PRAKASH FATANDAS JASSUJA, THANE V. ITO WD 3(2), THANE

ITA 4933/MUM/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3432 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 24-09-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V S JADHAVDR
• Keywords: Reopening of assessment; Gift; Business income; Depreciation; Transfer pricing; Loose papers; Opportunity of being heard; International transaction; Cost of acquisition; Tangible material; Difference of opinion; Competent authority; Assessment record; Onus to prove; Retraction; Reason to believe; Documents seized; Change of opinion; Reassessment proceedings
• Section: 44AD; 133A; 147; 131; 148; 139

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NOS.4933 TO 4938/MUM/2015 ASSESSMENT YEARS: 2005-06 TO 2010-11 SHIR PRAKASH FATANDAS JASSUJA, M/S FATANDAS MANGUMAL, MAHATMA PHULE MARKET, NR. OLD MUNICIPAL OFFICE, BHAJI MARKET, THANE(W)-400601 / VS. INCOME TAX OFFICER, WARD-3(2), ROOM NO.3, B WING, ASHAR IT PARK, ROAD NO.16Z, WAGLE ESTATE, THANE, MAHARASHTRA / ASSESSEE / REVENUE P.A. NO. AEVPJ3440E $ % & / ASSESSEE BY SHRI DEVENDRA JAIN $ % & / REVENUE BY SHRI V.S. JADHAV-DR / DATE OF HEARING 19/01/2016 & / DATE OF ORDER: 20/01/2016 & / O R D E R THIS BUNCH OF SIX APPEALS IS BY THE ASSESSEE, AGGR IEVED BY THE IMPUGNED ORDERS ALL DATED 30/06/2015 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI, ON IDENTICAL GRO UNDS. ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 2 2. DURING HEARING OF THIS APPEAL, SHRI DEVENDRA JAIN, LD. COUNSEL FOR THE ASSESSEE, EXPLAINED THAT IDENTICAL GROUNDS HAVE BEEN RAISED IN ALL THE APPEALS, THEREF ORE, THESE CAN BE HEARD TOGETHER. BROADLY, TWO GROUNDS HAVE BE EN RAISED, ONE IS WITH RESPECT TO REOPENING OF ASSESSM ENT U/S 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE AC T) AND THE SECOND ONE WITH RESPECT TO ADDING RS.1,80,851/- (A.Y. 2005-06), RS.2,75,820 (A.Y. 2006-07), RS.5,35,800/- (A.Y. 2007-08), RS.4,00,464/- (A.Y. 2008-09), RS.4,12,886 /- (A.Y. 2009-10) AND RS.5,68,244/- (A.Y. 2010-11), BEING 50 % OF THE GROSS PROFIT OF THE RESPECTIVE ASSESSMENT YEAR. 2.1. THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF TH E ASSESSEE, IS THAT SURVEY ACTION U/S 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSE E, WHEREIN, VARIOUS BILLS, RECEIPTS, LOOSE PAPERS, ETC , RELATED TO UNACCOUNTED PURCHASES AND SALES WERE FOUND AND IMPOUNDED. STATEMENT OF THE ASSESSEE WAS RECORDED ON 07/01/2011 AND 10/01/2011 WHICH WAS RETRACTED ON 12/03/2013. IT WAS ASSERTED THAT REOPENING WAS MAD E MERELY ON THE BASIS OF STATEMENT OF THE ASSESSEE. T HE LD. COUNSEL CHALLENGED THE REOPENING U/S 147 R.W.S 148 OF THE ACT, BY CONTENDING THAT THE REOPENING IS BAD IN LAW FOR WHICH RELIANCE WAS PLACED UPON THE FOLLOWING DECISI ONS:- I. CIT VS KELVINATOR OF INDIA LTD. (2010) 320 ITR 561 (SC) II. RALLIS INDIA LTD. VS ACIT (2010) 323 ITR 54 (BOM.) ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 3 III. DR. J MOHAN VS ACIT (2012)18 ITR (T) 363 (CHENNAI) AND IV. ITO VS BUA DAS (2006) 155 TAXMAN 130 (ASR.) 2.2. ON THE OTHER HAND, THE LD. DR, SHRI V.S. JADH AV, STRONGLY SUPPORTED THE REOPENING OF THE CASE BY CON TENDING THAT REOPENING WAS NOT MERELY DONE ON THE BASIS OF STATEMENT BUT CERTAIN RELATED DOCUMENTS SUCH AS BIL LS, RECEIPTS AND PAPERS WERE ALSO RECOVERED, DURING SUR VEY, CONNECTING THE ASSESSEE THAT UNACCOUNTED PURCHASES/ SALES WERE MADE BY THE ASSESSEE AND FURTHER DULY ADMITTED BY THE ASSESSEE IN HIS STATEMENT, THUS, THE INCOME ESCAPED ASSESSMENT, THEREFORE, IT WAS RIGHTLY REOPENED U/S 147 OF THE ACT. IT WAS ALSO EXPLAINED THAT IN HIS STATEMEN T THAT THE ASSESSEE ADMITTED EVEN FOR THE EARLIER ASSESSMENT Y EARS, IDENTICAL UNACCOUNTED PURCHASES/SALES WERE MADE BY THE ASSESSEE. 2.3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT THE ASSESSEE AN INDIVIDUAL WAS CARRYING OU T IN THE BUSINESS OF TRADING IN POTATO, ONION AND GARLIC UND ER THE NAME AND STYLE OF M/S FATANDAS MANDALDAS. A SURVEY WAS CARRIED OUT ON 07/01/2011 AT THE BUSINESS PREMISES/ SHOP OF THE ASSESSEE. DURING SURVEY, VARIOUS BILLS, RECE IPTS, LOOSE PAPERS, ETC, RELATING TO UNACCOUNTED PURCHASES AND SALES WERE FOUND AND IMPOUNDED. STATEMENT OF THE ASSESS EE WAS RECORDED ON 07/01/2011 AND 10/01/2011. IN HIS ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 4 STATEMENT, THE ASSESSEE DULY ADMITTED THAT HE CARRI ED OUT PURCHASES AND SALES OF ONION, POTATO AND GARLIC, WH ICH WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS, MAIN TAINED BY THE ASSESSEE. AGAIN ON 10/01/2011, THE STATEMENT OF THE ASSESSEE WAS RECORDED, WHEREIN, HE CONFIRMED THE ST ATEMENT RECORDED ON 07/01/2011. IMPOUNDING OF DOCUMENT FRO M THE BUSINESS PREMISES OF THE ASSESSEE IS NOT IN DIS PUTE AS IS EVIDENT FROM REPLY TO QUESTION NO.4 OF THE STATEMEN T. EVEN, IN REPLY TO QUESTION NO.5 WITH RESPECT TO PAPERS SE RIALLY NUMBERED 1 TO 35 AND IN REPLY IN QUESTION NO. 16 OF THE STATEMENT RECORDED ON 07/01/2011, IT WAS CATEGORICA LLY TENDERED BY THE ASSESSEE THAT HE DID NOT ENTERED TH E TRANSACTIONS OF PURCHASE AND SALE IN HIS REGULAR BO OKS OF ACCOUNTS. IN REPLY TO QUESTION NO.6 WITH RESPECT TO KEEPING THE BILLS OF THE PERIOD NOVEMBER 2010 ONWARDS, THE ASSESSEE TENDERED THAT SINCE THE TRANSACTION WERE CASH SALES/PURCHASES, THE SAME HAVE BEEN DESTROYED. IN R EPLY TO QUESTION NO. 7, THE ASSESSEE TENDERED THAT ALMOST S AME AMOUNT OF PURCHASES AND SALES WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS. QUESTION NO.8 AND ITS REPLY IS REPRODUCED HEREUNDER FOR READY REFERENCE:- Q. NO.8. AS SEEN AND OBSERVED DURING THE COURSE OF SURVEY U/S 133A AND ADMITTED BY YOU AS WELL THAT YO U DO NOT ENTER ALL THE CASH PURCHASES AND SALES IN YO UR BOOKS OF ACCOUNT. PLEASE STATE WHETHER DURING THE PRESIDING YEARS ALSO YOU HAVE MADE UNACCOUNTED SALE S ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 5 AND PURCHASES. IF SO, PLEASE GIVE QUANTUM OF UNRECO RDED SALES AND PURCHASES DURING PRECEDING YEARS. ANS. I STATED THAT DURING PRECEDING YEARS ALSO I HA VE MADE UNRECORDED PURCHASES AND SALES DURING PRECEDIN G YEARS, HOWEVER, THE QUANTUM OF UNRECORDED PURCHASES AND SALES USED TO BE AROUND 50%. THIS YEAR DUE TO INCREASE IN PRICES OF ONION OF RECENT MONTHS THE QU ANTUM OF UNRECORDED PURCHASES AND SALES HAVE GONE UP. 2.4. IN VIEW OF THE ABOVE AND THE MATERIAL AVAILAB LE ON RECORD, IT IS MY BOUNDED DUTY TO EXAMINE THE VALIDI TY OF REOPENING U/S 147 R.W.S 148 OF THE ACT. BEFORE ADVE RTING FURTHER I AM REPRODUCING HEREUNDER THE RELEVANT PRO VISION OF SECTION 147 OF THE ACT FOR READY REFERENCE AND ANAL YSIS:- . IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THA T ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 T O 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHAR GEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT Y EAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 1 53 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR) : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER T HE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PAR T OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE T O A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT, FOR THAT ASSESSMENT YEAR: ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 6 PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRST PROVISO SHALL APPLY IN A CASE WHERE ANY INCOME IN RELATION TO ANY ASSET (INCLUDING FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE I NDIA, CHARGEABLE TO TAX, HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR : PROVIDED ALSO THAT THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVING MATTERS WHI CH ARE THE SUBJECT MATTERS OF ANY APPEAL, REFERENCE OR REVISIO N, WHICH IS CHARGEABLE TO TAX AND HAS ESCAPED ASSESSMENT. EXPLANATION 1.PRODUCTION BEFORE THE ASSESSING OFFI CER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENC E COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY THE ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, TH E FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, NAMELY : (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF AN Y OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DU RING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARG EABLE TO INCOME-TAX ; (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE A SSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN T HE RETURN ; (BA) WHERE THE ASSESSEE HAS FAILED TO FURNISH A REP ORT IN RESPECT OF ANY INTERNATIONAL TRANSACTION WHICH HE WAS SO REQUIRED UNDER SECTION 92E; (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDERASSESS ED ; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RA TE ; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCE SSIVE RELIEF UNDER THIS ACT ; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR AN Y OTHER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED; (D) WHERE A PERSON IS FOUND TO HAVE ANY ASSET (INC LUDING FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE INDIA. EXPLANATION 3.FOR THE PURPOSE OF ASSESSMENT OR REA SSESSMENT UNDER THIS SECTION, THE ASSESSING OFFICER MAY ASSES S OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED A SSESSMENT, AND ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 7 SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, NOTWITHSTANDING THA T THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RE CORDED UNDER SUB-SECTION (2) OF SECTION 148. EXPLANATION 4.FOR THE REMOVAL OF DOUBTS, IT IS HER EBY CLARIFIED THAT THE PROVISIONS OF THIS SECTION, AS AMENDED BY THE F INANCE ACT, 2012, SHALL ALSO BE APPLICABLE FOR ANY ASSESSMENT YEAR BE GINNING ON OR BEFORE THE 1ST DAY OF APRIL, 2012. 2.5. IF THE AFORESAID PROVISION OF THE ACT IS ANAL YZED, I FIND THAT AFTER INSERTION OF EXPLANATION -3 TO SECT ION 147 OF THE ACT BY THE FINANCE (NO.2) ACT OF 2009 WITH EFFE CT FROM 01/04/1989 SECTION 147 HAS AN EFFECT THAT ASSESSING OFFICER HAS TO ASSESS OR REASSESS INCOME (SUCH INCOME) WHIC H HAS ESCAPED ASSESSMENT AND WHICH WAS BASIS OF FORMATION OF BELIEF AND, IF HE DOES SO, HE CAN ALSO ASSESS OR RE ASSESS ANY OTHER INCOME WHICH HAS ESCAPED ASSESSMENT AND WHICH CAME TO THE NOTICE DURING THE COURSE OF PROCEEDINGS . IDENTICAL RATIO WAS LAID DOWN BY HONBLE JURISDICT IONAL HIGH COURT IN CIT VS JET AIRWAYS INDIA PVT. LTD. (2010) 195 TAXMAN 117 (MUM.) AND THE FULL BENCH DECISION FROM HONBLE KERALA HIGH COURT IN CIT VS BEST WOOD INDUS TRIES AND SAW MILLS (2011) 11 TAXMAN.COM 278 (KERALA)(FB) . A PLAIN READING OF EXPLANATION-3 TO SECTION 147 CLEAR LY DEPICTS THAT THE ASSESSING OFFICER HAS POWER TO MAKE ADDITI ON, WHERE HE ARRIVED TO A CONCLUSION THAT INCOME HAS ES CAPED ASSESSMENT WHICH CAME TO HIS NOTICE DURING THE COUR SE OF PROCEEDINGS OF REASSESSMENT U/S 148. MY VIEW IS FO RTIFIED BY THE DECISION IN MAJINDER SINGH KANG VS CIT (2012 ) 25 TAXMAN.COM 124/344 ITR 358 (P & H) AND JAY BHARAT ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 8 MARUTI LTD. VS CIT (2010) TAX LR 476 (DEL.) AND V. LAKSHMI REDDY VS ITO (2011) 196 TAXMAN 78 (MAD.). THE PROV ISION OF THE ACT IS VERY MUCH CLEAR AS WITH EFFECT FROM 01/0 4/1989, THE ASSESSING OFFICER HAS WIDE POWERS TO INITIATE P ROCEEDINGS OF REOPENING. THE HONBLE KERALA HIGH COURT IN CIT VS ABDUL KHADAR AHMAD (2006) 156 TAXMAN 206 (KERALA) E VEN WENT TO THE EXTENT SO LONG AS THE AO HAS INDEPENDEN TLY APPLIED HIS MIND TO ALL THE RELEVANT ASPECT AND HAS ARRIVED TO A BELIEF THE REOPENING CANNOT BE SAID TO BE INVA LID. 2.6. I AM AWARE THAT MERE CHANGE OF OPINION CANNOT FORM THE BASIS OF REOPENING WHEN THE NECESSARY FACT S WERE FULLY AND TRULY DISCLOSED BY THE ASSESSEE IN THAT S ITUATION, THE ITO IS NOT ENTITLED TO REOPEN THE ASSESSMENT ME RELY ON THE BASIS OF CHANGE OF OPINION. HOWEVER, POWERS UN DER AMENDED PROVISION ARE WIDE ENOUGH WHERE THERE IS A REASONABLE BELIEF WITH THE ASSESSING OFFICER, THAT INCOME HAS ESCAPED ASSESSMENT, BECAUSE THE POWERS WITH EFFECT FROM 01/04/1989 ARE CONTEXTUALLY DIFFERENT AND THE CUMUL ATIVE CONDITIONS SPELT OUT IN CLAUSES (A) AND (B) OF SECT ION 147, PRIOR TO ITS AMENDMENT ARE NOT PRESENT IN THE AMEND ED PROVISION. THE ONLY CONDITION FOR ACTION IS THAT T HE ASSESSING OFFICER SHOULD HAVE REASON TO BELIEVE THA T INCOME HAS ESCAPED ASSESSMENT. SUCH BELIEF CAN BE REACHED IN ANY MANNER AND IS NOT QUALIFIED BY A PRE-CONDITION OF F AITH AND TRUE DISCLOSURE OF MATERIAL FACTS BY AN ASSESSEE AS CONTEMPLATED IN PRE-AMENDED SECTION 147. VIEWED IN THAT ANGLE, POWER TO REOPEN ASSESSMENT IS MUCH WIDER UND ER THE ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 9 AMENDED PROVISION. MY VIEW IS FORTIFIED BY THE DEC ISION FROM HONBLE DELHI HIGH COURT IN BAWA ABHAI SINGH VS DCI T (2001) 117 TAXMAN 12 AND RAKESH AGARWAL VS ACIT (19 96) 87 TAXMAN 306 (DEL.). THE HONBLE APEX COURT IN CI T VS SUN ENGINEERING WORKS PVT. LTD. 198 ITR 297 (SC) CL EARLY HELD THAT PROCEEDINGS U/S 147 ARE FOR THE BENEFIT F OR THE REVENUE, WHICH ARE AIMED AT GATHERING THE ESCAPED INCOME. AT THE SAME TIME, I AM AWARE THAT POWERS U/S 147 AN D 148 OF THE ACT ARE NOT UNBRIDLED ONE AS IT IS HEDGED WI TH SEVERAL SAFEGUARDS CONCEIVED IN THE INTEREST OF ELIMINATING ROOM FOR ABUSE OF THIS POWER BY THE AO. HOWEVER, THE MATERI AL AVAILABLE ON RECORD, CLEARLY INDICATES THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT AND DULY CONFIRMED BY THE ASSESSEE, WHILE RECORDING HIS STATEMENT ON 07/01/20 11 AND 10/01/2011, THEREFORE, THE LD. ASSESSING OFFICER W AS WITHIN HIS JURISDICTION TO REOPEN THE ASSESSMENT. THE HON BLE APEX COURT IN ESS ESS KAY ENGINEERING CO. PVT. LTD. (20 01) 247 ITR 818 (SC) HELD THAT MERELY BECAUSE THE CASE OF T HE ASSESSEE WAS CORRECT IN ORIGINAL ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR, IT DOES NOT PRECLUDE THE ITO TO RE OPEN THE ASSESSMENT OF AN EARLIER YEAR ON THE BASIS OF FINDI NG OF HIS FACT THAT FRESH MATERIAL CAME TO HIS KNOWLEDGE. 2.7. UNDER SECTION 147, AS SUBSTITUTED WITH EFFECT FROM 01/04/1989, THE SCOPE OF REASSESSMENT HAS BEEN WIDE NED. AFTER SUCH SUBSTITUTION, THE ONLY RESTRICTION, PUT IN THAT SECTION IS THAT REASON TO BELIEVE. THAT REASON HA S TO BE A REASON OF A PRUDENT PERSON WHICH SHOULD BE FAIR AND NOT ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 10 NECESSARILY DUE TO FAILURE OF THE ASSESSEE TO DISCL OSE FULLY AND PARTIALLY SOME MATERIAL FACTS RELEVANT FOR ASSE SSMENT (DR. AMINS PATHOLOGY LABORATORY VS JCIT (2001) 252 ITR 673, 682 (BOM.) IDENTICAL RATIO WAS LAID DOWN BY H ONBLE DELHI HIGH COURT IN UNITED ELECTRICAL COMPANY PVT. LTD. VS CIT (2002) 258 ITR 317, 322 (DEL.) AND PRAFULL CHUN NILAL PATEL VS ACIT 236 ITR 832, 838 (GUJ.). THE ESSENTIA L REQUIREMENT FOR INITIATING REASSESSMENT PROCEEDING U/S 147 R.W.S 148 OF THE ACT IS THAT THE LD. ASSESSING OFFI CER MUST HAVE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE T O TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR. THE HONBLE GUJARA HIGH COURT IN PRAFULL CHUNNILAL PATE L VS ACIT (SUPRA) EVEN WENT TO THE EXTENT THAT AT THE IN ITIATION STAGE FORMATION OF REASONABLE BELIEF IS NEEDED AND NOT A CONCLUSIVE FINDING OF FACTS. IDENTICAL RATIO WAS LA ID DOWN IN BRIJMOHAN AGRAWAL VS ACIT (2004) 268 ITR 400, 405 ( ALL.) AND RATNACHUDAMANI S. UTNAL VS ITO (2004) 269 ITR 2 72, 277 (KARNATAKA) APPLYING SOWDAGAR AHMED KHAN VS ITO (1968) 70 ITR 79(SC). 2.8. SO FAR AS, THE MEANING OF EXPRESSION, REASON TO BELIEVE IS CONCERNED, IT REFERS TO BELIEVE WHICH P ROMPTS THE ASSESSING OFFICER TO APPLY SECTION 147 TO A PARTICU LAR CASE. IT DEPEND UPON THE FACTS OF EACH CASE. THE BELIEF M UST BE OF AN HONEST AND REASONABLE PERSON BASED ON REASONABLE GROUNDS. THE ASSESSING OFFICER IS REQUIRED TO ACT, NOT ON MERE SUSPICION, BUT ON DIRECT OR CIRCUMSTANTIAL EVI DENCE. MY ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 11 VIEW FIND SUPPORT FROM THE RATIO LAID DOWN IN FOLLO WING CASES:- I. EPICA LABORATORIES LTD. VS DCIT 251 ITR 420, 425-426 (BOM.), II. VISHNU BOREWELL VS ITO (2002) 257 ITR 512 (ORISSA), III. CENTRAL INDIA ELECTRIC SUPPLY COMPANY LTD. VS ITO (20 11) 333 ITR 237 (DEL.), IV. V.J. SERVICES COMPANY MIDDLE EAST LTD. VS DCIT (2011) 339 ITR 169 (UTTRAKHAND), V. CIT VS ABHYUDAYA BUILDERS (P. ) LTD. (2012) 340 ITR 310 (ALL.), VI. CIT VS DR. DEVENDRA GUPTA (2011) 336 ITR 59 (RAJ.), VII. EMIRATES SHIPPING LINE FZE VS ASST. DIT (2012) 349 ITR 493 (DEL.). VIII. REFERENCE MAY ALSO MADE TO FOLLOWING JUDICIAL DECISI ONS:- IX. SAFETAG INTERNATIONAL INDIA P. LTD. (2011) 332 ITR 622 (DEL.), X. CIT VS ORIENT CRAFT LTD. (2013) 354 ITR 536 (DEL.) XI. ACORUS UNITECH WIRELSS PVT. LTD. VS ACIT (2014) 362 IT R 417 (DEL.). XII. PRAFUL CHUNILAL PATEL: VASANT CHUNILAL PATEL VS ASST. CIT (1999) 832, 843-44, 844-45 (GUJ.), XIII. VENUS INDUSTRIAL CORPORATION VS ASST. CIT (1999) 236 I TR 742, 746 (PUNJ.), XIV. SRICHAND LALCHAND TALREJA VS ASST. CIT (1998) 98 TAXM AN 14, 19 (BOM.), XV. USHA BELTRON LTD. VS JCIT (1999) 240 ITR 728, 736-37, 739 (PAT.) XVI. KAPOOR BROTHERS VS UNION OF INDIA (2001) 247 ITR 324 , 331, 332-33 XVII. VIPPY PROCESSORS PVT. LTD. VS CIT (2001) 249 ITR 7, 8 (MP) ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 12 2.9. IN DILIP S. DAHANUKAR VS ASST. CIT (2001) 248 ITR 147, 150-51 (BOM.). THE HONBLE JURISDICTIONAL HIGH COURT HELD AS UNDER:- HELD, THAT THERE WAS MATERIAL ON RECORD ON THE BASIS OF SURVEY AND STATEMENT OF PERSON TO SHOW THAT THE ASSESSEE HAD WRONGFULLY CLAIM DEDUCTION U/S 80IA. THEREFORE, THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT FOR ASSESSMENT YEAR 1994- 95. IDENTICALLY IN THE CASE OF SRICHAND LALCHAND TALREJ A V. ASST. CIT, (1998) 98 TAXMAN 14, 19 (BOM), WHERE THE INFORMATION REGARDING ACQUISITION OF THE ASSET WAS NOT AVAILABLE WITH THE ASSESSING OFFICER DURING THE REL EVANT ASSESSMENT YEAR 1992-93 AND SUCH INFORMATION WAS DISCLOSED IN THE RETURN FOR THE ASSESSMENT YEAR 199 5-96, THE HONBLE JURISDICTIONAL HIGH COURT HELD THAT THE ASSESSING OFFICER CAN FORM A BONA FIDE BELIEF THAT THERE WAS ESCAPEMENT OF INCOME IN RELATION TO ASSESSMENT YEAR 1992-93 . 2.10. THE HONBLE JURISDICTIONAL HIGH COURT IN EX PORT CREDIT GUARANTEE CORPORATION OF INDIA LTD. V. ADDL. CIT, (2013) 350 ITR 651 (BOM), WHERE THERE HAD BEEN NO APPLICATION OF MIND TO THE RELEVANT FACTS DURING TH E COURSE OF ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 13 THE ASSESSMENT PROCEEDINGS BY THE ASSESSING OFFICER , THE REOPENING OF THE ASSESSMENT WAS HELD TO BE VALID. 2.11. THE HONBLE JURISDICTIONAL HIGH COURT IN GIRI LAL & CO. V. S.L. MEENA, ITO, (2008) 300 ITR 432 (BOM), HELD THAT IN ORDER TO INVOKE THE EXTRAORDINARY JURISDICTION OF THE COURT THE PETITIONER MUST ALSO MAKE OUT A CASE THAT NO PART OF THE RELEVANT MATERIAL HA D BEEN KEPT OUT FROM THE ASSESSING OFFICER). THE INFORMATI ON WAS IN THE ANNEXURES AND CONSEQUENTLY EXPLANATION 2(C)(IV) OF SECTION 147 WOULD APPLY. THE REASSESSME NT PROCEEDINGS AFTER FOUR YEARS WERE VALID. 2.12. IN THE CASE OF DEPUTY CIT V. GOPAL RAMNARAYA N KASAT, (2010) 328 ITR 556 (BOM), IT WAS NOT THE CAS E OF THE ASSESSEE THAT THE NOTICE ISSUED WAS AFTER THE EXPIR Y OF THE TIME LIMIT PROVIDED IN SECTION 153(2). THE REASSESS MENT PROCEEDINGS WERE HELD TO BE VALID. 2.13. INDIAN HUME PIPE CO. LTD. V. ASST. CIT, (201 2) 348 ITR 439 (BOM), BOTH IN THE COMPUTATION OF TAXAB LE LONG- TERM CAPITAL GAINS IN THE ORIGINAL RETURN OF INCOME AND IN THE COMPUTATION THAT WAS SUBMITTED IN RESPONSE TO THE Q UERY OF THE ASSESSING OFFICER THERE WAS A COMPLETE SILENCE IN REGARD TO THE DATES ON WHICH THE AMOUNTS WERE INVESTED, AS SUCH THERE BEING A FAILURE TO DISCLOSE FULLY AND TRULY M ATERIAL FACTS NECESSARY FOR ASSESSMENT. THE REASSESSMENT PROCEEDI NGS ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 14 WERE HELD TO BE VALID. THIS VIEW WAS ALSO CONFIRMED IN FOLLOWING CASES:- A. DALMIA P. LTD. V. CIT, (2012) 348 ITR 469 (DEL); B. CIT V. K. MOHAN & CO. (EXPORTS), (2012) 349 ITR 653 (BOM); C. REMFRY & SAGAR V. CIT, (2013) 351 ITR 75 (DEL); D. OPG METALS & FINSEC LTD. V. CIT, (2013) 358 ITR 144 (DEL). 2.14. IN THE CASE OF VENUS INDUSTRIAL CORPORATION V. ASST. CIT, (1999) 236 ITR 742, 746 (P & H) [WHERE I NITIATION WAS STARTED WITHIN FOUR YEARS FOR RE-EXAMINING THE DEDUCTION UNDER SECTION 80HHC, WAS HELD TO BE WRONGLY ALLOWED IN THE ORIGINAL ASSESSMENT. IDENTICALLY, IN THE CASE OF HAPPY FORGING LTD. V. C IT, (2002) 253 ITR 413,416-17 (P & H), WHERE EXCISE DUT Y PAID IN ADVANCE WAS SHOWN AS AN ASSET IN THE BALANCE SHE ET AND WAS ALLOWED AS A DEDUCTION, REASSESSMENT NOTICE ON THE GROUND THAT EXCISE DUTY WAS SHOWN AS AN ASSET IN TH E BALANCE SHEET AND WAS NOT ROUTED THROUGH THE PROFIT AND LOSS ACCOUNT. THE REOPENING AT THIS STAGE WAS HELD TO BE VALID. 2.15. IN THE CASE OF VIPAN KHANNA V. CIT, (2002) 2 55 ITR 220, 230 (P & H), WHERE FROM THE FACTS IT WAS C LEAR THAT THE ASSESSEE HAD CLAIMED DEPRECIATION IN THE RETURN AT THE RATE OF 50 PER CENT AND HE HAD NOWHERE DISPUTED THE FACT ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 15 THAT THE ADMISSIBLE RATE OF DEPRECIATION TO HIM WAS 40 PER CENT., SUCH FACT ALONE WAS SUFFICIENT TO INITIATE R EASSESSMENT PROCEEDINGS UNDER SECTION 147 AND, THEREFORE, SUCH INITIATION WAS SUSTAINED. THE HONBLE PUNJAB & HARYANA HIGH COURT IN MRS. RAMA SINHA V. CIT, (2002) 256 ITR 481, 483, 486, WH ERE THE REASSESSMENT NOTICE HAS BEEN ISSUED ON THE BASIS OF DEFINITE INFORMATION FROM CBI REGARDING INVESTMENTS BY THE A SSESSEE WHICH HAD NOT BEEN DISCLOSED DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, SUCH INITIATION HAS BEEN UP HELD. 2.16. IN THE CASE OF PAL JAIN V. ITO, (2004) 267 I TR 540, 544-45, 548, 549 (P & H), APPLYING PHOOL CHAND BAJR ANG LAL V. ITO, (1993) 203 ITR 456 (SC), ALTHOUGH THE TRANS ACTION OF SALE OF SHARES WAS DISCLOSED AND ACCEPTED IN THE OR IGINAL ASSESSMENT, BUT THE SUBSEQUENT DISCOVERY BY THE DDI (INVESTIGATION) REVEALED THAT THE TRANSACTION WAS N OT GENUINE, A REASSESSMENT NOTICE AFTER FOUR YEARS HAS BEEN HELD TO BE VALID BECAUSE THERE WAS NO TRUE DISCLOSU RE OF THE MATERIAL FACTS. IN THIS REGARD, THE PETITIONER-ASSE SSEE CANNOT DRAW ANY SUPPORT FROM THE STATEMENT FOR CHALLENGING THE VALIDITY OF THE NOTICE FOR REASSESSMENT. IT GOES WI THOUT SAYING THAT FOR THE PURPOSE OF MAKING THE ASSESSMENT, THE ASSESSING OFFICER SHALL HAVE TO CONFRONT THE PETITI ONER WITH THE ENTIRE MATERIAL IN HIS POSSESSION ON THE BASIS OF WHICH HE PROPOSES TO MAKE THE ADDITIONS. ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 16 2.17. IN PUNJAB LEASING PVT. LTD. V. ASST. CIT, (2 004) 267 ITR 779, 781-82 (P & H), WHERE DEPRECIATION WAS ALLOWED TO THE ASSESSEE, WHO WAS ENGAGED IN THE BUS INESS OF FINANCING OF VEHICLES AND CONSUMER DURABLES ON 'HIR E- PURCHASE BASIS' AS WELL AS ON 'LEASE/RENT BASIS', A REASSESSMENT NOTICE ISSUED AFTER FOUR YEARS HAS BEE N HELD NOT TO SUFFER FROM ANY ILLEGALITY AS THE SAME WAS B ASED ON THE BONA FIDE ACTION OF THE COMPETENT AUTHORITY TO DETERMINE WHETHER OR NOT THE VEHICLES IN RESPECT OF WHICH THE PETITIONER HAD BEEN CLAIMING DEPRECIATION, WERE ACTUALLY OWNED BY IT. 2.18. IN JAWAND SONS V. CIT(A), (2010) 326 ITR 39 (P & H), IN THE INITIAL ASSESSMENT, THE BENEFIT OF DEDUC TION OF THE DUTY DRAWBACK AND DEPB UNDER SECTION 80-IB WAS WRON GLY GRANTED TO THE ASSESSEE, FOR WHICH IT WAS NOT ENTIT LED. THEREFORE, REASSESSMENT PROCEEDINGS TO WITHDRAW THE DEDUCTION WERE HELD TO BE VALID. 2.18. LIKEWISE, IN CIT V. HINDUSTAN TOOLS & FORGIN GS P. LTD., (2008) 306 ITR 209 (P & H), WHERE, THE ASSESS EE IN THE REGULAR ASSESSMENT HAD BEEN ALLOWED DEDUCTION MORE THAN ACTUALLY ALLOWABLE UNDER SECTION 80HHC. THEREFORE, THE ACTION INITIATED BY THE AO FOR REASSESSMENT UNDER S ECTION 147(B) COULD NOT BE HELD TO BE INVALID. 2.19. IN THE CASE OF MARKANDA VANASPATI MILLS LTD. V. CIT, (2006) 280 ITR 503 (P & H), WHEREIN, THE INFOR MATION FURNISHED BY THE ASSESSEE GAVE NO CLUE TO THE PAYME NT OF LIABILITY IN REGARD OF THE SALES TAX COLLECTED IN E XCESS. THE ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 17 ASSESSING OFFICER WAS HELD TO BE VALIDLY INITIATED THE REASSESSMENT PROCEEDINGS UNDER SECTION 147 FOR BOTH THE YEARS UNDER CONSIDERATION. IN THE CASE OF SAT NARAIN V. CIT, (2010) 320 ITR 448 (P & H), THE DOCUMENT DID NOT FORM THE SOLE BAS IS FOR THE ASSESSING OFFICER TO INITIATE REASSESSMENT PRO CEEDING BUT HE ALSO TOOK INTO CONSIDERATION THE LETTER WRIT TEN BY THE ASSISTANT COMMISSIONER AS WELL AS THE FACT THAT NO RETURN HAD BEEN FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 1995-96. THUS, IT WAS HELD THAT THE ASSESSING OFFICER HAD RI GHTLY INVOKED THE JURISDICTION TO INITIATE THE REASSESSME NT PROCEEDINGS UNDER SECTION 147. 2.20. IN THE CASE OF CIT V. HUKAM SINGH, (2005) 27 6 ITR 347 (P & H), HELD THAT THE RESPONDENTS DID NOT HAVE THE LOCUS STANDI TO QUESTION THE ORDERS OF REASSESSMENT ON THE GROUND OF LACK OF NOTICE. NON-ISSUANCE OF NOTICE TO SOME OF THE LEGAL HEIRS OF THE LATE P WAS MERELY AN IRREGUL ARITY AND THE SAME DID NOT AFFECT THE VALIDITY OF THE REASSES SMENT ORDERS. LIKEWISE, IN TILAK RAJ BEDI V. JOINT CIT, (2009) 3 19 ITR 385 (P & H), WHEREIN, FACTS COMING TO LIGHT IN A SU BSEQUENT ASSESSMENT YEAR COULD VALIDLY FORM THE BASIS FOR IN ITIATING REASSESSMENT PROCEEDINGS, IN VIEW OF EXPLANATION 2 TO SECTION 147. THE ACTION OF THE INCOME TAX AUTHORITI ES IN REOPENING THE ASSESSMENT OF THE ASSESSEE AND RESTRI CTING THE DEDUCTION UNDER SECTION 80-IB WAS HELD TO BE VALID. ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 18 2.21. IN THE CASE OF SMT. USHA RANI V. CIT, (2008) 301 ITR 121 (P & H), THERE WAS NOTHING ON RECORD TO SHO W THE RELATIONSHIP BETWEEN THE DONOR AND THE DONEE, CAPAC ITY OF THE DONOR TO MAKE GIFTS AND THE OCCASION THEREFORE. THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS TO PROVE THE GIFTS. THE REASSESSMENT PROCEEDINGS WERE HELD TO BE VALID. IN THE CASE OF USHA BELTRON LTD. V. JOINT CIT, (199 9) 240 ITR 728, 736-37, 739 (PAT), WHERE THE INVESTIGATION REPORT INDICATED THAT THE OFFICER HAD REASON TO BELIEVE TH AT ON ACCOUNT OF FAILURE ON THE PART OF THE PETITIONER-AS SESSEE TO DISCLOSE TRUE AND FULL FACTS, INCOME HAD BEEN GROSS LY UNDER ASSESSED, REASSESSMENT PROCEEDINGS WERE HELD VALIDL Y INITIATED. 2.22. IN THE CASE OF KAPOOR BROTHERS V. UNION OF I NDIA, (2001) 247 ITR 324, 331, 332-33 (PAT), WHERE THE MA TERIAL EVIDENCE FOR THE PURPOSE OF REOPENING OF THE ASSESS MENT ALREADY COMPLETED HAS BEEN BROUGHT TO THE NOTICE OF THE AUTHORITY DURING THE COURSE OF ENQUIRY. THE NOTICE WAS HELD TO BE VALID BY THE HONBLE HIGH COURT. IN THE CASE OF VIPPY PROCESSORS PVT. LTD. V. CIT, ( 2001) 249 ITR 7, 8 (MP), WHERE THE NEED TO ISSUE NOTICE A ROSE DUE TO NOTICING OF VAST DIFFERENCE IN VALUE OF PROPERTI ES DISCLOSED BY THE ASSESSEE AND THAT OF THE REPORT OF THE VALUA TION OFFICER AND THE REASONS THAT LED TO THE ISSUE OF TH E NOTICE ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 19 WERE DULY RECORDED AND THE SAME WERE ALSO ADEQUATE AND BASED ON RELEVANT FACTS AND MATERIAL, INITIATION WA S UPHELD. IN TRIPLE A TRADING & INVESTMENT PVT. LTD. V. ASS T. CIT, (2001) 249 ITR 109, 110-11 (MP), WHERE THE NOT ICE WAS ISSUED AFTER RECORDING REASONS IN THAT REGARD, INIT IATION WAS UPHELD. 2.23. LIKEWISE, HONBLE GUJARAT HIGH COURT IN GARD EN FINANCE LTD. V. ADD/. CIT, (2002) 257 ITR 481, 489, 494-95, SPECIAL LEAVE PETITION DISMISSED BY THE SUPREME COU RT: (2002) 255 ITR (ST.) 7-8 (SC), WHERE THE ASSESSEE W AS HOLDING SHARES IN AN AMALGAMATING COMPANY AND HE WA S ALLOTTED SHARES IN THE AMALGAMATED COMPANY AND SUCH SHARES WERE SOLD BY HIM AND HE HAS DISCLOSED THE MA RKET PRICE OF SUCH SHARES AS ON THE DATE OF AMALGAMATION AS THE COST OF ACQUISITION OF SUCH SHARES AND HAS NOT DISC LOSED THE COST OF ACQUISITION OF SHARES IN THE AMALGAMATING C OMPANY IN ACCORDANCE WITH SECTION 49(2) READ WITH SECTION 47(VII), INITIATION OF REASSESSMENT PROCEEDINGS AFTER FOUR Y EARS HAS BEEN SUSTAINED BECAUSE THERE WAS FAILURE ON THE PAR T OF THE ASSESSEE TO DISCLOSE MATERIAL FACTS NECESSARY FOR A SSESSMENT. 2.24. LIKEWISE, IN SUMAN STEELS V. UNION OF INDIA, (2004) 269 ITR 412,418-19 (RAJ), WHERE THE RETURN O F THE ASSESSEE FOR ASSESSMENT YEAR 1995-96 WAS PROCESSED UNDER SECTION 143(1)(A) ACCEPTING THE NET PROFIT RATE DEC LARED BY THE ASSESSEE, WHO CARRIED ON CON- TRACT BUSINESS, INITI ATION OF ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 20 REASSESSMENT PROCEEDINGS BY ISSUING A NOTICE DATED 15-5- 2001 PROPOSING TO REASSESS PETITIONER-ASSESSEE AT H IGHER RATE IN VIEW OF THE PRESUMPTIVE RATE PRESCRIBED UND ER SECTION 44AD HAS BEEN SUSTAINED. IN THE CASE OF DR. SAHIB RAM GIRI V. ITO, (2008) 30 1 ITR 294 (RAJ), THE REASSESSMENT PROCEEDINGS WERE IN ITIATED AFTER RECORDING REASONS IN WRITING BY THE AO. THE N ON- AVAILABILITY OF A FEW DOCUMENTS DEMANDED BY THE ASS ESSEE WOULD NOT MAKE THE REASSESSMENT PROCEEDINGS INITIAT ED FOR THE REASONS RECORDED IN DETAIL ILLEGAL. 2.25. IN THE CASE OF DESH RAJ UDYOG : CHAMAN UDYOG V. ITO, (2009) 318 ITR 6 (ALL), IN THE ASSESSMENT YEAR S IN QUESTION, THE MATTER WAS STILL TO BE DECIDED FINALL Y BY THE ASSESSING AUTHORITY WHETHER THE INCOME SHOULD BE TR EATED UNDER THE HEAD 'BUSINESS INCOME' OR 'PROPERTY INCOM E'. THE ASSESSEE WOULD GET OPPORTUNITY TO SHOW SUFFICIENT C AUSE TO THE ASSESSING AUTHORITY DURING THE COURSE OF ASSESS MENT. THUS, IT COULD NOT BE SAID THAT THERE WAS NO RELEVA NT MATERIAL TO INITIATE PROCEEDINGS UNDER SECTION 147. IN THE CASE OF KARTIKEYA INTERNATIONAL V. CIT, (201 0) 329 ITR 539 (ALL), IN VIEW OF THE MATTER, THE PETIT IONER WAS NOT ENTITLED FOR THE DEDUCTION ON THE DUTY DRAWBACK AMOUNT UNDER SECTION 80-IB AND SINCE IT HAD BEEN ALLOWED I N THE ASSESSMENT ORDER PASSED UNDER SECTION 143(1), IT HA D ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 21 ESCAPED ASSESSMENT. ON THESE FACTS THE INITIATION O F THE PROCEEDINGS UNDER SECTION 147 READ WITH SECTION 148 FOR ASSESSMENT YEARS 2005-06 AND 2006-07 WAS LEGAL AND IN ACCORDANCE WITH LAW. 2.26. LIKEWISE, IN THE CASE OF SUNIL KUMAR LAIN: S URESH CHANDRA LAIN V. ITO, (2006) 284 ITR 626 (ALL), NOTWITHSTANDING THE FACT THAT THE AMOUNT HAD BEEN A SSESSED TO TAX IN THE HANDS OF P, HE HAD TAKEN A STAND THAT THE AMOUNT DID NOT BELONG TO HIM AND INSTEAD BELONGED T O S. THUS, IT WAS NOT CLEAR AS TO IN WHOSE HANDS THE AMO UNT IN QUESTION HAD TO BE ASSESSED. THE ITO WAS JUSTIFIED IN TAKING PROCEEDINGS UNDER SECTION 147 FOR ASSESSING THE AMO UNTS IN THE HANDS OF THE PETITIONERS ACCORDING TO THE CLAIM MADE BY THE PETITIONERS. 2.27. LIKEWISE, HONBLE KERALA HIGH COURT IN CIT V . DR. SADIQUE UMMER, (2010) 322 ITR 602 (KER), WHERE, THE ASSESSING OFFICER COLLECTED FURTHER INFORMATION TO COMPLETE THE REASSESSMENTS WHICH WAS ALSO PERMISSIBLE UNDER THE ACT. THE FINDING OF THE FIRST APPELLATE AUTHORITY A S WELL AS THE TRIBUNAL, THAT THE ASSESSING OFFICER HAD NO MATERIA L TO BELIEVE THAT THE INCOME HAD ESCAPED ASSESSMENT WAS WRONG AND CONTRARY TO FACTS. THE ASSESSEE HAD NOT MAINTAI NED ANY BOOKS OF ACCOUNT. THEREFORE, THE REOPENING OF ASSES SMENTS WAS HELD TO BE VALID AND WITHIN TIME. ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 22 IN THE CASE OF CIT V. UTTAM CHAND NAHAR, (2007) 29 5 ITR 403 (RAJ), THE NOTICE REQUIRING THE ASSESSEE TO FILE THE RETURN WITHIN 30 DAYS WAS IN ACCORDANCE WITH SECTIO N 148 AS IT MUST BE DEEMED TO BE IN FORCE WITH EFFECT FROM 1 -4-1989, AND IN FORCE AS ON THE DATE NOTICE WAS ISSUED. THER E WAS NO VIOLATION OF SECTION 148 IN RESPECT OF THE SPECIFIE D PERIOD WITHIN WHICH THE RETURN IS TO BE SUBMITTED. THE REASSESSMENT PROCEEDINGS WERE HELD TO BE VALID. 2.28. IN THE CASE OF CIT V. C. V. LAYACHANDRAN, (2 010) 322 ITR 520 (KER), WHERE, THE ASSESSEE DID NOT CONC EDE THE INCOME ON CAPITAL GAIN EITHER UNDER THE UN-AMENDED PROVISION OR UN-DER THE AMENDED PROVISION, THE RECO URSE OPEN TO THE DEPARTMENT WAS TO BRING TO TAX INCOME E SCAPING ASSESSMENT UNDER SECTION 147 WHICH WAS NOT TIME BAR RED OR OTHERWISE INVALID. LIKEWISE, IN ATUL TRADERS V. ITO, (2006) 282 ITR 5 36 (ALL), THE ACCOUNT BOOKS OR RECORD AND OTHER MATERI AL WERE ALL COMMON WHICH WERE BEING CONSIDERED BY THE CIT(A) IN THE PROCEEDINGS RELATING TO THREE APPEALS. THE PETITION ER HAD NOTICE AND OPPORTUNITY OF BEING HEARD. THE REASSESS MENT PROCEEDINGS WERE HELD TO BE VALIDLY INITIATED. 2.29. IN THE CASE OF INDUCTOTHERM (INDIA) P. LTD. V. LAMES KURIAN, ASST. CIT, (2007) 294 ITR 341 (GUJ), THE ASSESSING OFFICER HAD FOUND THAT THERE WERE ERRORS IN THE ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 23 COMPUTATION OF ALLOWANCES. THE REASSESSMENT PROCEED INGS WERE HELD TO BE VALID. IN THE CASE OF PAPAYA FARMS PVT. LTD. V. DEPUTY CIT , (2010) 323 ITR 60 (MAD), WHERE THE ASSESSEE HAD FUR NISHED INCORRECT PARTICULARS AND THEREFORE, THE REOPENING OF THE ASSESSMENT WAS HELD TO BE JUSTIFIED. 2.30. IN THE CASE OF CIT V. KERALA STATE CASHEW DEVELOPMENT CORPORATION LTD., (2006) 286 ITR 553 (K ER), WHEREIN, THE ASSESSEE WAS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING SHOULD NOT HAVE CLAIMED DEDUCTION OF PEN AL INTEREST WHICH HAD ACCRUED NOT IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR BUT IN EARLIER YEARS. THIS T HE ASSESSEE HAD NOT DISCLOSED. THE REASSESSMENT WAS HE LD TO BE VALID. LIKEWISE, IN KUSUM INDUSTRIES P. LTD. V. CIT, (200 8) 296 ITR 242 (ALL), AS THE AWARD HAD BECOME FINAL IT WOULD BE TAKEN THAT THE DIRECTORS OF THE ASSESSEE HAD ACCEPT ED THE FACTUM OF EARNING OF SECRET PROFIT NOT REFLECTED IN THE BOOKS OF ACCOUNT, WHICH WAS ALSO BINDING ON THE COMPANY. THE NON-APPEARANCE OF ONE OF THE ARBITRATORS AND ONE OF THE DIRECTORS IN RESPECT OF THE SUMMON ISSUED UNDER SEC TION 131 WOULD NOT MAKE THE REASSESSMENT INVALID. ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 24 2.31. THE HONBLE KERALA HIGH COURT IN CIT V. INDO MARINE AGENCIES (KERALA) P. LTD., (2005) 279 ITR 37 2 (KER), HELD THAT THE ENTRY WOULD AMOUNT TO AN ORDER UNDER SECTION 144. THE MERE FACT THAT IT WAS NOT COMMUNICATED TO THE ASSESSEE WOULD NOT MAKE SUCH AN ASSESSMENT RECORDED IN THE ORDER SHEET ILLEGAL AND THAT WOULD NOT BAR FURT HER PROCEEDINGS UNDER SECTION 147. THUS, THE ASSESSMENT WAS HELD TO BE VALIDLY REOPENED UNDER EXPLANATION 2(C) TO SECTION 147. LIKEWISE, IN CIT V. N. JAYAPRAKASH, (2006) 285 ITR 369 (KER), WHERE, THE ASSESSEE COULD NOT, AFTER HAVING PERSUADED THE ASSESSING AUTHORITY TO WITHDRAW THE NOTICE DATE D 1-10- 1993, POINTING OUT THAT IT WAS NOT IN CONFORMITY WI TH LAW, BE ALLOWED TO CONTEND THAT THE NOTICE WAS VALID DUE TO THE OMISSION OF THE TIME-LIMIT BY THE FINANCE (NO.2) AC T, 1996, WITH EFFECT FROM 1-4-1989. IN THE ABSENCE OF SPECIF IC PROVISION IN THE FINANCE (NO. 2) ACT, 1996, INVALID ATING PROCEEDINGS INITIATED BY THE INCOME-TAX OFFICER, TH E ACTION TAKEN BY HIM APPLYING THE THEN EXISTING LAW COULD N OT BE SAID TO BE INVALID. 2.32. LIKEWISE, IN CIT V. S.R. TALWAR, (2008) 305 ITR 286 (ALL), THE FACTUM OF TAKING ADVANCES OR LOAN FR OM T AND K, IN WHICH THE ASSESSEE WAS ONE OF THE DIRECTORS H AD NOT BEEN DISCLOSED NOR A COPY OF THE LEDGER ACCOUNT OF THE ASSESSEE MAINTAINED BY THE COMPANY FILED. IN VIEW O F THE ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 25 ABSENCE OF THESE DETAILS, THE ASSESSING OFFICER CO ULD NOT EXAMINE THE TAXABILITY OF ADVANCES OR LOAN RAISED B Y THE ASSESSEE. THERE WAS FAILURE TO DISCLOSE MATERIAL FA CTS NECESSARY FOR ASSESSMENT. THE REASSESSMENT PROCEEDI NGS WERE HELD TO BE VALID. IN ANOTHER CASE, THE HONBLE ALLAHABAD HIGH COURT I N CHANDRA PRAKASH AGRAWAL V. ASST. CIT, (2006) 287 IT R 172 (ALL), WHEREIN, THE INCOME-TAX DEPARTMENT HAD SENT A REQUISITION ON 27-3-2002, UNDER SECTION 132A REQUIS ITIONING THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS SEIZED BY THE CENTRAL EXCISE DEPARTMENT. THE RECORD OF THE PROCEE DING DATED 18-4-2002, SHOWED THAT THE REQUISITION WAS NO T FULLY EXECUTED AS ALL THE BOOKS OF ACCOUNT AND OTHER DOCU MENTS HAD NOT BEEN DELIVERED TO THE REQUISITIONING AUTHOR ITY. THE PROCEEDINGS INITIATED UNDER SECTION 147 WAS HELD TO BE VALID. 2.33. IN RAMILABEN RATILAL SHAH V. CIT, (2006) 282 ITR 176 (GUJ), HELD THAT THE NOTING IN THE DIARY CONSTITUTED SUFFICIENT INFORMATION FOR THE ESCAPEME NT OF INCOME BY EITHER NON-DECLARATION OF CORRECT SALE CONSIDERATION OR FURNISHING OF INACCURATE PARTICULA RS AS REGARDS SALE CONSIDERATION. THUS, THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE HAD FAILED T O DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR THE ASSESSMENT OF THE RELEVANT ASSESSMENT YEAR. THE REASSESSMENT PROCEEDINGS HAD BEEN VALIDLY INITIATED . ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 26 LIKEWISE, IN CIT V. ABDUL KHADER AHAMED, (2006) 28 5 ITR 57 (KER), IT WAS CLEAR FROM THE REASONS RECORDE D BY THE DEPUTY CIT THAT HE PRIMA FACIE HAD REASON TO BELIEV E THAT THE ASSESSEE HAD OMITTED TO DISCLOSE FULLY AND TRULY THE MATERIAL FACTS AND THAT AS A CONSEQUENCE INCOME HAD ESCAPED ASSESSMENT. THE REASSESSMENT WAS HELD TO BE VALID. 2.34. IN THE CASE OF U.P. STATE BRASSWARE CORPORAT ION LTD. V. CIT, (2005) 277 ITR 40 (ALL), THE PRINCIPLE S LAID DOWN BY THE CALCUTTA HIGH COURT IN CIT V. NEW CENTRAL JU TE MILLS CO. LTD. : (1979) 118 ITR 1005 (CAL) DID CONSTITUTE INFORMATION ON A POINT OF LAW WHICH SHOULD BE TAKEN INTO CONSIDERATION BY THE ITO IN FORMING HIS BELIEF THAT THE INCOME TO THAT EXTENT HAD ESCAPED ASSESSMENT TO TAX AND, THE REASSESSMENT WAS HELD TO BE VALID. IN SUNDER CARPET INDUSTRIES V. ITO, (2010) 324 ITR 417 (ALL), HELD THAT THE DEPARTMENTAL VALUER'S REPORT CONSTITUTED MATERIAL FOR ENTERTAINING A BELIEF OF E SCAPED INCOME IN THE YEARS UNDER CONSIDERATION. THE REASSE SSMENT PROCEEDING WAS HELD TO BE VALID. 2.35. IN AUROBINDO SANITARY STORES V. CIT, (2005) 276 ITR 549 (ORI), THERE BEING A SUBSTANTIAL DIFFERENCE BETWEEN THE FIGURES OF LIABILITIES TOWARDS SUNDRY CREDITORS IN THE PARTY LEDGERS OF THE ASSESSEE-FIRM AND THE FIGURES OF LIA BILITIES TOWARDS SUNDRY CREDITORS IN THE BALANCE-SHEET OF TH E ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 27 ASSESSEE-FIRM FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1989-90. THESE MATERIALS HAD A DIRE CT LINK AND NEXUS FOR FORMATION OF A BELIEF BY THE ASSESSIN G OFFICER THAT INCOME OF THE ASSESSEE-FIRM HAD ESCAPED ASSESS MENT BECAUSE OF FAILURE OF THE ASSESSEE TO DISCLOSE FULL Y AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. 2.36. IN THE CASE OF CIT V. BEST WOOD INDUSTRIES & SAW MILLS, (2011) 331 ITR 63 (KER), THE ASSESSEE CHALLE NGED THE VALIDITY OF THE REASSESSMENT ON THE GROUND THAT THE AO HAD EXCEEDED HIS JURISDICTION UNDER SECTION 147 AND BOT H THE FIRST APPELLATE AUTHORITY AS WELL AS THE TRIBUNAL A CCEPTED THE CONTENTION OF THE ASSESSEE HOLDING THAT SO FAR AS T HE REASSESSMENTS RELATED TO ASSESSMENT OF UNEXPLAINED TRADE CREDITS, THEY WERE INVALID. ON APPEAL, IT HAS BEEN HELD THAT THE REASSESSMENTS WERE TO BE VALID. IN HONDA SIEL POWER PRODUCTS LTD. V. DEPUTY CIT, (2012) 340 ITR 53 (DEL), THERE BEING OMISSION AND F AILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRUL Y MATERIAL FACTS THUS REASSESSMENT PROCEEDINGS WERE HELD TO BE VALID. 2.37. IN ATMA RAM PROPERTIES PRIVATE LTD. V. DEPUT Y CIT, (2012) 343 ITR 141 (DEL), AS THE BOOKS OF ACCO UNT AND OTHER MATERIAL WERE NOT PRODUCED AND NO LETTER WAS FILED, THE ORDER PASSED BY THE COMMISSIONER (APPEALS) IN THE ASSESSMENT YEAR 2001-02 WOULD CONSTITUTE 'INFORMATI ON' OR ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 28 MATERIAL FROM ANY EXTERNAL SOURCE AND, AS SUCH, THE REASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 20 00-01 WERE HELD TO BE VALID. LIKEWISE, IN THE CASE OF CIT V. SMT. R. SUNANDA BA I, (2012) 344 ITR 271 (KER), THE REASSESSMENT IN QUEST ION WERE HELD TO BE VALID ON THE FACT THAT THE ASSESSEE CLAI MED AND WAS GIVEN RELIEF UNDER SECTION 80HHA FOR THE THREE PRECEDING YEAR WHICH DISENTITLED HER FOR DEDUCTION UNDER SECT ION 80HH FOR THE ASSESSMENT YEARS 1992-93 AND 1993-94. 2.38. IN THE CASE OF AQUAGEL CHEMICALS P. LTD. V. ASST. CIT, (2013) 353 ITR 131 (GUJ), SINCE THERE BEING SU FFICIENT MATERIAL ON RECORD FOR THE ASSESSING OFFICER TO FOR M A BELIEF AS REGARDS THE ESCAPEMENT OF INCOME IN RELATION TO THE CLAIM OF DEPRECIATION IN RESPECT OF THE BUILDING OF COAL FIRE BOILER, THE REASSESSMENT WAS HELD TO BE VALID. IN THE CASE OF CONVERGYS CUSTOMER MANAGEMENT V. ASST. DIT, (2013) 357 ITR 177 (DEL), WHERE THERE BE ING PRIMA FACIE MATERIAL IN THE POSSESSION OF THE ASSESSING O FFICER TO FORM A TENTATIVE BELIEF THAT SECTION 9(1)(I) HELD A TTRACTED, SAID REASON BY ITSELF CONSTITUTED A RELEVANT GROUND TO R EOPEN THE ASSESSMENT OF THE ASSESSEE. REFERENCE MAY ALSO BE MADE TO I. AJAI VERMA V. CIT [(2008) 304 ITR 30 (ALL)]; II. ASHOK ARORA V. CIT [(2010) 321 ITR 171 (DEL)]; ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 29 III. CIT V. CHANDRASEKHAR BALAGOPAL [(2010) 328 ITR 619 (KER)]; IV. JAYARAM PAPER MILLS LTD. V. CIT [(2010) 321 ITR 56 ( MAD)]; V. KERALA FINANCIAL CORPORATION V. JOINT CIT [(2009) 30 8 ITR 434 (KER)]; VI. MAVIS SATCOM LTD. V. DEPUTY CIT [(2010) 325 ITR 428 (MAD)]; VII. CIT V. MADHYA BHARAT ENERGY CORPORATION LTD. [(2011) 3 37 ITR 389 (DEL)]; VIII. KONE ELEVATOR INDIA P. LTD. V. ITO [(2012) 340 ITR 45 4 (MAD)]; IX. VIJAY KUMAR SABOO V. ASST. CIT [(2012) 340 ITR 382 ( KARN)]; X. SIEMENS INFORMATION SYSTEMS LTD. V. ASST. CIT [(2012) 3 43 ITR 188 (BOM)]; XI. I.P. PATEL & CO. V. DEPUTY CIT [(2012) 346 ITR 207 (GUJ)]; XII. DISHMAN PHARMACEUTICALS & CHEMICALS LTD. V. DEPUTY CI T [(2012) 346 ITR 228 (GUJ)]; XIII. VIDEO ELECTRONICS LTD. V. JOINT CIT [(2013) 353 ITR 73 (DEL)]; XIV. A G GROUP CORPORATION V. HARSH PRAKASH [(2013) 353 I TR 158 (GUJ)]; XV. INDUCTOTHERM (INDIA) P. LTD. V. M. GOPALAN, DEPUTY CIT [(2013) 356 ITR 481 (GUJ)]; CIT V. DHANALEKSHMI BAN K LTD. [(2013) 357 ITR 448 (KER)]; XVI. SITARA DIAMOND PVT. LTD. V. ITO [(2013) 358 ITR 424 (B OM)]; XVII. RAYALA CORPORATION P. LTD. V. ASST. CIT [(2014) 363 IT R 630 (MAD)]. 3. SO FAR AS, THE DECISION IN THE CASE OF CIT VS KELVINATOR OF INDIA LTD. (2010) 320 ITR 561 (SC) IS CONCERNED, THE HONBLE APEX COURT, WHILE COMING TO A ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 30 PARTICULAR CONCLUSION, ONLY IN A SITUATION, WHEN NO T A SINGLE PIECE OF PAPER OR DOCUMENT WAS RECOVERED, THEREFORE , THE HONBLE COURT HELD THAT SINCE THERE WAS NO TANGIBLE MATERIAL FOUND AND THE ADDITION WAS MERELY ON THE BASIS OF S TATEMENT ONLY THEN REOPENING OF ASSESSMENT U/S 147 OF THE AC T WAS NOT PERMISSIBLE. IT IS FURTHER NOTED THAT RETRACTIO N WAS MADE BY THE ASSESSEE, MERELY AFTER A LONG GAP OF MORE TH AN TWO YEARS AND NOT AT THE EARLIEST POSSIBLE TIME. IT WAS MERELY AS AFTERTHOUGHT. THERE IS A POSSIBILITY THAT THE STAT EMENT, IF, RECORDED UNDER DURESS AND THREAT (WHICH IS NOT THE CASE IN THE PRESENT APPEALS) IN THAT SITUATION, THERE IS A LESS POSSIBILITY OF RETRACTION DURING THAT PERIOD, HOWEV ER, IF THE RETRACTION IS MADE WITHIN SHORT SPAN OF TIME THEN R ETRACTION CARRIES MORE WEIGHT. THE ASSESSEE NEVER ALLEGED TH AT THE STATEMENT WAS RECORDED UNDER DURESS AND THREAT. LIK EWISE, IN THE CASE OF CIT VS S. KHADER KHAN SON (2012) 254 CTR 228 (SC), AFFIRMING THE DECISION OF MADRAS HIGH COU RT IN (2008) 300 ITR 157 (MAD.), THE WHOLE ADDITION WAS M ADE SOLELY ON THE BASIS OF STATEMENT U/S 133A AND NO OT HER MATERIAL WAS FOUND, IN THAT SITUATION, IT WAS HELD THAT THE SUCH STATEMENT HAS NO EVIDENTIARY VALUE, THUS, UNDE R THE PECULIAR FACTS IN THE PRESENT APPEAL, THE CASES REL IED UPON BY THE ASSESSEE ARE NOT OF MUCH HELP AS IS CLEARLY OOZING OUT FROM THE CONTENTS OF THE STATEMENT TENDERED BY THE ASSESSEE WITHOUT DURESS OR THREAT, CONNECTING THE ASSESSEE O F NON- RECORDING OF PURCHASE AND SALE IN THE REGULAR BOOKS OF ACCOUNTS. ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 31 4. IF THE MATERIAL AVAILABLE ON RECORD AND THE JUD ICIAL PRONOUNCEMENTS DISCUSSED HEREINABOVE, I FIND THAT T HERE WAS LINKAGE OF THE DOCUMENTS WITH THE STATEMENT TEN DERED BY THE ASSESSEE EVIDENCING THAT INCOME HAD ESCAPED ASSESSMENT. IT IS NOT THE CASE IN THE PRESENT APPEA LS THAT ADDITION HAS BEEN MADE MERELY ON THE BASIS OF STATE MENT RECORDED BY THE REVENUE, RATHER, THERE WAS ENOUGH MATERIAL ON RECORD WHICH COULD BE UNEARTHED ON THE BASIS OF SURVEY FOLLOWED BY THE STATEMENT OF THE ASSESSEE TO SHOW T HAT THE ASSESSEE MADE PURCHASES/SALE WHICH WERE NOT ENTERED IN THE REGULAR BOOKS OF ACCOUNTS, RESULTING INTO ESCAP EMENT OF INCOME, THEREFORE, I AM OF THE OPINION THAT, SO FAR AS, INITIATION OF PROCEEDINGS U/S 147 R.W.S. 148 OF THE ACT ARE CONCERNED, THE LD. ASSESSING OFFICER WAS JUSTIFIABL Y WITHIN HIS JURISDICTION UNDER THE PARAMETER OF THE LAW TO REOPEN THE ASSESSMENT, THEREFORE, I AFFIRM THE STAND OF THE LD . FIRST APPELLATE AUTHORITY. 5. SO FAR AS, THE NEXT GROUND WITH RESPECT TO ADDI NG THE RESPECTIVE AMOUNTS BEING 50% OF THE GROSS PROFI T IS CONCERNED, I FIND THAT AD-HOC ADDITION HAS BEEN MAD E ON THE BASIS OF TRADING ACCOUNT. THERE IS NO DISPUTE TO TH E FACT THAT WHILE TENDERING THE STATEMENT, THE ASSESSEE ADMITTE D TO HAVE CARRIED OUT PURCHASE AND SALE, WHICH WERE NOT ENTERED IN REGULAR BOOKS OF ACCOUNTS. THE ASSESSING OFFICER HAS ADDED 50% OF THE GROSS PROFIT ON AD-HOC BASIS. IN T HE MODERN ERA OF CUT THROAT COMPETITION, 50% OF THE GR OSS ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 32 PROFIT IS NOT EXPECTED. EVEN, WHILE COMING TO A PA RTICULAR CONCLUSION, NEITHER THE ASSESSING OFFICER HAS CITED ANY COMPARABLE CASE IN A IDENTICAL BUSINESS NOR HAS COM PARED THE SAME WITH ANY OTHER ASSESSMENT YEARS, THEREFORE , TO MEET THE ENDS OF JUSTICE, TO CUT SHORT THE LITIGATI ON, I FEEL THE 20% OF THE GROSS PROFIT WILL BE SUFFICIENT TO SAFEG UARD THE INTEREST OF THE REVENUE IN PLACE OF 50% SUSTAINED B Y THE LD. COMMISSIONER OF INCOME TAX (APPEALS), BECAUSE, ON T HE BASIS OF EVIDENCE FOR A PARTICULAR PERIOD, EXTRAPOL ATION OF THE INCOME TO THE WHOLE PERIOD OF REASSESSMENT IS NOT J USTIFIED. FOR THIS PROPOSITION, THE RATIO LAID DOWN IN FOLLOW ING CASES SUPPORTS MY VIEW:- A. SAMRAT BEAR BAR VS ACIT (2000) 75 ITD 19 (PUNE)(TM) B. D. N. KAMANI (HUF) VS DCIT (1999) 70 ITD 77 (TM)(PA T) C. CIT VS MAHESH CHAND 199 ITR 247 (ALL.) D. DR. S. S. REDDY VS ACIT (2000) 72 ITD 205 (HYD) 6. SO FAR AS, THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE, THAT NET PROFIT RATE SHOULD BE ADOPTED AN D NOT THE GROSS PROFIT IS CONCERNED, I AM NOT AGREEING WITH T HIS PROPOSITION, BECAUSE, IN THE PRESENT SET OFF CASES, THE ASSESSEE HAS NOT DECLARED ANYTHING AND THE WHOLE PR OFIT WAS EARNED AS THE PURCHASE AND SALES WERE NOT EVEN ENTE RED IN THE BOOKS OF ACCOUNTS BY THE ASSESSEE. THUS, THIS G ROUND OF THE ASSESSEE IS NOT HAVING ANY MERIT, THEREFORE, DI SMISSED. EVEN OTHERWISE, THE 20% HAS BEEN REDUCED FROM 50% ITA NOS.4933 TO 4938/MUM/2015 SHRI PRAKASH FATANDAS JASSUJA. 33 SUSTAINED BY THE LD. CIT(A) AND THAT TO ON GROSS P ROFIT AND NOT ON NET PROFIT. FINALLY, THE APPEALS OF THE ASSESSEE ARE PARTLY ALL OWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 19/01/2016. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 20/01/2016 F{X~{T? P.S / ! &($)!*+,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. )) * ( '#$ ) / THE CIT, MUMBAI. 4. )) * / CIT(A)- , MUMBAI 5. -./' , )'#$' 1 , / DR, ITAT, MUMBAI 6. /23$ / GUARD FILE. &( / BY ORDER, (-#' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI