Sarwar Mohd. Khan, Bhopal V. Assistant Commissioner of Income Tax 2 (1), Bhopal

ITA 511/Ind/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5259 (ITAT-INDORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-10-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 01-06-2018
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.511/IND/2018 ASSESSMENT YEAR 2008-09 REVENUE BY SHRI LAL CHAND, CIT ASSESSEE BY SHRI S. S. SOLANKI, CA DATE OF HEARING 5 .2 .20 20 DATE OF PRONOUNCEMENT 20 .2. 2020 O R D E R PER MANISH BORAD, AM THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 2015-16 IS DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEA LS)-II (IN SHORT LD.CIT(A)], INDORE DATED 24.12.2018 WHICH IS ARIS ING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(IN SHOR T THE ACT) DATED 13.12.2017 FRAMED BY ITO -5(5), INDORE. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEA L; SHRI SARWAR MOHD. KHAN, 402, QUEENS PALACE, IN FRONT OF N.R.I COLONY, KOHEFIZA, BHOPAL VS. ACIT 2(1), BHOPAL (APPELLANT) (RESPONDENT ) PAN ANPPK7336R SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 2 1. THAT THE LEARNED CIT (A) ERRED IN' REJECTING THE CLAIM OF THE ASSESSEE REGARDING WRONG REOPENING OF THE CASE U/S 148. THE REOPENING SO MADE BEING ILLEGAL AND WRONG, THE ORDER SO PASSED REQUI RES TO BE QUASHED. WITHOUT PREJUDICE TO THE ABOVE 2. THAT THE LEARNED CIT(A) ERRED IS NOT ALLOWING E XPENSES OF RS.39,40,000/- BEING BROKERAGE PAID TO DSP FINPRIN T LTD OF RS. 38,40,000/- FOR ASSISTING IN SALE OF LAND, AND THE SAME HAS BEING ALREADY TAXED IN THE HANDS OF DSP FINPRINT LTD BY THE DEPA RTMENT. AND OTHER TRANSFER EXPENSES OF RS.L,0O,OOO/- BEING EXPENSES RELATED TO THE SALE OF LAND. THE CLAIM OF ASSESSEE BEING LEGAL AND PROPER .' DEDUCTION FOR THE SAME REQUIRES TO BE ALLOWED. THE APPELLANT CRAVES LEAVE TO ACID, AMEND ALTER OR OTHERWISE RAISE ANY OTHER D OF APPEAL. 3 . BRIEF FACTS RELATING TO THIS ISSUE ARE THAT THE ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM OTHER SOURCES. THE R ETURN FOR ASSESSMENT YEAR 2008-09 FILED ON 24.6.2009 DECLARIN G INCOME OF RS.23,80,135/-. CASE SELECTED FOR SCRUTINY UNDER AN D NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE SERVED UPON THE A SSESSEE. ASSESSMENT COMPLETED U/S 143(3) OF ACT AT RS. 63,20 ,135/- AFTER MAKING ADDITION OF RS.39,40,000/- ON ACCOUNT OF LON G TERM CAPITAL GAIN TO THE DECLARED INCOME. PENALTY PROCEEDINGS U/ S 271(1(C) FOR CONCEALMENT OF INCOME WAS ALSO INITIATED. THE CASE WAS REOPENED BY ISSUANCE OF NOTICE U/S 148 WAS ISSUED TO THE ASSES SEE. IN RESPONSE TO THE NOTICE ASSESSEE FILED RETURN DECLARING THE S AME INCOME AS SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 3 WAS DECLARED IN THE ORIGINAL RETURN OF INCOME. THE ASSESSMENT U/S 143(3) R.W.S. 148 OF THE ACT WAS COMPLETED ON THE I NCOME OF RS.63,20,140/-. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) BUT COULD NOT SUCCEED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED AS UNDER :- 1.1 THE ASSESSEE FILED HIS RETURN OF INCOME DECLARI NG TOTAL INCOME OF RS. 23,80, 135/-. 1.2 THE AO VIDE ORDER U/S' 143(3) DATED 21.8.2010 A SSESSED THE TOTAL INCOME AT RS. 63,20,135/- BY ADDING RS. 39,40,000/- AS LONG TERM CAPITAL GAIN. 1.3 AGAINST THE ADDITION MADE BY THE AO VIDE HIS O RDER U/S 143(3) DATED 21.8.2010, THE ASSESSEE FILED AN APPEAL BEFOR E LEARNED CIT (A) AGITATING THE ADDITION OF RS. 39,40,000/- MADE BY HIM. THE APPEAL IS STILL PENDING WITH LEARNED CIT(A). 1.4 NOTICES U/ S 148 WAS ISSUED FOR ALLEGED VIOLATION OF THE PROVISI ONS OF SECTION 54F BY WITHDRAWING A SUM OF RS. 26,00,000/- FROM THE AMOUNT DEPOSITED UNDER CAPITAL GAIN SCHEME. HOWEVER, NO AD DITION WAS MADE UNDER THIS HEAD AND THE INCOME ASSESSED VIDE ORDER U/ S 143(3)/147 REMAINED AT RS. 63,20,135/-. COPY OF REASONS FOR INITIATING PROCEEDINGS U/ S 148 IS ENCLOSED. 1.5 AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE LEARNED CIT(A) RAISING FOLLOWING GROUNDS:- SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 4 (I) CHALLENGING THE REOPENING U/S 147 (II) ADDITION OF RS. 39,40,000/-- MADE AS LONG TERM CAPITAL GAIN. 1.6 LEARNED CIT (A) VIDE HIS ORDER DATED 31.3.2016 DISMISSED GROUND NO. 1 BY RELYING ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF ITO VS. BIJU PATNAIK. AS REGARD ADDITION OF RS. 39,40,000/- (38,00,000/- + RS. 1,00,000/-) HE DISMISSED THE GROUND BY HOLDING THAT THE ASSESSE E HAS PREFERRED AN APPEAL AGAINST ORDER U/S 143(3) ON THE SAME ISSUE. 1.7 WE HAVE FILED AN APPLICATION BEFORE LEARNED CI T(A) BHOPAL ON 24.9.2019 FOR FIXATION OF THE APPEAL. HOWEVER, THE SAME HAS NOT BEEN FIXED TILL TODAY. 1.8 NOW COMING TO GROUND NO. 1 IN WHICH WRONG REOPE NING OF THE CASE WAS CHALLENGED, OUR SUBMISSIONS ARE AS UNDER:- (A) IN THE PRESENT CASE, IN THE REASONS RECORDED I T WAS STATED THAT AS THE ASSESSEE HAS WITHDRAWN A SUM OF RS. 26,00,000/-, HE HAS CONTRAVENED THE PROVISIONS STIPULATED IN SECTION 5 4F, THE EXEMPTION CLAIMED BY THE ASSESSEE U/S 54F IN A.Y 2 008-09 IS LIABLE TO BE WITHDRAWN. (B) IN THE ORDER U/S 143(3)/147, NO ADDITION ON TH IS ISSUE WAS MADE. THE FACT IS THAT NO ADDITION AT ALL WAS MAD E BY THE AO IN ORDER U/S 143(3)/147. THE ASSESSED INCOME REMAINE D SAME AT RS.63,20,140/- AS WAS IN ORDER U/S 143(3) DATED 30 .12.2010. THAT WHEN NO ADDITION WAS MADE IN ORDER U/S 143(3) /147 OTHER THAN THE ONE WHICH WAS MADE IN ORDER U/S143(3), TH E ORDER PASSED U/S 147 IS NULL AND VOID. (C) FURTHER IF ASSESSING OFFICER DOES NOT ASSESS INC OME F OR WHICH REASONS WERE RECORDED U/S 147, HE CANNOT ASSESS OTHER INCOME SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 5 U/S 147. FOR THIS PROPOSITION RELIANCE IS PLACED ON FOLLOWING DECISIONS:- (I) HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF C OMMISSIONER OF INCOME TAX VS. JET AIRWAYS (I) LTD REPORTED IN 78 CCH 0365 MUM HC. (II) HON'BLE HIGH COURT OF DELHI IN THE CASE OF R ANBAXY LABORATORIES LIMITED VS. ,COMMISSIONER OF INCOME T AX REPORTED IN ITA NO. 148/2008 DEL HC. (III) HON 'BLE IT AT KOLKATA BENCH 'B' IN THE CAS E OF DIPTI MEHTA VS. ITO WARD 43(2) REPORTED IN ITA NO. 2032/ KO1L2018 KOL TRIB. 1.9 THAT PROVISO 3 TO SECTION 147 READS AS UNDER:- {[PROVIDED ALSO] THAT THE ASSESSING OFFICER MAY AS SESS OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVING MAT TERS WHICH ARE THE SUBJECT MATTER OF ANY APPEAL, REFERENCE O R REVISION, WHICH IS CHARGEABLE TO TAX AND HAS ESCAPED.} THAT AS PER THE PROVISO MENTIONED ABOVE, INCOME WH ICH ARE NOT THE SUBJECT MATTER OF THE APPEAL CAN ONLY BE ASSESSED OR REASSESSED. IN THE CASE OF ASSESSEE, AN APPEAL HA S BEEN PREFERRED BEFORE LEARNED CIT(A) ON WHICH ALLEGED A DDITION WAS MADE. THE NOTICE SO ISSUED U/S 147 AND OTHER SO PASSED U /S 148 IS THEREFORE, ILLEGAL AND WRONG. THE SAME, THEREFOR E REQUIRE TO BE QUASHED. 2.0 NOW COMING TO GROUND NO. 2. THAT THE ASSESSEE HAS ENTERED INTO SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 6 AN AGREEMENT WITH DSP FINPRINT LTD ACCORDING. TO W HICH BROKERAGE OF RS. 38.40 LACS WAS AGREED TO BE PAID TO THE BRO KER I.E DSP FINPRINT LTD. THIS AGREEMENT WAS EXECUTED ON 6.7.2 007. 2.1 VIDE CHEQUE NO. 917764 DATED 14.8.2007 OF ICIC I BANK LTD, THE ASSESSEE MADE PAYMENT OF BROKERAGE OFRS.38.40 LAC S. 2.2 (I) BROKERAGE AMOUNT OF RS. 38,40,000/- (38,40,000/- X 5 = 1,92,00,000) WAS ASSESSED BY THE AO IN THE HANDS OF M/S DSP FINPRINT LTD VIDE ORDER U/S 143(3) DATED 30.12.201 0. (II) LEARNED CIT (A) VIDE HIS ORDER DATED 18/1112011 IN THE CASE OF DSP FINPRINT LTD DISMISSED THE APPEAL AND CONFIRME D THE ADDITION OF RS. 1,92,00,000/- MADE BY THE AO. (III) HON'BLE ITAT INDORE BENCH VIDE ITS ORDER DAT ED 12.6.2012 DISMISSED THE APPEAL OF DSP FINPRINT LTD. (IV) NOT ONLY THIS, THE PENALTY OF RS. 58,00,0001- IMPOSED BY THE AO WAS ALSO CONFIRMED BY HON'BLE ITAT INDORE BENCH VI DE ITS ORDER DATED 20.5.2016. 2.3 (I) THAT THE ASSESSEE HAS PAID BROKERAGE OF RS . 38.40 LACS UNDER AN AGREEMENT WITH DSP FINPRINT LTD. (II) THE PAYMENT WAS MADE THROUGH ACCOUNT PAYEE CH EQUE. ON MERITS, THE ASSESSEE HAS RIGHTLY CLAIMED THE BROKE RAGE OF RS. 38.40 LACS. (III) FURTHER BROKERAGE OF RS. 38,40,000/- WAS ASSESSED IN THE HANDS OF DSP FINPRINT LTD. (IV) WHEN THE INCOME HAS BEEN ASSESSED IN THE HAND S OF PARTY TO WHOM BROKERAGE IS PAID, DEDUCTION FOR THE SAME REQ UIRES TO BE SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 7 ALLOWED TO THE ASSESSEE. 6. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUE D SUPPORTING ORDERS OF BOTH THE LOWER AUTHORITIES. H OWEVER LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT TH E FACT THAT IN THE REASSESSMENT PROCEEDINGS NO ADDITION WAS MADE F OR THE REASONS RECORDED U/S 148 OF THE ACT AND ALSO COULD NOT CONT ROVERT THAT THE ADDITION MADE IN THE REASSESSMENT PROCEEDINGS STAND S ALREADY MADE IN THE REGULAR ASSESSMENT PROCEEDINGS U/S 143( 3) OF THE ACT AND THE ASSESSEES APPEAL BEFORE LD. CIT(A) IS PEND ING FOR ADJUDICATION. 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE JUD GMENTS RELIED BY THE LD. COUNSEL FOR THE ASSESSEE. 8. WE WILL FIRST TAKE UP THE LEGAL ISSUE RAISED IN GROUND NO.1 WHEREIN THE ASSESSEE HAS CHALLENGED CIT(A) FINDING REJECTING THE CLAIM OF THE ASSESSEE REGARDING WRONG REOPENING OF THE CASE U/S 148 OF THE ACT. LD. COUNSEL FOR THE ASSESSEE RELYI NG ON THE WRITTEN SUBMISSION CONTENDED THAT THE REOPENING SO MADE IS ILLEGAL AND WRONG AND THE ORDER SO PASSED REQUIRES TO BE QUASHE D. SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 8 9. WE OBSERVE THAT THE CASE OF THE ASSESSEE WAS SEL ECTED FOR SCRUTINY AND AFTER SERVING NOTICES U/S 143(2) OF TH E ACT ON 21.8.2010 ASSESSMENT WAS COMPLETED U/S 143(3) OF TH E ACT ON 30.12.2010 AFTER MAKING ADDITION OF RS.39,40,000/- ON ACCOUNT OF DENIAL OF CLAIM OF COST OF ACQUISITION MADE BY THE ASSESSEE. ASSESSEE HAS CHALLENGED THIS ADDITION OF RS.39,40,0 00/- BY WAY OF FILING APPEAL TO LD. CIT(A) WHICH IS STILL PENDING TO BE DISPOSED. 10. SUBSEQUENTLY NOTICE U/S 148 OF THE ACT DATED 22 .2.2011 WAS SERVED ON THE ASSESSEE RECORDING THE REASON THAT TH E ASSESSEE HAD VIOLATED THE PROVISIONS OF SECTION 54F OF THE INCOM E TAX ACT BY WAY OF WITHDRAWING RS. 26,00,000/- FROM THE AMOUNT DEPO SITED UNDER THE CAPITAL GAIN ACCOUNT SCHEME. THIS AMOUNT WAS W ITHDRAWN ON 29.9.2010 AND IT WAS LIABLE TO BE TAXED FOR ASSESSM ENT YEAR 2011- 12. IN THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT LD. A.O ALSO CATEGORICALLY OBSERVED THAT THE ASSESS EES NON COMPLIANCE TO THE PROVISIONS OF SECTION 54F OF THE ACT BY WITHDRAWING AN AMOUNT OF RS.26,00,000/- BEFORE THE EXPIRY OF TIME PROVIDED IN SECTION 54F OF THE ACT IS NO MORE IN DI SPUTE AS THE ASSESSEE HAS OFFERED IT TO TAX IN THE INCOME TAX RE TURN FILED FOR SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 9 ASSESSMENT YEAR 2011-12. IN THE REASSESSMENT PROCE EDINGS LD. A.O MADE NO NEW ADDITION EXCEPT THE ADDITION OF LON G TERM CAPITAL GAIN OF RS.39,40,000/- WHICH WAS INITIALLY MADE IN THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT COMPLETED ON 30.1 2.2010. 11. SO THE UNDISPUTED FACT REMAINS IS THAT NO ADDIT ION WAS MADE BY THE LD. A.O IN THE REASSESSMENT PROCEEDINGS FOR THE REASONS RECORDED IN THE NOTICE ISSUED U/S 148 OF THE ACT. THE QUESTION BEFORE US IS THAT IN THIS SITUATION WHETHER THE IMP UGNED REASSESSMENT PROCEEDINGS ARE VALID IN THE EYES OF L AW. 12. WE FIND THAT SIMILAR ISSUE CAME UP FOR ADJUDIC ATION BEFORE VARIOUS HONBLE COURTS AND IT HAS BEEN CONSISTENTLY HELD THAT IF AFTER ISSUANCE OF NOTICE U/S 148 OF THE ACT THE LD. A.O ACCEPTS THE CONTENTIONS OF THE ASSESSEE AND HOLDS THAT THE INCO ME WHICH HE HAS INITIALLY FORMED A REASON TO BELIEVE HAD ESCAPED AS SESSMENT, HAS AS A MATTER OF FACT NOT ESCAPED ASSESSMENT, IT IS NOT OPEN TO HIM INDEPENDENTLY TO ASSESS SOME OTHER INCOME. 13. HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF COM MISSIONER OF INCOME TAX VS. JET AIRWAYS (I) LTD REPORTED IN 7 8 CCH 0365 SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 10 MUM HC HELD AS UNDER:- 'AO MAY ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF T HE PROCEEDINGS THOUGH THE REASONS FOR SUCH ISSUE WERE NOT INCLUDED IN THE NOTICE; HOWEVER, IF AFTER ISSUING A NOTICE UNDER S. 148, THE AO ACCEPTED THE CONTENTION OF THE ASSESSEE AND HOLDS THAT THE INCOME WHICH HE HAS IN ITIALLY FORMED A REASON TO BELIEVE HAD ESCAPED ASSESSMENT, HAS AS A MATTER OF FACT' NOT ESCAPED ASSESSMENT, IT IS NOT OPEN TO HIM INDEPENDE NTLY TO ASSESS SOME OTHER INCOME.' 14. HON'BLE HIGH COURT OF DELHI IN THE CASE OF RAN BAXY LABORATORIES LIMITED VS. COMMISSIONER OF INCOME TAX REPORTED IN ITA NO. 148/2008 DEL HC HELD AS UNDER:- 'IN VIEW OF OUR ABOVE DISCUSSIONS, THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE ASSESSING OFFICER HAD THE JURISDICTION TO REASS ESS ISSUES OTHER THAN THE ISSUES IN RESPECT OF WHICH PROCEEDINGS ARE INITIATE D BUT HE WAS NOT SO JUSTIFIED WHEN THE REASONS FOR THE INITIATION OF TH OSE PROCEEDINGS CEASED TO SURVIVE. CONSEQUENTLY, WE ANSWER THE FIRST PART OF QUESTION IN AFFIRMATIVE IN FAVOUR OF REVENUE AND THE SECOND PART OF THE QUE STION AGAINST THE REVENUE.' 15. HON 'BLE IT AT KOLKATA BENCH 'B' IN THE CASE O F DIPTI MEHTA VS. ITO WARD 43(2) REPORTED IN ITA NO. 2032/K O1/2018 KOLTRIB 'HELD AS UNDER:- 'WE NOTE THAT IN THE PRESENT CASE IN HAND, THE FACT S ON THE BASIS OF WHICH SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 11 THE REASONS WERE RECORDED BY AO FOR INVOKING JURISD ICTION FOR REOPENING THE ASSESSMENT WAS THAT THE ASSESSEE HAD TAKEN ACCOMMOD ATION ENTRIES FOR LOSS OF RS. 2,71,5001- FROM MAHASAGAR GROUP OF CASES WHICH FACT LED THE AO TO THE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT . HOWEVER, IN THE REASSESSMENT ORDER THE AO HAS NOT MADE ANY ADDITION /DISALLOWANCE ON THIS ISSUE. SO, WITHOUT MAKING ANY ADDITION/DISALLO WANCE ON THIS ACCOMMODATION ENTRY FOR LOSS OF RS. 2,71,500/-, THE AO OUGHT NOT TO HAVE PROCEEDED TO RE-ASSESS THE ASSESSEE ON OTHER INCOME S LIKE THE ADDITION OF STCG AND DISALLOWANCE U/S 14A OF THE ACT. THE JURISDICTIONAL FACT WHICH EMPOWERED THE AO TO INVOKE THE JURISDICTION TO REOP EN BY ISSUE OF NOTICE U/S. 148 R.W.S, 147 -OF THE ACT AS DECIPHERED FROM THE REASONS RECORDED IS THE ACCOMMODATION ENTRY OF LOSS OF RS.2,71,500/-. SO, WHEN AO DESIRED TO REOPEN THIS ASSESSMENT YEAR, HE HAD INFORMATION OF ASSESSEE IN RECEIPT OF ACCOMMODATION ENTRY OF LOSS FROM MAHANAGAR GROU P, WHICH FACT WAS RECORDED TO RE-OPEN THE ASSESSMENT. THIS PRECISE FACT WAS THE FOUNDATION ITA NO. 2032/KOL/2018 DIPTI MEHTA AY- 2010-11 BASED ON THE INFORMATION FROM DIRECTOR OF INCOME TAX AND THE AO RECORDED THE REASON WHICH WARRANTED HIM TO HOLD THE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND THEREAFTER, THE AO USURPED T HE JURISDICTION TO REOPEN THE ASSESSMENT. IN OTHER WORDS IS THE 'INCOM E' WHICH ACCORDING TO THE AO ESCAPED ASSESSMENT WHILE RECORDING REASONS FOR REOPENING ASSESSMENT U/S 147 R.W.S. 148 OF THE ACT. THIS 'INCOME' WHICH AO R ECORDS IN HIS REASONS RECORDED HAS ESCAPED ASSESSMENT AND WHICH CONSTITUTED THE BEDROCK/BASIS FOR REOPENING IS THE JURISDICTION AL FACT WHICH EMPOWERED HIM TO USURP THE JURISDICTION TO REOPEN A ND REASSESS THE ESCAPED INCOME AS CONTEMPLATE U/S 147/148 OF THE ACT. SO, WHEN THAT INCOME WHICH WAS THE FOUNDATION ON WHICH HE BASED H IS BELIEF OF ESCAPEMENT OF INCOME IS ABSENT/DISAPPEARED THEN THE AO'S VERY USURPATION OF JURISDICTION IS ON NON-EXISTING JURI SDICTIONAL FACT WHICH RENDERS HIS USURPATION OF JURISDICTION TO REOPEN TH E ASSESSMENT LEGALLY UNTENABLE AND SO NULL IN THE EYES OF LAW AND THERE FORE, THE ASSESSEE SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 12 SUCCEEDS AND THEREFORE, WE QUASH THE REASSESSMENT M ADE BY THE AO WITHOUT JURISDICTION.' 16. IN THE LIGHT OF ABOVE STATED JUDGMENTS, THE RAT IO LAID DOWN BY VARIOUS HONBLE COURTS AND CORDINATE BENCH AND EXAM INING FACTS OF THE INSTANT CASE IN THE LIGHT THERE OFF, WE CAN CON CLUDE THAT ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147 OF TH E ACT DATED 8.11.2011 DESERVES TO BE QUASHED AS IT IS ILLEGAL A ND BAD IN LAW SINCE THE LD. A.O HAS NOT MADE ANY ADDITION ON THE REASONS TO BELIEVE RECORDED IN THE NOTICE ISSUED U/S 148 OF T HE ACT AND HAS HIMSELF ADMITTED THAT THE REASONS SO RECORDED ARE N OT COMING IN THE PURVIEW OF THE ESCAPED INCOME BECAUSE THE EARLY WIT HDRAWAL OF THE AMOUNT DEPOSITED IN THE CAPITAL GAIN ACCOUNT BEFORE THE EXPIRY OF THE TIME PERIOD PROVIDED U/S 54F OF THE ACT HAS BEE N OFFERED TO TAX BY THE ASSESSEE AND SHOWN AS INCOME FOR ASSESSMENT YEAR 2011- 12. 17. FURTHER ADDITION OF RS. 39,40,000/- MADE IN THE REASSESSMENT PROCEEDINGS WAS ALREADY MADE DURING THE COURSE OF O RIGINAL ASSESSMENT PROCEEDINGS. THE ASSESSEE HAS CHALLENGE D THE DISALLOWANCE OF COST OF ACQUISITION OF THE PROPERTY DENIED BY THE LD. A.O. IN THE APPEAL FILED TO LD. CIT(A), WHO HAS STI LL NOT ADJUDICATED SHRI SARWAR MOHD. KHAN ITA NO. 511/IND/2018 13 THE ISSUE ON MERIT. 18. WE THEREFORE QUASH THE REASSESSMENT PROCEEDINGS AND ALLOW THE LEGAL ISSUE RAISED BY THE ASSESSEE IN GROUND NO .1. 19. APROPOS GROUND NO.2 WHICH IS RAISED ON MERITS W E FIND IT TO BE MERELY ACADEMIC TO ADJUDICATE THE SAME SINCE WE HAVE ALREADY QUASHED THE REASSESSMENT PROCEEDINGS AND IMPUGNED A DDITION OF RS.39,40,000/- IS STILL PENDING BEFORE LD. CIT(A) F OR ADJUDICATION IN THE APPEAL FILED AGAINST THE ORIGINAL ASSESSMENT U/ S 143(3) OF THE ACT. WE THEREFORE DISMISS GROUND NO.2 AS INFRUCTUO US. 20. THUS APPEAL OF THE ASSESSEE IS ALLOWED ON LEGAL GROUND ITSELF. THE ORDER PRONOUNCED IN THE OPEN COURT ON 20.02.2 020. SD/- SD/- ( KUL BHARAT) (MANI SH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 20 FEBRUARY , 2020 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE