JIMMY JAL GAZDAR, MUMBAI V. ITO WD 5(2)(3), MUMBAI

ITA 5780/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9221 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 11-10-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 16-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Salary income; Source of fund; Retrospective amendment; Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI I.P.BANSAL,JUDICIAL MEMBER & SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.5780/MUM/2010(A.Y. 2003-04) MR. JIMMY JAL GAZDAR, G. J. INDUSTRIES, SHOP NO.16, MAKER ARCADE PREMISES, CHS, CUFFE PARADE, MUMBAI - 400 005. PAN:AAEPG 0228Q (APPELLANT) VS. THE DCIT, RANGE 12(2), AAYKAR BHAVAN, MK ROAD, MUMBAI - 20. (RESPONDENT) APPELLANT BY : MS. AASIFA KHAN RESPONDENT BY : SHRI MANOJ KUMAR DATE OF HEARING : 19/12/2012 DATE OF PRONOUNCEMENT : 1 9/12/2012 ORDER PER I.P.BANSAL, J.M THIS APPEAL IS FILED BY THE ASSESSEE. IT IS DIRE CTED AGAINST THE ORDER PASSED BY LD. CIT(A)-23, MUMBAI DATED 3/5/2010 FOR ASSESSM ENT YEAR 2003-04. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UN DER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN LAW AND ON THE FACTS OF THE CASE IN NOT APPEARING THAT ISSUE OF N OTICE U/S. 148 OF THE ACT FOR REOPENING THE ASSESSMENT U/S. 147 OF THE ACT AND C ONSEQUENTLY ASSESSMENT MADE U/S. 143(3) R.W.S. 147 OF THE ACT WAS BAD IN L AW AND CONTRARY TO LAW IN AS MUCH AS THERE WAS NO REASON TO BELIEVE THAT AN Y INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT FOR AY. 2003-2004. 2. WITHOUT PREJUDICE TO GROUND NO. 1 ABOVE, THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITIONS OF RS. 4,68,750/- BEING PAYMENT MADE TO MR. BAPU V NAIK AND RS. 2,21,000/- BEING PAYMENT MADE TO MR. KOYA AS AP PELLANTS UNEXPLAINED INVESTMENTS FROM UNEXPLAINED SOURCES AND TREATING T HE SAME AS APPELLANTS INCOME U/S. 69-B OF THE ACT.. ITA NO.5780/MUM/2010(A.Y. 2003-04) 2 3. WITHOUT PREJUDICE TO GROUND NO.1 ABOVE, THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF PS. 20,00,000/- BEING PAYMENT MADE TO A NAND RATHI SECURITIES PVT LTD. OUT OF TOTAL PAYMENT OF RS.45,00,000/- AS APP ELLANTS UNEXPLAINED INVESTMENTS FROM UNEXPLAINED SOURCES AND TREATING T HE SAME AS APPELLANTS INCOME U/S. 69B OF THE ACT 4. WITHOUT PREJUDICE TO GROUND NO.1 ABOVE, THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON THE FACTS IN CONFIRMING THE ADDITIONS OF PS. 17,00,0001- BEING PAYMENT MADE TO MR. JOSE K YNADI AS APPELLANTS UNEXPLAINED INVESTMENT FROM UNEXPLAINED SOURCES AN D BEATING THE SAME AS APPELLANTS INCOME U/S. 69B OF THE ACT. 2. IMPUGNED ASSESSMENT ORDER IS AN ORDER PASSED ON 30/12/2008 UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT,196 1 (THE ACT). THE ASSESSEE FILED HIS RETURN OF INCOME ON 29/3/2004 AT A SUM OF RS.66 ,218/- , WHICH INCLUDED INCOME FROM SALARY AND INTEREST. THE RETURN OF THE ASSESSEE WAS PROCESSED BUT NO SCRUTINY ASSESSMENT WAS DONE. SUBSEQUENTLY, PURSUA NT TO INFORMATION FROM THE TAX EVASION PETITION AND VERIFICATION REPORT ON THE SAME FORWARDED BY DDIT (INV), MUMBAI TO THE ITO 12(2)(4) IT WAS NOTICED THAT THE ASSESSEE HAD GIVEN SUBSTANTIAL CASH LOANS / DEPOSITS TO A COMPANY NAMELY M/S. COC HIN MALABAR ESTATE & INDUSTRIES LTD. IN KERALA, WHICH IS SHORTLY REFERRE D BY THE AO AS CME LTD., OF WHICH ASSESSEE WAS THE CHAIRMAN & MANAGING DIRECTO R. THOSE PAYMENTS WERE IN CONNECTION WITH A MEMORANDUM OF UNDERSTANDING ENTER ED INTO BETWEEN THE COMPANY AND ONE P.K.C. AHMED KUTTY FOR SALE OF PROP ERTY OWNED BY THE COMPANY CALLED KINALUR ESTATE IN KERALA. THE INFORMA TION WAS ABOUT HUGE DEPOSITS / LOANS STANDING TO THE CREDIT OF THE ASSESSEE IN HI S PERSONAL ACCOUNT WITH THE SAID COMPANY FROM THE SAID PROPERTY TRANSACTION. THE AO NOTICED THAT THESE TRANSACTIONS WERE NOT SHOWN BY THE ASSESSEE IN HIS RETURN AND THE SOURCE OF INCOME FOR MAKING DEPOSITS / LOANS IN THE RETURN O F INCOME. IT IS FOR THESE REASONS, REASSESSMENT PROCEEDINGS WERE INITIATED IN THE CASE OF THE ASSESSEE AFTER RECORDING THE REASONS, COPY OF WHICH HAS BEEN PLACE D AT PAGE 1 & 2 OF THE PAPER BOOK. THESE FACTS ARE STATED IN THE ASSESSMENT ORDER IN PARA 2. ACCORDINGLY THE NOTICE UNDER SECTION 148 WAS ISSUED AND SERVED ON 2 4/3/2008. THE ASSESSEE VIDE LETTER DATED 25/3/2005 REQUESTED FOR THE COPY OF RE ASONS WHICH WAS PROVIDED ITA NO.5780/MUM/2010(A.Y. 2003-04) 3 VIDE LETTER DATED 30/4/2008. THE ASSESSEE FILED OB JECTIONS REGARDING INITIATION OF REASSESSMENT PROCEEDINGS. HOWEVER, VIDE LETTER DAT ED 25/3/2008 THE ASSESSEE SUBMITTED THAT RETURN FILED EARLIER SHOULD BE TREA TED AS RETURN FILED IN RESPONSE TO NOTICE ISSUED UNDER SECTION 148 OF THE ACT. IT IS IN THIS MANNER REASSESSMENT PROCEEDINGS WERE INITIATED. 3. FROM THE COPY OF THE REASONS IT IS OBSERVED THAT REASSESSMENT PROCEEDINGS HAVE BEEN INITIATED AGAINST THE ASSESSEE ON THE GRO UND THAT CERTAIN SPECIFIC LOAN / DEPOSITS AGGREGATING TO RS.33,09,000/- PAID BY THE ASSESSEE TO CME LTD. WERE NOT DISCLOSED BY THE ASSESSEE AND, THEREFORE, THE INCOM E TO THAT EXTENT ALONG WITH INTEREST THEREON HAS ESCAPED ASSESSMENT. LD. CIT( A) HAS UPHELD THE VALIDITY OF REASSESSMENT PROCEEDINGS ON THE GROUND THAT IN THE ABSENCE OF DETAILS REGARDING LOAN AND DEPOSITS REFLECTED IN THE RETURN NO EXAMIN ATION OF FACTS IN THE EARLIER ASSESSMENT COULD BE DONE, THEREFORE, AO HAD SUFFICI ENT REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. THE REASONS WERE RE CORDED BY THE AO AND OBJECTIONS OF THE ASSESSEE WERE ALSO DEALT WITH, TH EREFORE, AOS ACTION FOR REOPENING THE ASSESSMENT IS VALID. 4. THE ASSESSEE IN THE PRESENT APPEAL, AS PER GROUN D NO.1, IS AGGRIEVED WITH SUCH DECISION OF LD. CIT(A). 5. AT THE OUTSET IT WAS THE CASE OF LD. AR THAT INI TIATION OF REASSESSMENT PROCEEDINGS IS INVALID AS THE AMOUNT WHICH IS STATE D TO BE ESCAPED INCOME IN THE REASONS HAS NOT BEEN ASSESSED OR REASSESSED IN THE ASSESSMENT ORDER, THEREFORE, NO OTHER ADDITION COULD BE MADE. SHE CARRIED US TH ROUGH ASSESSMENT ORDER TO SHOW THAT THE AO DID NOT MAKE ANY ADDITION WITH REG ARD TO AFOREMENTIONED ADDITION OF RS.33,09,000/-. THE ADDITION, IF ANY, IS MADE BY THE AO WITH REGARD TO ANOTHER SUM AGGREGATING TO RS.63,89,750/-. SHE REF ERRED TO THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. JET AIRWAYS INDIA LTD., 331 ITR 236 TO CONTEND THAT UNLESS INCOME STATED TO HAV E ESCAPED IN THE REASONS HAS BEEN ASSESSED OR REASSESSED, THE AO DOES NOT HAVE A UTHORITY TO ASSESS ANY OTHER ITA NO.5780/MUM/2010(A.Y. 2003-04) 4 INCOME WHICH HAS ESCAPED ASSESSMENT AND WHICH HAS C OME TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER SECTION 148 OF THE ACT. SHE CARRIED US THROUGH THE RELEVANT OBSERVATION OF THE IR LORDSHIP FROM THE SAID DECISION AND ALSO TO THE REASONS RECORDED BY THE AO AND ALSO THE ASSESSMENT ORDER. THUS IT IS THE MAIN CASE OF LD. AR THAT IN ABSENCE OF ASSESSMENT OF THE AMOUNT STATED TO HAVE ESCAPED INCOME IN THE REASONS RECORDED BY THE AO, ASSESSEE COULD NOT BE ASSESSED IN RESPECT OF ANY OT HER INCOME ESCAPED FROM ASSESSMENT WHICH HAS SUBSEQUENTLY CAME TO THE NOTIC E OF AO IN THE COURSE OF REASSESSMENT PROCEEDINGS. 6. ON THE OTHER HAND, LD. DR STRONGLY OBJECTED TO SUCH ARGUMENTS OF LD. AR. HE SUBMITTED THAT THE WORD ASSESSMENT CANNOT BE R ESTRICTED TO MERE ASSESSMENT OF THE PARTICULAR AMOUNT. HE SUBMITTED THAT SCOPE OF WORD ASSESSMENT IS LARGE. HE SUBMITTED THAT IT IS TRUE THAT THE AMOUNT OF RS .33.09 LACS IS NOT ASSESSED IN THE IMPUGNED ASSESSMENT ORDER BUT AO HAS MADE OBSER VATION REGARDING THE SAID AMOUNT IN PARA 4 WHICH READ AS UNDER: 4. DURING THE ASSESSMENT PROCEEDINGS THE COPIES OF BANK STATEMENTS, BANK SUMMARY, CASH ACCOUNT, COPY OF ACCOUNT OF THE ASSES SEE WITH THE COMPANY M/S. COCHIN MALABAR ESTATES &INDUSTRIES LTD ETC HAV E BEEN CANED FOR. ON VERIFICATION IT IS NOTICED THAT THE ASSESSEE HAD GI VEN CASH LOAN/DEPOSIT TO CME LTD ( COCHIN MALABAR ESTATES & INDUSTRIES LTD) AND ALSO RECEIVED BACK THE REPAYMENT OF LOANS/DEPOSIT IN CASH FROM THE SAID CO MPANY, WHICH ARE IN EXCESS OF THE AMOUNT SPECIFIED U/S. 269SS AND 269T AND THEREFORE ATTRACTS PENALTY PROVISIONS U/S. 271D AND 271E . THE PENALTY MATTER IS REFERRED TO THE JT. CIT 12(2) AND THE PROCEEDINGS ARE INITIATED SEP ARATELY. 7. TO CONTEND THAT SCOPE OF WORD ASSESSMENT AS RE FERRED TO IN REASSESSMENT CONTEXT IS WIDER. LD. DR REFERRED TO THE FOLLOWING DECISIONS: 1. MAHARAJ KUMAR KAMAL SINGH VS. CIT, 35 ITR 1(SC) 2. S.SANKAPPA & OTHERS VS. ITO, 68 ITR 760. ITA NO.5780/MUM/2010(A.Y. 2003-04) 5 HE SUBMITTED THAT IN VIEW OF THE FINDINGS RECORDED BY AO IN PARA -4 OF THE ASSESSMENT ORDER IT CANNOT BE SAID THAT AO HAS NOT ASSESSED SUM OF RS.33.09 LACS. HE, THEREFORE, SUBMITTED THAT REASSESSMENT P ROCEEDINGS CANNOT BE HELD TO BE INVALID. LD. DR FURTHER REFERRED TO PARA 2.1 OF TH E REASONS TO CONTEND THAT THE INCOME DECLARED BY THE ASSESSEE WAS QUITE INSUFFICI ENT TO SUPPORT THE AFOREMENTIONED LOANS AND DEPOSITS. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF MATERIAL PLACED BEFORE US. IT WILL BE RELEVANT TO REPRODU CE THE REASONS RECORDED BY THE AO: REASONS FOR RE-OPENING THE ASSESSMENT U/S. 147: THE ASSESSEE IS AN INDIVIDUAL AND HAS FILED THE RET URN OF INCOME FOR THE A.V. 2003-04 ON 29.3.2004 DECLARING TOTAL INCOME OF RS.66218/-. THE RETURNED INCOME CONSISTED OF SALARY INCOME OF RS. 48982/- AND INCOME FROM OTHER SOURCES BEING DIVIDEND, INTEREST AMOUNTING TO RS. 29236/-. THE RETURN OF INCOME WAS PROCESSED BUT NO SCRUTINY ASSESSMENT WAS DONE. 2. PURSUENT TO INFORMATION RECEIVED FROM THE DDIT(I NV) UNIT-IV(3), MUMBAI, IT HAS COME TO ATTENTION THAT THERE HAD BEEN A TAX EVASION PETI TION IN THE CASE OF THE ASSESSEE WHEREIN CERTAIN INFORMATION RELATED TO THE IMMOVABL E PROPERTY DEAL ENTERED INTO BY THE ASSESSEE/EMPLOYER AND ALSO THE LOANS/ DEPOSITS MADE BY HIM WITH M/S. COCHIN MALABAR ESTATES & INDUSTRIES LTD, ERNAKULAM, KERALA , IN WHICH HE WAS THE CHAIRMAN AND MANAGING DIRECTOR HAS COME TO LIGHT. THE INFORM ATION RECEIVED BY THE DDIT(INV) HAS BEEN AFTER PROCESSING THE SAID TEP AND GATHERIN G INFORMATION ON THE ALLEGED DEALS ENTERED INTO BY THE ASSESSEE. ACCORDING TO TH E INFORMATION RECEIVED, THE ASSESSEE HAS RECEIVED SUBSTANTIAL AMOUNT OF CASH/DD S FROM THE PURCHASER OF LANDED PROPERTY BEING THE KINALUR ESTATE SITUATED IN KERAL A, AND ADMEASURING 2400 ACRES OWNED BY M/S. COCHIN MALABAR ESTATES & INDUSTRIES L TD. AS PER CONFIDENTIAL INFORMATION RECEIVED FROM THE PETITIONER OF TEP, IN TERMS OF AGREEMENT WITH ONE MR. PKC ALANED KUTTY, THE SAID COMPANY HAD AGREED TO SE LL THE SAID ESTATE FOR A DISCLOSED CONSIDERATION OF RS.31.10 CRORES EVEN THO UGH THE ACTUAL VALUATION WAS MUCH MORE THAN THE SAID AMOUNT OF RS. 31.10 CRORES. THERE WAS INFORMATION THAT HUGE AMOUNTS OF MONEY HAD BEEN DEPOSITED IN THE BAN K ACCOUNTS OF THE ASSESSEE WHICH WAS IN TURN GIVEN BY ASSESSEE TO THE SAID COM PANY IN THE FORM OF LOAN/DEPOSIT. THIS INFORMATION ON THE DEPOSITS MADE IN THE BANK A CCOUNTS OF THE ASSESSEE AS WELL AS THE LOAN /DEPOSIT GIVEN BY HIM HAS BEEN FOUND CO RRECT DURING THE COURSE OF PRELIMINARY INQUIRIES MADE BY THE DDIT. DURING THE PREVIOUS YEAR RELEVANT TO THE Y. 2003-04, ASSESSEE HAS GIVEN THE FOLLOWING LOANS/DEP OSITS TO M/S. COCHIN MALABAR ESTATES & INDUSTRIES LTD. DATE AMOU NT RS. 12.7.02 200000 ITA NO.5780/MUM/2010(A.Y. 2003-04) 6 26.7.02 200000 4.9.02 95000 5.9.02 2500 23.12.02 100000 13.4.02 10000 11.12.02 15000 17.1.03 15000 19.10.02 1 150000 5.2.03 500000 31.3.03 900000 7.4.02 15000 29.1.03 11000 7.2.03 20000 31.12.02 50000 7.9.02 45000 6.3.02 17000 5.3.02 18000 6.5.02 8000 4.4.02 15000 ---------- 3309000 ======== 2.1 ON VERIFICATION OF THE ASSESSEES RETURN, IT I S NOTICED THAT ASSESSEE HAS NOT FURNISHED THE CAPITAL ACCOUNT AND BALANCE SHEET WIT H THE RETURN OF INCOME AND NO IFLFORMATION RELATED TO THE SAID LOAN/DEPOSIT WITH THE COMPANY AFORESAID IS APPEARING IN THE RETURN OF INCOME FILED. SIMILARLY, NO INFORM ATION IS ALSO AVAILABLE ON RECORD TO EXPLAIN THE SOURCES OF FUNDS UTILIZED BY THE ASSESS EE FOR MAKING DEPOSITS IN HIS BANK ACCOUNTS AND ADVANCING THE LOAN /DEPOSITS WITH THE SAID COMPANY. THE TOTAL INCOME DECLARED BY THE ASSESSEE IS ALSO QUITE INSUFFICIENT TO ACCOUNT FOR THE SOURCES OF INCOME UTILIZED FOR THE BANK DEPOSITS AND ADVANCING LOANS. APART FROM THIS, THE INTEREST RECEIVED/RECEIVABLE BY THE ASSESSEE FROM THE SAID C OMPANY ON LOANS/ADVANCES HAS ALSO NOT BEEN SHOWN IN THE RETURN OF INCOME. 3. I HAVE THEREFORE REASON TO BELIEVE THAT ASSESSE E HAS NOT DISCLOSED THE INCOME AMOUNTING TO RS. 33,09,000/- ALONG WITH THE MEANIN G OF SECTION 147(B). ISSUED NOTICE U/S. 148 OF THE ACT ACCORDINGLY. 8.1 FROM THE AFOREMENTIONED REASONS IT IS CLEAR THA T THE REASSESSMENT PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEE WIT H REGARD TO THE AMOUNT OF RS.33.09 LACS. THE AMOUNT OF RS.33.09 LACS IS AN A GGREGATE OF SPECIFIC ENTRIES FOR WHICH INFORMATION WAS AVAILABLE WITH THE DEPARTME NT. THESE ARE ENTRIES RELATING TO CEM LTD. THE ASSESSEE HAD SUBMITTED THE DETAIL S BEFORE THE AO WITH REGARD TO THESE ENTRIES AND AO DID NOT ASSESS THE SAID SUM O F RS.33.09 AS INCOME OF THE ASSESSEE IN THE IMPUGNED ASSESSMENT ORDER. THE AO MADE THE OTHER ADDITIONS OF ITA NO.5780/MUM/2010(A.Y. 2003-04) 7 RS.63,89,750/-. THE COMPUTATION MADE BY THE AO IN THE IMPUGNED ASSESSMENT ORDER IS AS UNDER: RS. INCOME FROM SALARY SALARY FROM CME INDUSTRIES 48,982 INCOME FROM OTHER SOURCES: I) INTEREST ON SB A/C WITH B ANKS 29236 II)INCOME U/S. 69B DISCUSSED IN THE ORDER: 6389750 64,18,986 GROSS TOTAL INCOME 64,67,986 LESS: DEDUCTION U/S. 80L 12,000 TOTAL INCOME 64,55,968 ROUNDED OFF TO 64,55,970 ========= 8.2 THUS IT IS CLEAR FROM THE ASSESSMENT ORDER AS WELL AS FROM THE COMPUTATION OF INCOME MADE BY THE AO THAT NO ADDITION HAS BEE N MADE EITHER WITH REGARD TO RS.33.09 LACS OR OF INTEREST PERTAINING THERETO. SALARY INCOME AND INTEREST INCOME WHICH HAS BEEN ASSESSED IN THE COMPUTATION W ERE FORMING PART OF THE RETURNED INCOME FILED BY THE ASSESSEE. THE MAIN A RGUMENT OF THE LD. AR IS THAT UNLESS THE ALLEGED ESCAPED INCOME AS MENTIONED IN T HE REASONS IS ASSESSED, THE AO DOES NOT HAVE THE AUTHORITY TO ASSESS OTHER ESCAPED INCOME WHICH SUBSEQUENTLY CAME TO THE NOTICE OF AO. SUCH CONTENTION HAS BEEN SUPPORTED BY THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. JE T AIRWAYS INDIA LTD.(SUPRA). HERE THE CONTENTION OF LD. DR IS THAT THE OBSERVATION OF AO IN PARA-4 AMOUNTS TO ASSESSMENT OF THE SAID SUM OF RS.33.09 LACS IN THE HANDS OF THE ASSESSEE. WE SEE NO FORCE IN SUCH ARGUMENTS OF LD. DR. THE AO, RATH ER IS SATISFIED WITH THE EXPLANATION OF THE ASSESSEE THAT THE SAID AMOUNT HA S NOT ESCAPED FROM ASSESSABLE INCOME IN THE HANDS OF THE ASSESSEE. VIOLATION OF SECTION 269SS AND 269T OF THE ITA NO.5780/MUM/2010(A.Y. 2003-04) 8 ACT CANNOT BE SAID TO BE EQUIVALENT TO ESCAPEMENT OF INCOME AS THE CONSEQUENCE OF THE SAME MAY RESULT INTO LEVY OF PENALTY UNDER S ECTION 271D OR 271E OF THE ACT BUT THAT CANNOT MAKE THE ASSESSEE LIABLE FOR ESCAPE MENT OF ASSESSABLE INCOME. THE FACT REMAINS IS THAT IN THE REASSESSMENT ORD ER NEITHER AMOUNT OF RS.33.09 LACS HAS BEEN ASSESSED NOR INTEREST PERTAINING THE RETO. IN OUR OPINION LD. AR IS JUSTIFIED IN ARGUING THAT AO COULD NOT ASSESS OTHE R ESCAPED INCOME OF RS.63,89,750/- IN ABSENCE OF ASSESSMENT OF INCOME S TATED TO HAVE ESCAPED IN THE REASONS RECORDED BY THE AO. IT WILL BE RELEVANT T O REPRODUCE THE QUESTION WHICH WAS REQUIRED TO BE ANSWERED BY THE HONBLE JURISDI CTIONAL HIGH COURT IN THE CASE OF JET AIRWAYS INDIA LTD. WHERE UPON THE ISSUANCE OF A NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT, 196]. READ WITH SECTION 147, THE ASSESSING OFFICER DOES NOT ASSESS OR, AS THE CASE MAY BE, REASSESS THE INCOME WHICH HE HAS REASO N TO BELIEVE HAD ESCAPED ASSESSMENT AND WHICH FORMED THE BASIS OF A NOTICE U NDER SECTION 148, IS IT OPEN TO THE ASSESSING OFFICER TO ASSESS OR REASSESS INDEPENDENTLY ANY OTHER INCOME, WHICH DOES NOT FORM THE SUBJECT-MATTER OF T HE NOTICE? 8.3 THEIR LORDSHIP HAVE EXAMINED THE AMENDED PROVI SIONS OF SECTION 147 AS APPLICABLE W.E.F. 1/4/1989 AND ALSO THE PROVISIONS OF EXPLANATION 3 TO SECTION 147 INSERTED BY THE FINANCE (NO.2) ACT OF 2009 WITH RETROSPECTIVE EFFECT FROM 1/4/1989. AFTER EXAMINING ALL THESE PROVISIONS AND THE PRECEDENTS AVAILABLE PRIOR TO INSERTION OF EXPLANATION- 3, THEIR LORDSHIP HAVE REACHED A CONCLUSION THAT SECTION 147 AS IT STANDS AFTER AMENDMENT OF 2009 CA N BE SUMMARIZED AS FOLLOWS: (I) THE ASSESSING OFFICER MUST HAVE REASON TO BEL IEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR; (II) UPON THE FORMATION OF THAT BELIEF AND BEFORE HE PROCEEDS TO MAKE AN ASSESSMENT, REASSESSMENT OR RECOMPUTATION, THE ASSESSING OFFICE R HAS TO SERVE ON THE ASSESSEE A NOTICE UNDER SUB-SECTION (1) OF SECTION 148 ; (III) THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME, WHICH H E HAS REASON TO BELIEVE, HAS ESCAPED ASSESSMENT AND ALSO ANY OTHER INCOME, C HARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTIC E SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THE SECTION; AND (I V) THOUGH THE NOTICE UNDER SECTION 148(2) DOES NOT INCLUDE A PARTICULAR, ISSUE WITH RESPECT TO WHICH INCOME HAS ESCAPED ASSESSMENT, HE MAY NONE THE LESS ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE WHICH HAS ESCAPED ASSESSMEN T AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY TO THE COURSE OF THE PROCEEDING S UNDER THE SECTION. ITA NO.5780/MUM/2010(A.Y. 2003-04) 9 8.4 AFTER ANALYZING THE SECTION AS ABOVE THEIR LORD SHIP HAVE CONSIDERED THE CONTENTION OF THE ASSESSEE REGARDING WORDS AND AL SO AS APPEARING IN SECTION 147 WHICH POSTULATE THAT THE AO MAY ASSESS OR REASSE SS THE INCOME WHICH HE HAS REASON TO BELIEVE AS ESCAPED ASSESSMENT TOGETHER WI TH ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN OT HER WORDS, UNLESS THE AO ASSESS THE INCOME WITH REFERENCE TO WHICH HE HAD FO RMED A REASON TO BELIEVE WITHIN THE MEANING OF SECTION 147, IT WOULD NOT BE OPENED TO HIM TO ASSESS OR REASSESS ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAP ED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF P ROCEEDINGS. THEIR LORDSHIP HAVE ALSO CONSIDERED THE ARGUMENTS OF THE REVENUE T HAT EVEN IF DURING THE COURSE OF ASSESSMENT OR, AS THE CASE MAY BE, REASSESSMENT , THE AO DOES NOT ASSESS OR REASSESS THE INCOME WHICH HAS REASON TO BELIEVE HA S ESCAPED ASSESSMENT AND WHICH FORMED THE SUBJECT MATTER OF A NOTICE UNDER SECTION 148(2), IT IS NONE THE LESS OPEN TO HIM TO ASSESS ANY OTHER INCOME WHICH D URING THE COURSE OF PROCEEDINGS IS BROUGHT TO HIS NOTICE AS ESCAPED AS SESSMENT. AFTER CONSIDERING THE RIVAL SUBMISSIONS THE OBSERVATIONS OF THEIR LORDSHI P ARE AS UNDER: INTERPRETING THE SECTION AS IT STANDS AND ON THE BASIS OF PRECEDENT ON THE SUBJECT. INTERPRETING THE PROVISION AS IT STANDS AN D WITHOUT ADDING OR DEDUCTING FROM THE WORDS USED BY PARLIAMENT, IT IS CLEAR THAT UPON THE FORMATION OF A REASON TO BELIEVE UNDER SECTION 147 AND FOLLOWING THE ISSUANCE OF A NOTICE UNDER SECTION 148, THE ASSESSING OFFICE R HAS POWER TO ASSESS OR REASSESS THE INCOME WHICH HE HAS REASON TO BELIEVE HAD ESCAPED ASSESSMENT, AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX. THE WO RDS AND ALSO CANNOT BE IGNORED. THE INTERPRETATION WHICH THE COURT PLACES ON THE PROVISION SHOULD NOT RESULT IN DILUTING THE EFFECT OF THESE WORDS OR REN DERING ANY PART OF THE LANGUAGE USED BY PARLIAMENT OTIOSE. PARLIAMENT HAVI NG USED THE WORDS ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT, THE WORDS AND ALSO CANNOT BE READ AS BEING IN THE ALTERNATIVE. ON THE CONTRARY, THE CORR ECT INTERPRETATION WOULD BE TO REGARD THOSE WORDS AS BEING CONJUNCTIVE AND CUMULAT IVE. IT IS OF SOME SIGNIFICANCE THAT PARLIAMENT HAS NOT USED THE WORD OR. THE LEGISLATURE DID NOT REST CONTENT BY MERELY USING THE WORD AND. TH E WORDS AND AS WELL AS ALSO HAVE BEEN USED TOGETHER AND IN CONJUNCTION. ITA NO.5780/MUM/2010(A.Y. 2003-04) 10 THE SHORTER OXFORD DICTIONARY DEFINES THE EXPRESSIO N ALSO TO MEAN 15 FURTHER, IN ADDITION BESIDES, TOO. THE WORD HAS BEE N TREATED AS BEING RELATIVE AND CONJUNCTIVE. EVIDENTLY THEREFORE, WHAT PARLIAME NT INTENDS BY USE OF THE WORDS AND ALSO IS THAT THE ASSESSING OFFICER, UPO N THE FORMATION OF A REASON TO BELIEVE UNDER SECTION 147 AND THE ISSUANCE OF A NOTICE UNDER SECTION 148(2) MUST ASSESS OR REASSESS : (I) SUCH INCOME ; AND ALS O I (II) ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDING S UNDER THE SECTION. THE WORDS SUCH INCOME REFER TO THE INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT, AND IN RESPECT OF WHICH THE ASSESSING O FFICER HAS FORMED A REASON TO BELIEVE THAT IT HAS ESCAPED ASSESSMENT. H ENCE, THE LANGUAGE WHICH HAS BEEN USED BY PARLIAMENT IS INDICATIVE OF THE PO SITION THAT THE ASSESSMENT OR REASSESSMENT MUST BE IN RESPECT OF THE INCOME IN RESPECT OF WHICH HE HAS FORMED A REASON TO BELIEVE THAT IT HAS ESCAPED ASSE SSMENT AND ALSO IN RESPECT OF ANY OTHER INCOME I WHICH COMES TO HIS NOTICE SUB SEQUENTLY DURING THE COURSE OF THE PROCEEDINGS AS HAVING ESCAPED ASSESSMENT T HE INCOME, THE ESCAPEMENT OF WHICH WAS THE BASIS OF THE FORMATION OF THE REASON TO BELIEVE IS NOT ASSESSED OR REASSESSED, IT WOULD NOT BE OPEN TO THE ASSESSING OFFICER TO INDEPENDENTLY ASSESS ONLY THAT INCOME WHICH COMES T O HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THE SECTION AS HAVING ESCAPTED ASSESSMENT. IF UPON THE ISSUANCE OF A NOTICE UNDER SECTION 148(2), THE ASSESSING OFFICER ACCEPTS THE OBJECTIONS OF THE A SSESSEE AND DOES NOT ASSESS OR REASSESS THE INCOME WHICH WAS THE BASIS OF THE N OTICE, IT WOULD NOT BE OPEN TO HIM TO ASSESS INCOME UNDER SOME OTHER ISSUE INDE PENDENTLY. PARLIAMENT WHEN IT ENACTED THE PROVISIONS OF SECTION 147 WITH EFFECT FROM APRIL 1, 1989 CLEARLY STIPULATED THAT THE ASSESSING OFFICER HAS T O ASSESS TO REASSESS THE INCOME WHICH HE HAD REASON TO BELIEVE HAD ESCAPED ASSESSMENT AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH CAME TO HIS NO TICE DURING THE PROCEEDING. IN THE ABSENCE OF THE ASSESSMENT OR REASSESSMENT OF THE FORMER, HE CANNOT INDEPENDENTLY ASSESS THE 1ATTER. 8.5 THEIR LORDSHIP HAVE ALSO REFERRED TO THE DECISI ON OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SUN ENGINEERING PVT. LTD., 1 98 ITR 297(SC) AND HAVE HELD THAT HONBLE SUPREME COURT DEALT WITH THE PROVISION S OF SECTION 147 AS THEY STOOD PRIOR TO AMENDMENT ON 1/4/1989. IT WAS ALSO HELD B Y THE HONBLE SUPREME COURT IN THAT CASE THAT THE EXPRESSION ESCAPED ASSESSMEN T INCLUDE BOTH NON ASSESSMENT AS WELL AS UNDER ASSESSMENT. THE EXP RESSION ASSESS REFERRED TO A SITUATION WHERE THE ASSESSMENT OF THE INCOME FOR A PARTICULAR YEAR IS, FOR THE FIRST TIME MADE BY RESTORING TO THE PROVISIONS OF SECTION 147. THE EXPRESSION REASSESS REFERS TO A SITUATION WHERE, AN ASSESSMENT HAS ALRE ADY BEEN MADE BUT THE AO HAS REASON TO BELIEVE THAT THERE IS AN UNDER ASSESSMENT ON ACCOUNT OF EXISTENCE OF COMMON GROUNDS CONTEMPLATED BY EXPLANATION-1 TO SEC TION 147 OF THE ACT. AFTER ITA NO.5780/MUM/2010(A.Y. 2003-04) 11 CONSIDERING ALL THESE SUBMISSIONS THEIR LORDSHIP HA VE OBSERVED THAT THE EFFECT OF AMENDED PROVISIONS ARE TO BE CONSIDERED IN TWO DIST INCT LINE OF PRECEDENT ON THE SUBJECT. THE FIRST LINE OF AUTHORITY TO WHICH A R EFERENCE HAS ALREADY BEEN MADE WERE THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF VIPIN KHANNA VS. CIT, 255 ITR 220 (P&H) AND THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF TRAVANCORE CEMENT LTD. VS. ACI T, 305 ITR 170, WHEREIN IT WAS HELD THAT ONCE THE AO HAS REASON TO BELIEVE THAT IN COME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND PROCEEDS TO ISSUE A NOTICE U NDER SECTION 148 OF THE ACT, IT IS NOT OPEN TO HIM TO ASSESS OR, AS THE CASE MAY BE , REASSESS INCOME UNDER AN INDEPENDENT OR UNCONNECTED ISSUE, WHICH WAS NOT TH E BASE OF THE NOTICE FOR REOPENING THE ASSESSMENT. THIS LINE OF AUTHORITY W AS OBSERVED TO HAVE CEASED BY VIRTUE OF AMENDMENT WHICH WAS BROUGHT BY THE STATU TE BY INSERTING EXPLANATION 3 TO SECTION 147 BY FINANCE (NO.2) ACT OF 2009. T HE SECOND LINE OF PRECEDENT WAS OBSERVED TO BE LAID DOWN BY THE DECISION OF RAJASTH AN HIGH COURT IN THE CASE OF CIT VS. SHRI RAM SINGH, 306 ITR 343 (RAJ) IN WHICH IT WAS HELD THAT IF IN THE COURSE OF PROCEEDINGS UNDER SECTION 147, THE AO WERE TO CO ME TO THE CONCLUSION, THAT ANY INCOME CHARGEABLE TO TAX, WHICH, ACCORDING TO HIS REASON TO BELIEVE, HAD ESCAPED ASSESSMENT FOR ASSESSMENT YEAR, DID NOT ESC APE ASSESSMENT, THEN, THE MERE FACT THAT THE AO ENTERTAINED A REASON TO BELIE VE, ALBEIT EVEN A GENUINE REASON TO BELIEVE, WOULD NOT CONTINUE TO VEST WITH THE JUR ISDICTION, TO SUBJECT TO TAX, ANY OTHER INCOME, CHARGEABLE TO TAX WHICH THE AO MAY FI ND TO HAVE ESCAPED ASSESSMENT, AND WHICH MAY COME TO HIS NOTICE SUBSEQ UENTLY, IN THE COURSE OF PROCEEDINGS UNDER SECTION 147. 8.6 THEIR LORDSHIP HAVE AGREED WITH THE VIEW TAKEN BY HONBLE RAJASTHAN HIGH COURT AND FINALLY OBSERVED AS UNDER: WE AGREE WITH THE SUBMISSION WHICH HAS BEEN URGED ON BEHALF OF THE ASSESSEE THAT SECTION 147 AS IT STANDS POSTULATES T HAT UPON THE FORMATION OF A REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, THE ASSESSING OFFICER MAY ASSE SS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TA X WHICH COMES TO HIS NOTICE SUBSEQUENTLY DURING THE PROCEEDINGS AS HAVIN G ESCAPED ASSESSMENT. ITA NO.5780/MUM/2010(A.Y. 2003-04) 12 THE WORDS AND ALSO ARE USED IN A CUMULATIVE AND C ONJUNCTIVE SENSE. TO READ THESE WORDS AS BEING IN THE ALTERNATIVE WOULD BE TO REWRITE THE LANGUAGE USED BY PARLIAMENT. OUR VIEW HAS BEEN SUPPORTED BY THE B ACKGROUND WHICH LED TO THE INSERTION TO EXPLANATION 3 TO SECTION 147. PARL IAMENT MUST BE REGARDED AS BEING AWARE OF THE INTERPRETATION THAT WAS PLACED O N THE WORDS AND ALSO BY THE RAJASTHAN HIGH COURT IN SHRI RAM SINGH [2008] 3 06 ITR 343. PARLIAMENT HAS NOT TAKEN AWAY THE BASIS OF THAT DECISION. WHIL E IT IS OPEN TO PARLIAMENT, HAVING REGARD TO THE PLENITUDE OF ITS LEGISLATIVE P OWERS TO DO SO, THE PROVISIONS OF SECTION 147 AS THEY STOOD AFTER THE AMENDMENT OF APRIL 1, 1989, CONTINUE TO HOLD THE FIELD. IN THAT VIEW OF THE MATTER AND FOR THE REASONS THAT WE HAVE INDICATED, WE DO NOT REGARD THE DECISION OF THE TRIBUNAL, IN T HE PRESENT CASE AS BEING IN ERROR. THE QUESTION OF LA SHL1 ACCORD4NGLY STAND AN SWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THE APPEAL I S ACCORDINGLY DISMISSED. THERE SHALL BE NO ORDER AS TO COSTS. 8.7 ACCORDINGLY THE AFOREMENTIONED QUESTION WAS ANS WERED BY THEIR LORDSHIP OF HONBLE JURISDICTIONAL HIGH COURT IN FAVOUR OF ASSE SSEE AGAINST THE REVENUE. 8.8 THE AFOREMENTIONED POSITION OF LAW HAS BEEN REI TERATED BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. IC ICI BANK LTD., 349 ITR 482(BOM). IN THE SAID CASE IT WAS THE SUBMISSION O F THE ASSESSEE THAT IN THE REASSESSMENT ORDER ADDITION WAS MADE ON A COMPLETEL Y NEW GROUND, THEREFORE, REASSESSMENT ORDER IS NOT SUSTAINABLE. NOTING THE SAID FACT THE OBSERVATIONS OF THEIR LORDSHIP ARE AS UNDER:- 16. FURTHER, THE ASSESSING OFFICER WHILE REASSESSI NG THE RESPONDENT BY AN ORDER DATED MARCH 26, 2002, HAS IN FACT TAKEN A GRO UND DIFFERENT FROM THE GROUNDS IN THE REASONS RECORDED FOR REOPENING THE A SSESSMENT UNDER SECTION 148 OF THE SAID ACT. THE REASONS FURNISHED FOR REOP ENING THE ASSESSMENT ALLEGED THAT THE NON-FUND INCOME HAD BEEN SHOWN IN THE FUND BASED INCOME SO AS TO AVAIL OF A HIGHER DEDUCTION. HOWEVER, THE BAS IS OF THE ORDER DATED MARCH 26, 2002, WAS THAT 20.1 PER CENT. OUT OF THE GROSS EXPENSES ATTRIBUTED TO THE NON-FUND INCOME WAS EXCESSIVE AND OUGHT TO BE RESTR ICTED TO ONLY 10 PER CENT. THUS, THE BASIS OF THE ORDER IS COMPLETELY DIFFEREN T FROM THE REASONS RECORDED FOR REOPENING THE ASSESSMENT. THIS IS CLEARLY NOT P ERMISSIBLE AS HELD BY THIS COURT IN CIT V. JET AIRWAYS (I) LTD. [2011] 331 ITR 236 (BORN). THE DIVISION BENCH OF THIS COURT IN JET AIRWAYS HELD AS UNDER (P AGE 247): SECTION 147 HAS THIS EFFECT THAT THE ASSESSING OFF ICER HAS TO ASSESS OR REASSESS THE INCOME (SUCH INCOME) WHICH ESCAPED AS SESSMENT AND ITA NO.5780/MUM/2010(A.Y. 2003-04) 13 WHICH WAS THE BASIS OF THE FORMATION OF BELIEF AND IF HE DOES SO, HE CAN ALSO ASSESS OR REASSESS ANY OTHER INCOME WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE DURING THE COURSE OF THE PROCEEDINGS. HOWEVER, IF AFTER ISSUING A NOTICE UND ER SECTION 148, HE ACCEPTED THE CONTENTION OF THE ASSESSEE AND HOLDS T HAT THE INCOME WHICH HE HAS INITIALLY FORMED A REASON TO BELIEVE H AD ESCAPED ASSESSMENT, HAS AS A MATTER OF FACT NOT ESCAPED ASS ESSMENT, IT IS NOT OPEN TO HIM INDEPENDENTLY TO ASSESS SOME OTHER INCO ME. IF HE INTENDS TO DO SO, A FRESH NOTICE UNDER SECTION 148 WOULD BE NE CESSARY, THE LEGALITY OF WHICH WOULD BE TESTED IN THE EVENT OF A CHALLENG E BY THE ASSESSEE. 17. IN VIEW OF THE ABOVE REASONS, WE ARE OF THE VIE W THAT THE TRIBUNAL WAS CORRECT IN TAKING THE VIEW THAT THE REOPENING OF AS SESSMENT BY NOTICE DATED MARCH 20, 2001, UNDER SECTION 148 OF THE SAID ACT I S NOT SUSTAINABLE IN LAW. WE ANSWER THE QUESTION RAISED FOR OUR CONSIDERATION IN THE AFFIRMATIVE, I.E., IN FAVOUR OF THE RESPONDENT AND AGAINST THE APPELLANT- REVENUE. THE APPEAL IS DISPOSED OF. NO ORDER AS TO COST. 8.9 SO FAR AS IT RELATES TO DECISION RELIED UPON BY THE LD. D.R, WE FOUND THAT THE DECISION IN THE CASE OF MAHARAJ KUMAR KAMAL SINGH VS. CIT(SUPRA) DOES NOT SUPPORT THE CONTENTION OF THE REVENUE AS THE SAID D ECISION IS WITH REGARD TO OLD PROVISIONS I.E. 34(1)(B) AND THE EXPRESSIONS CONSI DERED BY HONBLE SUPREME COURT WERE INFORMATION, ESCAPE AND THE SAID DECISIO N WAS RENDERED IN ENTIRELY DIFFERENT CONTEXT, WHEREAS THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JET AIRWAYS (I) LTD.(SUPRA) IS DIRECTLY ON THE ISSUE AND IN ABSENCE OF CONTRARY DECISION, IT IS BINDING ON THE TRIBUNAL. THE NEXT DECISION RELIED UPON BY LD. D.R IS IN THE CASE OF S.SANKAPPA & OTHERS VS. I TO (SUPRA). THAT DECISION IS ALSO IN THE CONTEXT OF SS.14(2)(A), 16(1)(A), 23(5) , 35(1), 5 OF INCOME TAX ACT, 1922, CORRESPONDING SS. 155, 297(2)(A) OF INCOME TAX ACT, 1961. THEREFORE, THE CONTEXT OF THIS DECISION IS ALSO DIFFERENT. ACCORD ING TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SUN ENGINEERING (SUPRA ) IT IS NEITHER DESIRABLE NOR PERMISSIBLE TO PICK OUT A WORD OR SENTENCE FROM TH E JUDGMENT OF THE HONBLE SUPREME COURT DIVORCED FROM THE CONTEXT OF THE QU ESTION UNDER CONSIDERATION AND TREAT IT TO BE THE COMPLETE LAW DECLARED BY T HE COURT. THE JUDGMENT MUST BE READ AS A WHOLE AND THE OBSERVATIONS FROM THE JUDGM ENT HAVE TO BE CONSIDERED IN THE LIGHT OF QUESTIONS WHICH WERE BEFORE THE COURT . A DECISION OF THE SUPREME COURT TAKES ITS COLOUR FROM THE QUESTION INVOLVED I N THE CASE IN WHICH IT HAS BEEN ITA NO.5780/MUM/2010(A.Y. 2003-04) 14 RENDERED AND, WHILE APPLYING THE DECISION TO A LATE R CASE, COURTS MUST CAREFULLY TRY TO ASCERTAIN THE TRUE PRINCIPLE LAID DOWN BY THE DE CISION. IT HAS ALREADY BEEN MENTIONED THAT BOTH THE DECISIONS RELIED UPON BY LD . D.R ARE RENDERED IN THE DIFFERENT CONTEXT AND THE DECISION RELIED UPON BY L D. AR OF THE JURISDICTIONAL HIGH COURT IS IN THE SAME CONTEXT. THEREFORE, APPLYING THE RATIO OF AFOREMENTIONED TWO DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT TO THE FACTS OF THE PRESENT CASE IT IS CLEAR THAT THE INCOME WHICH WAS MENTIONED TO HAVE ESCAPED ASSESSMENT IN THE REASON TO BELIEVE HAS NOT BEEN ASSESSED BY THE AO I N THE IMPUGNED ASSESSMENT ORDER. IN ABSENCE OF ASSESSMENT THEREOF, THE AO DO ES NOT HAVE AUTHORITY TO ASSESS ANY OTHER INCOME EVEN ON THE EXISTENCE OF A GENUINE REASON TO BELIEVE. THEREFORE, ASSESSMENT OF ANOTHER SUM OF RS.63,89,750/- TO THE RETURNED INCOME OF THE ASSESSEE IS INVALID. 8.10 IN VIEW OF THE ABOVE DISCUSSIONS WE HOLD THAT RESORT TO SECTION 148 IN THE PRESENT CASE IS NOT SUSTAINABLE IN LAW, THEREFORE, THE REASSESSMENT ORDER IS HELD TO BE INVALID. SINCE WE HAVE HELD THAT REASSESSMENT PROCEEDINGS HAVE BEEN WRONGLY CARRIED OUT AND ADDITION OF RS.63,89,750/- COULD NO T BE MADE, WE DO NOT CONSIDER IT NECESSARY TO GO INTO THE MERIT OF THE ADDITION A S THE SAME HAS BECOME INFRUCTUOUS. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON THE 19 TH DAY OF DEC. 2012 SD/- SD/- ( D.KARUNAKARA RAO ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 19 TH DEC. 2012 ITA NO.5780/MUM/2010(A.Y. 2003-04) 15 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.R I BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM.