Monaben Amitkumar Shah, Bhavnagar V. The Dy. CIT, Circle-1, Bhavnagar

ITA 707/AHD/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1028 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-12-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 22-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B R POPAT; ROHAN POPAT A RS
• Keywords: Transactions in derivatives
• Section: 143(3); 64; 148

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 707/AHD/2018 ( ASSESSMENT YEAR : 2012-13) MONABEN AMITKUMAR SHAH 1526/A, PUSHPAK, B/H. THEOSOPHICAL LODGE, RUPANI CIRCLE, BHAVNAGAR - 364001 / VS. THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-1, BHAVNAGAR ./ ./ PAN/GIR NO. : APUPS4332J ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI B. R. POPAT & SHRI ROHAN POPAT, A.RS. / RESPONDENT BY : SHRI DILEEP KUMAR, SR.D.R. DATE OF HEARING 05/12/2019 !'# / DATE OF PRONOUNCEMENT 18/12/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-6, AHMEDABAD, (CIT(A) IN SHORT), DATED 22.02.2018 AR ISING IN THE ASSESSMENT ORDER DATED 20.11.2017 PASSED BY THE ASS ESSING OFFICER (AO) UNDER S. 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1 961 (THE ACT) CONCERNING AY 2012-13. ITA NO.707/AHD/18 [MONABEN A. SHAH ] A.Y. 2012-13 - 2 - 2. THE GROUND OF APPEAL RAISED BY ASSESSEE READS AS UNDER: 1. CONFIRMING THE ACTION OF THE AO IN RE-OPENING T HE ASSESSMENT FOR THE REASONS AS RECORDED AND CONVEYED IN DUE COURSE OF TIME TO THE APPELLANT; AND 2. CONFIRMING THE ACTION OF THE AO IN MAKING DISALL OWANCE OF RS.13,21,091/- AND THEREBY MAKING ADDITION OF THE S AID AMOUNT TO THE RETURNED INCOME, FOR THE REASONS AS STATED IN THE B ODY OF THE ORDER. 3. BRIEFLY STATED, THE ASSESSEE FILED RETURN OF T HE INCOME DECLARING TOTAL INCOME AT RS.7,90,860/- FOR AY 2012-13 IN QUE STION. THE RETURN WAS PROCESSED UNDER S.143(1) OF THE ACT. THE CASE WAS THEREAFTER REOPENED UNDER S.148 OF THE ACT AND THE PROCEEDINGS UNDER S.147 OF THE ACT WERE INITIATED. THE AO IN THE COURSE OF THE RE- ASSESSMENT PROCEEDINGS ALLEGED THAT THE ASSESSEE HAS INDULGED IN CLIENT CODE MODIFICATION (CCM) FACILITY IN CONNIVANCE WITH THE BROKER WHICH RESULTED IN SHIFTING OUT OF THE PROFITS OF THE ASSE SSEE AND SHIFTING IN OF THE LOSSES OF OTHER PERSONS. IT WAS THUS ALLEGED T HAT SUCH CCM RESULTED IN REDUCTION OF TAXABLE INCOME TO THE EXTENT OF RS. 13,21,091/- BASED ON THE INFORMATION RECEIVED FROM THE INVESTMENT DIRECT ORATE IN THIS REGARD. THE AO DISALLOWED THE LOSSES ARISING AS A RESULT OF CCM AS CONTRIVED LOSSES AND BOGUS LOSSES CLAIMED BY THE ASSESSEE. T HE AO ACCORDINGLY RE- ASSESSED THE INCOME AT RS.21,11,951/- BY MAKING AN ADDITION OF RS.13,21,091/- ON ACCOUNT OF LOSSES ATTRIBUTABLE TO CCM IN RESPECT OF MODIFIED TRADE TRANSACTIONS CARRIED THROUGH ITS BRO KER FOR EXECUTION OF TRADE USING THE FACILITY OF THE STOCK EXCHANGE PLAT FORM. 4. THE CIT(A) CONFIRMED THE ACTION OF THE AO IN ASS UMING JURISDICTION UNDER S.147 OF THE ACT. THE CIT(A) AL SO FOUND NO MERIT IN THE PLEA OF THE ASSESSEE AGAINST MIS-USE OF CCM FAC ILITY AND CONFIRMED THE LOSSES ARISING TO THE ASSESSEE TO THE TUNE OF R S.13,21,091/- TO BE CONTRIVED LOSSES BY ADOPTING SYSTEMIC SHIFTING OF S UCH CRYSTALIZED LOSSES TO THE ACCOUNT OF THE ASSESSEE FROM TRADE EXECUTED AT THE NATIONAL STOCK EXCHANGE. THE CIT(A), IN A NUT SHELL, OBSERVED THA T THE BROKER INDULGED IN A LARGE SCALE CCM SO AS TO FACILITATE SHIFTING O F LOSSES AND PROFITS TO ITA NO.707/AHD/18 [MONABEN A. SHAH ] A.Y. 2012-13 - 3 - THE ADVANTAGE OF ASSESSEE IN AN IMPERMISSIBLE MANNE R. THE CIT(A) ACCORDINGLY DECLINED TO INTERFERE WITH THE ADDITION S MADE. 5. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 6. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE REFERRED TO THE REASONS RECORDED UNDER S.1 48(2) OF THE ACT, WHEREBY THE JURISDICTION TO RE-ASSESS THE INCOME WA S USURPED. THE LEARNED AR FOR THE ASSESSEE RELIED UPON THE JUDICIA L PRECEDENTS, NAMELY, VARSHABEN SANATBHAI PATEL V. ITO [2015] 64 TAXMANN. COM 179 (GUJARAT); CORONATION AGRO INDUSTRIES LTD. VS. DCIT REPORTED IN (2017) 390 ITR 464 (BOM.); FOR THE PROPOSITION THAT THE REOPENING IS NOT VALI D ON THE BASIS OF CCM ALLEGEDLY DONE BY THE ASSESSEE S BROKER. THE LEARNED AR THEREAFTER SUBMITTED ON MERIT THAT THE D ETAILS FURNISHED BY THE AO TOWARDS LOSSES ARISING IN DIFFERENT FINANCIA L YEARS ATTRIBUTABLE TO CCM CONCERNING FYS. 2008-09 TO 2010-11. THE AO HAS WRONGLY ADOPTED THE IDENTICAL FIGURE OF RS.13,12,091/- CONC ERNING FY 2010-11 AS THE LOSS OF FY 2011-12 ALSO. THE LEARNED AR REFERR ED TO THE PRINT OUT TAKEN FROM SOFT DATE SHEET SUPPLIED BY THE AO IN RE -ASSESSMENT PROCEEDINGS TO ASSERT THE ABOVE FACTS WHICH IS EXTR ACTED AS UNDER: BENEFICIARY CLIENT AND BROKER PARTICULARS OF THE BENEFICIARIES OF CLIENT CODE MODIFICATION PAN OF BENEFICIARY CLIENT APUPS4322J NAME OF BENEFICIARY CLIENT MONA A SHAH ADDRESS OF BENEFICIARY PLOT NO 2130-A/2- VRAJRAJ T/P-AATABHAI ROAD--BHAVNAGAR- 364002 JURISDICTIONAL AO CIRCLE 1, BHAVNAGAR JURISDICTIONAL ADDL/JT CIT RANGE 1, BHAVNAGAR JURISDICTIONAL PR CIT PCIT 6, AHMEDABAD JURISDICTIONAL PR CCIT CCIT 1, AHMEDABAD AREA CODA GUJ AO TYPE C FLANGE CODE 120 AO NUMGER 1 PR CC1T CODE 11 ITA NO.707/AHD/18 [MONABEN A. SHAH ] A.Y. 2012-13 - 4 - AREA GUJARAT NAME OF BROKER MANGAL KESHAV SECURITIES LTD. QUANTUM ANALYSIS FV 2008-09 WHEN OC (ASCERTAINED PROFIT SHIFTED OUT) 331462 WHEN MC (ASCERTAINED LOSSES SHIFTED IN) -2535009 NET REDUCTION IN INCOME DUE TO CCM -2966471 FY 2009-10 WHEN OC (ASCERTAINED PROFIT SHIFTED OUT) 648684 WHEN MC (ASCERTAINED LOSSES SHIFTED IN 545606 NET REDUCTION IN INCOME DUE TO CCM -103078 FY 2010-11 WHEN OC (ASCERTAINED PROFIT SHIFTED OUT) 879524 WHEN MC (ASCERTAINED LOSSES SHIFTED N) -1312091 NET REDUCTION IN INCOME DUE TO CCM -2191615 FY 2011-12 WHEN OC (ASCERTAINED PROFIT SHIFTED OUT) 0 WHEN MC (ASCERTAINED LOSSES SHIFTED N) -1312091 NET REDUCTION IN INCOME DUE TO CCM -1312091 NET AFFECT IN 4 YEARS GRAND TOTAL OF NET REDUCTION IN INCOME DUE TO CCM -6573255 PERCENTAGE ANALYSIS COUNT OF TRANSACTIONS AS ORIGINAL CLIENT NO. OF TRANSACTIONS WHERE ASCERTAINED PROFIT IS SHIFTED OUT 138 NO. OF TRANSACTIONS WHERE ASCERTAINED LOSS IS SHIFTED OUT 59 % OF TRANSACTIONS WHERE ASCERTAINED PROFIT IS SHIFTED OUT 70.05 % OF TRANSACTIONS WHERE ASCERTAINED LOSS IS SHIFTED OUT 29.95 COUNT OF TRANSACTION AS MODIFIED CLIENT NO, OF TRANSACTIONS WHERE PROFIT SHIFTED IN 30 NO. OF TRANSACTIONS WHERE LOSS SHIFTED IN 74 % OF TRANSACTIONS WHERE PROFIT SHITTED IN 28.85 % OF TRANSACTIONS WHERE LOSS SHIFTED IN 71.15 AS ORIGINAL CLIENT 2008-09 NO. OF TRANSACTIONS WHERE ASCERTAINED LOSS IS SHIFTED OUT 35 TRANSACTIONS RESULTING IN NO PROFIT NO LOSS 0 THE LEARNED AR ACCORDINGLY SUBMITTED THAT IN THE AB SENCE OF SPECIFIC DATA TOWARDS CCM RELATABLE TO ASSESSEE FOR THE AY 2 012-13 IN QUESTION, IT WILL NOT BE POSSIBLE TO OFFER ANY COMMENT ON CCM FOR THE IMPUGNED ASSESSMENT YEAR. ITA NO.707/AHD/18 [MONABEN A. SHAH ] A.Y. 2012-13 - 5 - 7. THE LEARNED DR FOR THE REVENUE, ON THE OTHER HAN D, RELIED UPON THE LOWER AUTHORITIES. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE ASSESSEE HAS RAISED THE VALIDITY OF ASSUMPTION OF JURISDICTI ON UNDER S.147 AS WELL AS CHALLENGED MERITS OF ADDITIONS MADE TOWARDS CONT RIVED LOSSES OWING TO ALLEGED CCM BY THE BROKER IN RELATION TO CERTAIN TRADES PERFORMED ON THE PLATFORM OF THE STOCK EXCHANGE. 9. WE SHALL FIRST ADDRESS ON THE OBJECTION RAISED O N JURISDICTIONAL ASPECTS. 9.1 THE REASONS RECORDED BY THE AO FOR INVOKING SEC TION 147 OF THE ACT READ AS UNDER: IN THIS CASE THE TRADE DATA RELATED TO ALL THE TRA NSACTIONS ENTERED BY THE ASSESSEE IN THE CASH, DERIVATIVE AND F&O SEGMEN T HAS BEEN CALLED FOR FROM THE EXCHANGES. THE DATA WAS CALLED FOR ALO NG WITH THE DETAILS OF ALL THE MODIFIED TRADE DATA BY USING CLIENT CODE MODIFICATION IE. MODIFIED TRADE IN WHICH THE ASSESSEE WAS ORIGINAL C LIENT AS WELL AS THE MODIFIED TRADE IN WHICH THE ASSESSEE WAS MODIFIED C LIENT. IN RESPECT OF THE MODIFIED TRADE TRANSACTION BY USING CLIENT CODE MODIFICATION (CCM) IT IS PERTINENT TO MENTION THAT CLIENT CODE MODIFIC ATION MEANS MODIFICATION / CHANGE OF THE CLIENT CODES, AFTER EX ECUTION OF TRADES. VIDE CIRCULAR NO. SMD/POLICY/CIR-/03 DATED FEBRUARY 6, 2003 SEBI MANDATED THAT THE STOCK EXCHANGES SHALL NOT NORMALL Y PERMIT CHANGES IN THE CLIENT CODE EXCEPT TO CORRECT FOR GENUINE MISTA KES. EVERY CLIENT IS GIVEN A CODE WHICH IS REGISTERED WITH THE STOCK EXC HANGES. THE. CLIENT CODE MODIFICATIONS PERMIT BROKERS TO RECTIFY HUMAN ERRORS WHEN A CLIENT INADVERTENTLY PROVIDES A WRONG CODE OR WHEN OR A WR ONG CODE IS PUNCHED IN BY THE BROKER WHILST EXECUTING THE TRADE . THE BROKER IS ALLOWED TO CHANGE IT BETWEEN 3.30 PM AND 4 PM TO RE CTIFY A GENUINE ERROR THAT MAY HAVE OCCURRED WHILE ENTERING THE COD E. THE FACILITY ENSURES SMOOTH FUNCTIONING OF THE SYSTEM AND IS TO BE USED AS AN EXCEPTION RATHER THAN ROUTINE. OVER A PERIOD OF TIME, SOME PERSONS, IN CONNIVANCE WITH BROKERS STARTED USING CLIENT CODE MODIFICATIONS FOR PURPOSES OTHER THAN GENUINE ERRORS. CONTRARY TO ITS MOTIVE, CCM FACILITY BEING MISUSED AND BROKERS TRANSFERRED GAINS OR LOSSES FROM ONE PERSON TO ANOT HER BY CHANGING THE CODE, IN THE GARB OF CORRECTING AN ERROR. THESE GAI N OR LOSS-BOOK ENTRIES WERE THEN USED TO EVADE TAXES. SEBI CONDUCTED A PROBE INTO 'MODIFICATION OF CLIENT CODES' BY BROKERS, PURSUANT TO OBSERVATIONS BY THE FINANCE MINISTRY AB OUT MANY SUCH MODIFICATIONS TAKING PLACE IN DERIVATIVES TRANSACTI ONS AT THE NSE DURING MARCH 2010. WITH REGARD TO THE CLIENT CODE M ODIFICATIONS, THE ITA NO.707/AHD/18 [MONABEN A. SHAH ] A.Y. 2012-13 - 6 - TRADING ACTIVITIES UNDER SCANNER OF SEBI MOSTLY TOO K PLACE BETWEEN 2009 AND 2011 AFTER WHICH SEBI TIGHTENED ITS NORMS TO PUT A FULL-STOP TO SUCH MANIPULATIONS. BEFORE TIGHTENING OF THE NOR MS, THE INDIAN MARKETS WERE SEEING CLIENT CODE MODIFICATIONS TO TH E TUNE OF RS 50,000 - RS 60,000 CRORE A MONTH, WHICH CAME DOWN TO JUST AB OUT RS 100 CRORE SOON AFTER SEBI'S ACTION. THE PROBE ALSO SHOWED THA T THE QUANTUM OF SUCH MODIFICATIONS WAS MUCH HIGHER DURING MARCH, CO MPARED RE-THE OTHER MONTHS, WHICH HINTED TOWARDS THE TAX EVASION ANGLE DUE TO IT BEING THE LAST MONTH OF THE FISCAL. THIS SHOWED THA T A LARGE-SCALE MANIPULATION WAS TAKING PLACE WHERE BROKERS WERE MA KING CHANGES IN THE CLIENT DETAILS AFTER EXECUTION OF TRADES CITING 'GENUINE ERRORS'. IN APRIL 2012, SEBI PASSED AN ORDER AGAINST NSE FOR BE ING 'NEGLIGENT IN DISCHARGE OF ITS DUTIES' IN CASE OF MODIFICATION OF CLIENT CODES. SEBI, IN THIS ORDER DIRECTED NSE TO BE MORE CAUTIOUS AND PER CEPTIVE IN DISCHARGE OF ITS REGULATORY DUTIES, STATING IT WAS 'CONVINCED THAT NSE HAS BEEN NEGLIGENT IN DISCHARGE OF ITS DUTIES...'. IT WAS ESTABLISHED BEYOND DOUBT THAT THE ELEMENT OF MALAFIDE INTENTION WAS PRESENT IN THE PROCESS OF CCM. SEBI HAD IN JULY 2011 IMPOSED A STRICTER PENALTY ON SUCH MODIFICATIONS TO FURTHER STRENGTHEN THE SYSTEM, SEBI INSTRUCTED B OURSES TO IMPOSE A MONETARY PENALTY OF 1% OF THE VALUE OF THE TRANSACT ION WHERE THE CLIENT CODES WERE MODIFIED. ACCORDING TO BROKERS, THE PENA LTY IS 50 TIMES THE YIELD IN THE F&O SEGMENT. THE AVERAGE YIELD IN THE DERIVATIVES SEGMENT IS 0.02%, SEBI ALSO DIRECTED THE EXCHANGES TO CONDU CT SPECIAL INSPECTION OF TRADING MEMBERS TO CHECK WHETHER SUCH MODIFICATIONS ARE BEING CARRIED ON AS PER THE CRITERIA. THEREFORE, IN ORDER TO INVESTIGATE THE GAMUT BEHIND THE CCM THE DIRECTORATE, AHMEDABAD INVESTIGATION WING HAS COLLE CTED ALL INDIA DATA OF CCM FROM DIFFERENT EXCHANGES AND ANALYZED THE DA TA, THE PRELIMINARY ANALYSIS OF THIS DATA INDICATES TOWARDS THE SYSTEMIC SHIFTING OF HUGE CRYSTALLIZED LOSSES USING CCM. THE RESULTS OF THE ANALYSIS INDICATE THAT THE FINDING OF SEBI THAT CCM WAS USED FOR PURPOSE 'OTHER THAN FOR RECTIFYING THE GENUINE ERRORS' WAS NOTHING BUT A EUPHEMISM FOR TAX EVASION. IN VIEW OF THE ABOVE, THIS OFFICE HAS ALSO ANALYZED THE TRADE DATA IN WHICH CCM WAS RESORTED. ON ANALYSIS OF THE TRADE DA TA FOR THE YEAR UNDER CONSIDERATION, IT IS SEEN THAT IN THIS CASE T HE ASSESSEE HAS SHIFTED IN THE LOSSES OF RS. -1321091/-. THUS, BY RESORTING THE CCM, THE ASSESSEE HAS REDUCED THE TAXABLE INCOME TO THE TUNE OF RS.1321091/-. FURTHER, IN ORDER TO ASCERTAIN THE TOTAL NO. OF EDI TS IN BOTH TYPE OF MODIFICATION I,E. WHEN THE ASSESSEE WAS ORIGINAL CL IENT (OCC) AND WHEN THE, ASSESSEE WAS MODIFIED CLIENT (MCC), ANALYSIS O F THE MODIFIED TRANSACTION HAS ALSO BEEN DONE WITH THE HELP OF LEV ENSTINE TABLE. THE LEVENSHTEIN DISTANCE ANALYSIS OR DIGIT EDIT ANALYSI S HELPS US KNOW THE MINIMUM NUMBER OF EDITS REQUIRED FROM CHANGING ONE CODE TO ANOTHER. THE LEVENSHTEIN DISTANCE, ANALYSIS. ESTABLISHED THA T CLIENT CODE MODIFICATION IN THIS C?,SE HAS BEEN DONE TO REDUCE THE TAX LIABILITY BY SHIFTING OUT THE ASCERTAINED PROFIT AND SHIFTING IN THE CONTRIVED LOSS. FURTHER, IT IS ALSO NECESSARY TO MENTION THAT A SUR VEY U/S.!33A OF ACT WAS CARRIED OUT IN THE CASE OF THE ASSESSEE'S BROKE R I.E. MANGAL KESHAV ITA NO.707/AHD/18 [MONABEN A. SHAH ] A.Y. 2012-13 - 7 - SECURITIES, DURING THE COURSE OF THE SURVEY IT IS S EEN THAT THIS BROKER WAS INDULGED IN LARGE SCALE CLIENT CODES MODIFICATI ONS SO AS TO FACILITATE LOSSES AND PROFITS TO THE CLIENTS AS PER THE REQUIREMENT. HENCE, IN VIEW OF THE ABOVE IT CAN BE CONCLUDED THA T; BY RESORTING THE CCM, THE ASSESSEE HAD REDUCED THE TAXABLE INCOME TO THE TUNE OF RS. 1321091/-. THEREFORE, AFTER APPLICATION OF MIND I H AVE STRONG REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX TO THE TUN E OF RS. 1321091/- HAS BEEN ESCAPED ASSESSMENT WITHIN THE MEANING OF P ROVISIONS OF SECTION 147 OF THE ACT, AND THIS CASE IS FIT /OR IS SUE OF NOTICE U/S. 148 OF THE INCOME-TAX ACT. 9.2 IT APPEARS THAT THE AO HAS OBTAINED CERTAIN INF ORMATION FROM THE INVESTIGATION WING OF THE DEPARTMENT TOWARDS THE MODUS OPERANDI USED BY THE CLIENT IN CONNIVANCE WITH BROKERS TO WRONGFU LLY SHIFT THE PROFITS/LOSSES FROM ONE PERSON TO ANOTHER TO MINIMI ZE THE INCIDENCE OF TAXATION BY ARTIFICIALLY LOWERING THE PROFITS GENER ATED. THE AO CLAIMS TO HAVE ANALYZED TRADE DATA EXECUTED ON THE PLATFORM O F EXCHANGE IN WHICH CCM HAS BEEN ASSERTED. THE AO CLAIMED THAT REOPENI NG WAS NOT DONE MERELY ON THE BASIS OF FINDINGS OF THE INVESTIGATIO N DIRECTORATE, AHMEDABAD BUT AFTER ANALYSIS OF THE TRADE DATA RELA TED TO TRANSACTIONS ENTERED INTO BY THE ASSESSEE IN CASH OR DERIVATIVE SEGMENTS IN VARIOUS EXCHANGES. IT WAS CLAIMED THAT THE DATA ANALYZED W AS THE BASIS WHICH WAS CONFRONTED TO THE ASSESSEE THROUGH SHOW CAUSE N OTICE AND THE DATA ANALYSIS WAS THE KEY REASON WHERE THE AO DISCOVERED THE BOOKING OF CONTRIVED LOSSES. 9.3 IN THIS BACKDROP, THE BASIS FOR REOPENING AND D ATA TO SUPPORT THE ESCAPEMENT OF INCOME IS UNDER CHALLENGE. TO BEGIN WITH, WE OBSERVE THAT THE ONUS IS ON THE REVENUE TO JUSTIFY THE ALLE GATIONS MADE IN THE REASONS RECORDED. AS STATED ON BEHALF OF THE ASSES SEE, THE AO HIMSELF HAS FAILED TO POINT OUT ANY TRANSACTION INVOLVING C CM RELATION TO FY 2011-12 I.E. AY 2012-13. THE DATA PROVIDED TO THE ASSESSE SPECIFYING AMOUNT OF RS.13,12,091/- RELATES TO OTHER FINANCIAL YEAR AND DOES NOT PERTAIN TO FY 2011-12 CONCERNING AY 2012-13 IN QUES TION. INCIDENTALLY, WE ALSO NOTICE FROM A SUMMARY SHEET PREPARED FROM T HE DATA AS SUPPLIED BY THE AO IN THE COURSE OF THE RE-ASSESSMENT PROCEE DINGS THAT ALLEGATION TOWARDS LOSS SHIFTED IN FOR FY 2011-12 AT RS.13,12, 091/- IS IDENTICAL TO ITA NO.707/AHD/18 [MONABEN A. SHAH ] A.Y. 2012-13 - 8 - THE LOSS ALLEGEDLY SHIFTED IN RELATION TO EARLIER F Y 2010-11. IT CLEARLY SHOWS THAT THE AO HAS WRONGLY ADOPTED THE DATA OF A N EARLIER YEAR AND HAS WRONGLY ALLEGED THE SAME AMOUNT AS ESCAPED INCO ME FOR AY 2012-13 WITHOUT BASING HIS ANALYSIS ON ANY DATA CONCERNING FY 2011-12. IN SHORT, ALLEGATION OF ESCAPEMENT IS WITHOUT ANY FACT UAL DATA ON CCM FOR FY 2011-12 CONCERNED. THUS, IT IS AN OSTENSIBLE CA SE OF PALPABLY WRONG ASSUMPTION OF FACTS FOR INVOKING SECTION 147 OF THE ACT. THE INVOCATION OF SECTION 147 OF THE ACT IS WITHOUT ANY FACTUAL BA SIS. THIS IS CLEARLY IMPERMISSIBLE IN LAW. THE REOPENING UNDER S.147 R. W.S. 148 OF THE ACT IN RELATION TO AY 2012-13 IS OBVIOUSLY WITHOUT ANY BON AFIDE BELIEF TOWARDS ESCAPEMENT OF INCOME. THEREFORE, THE NOTICE UNDER S.148(2) OF THE ACT IS UNSUSTAINABLE IN LAW AND IMPUGNED RE-ASSESSMENT ORD ER MADE UNDER S.147 R.W.S. 143(3) OF THE ACT IS BAD IN LAW. WE THEREFO RE REVERSE THE ACTION OF THE CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION S. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. SD/- SD/- (MADHUMITA ROY) (PRADIP KUMAR K EDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 18/12/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 18/12/2019