON TO BELIEVE ON THE BASIS OF WHICH ASSESSMENT WAS REOPENED DOES NOT EXIST; AND T HE AO HAS DULY ACCEPTED AFTER VERIFICATION THAT THE ADDIT ION CANNOT BE MADE AND INFORMATION WAS INCORRECT, THEN, IT WAS INCUMBENT UPON THE LD. PR. CIT TO POINT OUT AS TO W HAT WAS THE ERROR IN THE ASSESSMENT ORDER. ONCE, THE AO HAS NOT MADE ANY ADDITION IN RESPECT OF ALLEGED ACCOMMODATION EN TRY FROM M/S EUPHORIA CAPITAL PRIVATE LIMITED, THEN THERE IS NO SCOPE OF EXPANDING THE REASONS RECORDED AND TRAVEL BEYOND THE REASONS RECORDED ON WHICH ASSESSING OFFICER HAD ACQ UIRED JURISDICTION FOR REOPENING U/S 147 BY THE LD. PR. C IT IN HIS REVISIONARY JURISDICTION U/S 263. BEFORE US, THE LD . COUNSEL FOR THE ASSESSEE HAD HEAVILY RELIED UPON THE ORDER OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS SOFTWARE CONSULTANTS [2012] 341 ITR 240 (DEL.), WHEREIN ON ALMOST ON SIMILAR ISSUE, THE HONBLE COURT OBSERVED AND HE LD AS UNDER:- ONE OF THE CONTENTIONS, WHICH HAS BEEN ACCEPTED BY THE TRIBUNAL IS THAT THE ORDER OF THE ASSESSING OFFICER CANNOT BE REGARDED AS ERRONEOUS EVEN IF THE ASSESSING OFFICER HAD FAILED TO CARRY OUT NECESSARY VERIFICATION AND REQU IRED ENQUIRIES IN RESPECT OF THE SHARE APPLICATION MONEY , AS NO ADDITION HAS BEEN MADE ON ACCOUNT OF THE REASONS FO R REOPENING, WHICH WERE RECORDED BEFORE ISSUE OF NOTI CE UNDER SECTION 148. IT HAS BEEN HELD THAT THE ASSESSING OFF ICER COULD NOT HAVE MADE AN ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY AS NO ADDITION HAS BEEN MADE ON ITA NO.4819/DEL/2019 14 ACCOUNT OF FDRS OF RS. 20 LACS. THE TRIBUNAL HAS NO TICED AND RECORDED THAT IN THE REASONS FOR REOPENING IT W AS MENTIONED THAT THE ASSESSEE HAD MADE INVESTMENT IN FORM OF FDRS OF RS. 20 LACS BUT IN THE ASSESSMENT ORDER P ASSED UNDER SECTION 147/143(3) IT HAS BEEN HELD THAT THE RESPONDENT ASSESSEE HAD BEEN ABLE TO SHOW AND ESTAB LISH THE GENUINENESS OF AND CAPACITY TO MAKE THE SAID INVESTMENT. [PARA 9] ON THE SECOND ASPECT RAISED BY THE COMMISSIONER (AP PEALS) WITH REGARD TO THE ASSESSING OFFICER ACCEPTING THE L OSS RETURN OF RS. 1,02,756 IT IS HELD THAT THE SAME DID NOT REQUIRE EXERCISE OF REVISIONARY POWER UNDER SECTION 263. THE OBSERVATIONS OF THE ASSESSING OFFICER WERE ONLY TO T HE EXTENT OF STATING THAT HE HAD ACCEPTED THE RETURN. BENEFIT OF CARRY FORWARD OF LOSS CAN BE CLAIMED IN CASE A RETURN IS FILED UNDER SECTION 139(1). IT IS NOT THE CASE OF THE REV ENUE THAT THE ASSESSEE HAD TRIED TO CLAIM BENEFIT OF CARRY FO RWARD OF LOSS ON THE BASIS OF THE ORDER PASSED UNDER SECTION 147/143(3). [PARA 13] FOR EXERCISE OF POWER UNDER SECTION 263 IT IS MANDA TORY THAT THE ORDER PASSED BY THE ASSESSING OFFICER SHOULD BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. IN THE INSTANT CASE, THE ASSESSING OFFICER DID NOT MAKE ANY ADDITION FOR THE REASONS RECORDED AT THE TIME OF IS SUE OF NOTICE UNDER SECTION 148, THIS POSITION IS NOT DISP UTED AND DISTURBED BY THE COMMISSIONER IN HIS ORDER UNDER SE CTION 263. SEQUITUR IS THAT THE ASSESSING OFFICER COULD NO T HAVE ITA NO.4819/DEL/2019 15 MADE AN ADDITION ON ACCOUNT OF SHARE APPLICATION MO NEY IN THE ASSESSMENT PROCEEDINGS UNDER SECTION 147/148. ACCORDINGLY, THE ASSESSMENT ORDER IS NOT ERRONEOUS. THUS, THE COMMISSIONER COULD NOT HAVE EXERCISED JURISDICT ION UNDER SECTION 263. [PARA 14] THE QUESTION OF LAW IS ACCORDINGLY ANSWERED IN AFFI RMATIVE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. [PARA 15]. 12. IT IS NOT A CASE HERE WHERE THE BASIS AND MATE RIAL ON WHICH THE REASONS WERE RECORDED HAS NOT BEEN CONS IDERED BY THE ASSESSING OFFICER. IN FACT, THE ASSESSMENT RECO RD CLEARLY SHOWS THAT THE AO HAS DULY CALLED FOR ALL THE INFOR MATION AND HAS VERIFIED THE SAME AND HAS ARRIVED AT THE CONCLU SION. WITHOUT FINDING ANY ERROR IN SUCH FINDING OF THE AO OR FROM THE RECORDS, THE LD. PR. CIT CANNOT HOLD THAT THE O RDER PASSED BY THE AO IS ERRONEOUS IN LAW OR IN FACTS. IT IS T RITE LAW THAT WHILE EXERCISING THE JURISDICTION U/S 263 OF THE AC T, THE LD. PR. CIT HAS TO PROVE TWIN CONDITIONS ARE MET, THAT IS, THE ORDER PASSED BY THE AO IS ERRONEOUS; AND SECONDLY, IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. BOTH THE CONDITION SHOULD FULFILL SIMULTANEOUSLY AND IS CUMULATIVE AND IF ONE OF THE CONDITIONS IS LACKING, THEN PR. CIT CANNOT CANCEL/S ET-ASIDE THE ASSESSMENT ORDER. HERE THE LD. PR. CIT HAD TRIE D TO PRESUME THE ERROR IN THE ASSESSMENT ORDER WHICH AT THE FACE OF THE RECORD IS NOT THERE; OR THERE IS ANYTHING TO PERCEIVE THAT ASSESSING OFFICER HAS NOT EXAMINED THE INFORMATION WHICH WAS THE BASIS FOR REASON TO BELIEVE FOR REOPENING T HE CASE. ITA NO.4819/DEL/2019 16 HERE IN THIS CASE, IT CANNOT BE HELD THAT THE AO HA S NOT APPLIED HIS MIND ON THE INFORMATION RECEIVED OR HAS NOT CARRIED OUT ANY ENQUIRY OR VERIFICATION. NOWHERE, T HE LD. PR. CIT HAS HELD AS TO HOW THE ORDER OF THE AO IS ERRON EOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. PR. CIT HAS TO ESTABLISH FROM THE RECORDS AND HAS TO GIVE REASO NS AS TO WHY THE ORDER OF THE AO IS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF THE REVENUE TO CANCEL OR SET-ASIDE THE ASSESSMENT ORDER. WE FIND THAT NOWHERE THE LD. PR. CIT HAS POI NTED OUT ANY ERROR AS TO HOW THE ORDER OF THE AO IS ERRONEOU S AND SINCE ONE OF THE CONDITION IS LACKING, THEREFORE, N EITHER IN LAW NOR ON FACTS, HE CAN SET ASIDE OR CANCEL THE ASSESS MENT ORDER AND DIRECT TO PASS FRESH ASSESSMENT ORDER. IN VIEW OF OUR AFORESAID REASONING, THE IMPUGNED ORDER U/S 263 PAS SED BY THE LD. PR. CIT IS QUASHED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH DECEMBER, 2020 . SD/- SD/- [G.S. PANNU] [AMIT SHUKLA] VICE PRESIDENT JUDICIAL MEMBER DATED: 11 TH DECEMBER, 2020 F{X~{T COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT ITA NO.4819/DEL/2019 17 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR ITAT, NEW DELHI