S.P.TEXTWORLD PRIVATE LIMITED, MUMBAI V. PR.CIT-8, MUMBAI

ITA 608/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6881 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2011-2012
• Appeal Filed On: 01-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Assessee Lawyers: REEPAL TRALSHAWLA
• Keywords: Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 143(3); 148; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI G S PANNU, ACCOUNTANT MEMBER & SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.608/MUM/2018 ASSESSMENT YEAR : 2011-12 S P TEXTWORLD PRIVATE LIMITED, A/3, AIDUN BLDG., 1 ST FLOOR, 1 ST DHOBI TALOA LANE, NEAR METRO CINEMA, OPP KAYANI BAKERY, MARINE LINES, MUMBAI 400 002 PAN AALCS7384K VS. PR CIT-8, AAYAKAR BHAVAN, MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI REEPAL TRALSHAWLA & MAHENDR A SANGHVI, RESPONDENT BY: MS. ARJU GARODIA DATE OF HEARING : 18.06.2018 DATE OF PRONOUNCEMEN T : 20.06.2018 O R D E R PER G S PANNU, ACCOUNTANT MEMBER THIS APPEAL IS DIRECTED AGAINST THE ORDER OF THE P R. CIT-8, MUMBAI, (HEREINAFTER REFERRED TO AS THE COMMISSIONER) DAT ED 09.01.2018, WHEREBY THE RE- ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/ S. 143(3) R.W.S. 147 DATED 30.12.2016 HAS BEEN FOUND TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE U/S. 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) RELATING TO A.Y. 2011-12. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER: ORDER PASSED U/S. 263 IS BAD-IN-LAW & LIABLE TO BE QUASHED 1. THE LD. PR. CIT ERRED IN PASSING REVISION ORDER U/S. 263 OF THE ACT WITHOUT APPRECIATING THAT THE ORDER PASSED BY THE L D. AO WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE RE VENUE AND HENCE, THE ITA NO.608/MUM/2018 S P TEXTWORLD PRIVATE LIMITED 2 ORDER PASSED UNDER SECTION 263 OF THE ACT IS BAD-IN -LAW AND LIABLE TO BE QUASHED. 2. THE LD. PR. CIT FAILED TO APPRECIATE THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT AND THEREAFTER THE ASSESSMENT WAS REOPENED U/S. 148 OF THE ACT AND INFORMATION RECEIV ED REGARDING SHARE CAPITAL SUBSCRIBED AT PREMIUM BY CERTAIN CONCERNS O PERATED BY ONE SHRI SHIRISH C. SHAH AND HE HAS ADMITTED IN HIS SEARCH A CTION THAT HE IS IN BUSINESS OF PROVIDING ACCOMMODATION ENTRIES AND IN LIEU OF THIS, THE AO CALLED FOR VARIOUS DETAILS DURING REASSESSMENT PROC EEDINGS AND AFTER EXAMINING ALL THE DETAILS & EXPLANATIONS FILED IN S UPPORT, THE AO ACCEPTED THE GENUINENESS OF SHARE CAPITAL SUBSCRIBED AND HEN CE, THE ORDER PASSED U/S.263 OF THE ACT DIRECTING THE AO TO MAKE FRESH A SSESSMENT AFTER MAKING APPROPRIATE ENQUIRIES IS WITHOUT ANY JUSTIFI CATION, BAD-IN-LAW AND LIABLE TO BE QUASHED. 3. THE LD. PR. CIT FAILED TO APPRECIATE THAT THE REVISION POWER U/S.263 IS NOT FOR SUBSTITUTING THE VIEW OF PR. CIT IN PLACE OF AO AND THE DISCRETION OF THE AO IN ARRIVING AT CONCLUSION AFTE R VERIFICATION OF FACTS COULD NOT BE TAKEN AWAY BY INVOKING PROVISIONS OF S .263 OF THE ACT AND SINCE THE AO HAD APPLIED HIS MIND ON THE ISSUES, TH E ORDER OF THE AO IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F THE REVENUE AND HENCE, THE ORDER PASSED U/S.263 OF THE ACT IS BAD I N LAW AND LIABLE TO BE QUASHED. 3. BEFORE WE PROCEED TO ADJUDICATE SPECIFIC ISSUES RAISED BY THE APPELLANT, A PERUSAL OF THE ABOVE STATED GROUNDS OF APPEAL, SHOW THAT THE ARGUMENTS OF THE ASSESSEE ARE TWO-FOLD. FIRSTLY, IT IS CONVASSED TH AT THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERESTS OF THE R EVENUE WITHIN THE PROVISIONS OF SECTION 263 OF THE ACT. SECONDLY, IT IS CONVASSED THAT IN THE ORIGINAL ASSESSMENT FINALIZED U/S. 143(3) OF THE ACT DATED 28.03.2014, AS WELL AS IN THE REASSESSMENT FINALIZED U/S. 143(3) R.W.S. 147 OF THE ACT DATED 3 0.12.2016 (SUPRA), THE ASSESSING OFFICER HAD CALLED FOR RELEVANT DETAILS AND ONLY AF TER EXAMINING SUCH DETAILS AND EXPLANATION RELATING TO THE SUBSCRIPTION OF SHARE C APITAL, THE ASSESSMENT WAS FINALIZED WITH NO ADDITION ON THIS COUNT. 4. IN ORDER TO APPRECIATE THE CONTROVERSY THE FOLLO WING DISCUSSION IS RELEVANT. THE APPELLANT BEFORE US IS A COMPANY INCORPORATED U NDER THE COMPANIES ACT 1956, AND FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IT FILED RETURN OF INCOME ON 30.09.2011 DECLARING TOTAL INCOME OF ` 18,84,511/- WHICH WAS SUBJECT TO SCRUTINY ITA NO.608/MUM/2018 S P TEXTWORLD PRIVATE LIMITED 3 ASSESSMENT. IN THE ENSUING ASSESSMENT U/S. 143(3) OF THE ACT, DATED 28.03.2014, THE RETURNED INCOME WAS ACCEPTED. HOWEVER, SUBSEQU ENTLY, THE ASSESSING OFFICER RE-OPENED THE ASSESSMENT BY ISSUANCE OF NOTICE U/S. 148 OF THE ACT, DATED 21.03.2016, ON THE GROUND THAT CERTAIN INCOME CHARG EABLE TO TAX HAD ESCAPED ASSESSMENT. IN ORDER TO APPRECIATE THE REASONS FOR RE-OPENING, OUR ATTENTION WAS INVITED TO PAGE 22 OF THE PAPER-BOOK, WHEREIN IS PL ACED COPY OF THE COMMUNICATION OF ASSESSING OFFICER, DATED 19.05.2016 INTIMATING T O THE ASSESSEE THE REASONS FOR RE-OPENING OF ASSESSMENT. SO FAR IT IS RELEVANT FO R THE PRESENT PURPOSE, THE FOLLOWING PORTION OF THE REASONS RECORDED IS REPROD UCED:- A SEARCH ACTION U/S.132 OF THE INCOME TAX ACT WAS C ONDUCTED BY THE DDIT(INV.), AHMADABAD AT THE RESIDENCE AND OFFICE P REMISES OF SHRI SHIRISH C. SHAH ON 09.04.2013. IT WAS DETECTED THAT SHRI SHIRISH C. SHAH HAS CREATED AN INFRASTRUCTURE OF 212 COMPANIES WHIC H ARE USED FOR LAYERING OF FUNDS AND PURCHASE AND SALE OF SHARES, WHICH ARE MAINLY ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES OF SHARE CAPITAL, SHARE PREMIUM, SHARE APPLICATION MONEY, UN SECURED LOANS, LTCG AND STCG. INFORMATION GATHERED/AVAILABLE IN THIS OFFICE REVEA LED THAT M/S. S.P. TEXTWORLD P. LTD. HAS OBTAINED ACCOMMODATION ENTRIE S FROM SHRI SHIRISH C. SHAH ON ACCOUNT OF SHARE APPLICATION MONEY PERTA INING TO THE A.Y.2011-12. SHRI SHIRISH C. SHAH IN THE CASE OF TH E ASSESSEE HAS ACCEPTED IN HIS STATEMENT RECORDED THAT HE AND HIS COMPANIES ARE PROVIDING ONLY BOGUS ENTRIES FOR THE 'ONE TIME ENTR Y'' TO THE BENEFICIARY COMPANIES. THIS IS EVIDENT FROM THE EXAMINATION AND ANALYSIS OF THE SEIZED AND IMPOUNDED MATERIALS OF SHRI SHIRISH C. S HAH. THESE ENTRIES WERE CONDUCTED THROUGH BROKERS AND INTERMEDIARIES W HO WERE APPROACHED BY THE BENEFICIARIES OR THE CLIENTS TO W HOM THE ACCOMMODATION ENTRIES ARE PROVIDED. THE COMPANIES OF SHRI SHIRISH C. SHAH FROM WHOM THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES ARE AS GIVEN BELOW : - 1. EMPORIS PROJECT LTD. RS.70,00,000/- 2. EMPOWER INDUSTRIES INDIA LTD. RS.45,00,000/- 3. SANGUINE MEDIA LTD. RS.35,00,000/- 4. SECUNDERABAD HEALTHCARE LTD. RS.35,00 .000/- TOTAL RS. 1,85,00,000/- WEBSITE DEVELOPMENT CHARGES RS. 87,000/ - TOTAL RS. 1,85,87,000/- ITA NO.608/MUM/2018 S P TEXTWORLD PRIVATE LIMITED 4 IN VIEW OF THE ABOVE DISCUSSION, SINCE THE ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR IT S ASSESSMENT, I HAVE REASON TO BELIEVE THAT INCOME OF RS.1,85,87,000/- H AS ESCAPED FOR ASSESSMENT FOR A.Y.2011-12 WITHIN THE MEANING OF EX PLANATION 2 CLAUSE (C)(I) TO SECTION 147 OF THE INCOME TAX ACT, 1951.' 5. A PERUSAL OF THE AFORESAID REASONS REVEAL THAT A S PER THE ASSESSING OFFICER, CONSEQUENT TO SEARCH ACTION U/S. 132 OF THE ACT IN THE CASE OF ONE SHRI SHIRISH C SHAH ON 9.04.2013, IT CAME TO LIGHT THAT VARIOUS CO NCERNS CONTROLLED BY HIM WERE INDULGING IN PROVIDING ACCOMMODATION ENTRIES IN THE FORM SHARE CAPITAL, SHARE PREMIUM, SHARE APPLICATION MONEY, UNSECURED LOANS, LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN ETC. THEREAFTER, THE ASSES SING OFFICER HAS SPECIFICALLY RECORDED THAT IN THE CONTEXT OF THE ASSESSEE I.E. M /S. S P TEXTWORLD PRIVATE LIMITED, THE SAID SHRI SHIRISH C SHAH ACCEPTED IN HIS STATEM ENT RECORDED, THAT BOGUS ENTRIES WERE PROVIDED. THE REASONS FURTHER REFERRED TO THE DETAILS OF SUCH AMOUNTS TOTALLING TO ` 1,85,00,000/-. IN THE ENSUING ASSESSMENT FINALIZE D U/S. 143(3) R.W.S. 147 OF THE ACT THE ASSESSING OFFICER CALLED FOR VARIOUS DE TAILS WITH REGARD TO THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE AND EXAM INED THE SAME. THE ASSESSING OFFICER ACCEPTED THE TRANSACTIONS AS RETURNED BY TH E ASSESSEE AND THEREFORE, NO ADDITION ON ACCOUNT OF RECEIPT OF SHARE APPLICATION MONEY WAS MADE. 6. THE AFORESAID ASSESSMENT HAS BEEN FOUND TO BE ER RONEOUS BY THE COMMISSIONER AND THE RELEVANT SHOW CAUSE NOTICE ISS UED BY HIM IN THIS REGARD IS PLACED AT PAGES 39 TO 40 OF THE PAPER-BOOK, WHICH I S DATED 28.08.2017. THE SUM AND SUBSTANCE OF THE CONTENTS OF SHOW CAUSE NOTICE SHOW THAT AS PER THE COMMISSIONER THE RE-ASSESSMENT WAS FINALIZED ON 30. 12.2016 (SUPRA), WITHOUT PROPER ENQUIRY, QUA THE SHARE PREMIUM OF ` 1,40,00,000/- RECEIVED BY THE ASSESSEE FROM BOGUS CONCERNS CONTROLLED BY SHRI SHI RISH C SHAH. THE RECORD ALSO SHOWS THAT THE ACTION OF THE COMMISSIONER WAS SOUGH T TO BE RESISTED BY THE ASSESSEE AND IN THIS CONTEXT THE WRITTEN SUBMISSION S MADE TO THE COMMISSIONER HAVE BEEN REPRODUCED BY HIM IN THE IMPUGNED ORDER. 7. AT THE TIME OF HEARING, THE LEARNED REPRESENTATI VE HAS TAKEN US THROUGH THE WRITTEN SUBMISSIONS, COPIES OF WHICH HAVE BEEN PLAC ED IN THE PAPER-BOOK FILED BEFORE US. AFTER CONSIDERING THE EXPLANATIONS PREF ERRED BY THE ASSESSEE, THE ITA NO.608/MUM/2018 S P TEXTWORLD PRIVATE LIMITED 5 COMMISSIONER WAS SATISFIED THAT IN THE RE-ASSESSMEN T PROCEEDINGS THE ASSESSING OFFICER HAS NOT MADE PROPER ENQUIRIES IN AS MUCH AS THE CONFESSION OF SHRI SHIRISH C SHAH OF HAVING ARRANGED BOOK ENTRIES TO THE ASSESSE E COMPANY HAS NOT BEEN ENQUIRED AND THE CLAIM OF THE ASSESSEE HAS BEEN ACC EPTED AS SUCH. FOR THE SAID REASON HE SET ASIDE THE ASSESSMENT ORDER DATED 30.1 2.2016 (SUPRA), WITH A DIRECTION TO MAKE ASSESSMENT AFRESH AFTER CONSIDERI NG THE FINDING OF THE SEARCH CARRIED OUT U/S. 132(1) OF THE ACT IN THE CASE OF S HRI SHIRISH C SHAH. AGAINST SUCH DECISION OF THE COMMISSIONER, THE ASSESSEE IS IN AP PEAL BEFORE US. 8. BEFORE US, THE LEARNED REPRESENTATIVE FOR THE AS SESSEE REFERRED TO THE QUERIES RAISED BY THE ASSESSING OFFICER DATED 6.12.2016 AS WELL AS 20.12.2016 IN THE COURSE OF RE-ASSESSMENT PROCEEDINGS AND REFERRED TO THE WR ITTEN SUBMISSIONS MADE TO THE ASSESSING OFFICER DATED 9.12.2017, 26.12.2016 & 28. 12.2016, TO POINT OUT THAT THE ENTIRE MATERIAL RELATABLE TO THE SUBSCRIBER COMPANI ES WAS FURNISHED TO THE ASSESSING OFFICER. IT WAS CONTENTED THAT IT WAS NOT A CASE W HERE THE RE-ASSESSMENT ORDER WAS MADE WITHOUT MAKING ANY ENQUIRIES. FURTHERMORE, TH E LEARNED REPRESENTATIVE POINTED OUT THAT THE RE-OPENING OF ASSESSMENT WAS I TSELF MADE ON ACCOUNT OF THE FINDING OF SEARCH IN THE CASE OF SHRI SHIRISH C SHA H AND THEREFORE, ONCE IN THE ENSUING RE-ASSESSMENT PROCEEDINGS, THE REQUISITE DE TAILS HAVE BEEN CALLED FOR AND EXAMINED BY THE ASSESSING OFFICER, IT CANNOT BE SAI D THAT THE ASSESSEE WAS MADE WITHOUT MAKING PROPER ENQUIRIES. IT IS ALSO POINTE D OUT THAT THE COMMISSIONER HAS NOT STATED AS TO WHAT PARTICULAR ENQUIRY WAS NOT MA DE AND, FURTHER, IF AT ALL ANY ENQUIRY WAS LIABLE TO BE MADE, THE COMMISSIONER OUG HT TO HAVE MADE IT HIMSELF BEFORE LABELLING THE ASSESSMENT ORDER, DATED 30.12. 2016 (SUPRA), AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE WITHIN THE MEANING OF SECTION 263 OF THE ACT. 9. ON THE OTHER HAND, THE LEARNED DR APPEARING FOR THE REVENUE HAS CONTENDED THAT THE COMMISSIONER MADE NO MISTAKE IN HOLDING TH E ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE, IN AS MUCH AS THE REASONS FOR RE-OPENING OF ASSESSMENT, VIZ., THE CONFESSION OF SHRI SHIRISH C SHAH WAS NOT ENQUIRED INTO BY THE ASSESSING OFFICER IN THE ENSUI NG PROCEEDINGS. ITA NO.608/MUM/2018 S P TEXTWORLD PRIVATE LIMITED 6 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. SECTION 263 OF THE ACT EMPOWERS THE COMMISSIONER TO CALL FOR AND EXAMINE T HE RECORD OF ANY PROCEEDING UNDER THE ACT AND PASS SUCH ORDER THEREON AS THE CI RCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSES SMENT OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT, IF HE CONSIDERS THAT ANY ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. OF COURSE, THE POWER SO GRANTED TO THE C OMMISSIONER IS CIRCUMSCRIBED BY THE REQUIREMENT OF GIVING ASSESSEE AN OPPORTUNIT Y OF BEING HEARD AND AFTER MAKING OR CAUSING SUCH ENQUIRIES AS HE MAY DEEM NEC ESSARY. THE PHRASEOLOGY OF THE SECTION 263 OF THE ACT ITSELF MAKES IT CLEAR TH AT THE POWER OF THE COMMISSIONER IS BASED ON FULFILMENT OF TWO PRE-REQUISITES NAMELY , (I) THE ORDER OF THE ASSESSING OFFICER BEING ERRONEOUS; AND (II) SUCH ORDER BEING PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IT IS JUDICIALLY WELL-SETTLED THAT BOTH T HE CONDITIONS ARE REQUIRED TO BE CUMULATIVELY SATISFIED BEFORE A VALID JURISDICTION CAN BE ASSUMED BY THE COMMISSIONER U/S. 263 OF THE ACT. AT THIS STAGE, W E MAY REFER TO THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUST RIAL CO. LTD. VS. CIT (243 ITR 83), WHEREIN IT HAS BEEN HELD THAT ORDERS PASSED WI THOUT APPLICATION OF MIND WOULD JUSTIFY RECOURSE TO SECTION 263 OF THE ACT. 11. IF WE COME BACK TO THE FACTS OF THE INSTANT CAS E, IT CLEARLY EMERGES THAT THE ERROR SOUGHT TO BE POINTED OUT BY THE COMMISSIONER IS THAT THE CONFESSION MADE BY SHRI SHIRISH C SHAH, WHICH PROMPTED THE INITIATION OF PROCEEDINGS U/S. 148 OF THE ACT, WAS NOT ENQUIRED INTO BY THE ASSESSING OFFICER IN THE ENSUING RE-ASSESSMENT PROCEEDINGS. THE SAID ERROR BROUGHT OUT BY THE COM MISSIONER, IN OUR VIEW, IS CLEARLY BORNE OUT OF THE RECORD. FOR THIS PURPOSE, WE MAY REFER TO THE EXTRACT OF THE REASONS RECORDED BY THE ASSESSING OFFICER BEFORE IS SUANCE OF NOTICE U/S. 148 OF THE ACT, WHICH WE HAVE REPRODUCED IN THE EARLIER PARA. IN THE SAID EXTRACT, IT IS CLEARLY AVERRED THAT SHRI SHIRISH C SHAH IN THE CASE OF THE ASSESSEE HAS ACCEPTED IN HIS STATEMENT RECORDED THAT HE AND HIS COMPANIES ARE PR OVIDING ONLY BOGUS ENTRIES FOR THE ONE TIME ENTRY TO THE BENEFICIARY COMPANIES. THIS IS EVIDENT FROM THE EXAMINATION AND ANALYSIS OF THE SEIZED AND IMPOUNDE D MATERIALS OF SHRI SHIRISH C SHAH. ITA NO.608/MUM/2018 S P TEXTWORLD PRIVATE LIMITED 7 12. THOUGH THE ASSESSEE HAS TAKEN US COPIOUSLY THRO UGH VARIOUS QUERIES RAISED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROC EEDINGS AND REPLIES OF THE ASSESSEE THEREOF, BUT THERE IS NO MATERIAL TO ESTAB LISH THAT THE CONFESSION OF SHRI SHIRISH C SHAH REFERRED TO IN THE REASONS FOR RE-OP ENING, WAS CONFRONTED OR ENQUIRED INTO BY THE ASSESSING OFFICER IN SUCH RE-ASSESSMENT PROCEEDINGS. PERTINENTLY, WHETHER OR NOT A PARTICULAR ITEM OR ISSUE HAS BEEN MADE A SUBJECT MATTER OF ENQUIRY IN THE ASSESSMENT PROCEEDINGS IS A MATTER OF FACT A ND IT OUGHT TO BE DISCERNIBLE FROM EXAMINATION OF RECORD. IN THE PRESENT CASE, IT CLE ARLY STANDS OUT THAT THE ASSESSING OFFICER DID NOT ENQUIRE INTO THIS ASPECT OF THE MAT TER, WHICH WAS CRUCIAL BECAUSE IT WAS THE FOUNDATION FORMULATED BY HIM AT THE TIME OF RE-OPENING OF ASSESSMENT TO FORM AN OPINION THAT THERE WAS ESCAPEMENT OF INCOME QUA THE SHARE CAPITAL AND PREMIUM RECEIVED FROM FOUR COMPANIES CONTROLLED BY SHRI SHIRISH C SHAH. THUS, NON-ENQUIRY BY HIM ON THE ABOVE LINES DID RENDER TH E SUBSEQUENT ASSESSMENT TO BE ERRONEOUS AS IT CAN BE SAID TO BE MADE WITHOUT APPL ICATION OF MIND WHICH LEAD TO PREJUDICE TO THE INTERESTS OF THE REVENUE, IN AS MU CH AS THE CONFESSION OF SHRI SHIRISH C SHAH WAS NOT CONFRONTED OR ENQUIRED IN TH E REASSESSMENT PROCEEDINGS. THEREFORE, HAVING REGARD TO THE FACTS OF THE CASE, WE UPHOLD THE ACTION OF THE COMMISSIONER IN PRINCIPLE. 13. BEFORE PARTING, WE MAY REFER TO CERTAIN CASE LA WS CITED BY THE LEARNED REPRESENTATIVE IN SUPPORT OF HIS ARGUMENTS. FIRSTL Y, THE LEARNED REPRESENTATIVE RELIED UPON THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN T HE CASE OF CIT VS. NIRAV MODI (390 ITR 292) TO CONTEND THAT WHERE THE ASSESSMENT HAS BEEN MADE AFTER CALLING FOR SUFFICIENT DETAILS AND ENQUIRIES, RECOURSE TO S ECTION 263 OF THE ACT IS NOT JUSTIFIED. WE FIND THAT THE PROPOSITION SET OUT IN THE SAID JU DGMENT IS NOT APPLICABLE IN SO FAR AS THE FACTS OF THE PRESENT CASE ARE CONCERNED. AS WE HAVE NOTED EARLIER, IN THE PRESENT CASE, THERE IS AN APPARENT LACK OF INQUIRY QUA THE VERY REASON FOR WHICH THE RE-OPENING OF ASSESSMENT WAS MADE AND, THEREFORE, I T IS NOT A CASE WHERE IT CAN BE SAID THAT IMPUGNED ASSESSMENT DATED 30.12.2016, WAS MADE AFTER SUFFICIENT ENQUIRY. THEREFORE, THE SAID DECISION DOES NOT H ELP THE CASE OF THE ASSESSEE. 14. THE SECOND DECISION RELIED UPON BY THE LEARNED REPRESENTATIVE IS THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME-TAX VS. JYOTI ITA NO.608/MUM/2018 S P TEXTWORLD PRIVATE LIMITED 8 FOUNDATION (357 ITR 388). THE SAID DECISION HAS BE EN RELIED UPON FOR THE PROPOSITION THAT WHERE THE REVISIONARY AUTHORITY FI NDS LACK OF ENQUIRY BY THE ASSESSING OFFICER, THE ASSESSMENT ORDER CANNOT BE S ET ASIDE ON THAT COUNT BEFORE THE REVISIONARY AUTHORITY HIMSELF MAKES THE RELEVAN T ENQUIRY. IN OUR VIEW, THE FACTUAL SITUATION IN THE INSTANT CASE DOES NOT INVI TE THE PROPOSITION UPHELD BY HONBLE DELHI HIGH COURT IN THE CASE OF JYOTI FOUND ATION (SUPRA). AS WE HAVE NOTED EARLIER, THE FACT SITUATION IN THE PRESENT CASE STA NDS ON A TOTALLY DIFFERENT FOOTING, IN AS MUCH AS THIS IS A CASE WHERE THE ERROR POINTED O UT BY THE COMMISSIONER IS THE NON-ENQUIRY BY THE ASSESSING OFFICER ABOUT THE REAS ON WHICH HAS BEEN FORMULATED BY THE ASSESSING OFFICER HIMSELF TO REOPEN THE ASSE SSMENT. WE FIND THAT IN THE INSTANT CASE IN THE RE-ASSESSMENT PROCEEDINGS THE A SSESSING OFFICER HAS GIVEN A COMPLETE GO-BY TO THE SPECIFIC ASPECT OF CONFESSION BY SHRI SHIRISH C SHAH NOTED IN THE REASONS RECORDED AND, THEREFORE, IT IS CASE WHE RE THE COMMISSIONER HAS MERELY NOTED INACTION OF THE ASSESSING OFFICER IN NOT ENQU IRING ABOUT THE REASONS WHICH HE HAS RECORDED SUO MOTO IN ORDER TO INITIATE RE-ASSES SMENT PROCEEDINGS. THUS, THE FACTS IN THIS CASE STAND ON A DIFFERENT FOOTING THA N THOSE WHICH WERE BEFORE HONBLE DELHI HIGH COURT IN THE CASE OF JYOTI FOUNDATION (S UPRA). 15. THE THIRD DECISION RELIED UPON BY THE LEARNED R EPRESENTATIVE FOR THE ASSESSEE IS THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. KRISHNA CAPBOX (P.) LTD.(372 ITR 310). THE SAID DECISION H AS BEEN RELIED UPON FOR THE PROPOSITION THAT MERELY BECAUSE THE ASSESSING OFFIC ER HAS NOT MADE A DETAILED DISCUSSION IN THE ASSESSMENT ORDER WOULD NOT RENDER THE ASSESSMENT ORDER ERRONEOUS WITHIN THE MEANING OF SECTION 263 OF THE ACT IF OTHERWISE THE ASSESSMENT HAS BEEN COMPLETED AFTER MAKING THE RELEVANT ENQUIR IES. IN OUR VIEW, THE SAID DECISION DOES NOT HELP THE ASSESSEE IN AS MUCH AS I N THE PRESENT CASE THE ERROR SOUGHT TO BE MADE IS LACK OF ENQUIRY AND NOT THE FA CT OF THERE BEING A CRYPTIC DISCUSSION IN THE ASSESSMENT ORDER. THUS, THE SAID DECISION ALSO DOES NOT HELP THE CASE OF THE ASSESSEE. 16. FURTHER, THE LEARNED REPRESENTATIVE RELIED UPON THE DECISION OF THE CO- ORDINATE BENCH, DATED 19.01.2018, IN THE CASE OF M/ S. INDUS BEST HOSPITALITY & REALTORS PVT. LTD. VS. PR. CIT IN ITA NO. 3125/MUM/ 2017 FOR A.Y. 2012-13, AND DREW ITA NO.608/MUM/2018 S P TEXTWORLD PRIVATE LIMITED 9 OUT ATTENTION SPECIFICALLY TO THE DISCUSSION IN PAR A NOS. 16 & 17 THEREOF. THE SAID DECISION HAS BEEN RELIED UPON FOR THE PROPOSITION T HAT IN THE ABSENCE OF ENQUIRY CAUSED BY THE COMMISSIONER HIMSELF TO FIND OUT THE CORRECTNESS OF THE STAND OF THE ASSESSING OFFICER, THE ASSESSMENT ORDER CANNOT BE S AID TO BE ERRONEOUS UNDER THE PROVISIONS OF SECTION 263 OF THE ACT. THE AFORESAI D PROPOSITION RELIED UPON BY OUR CO-ORDINATE BENCH IN THE CASE OF INDUS BEST HOSPITA LITY & REALTORS PVT. LTD.(SUPRA), CANNOT BE DISPUTED AND THERE IS NO QUARREL ON THE S AME. HOWEVER, AS OUR EARLIER DISCUSSION SHOWS, THE ERROR SOUGHT TO BE MADE OUT I N THE INSTANT CASE STANDS ON A COMPLETELY DIFFERENT FOOTING. AT THE COST OF REPET ITION, IT MAY BE NOTED THAT IN THE PRESENT CASE, THE COMMISSIONER HAS DEMONSTRATED LAC K OF ENQUIRY BY THE ASSESSING OFFICER QUA THE VERY REASON ON WHICH THE ASSESSMENT WAS RE-OPENED BY THE ASSESSING OFFICER. THUS, THIS IS A CASE WHERE THE ASSESSMENT ORDER IS PASSED WITHOUT MAKING ENQUIRIES WHICH SHOULD HAVE BEEN MAD E. THE SAID FACT SITUATION IS ON A COMPLETELY DIFFERENT FOOTING THAN THE POSITION BEFORE OUR CO-ORDINATE BENCH IN THE CASE OF M/S. INDUS BEST HOSPITALITY & REALTORS PVT. LTD.(SUPRA), THEREFORE, THE SAID DECISION DOES NOT HELP THE CASE OF THE ASSESSE E. 17. LASTLY, THE LEARNED REPRESENTATIVE HAS ALSO REL IED ON THE DECISION OF CO- ORDINATE BENCH, DATED 17.12.2015, IN THE CASE OF EL DER IT SOLUTIONS PVT. LTD. VS. PR. CIT IN ITA NO.2461/MUM/2015 FOR A.Y. 2010-11. IN T HE SAID DECISION THE ONLY ASPECT WHICH HAS BEEN REFERRED TO IS THE RELIANCE P LACED BY THE BENCH ON THE DECISION OF THE TRIBUNAL IN THE CASE OF ASSESSEE BE FORE THEM FOR EARLIER PERIOD OF A.Y. 2009-10. THEREIN ALSO, THE ISSUE WAS RELATING TO THE ASSESSMENT FINALIZED BY THE ASSESSING OFFICER ACCEPTING AS EXPLAINED THE SH ARE CAPITAL AND PREMIUM THEREOF RECEIVED BY THE ASSESSEE FROM FOUR DIFFERENT CONCER NS. WHEN THE COMMISSIONER INVOKED THE REVISIONARY POWERS U/S. 263 OF THE ACT THE MATTER TRAVELLED TO THE TRIBUNAL. THE TRIBUNAL NOTED THAT THE ASSESSMENT O RDER REVEALED THAT THE ASSESSING OFFICER HAD EXAMINED THE FINANCIAL ACCOUNTS OF ALL THE FOUR CONCERNS FROM WHOM THE SHARE CAPITAL AND SHARE PREMIUM HAS BEEN RECEIVED A ND ALSO EXAMINED THOSE PARTIES. THE TRIBUNAL NOTED THAT WHEN THE ENTIRE R ECORD OF ASSESSMENT INCLUDING THE VERIFICATION EXERCISE CARRIED ON BY THE ASSESSING O FFICER WAS AVAILABLE WITH THE COMMISSIONER, WHICH SHOWED THAT THE REQUISITE ENQUI RIES WERE MADE, INCLUDING ITA NO.608/MUM/2018 S P TEXTWORLD PRIVATE LIMITED 10 EXAMINATION OF THE PARTIES, SECTION 263 OF THE ACT COULD NOT BE JUSTIFIED ON THE GROUND OF NON-MAKING OF ENQUIRIES. 18. WE HAVE CAREFULLY PERUSED THE SAID DECISION AND FIND THAT THE PROPOSITION ARTICULATED BY THE CO-ORDINATE BENCH IN THE CASE OF ELDER IT SOLUTIONS PVT. LTD.(SUPRA), IS NOT ATTRACTED TO THE FACTS OF THE P RESENT CASE. QUITE CLEARLY IN THE CASE OF ELDER IT SOLUTIONS PVT. LTD. (SUPRA), THE A O WAS FOUND TO HAVE NOT ONLY EXAMINED THE RELEVANT FINANCIAL RECORD BUT ALSO EXA MINED THE PARTIES FROM WHOM THE SHARE CAPITAL AND SHARE PREMIUM WAS RECEIVED. NOW THIS FACTUAL SITUATION IS IN CONTRAST TO THE SITUATION BEFORE US WHEREIN IT IS A PPARENT THAT IN THE IMPUGNED RE- ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS N OT CARRIED OUT ANY ENQUIRY QUA THE CONFESSION MADE BY SHRI SHIRISH C SHAH OF HAVIN G GIVEN BOGUS ENTRIES TO THE ASSESSEE QUA THE SHARE CAPITAL AND SHARE PREMIUM IN QUESTION. THEREFORE, THE SAID DECISION DOES NOT HELP THE CASE OF THE ASSESSEE IN THE PRESENT CASE. 19. ON THE OTHER HAND, THE LEARNED DR APPEARING FOR THE REVENUE HAS DRAWN SUPPORT FROM THE DECISION KOLKATA BENCH OF THE TRIB UNAL, DATED 30.07.2017, IN THE CASE OF M/S. SUBHLAKSHMI VANIJYA PVT. LTD. VS. CIT & ORS IN ITA NOS. 1104/KOL/2014 & ORS FOR A.Y. 2009-10. 20. IN VIEW OF OUR AFORESAID DISCUSSION, IN THE FIN AL ANALYSIS, WE UPHOLD THE ACTION OF THE COMMISSIONER IN TREATING THE ASSESSMENT ORDE R DATED 30.12.2016 (SUPRA), AS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE U/S. 263 OF THE ACT, ON THE GROUND THAT THE ASSESSING OFFICER NOT H AVING MADE PROPER ENQUIRIES QUA THE SHARE CAPITAL SUBSCRIBED BY THE FOUR PARTIES OF SHRI SHIRISH C SHAH CONTROLLED GROUP.. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 20 TH JUNE 2018. SD/- SD/- (PAWAN SINGH) (G S PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED : 20 TH JUNE, 2018. SA ITA NO.608/MUM/2018 S P TEXTWORLD PRIVATE LIMITED 11 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T , MUMBAI. 5. THE DR, J BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI