K K JEWELLERS, NEW DELHI V. ITO, WARD- 47(3), NEW DELHI

ITA 6759/DEL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6582 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 25-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Accommodation entries; Reassessment proceedings; Borrowed satisfaction
• Section: 13; 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC-1 BENCH, NEW DELH I BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO.6759/DEL/2018 [A.Y 2008-09] K K JEWELLERS VS. ITO G-23, SOUTH EXTENSION, WARD- 47 (3) PART-1, NEW DELHI-110049 NEW DELHI APPELLANT BY : SH. ABHISHEK MATHUR , CA RESPONDENT BY : MS. RAKHI VIMAL, SR. DR DATE OF HEARING : 14.09.2020 DATE OF PRONOUNCEMENT : .09.2020 ORDER PER N. K. BILLAIYA , AM : 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE CIT(A)-16, NEW DELHI DATED 12.03.2018 PERTAINING TO A.Y. 2008-09. 2 2. THE GRIEVANCE OF THE ASSESSEE IS TWOFOLD. FIRSTLY, THE ASSESSEE CHALLENGED THE REOPENING OF THE ASSESSMENT AND SECO ND THE ASSESSEE IS AGGRIEVED BY THE ADDITIONS SUSTAINED BY THE CIT(A) AMOUNTING TO RS.5,93,335/-. 3. SINCE THE CHALLENGE TO THE REOPENING OF THE ASSESSM ENT GOES TO THE ROOT OF THE MATTER, I PROCEED TO DECIDE THIS ISSUE FIRST. 4. REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH. CASE RECORD CAREFULLY PERUSED AND WITH THE ASSISTANCE OF THE COUNSEL I HAVE CAREFULLY CONSIDERED THE RELEVANT DOCUMENTARY EVIDE NCES BROUGHT ON RECORD IN THE FORM OF PAPER BOOK IN THE LIGHT OF RU LE 18 (6) OF THE ITAT RULES. 5. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT AC TION U/S.147 OF THE ACT WAS TAKEN AND ACCORDINGLY NOTICE U/S.148 WAS IS SUED. THE BASIS FOR ISSUING THE NOTICE U/S.148 IS THE INFORMATION RECEI VED FROM DGIT (INVESTIGATION), MUMBAI FROM WHICH THE AO CAME TO K NOW THAT THE ASSESSEE HAS RECEIVED ACCOMMODATION ENTRIES FROM A GROUP OWNED BY RAJENDRA JAIN. BE THAT AS IT MAY, THE REASSESSMENT PROCEEDINGS ARE TRIGGERED BY SERVICE OF NOTICE U/S. 148 OF THE ACT AND THE ROOT FOR THE ISSUE OF SUCH NOTICE LIE IN THE REASONS RECORDED. 3 6. THE REASONS RECORDED BY THE AO IS AS UNDER :- 4 7. I HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE A FOREMENTIONED NOTICE. A PERUSAL OF THE SAME SHOW THAT THE SOURCE OF THE INFORMATION HAS NOT BEEN MENTIONED ANYWHERE NOR THERE IS ANY RE FERENCE TO THE PERSON WHO HAS GIVEN THIS INFORMATION. THE NOTICE SIMPLY SAYS THAT AS PER INFORMATION BUT HOW THAT INFORMATION PERTAINS TO THE ASSESSMENT YEAR UNDER CONSIDERATION IS NOT KNOWN. I FAIL TO U NDERSTAND HOW THE AO CAME TO THE CONCLUSION THAT INCOME HAS ESCAPED ASSE SSMENT WHICH REQUIRES REASSESSMENT. IT APPEARS THAT THE AO IS S IMPLY CARRIED AWAY WITH A BORROWED SATISFACTION. 8. THOUGH THE DR STRONGLY SUPPORTED THE ASSESSMENT ORDER AND VEHEMENTLY STATED THAT THE INVESTIGATION REPORT REC EIVED FROM DGIT (INVESTIGATION), MUMBAI WAS THE BASIS FOR REOPENING THE ASSESSMENT AND ON THE BASIS OF SUCH INFORMATION THE AO HAS APPLIED HIS MIND. IT IS THE SAY OF THE DR THAT THE INFORMATION WHICH WAS IN POSSESS ION OF THE AO WAS VERY MUCH IN THE KNOWLEDGE OF THE ASSESSEE. 5 9. I FAILED TO PERSUADE MYSELF IN AGREEING WITH THE CONTENTIONS OF THE DR. AS MENTIONED ELSEWHERE THE AO HAS TO GIVE HIS OPINION OF ESCAPEMENT OF INCOME WHILE ISSUING THE NOTICE AND R ECORDING THE REASONS. AS I HAVE OBSERVED EARLIER THE ENTIRE REOPENING IS BASED ON A BORROWED SATISFACTION. 10. THE HONBLE HIGH COURT OF DELHI IN THE CASE OF MEENAKSHI OVERSEAS PRIVATE LIMITED HAD THE OCCASION TO CONSIDER A SIMI LAR ISSUE WHEN IT WAS SEIZED WITH THE FOLLOWING QUESTION OF LAW. 11. WHETHER THE ITAT ERRED IN LAW AND ON FACTS IN QUASHING THE ASSESSMENT PROCEEDINGS U/S. 147 /148 OF THE ACT AND THE HONBLE HIGH COURT UPHELD THE ORDER OF THE TRIBUNAL UPHOLDING TH AT REASSESSMENT PROCEEDINGS WAS NOT LEGAL. THE RELEVANT FINDINGS OF THE HONBLE HIGH COURT READ AS UNDER :- 6 7 8 9 10 11 12 12. IN THE LIGHT OF THE AFOREMENTIONED DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I HAVE NO HESITATION IN Q UASHING THE NOTICE ISSUED U/S. 148 OF THE ACT THEREBY QUASHING THE ASS ESSMENT ORDER ITSELF. SINCE I HAVE QUASHED THE ASSESSMENT ORDER I DO NOT FIND IT NECESSARY TO DWELL INTO THE MERITS OF THE CASE. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.09.2020. SD/- [ N. K. BILLAIYA] ACCOUNTANT MEMBER DATED: 17.09.2020 *NEHA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR ITAT, NEW DELHI DATE OF DICTATION 15.09.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17.09.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 17.09.2020 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS 17.09.2020 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 17.09.2020 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 17.09.2020 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 17.09.2020 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 17.0 9.2020 DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 13