NAMRATA NILESH MEHTA, MUMBAI V. ITO 16(1)(1), MUMBAI

ITA 557/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0353 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 27-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Keywords: Search and seizure; Principle of natural justice; Opportunity of cross examination; Third party statement; Accommodation entries; Reason to believe
• Section: 143(3); 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B, MU MBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.557/MUM/2015 (ASSESSMENT YEAR- 2005-06) SMT. NAMRATA NILESH MEHTA 604, JEWELLERS APARTMENT, 56, PEDDAR ROAD, MUMBAI-400036 PAN: AXHPM4550H VS. ITO -16(1)(1), MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAHUL HAKANI (AR) REVENUE BY : SHRI RAJAT MITTAL (DR) DATE OF HEARING : 16.06.2017 DATE OF PRONOUNCEMENT : 16.06.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE U/S 253 OF THE INCOME-TAX A CT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-27, MUMBAI DATED 20 .10.2014 FOR AY-2005-06. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: I. REOPENING IS BAD IN LAW . 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER OF LEARNED A.O. WITHOUT APPRECIATING THAT LEARNED ASSESSING OFFICER HAD NO REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT AS HE RELIED ONLY ON THIRD PARTY STATEMENT NOT TAKEN BY HIM AND THE INFORMATION RELIED BY HIM DID NOT BELONG TO THE ASSESSEE AND HENCE THE REOPENING IS BAD IN LAW. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER OF LEARNED A.O. WITHOUT APPRECIATING THAT THOUGH RECORDED REASONS STATED TH AT INCOME CHARGEABLE TO TAX TO THE TUNE OF RS.7,75,273/- HAS ESCAPED ASSESS MENT, THE REASSESSMENT ORDER MADE ADDITION OF RS.8,77,946/- ON THE BASIS O F SAME FACTS RECORDED IN THE RECORDED REASONS AND HENCE REOPENING IS BAD IN LAW. NATURAL JUSTICE ITA NO.557/M/2015 SMT. NAMRATA NILESH MEHTA 2 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER OF LEARNED A.O. WITHOUT APPRECIATING THAT NO OPPORTUNITY OF CROSS-EXAMINATI ON WAS AFFORDED TO THE ASSESSEE EVEN THOUGH ASSESSEE STATED THAT STATEMENT OF MR. MUKESH CHOKSHI DID NOT CONTAIN ITS NAME AND THE INFORMATION FOUND DURING SEARCH DID NOT BELONG TO ASSESSEE AND THUS THE ORDER PASSED BY LEA RNED A.O. WAS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND HENCE THE ORDE R OF LEARNED CIT(A) MAY BE QUASHED. II. MERITS : 4. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER OF LEARNED A.O. WITHOUT APPRECIATING THAT SALE CONSIDERATION OF RS.8,77,946 /- DID NOT BELONG TO THE ASSESSEE AND THAT THE ASSESSEE HAD DECLARED ALL TRA NSACTIONS CARRIED OUT THROUGH M/ S. MAHASAGAR SECURITIES PVT. LTD. IN ITS RETURN OF INCOME RESULTING IN SHORT TERM CAPITAL GAINS OF RS.7,02,673/ - WHICH WERE DULY SUPPORTED BY BILLS ETC AND HENCE THE ADDITION OF RS.8,77,946/- A S INCOME FROM OTHER SOURCES IS BAD IN LAW. 5. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER OF LEARNED A.O. WITHOUT APPRECIATING THAT STATEMENT OF SHRI MUKESH CHOKSHI IS A GENERAL STATEMENT AND SUCH STATEMENT IS TAKEN IN 2009 WHEREAS ASSESSE E HAD ENTERED INTO TRANSACTION IN A.Y. 2005-06 AND HENCE THE ADDITION OF SALE CONSIDERATION OF RS. 8,77,946/- IS BASED ON SURMISES AND CONJECTURES AND HENCE THE ADDITION OF RS. 8,77,946/- AS INCOME FROM OTHER SOURCES IS BAD IN LAW. 6. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER OF LEARNED A.O. WITHOUT APPRECIATING THAT THE ADDITION OF RS. 43,897/- BEIN G COMMISSION PAID FOR OBTAINING ACCOMMODATION ENTRY IS BASED ON PRESUMPTI ONS, CONJECTURES AND SURMISES AND IS HENCE BAD IN LAW. 2. BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCO ME WAS FILED ON 31.08.2015 DECLARING TOTAL INCOME AT RS. 8,03,432/-. THE ASSES SMENT WAS RE-OPENED U/S 147OF THE ACT. THE REOPENING WAS BASED ON THE FACTS THAT A SEARCH AND SEIZURE ACTION U/S 132 WAS CARRIED OUT IN CASE OF M/S MAHASAGAR SECURI TIES PVT. LTD. (MSPL) BY DDIT UNIT 1(4), MUMBAI ON 25.11.2009 ON THE INFORMA TION THAT M/S MSPL AND GROUP COMPANIES ARE ENGAGED IN PROVIDING BOGUS BILL S IN TRANSACTION IN SHARE AND SECURITIES. THE DIRECTORS OF THOSE COMPANIES WERE E NGAGED IN ISSUING FRAUDULENT BILLING ACTIVITIES. DURING THE SEARCH, FROM THE SEI ZED DATA, A LIST OF BENEFICIARY WAS EXTRACTED. THE ASSESSEE WAS ALSO REPORTED TO BE ONE OF THE BENEFICIARY APPEARING IN ITA NO.557/M/2015 SMT. NAMRATA NILESH MEHTA 3 THE LIST FORWARDED BY DDIT(INVESTIGATION) UNIT-4, M UMBAI DURING THE FINANCIAL YEAR 2004-05. ON THE BASIS OF SAID INFORMATION, THE AO MADE HIS PLEA THAT INCOME HAS ESCAPED ASSESSMENT AND THUS, CASE WAS RE-OPENED AFTER RECORDING REASONS OF RE-OPENING. NOTICE U/S 148 WAS ISSUED TO THE ASSESS EE ON 16.03.2012 AND SERVED ON 20.03.2012. IN RESPONSE TO THE NOTICE U/S 148, T HE ASSESSEE VIDE HER LETTER DATED 30.03.2012 REQUESTED FOR SUPPLY OF COPY OF REASONS RECORDED. THE REASONS WERE MADE AVAILABLE TO THE ASSESSEE VIDE OFFICE LETTER D ATED 26.09.2012. THE ASSESSEE VIDE HIS APPLICATION DATED 29.10.2012 AND AGAIN BY LETTER DATED 26.02.2013 RAISED THE OBJECTION REGARDING THE RE-OPENING OF THE ASSES SMENT. DESPITE THE OBJECTION RAISED BY ASSESSEE, THE AO PROCEEDED ON RE-ASSESSME NT PROCEEDING HOLDING THAT THERE IS NO MERIT IN THE OBJECTION RAISED BY ASSESS EE. THE AO ON THE BASIS OF STATEMENT OF MUKESH CHOKSI CONCLUDED THAT THERE WA S NO REAL SALE AND PURCHASE OF THE SHARE AS ADMITTED BY MUKESH CHOKSI AND HIS E MPLOYEE THAT THEY WERE PROVIDING ENTRY TO THE CLIENTS IN CONSIDERATION OF MONEY RECEIVED IN CASH. THUS, THE SHORT TERM CAPITAL GAIN SHOWN BY THE ASSESSEE I N HER RETURN OF INCOME WAS DECLARED AS MERE ENTRY TAKEN BY ASSESSEE FROM MUKES H CHOKSI, DIRECTOR OF M/S MSPL. THE ASSESSING OFFICER TREATED THE ENTIRE BILL AMOUNT OF RS. 8,77,946/- BEING THE TOTAL SALE CONSIDERATION AS INCOME OF THE ASSES SEE FROM UNDISCLOSED SOURCES. THE AO FURTHER ADDED 5% OF RS. 8,77,946/- AS A COMM ISSION PAYABLE ON SUCH ACCOMMODATION ENTRIES. THUS, THE AO MADE THE ADDITI ON OF RS. 8,77,946/- ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCE AND RS. 4 3,897/- ON ACCOUNT OF COMMISSION IN ITS ORDER DATED 26.03.2013 U/S 143(3) R.W.S 147 OF THE ACT. ON ITA NO.557/M/2015 SMT. NAMRATA NILESH MEHTA 4 APPEAL BEFORE THE LD. CIT(A), THE ADDITION WAS SUST AINED. FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE PRESENT APPEAL IS FILED BE FORE US. 3. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) OF ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASSESSEE SUB MITS THAT GROUND NO. 1 & 2 RELATES TO RE-OPENING OF ASSESSMENT AS BAD-IN-LAW. GROUND NO.3 RELATES TO DENIAL OF NATURAL JUSTICE BY DENYING THE OPPORTUNITY FOR C ROSS-EXAMINATION OF MUKESH CHOKSI ON WHOSE STATEMENT, THE ENTIRE ADDITION WAS MADE. GROUND NO.4 TO 6 RELATES TO THE MERIT OF THE CASE. AND THE GROUND NO .7 IS GENERAL WHICH NEEDS NO ADJUDICATION. 4. FIRST WE SHALL DEAL WITH THE GROUNDS WHICH RELATES TO THE RE-OPENING AND RELATED WITH THE VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. THE LD. AR OF THE ASSESSEE ARGUED THAT NOTICE U/S 148 DATED 16.03.2012 WAS SER VED UPON THE ASSESSEE ON 20.03.2012. THE ASSESSEE VIDE HIS APPLICATION/LETTE R DATED 30.03.2012 REQUESTED FOR SUPPLY OF REASONS RECORDED. THE REASONS SUPPLIE D TO THE ASSESSEE ARE AS UNDER: A SEARCH AND SEIZURE ACTION U/S 132 OF THE INCOME TAX ACT,1961 WAS CARRIED OUT IN THE CASE OF M/S MAHASAGAR SECURITIES PRIVATE LIMITED BY THE DDIT (INV) - 1 (4), MUMBAI ON 25.11.2009 AND SUBSEQUENT DATES .IT WAS ON THE BASIS OF INFORMATION RECEIVED IN AN FLU ALERT FROM NEW DELHI REGARDING S USPICIOUS TRANSACTIONS TAKING PLACE IN THE BANK ACCOUNTS OF THIS COMPANY A ND ITS RELATED GROUP OF COMPANIES AND RELATED COMPANIES. THE DIRECTORS OF T HESE COMPANIES WERE NAMELY, SHRI MUKESH M CHOKSI AND SHRI JAYESH K SAMP AT. DURING THE COURSE OF THE SEARCH AND SEIZURE ACTION, IT WAS REVEALED B Y THEM THAT THE MAHASAGAR SECURITIES PRIVATE LIMITED AND ITS RELATED GROUP OF 34 ODD COMPANIES, THE PROMINENT ONES BEING M/S ALLIANCE INTERMEDIARIES & NETWORK PRIVATE LIMITED, M/S MIHIR AGENCIES PRIVATE LIMITED, M/S GO LDSTAR FINVEST PRIVATE LIMITED ETC. ALL RUN BY SHRI MUKESH M CHOKSI AND HI S ASSOCIATES ) ARE ENGAGED IN FRAUDULENT BILLING ACTIVITIES AND 'ARE I N THE BUSINESS OF PROVIDING ITA NO.557/M/2015 SMT. NAMRATA NILESH MEHTA 5 ENTRIES FOR SPECULATION PROFIT / LOSS, SHORT TERM/L ONG TERM CAPITAL GAIN /LOSS, SHARE APPLICATION MONEY, COMMODITIES PROFIT I LOSS ON COMMODITY TRADING (THROUGH MCX). THESE ENTRIES ARE BOGUS. NO SUCH TRA NSACTION IN THE NAME OF PERSON, TO WHOM THESE ENTRIES HAS BEEN PROVIDED WER E MADE. NO 'CONTRACT NOTES' FOR THESE TRANSACTIONS ON THE DATE OF TRANSA CTIONS WERE ISSUED. THESE ACTIVITIES WERE CARRIED OUT IN THE PAST MANY YEARS. IN THE STATEMENT RECORDED DURING THE COURSE OF SEAR CH AND SEIZURE PROCEEDING, SHRI MUKESH CHOKSI HAS ADMITTED OF HAVI NG PROVIDED ACCOMMODATION ENTRIES TO VARIOUS PERSONS .THE ABOVE NAMED ASSESSEE, WHO IS ASSESSED TO TAX WITH THIS OFFICE, IS ONE OF SUCH PE RSON, WHO HAS OBTAINED BOGUS ENTRIES TOWARDS THE PURCHASE AND SALE OF SHARES AND SECURITIES'. WHATEVER INCOME SHE HAS GENERATED FROM A SOURCE, WHICH SHE H AS NOT DISCLOSED TO THE DEPARTMENT IN HER RETURN OF INCOME, HAS BEEN OFFERE D TO TAX AS INCOME GENERATED OUT OF THESE TRANSACTIONS WHICH NEVER TOO K PLACE. SOME OF THESE INCOME HAS BEEN CLAIMED AS EXEMPT AS LONG TERM CAPI TAL GAINS OR OFFERED TO TAX AS SHORT TERM CAPITAL GAINS, AT LOWER RATE OF T AX. ON VERIFICATION OF THE DATA AS FOUND DURING THE COU RSE OF SEARCH AND SEIZURE PROCEEDINGS, IT IS FOUND THAT THE ABOVE NAM ED ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES AND HAS SHOWN SHORT TERM CAPI TAL GAIN OF RS 7,02,673/- ON THE PURCHASE AND SALE OF SHARES OF M/ S BHUSHAN STEEL & STRI AND M/S ASTRA MICRO LTD. THROUGH M/S MAHASAGAR SECURITI ES PVT. LTD. DURING THE F.Y. 2004-05 RELEVANT TO THE A.Y. 2005-06. THIS IS NOTHING BUT INCOME EARNED FROM SOURCES, WHICH HAS NOT BEEN DISCLOSED TO THE D EPARTMENT IN HER RETURN OF INCOME. SHE HAS FAILED TO DISCLOSE HER TRUE AND COM PLETE PARTICULARS OF INCOME AND ITS SOURCES. A TOTAL SALE PROCEEDS OF RS 8,77,9 46/- HAS BEEN SHOWN BY THE ASSESSEE. THIS IS NOTHING BUT HER OWN MONEY, SOURCE S OF WHICH HAS NOT BEEN DISCLOSED TO THE DEPARTMENT. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX TO THE TUNE OF RS 1,75,2731- ( RS 8,77,946 - RS 7,02,6 73 ) HAS ESCAPED ASSESSMENT FOR THE A.Y. 2005-06. REQUISITE APPROVAL OF THE AUTHORITY U/S151 OF THE ACT HAS BEEN OBTAINED. THE ASSESSEE VIDE HER APPLICATION DATED 29.10.2012 AND AGAIN ON 26.02.2013 OBJECTED ABOUT THE RE-OPENING OF THE ASSESSMENT. TH E AO INSTEAD OF PASSING ANY ORDER ON THE OBJECTION MADE BY ASSESSEE PROCEEDED F OR RE-ASSESSMENT. THE ACTION OF THE ASSESSING OFFICER IS BAD IN LAW. THE ASSESSI NG OFFICER WAS FIRST REQUIRED TO DISPOSE THE OBJECTION RAISED BY ASSESSEE BY SPEAKIN G ORDER. IN SUPPORT OF HIS CONTENTION, LD. AR OF THE ASSESSEE RELIED UPON THE DECISION OF HONBLE SUPREME ITA NO.557/M/2015 SMT. NAMRATA NILESH MEHTA 6 COURT IN GKN DRIVESHAFTS (INDIA) LTD. V/S ITO (2003 ) 259 ITR 19 (SC) AND THE LATEST DECISION OF HONBLE BOMBAY HIGH COURT IN BAY ERS MATERIAL SCIENCE PVT. LTD. (2016) 382 ITR 333 (BOM). IT WAS FURTHER ARGUE D THAT THE AO RELIED UPON THE STATEMENT OF THIRD PARTY. THE ASSESSEE DURING THE A SSESSMENT PROCEEDING REQUESTED THE AO TO GIVE OPPORTUNITY OF CROSS-EXAMINATION TO SHRI MUKESH CHOKSI. DESPITE THE OBJECTION/REQUEST OF THE ASSESSEE, THE AO RELIE D UPON THE STATEMENT OF MUKESH CHOKSI WITHOUT GIVING ANY OPPORTUNITY OF CROSS-EXAM INATION. THUS, THE AO VIOLATED THE PRINCIPLE OF NATURAL JUSTICE. ON MERIT OF THE CASE THE LD. AR OF THE ASSESSEE ARGUED THAT ASSESSEE DURING THE REASSESSM ENT SUBMITTED THE COPY OF RETURN OF INCOME ALONG WITH COMPUTATION OF INCOME, COPY OF BILLS AND CONTRACT NOTES, DETAILS OF WORKING OF CAPITAL GAIN AND OTHER RELATED EVIDENCES. THE AO INSTEAD OF GIVING ANY FINDING ON SUCH EVIDENCES REL IED ON THE STATEMENT OF MUKESH CHOKSI AND TREATED SALE CONSIDERATION OF SHARE AS I NCOME FROM UNDISCLOSED SOURCES. THE ASSESSING OFFICER DEVIATED FROM THE RE ASONS RECORDED. FURTHER IN SUPPORT OF HIS CONTENTION THE LD AR FOR THE ASSESSE E RELIED ON THE FOLLOWING DECISIONS AND FILED THE COPIES OF ALL THE CITATIONS . SR. NO. PARTICULARS PAGE NOS. 1 CIT VS. LOVELY EXPORT EXPORTS PVT. LTD. 216 CTR 195 2 SHRI KAMLESH MUNDRA VS. ITO ITA NO. 6248/M/2012, A.Y. 2003-04 DT. 4/3/2016 68 -79 3 DY. CIT VS. M/S. SHARDA CREDITS PVT. LTD. ITA NO. 3415/M/2007, A.Y. 2001-02 DT. 9/2/2009 80- 84 4 CIT VS. M/S. SHARDA CREDIT PVT. LTD. ITA NO. 3090 OF 2009 DT. 12/9/2011 BOMBAY HIGH COURT JUDGEMENT 85 5 ITO VS. MRS. RASILA N. GADA IT A NO. 1773/M/2010 A.Y. 2006-07 DT. 8/8/2012 86-96 6 ULKA VIJAY SALVI VS. ITO ITA NO. 20691M12015 A.Y. 2005- 06 DT. 30/11/2015 97 - 104 7 SHRI CHANDRAKANG G. PATEL. VS. ITO ITA NO. 2705/M/2004 DT. 2005-06 DT. 25/5/2016 105 - 115 ITA NO.557/M/2015 SMT. NAMRATA NILESH MEHTA 7 8 ITO VS. SMT. NAVNEETA MEHRA ITA NO. 36421M12010 DT. 29/7/2010 116 -122 9 JAFFERALI K. RATTONSEY VS. DY. CIT (2012) 53 SOT 22 0 (MUM.)(TRIB.) 123 - 134 10 SHRI ANANTRAI B. SHAH VS. ITO ITA NO. 1842/M/201 2, A.Y. 2003-04 DT. 14112/2012 135 - 141 11 MR. KARTARIA KETAN ISHWARLAL VS. ITO ITA NO. 430 4/M/2007, A.Y. 2002-03 DT. 30/4/2010 142 - 147 12 ITO VS. M/S. SUPERLINE CONSTRUCTION PVT. LTD. ITA N O. 3645/M/2014, A.Y. 2007-08 DT. 30/11/2015 148 - 164 13 SMT. SMITA P. PATIL VS. ACIT (2015) 55 TAXMANN.C OM 346 (PUNE)(TRIB.) 165 - 181 14 ACIT VS. TRISTAR JEWELLERY ITA NO. 7593/M/2011, A.Y . 2006-07 DT. 31/7/2015 182-188 15 PR. CIT VS. G & G PHARMA INDIA LTD. IT A NO. 545 OF 2015 DELH HIGH COURT 189 - 196 16 ACIT VS. SHRI DEVESH KUMAR ITA NO. 2068/DEL./201 0 A.Y. 2004-05 197 - 210 17 SARTHAK SECURITIES CO. P. LTD. VS. ITO (2010 ) 195 TAXMAN 262 (DELHI)(HC) 211 - 220 18 KHUBCHANDANI HELATHPARKS PVT. LTD. VS. ITO WP NO . 3027 OF 2015 DT. 10/2/2016 221 - 229 ON THE OTHER HAND THE LD. DR FOR THE REVENUE STRONG LY SUPPORTED THE ORDER OF AUTHORIZES BELOW. THE LD. DR FOR THE REVENUE FURTHE R ARGUED THAT DURING THE FIRST APPELLATE PROCEEDING (FAA) ASSESSEE HAS NOT RAISED ANY GROUNDS OF APPEAL FOR CHALLENGING THE RE-OPENING OF THE ASSESSMENT AS BAD -IN-LAW. THUS, THE ASSESSEE IS NOW PRECLUDED FROM RAISING SUCH ISSUE FOR THE FIRST TIME BEFORE THE TRIBUNAL. IT WAS ARGUED THAT ASSESSEE FOR THE FIRST TIME OBJECTED AB OUT THE RE-OPENING ONLY VIDE APPLICATION/LETTER DATED 26.02.2013 AND THE OBJECTI ON WAS AFTER LAPSE OF FOUR MONTHS FROM THE DATE OF SUPPLY OF REASONS RECORDED. IT WAS FURTHER ARGUED THAT THE AO MADE DETAILED DELIBERATION ON THE OBJECTIONS OF THE ASSESSEE IN HIS ORDER AND AFTER CONSIDERING THE OBJECTIONS PROCEEDED IN THE M ATTER, THUS IMPLIEDLY REJECTED/ DISPOSED OF THE OBJECTIONS RAISED BY THE ASSESSEE. IN THE REJOINDER ARGUMENT, LD. AR OF THE ASSESSEE INVITED OUR ATTENTION THAT PARA 6 OF THE ASSESSMENT ORDER WHEREIN THE AO HAS RECORDED THE EXTRACT OF LETTER D ATED 29.10.2012. WHILE TAKING ITA NO.557/M/2015 SMT. NAMRATA NILESH MEHTA 8 US TO PARA 6 OF THE ORDER THE LD AR ARGUED THAT THE RE IS NO DISPOSAL OF THE OBJECTION RAISED BY ASSESSEE. IN SUPPORT OF HIS SUBMISSION TH E LD AR FOR ASSESSEE RELIED ON THE DECISION OF BOMBAY HIGH COURT IN ASIAN PAINTS V S DCIT[ 2008] 296 ITR 90 (BOM). IT WAS FURTHER SUBMITTED THAT AS PER THE DEC ISION OF ASIAN PAINTS (SUPRA) , THAT IN CASE THE OBJECTIONS SO FILED BY ASSESSEE IS NOT ACCEPTED BY AO, THE AO SHALL NOT PROCEED FURTHER IN THE MATTER WITH IN FOUR WEEK S FROM THE DATE OF RECEIPT OF SERVICE OF THE ORDER ON THE OBJECTIONS OF THE PETI TIONER( ASSESSEE). 5. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND THE VARIOUS DECISION RELIE D BY THE PARTIES. THE AO RE- OPENED THE CASE ON THE BASIS OF INFORMATION RECEIVE D FROM DDIT UNIT-1(4), MUMBAI THAT M/S MSPL AND ITS RELATED GROUP COMPANIE S WERE INVOLVED IN PROVIDING BOGUS BILLS AND TRANSACTION IN SHARE AND SECURITIES. IN THE REASONS OF RE- OPENING THE AO RECORDED THAT ASSESSEE OBTAINED ACCO MMODATION ENTRY AND HAS SHOWN AS STCG OF RS. 7,02,673/- ON PURCHASE AND SAL E OF SHARES OF M/S BHUSHAN STEEL & STRI AND M/S. ASTRA MICRO LTD. THOUGH M/S M SPL. THE TRANSACTION IS NOTHING BUT INCOME EARNED FROM SOURCES WHICH HAVE N OT BEEN DISCLOSED TO THE DEPARTMENT IN THE RETURN OF INCOME. THE ASSESSEE FA ILED TO DISCLOSE HER TRUE AND COMPLETE PARTICULARS OF INCOME AND ITS SOURCES. THE SALE PROCEED OF RS. 8,77,946/- HAS BEEN SHOWN BY ASSESSEE WHICH IS NOTHING BUT HER OWN MONEY, SOURCE OF WHICH HAS NOT BEEN DISCLOSED TO THE DEPARTMENT. WE HAVE N OTICED THAT THE ASSESSEE HAS SPECIFICALLY OBJECTED VIDE HER APPLICATION/LETTER D ATED 26.02.2013 THAT THE NOTICE U/S 148 IS BAD-IN-LAW AND RE-OPENING IS INCORRECT/I NVALID. THE AO HAS NOT PASSED ANY ORDER ON THE OBJECTION RAISED BY ASSESSEE. THE ASSESSING OFFICER COMPLETED THE ITA NO.557/M/2015 SMT. NAMRATA NILESH MEHTA 9 RE-ASSESSMENT PROCEEDINGS WITHOUT PASSING A SPEAKIN G ORDER ABOUT THE OBJECTIONS RAISED BY ASSESSEE. 6. THE HONBLE APEX COURT IN GKN DRIVESHAFTS (INDIA) LTD. V/S ITO (SUPRA) HELD THAT THE AO IS REQUIRED TO DISPOSE OF THE OBJECTION TO THE REASONS RECORDED BY PASSING SPEAKING ORDER BEFORE PROCEEDING WITH THE A SSESSMENT PROCEEDING OF THE RE-OPENED ASSESSMENT. FURTHER, THE HONBLE BOMBAY H IGH COURT IN BAYERS MATERIAL SCIENCE PVT. LTD. VS. DCIT (SUPRA) HELD TH AT THE ASSESSMENT ORDER PASSED WITHOUT DISPOSING OF THE OBJECTION OF THE ASSESSEE TO THE REASONS RECORDED IN SUPPORT OF THE IMPUGNED NOTICE IS NOT SUSTAINABLE. FURTHER, HONBLE BOMBAY HIGH COURT IN ASIAN PAINTS VS DCIT[ 2008] 296 ITR 90 (BO M) HELD THAT IN CASE THE OBJECTIONS SO FILED BY ASSESSEE IS NOT ACCEPTED BY AO, THE AO SHALL NOT PROCEED FURTHER IN THE MATTER WITH IN FOUR WEEKS FROM THE D ATE OF RECEIPT OF SERVICE OF THE ORDER ON THE OBJECTIONS OF THE ASSESSEE. CONSIDE RING, THE ABOVE LEGAL POSITION, WE FIND THAT THE ORDER PASSED BY ASSESSING OFFICER IS NOT SUSTAINABLE THUS THE SAME IS SET-ASIDE. THUS, GROUND NO.1 TO 3 OF APPEAL IS A LLOWED AND THE APPEAL OF THE ASSESSEE IS ACCEPTED. 7. AS WE HAVE ALLOWED THE APPEAL OF THE ASSESSEE ON LE GAL ISSUES THUS, THE DISCUSSION ON MERIT OF THE CASE HAS BECOME ACADEMIC. 8. IN THE RESULT APPEAL FILED BY ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DAY OF JUNE 2017. SD/- SD/- (G.S. PANNU) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 16/06/2017 S.K.PS ITA NO.557/M/2015 SMT. NAMRATA NILESH MEHTA 10 COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/