DCIT 7(1)-1, MUMBAI V. GOLDMOHUR DESIGN & APPAREL PARK LTD, MUMBAI

ITA 622/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6916 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 08-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT PATANKARDR
• Keywords: Reopening of assessment; Unexplained cash credit; Depreciation; Share purchase agreement; Source of fund; Question of law; Tangible material; Fair market value; Difference of opinion; Assessment record; Capital receipt; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 14A; 147; 68; 148; 63; 144; 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO.622/MUM/2016 ASSESSMENT YEAR: 2009-10 ACIT, CIRCLE-7(1)-1, ROOM NO.23, GROUND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. M/S GOLDMOHUR DESIGN AND APPAREL PARK LTD. GOLDMOHUR TEXTILE MILL, DADASAHEB PHALKE ROAD, DADAR (E), MUMBAI-400014 ( / REVENUE) ( !' /ASSESSEE) P.A. NO.AADCG1613M / REVENUE BY SHRI ABHIJIT PATANKAR-DR !' / ASSESSEE BY SHRI VIPUL JOSHI # $ % '& / DATE OF HEARING : 23/04/2018 % '& / DATE OF PRONOUNCEMENT 20/06/2018 ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 30/11/2015 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI IN SETTING ASIDE THE REOPENING OF ASSESSMENT HOLDING THAT INFORMATION WAS ALREADY AVAILABLE WITH THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT U /S 143(3) OF THE ACT WITHOUT APPRECIATING THE FACT THA T EXPLANATION-1 TO SECTION 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) THAT THE PRODUCTION OF BOOKS OF ACCOUNTS OR OTHER EVIDENCES IN ITSELF BY THE ASSESS EE WOULD NOT NECESSARILY AMOUNTS TO DISCLOSURE WHERE THE ESCAPEMENT ARISES OUT OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR ASSESSMENT. 2. DURING HEARING, THE LD. CIT-DR, SHRI ABHIJIT PATANKAR, INVITED OUR ATTENTION TO THE PROVISION OF SECTION 147 OF THE ACT, REASONS FOR REOPENING OF ASSESSMENT (PAGE- 52 OF THE PAPER BOOK), PARA 4.3. (PAGE-5 OF THE IMP UGNED ORDER) BY CONTENDING THAT THE REOPENING WAS DONE WI THIN FOUR YEARS BY FOLLOWING THE PROCEDURE PRESCRIBED IN THE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 3 SECTION AND THERE WAS INFORMATION WITH THE ASSESSIN G OFFICER FROM THE ROC THAT THE PREMIUM WAS AT HIGHER VALUE. RELIANCE WAS PLACED UPON THE DECISION FROM H ON'BLE APEX COURT IN THE CASE OF RAJESH JHAVERI (291 ITR 5 00) (SUPREME COURT). IT WAS PLEADED THAT SUFFICIENT AND CORRECTNESS IS NOT REQUIRED AT EARLY STAGES FOR WHI CH RELIANCE WAS PLACED UPON THE DECISION IN RAYMOND WO OLLEN MILLS LTD. VS INCOME-TAX OFFICER AND ORS. 236 ITR 3 4 (SUPREME COURT). IN REPLY, THE LD. COUNSEL FOR THE ASSESSEE, SHRI VIPUL JAIN, DEFENDED THE IMPUGNED ORDER BY CONTENDING THAT IT IS NOT A CASE OF BOGUS SHARES AN D THE ASSESSEE IS A GOVERNMENT OWNED COMPANY AND THE ISSU E PERTAINS TO EXCESS SHARE PREMIUM. IT WAS PLEADED TH AT THE SOURCE IS DOUBTED AND THE PREMIUM IS MENTIONED IN T HE AGREEMENT ITSELF. OUR ATTENTION WAS INVITED TO PAPE R BOOK PAGES 43, 44 AND 47. IN REPLY, THE LD. CIT-DR, CONT ENDED THAT IT IS A CASE OF ABNORMAL SHARE PREMIUM. HE REL IED UPON THE DECISION IN COMMISSIONER OF INCOME-TAX VS PRECISION FINANCE PVT. LTD. 208 ITR 465 (CAL.) AND CIT VS VIR BHAN & SONS 273 ITR 206 (P & H). ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 4 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE AD VERTING FURTHER, IT IS OUR BOUNDED DUTY TO ANALYZE SECTION 147 OF THE ACT ALSO, WHICH IS REPRODUCED HEREUNDER:- '147. INCOME ESCAPING ASSESSMENT.IF THE ASSESSING OFFICER, HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RE-COMPUTE THE LOSS OR THE DEPRECIATION ALLOWANC E OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT Y EAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTION S 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR) : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE R ELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THI S SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REAS ON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETUR N UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB- SE CTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THA T ASSESSMENT YEAR. EXPLANATION 1.PRODUCTION BEFORE THE ASSESSING OFFI CER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY TH E ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE W ITHIN THE MEANING OF THE FORE GOING PROVISO. EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, TH E FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARG EABLE TO TAX HAS ESCAPED ASSESSMENT, NAMELY : (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INC OME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE U NDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUN T WHICH IS NOT CHARGEABLE TO INCOME-TAX ; ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 5 (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED B Y THE ASSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN ; (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSESSE D ; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RAT E ; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCE SSIVE RELIEF UNDER THIS ACT ; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR AN Y OTHER ALLOW ANCE UNDER THIS ACT HAS BEEN COMPUTED. EXPLANATION 3.FOR THE PURPOSE OF ASSESSMENT OR REA SSESSMENT UNDER THIS SECTION, THE ASSESSING OFFICER MAY ASSES S OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAP ED ASSESSMENT, AND SUCH ISSUE COMES TO HIS NOTICE SUBS EQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, N OTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLU DED IN THE REASONS RECORDED UNDER SUB- SECTION (2) OF SECTION 148.' 2.2. IF THE AFORESAID PROVISION OF THE ACT IS ANAL YZED, WE ARE OF THE VIEW THAT FOR REOPENING AN ASSESSMENT MADE UNDER SECTION 143(3) OF THE ACT, THE FOLLOWING COND ITIONS ARE REQUIRES TO BE SATISFIED : (I) THE ASSESSING OFFICER MUST FORM A TENTATIVE OR PRIMA FACIE OPINION ON THE BASIS OF MATERIAL THAT THERE IS UNDERASSESSMENT OR ESCAPEMENT OF INCOME ; (II) HE MUST RECORD THE PRIMA FACIE OPINION INTO WR ITING ; (III) THE OPINION FORMED IS SUBJECTIVE BUT THE REAS ONS RECORDED OR THE INFORMATION AVAILABLE ON RECORD MUS T SHOW THAT THE OPINION IS NOT A MERE SUSPICION. (IV) REASONS RECORDED AND/OR THE DOCUMENTS AVAILAB LE ON RECORD MUST SHOW A NEXUS OR THAT IN FACT THEY ARE G ERMANE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 6 AND RELEVANT TO THE SUBJECTIVE OPINION FORMED BY TH E ASSESSING OFFICER REGARDING ESCAPEMENT OF INCOME. (V) IN CASES WHERE THE FIRST PROVISO APPLIES, THERE IS AN ADDITIONAL REQUIREMENT THAT THERE SHOULD BE FAILURE OR OMISSION ON THE PART OF THE ASSESSEE IN DISCLOSING FULL AND TRUE MATERIAL FACTS. THE EXPLANATION TO THE SECTION STIPULATES THAT MERE PRODUCTION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS FROM WHICH THE ASSESSING OFFICER COULD HA VE, WITH DUE DILIGENCE, INFERRED MATERIAL FACTS, DOES N OT AMOUNT TO 'FULL AND TRUE DISCLOSURE OF MATERIAL FACTS' (TH E PROVISO IS NOT APPLICABLE WHERE REASONS TO BELIEVE FOR ISSUE O F NOTICE ARE RECORDED AND NOTICE IS ISSUED WITHIN FOUR YEARS FROM THE END OF ASSESSMENT YEAR). 2.3. THE TERM AND FACETS OF THE TERM 'CHANGE OF OPINION'. THE EXPRESSION 'CHANGE OF OPINION' POSTUL ATES FORMATION OF OPINION AND THEN A CHANGE THEREOF. IN THE CONTEXT OF SECTION 147 OF THE ACT IT IMPLIES THAT T HE ASSESSING OFFICER SHOULD HAVE FORMED AN OPINION AT THE FIRST INSTANCE, I.E., IN THE PROCEEDINGS UNDER SECTION 14 3(3) AND NOW BY INITIATION OF THE REASSESSMENT PROCEEDING, T HE ASSESSING OFFICER PROPOSES OR WANTS TO TAKE A DIFFE RENT VIEW. 2.4. THE WORD 'OPINION' IS DERIVED FROM THE LATIN WORD 'OPINARI' WHICH MEANS 'TO BELIEVE', 'TO THINK' . THE WORD 'OPINION' AS PER THE BLACK'S LAW DICTIONARY ME ANS A STATEMENT BY A JUDGE OR A COURT OF A DECISION REACH ED BY HIM INCORPORATING CAUSE TRIED OR ARGUED BEFORE THEM , EXPOUNDING THE LAW AS APPLIED TO THE CASE AND, DETA ILING ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 7 THE REASONS UPON WHICH THE JUDGMENT IS BASED. ADVAN CED LAW LEXICON BY P. RAMANATHA AIYAR (THIRD EDITION) E XPLAINS THE TERM 'OPINION' TO MEAN 'SOMETHING MORE THAN MER E RETAINING OF GOSSIP OR HEARSAY ; IT MEANS JUDGMENT OR BELIEF, THAT IS, A BELIEF OR A CONVICTION RESULTING FROM WH AT ONE THINKS ON A PARTICULAR QUESTION . . . AN OPINION IS A CONVICTION BASED ON TESTIMONY . . . THEY ARE AS A R ESULT OF READING, EXPERIENCE AND REFLECTION'. 2.5. IN THE CONTEXT OF ASSESSMENT PROCEEDINGS, IT MEANS FORMATION OF BELIEF BY AN ASSESSING OFFICER R ESULTING FROM WHAT HE THINKS ON A PARTICULAR QUESTION. IT IS A RESULT OF UNDERSTANDING, EXPERIENCE AND REFLECTION TO USE THE WORDS IN LAW LEXICON BY P. RAMANATHA AIYAR. THE QUE STION OF CHANGE OF OPINION ARISE WHEN AN ASSESSING OFFICE R FORMS AN OPINION AND DECIDES NOT TO MAKE AN ADDITION OR H OLDS THAT THE ASSESSEE IS CORRECT AND ACCEPTS HIS POSITI ON OR STAND. IN HARI IRON TRADING CO. V. CIT [2003] 263 I TR 437 (P&H), A DIVISION BENCH OF THE HONBLE PUNJAB AND H ARYANA HIGH COURT OBSERVED THAT AN ASSESSEE HAS NO CONTROL OVER THE WAY AN ASSESSMENT ORDER IS DRAFTED. IT WAS OBSE RVED THAT GENERALLY, THE ISSUES WHICH ARE ACCEPTED BY TH E ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 8 ASSESSING OFFICER DO NOT FIND MENTION IN THE ASSESS MENT ORDER AND ONLY SUCH POINTS ARE TAKEN NOTE OF ON WHI CH THE ASSESSEE'S EXPLANATIONS ARE REJECTED AND ADDITIONS/DISALLOWANCES ARE MADE. APPLYING THE PRI NCIPLES LAID DOWN BY THE FULL BENCH OF THIS COURT AS WELL A S THE OBSERVATIONS OF THE PUNJAB AND HARYANA HIGH COURT, WE FIND THAT IF THE ENTIRE MATERIAL HAD BEEN PLACED BY THE ASSESSED BEFORE THE ASSESSING OFFICER AT THE TIME W HEN THE ORIGINAL ASSESSMENT WAS MADE AND THE ASSESSING OFFI CER, APPLIED HIS MIND TO THAT MATERIAL AND ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE, THEN MERELY BECAUSE HE D ID EXPRESS THIS IN THE ASSESSMENT ORDER, THAT BY ITSEL F WOULD NOT GIVE HIM A GROUND TO CONCLUDE THAT INCOME HAS E SCAPED ASSESSMENT AND, THEREFORE, THE ASSESSMENT NEEDED TO BE REOPENED. ON THE OTHER HAND, IF THE ASSESSING OFFIC ER DID NOT APPLY HIS MIND AND COMMITTED A LAPSE, THERE IS NO REASON WHY THE ASSESSEE SHOULD BE MADE TO SUFFER TH E CONSEQUENCES OF THAT LAPSE. 2.6. THE HONBLE DELHI HIGH COURT IN CONSOLIDATED PHOTO AND FINVEST LTD. [2006] 281 ITR 394 (DELHI) H ELD AS UNDER: ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 9 'IN THE LIGHT OF THE AUTHORITATIVE PRONOUNCEMENTS O F THE SUPREME COURT REFERRED TO ABOVE, WHICH ARE BINDING UPON US AND THE OBSERVATIONS MADE BY THE HIGH COURT OF GUJARAT WITH WHICH WE FIND OURSELVES IN RESPECTFUL AGREEMENT, THE ACTION INITI ATED BY THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT CANN OT BE SAID TO BE EITHER INCOMPETENT OR OTHERWISE IMPROPER TO CALL FOR INTERFERENCE BY A WRIT COURT. THE ASSESSING OFFICER HAS IN THE R EASONED ORDER PASSED BY HIM INDICATED THE BASIS ON WHICH INCOME E XIGIBLE TO TAX HAD IN HIS OPINION ESCAPED ASSESSMENT. THE ARGUMENT THAT THE PROPOSED REOPENING OF ASSESSMENT WAS BASED ONLY UPO N A CHANGE OF OPINION HAS NOT IMPRESSED US. THE ASSESSM ENT ORDER DID NOT ADMITTEDLY ADDRESS ITSELF TO THE QUESTION W HICH THE ASSESSING OFFICER PROPOSES TO EXAMINE IN THE COURSE OF REASSESSMENT PROCEEDINGS. THE SUBMISSION OF MR. VOH RA THAT EVEN WHEN THE ORDER OF ASSESSMENT DID NOT RECORD AN Y EXPLICIT OPINION ON THE ASPECTS NOW SOUGHT TO BE EXAMINED, I T MUST BE PRESUMED THAT THOSE ASPECTS WERE PRESENT TO THE MIN D OF THE ASSESSING OFFICER AND HAD BEEN HELD IN FAVOUR OF TH E ASSESSEE IS TOO FAR-FETCHED A PROPOSITION TO MERIT ACCEPTANCE. THERE MAY INDEED BE A PRESUMPTION THAT THE ASSESSMENT PROCEED INGS HAVE BEEN REGULARLY CONDUCTED, BUT THERE CAN BE NO PRESU MPTION THAT EVEN WHEN THE ORDER OF ASSESSMENT IS SILENT, ALL PO SSIBLE ANGLES AND ASPECTS OF A CONTROVERSY HAD BEEN EXAMINED AND DETERMINED BY THE ASSESSING OFFICER. IT IS TRITE THAT A MATTER IN ISSUE CAN BE VALIDLY DETERMINED ONLY UPON APPLICATION OF MIND BY THE AUTHORITY DETERMINING THE SAME. APPLICATION OF MIND IS, IN TU RN, BEST DEMONSTRATED BY DISCLOSURE OF MIND, WHICH IS BEST D ONE BY GIVING REASONS FOR THE VIEW WHICH THE AUTHORITY IS TAKING. IN CASES WHERE THE ORDER PASSED BY A STATUTORY AUTHORITY IS SILENT AS TO THE REASONS FOR THE CONCLUSION IT HAS DRAWN, IT CAN WELL BE SAI D THAT THE AUTHORITY HAS NOT APPLIED ITS MIND TO THE ISSUE BEF ORE IT NOR FORMED ANY OPINION. THE PRINCIPLE THAT A MERE CHANGE OF OP INION CANNOT BE A BASIS FOR REOPENING COMPLETED ASSESSMENTS WOUL D BE APPLICABLE ONLY TO SITUATIONS WHERE THE ASSESSING O FFICER HAS APPLIED HIS MIND AND TAKEN A CONSCIOUS DECISION ON A PARTICULAR MATTER IN ISSUE. IT WILL HAVE NO APPLICATION WHERE THE ORDER OF ASSESSMENT DOES NOT ADDRESS ITSELF TO THE ASPECT WH ICH IS THE BASIS FOR REOPENING OF THE ASSESSMENT, AS IS THE PO SITION IN THE PRESENT CASE. IT IS IN THAT VIEW INCONSEQUENTIAL WH ETHER OR NOT THE MATERIAL NECESSARY FOR TAKING A DECISION WAS AVAILA BLE TO THE ASSESSING OFFICER EITHER GENERALLY OR IN THE FORM O F A REPLY TO THE QUESTIONNAIRE SERVED UPON THE ASSESSEE. WHAT IS IMP ORTANT IS WHETHER THE ASSESSING OFFICER HAD BASED ON THE MATE RIAL AVAILABLE TO HIM TAKEN A VIEW. IF HE HAD NOT DONE SO, THE PRO POSED REOPENING CANNOT BE ASSAILED ON THE GROUND THAT THE SAME IS BASED ONLY ON A CHANGE OF OPINION.' 2.7. FROM THE FOREGOING DISCUSSION, THE CLEAR POSIT ION EMERGES AS UNDER: ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 10 (1) REASSESSMENT PROCEEDINGS CAN BE VALIDLY INITIAT ED IN CASE RETURN OF INCOME IS PROCESSED UNDER SECTION 143(1) AND NO SCRUTINY ASSESSMENT IS UNDERTAKEN. IN SUCH CASES TH ERE IS NO CHANGE OF OPINION. (2) REASSESSMENT PROCEEDINGS WILL BE INVALID IN CAS E THE ASSESSMENT ORDER ITSELF RECORDS THAT THE ISSUE WAS RAISED AND IS DECIDED IN FAVOUR OF THE ASSESSEE. REASSESSMENT PRO CEEDINGS IN THE SAID CASES WILL BE HIT BY THE PRINCIPLE OF 'CHA NGE OF OPINION'. (3) REASSESSMENT PROCEEDINGS WILL BE INVALID IN CAS E AN ISSUE OR QUERY IS RAISED AND ANSWERED BY THE ASSESSEE IN ORI GINAL ASSESSMENT PROCEEDINGS BUT THEREAFTER THE ASSESSING OFFICER DOES NOT MAKE ANY ADDITION IN THE ASSESSMENT ORDER. IN S UCH SITUATIONS IT SHOULD BE ACCEPTED THAT THE ISSUE WAS EXAMINED B UT THE ASSESSING OFFICER DID NOT FIND ANY GROUND OR REASON TO MAKE ADDITION OR REJECT THE STAND OF THE ASSESSEE. HE FO RMS AN OPINION. THE REASSESSMENT WILL BE INVALID BECAUSE THE ASSESS ING OFFICER HAD FORMED AN OPINION IN THE ORIGINAL ASSESSMENT, T HOUGH HE HAD NOT RECORDED HIS REASONS. 2.8. THUS, WHERE AN ASSESSING OFFICER INCORRECTLY OR ERRONEOUSLY APPLIES LAW OR COMES TO A WRONG CONCLUS ION AND INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT , RESORT TO SECTION 263 OF THE ACT IS AVAILABLE AND S HOULD BE RESORTED TO. BUT INITIATION OF REASSESSMENT PROCEED INGS WILL BE INVALID ON THE GROUND OF CHANGE OF OPINION. HER E A DISTINCTION HAS TO BE DRAWN BETWEEN ERRONEOUS APPLICATION/INTERPRETATION /UNDERSTANDING OF LAW AN D CASES WHERE FRESH OR NEW FACTUAL INFORMATION COMES TO THE KNOWLEDGE OF THE ASSESSING OFFICER SUBSEQUENT TO TH E PASSING OF THE ASSESSMENT ORDER. IF NEW FACTS, MATE RIAL OR INFORMATION COMES TO THE KNOWLEDGE OF THE ASSESSING OFFICER, WHICH WAS NOT ON RECORD AND AVAILABLE AT T HE TIME ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 11 OF THE ASSESSMENT ORDER, THE PRINCIPLE OF 'CHANGE O F OPINION' WILL NOT APPLY. THE REASON IS THAT 'OPINIO N' IS FORMED ON FACTS. 'OPINION' FORMED OR BASED ON WRONG AND INCORRECT FACTS OR WHICH ARE BELIED AND UNTRUE DO N OT GET PROTECTION AND COVER UNDER THE PRINCIPLE OF 'CHANGE OF OPINION'. FACTUAL INFORMATION OR MATERIAL WHICH WAS INCORRECT OR WAS NOT AVAILABLE WITH THE ASSESSING O FFICER AT THE TIME OF ORIGINAL ASSESSMENT WOULD JUSTIFY INITI ATION OF REASSESSMENT PROCEEDINGS. THE REQUIREMENT IN SUCH C ASES IS THAT THE INFORMATION OR MATERIAL AVAILABLE SHOUL D RELATE TO MATERIAL FACTS. THE EXPRESSION 'MATERIAL FACTS' MEA NS THOSE FACTS WHICH IF TAKEN INTO ACCOUNT WOULD HAVE AN ADV ERSE EFFECT ON THE ASSESSEE BY A HIGHER ASSESSMENT OF IN COME THAN THE ONE ACTUALLY MADE. CORRECT MATERIAL FACTS CAN BE ASCERTAINED FROM THE ASSESSMENT RECORDS ALSO AND IT IS NOT NECESSARY THAT THE SAME MAY COME FROM A THIRD PERSO N OR SOURCE, I.E., FROM SOURCE OTHER THAN THE ASSESSMENT RECORDS. HOWEVER, IN SUCH CASES, THE ONUS WILL BE O N THE REVENUE TO SHOW THAT THE ASSESSEE HAD STATED INCORR ECT AND WRONG MATERIAL FACTS RESULTING IN THE ASSESSING OFF ICER PROCEEDING ON THE BASIS OF FACTS, WHICH ARE INCORRE CT AND ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 12 WRONG. THE REASONS RECORDED AND THE DOCUMENTS ON RE CORD ARE OF PARAMOUNT IMPORTANCE AND WILL HAVE TO BE EXA MINED TO DETERMINE WHETHER THE STAND OF THE REVENUE IS CO RRECT. A DECISION OF FROM HONBLE DELHI HIGH COURT DATED SEP TEMBER 26, 2011 IN DALMIA P. LTD. V. CIT [2012] 348 ITR 46 9 (DELHI) AND ANOTHER DECISION FROM HONBLE JURISDICT IONAL HIGH COURT DATED NOVEMBER 8, 2011, IN INDIAN HUME P IPE CO. LTD. V. ASST. CIT [2012] 348 ITR 439 (BOM) ARE TWO SUCH CASES, WHICH THROWS LIGHT ON THE ISSUE. IN THE FIRS T CASE, THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT HAD MA DE ADDITION OF RS. 19,86,551 UNDER SECTION 40(1) ON AC COUNT OF UNCONFIRMED SUNDRY CREDITORS. THE REASSESSMENT PROCEEDINGS WERE INITIATED AFTER NOTICING THAT UNCO NFIRMED SUNDRY CREDITORS, OF WHICH DETAILS, ETC., WERE NOT FURNISHED, WERE TO THE EXTENT OF RS. 52,84,058 AND NOT RS. 19, 86,551. IN INDIAN HUME PIPE CO. LTD. (SUPRA), AFTER VERIFIC ATION THE CLAIM UNDER SECTION 54EC WAS ALLOWED BUT SUBSEQUENT LY ON EXAMINATION IT TRANSPIRED THAT THE SECOND PROPERTY WAS PURCHASED PRIOR TO THE DATE OF SALE. THE AFORESAID DECISIONS/ FACTS CASES MUST BE DISTINGUISHED FROM C ASES WHERE THE MATERIAL FACTS ON RECORD ARE CORRECT BUT THE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 13 ASSESSING OFFICER DID NOT DRAW PROPER LEGAL INFEREN CE OR DID NOT APPRECIATE THE IMPLICATIONS OR DID NOT APPLY TH E CORRECT LAW. THE SECOND CATEGORY WILL BE A CASE OF 'CHANGE OF OPINION' AND CANNOT BE REOPENED FOR THE REASON THAT THE ASSESSEE, AS REQUIRED, HAS PLACED ON RECORD PRIMARY FACTUAL MATERIAL BUT ON THE BASIS OF LEGAL UNDERSTANDING, T HE ASSESSING OFFICER HAS TAKEN A PARTICULAR LEGAL VIEW . HOWEVER, AS STATED ABOVE, AN ERRONEOUS DECISION, WH ICH IS ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE, C AN BE MADE SUBJECT-MATTER OF ADJUDICATION UNDER SECTION 2 63 OF THE ACT. 2.9. A DIVISION BENCH OF HONBLE DELHI HIGH COURT IN NEW LIGHT TRADING CO. V. CIT [2002] 256 ITR 391 (DE LHI), REFERRED TO THE DECISION OF THE HONBLE APEX COURT IN CIT V. P. V. S. BEEDIES P. LTD. [1999] 237 ITR 13 (SC) AND MADE FOLLOWING OBSERVATIONS. (PAGE 392) : 'IN THE CASE OF CIT V. P. V. S. BEEDIES P. LTD. [19 99] 237 ITR 13 (SC), THE APEX COURT HELD THAT THE AUDIT PARTY CAN POINT OUT A FACT, WHICH HAS BEEN OVERLOOKED BY THE INCOME-TAX OFFICER IN THE ASSESSMENT. THOUGH THERE CANNOT BE ANY INTERPRETATI ON OF LAW BY THE AUDIT PARTY, IT IS ENTITLED TO POINT OUT A FACTUAL ERROR OR OMISSION IN THE ASSESSMENT AND REOPENING OF A CASE ON THE BASIS OF FACTUAL ERROR OR OMISSION POINTED OUT BY THE AUDIT PARTY IS PERMISSI BLE UNDER LAW. AS THE TRIBUNAL HAS RIGHTLY NOTICED, THIS WAS NOT A CA SE OF THE ASSESSING OFFICER MERELY ACTING AT THE BEHEST OF THE AUDIT PA RTY OR ON ITS REPORT. IT HAS INDEPENDENTLY EXAMINED THE MATERIALS COLLECT ED BY THE AUDIT ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 14 PARTY IN ITS REPORT AND HAS COME TO AN INDEPENDENT CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME. THE ANSWER TO THE Q UESTION IS, THEREFORE, IN THE AFFIRMATIVE, IN FAVOUR OF THE REV ENUE AND AGAINST THE ASSESSEE.' AS RECORDED ABOVE, THE REASONS RECORDED OR THE DOC UMENTS AVAILABLE MUST SHOW NEXUS THAT IN FACT THEY ARE GER MANE AND RELEVANT TO THE SUBJECTIVE OPINION FORMED BY THE AS SESSING OFFICER REGARDING ESCAPEMENT OF INCOME. AT THE SAME TIME, I T IS NOT THE REQUIREMENT THAT THE ASSESSING OFFICER SHOULD HAVE FINALLY ASCERTAINED ESCAPEMENT OF INCOME BY RECORDING CONCL USIVE FINDINGS. THE FINAL ASCERTAINMENT TAKES PLACE WHEN THE FINAL OR REASSESSMENT ORDER IS PASSED. IT IS ENOUGH IF THE ASSESSING OFFI CER CAN SHOW TENTATIVELY OR PRIMA FACIE ON THE BASIS OF THE REAS ONS RECORDED AND WITH REFERENCE TO THE DOCUMENTS AVAILABLE ON RECORD THAT INCOME HAS ESCAPED ASSESSMENT. THIS TAKES US TO THE OBSERVATIONS OF THE DELHI HIGH COURT IN KELVINATOR OF INDIA LTD. [2002] 256 ITR 1 (DELHI) [FB] WHICH READ AS UNDER (PAGE 18): 'THE BOARD IN EXERCISE OF ITS JURISDICTION UNDER TH E AFOREMENTIONED PROVISIONS HAD ISSUED THE CIRCULAR O N OCTOBER 31, 1989. THE SAID CIRCULAR ADMITTEDLY IS B INDING ON THE REVENUE. THE AUTHORITY, THEREFORE, COULD NOT HA VE TAKEN A VIEW, WHICH WOULD RUN COUNTER TO THE MANDATE OF T HE SAID CIRCULAR. FROM A PERUSAL OF CLAUSE 7.2 OF THE SAID CIRCULAR IT WOULD APPEAR THAT IN NO UNCERTAIN TERMS IT WAS STAT ED AS TO UNDER WHAT CIRCUMSTANCES THE AMENDMENTS HAD BEEN CARRIED OUT, I.E., ONLY WITH A VIEW TO ALLAY THE FE ARS THAT THE OMISSION OF THE EXPRESSION 'REASON TO BELIEVE' FROM SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OF FICER TO REOPEN PAST ASSESSMENT ON MERE CHANGE OF OPINION. I T IS, THEREFORE, EVIDENT THAT EVEN ACCORDING TO THE CBDT A MERE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 15 CHANGE OF OPINION CANNOT FORM THE BASIS FOR REOPENI NG A COMPLETED ASSESSMENT. 2.10. ANOTHER ASPECT OF THE MATTER ALSO CANNOT BE LOST SIGHT OF. A STATUTE CONFERRING AN ARBITRARY POWER M AY BE HELD TO BE ULTRA VIRUS ARTICLE 14 OF THE CONSTITUTI ON OF INDIA. IF TWO INTERPRETATIONS ARE POSSIBLE, THE INTERPRETA TION WHICH UPHOLDS CONSTITUTIONALITY, IT IS TRITE, SHOULD BE F AVOURED. IN THE EVENT IT IS HELD THAT BY REASON OF SECTION 147 IF THE INCOME-TAX OFFICER EXERCISES ITS JURISDICTION FOR I NITIATING A PROCEEDING FOR RE-ASSESSMENT ONLY UPON MERE CHANGE OF OPINION, THE SAME MAY BE HELD TO BE UNCONSTITUTIONA L. I AM, THEREFORE, OF THE OPINION THAT SECTION 147 OF THE A CT DOES NOT POSTULATE CONFERMENT OF POWER UPON THE ASSESSIN G OFFICER TO INITIATE REASSESSMENT PROCEEDING UPON HI S MERE CHANGE OF OPINION. 2.11. THE HONBLE APEX COURT THEREAFTER REFERRED T O THE SUBSEQUENT DECISION IN INDIAN AND EASTERN NEWSPAPER SOCIETY V. CIT [1979] 119 ITR 996 (SC), WHEREIN IT WAS OBSERVED THAT SOME OF THE OBSERVATIONS MADE IN KALY ANJI MAVJI (SUPRA) WERE FAR TOO WIDE AND THE STATUTE DID NOT PERMIT REAPPRAISAL OF MATERIAL CONSIDERED BY THE AS SESSING ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 16 OFFICER DURING THE ORIGINAL ASSESSMENT. THE OBSERVA TIONS IN KALYANJI MAVIJI (SUPRA) THAT REOPENING WOULD COVER A CASE 'WHERE INCOME HAS ESCAPED ASSESSMENT DUE TO THE OVERSIGHT, INADVERTENCE OR MISTAKE' WAS TOO BROADLY EXPRESSED AND DID NOT LAY DOWN THE CORRECT LAW. IT WAS CLARIFIED AND OBSERVED AT PAGE 1004 IN INDIAN AND E ASTERN NEWSPAPER SOCIETY [1979] 119 ITR 996 (SC) AS UNDER : 'NOW, IN THE CASE BEFORE US, THE INCOME-TAX OFFICER HAD, WHEN HE MADE THE ORIGINAL ASSESSMENT, CONSIDERED THE PROVIS IONS OF SECTIONS 9 AND 10. ANY DIFFERENT VIEW TAKEN BY HIM AFTERWARDS ON THE APPLICATION OF THOSE PROVISIONS WOULD AMOUNT TO A CHANGE OF OPINION ON MATERIAL ALREADY CONSIDERED BY HIM. THE REVENUE CONTENDS THAT IT IS OPEN TO HIM TO DO SO, AND ON TH AT BASIS TO REOPEN THE ASSESSMENT UNDER SECTION 147(B). RELIANCE IS PL ACED ON KALYANJI MAVJI AND CO. V. CIT [1976] 102 ITR 287 (S C), WHERE A BENCH OF TWO LEARNED JUDGES OF THIS COURT OBSERVED THAT A CASE WHERE INCOME HAD ESCAPED ASSESSMENT DUE TO THE 'OVE RSIGHT, INADVERTENCE OR MISTAKE' OF THE INCOME-TAX OFFICER MUST FALL WITHIN SECTION 34(1)(B) OF THE INDIAN INCOME-TAX ACT, 1922 . IT APPEARS TO US, WITH RESPECT, THAT THE PROPOSITION IS STATED TO O WIDELY AND TRAVELS FARTHER THAN THE STATUTE WARRANTS IN SO FAR AS IT C AN BE SAID TO LAY DOWN THAT IF, ON REAPPRAISING THE MATERIAL CONSIDER ED BY HIM DURING THE ORIGINAL ASSESSMENT, THE INCOME-TAX OFFICER DIS COVERS THAT HE HAS COMMITTED AN ERROR IN CONSEQUENCE OF WHICH INCO ME HAS ESCAPED ASSESSMENT IT IS OPEN TO HIM TO REOPEN THE ASSESSMENT. IN OUR OPINION, AN ERROR DISCOVERED ON A RECONSIDERATI ON OF THE SAME MATERIAL (AND NO MORE) DOES NOT GIVE HIM THAT POWER . THAT WAS THE VIEW TAKEN BY THIS COURT IN MAHARAJ KUMAR KAMAL SIN GH V. CIT [1959] 35 ITR 1 (SC), CIT V. A. RAMAN AND CO. [1968 ] 67 ITR 11 (SC) AND BANKIPUR CLUB LTD. V. CIT [1971] 82 ITR 83 1 (SC), AND WE DO NOT BELIEVE THAT THE LAW HAS SINCE TAKEN A DIFFE RENT COURSE. ANY OBSERVATIONS IN KALYANJI MAVJI AND CO. V. CIT [1976 ] 102 ITR 287 (SC) SUGGESTING THE CONTRARY DO NOT, WE SAY WITH RE SPECT, LAY DOWN THE CORRECT LAW.' 2.12. IN A. L. A. FIRM (SUPRA), THE HONBLE APEX C OURT EXPLAINED THAT THERE WAS NO DIFFERENCE BETWEEN THE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 17 OBSERVATIONS OF THE SUPREME COURT IN KALYANJI MAVIJ I [1976] 102 ITR 287 (SC) AND INDIAN AND EASTERN NEWSPAPER SOCIETY CASE [1979] 119 ITR 996 (SC), AS FAR AS PRO POSITION (4) IS CONCERNED. IT WAS HELD THAT (PAGE 297 OF 189 ITR) : 'WE HAVE POINTED OUT EARLIER THAT KALYANJI MAVIJI'S CASE [1976] 102 ITR 287 (SC) OUTLINES FOUR SITUATIONS IN WHICH ACTION UNDER SECTION 34(1)(B) CAN BE VALIDLY INITIATED. THE INDI AN EASTERN NEWSPAPER SOCIETY'S CASE [1979] 119 ITR 996 (SC) HA S ONLY INDICATED THAT PROPO SITION (2) OUTLINED IN THIS CA SE AND EXTRACTED EARLIER MAY HAVE BEEN SOMEWHAT WIDELY STA TED ; IT HAS NOT CAST ANY DOUBT ON THE OTHER THREE PROPOSITI ONS SET OUT IN KALYANJI MAVJI'S CASE. THE FACTS OF THE PRESENT CASE SQUARELY FALL WITHIN THE SCOPE OF PROPOSITIONS 2 AND 4 ENUNC IATED IN KALYANJI MAVIJI'S CASE [1976] 102 ITR 287 (SC). PRO POSITION (2) MAY BE BRIEFLY SUMMARIZED AS PERMITTING ACTION EVEN ON A 'MERE CHANGE OF OPINION'. THIS IS WHAT HAS BEEN DOU BTED IN THE INDIAN AND EASTERN NEWSPAPER SOCIETY CASE [1979] 11 9 ITR 996 (SC) AND WE SHALL DISCUSS ITS APPLICATION TO TH IS CASE A LITTLE LATER. BUT, EVEN LEAVING THIS OUT OF CONSIDERATION, THERE CAN BE NO DOUBT THAT THE PRESENT CASE IS SQUARELY COVERED BY PROPOSITION (4) SET OUT IN KALYANJI MAVIJI'S CASE [ 1976] 102 ITR 287 (SC). THIS PROPOSITION CLEARLY ENVISAGES A FORM ATION OF OPINION BY THE INCOME-TAX OFFICER ON THE BASIS OF M ATERIAL ALREADY ON RECORD PROVIDED THE FORMATION OF SUCH OP INION IS CONSEQUENT ON 'INFORMATION' IN THE SHAPE OF SOME LI GHT THROWN ON ASPECTS OF FACTS OR LAW WHICH THE INCOME-TAX OFF ICER HAD NOT EARLIER BEEN CONSCIOUS OF. TO GIVE A COUPLE OF ILLU STRATIONS ; SUPPOSE AN INCOME-TAX OFFICER, IN THE ORIGINAL ASSE SSMENT, WHICH IS A VOLUMINOUS ONE INVOLVING SEVERAL CONTENT IONS, ACCEPTS A PLEA OF THE ASSESSEE IN REGARD TO ONE OF THE ITEMS THAT THE PROFITS REALISED ON THE SALE OF A HOUSE IS A CAPITAL REALISATION NOT CHARGEABLE TO TAX. SUBSEQUENTLY, HE FINDS, IN THE FOREST OF PAPERS FILED IN CONNECTION WITH THE ASSES SMENT, SEVERAL INSTANCES OF EARLIER SALES OF HOUSE PROPERT Y BY THE ASSESSEE. THAT WOULD BE A CASE WHERE THE INCOME-TAX OFFICER DERIVES INFORMATION FROM THE RECORD ON AN INVESTIGA TION OR ENQUIRY INTO FACTS NOT ORIGINALLY UNDERTAKEN. AGAIN , SUPPOSE THE INCOME-TAX OFFICER ACCEPTS THE PLEA OF AN ASSESSEE THAT A PARTICULAR RECEIPT IS NOT INCOME LIABLE TO TAX. BUT , ON FURTHER RESEARCH INTO LAW HE FINDS THAT THERE WAS A DIRECT DECISION HOLDING THAT CATEGORY OF RECEIPT TO BE AN INCOME RE CEIPT. HE WOULD BE ENTITLED TO REOPEN THE ASSESSMENT UNDER SE CTION 147(B) BY VIRTUE OF PROPOSITION (4) OF KALYANJI MAV JI. THE FACT THAT THE DETAILS OF SALES OF HOUSE PROPERTIES WERE ALREADY IN THE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 18 FILE OR THAT THE DECISION SUBSEQUENTLY COME ACROSS BY HIM WAS ALREADY THERE WOULD NOT AFFECT THE POSITION BECAUSE THE INFORMATION THAT SUCH FACTS OR DECISION EXISTED COM ES TO HIM ONLY MUCH LATER. WHAT THEN, IS THE DIFFERENCE BETWEEN THE SITUATIONS ENVISAGED IN PROPOSITIONS (2) AND (4) OF KALYANJI MAVIJI'S CA SE [1976] 102 ITR 287 (SC). THE DIFFERENCE, IF ONE KEEPS IN MIND THE TREND OF THE JUDICIAL DECISIONS, IS THIS. PROPOSITION (4) RE FERS TO A CASE WHERE THE INCOME- TAX OFFICER INITIATES REASSESSMEN T PROCEEDINGS IN THE LIGHT OF 'INFORMATION' OBTAINED BY HIM BY AN INVESTIGATION INTO MATERIAL ALREADY ON RECORD OR BY RESEARCH INTO THE LAW APPLICABLE THERETO WHICH HAS BROUGHT OUT AN ANGLE OR ASPECT THAT HAD BEEN MISSED EARLIER, FOR E.G., AS I N THE TWO MADRAS DECISIONS REFERRED TO EARLIER. PROPOSITION ( 2) NO DOUBT COVERS THIS SITUATION ALSO BUT IT IS SO WIDELY EXPR ESSED AS TO INCLUDE ALSO CASES IN WHICH THE INCOME-TAX OFFICER, HAVING CONSIDERED ALL THE FACTS AND LAW, ARRIVES AT A PART ICULAR CONCLUSION, BUT REINITIATES PROCEEDINGS BECAUSE, ON A REAPPRAISAL OF THE SAME MATERIAL WHICH HAD BEEN CON SIDERED EARLIER AND IN THE LIGHT OF THE SAME LEGAL ASPECTS TO WHICH HIS ATTENTION HAD BEEN DRAWN EARLIER, HE COMES TO A CON CLUSION THAT AN ITEM OF INCOME WHICH HE HAD EARLIER CONSCIO USLY LEFT OUT FROM THE EARLIER ASSESSMENT SHOULD HAVE BEEN BROUGH T TO TAX. IN OTHER WORDS, AS POINTED OUT IN INDIAN AND EASTER N NEWSPAPER SOCIETY'S CASE [1979] 119 ITR 996 (SC), I T ALSO ROPES IN CASES OF A 'BARE OR MERE CHANGE OF OPINION ' WHERE THE INCOME-TAX OFFICER (VERY OFTEN A SUCCESSOR OFFICER) ATTEMPTS TO REOPEN THE ASSESSMENT BECAUSE THE OPINION FORMED EA RLIER BY HIMSELF (OR, MORE OFTEN, BY A PREDECESSOR INCOME- T AX OFFICER) WAS, IN HIS OPINION, INCORRECT. JUDICIAL DECISIONS HAD CONSISTENTLY HELD THAT THIS COULD NOT BE DONE AND T HE INDIAN AND EASTERN NEWSPAPER SOCIETY'S CASE [1979] 119 ITR 996 (SC) HAS WARNED THAT THIS LINE OF CASES CANNOT BE TAKEN TO HAVE BEEN OVERRULED BY KALYANJI MAVJI [1976] 102 ITR 287 (SC). THE SECOND PARAGRAPH FROM THE JUDGMENT IN THE INDIAN AN D EASTERN NEWSPAPER SOCIETY'S CASE [1979] 119 ITR 996 (SC) EA RLIER EXTRACTED HAS ALSO REFERENCE ONLY TO THIS SITUATION AND INSISTS UPON THE NECESSITY OF SOME INFORMATION WHICH MAKE T HE INCOME-TAX OFFICER REALISE THAT HE HAS COMMITTED AN ERROR IN THE EARLIER ASSESSMENT. THIS PARAGRAPH DOES NOT IN ANY WAY AFFECT THE PRINCIPLE ENUMERATED IN THE TWO MADRAS CASES CI TED WITH APPROVAL IN ANANDJI HARIDAS 21 STC 326. EVEN MAKING ALLOWANCES FOR THIS LIMITATION PLACED ON THE OBSERV ATIONS IN KALYANJI MAVJI, THE POSITION AS SUMMARISED BY THE H IGH COURT IN THE FOLLOWING WORDS REPRESENTS, IN OUR VIEW, THE CO RRECT POSITION IN LAW (AT PAGE 629 OF 102 ITR) : THE RESULT OF THESE DECISIONS IS THAT THE STATUTE D OES NOT REQUIRE THAT THE INFORMATION MUST BE EXTRANEOUS TO THE RECORD. IT ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 19 IS ENOUGH IF THE MATERIAL, ON THE BASIS OF WHICH TH E REASSESSMENT PROCEEDINGS ARE SOUGHT TO BE INITIATED , CAME TO THE NOTICE OF THE INCOME-TAX OFFICER SUBSEQUENT TO THE ORIGINAL ASSESSMENT. IF THE INCOME-TAX OFFICER HAD CONSIDERE D AND FORMED AN OPINION ON THE SAID MATERIAL IN THE ORIGI NAL ASSESSMENT ITSELF, THEN HE WOULD BE POWERLESS TO ST ART THE PROCEEDINGS FOR THE REASSESSMENT. WHERE, HOWEVER, T HE INCOME-TAX OFFICER HAD NOT CONSIDERED THE MATERIAL AND SUBSEQUENTLY CAME BY THE MATERIAL FROM THE RECORD I TSELF, THEN SUCH A CASE WOULD FALL WITHIN THE SCOPE OF SECTION 147(B) OF THE ACT'.' (EMPHASIS SUPPLIED) THE AFORESAID OBSERVATIONS ARE A COMPLETE ANSWER TO THE ISSUE THAT IF A PARTICULAR SUBJECT-MATTER, ITEM , DEDUCTION OR CLAIM IS NOT EXAMINED BY THE ASSESSING OFFICER, IT WILL NEVERTHELESS BE A CASE OF CHANGE OF OPINION AND THE REASSESSMENT PROCEEDINGS WILL BE BARRED. 2.13. SO FAR AS, THE RELIANCE BY THE LD. CIT-DR UP ON THE DECISIONS FROM HON'BLE CALCUTTA HIGH COURT/PUNJ AB & HARYANA HIGH COURT ((SUPRA)) IS CONCERNED, THOSE CA SES ARE BASED UPON THE FACTS CONTAINED THEREIN. THE HON'BLE APEX COURT IN CIT VS FORAMER FRANCE, VIDE ORDER DATED 16/01/2003, WHERE, THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE THE MATERIAL FACTS, IT WAS HEL D THAT THE NOTICE ISSUED BEYOND PRESCRIBED PERIOD CANNOT BE SU STAINED MERELY ON THE BASIS OF CHANGE OF OPINION. EVEN OTHE RWISE, WHEN TWO VIEWS ARE POSSIBLE, THE VIEW, WHICH FAVOUR S THE ASSESSEE HAS TO BE PREFERRED. ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 20 2.14. WE ARE CONSCIOUS OF THE FACT THAT THE AFORE SAID OBSERVATIONS HAVE BEEN MADE IN THE CONTEXT OF SECTI ON 147(B) WITH REFERENCE TO THE TERM 'INFORMATION' AND CONCEPTUALLY THERE IS DIFFERENCE IN SCOPE AND AMBIT OF REOPENING PROVISIONS INCORPORATED WITH EFFECT FROM APRIL 1, 1989. HOWEVER, IT WAS OBSERVED BY THE HONBLE APEX COURT IN KELVINATOR OF INDIA LTD. [2010] 320 ITR 561 (SC) THAT THE AMENDED PROVISIONS ARE WIDER. WHAT IS IMPORTANT AND RELEVANT IS THAT THE PRINCIPLE OF 'CHANGE OF OPINIO N' WAS EQUALLY APPLICABLE UNDER THE UN-AMENDED PROVISIONS. THE SUPREME COURT WAS, THEREFORE, CONSCIOUS OF THE SAID PRINCIPLE, WHEN THE OBSERVATIONS MENTIONED ABOVE IN A. L. A. FIRM [1991] 189 ITR 285 WERE MADE. 2.15. UNDER THE NEW PROVISIONS OF SECTION 147, AN ASSESSMENT CAN BE REOPENED IF THE ASSESSING OFFICER HAS 'REASON TO BELIEVE' THAT INCOME CHARGEABLE TO TAX H AS ESCAPED ASSESSMENT; BUT IF HE WANTS TO DO SO AFTER A PERIOD OF FOUR YEARS OR MERELY ON THE CHANGE OF OPINION, H E CAN DO SO ONLY IF THE ASSESSEE HAS FALLEN SHORT OF HIS DUT Y TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT. THE ACT PLACES A GENERAL DUTY ON EVERY ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 21 ASSESSEE TO FURNISH FULL AND TRUE PARTICULARS ALONG WITH THE RETURN OF INCOME OR IN THE COURSE OF THE ASSESSMENT PROCEEDINGS SO THAT THE ASSESSING OFFICER IS ENABLE D TO COMPUTE THE CORRECT AMOUNT OF INCOME ON WHICH THE ASSESSEE SHALL PAY TAX. THE POSITION HAS BEEN FURTH ER CLARIFIED BY THE PROVISO ITSELF IN A CASE WHERE ASS ESSMENT UNDER SUB-SECTION (3) OF SECTION 144 OF THE ACT OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT Y EAR, NO ACTION SHALL BE TAKEN AFTER THE EXPIRY OF FOUR YEAR S FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INC OME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH Y EAR BY THE REASON OF FAILURE ON THE PART OF THE ASSESSEE T O MAKE A RETURN U/S 139 OR IN RESPONSE TO A NOTICE ISSUED UN DER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT FOR THAT ASSESSMENT YEAR. IT IS ALSO NOT ED THAT THE SCOPE OF NEWLY SUBSTITUTED (W.E.F. 01/04/1989) SECTION 147 HAS BEEN ELABORATED IN DEPARTMENT CIRCULAR NUMB ER 549 DATED 31 ST OCTOBER, 1989, MEANING THEREBY, ON OR AFTER 01/04/1989, INITIATION OF REASSESSMENT PROCEEDINGS HAS TO BE GOVERNED BY THE PROVISIONS OF SECTION 147 TO 151 AS ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 22 SUBSTITUTED (AMENDED) W.E.F. 01/04/1989. STILL, PO WER U/S 147 OF THE ACT, THOUGH VERY WIDE BUT NO PLENARY. WE ARE AWARE THAT HONBLE GUJARAT HIGH COURT IN PRAFUL CHU NILAL PATEL: VASANT CHUNILAL PATEL VS ACIT (1999) 236 ITR 82, 840 (GUJ.) EVEN WENT TO THE EXTENT THAT ACTION UNDE R MAIN SECTION 147 IS POSSIBLE IN SPITE OF COMPLETE DISCLO SURE OF MATERIAL FACTS. THE PRIMARY CONDITION OF REASONABLE BELIEF HAVING NEXUS WITH THE MATERIAL ON RECORD IS STILL O PERATIVE. HOWEVER, WE ARE OF THE VIEW, THAT MERE FRESH APPLIC ATION OF MIND TO THE SAME SET OF FACTS OR MERE CHANGE OF OPI NION DOES NOT CONFER JURISDICTION TO THE ASSESSING OFFIC ER EVEN UNDER THE POST 1989 SECTION 147 OF THE ACT. OUR VI EW FINDS SUPPORT FROM THE DECISION FROM HONBLE HIGH COURTS IN FOLLOWING CASES:- I. JINDAL PHOTO FILMS LTD. VS DCIT (1998) 234 ITR 170 (DEL.), II. GARDEN SILK MILLS PVT. LTD. VS DCIT (1999) 151 CTR (GUJ.) 533, III. GOVIND CHHAPABHAI PATEL VS DCIT 240 ITR 628, 630 (GUJ.), ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 23 IV. FORAMER VS CIT (2001) 247 ITR 436 (ALL.), AFFIRMED IN CIT VS FORAMER FINANCE (2003) 264 ITR 566, 567 (SC), V. IPICA LABORATORIES VS DCIT (2001) 251 ITR 416 (BOM.), VI. RITU INVESTMENT PVT. LTD.(2012) 345 ITR 214 (DEL.), VII. KETAN B. MEHTA VS ACIT (2012) 346 ITR 254 (GUJ.), VIII. MS. PRAVEEN P. BHARUCHA VS DCIT (2012) 348 ITR 325 (BOM.), IX. CIT VS USHA INTERNATIONAL LTD. 348 ITR 485 (DEL.), X. AGRICULTURAL PRODUCE MARKET COMMITTEE VS ITO (2013) 355 ITR 348 (GUJ.), XI. B.B.C. WORLD NEWS LTD. VS ASST. DIT (2014) 362 ITR 577 (DEL.). XII. IDENTICAL RATIO WAS LAID DOWN IN CIT VS MALAYALA MANORMA COMPANY LTD. (2002) 253 ITR 378 (KER.) WE THINK THIS THREAD RUNS THROUGH THE VARIOUS PROVISIONS OF THE ACT. BUT EXPLANATION 1 TO THE SEC TION CONFINES THE DUTY TO THE DISCLOSURE OF ALL PRIMARY AND MATERIAL FACTS NECESSARY FOR THE ASSESSMENT, FULLY AND TRULY. AS TO WHAT ARE MATERIAL OR PRIMARY FACTS WOULD DEPE ND UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE AND N O UNIVERSAL FORMULA CAN BE ADOPTED. THE LEGAL OR FACT UAL ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 24 INFERENCES FROM THOSE PRIMARY OR MATERIAL FACTS ARE FOR THE ASSESSING OFFICER TO DRAW IN ORDER TO COMPLETE THE ASSESSMENT AND IT IS NOT FOR THE ASSESSEE TO ADVISE HIM, FOR OBVIOUS REASONS. THE EXPLANATION, HOWEVER, CAUTIONS THE ASSESSEE THAT HE CANNOT REMAIN SMUG WITH THE BELIEF THAT SINCE HE HAS PRODUCED THE BOOKS OF ACCOUNT BEFORE T HE ASSESSING OFFICER FROM WHICH MATERIAL OR EVIDENCE C OULD HAVE BEEN WITH DUE DILIGENCE GATHERED BY HIM, HE HA S DISCHARGED HIS DUTY. IT IS FOR HIM TO POINT OUT THE RELEVANT ENTRIES WHICH ARE MATERIAL, WITHOUT LEAVING THAT EX ERCISE TO THE ASSESSING OFFICER. THE CAVEAT, HOWEVER, IS THAT SUCH PRODUCTION OF BOOKS OF ACCOUNT MAY, IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES, AMOUNT TO FULL AND TRUE DISCLOSU RE ; THIS IS CLEAR FROM THE USE OF THE EXPRESSION 'NOT N ECESSARILY' IN THE EXPLANATION. THUS, THE QUESTION OF FULL AND TRUE DISCLOSURE OF PRIMARY OR MATERIAL FACTS IS A PURE Q UESTION OF FACT, TO BE DETERMINED ON THE FACTS AND CIRCUMSTANC ES OF EACH CASE. NO GENERAL PRINCIPLE CAN BE LAID DOWN. IT WAS OBSERVED BY THE HONBLE APEX COURT, IN VARIOUS CASE S THAT THERE SHOULD BE SOME 'TANGIBLE MATERIAL' COMING INT O THE POSSESSION OF THE ASSESSING OFFICER IN SUCH CASES T O ENABLE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 25 HIM TO RESORT TO SECTION 147 OF THE ACT. DESPITE BE ING A CASE OF FULL AND TRUE DISCLOSURE, TANGIBLE MATERIAL COMI NG TO THE POSSESSION OF THE ASSESSING OFFICER AFTER HE MADE T HE ORIGINAL ASSESSMENT UNDER SECTION 143(3), WOULD INF LUENCE THE OPINION, FORMED OR PRESUMED TO HAVE BEEN FORMED EARLIER, BY THE ASSESSING AUTHORITY; HE CAN WITH JU STIFICATION CHANGE IT, BUT THAT WOULD NOT BE A CASE OF A 'MERE CHANGE OF OPINION' UNGUIDED BY NEW FACTS OR CHANGE IN THE LEG AL POSITION. IT WILL BE A CASE OF THE ASSESSING AUTHOR ITY HAVING 'REASON TO BELIEVE', NOTWITHSTANDING THAT FULL AND TRUE PARTICULARS WERE FURNISHED BY THE ASSESSEE WHICH WE RE EXAMINED, OR PRESUMED TO BE EXAMINED, BY HIM. THER E WAS A DIVERGENCE OF OPINION AMONGST VARIOUS HIGH COURTS AS TO WHAT CONSTITUTE INFORMATION FOR THE PURPOSES OF S ECTION 34(1)(B) OF THE 1922 ACT (WHICH CORRESPONDS TO SECT ION 147(B) OF THE 1961 ACT) THE HONBLE APEX COURT IN C WT VS IMPERIAL TOBACCO COMPANY LTD. (1966) 61 ITR 461 HAS NOTED SUCH DIVERGENCE OF OPINION ON THE POINT. HON BLE JURISDICTIONAL HIGH COURT IN CIT VS SIR MOHAMMAD YU SUF ISMAIL (1944) 12 ITR 8 (BOM.) HELD THAT MERE CHANGE OF OPINION ON THE SAME FACTS ARE ON QUESTION OF LAW OR MERE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 26 DISCOVERY OF MISTAKE OF LAW IS NOT SUFFICIENT INFOR MATION AND THAT IN ORDER TO SUSTAINED ACTION U/S 34 BY FURTHER HOLDING THAT REASSESSMENT IS NOT PERMISSIBLE. THE HONBLE A PEX COURT IN SIMON CARVES LTD. (1976) 105 ITR 212 HELD THAT ERRORLESS LEGALLY CORRECT ORDER CANNOT BE REOPENED, THEREFORE, IT IS SETTLED LAW THAT WITHOUT ANY NEW I NFORMATION AND ON THE BASIS OF MERE CHANGE OF OPINION, REOPENI NG OF ASSESSMENT IS NOT PERMISSIBLE. AS WAS HELD IN CIT V S TTK PRESTIGE LTD. (2010) 322 ITR 390 (KARN.) SLP DISMIS SED IN (2010) 322 ITR (ST.) 14 (SC). REFERENCE ALSO MADE T O ASIAN PAINTS LTD. VS DCIT (2009) 308 ITR 195 (BOM.), ANDH RA BANK LTD. VS CIT (1997) 225 ITR 447 (SC). THE OBSER VATIONS OF THE SUPREME COURT ARE A PROTECTION AGAINST THE A BUSE OF POWER; THEY ALSO PROTECT THE REVENUE WHICH CAN, IN THE LIGHT OF SUBSEQUENT COMING INTO LIGHT OF FACTS OR LAW, RE OPEN THE ASSESSMENT. IN THE LIGHT OF THE AFORESAID DISCUSSIO N, NOW, WE SHALL EXAMINE THE FACTS OF THE PRESENT APPEAL. T HE ASSESSEE IS A PURPOSE VEHICLE, FORMED BY GOVT. OF I NDIA (THROUGH NATIONAL TEXTILE CORPORATION) AS A PART OF TEXTILE MILLS IN MUMBAI. IT IS FORMED IN PURSUANCE OF SCHEM E FOR REVIVAL AND REHABILITATION OF SICK TEXTILE COMPANIE S, AS ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 27 FRAMED AND APPROVED BY BOARD FOR INDUSTRIAL AND FIN ANCIAL RECONSTRUCTION. THE ASSESSEE WAS FORMED AS A JOINT VENTURE VEHICLE (JVV) BETWEEN NATIONAL TEXTILE CORPORATION LTD.(NTC), A GOVT. OF INDIA UNDERTAKING AND PANTALO ON RETAIL INDIA LTD. (PRIL), NOW FUTURE RETAILS LTD, P URSUANT TO MOU SIGNED BY NTC AND PRIL ON 06/11/2007, WHICH ENVISAGED NTC HOLDING 51% SHARE AND PRIL (ALONG WIT H GROUP COMPANIES) HOLDING REMAINING 49% OF THE TOTAL SHARE CAPITAL OF THE ASSESSEE. THE PURPOSE WAS TO RUN AND OPERATE THE TEXTILE MILL A COMMERCIALLY VIABLE UNIT. PRIL W AS TO INFUSE FRESH CAPITAL IN THE ASSESSEE IN TERMS OF MI NIMUM INVESTMENT PLAN FOR MODERNIZATION, BY ACQUIRING SHA RE CAPITAL OF THE ASSESSEE AT A PREMIUM. IN PURSUANT T O THIS BASE AGREEMENT, THREE AGREEMENTS WERE ENTERED INTO. IN FACT, THE MOU ITSELF CONTAINED DRAFT OF THESE THREE AGREEMENTS TO BE ENTERED INTO SUBSEQUENTLY. THE FIR ST UNDERTAKING TRANSFER AGREEMENT WAS EXECUTED BETWEEN NTC AND THE ASSESSEE ON 15/11/2007, IN PURSUANCE OF WHI CH, THE ENTIRE UNDERTAKING IN THE FORM OF TEXTILE MILL, WHICH INCLUDED THE ASSETS & LIABILITIES AS STATED IN THAT AGREEMENT, WERE TRANSFERRED AS GOING CONCERN AND ON AS IS ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 28 WHERE IS BASIS TO THE ASSESSEE. THIS INCLUDED AMON G OTHERS, ALL LICENSES PERMITS, CONTRACTS, OTHER RIGH TS AND PRIVILEGES ETC OF THE EXISTING RUNNING TEXTILE BUSI NESS. WE HAVE PERUSED THIS AGREEMENT AND NOTICE ISSUED U/S 1 43(2) R.W.S 129 OF THE ACT (PAGE-42 OF THE PAPER BOOK) AN D AS PER LETTER DATED 24/11/2011 (PAGE-43 OF THE PAPER BOOK) , THE ASSESSEE DULY FURNISHED THE DETAILS OF SHARE HOLDIN G BEFORE THE LD. ASSESSING OFFICER. IT IS FURTHER NOTED THAT AS PER LETTER DATED 01/12/2011, ADDRESSED TO THE ACIT, THE STATEMENT OF SHARE CAPITAL AND STATEMENT OF SHARE P REMIUM WAS ALSO DULY FURNISHED BY THE ASSESSEE. IT IS FURT HER NOTED THAT VIDE LETTER DATED 23/12/2011 (PAGE-47 OF THE P APER BOOK), ADDRESSED TO THE ACIT, THE ASSESSEE ALSO FUR NISHED THE COPY OF THE AGREEMENT. THE SHARES SUBSCRIPTION AND SHARE HOLDERS AGREEMENT BETWEEN THE PARTIES WAS EXE CUTED AT NEW DELHI ON 22/11/2007, WHICH CONTAINS THE NECE SSARY DETAILS AND WAS DULY FILED BY THE ASSESSEE BEFORE TH E LD. ASSESSING OFFICER, MEANING THEREBY, THE NECESSARY E VIDENCE WAS DULY MADE AVAILABLE BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS AND THUS NO NEW MATERIAL CAM E TO THE LIGHT/POSSESSION OF THE LD. ASSESSING OFFICER. ALL THE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 29 CORRESPONDENCE MADE DURING ORIGINAL ASSESSMENT BETW EEN THE ASSESSEE AND THE LD. ASSESSING OFFICER ARE AVAI LABLE IN THE PAPER BOOK. IT IS NOTED THAT THE LD. ASSESSING OFFICER REOPENED THE ASSESSMENT FRAMED U/S 143(3) OF THE AC T ON THE BASIS OF SOME INFORMATION FROM THE OFFICE OF RO C ABOUT RAISING SHARE CAPITAL ALONG WITH SHARE PREMIUM. WE HAVE PERUSED THE REASONS RECORDED BY THE LD. ASSESSING O FFICER AND CONSEQUENT OBJECTIONS RAISED BY THE ASSESSEE VI DE LETTER DATED 16/06/2014 (PAGE-53 TO 59 OF THE PAPER BOOK). THE ASSESSEE VIDE LETTER DATED 29/01/2015 (PAGES 62 TO 65 OF THE PAPER BOOK) EXPLAINED AND MORE PARTICULARLY POINTED OUT THAT THE FIXATION OF AMOUNT OF PREMIUM WAS DONE BY GOVERNMENT (THROUGH NTC) AND THE SAME WAS DULY REFL ECTED IN THE AUDITED ACCOUNTS OF THE RESPECTIVE SHARE HOLDERS/GOVERNMENT UNDERTAKING/PUBLIC LIMITED COMPA NY. THE RELEVANT MATERIAL INCLUDING THE COPIES OF THE A GREEMENT WAS MADE AVAILABLE BY THE ASSESSEE TO THE LD. ASSES SING OFFICER, THUS, IN VIEW OF THE FINDING OF THE LD. CO MMISSIONER OF INCOME TAX (APPEAL) THAT THERE WAS NO SCOPE OF B RINGING TO TAX THE EXCESS SHARE PREMIUM, THE LD. ASSESSING OFFICER WAS NOT JUSTIFIED TO ASSESS THE SHARE PREMIUM RECEI VED BY ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 30 THE ASSESSEE BY INVOKING THE PROVISION OF SECTION 6 8 OF THE ACT. SINCE, THERE WAS NO NEW TANGIBLE MATERIAL A VAILABLE WITH THE ASSESSING OFFICER WHILE RESORTING TO SECTI ON 147/148 OF THE ACT, MORE SPECIFICALLY, WHILE FRAMIN G ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT, THERE WAS FULL DI SCLOSURE OF MATERIAL FACTS BY THE ASSESSEE AND ON THE BASIS OF THOSE FACTS, ASSESSMENT WAS COMPLETED U/S 143(3) OF THE A CT, THEREFORE, IN MY HUMBLE OPINION, THE REASSESSMENT/REOPENING U/S 147 OF THE ACT IS UNJUST IFIED AS THERE WAS NO FRESH TANGIBLE MATERIAL WITH THE AS SESSING OFFICER, WHILE REOPENING THE ASSESSMENT, THEREFORE, THE REOPENING BEYOND A PERIOD OF FOUR YEARS IS NOT PERM ISSIBLE, MORE SPECIFICALLY, WHEN THE MATERIAL FACTS WERE DIS CLOSED BY THE ASSESSEE AND ASSESSMENT WAS FRAMED U/S 143(3) O F THE ACT, THUS, THE REOPENING OF ASSESSMENT IS BAD IN LA W, RESULTANTLY, WE FIND NO MERIT IN THE GROUND RAISED BY THE REVENUE, THEREFORE, DISMISSED. 3. THE NEXT GROUND RAISED BY THE REVENUE PERTAINS TO DELETING THE ADDITION MADE ON ACCOUNT OF ALLEGED INVESTMENT OF SHARE HOLDERS AS INCOME FROM DISCLOSE D SOURCES. THE CRUX OF THE ARGUMENT IS THAT IT IS NOT A CASE OF ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 31 BOGUS SHARES RATHER THE ALLEGATIONS ARE WITH RESPEC T TO EXCESS SHARE PREMIUM. IT WAS PLEADED THAT THE SOURC E IS NOT IN DOUBT AND THE PREMIUM IS MENTIONED IN THE AGREEMENT. OUR ATTENTION WAS INVITED TO PAGE 43, 44 , 47 AND 66 OF THE PAPER BOOK. IT WAS CONTENDED THAT IT IS GOVERNMENT OWNED COMPANY. ON THE OTHER HAND, THE LD . CIT-DR DEFENDED THE ADDITION MADE BY THE LD. ASSESS ING OFFICER BY CONTENDING THAT THE TESTS ARE THE SAME E VEN FOR THE GOVERNMENT COMPANY. RELIANCE WAS PLACED UPON TH E DECISION COMMISSIONER OF INCOME-TAX VS. PRECISION FINANCE (P.) LTD. 208 ITR 465 (CAL.), CIT VS VIR BHAN & SONS 273 ITR 206 ( P & H) AND ITA NO. 525 OF 2014. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE FILED ITS RETURN ON 24/09/200 9 DECLARING INCOME OF RS.7,80,32,935/-, WHICH WAS PRO CESSED UNDER SECTION 143(1) OF THE ACT. THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) ON 26/12/2011. AS PER T HE REVENUE, AN INFORMATION WAS RECEIVED FROM ROC THAT THE ASSESSEE CHARGED SHARE PREMIUM OF RS.154.72 PER SHA RES FOR 28,66,500 SHARES ISSUED DURING THE YEAR AND THU S THE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 32 AMOUNT OF RS.44,35,01,250/- WAS COLLECTED. THE ASSE SSEE WAS ASKED TO PROVE THE GENUINENESS OF THE TRANSACTI ONS ALONG WITH NATURE AND SOURCE OF FUNDS. AS PER THE R EVENUE, THE ASSESSEE DID NOT EXPLAIN THE EXCESS PREMIUM SO CHARGED AND THUS ADDITION WAS MADE UNDER SECTION 68 OF THE ACT. ON APPEAL BEFORE THE LD. COMMISSIONER OF I NCOME TAX (APPEAL), THE ADDITIONS SO MADE WAS DELETED, AG AINST WHICH THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL . 3.2. BEFORE ADVERTING FURTHER, IT IS OUR BOUNDED D UTY TO EXAMINE SECTION 68 OF THE ACT, WHICH IS REPRODUC ED HEREUNDER:- WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTO RY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR : PROVIDED THAT WHERE THE ASSESSEE IS A COMPANY (NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIAL LY INTERESTED), AND THE SUM SO CREDITED CONSISTS OF SH ARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED, ANY EXPLANATIO N OFFERED BY SUCH ASSESSEE-COMPANY SHALL BE DEEMED TO BE NOT SATISFACTORY, UNLESS ( A ) THE PERSON, BEING A RESIDENT IN WHOSE NAME SUCH CREDIT IS RECORDED IN THE BOOKS OF SUCH COMPANY ALS O OFFERS AN EXPLANATION ABOUT THE NATURE AND SOURCE O F SUCH SUM SO CREDITED; AND ( B ) SUCH EXPLANATION IN THE OPINION OF THE ASSESSING OFFICER AFORESAID HAS BEEN FOUND TO BE SATISFACTORY : ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 33 PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRST PROVISO SHALL APPLY IF THE PERSON, IN WHOSE NAME TH E SUM REFERRED TO THEREIN IS RECORDED, IS A VENTURE C APITAL FUND OR A VENTURE CAPITAL COMPANY AS REFERRED TO IN CLAUSE ( 23FB )OF SECTION 10 . 3.3. THE STAND OF THE REVENUE IS THAT THE ASSESSEE DID NOT DISCHARGED THE ONUS CAST UPON IT AND THE EXPLAN ATION OF THE ASSESSEE IS NOT SATISFACTORY AND THUS THE LD. A SSESSING OFFICER PROCEEDED TO CHARGE THE SHARE PREMIUM, RECE IVED BY THE ASSESSEE TO TAX. THE ASSESSEE FURNISHED THE SHA RES SUBSCRIPTION AND SHARE HOLDER AGREEMENT WHICH CONTA INS THE NAMES AND ADDRESSES OF INVESTORS AS WELL AS THE IR PROPOSED SHARE HOLDING AND PROPOSED CHARGE OF SHARE PREMIUM. THE ASSESSEE IS A JOINT VENTURE BETWEEN NT C AND PRIL. IT WAS ESTABLISHED WITH A VIEW TO REVIVE A SI CK TEXTILE MILL AND THE LARGER SCHEME OF REVIVAL WAS APPROVED BY BIFR. HOWEVER, STILL THE ASSESSEE IS INDEPENDENT COMPANY UNDER THE INCOME TAX ACT, THEREFORE THE COMPOSITION OF SH ARE HOLDING IS A MATERIAL. THE STAND OF THE REVENUE IS THAT UNLESS AND UNTIL THE GENUINENESS OF HIGHER SHARE PR EMIUM IS ESTABLISHED, THE ASSESSEE CANNOT BE SHIELDED BY STATING THAT THE VALUATION OF SHARES IS SUBJECTIVE MATTER. IT IS THE DUTY OF THE ASSESSEE TO EXPLAIN THE UNUSUAL SHARE P REMIUM COLLECTED OVER AND ABOVE THE NET ASSET VALUE (NAV). AS PER ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 34 THE LD. ASSESSING OFFICER, THE NAV OF THE SHARES AS ON 31/03/2008 AND EXCESS PREMIUM CHARGED IS AS UNDER:- SR. NO. AMOUNT IN RS. 1 TOTAL ASSETS 19,31,48,494 2. LESS MISC. EXPENSES - 77,976 3. TOTAL ASSETS 19,30,70,518 4. TOTAL NUMBER OF SHARES 58,50,000 5. NAV 33 6. PREMIUM CHARGED PER SHARES 154.72 7. EXCESS PREMIUM CHARGED 121.72 8. TOTAL EXCESS PR EMIUM CHARGED 34,89,10,380/ - IF THE AFORESAID FACTUAL MATRIX IS ANALYZED, THE NE T ASSET VALUE OF SHARES AS ON 31/03/2008 COMES TO RS.33/- A S THE TOTAL ASSET IS RS.19,30,70,518/-, WHEREAS, THE PREM IUM CHARGED PER SHARE IS RS. 154.72, THUS, THE EXCESS P REMIUM CHARGED COMES TO RS.121.72 RESULTING INTO TOTAL EXC ESS PREMIUM COMES TO RS.34,89,10,380/-. HOWEVER, WE NOT E THAT AS PER THE PROVISIONS OF SECTION 56(2)(VIIB), WHERE A COMPANY, NOT BEING A COMPANY IN WHICH THE PUBLIC AR E SUBSTANTIALLY INTERESTED, RECEIVES, IN ANY PREVIOUS YEAR, FROM ANY PERSON BEING A RESIDENT, ANY CONSIDERATION FOR ISSUE OF SHARES THAT EXCEEDS THE FACE VALUE OF SUCH SHARES, THE AGGREGATE CONSIDERATION RECEIVE FOR SUCH SHARE AS EXCEED THE FAIR MARKET VALUE OF SUCH SHARE WAS INSE RTED BY THE FINANCE ACT, 2012, W.E.F. 01/04/2013 AND THE PR ESENT ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 35 ASSESSMENT YEAR BEFORE US IS 2009-10, THEREFORE, TH E AMENDMENT MADE IN SECTION 68 IS PROSPECTIVE IN NATU RE. OUR VIEW FIND SUPPORTS FROM THE DECISION IN THE CAS E OF ACIT VS GAGANDEEP INFRASTRUCTURE PVT. LTD. (ITA NO.5784/MUM/2011), ORDER DATED 23/04/2014, WHEREIN THE FACTS ARE IDENTICAL. THE HON'BLE BOMBAY HIGH CO URT IN CIT VS GANGADEEP INFRASTRUCTURE PVT. LTD. (394 ITR 680)(BOM.) HELD AS UNDER:- 1. THIS APPEAL UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961 (THE ACT) CHALLENGES THE ORDER DATED 23RD APRIL, 2014 PA SSED BY THE INCOME TAX APPELLATE TRIBUNAL (THE TRIBUNAL). THE IMPUGNED ORDER IS IN RESPECT OF ASSESSMENT YEAR 2008-09. 2. MR. SURESH KUMAR, THE LEARNED COUNSEL APPEARING FO R THE REVENUE URGES THE FOLLOWING RE-FRAMED QUESTIONS OF LAW FOR OUR CO NSIDERATION: '( I ) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN DELETING THE ADDITION OF RS.7,53,50,000/- UNDER SECTION 68 OF THE ACT BEING SHARE CAPI TAL/SHARE PREMIUM RECEIVED DURING THE YEAR WHEN THE ASSESSING OFFICER HELD THE SAME AS UN EXPLAINED CASH CREDIT? ( II ) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN RESTRICTING THE DISALLOWA NCE UNDER S ECTION 14A OF THE ACT ONLY TO THE AMOUNT OF EXPENDITURE CLAIMED B Y THE ASSESSEE IN THE ABSENCE OF ANY SUCH RESTRICTION UNDER SECTION 14A A ND/OR RULE 8D?' 3. REGARDING QUESTION NO.( I ): ( A ) DURING THE PREVIOUS RELEVANT TO THE SUBJECT ASSESSM ENT YEAR THE RESPONDENT-ASSESSEE HAD INCREASED ITS SHARE CAPITAL FROM RS.2,50,000/- TO RS.83.75 LAKHS. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE RESPONDENT HAD COLLECTED SHARE PRE MIUM TO THE EXTENT OF RS.6.69 CRORES. CONSEQUENTLY HE CALL ED UPON THE RESPONDENT TO JUSTIFY THE CHARGING OF SHARE PREMIUM AT RS.190/- PER SHARE. THE RESPONDENT FURNISHED THE LIST OF ITS SHAREHOLDERS, COPY OF THE SHARE APP LICATION FORM, COPY OF SHARE CERTIFICATE AND FORM NO.2 FILED WITH THE REGISTRAR OF COMPANIES. THE JUSTIFICATION FOR CHARGING SHARE PREMIUM WAS ON THE BASIS OF THE FUTURE PROSPECTS OF THE BUSINESS OF THE RESPONDENT- ASSESSEE. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION/JUSTIFICATION OF THE RESPONDENT AND INVOKED ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 36 SECTION 68 OF THE ACT TO TRE AT THE AMOUNT OF RS.7.53 CRORES I.E. THE AGGREGATE OF THE ISSUE PRICE AND THE PREMIUM ON THE SHARES IS SUED AS UNEXPLAINED CASH CREDIT WITHIN THE MEANING OF SECTION 68 OF THE ACT. ( B ) BEING AGGRIEVED, THE RESPONDENT CARRIED THE ISSUE I N APPEAL. BY AN ORD ER DATED 24TH MAY, 2011 THE COMMISSIONER OF INCOME TAX (APPEALS) (CIT(A)) DELETED THE ADDITION OF RS.7.53 CRORES MADE BY THE ASSESSING OFFICER BY HOLDING THAT THE ASSESSING OFFICER HAD GIVEN NO REA SON TO CONCLUDE THAT THE INVESTMENT MADE (INCLUSIVE OF PREM IUM) WAS NOT GENUINE. THIS INSPITE OF EVIDENCE BEING FURNISHED BY THE RESPONDENT IN SUPPO RT OF THE GENUINENESS OF THE TRANSACTIONS. FURTHER HE HELD THAT THE APPROPRI ATE VALUATION OF THE SHARES IS FOR THE SUBSCRIBER/INVESTOR TO DECIDE AND NOT A SUBJECT OF E NQUIRY BY THE REVENUE. FINALLY HE RELIED UPON THE DECISION OF THE APEX COURT IN CIT V. LOVELY EXPORTS (P.) LTD. [2008] 216 CTR 195 TO HOLD THAT IF THE AMOUNTS HAVE BEEN SUBSCRIBED BY BOGUS SHAREHOLDERS IT IS FOR THE REVE NUE TO PROCEED AGAINST SUCH SHAREHOLDERS. THEREFORE IT HELD THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDING THE AMOUNT OF S HARE CAPITAL SUBSCRIPTION INCLUDING THE SHARE PREMIUM AS UNEXPLAINED CREDIT U ND ER SECTION 68 OF THE ACT. ( C ) BEING AGGRIEVED, THE REVENUE CARRIED THE ISSUE IN T HE APPEAL TO THE TRIBUNAL. THE IMPUGNED ORDER OF THE TRIBUNAL HOLDS THAT THE RESPONDENT- ASSESSEE HAD ESTABLISHED THE IDENTITY, GENUINENESS AND CAPACITY OF THE SHAREHOLDERS WHO HAD SUBSCRIBED TO ITS SHARES. THE IDENTITY WAS ESTABLISHED BY THE VERY FACT THAT THE DETAILED NAMES, ADDRESSES OF THE SHAREHOLDERS, PAN NUMBERS, BANK DETAILS AND CONFIRMATORY LETTERS WERE FILED. THE GENUINENESS OF THE TRANSACTION WAS ESTABLISHED BY FIL ING A COPY OF SHARE APPLICATION FORM, THE FORM FILED WITH THE REGISTRAR OF COMPANIES AND AS ALSO BANK DETAILS OF THE SHAREHOLDERS AND THEIR CONFIRMATIONS WHICH WOUL D INDICATE BOTH THE GENUINENESS AS ALSO THE CAPACITY OF THE SHAREHOLDER S TO SUBSCRIBE TO THE SHARES. FURTHER THE TRIBUNAL WHILE UPHOLDING THE FI NDING OF CIT(A) ALSO THAT THE AMOUNT RECEIVED ON ISSUE OF SHARE CAPITAL ALONG WITH THE PREMIUM RECEIVED THEREON, WOULD BE ON CAPITAL RECEIPT AND N OT IN THE REVENUE FIELD. FURTHER RELIANCE WAS ALSO PLACED UPON THE DECISION OF APEX COURT IN LOVELY EXPORTS (P.) LTD. ( SUPRA ) TO UPHOLD THE FINDING OF THE CIT(A) AND DISMISSING THE REVENUE'S APPEAL. ( D ) MR. SURESH KUMAR, THE LEARNED COUNSEL APPEARING FOR THE REVENUE CONTENDS THAT PROVISO TO SECTION 68 OF THE AC T WHICH WAS INTRODUCED WITH EFFECT FROM 1ST APRIL, 2013 WOULD APPLY IN THE FACTS OF THE PRE SENT CASE EVEN FOR A.Y. 2008-09. THE BASIS OF THE ABOVE SUBMISSION IS THAT THE DE HORS THE PROVISO ALSO THE REQUIREMENTS AS SET OUT THEREIN WOULD HAVE TO BE SATISFIED. ( E ) WE FIND THAT THE PROVISO TO SECTION 68 OF THE ACT H AS BEEN INTRODUCED BY THE FINANCE ACT 2012 WITH EFFECT FROM 1ST APRIL, 2013. THUS IT WOULD BE EFFECTIVE ONLY FROM THE ASSESSMENT YEAR 2013- 14 ONWARDS AND NOT FOR THE SUBJECT ASSESSMENT YEAR. IN F ACT, BEFORE THE TRIBUNAL, IT WAS NOT EVEN THE CASE OF THE REVENUE THAT SECTION 68 OF THE ACT AS I N FORCE DURING THE SUBJECT YEARS HAS TO BE READ/UNDERSTOOD AS THOUGH THE PROVI SO ADDED SUBSEQUENTLY EFFECTIVE ONLY FROM 1ST APRIL, 2013 WAS ITS NORMAL MEANING. THE PARLIAMENT DID NOT INTRODUCE TO PROVISO TO SECTION 68 OF THE A CT WITH RETROSPECTIVE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 37 EFFECT NOR DOES THE PROVISO SO INTRODUCED STATES TH AT IT WAS INTRODUCED 'FOR REMOVAL OF DOUBTS' OR THAT IT IS 'DECLARATORY'. THE REFORE IT IS NOT OPEN TO GIVE IT RETROS PECTIVE EFFECT, BY PROCEEDING ON THE BASIS THAT THE ADDITION OF THE PROVISO TO SECTION 68 OF THE ACT IS IMMATERIAL AND DOES NOT CHANGE THE INTERPRETATION OF SECTION 68 OF THE ACT BOTH BEFORE AND AFTER THE ADDING OF THE PROVISO. IN ANY VIEW OF THE MATTER TH E THREE ESSENTIAL TESTS WHILE CONFIRMING THE PRE- PROVISO SECTION 68 OF THE ACT LAID DOWN BY THE COUR TS NAMELY THE GENUINENESS OF THE TRANSACTION, IDENTITY AND THE CAPACITY OF THE INVESTOR HAVE ALL BEEN EXAMINED BY THE IMPUGNED ORD ER OF THE TRIBUNAL AND ON FACTS IT WAS FOUND SATISFIED. FURTHER IT WAS A SUBM ISSION ON BEHALF OF THE REVENUE THAT SUCH LARGE AMOUNT OF SHARE PREMIUM GIV ES RISE TO SUSPICION ON THE GENUINENESS (IDENTITY) OF THE SHAREHOLDERS I.E. THEY ARE BOGUS. THE APEX COURT IN LOVELY EXPORTS (P.) LTD. ( SUPRA ) IN THE CONTEXT TO THE PRE- AMENDED SECTION 68 OF THE ACT HAS HELD THAT WHERE THE REVEN UE URGES THAT THE AMOUNT OF SHARE APPLICATION MONEY HAS BEEN RECEIVED FROM BOGUS SHAREHOLDERS THEN IT IS FOR THE INCOME TAX OFFICER TO PROCEED BY REOPENING TH E ASSESSMENT OF SUCH SHAREHOLDERS AND ASSESSING THE M TO TAX IN ACCORDANCE WITH LAW. IT DOES NOT ENTITLE THE REVENUE TO ADD TH E SAME TO THE ASSESSEE'S INCOME AS UNEXPLAINED CASH CREDIT. ( F ) IN THE ABOVE CIRCUMSTANCES AND PARTICULARLY IN VIEW OF THE CONCU RRENT FINDING OF FACT ARRIVED AT BY THE CIT(A) AND THE TR IBUNAL, THE PROPOSED QUESTION OF LAW DOES NOT GIVE RISE TO ANY SUBSTANTI AL QUESTION OF LAW. THUS NOT ENTERTAINED. 4. ( A ) ADMIT THE SUBSTANTIAL QUESTION OF LAW AT (II) ABO VE. ( B ) THE ISSUE ARISING IN QUESTION NO. (II) IS ESSENTI ALLY WHETHER APPLICATION OF RULE 8D(2)(III) OF THE INCOME TAX ACT RULES WOUL D PERMIT THE REVENUE TO DISALLOW EXPENDITURE NOT CLAIMED I.E. MUCH LARGE R THAN THE EXPENDITURE / DEBITED IN EARNING ITS TOTAL INCOME. THE COUNSEL IN FORM US THAT THERE IS NO DECISION ON THIS ISSUE OF ANY COURT AVAILABLE AND I T WOULD AFFECT A LARGE NUMBER OF CASES WHERE SIMILAR ISSUES ARISE. THEREFO RE, THIS ISSUE WOULD REQUIRE AN EARLY DETERMINATION. IN THE ABOVE VIEW, AT THE REQUEST OF THE COUNSEL, THE APPEAL IS KEPT FOR HEARING ON 17TH APR IL, 2017 AT 3.00 P.M., SUBJECT TO OVERNIGHT PART-HEARD. 5. REGISTRY IS DIRECTED TO COMMUNICATE A COPY OF THIS ORDER TO THE TRIBUNAL. THIS WOULD ENABLE THE TRIBUNAL TO KEEP THE PAPERS A ND PROCEEDINGS RELATING TO THE PRESENT APPEAL AVAILABLE, TO BE PRO DUCED WHEN SOUGHT FOR BY THE COURT. IN THE AFORESAID CASE, THE HON'BLE HIGH COURT HELD THAT THE THREE ESSENTIAL TESTS WHILE CONFIRMING THE SECT ION 68 LAID DOWN BY THE COURT NAMELY THE GENUINENESS OF TH E TRANSACTION, IDENTITY AND THE CAPACITY OF THE INVES TOR HAVE ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 38 ALL BEEN EXAMINED BY THE IMPUGNED ORDER OF THE TRIB UNAL AND ON FACT IT WAS FOUND SATISFIED. FURTHER IT WAS A SUBMISSION ON BEHALF OF THE REVENUE THAT SUCH LARGE AMOUNT OF SHARE PREMIUM GIVES RISE TO SUSPICION ON THE GENUINENESS (IDENTITY) OF THE SHAREHOLDERS, I.E., T HEY ARE BOGUS. THE APEX COURT IN A CASE IN THIS CONTEXT TO THE PRE- AMENDED SECTION 68 HAS HELD THAT WHERE THE REVENUE URGES THAT THE AMOUNT OF SHARE APPLICATION MONEY HAS BEEN RECEIVED FROM BOGUS SHAREHOLDERS THEN IT IS FOR THE INCOME- TAX OFFICER TO PROCEED BY REOPENING THE ASSESSMENT OF SUCH SHAREHOLDER AND ASSESSING THEM TO TAX IN ACCORDANCE WITH LAW. IT DOES NOT ENTITLE THE REVENUE TO ADD THE SAM E TO THE ASSESSEE'S INCOME AS UNEXPLAINED CASH CREDIT. IDENT ICALLY IN THE CASE OF GREEN INFRA VS INCOME TAX OFFICER (2013 ) 38 TAXMAN.COM 253 (MUM. TRIB.), DECIDED IN FAVOUR OF T HE ASSESSEE AND THIS ORDER WAS CONFIRMED BY HON'BLE HI GH COURT IN CIT VS GREEN INFRA LTD. (2017) 392 ITR 7 ( BOM.). THE RATIO LAID DOWN IN PR. CIT VS APEAK INFOTECH & ORS. (ITA NO.26 TO 31/2017) ORDER DATED 08/06/2017 (BOMBAY HI GH COURT) AND HON'BLE MADRAS HIGH COURT IN CIT VS PRAN AV FOUNDATION LTD. (2015) 229 TAXMAN 58 (MADRAS) FURTH ER ITA NO.622/MUM/2016 M/S GOLDMOHUR DESIGN & APPAREL PARK LTD. 39 SUPPORTS THE CASE OF THE ASSESSEE. THUS, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF I NCOME TAX (APPEAL), THUS THIS GROUND OF THE REVENUE IS AL SO DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20/06/2018. SD/- (G. MANJUNATHA) SD/- (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; + DATED : 20/06/2018 F{X~{T? P.S/. . . , %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 2 2 # 3' , ( ,- ) / THE CIT, MUMBAI. 4. 2 2 # 3' / CIT(A)- , MUMBAI 5. 56 0' , 2 ,-& , , # $ / DR, ITAT, MUMBAI 6. 7 8$ / GUARD FILE. / BY ORDER, 15-' 0' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI