Sh. Kamal Kant Jain, Ambala V. JCIT, Ambala

ITA 70/CHANDI/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9086 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-07-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 16-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTALDR
• Keywords: Reopening of assessment; Gift; Tangible material; Wrong claim; Difference of opinion; Accommodation entries; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 71/CHD/2015 ASSESSMENT YEAR: 2006-07 SHRI PREM SAGAR JAIN, VS THE JCIT, C/O M/S KALA MANDIR, AMBALA RANGE, D.C.ROAD, AMBALA. AMBALA. PAN: ABLPJ2713K & ITA NO. 70/CHD/2015 ASSESSMENT YEAR: 2006-07 SHRI KAMAL KANT JAIN, VS THE JCIT, C/O M/S KALA MANDIR, AMBALA RANGE, D.C.ROAD, AMBALA. AMBALA. PAN: ABLPJ2718C & ITA NO. 72/CHD/2015 ASSESSMENT YEAR: 2006-07 SHRI NARINDER KUMAR JAIN, VS THE JCIT, (THROUGH LEGAL HEIR SMT. SAROJ JAIN), AMBALA RANG E, C/O M/S KALA MANDIR AMBALA. D.C.ROAD, AMBALA. PAN: ABLPJ2714Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI S.K.MITTAL,DR DATE OF HEARING : 05.08.2016 DATE OF PRONOUNCEMENT : 14.09.2016 O R D E R THIS ORDER SHALL DISPOSE OFF ALL THE APPEALS FILED BY DIFFERENT ASSESSEES ON COMMON QUESTIONS/ISSUES. 2 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSI DERED THE MATERIAL AVAILABLE ON RECORD. LD. REPRESENTATI VES OF BOTH THE PARTIES MAINLY ARGUED IN THE CASE OF THE A SSESSEE SHRI PREM SAGAR JAIN AND SUBMITTED THAT ISSUE IS SA ME IN REMAINING APPEALS. THE APPEALS ARE DECIDED AS UNDE R. ITA 71/2015 : SHRI PREM SAGAR JAIN 3. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINS T THE ORDER OF LD. CIT(APPEALS) PANCHKULA DATED 15.12 .2014 FOR ASSESSMENT YEAR 2006-07. 4. IN THIS APPEAL, ASSESSEE CHALLENGED THE ORDER OF THE LD. CIT(APPEALS) IN CONFIRMING THE ACTION OF THE AS SESSING OFFICER IN INITIATING THE PROCEEDINGS UNDER SECTION 147/148 OF THE INCOME TAX ACT AND CONFIRMING THE ADDITION UNDER SECTION 68 OF THE ACT AMOUNTING TO R S. 25,19,697/- AS UNDISCLOSED INCOME. 5. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME ON 31.10.2006 DECLARING INCOME OF RS. 1,72,524/- + RS. 25,19,697/- FROM SHORT TERM CAPITA L GAIN. THE ASSESSING OFFICER COMPLETED THE ASSESSME NT UNDER SECTION 143(3) ON 06.05.2008 AT AN INCOME OF RS. 27,57,000/- AFTER MAKING ADDITION OF RS. 16,780/- A ND RS. 48,000/- ON ACCOUNT OF INTEREST AND LOW HOUSEHOLD WITHDRAWALS RESPECTIVELY. AN INFORMATION WAS RECEI VED BY THE ASSESSING OFFICER FROM CIT CENTRAL-4, MUMBAI TH AT 3 SEARCH WAS CONDUCTED ON 25.09.2009 IN THE BUSINESS AND RESIDENTIAL PREMISES OF M/S MAHA SAGAR GROUP OF CAS ES WHOSE KEY PERSON WAS SHRI MUKESH CHOKSI. DURING TH E COURSE OF SEARCH AT THE PREMISES OF M/S MAHA SAGAR GROUP OF CASES, IT WAS ADMITTED BY SHRI CHOKSI THAT HE AND HIS GROUP WERE ENGAGED IN FRAUDULENT BILLING AC TIVITIES AND IN GIVING ACCOMMODATION ENTRIES IN ORDER TO ENA BLE THE CLIENTS TO DECLARE SPECULATION PROFIT/LOSS, SHO RT TERM CAPITAL GAIN, LONG TERM CAPITAL GAIN, PROFIT/LOSS O N ACCOUNT OF COMMODITY TRADING, INTRODUCED SHARE CAPITAL MONE Y, OR INTRODUCED MONEY IN THE FORM OF GIFTS. ON THE BASI S OF INFORMATION SO RECEIVED, IT WAS FOUND THAT INFORMAT ION ALSO PERTAIN TO THE ASSESSEE REGARDING ACCOMMODATIO N ENTRIES TAKEN FROM THE ABOVE GROUP. BASED ON THE INFORMATION, ASSESSING OFFICER RECORDED REASONS UND ER SECTION 148 OF THE ACT. THE ASSESSING OFFICER RECO RDED THAT ASSESSEE HAS SHOWN INCOME FROM SHORT TERM CAPI TAL GAIN OF RS. 25,19,697/- FROM PURCHASE OF SALE OF SH ARES AND PAID TAX ON THE SAME @ 10%. THE ASSESSEE HAS EARNED INCOME FROM OTHER SOURCES WHICH WAS SHOWN AS SHORT TERM CAPITAL GAIN BY OBTAINING ACCOMMODATION ENTRIES FROM M/S MAHA SAGAR SECURITIES GROUP OF CAS ES DURING THE ASSESSMENT YEAR UNDER APPEAL. THUS, THE INCOME OF RS. 25,19,697/- HAS BEEN UNDER ASSESSED T O LOW RATE. THEREFORE, ASSESSING OFFICER HAD REASON TO B ELIEVE THAT THE AMOUNT OF RS. 25,19,697/- HAD ESCAPED ASSESSMENT IN ASSESSMENT YEAR UNDER APPEAL. THE ASSESSEE SUBMITTED BEFORE ASSESSING OFFICER THAT RE TURN 4 ORIGINALLY FILED MAY BE TREATED AS RETURN FILED UND ER SECTION 148 OF THE ACT. THE ASSESSING OFFICER COMP LETED THE ASSESSMENT AND CONCLUDED THAT ASSESSEE HAS INTRODUCED A SUM OF RS. 44,75,142/- AS ACCOMMODATIO N ENTRIES WHICH REPRESENT UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSING OFFICER COMPLETED RE-ASSES SMENT VIDE ORDER DATED 28.02.2014 AT AN INCOME OF RS. 44,75,142/-. 6. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE CHALLENGED THE RE-OPENING OF THE ASSESSMENT AND SUBMITTED THAT THERE IS NO WHISPER TO THE EFFECT TH AT INCOME HAD ESCAPED ASSESSMENT ON ACCOUNT OF ANY FAI LURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT AND AS SUCH, REASONS ON THE BASIS OF WHICH THE ASSESSING OFFICER ASSUMED JURISDICTION TO RE-ASSESS, WERE INSUFFICIEN T AND AS SUCH, ASSESSING OFFICER WAS NOT COMPETENT TO RE- ASSESS THE CASE. THE ASSESSEE RELIED UPON SEVERAL DECISIO NS IN SUPPORT OF THE CONTENTION INCLUDING DECISION OF THE DELHI HIGH COURT IN THE CASE OF SIGNATURE HOTELS PVT. LTD . 338 ITR 51. THE ASSESSEE ALSO SUBMITTED THAT THERE IS NO REFERENCE IN THE STATEMENT OF SHRI MUKESH CHOKSI AN D SAME IS ALSO NOT CORROBORATED BY ANY TANGIBLE MATER IAL NOR THERE IS A MENTION OF ASSESSEE'S NAME IN ANY SUCH INFORMATION. THEREFORE, THE INFORMATION WAS NON-SP ECIFIC AND NOT RELIABLE. NO TRANSACTION WAS FOUND TO BE B OGUS AS ALL TRANSACTIONS WERE CARRIED THROUGH BANKING CHANN EL AND 5 THROUGH D-MAT ACCOUNT. THE ASSESSING OFFICER WAS REQUESTED MANY TIMES TO PRODUCE SHRI MUKESH CHOKSI FOR CROSS-EXAMINATION WHICH WAS NEVER DONE. THE SUBMISSIONS OF THE ASSESSEE WERE FORWARDED TO THE ASSESSING OFFICER AND ASSESSING OFFICER IN HIS REMA ND REPORT, REITERATED THAT INFORMATION WAS RECEIVED TH AT ASSESSEE HAD BUSINESS DEALINGS WITH AN ENTRY OPERAT OR, THEREFORE, RE-OPENING IS VALID. THE ASSESSEE FURTHE R SUBMITTED THAT REASONS RECORDED BY THE ASSESSING OF FICER ARE INCORRECT AS THEY HAVE MADE PAYMENT TO M/S MAHA SAGAR GROUP OF CASES AND NEVER RECEIVED BACK EVEN A PENNY FROM THEM. SO REASONS WERE BAD AND CONTRARY T O THE FACTS OF THE CASE AND INFORMATION SUPPLIED BY DIT ( SYSTEM) WAS INCORRECT. FURTHER, THE ASSESSING OFFICER HAS NEVER MENTIONED THE INCOME CHARGEABLE TO TAX AS ESCAPED ASSESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS WHICH IS ESSENTIAL AS PER PROVISO TO SECTION 147, PARTICULARLY WHEN ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) AND FOUR YEARS HAVE ELAPSED FR OM THE END OF SUCH ASSESSMENT YEAR. 7. THE LD. CIT(APPEALS), HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE AND FOUND THAT INFORMATI ON WAS RECEIVED THAT INCOME ESCAPED IN THE CASE OF THE ASS ESSEE AND THERE IS NO CHANGE OF OPINION, THEREFORE, CONFI RMED RE- OPENING OF THE ASSESSMENT. THE LD. CIT(APPEALS) O N MERIT FOUND THAT ADDITION IS MADE OF RS. 44,75,142/- AND 6 ASSESSEE FILED DETAILS BEFORE HIM TO CLAIM TRANSACT IONS ARE GENUINE AND THAT ASSESSEE HAS NOT OBTAINED ACCOMMODATION ENTRIES FROM M/S MAHA SAGAR SECURITIE S GROUP OF CASES. THE ASSESSEE ALSO EXPLAINED THAT A LL THE TRANSACTIONS WERE CARRIED THROUGH D-MAT ACCOUNT AND BANKING CHANNEL AND PURCHASES ARE GENUINE. THE ASSESSEE ALSO FURNISHED EVIDENCE IN THE SHAPE OF PH OTO COPIES OF THE CONTRACT NOTE, PHOTO COPY OF D-MAT AC COUNT WITH M/S S.P. JAIN SECURITIES AND BANK ACCOUNTS STATEMENTS TO SHOW THAT SALES OF THE SHARES HAVE BE EN MADE TO M/S S.P. JAIN SECURITIES. THE LD. CIT(APPE ALS) FROM THE DETAILS FOUND THAT INVESTMENTS OF RS. 19,55,480/- TOWARDS ACQUISITION OF SHARES STAND EXP LAINED AND ACCORDINGLY, DELETED THE ADDITION TO THAT EXTEN T, HOWEVER, ADDITION OF RS. 25,19,697/- WAS CONFIRMED TREATING THE SAME TO BE UNDISCLOSED INCOME. THE EXPLANATION OF THE ASSESSEE WITH REGARD TO EARNING OF SHORT TERM CAPITAL GAIN WAS REJECTED. 8. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND REFER RED TO VARIOUS DOCUMENTS IN THE PAPER BOOK AND SUBMITTED T HAT REASONS RECORDED BY THE ASSESSING OFFICER ARE FACTU ALLY INCORRECT AND WRONG FOR RE-OPENING OF THE ASSESSMEN T. NO INFORMATION HAS BEEN RECEIVED FROM DIT (SYSTEM) REG ARDING ACCOMMODATION ENTRIES RECEIVED BY ASSESSEE FROM M/S MAHA SAGAR SECURITY GROUP OF CASES. HE HAS SUBMITTE D THAT THERE IS A CHANGE OF OPINION ON THE PART OF AS SESSING 7 OFFICER, THEREFORE, RE-OPENING OF ASSESSMENT IS BAD IN LAW. HE HAS SUBMITTED THAT ALL THE TRANSACTIONS WERE CON DUCTED THROUGH D-MAT ACCOUNT. THE PURCHASE OF SHARES HAVE BEEN ACCEPTED BY LD. CIT(APPEALS) ON WHICH THERE IS NO DEPARTMENTAL APPEAL. THE DETAILS OF SALE PROCEEDS OF ASSESSEE HAVE BEEN FILED TO SHOW THAT SALES OF THE SHARES HAVE BEEN MADE THROUGH BROKERS ASHISH STOCK BROKING PVT. LTD. AND M/S S.P. JAIN SECURITIES PVT. LTD. HE HAS, THEREFORE, SUBMITTED THAT THE ADDITION ON MERIT IS ALSO WHOLLY UNJUSTIFIED. HE HAS RELIED UPON SEVERAL DEC ISIONS IN SUPPORT OF THE CONTENTION. 8(I) ON THE OTHER HAND, LD. DR RELIED UPON ORDERS O F THE AUTHORITIES BELOW. 9. I HAVE CONSIDERED RIVAL SUBMISSIONS. THE VALIDI TY OF RE-ASSESSMENT PROCEEDINGS SHALL HAVE TO BE DETERMIN ED WITH REFERENCE TO THE REASONS RECORDED BY THE ASSES SING OFFICER. THE ASSESSEE HAS FILED COPY OF THE REASON S RECORDED UNDER SECTION 148 OF THE INCOME TAX ACT AT PAGE 14 OF THE PAPER BOOK. THE SAME READS AS UNDER : ANNEXURE. 'A' NAME & ADDRESS OF THE ASSESSEE : SHRI PREM SAGAR JA IN C/O M/S KAIA MANDIR, D.C. ROAD AMBALA CANTT. PAN : ABLPJ2713K ASSESSMENT YEAR ,' 2006-07 REASONS FOR ISSUING NOTICE U/S 148 OF THE INCOME TA X ACT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASS TT. YEAR 2006-07 DECLARING INCOME OF RS, 2692221/- INCLUDING SHORT T ERM CAPITAL GAIN OF RS. 8 2519697/- AND THE ASSESSMENT WAS COMPLETED U/S 143( 3) AT AN INCOME OF RS. 2757000/- ON 06.05.2008. AS PER INFORMATIONS RECEIVED FROM DIT(SYSTEM), NEW DELHI, THROUGH THE ADDL. CIT, AMBALA RANGE, AMBALA ON 26.03.2013 T HAT THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES FROM M/S MAHASAGAR G ROUP OF CASES DURING THE F.Y 2005-06 RELEVANT TO ASST. YEAR 2006-07 FROM THE SALE/PURCHASE OF SHARES. THE ASSESSEE HAS SHOWN INCOME FROM SHORT TERM CAPIT AL GAIN OF RS.2519697/- FROM PURCHASE & SALE OF SHARES AND TAX ED THE SAME @ 10%. THE ASSESSEE HAS EARNED INCOME FROM OTHER SOURCE, WHICH HAS SHOWN AS SHORT TERM CAPITAL GAIN BY OBTAINING ACCOMMODATION ENTRIES FRO M M/S MAHASAGAR SECURITIES GROUP OF CASES DURING THE F.Y 2005-06 RE LEVANT TO ASST. YEAR 2006- 07. THUS, THE INCOME OF RS. 2519697/- HAS BEEN UNDE R ASSESSED AT TOO LOW RATE. THEREFORE, I HAVE THE REASONS TO BELIEVE THAT THE A MOUNT OF RS. 2519697/- HAS ESCAPED ASSESSMENT IN THE CASE OF ASSESSEE FOR THE ASSESSMENT YEAR 2006-07. SINCE INCOME OF RS. 2519697/- AS DISCUSSED ABOVE HA S ESCAPED ASSESSMENT IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07, NOTICE U/S 148 IS ISSUED TO THE ASSESSEE FOR THE ASST YEAR 2006-07. SD/- DCIT 10. PRIOR TO IT, ASSESSEE FILED RETURN OF INCOME ON 31.10.2006 ALONGWITH COMPUTATION OF INCOME IN WHICH ASSESSEE HAS DECLARED SHORT TERM CAPITAL GAIN IN A SUM OF RS. 25,19,697/-. THE ASSESSING OFFICER AT THE ORIG INAL ASSESSMENT STAGE, ISSUED A QUERY LETTER DATED 29.02 .2008 (PB-3) IN WHICH ASSESSING OFFICER ASKED FOR ALL THE DOCUMENTARY EVIDENCE TO BE PRODUCED WITH REGARD TO THE SAME SHORT TERM CAPITAL GAIN. THE ASSESSEE FILED D ETAILED REPLY BEFORE ASSESSING OFFICER (PB-5) ALONGWITH DOCUMENTARY EVIDENCES. THE ASSESSING OFFICER PASSE D THE 9 ORDER UNDER SECTION 143(3) DATED 06.05.2008 AND ACC EPTED THE GENUINENESS OF THE SHORT TERM CAPITAL GAIN. CO PY OF THE SAME IS FILED AT PAGE 10 OF THE PAPER BOOK. TH E ASSESSING OFFICER IN THE ASSESSMENT ORDER DISCUSSED THE ISSUE OF SHORT TERM CAPITAL GAINS ON SALE OF SHARES TO THE TUNE OF RS. 25,19,697/- AND AFTER EXAMINING THE DOCUMENTARY EVIDENCE ON RECORD AND COPY OF THE D-MA T ACCOUNT, CONTRACT NOTES AND BANK STATEMENTS ETC. FO UND THAT SALE OF SHARES HAVE BEEN MADE THROUGH M/S S.P. JAIN SECURITIES. THEREAFTER, THE ASSESSING OFFICER RECO RDED THE SAME REASONS FOR RE-OPENING OF THE ASSESSMENT. THE ASSESSEE FILED OBJECTIONS TO THE RE-OPENING OF THE ASSESSMENT BUT THE SAME HAVE NOT BEEN DECIDED BY TH E ASSESSING OFFICER. IT IS, THEREFORE, FATAL FOR THE RE-OPENING OF THE ASSESSMENT. THE ASSESSING OFFICER HAS NOT R ECORDED IN THE REASONS FOR RE-OPENING OF ASSESSMENT WHETHER THERE WAS ANY FAILURE ON THE PART OF THE ASSESSEE TO DISC LOSE TRULY AND FULLY MATERIAL FACTS NECESSARY FOR ASSESS MENT. 10(I) THE ASSESSEE FILED DETAILS OF SALE PROCEEDS OF THE SHARES AND LD. COUNSEL FOR THE ASSESSEE HIGHLIGHTED THAT ASSESSEE MADE SALE OF SHARES THROUGH M/S ASHISH STO CK BROKING PVT. LTD. AND M/S S.P.JAIN SECURITIES PVT. LTD. THE SAME FACT WAS PLEADED BEFORE ASSESSING OFFICER AT THE ORIGINAL ASSESSMENT STAGE. THE ASSESSEE ALSO PLEAD ED BEFORE LD. CIT(APPEALS) THAT ASSESSEE HAS NOT RECEI VED ANY PAYMENT FROM M/S MAHA SAGAR GROUP SECURITIES OF CAS ES AND HAVE NEVER RECEIVED BACK EVEN A PENNY FROM THEM . IT 10 WAS ALSO PLEADED THAT REASONS RECORDED BY THE ASSES SING OFFICER ARE BAD AND CONTRARY TO THE FACTS OF THE CA SE AND INFORMATION SUPPLIED BY DIT (SYSTEM) WAS INCORRECT. THE ASSESSEE ALSO FILED DOCUMENTARY EVIDENCES BEFORE LD . CIT(APPEALS) TO SHOW THAT SHARES WERE SOLD THROUGH D-MAT ACCOUNT WITH M/S S.P.JAIN SECURITIES AND ALL TRANSA CTIONS HAVE BEEN CARRIED OUT THROUGH BANKING CHANNEL. THE ASSESSING OFFICER, HOWEVER, RECORDED IN THE REASONS FOR RE- OPENING OF THE ASSESSMENT THAT ASSESSEE HAS OBTAINE D ACCOMMODATION ENTRIES FROM M/S MAHA SAGAR GROUP OF CASES. THE SOLE REASON FOR RE-OPENING OF THE ASSES SMENT WAS THAT ASSESSEE OBTAINED ACCOMMODATION ENTRIES FR OM M/S MAHA SAGAR SECURITIES GROUP OF CASES ON ACCOUNT OF SHORT TERM CAPITAL GAIN. THIS FACT ITSELF IS WRONG AND INCORRECT. THE ASSESSING OFFICER ALSO REFERRED TO INFORMATION RECEIVED FROM DIT (SYSTEM), NEW DELHI THROUGH ADDL. CIT, AMBALA RANGE, AMBALA THAT ASSESS EE HAS RECEIVED ACCOMMODATION ENTRIES FROM M/S MAHA SA GAR GROUP OF CASES ON PURCHASE/SALE OF SHARES. 10(II) THE LD. COUNSEL FOR THE ASSESSEE HAS REFER RED TO PB-47 WHICH IS LETTER OF DIT (SYSTEM) NEW DELHI DAT ED 07.03.2013 IN WHICH THE INFORMATION OF PURCHASE OF SHARES HAVE BEEN MENTIONED AND NO NAME OF ASSESSEE HAVE BE EN MENTIONED. THE INFORMATION OF PURCHASE OF SHARES H AVE NO CONNECTION WITH THE ASSESSEE AND FURTHER THE LD. CIT(APPEALS) HAS DELETED THE ADDITION ON FINDING TH E PURCHASE OF SHARES TO BE GENUINE AND THERE IS NO 11 DEPARTMENTAL APPEAL FILED BY THE REVENUE. CERTAIN ANNEXURES ARE ALSO ATTACHED WITH REPORT OF DIT (SYS TEM) TO SHOW THAT PURCHASES HAVE BEEN MADE THROUGH ALLIANCE INTERMEDIARY & NETWORK PVT. LTD. COPY OF THE STATE MENT OF SHRI MUKESH CHOKSI IS ALSO FILED TO SHOW THAT ACCOMMODATION ENTRIES HAVE BEEN PROVIDED TO M/S ALL IANCE INTERMEDIARY & NETWORK PVT. LTD. HOWEVER, ASSESSEE HAS NOT MADE ANY SALES OF THE SHARES EITHER THROUGH SHR I MUKESH CHOKSI OR M/S ALLIANCE INTERMEDIARY & NETWOR K PVT. LTD. THUS, ASSESSEE HAS NOT OBTAINED ANY ACCOMMODATION ENTRY FROM M/S MAHA SAGAR GROUP OF CA SES AS IS MENTIONED IN THE REASONS RECORDED FOR RE-OPEN ING OF THE ASSESSMENT. ACCORDING TO THE ASSESSEE AND MATE RIAL ON RECORD, THE ASSESSEE SOLD THE SHARES THROUGH M/S ASHISH STOCK BROKING PVT. LTD. AND M/S S.P.JAIN SECURITIES PVT. LTD. THEREFORE, THERE WAS NO TANGI BLE MATERIAL FOUND AGAINST ASSESSEE TO HAVE REASON TO B ELIEVE THAT ASSESSEE RECEIVED ANY ACCOMMODATION ENTRY AS ALLEGED IN THE REASONS FOR RE-OPENING OF ASSESSMENT FROM ANYBODY INCLUDING M/S MAHA SAGAR GROUP OF CASES. T HERE WAS NO REASON TO BELIEVE THAT INCOME OF THE ASSESSE E CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE ASSE SSING OFFICER RECORDED WRONG AND INCORRECT FACTS IN THE R EASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT. THE REA SONS DID NOT CLARIFY HOW IT WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS. NO INFORMATION WAS PROVIDED BY DIT (SYSTEM) TO ASSESSI NG OFFICER ABOUT ANY ACCOMMODATION ENTRY RECEIVED FROM M/S 12 MAHA SAGAR GROUP OF CASES DESPITE THE ASSESSEE MADE SPECIFIC EXPLANATION BEFORE THE AUTHORITIES BELOW I N THE ORIGINAL ASSESSMENT PROCEEDINGS AS WELL AS IN THE R E- ASSESSMENT PROCEEDINGS THAT SHARES HAVE BEEN SOLD THROUGH DIFFERENT BROKERS BUT THE AUTHORITIES BELOW FAILED TO CONSIDER THE EXPLANATION OF THE ASSESSEE WHICH I S SUPPORTED BY THE EVIDENCES AND MATERIAL ON RECORD. THERE WAS NO MATERIAL AVAILABLE WITH THE ASSESSING OFFICE R TO MAKE OUT A CASE OF ESCAPEMENT OF INCOME IN THE CASE OF THE ASSESSEE. A VALID RE-OPENING OF THE ASSESSMENT HAD TO BE BASED ONLY ON TANGIBLE MATERIAL TO JUSTIFY THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME. TH E ASSESSING OFFICER HAD RECORDED WRONG FACTS IN THE R EASONS AND HAD NOT APPLIED HIS MIND BEFORE FORMING THE BEL IEF OF ESCAPEMENT OF INCOME. THE ASSESSING OFFICER HAD NO T VALIDLY ASSUMED JURISDICTION UNDER SECTION 147/148 OF THE INCOME TAX ACT FOR RE-OPENING OF THE ASSESSMENT. T HE DIVISION BENCH OF ITAT CHANDIGARH BENCH IN THE CASE OF SMT. SARIKA JAIN & OTHERS VS ITO 46 ITR 246 (CHD) CONSIDERING VARIOUS DECISIONS INCLUDING THE DECISIO N OF SIGNATURE HOTELS PVT. LTD. (SUPRA) HELD AS UNDER : HELD, ALLOWING THE APPEAL, THAT THE REASONS RECORDE D DID NOT CLARIFY HOW THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. NO INF ORMATION WAS PROVIDED, BY THE ASSESSING OFFICER OF THE DONORS AB OUT ANY BOGUS GIFT GIVEN BY THE DONORS TO THE DONEE. DESPITE MAKI NG SPECIFIC ENQUIRY WITH REGARD TO THE GENUINENESS OF THE GIFT EVEN IN THE CASE OF THE DONOR AND EXAMINING ONE OF THE DONEES, NO AD VERSE INFERENCE WAS DRAWN AGAINST THE TRANSACTION OF THE GIFTS. THERE 13 WAS NO MATERIAL AVAILABLE WITH THE ASSESSING OFFICE R OF THE DONORS TO GIVE ANY INFORMATION TO THE ASSESSING OFF ICER OF THE ASSESSEE TO MAKE OUT A CASE OF ESCAPEMENT OF INCOME IN THE CASE OF THE ASSESSES. A VALID REOPENING OF ASSESSMENT HA D TO BE BASED ONLY ON TANGIBLE MATERIAL TO JUSTIFY THE CONCLUSION THAT TH ERE WAS ESCAPEMENT OF INCOME. THE ASSESSING OFFICER HAD RECORDED WRONG FA CTS IN THE REASONS AND HAD NOT APPLIED HIS MIND BEFORE FORMING THE BELIEF OF ESCAPEMENT OF INCOME. THE ASSESSING OFFICER HAD NOT VALIDLY ASSUMED JURISDICTION UNDER SECTIONS 147 AND 148 OF THE ACT FOR REOPENING OF THE ASSESSMENT. THE ADDITION WAS TO BE DELETED. 11. CONSIDERING ABOVE DISCUSSION, I AM OF THE VIEW RE- OPENING OF THE ASSESSMENT IS WHOLLY UNJUSTIFIED IN THE MATTER. THE ASSESSING OFFICER HAS NOT VALIDLY ASSU MED JURISDICTION UNDER SECTION 147/148 OF THE ACT. THE SAME IS, THEREFORE, LIABLE TO BE SET ASIDE AND QUASHED. 11(I) APART FROM ABOVE FINDINGS, IT IS CLEAR THAT AT THE ORIGINAL ASSESSMENT STAGE, ASSESSEE DECLARED SHORT TERM CAPITAL GAIN AND THE ASSESSING OFFICER AFTER RAISIN G SPECIFIC QUERY IN THIS REGARD AND CONSIDERING FACTS AND MATERIAL ON RECORD, ACCEPTED THE CLAIM OF THE ASSES SEE OF SHORT TERM CAPITAL GAIN UNDER SECTION 143(3) DATED 06.05.2008. THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND CORRECTLY THE MATERI AL FACTS NECESSARY FOR ASSESSMENT, THEREFORE, IT IS A CASE O F MERE CHANGE OF OPINION FOR INITIATING RE-ASSESSMENT PROCEEDINGS. I AM FORTIFIED IN MY VIEW BY THE JUDG EMENTS OF HON'BLE FULL BENCH OF DELHI HIGH COURT IN THE CA SE OF KELVINATOR OF INDIA 256 ITR 1, DECISION OF SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA 320 ITR 561, DEC ISION OF 14 GUJRAT HIGH COURT IN THE CASE OF GARDEN SILK MILLS PVT. LTD. 237 ITR 668, DECISION OF CALCUTTA HIGH COURT I N THE CASE OF BERGER PAINTS INDIA LTD. 245 ITR 648 AND DE CISION OF SUPREME COURT IN THE CASE OF CIT V FORAMER FRANC E 264 ITR 566. HON'BLE SUPREME COURT IN THE CASE OF INDI AN OIL CORPORATION 156 ITR 956 HELD THAT , NO CASE UNDER SECTION 148 IS MADE OUT WHEN FACTS WERE KNOWN ALL ALONG WIT H TO THE REVENUE WHILE MAKING ORIGINAL ASSESSMENT. HON'BLE SUPREME COURT IN THE CASE OF ASSOCIATED STONE INDUS TRIES LTD. 224 ITR 560 HELD THAT, ASSESSEE SHALL HAVE TO DISCLOSE ONLY THE PRIMARY FACTS. HON'BLE BOMBAY HIGH COURT IN THE CASE OF TITANOR COMPONENTS LTD. VS ACI T 343 ITR 183 HELD AS UNDER : 'WHERE A REASSESSMENT IS SOUGHT TO BE MADE AFTER FO UR YEARS THE POWER CONFERRED BY SECTION 147 OF THE INCOME-TAX ACT, 1961, DOES NOT PROVIDE A FRESH OPPORTUNITY TO THE ASSESSI NG OFFICER TO CORRECT AN INCORRECT ASSESSMENT MADE EARLIER UNLESS T HE MISTAKE IN THE ASSESSMENT SO MADE IS THE RESULT OF A FAILURE OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERI ALS FACTS NECESSARY FOR ASSESSMENT. THERE IS A DIFFERENCE BET WEEN A WRONG CLAIM MADE BY AN ASSESSEE AFTER DISCLOSING ALL THE TRUE AND MATERIAL FACTS FULLY AND TRULY AND A WRONG CLAIM M ADE BY THE ASSESSEE BY WITHHOLDING THE MATERIAL FACTS FULLY AND TRULY. IT IS ONLY IN THE LATTER CASE THAT THE ASSESSI NG OFFICER WOULD BE ENTITLED TO PROCEED UNDER SECTION 147. HELD, ALLOWING THE PETITION, THAT THE ASSESSING OFFICER HAD NOT RECORDED THE FAILURE ON THE PART OF THE PETITIONER TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT YEAR 1997-98. WHAT WAS RECORDED WAS THAT THE PETITIO NER HAD WRONGLY CLAIMED CERTAIN DEDUCTIONS WHICH HE WAS NOT ENTITLED 15 TO. THE REASSESSMENT PROCEEDINGS INITIATED IN THE Y EAR 2004 WERE NOT VALID 11(II) HON'BLE DELHI HIGH COURT IN THE CASE OF TEC HMAN BUILDWELL P. LTD. V ACIT 370 ITR 771 HELD AS UNDER : HELD, ALLOWING THE PETITION, THAT THE 'REASONS TO B ELIEVE' NOWHERE HIGHLIGHTED WHAT, IF AT ALL, WAS THE MATERIA L WHICH THE ASSESSING OFFICER CAME UPON OR BECAME AWARE OF SUBSE QUENT TO THE ORIGINAL ASSESSMENT. IN OTHER WORDS, WHAT TRIGG ERED THE ASSESSING OFFICER'S CURIOSITY TO IMPEL HIM TO RE-EX AMINE THE FILES AND DOCUMENTS PERTAINING TO A COMPLETED ASSESSMENT WAS UNKNOWN. NOR DID THE MATERIALS PLACED IN THE ASSESS MENT SHOW THAT THE ASSESSEE HAD UNJUSTIFIABLY SUPPRESSED VALI D OR RELEVANT INFORMATION WHICH WAS OTHERWISE AVAILABLE. THE ADVE RTENCE TO THE DISALLOWANCE OF A PROVISION FOR AN UNASCERTAINE D LIABILITY POINTS TO THE ASSESSING OFFICER INDULGING IN WHAT AM OUNTED TO NOTHING BUT A MASKED REVIEW. WHAT APPEARED TO HAVE EXCI TED THE ASSESSING OFFICER'S MIND WAS THAT THE ORIGINAL ASSE SSMENT ORDER WAS NOT FRAMED PROPERLY AS IT OVERLOOKED CERT AIN MATERIALS WHICH LED TO LOSS OF REVENUE. THE ASSESSING OFFICER IN THE FIRST INSTANCE DID NOT PERFORM HIS JOB PROPERLY FOR WHICH THE ASSESSEE COULD NOT BE FAULTED. THE ASSESSING OFFICE RS OMISSION WAS THE SOLE BASIS FOR ISSUING THE REASSESSMENT NOT ICE AND, CONSEQUENTLY, PROCEEDING TO MAKE THE DEMAND. THEREF ORE, THE NOTICE AND THE DEMANDS ARISING CONSEQUENT TO THE NO TICE WERE QUASHED. 12. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE DECISIONS, IT IS CLEAR THAT RE-OPENING IS DON E MERELY ON CHANGE OF OPINION WHICH IS NOT PERMISSIBLE UNDER THE LAW. I HAVE ALREADY NOTED ABOVE THAT EVEN IN THE R EASONS THE FACTS HAVE BEEN WRONGLY RECORDED, THEREFORE, RE - 16 OPENING OF THE ASSESSMENT IS CLEARLY BAD IN LAW AND CANNOT BE SUSTAINED. I, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW QUA THE INITIATION OF RE-ASSES SMENT PROCEEDINGS AND QUASH RE-OPENING OF THE ASSESSMENT IN THE MATTER. RESULTANTLY, THE ADDITIONS MADE IN RE- ASSESSMENT ORDER OF RS. 25,19,697 IS DELETED. IN T HIS VIEW OF THE MATTER, THERE IS NO NEED TO DECIDE THE ADDIT ION ON MERIT. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ITA 70/2015 ( SHRI KAMAL KANT JAIN) ITA 72/2015 ( SHRI NARINDER KUMAR JAIN, THROUGH LR) 14. BOTH THE APPEALS BY DIFFERENT ASSESSEES ARE D IRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS), PANCH KULA DATED 22.12.2014 FOR ASSESSMENT YEAR 2006-07 IN WHI CH THE ASSESSEES HAVE CHALLENGED INITIATION OF RE-ASSE SSMENT PROCEEDINGS UNDER SECTION 147/148 OF THE INCOME TAX ACT AND ADDITIONS UNDER SECTION 68 OF THE INCOME TAX AC T OF RS. 21,98,180/- AND RS. 20,22,785/- AS UNDISCLOSED INCOME RESPECTIVELY ON ACCOUNT OF SHORT TERM CAPITA L GAIN. 14(I) THE ASSESSING OFFICER, SIMILARLY RECORDED R EASONS FOR RE-OPENING OF THE ASSESSMENT IN BOTH THE CASES THAT ASSESSEES HAVE OBTAINED ACCOMMODATION ENTRIES FROM M/S MAHA SAGAR GROUP OF CASES, WHICH FACT IS INCORRECT BECAUSE THE ASSESSEE HAVE SOLD THE SHARES THROUGH DIFFERENT BROKERS AS HAVE BEEN CONSIDERED IN THE CA SE OF SHRI PREM SAGAR JAIN (SUPRA). THE LD. COUNSEL FOR THE 17 ASSESSEE POINTED OUT THAT THE ONLY DIFFERENCE IS TH AT IN THESE CASES, THE RETURNS WERE PROCESSED UNDER SECTI ON 143(1) OF THE INCOME TAX ACT. THEREFORE, THE ISSUE IS SAME AS HAVE BEEN CONSIDERED IN THE CASE OF SHRI PR EM SAGAR JAIN (SUPRA). I, THEREFORE, FOLLOWING THE RE ASONS FOR DECISION IN THE CASE OF SHRI PREM SAGAR JAIN (SUPRA ) (EXCEPT ON CHANGE OF OPINION), SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND QUASH THE RE-OPENING OF THE ASSESSMENTS IN THE MATTER. RESULTANTLY, ALL ADDITI ONS ON MERIT ARE ALSO DELETED. THERE IS NO NEED TO CONSID ER THE ISSUES ON MERIT. 15. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED. 16. IN THE RESULT, ALL APPEALS OF THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 14 TH SEPT., 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH