Appeal Details
Counselvise Citation
[2019] 115 COUNSELVISE.COM (IT) 4544 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 2 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
20-03-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
D
Assessment Year
2006-2007
Appeal Filed On
27-12-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.7403/M/2017 ASSESSMENT YEAR: 2006-07 DCIT 3(3)(1), ROOM NO.609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. SMT. DIPTI DATTARAJ SALGAOKAR, SALGAOKAR HOUSE, DR. F.L. GOMES ROAD, VASCO DA GAMA, GOA. PAN: ABKPS7317M (APPELLANT) (R ESPONDENT) ITA NO.7404/M/2017 ASSESSMENT YEAR: 2006-07 SMT. DIPTI DATTARAJ SALGAOKAR, SALGAOKAR HOUSE, DR. F.L. GOMES ROAD, VASCO DA GAMA, GOA. PAN: ABKPS7317M VS. DCIT 3(3)(1), ROOM NO.609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VIJAY MEHTA, A.R. SHRI GOVIND JHAVERI, A.R. REVENUE BY : SHRI T. KIPGEN, D.R. DATE OF HEARING : 20.02.2019 DATE OF PRONOUNCEMENT : 20.03.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE CROSS APPEALS ONE BY THE REVENUE AND THE OTHER BY THE ASSESSEE HAVE BEEN PREFERRED AGAINST THE ORD ER DATED 13.10.2017 OF THE COMMISSIONER OF INCOME TAX (APPEA LS) ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 2 [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2006-07. ITA NO.7404/M/2017 (ASSESSEES APPEAL) 2. IN THE ASSESSEES APPEAL, THE CONFIRMATION OF RE -OPENING OF ASSESSMENT HAS BEEN CHALLENGED WHEREAS, THE REVENUE IN ITS APPEAL ASSAILED THE ORDER OF CIT(A) DELETING THE AD DITION ON MERITS. FIRST, WE SHALL TAKE UP THE APPEAL OF THE A SSESSEE IN ITA NO. 7407. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- 1. THE LEARNED C1T(A) ERRED IN CONFIRMING REOPEN ING OF ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT, WITHOUT APPRECIATING THE FACT T HAT ASSESSING OFFICER (AO) HAS NOT COMPLIED WITH THE JURISDICTIONAL CONDITIONS WHICH A RE REQUIRED TO BE FULFILLED BEFORE THE JURISDICTION CAN BE VALIDLY ASSUMED. THE LEARNE D CIT(A) FAILED TO APPRECIATE THAT AO DID NOT PROVIDE ANY AUTHENTICATED INFORMATION AL LEGED TO BE IN HIS POSSESSION WHICH HAD LED TO HIS BELIEF THAT THERE IS ESCAPEMEN T OF INCOME AS THE VERY SAME INCOME IS TAXED IN THE HANDS OF THE HUSBAND OF APPE LLANT. 2. IT IS THEREFORE PRAYED THAT THE ORDER OF THE C OMMISSIONER OF INCOME-TAX (APPEALS) BE CANCELLED AND DIRECTION BE ISSUED TO A LLOW THE APPEAL ON THE GROUNDS RAISED BEFORE HIM. 3. EACH ONE OF THE ABOVE GROUNDS OF APPEAL IS WI THOUT PREJUDICE TO THE OTHER. 4. THE APPELLANT RESERVES THE RIGHTS TO AMEND ALT ER OR ADD TO ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS DERI VING INCOME FROM SALARIES, CAPITAL GAIN AND OTHER SOURCES AND F ILED HER RETURN OF INCOME ON 31.7.2006 DECLARING AN INCOME O F RS.1,26,25,760/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THE CASE WAS SELECTED FOR SCRUTINY PROCEEDINGS AND ASSESSMENT U/S 143(3) WAS FRAMED VIDE ORDER DATED 17.4.2008. T HEREAFTER INFORMATION WAS RECEIVED FROM THE GOVERNMENT OF FRA NCE UNDER DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) REGARDIN G BANK ACCOUNT WITH HSBC, GENEVA IN THE NAME OF SMT DIPTI SALGAOCAR ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 3 JOINTLY WITH HER HUSBAND AND CHILDREN WHICH WAS PA SSED ON TO THE AO. THE CASE OF THE ASSESSEE WAS RE-OPENED U/ S 147 OF THE ACT BY DCIT MUMBAI BY ISSUING NOTICE U/S 148 ON 3.6 .2014. THE REASONS RECORDED ARE EXTRACTED BELOW:- ...INFORMATION UNDER THE DOUBLE TAXATION AVOIDANCE AGREEMENT (HEREINAFTER REFERRED AS DTAA) FROM THE FRENCH AUTHORITIES REGAR DING EXISTENCE OF CERTAIN BANK ACCOUNTS WITH HSBC BANK, GENEVA IN THE NAME OF SMT. DIPTI DATTARAJ SALGAOCAR HAS BEEN RECEIVED FROM THE JOINT COMMISSIONER OF INCOME TAX, MARGAO RANGE, MARGAO. 2. AS PER THE INFORMATION, SMT DIPTI DATTARAJ SALGA OCAR HAS BANK ACCOUNTS WITH HSBC BANK, GENEVA, WITH FOLLOWING INTERNAL IDENTIFI ER (IDENTIFIANTS INTERNES) DETAILS S.NO. BUP_SIFIC_PER_ID PER ID PER_NO. 1. 5090184332 144366 184332 3. FURTHER, SMT. DIPTI DATTARAJ SALGAOCAR WITH THE AFORESAID IDENTIFICATION DETAILS IS LINKED WITH THE FOLLOWING BANK ACCOUNT: S.NO. NOM DU PROFIT CLIENT CODE PROFIT CLIENT I BAN NO. (I) GALLI ARD CAPITAL LIMITED 5091457543 CH 05 08 68 9050 9120 3244 7 CH 48 0868 9050 9120 4408 9 4. THE ASSESSEE IS THE HOLDER OF THE AFORESAID BANK ACCOUNT WHICH HAS A PEAK CREDIT/ DEPOSIT OF USS 51,78,668.83, EQUIVALENT TO APPROXIM ATE OF RS.23,09,68,630/- I.E RS.44.60/- PER US$) DURING THE YEAR UNDER CONSIDERA TION. THUS THE ASSESSEE IN THE FY 2005-06 RELEVANT TO AY 2006-07, HAS PEAK CREDIT / DEPOSIT OF USS 51,78,668.83 (EQUIVALENT TO RS.23,09;68,630/-) IN THE FOREIGN BA NK ACCOUNT. 5. FROM THE RECORDS, IT IS SEEN THAT SMT. DIPTI DAT TARAJ SALGAOCAR, HAS FILED THE RETURN OF INCOME FOR A.Y. 2006-07 ON 31.07.2006 DECLARING THE TOTAL INCOME OF RS.1,26,25,760/-. THE ASSESSMENT IN THIS CASE HAS B EEN COMPLETED U/S 143(3) OF THE ACT ON 17.04.2008 DETERMINING THE TOTAL INCOME AT R S.1,26,25,760/-. ON FURTHER EXAMINATION OF RECORDS, IT CAME TO LIGHT THAT THE S AID FOREIGN BANK ACCOUNT, SOURCE OF INVESTMENT IN THE SAID FOREIGN BANK ACCOUNT AND INCOME FROM THE SAME HAS NOT BEEN DISCLOSED IN THE ORIGINAL RETURN OF INCOME. 6. BASED ON THE ABOVE, I HAVE REASON TO BELIEVE THA T THE INCOME OF US$ 51,78,668.83 TRANSLATING INTO AT LEAST RS. 23,09,68 ,630/ [51,78,668.83 X RS. 44.60) I.E. SBI TT BUYING RATE PER US$ AS ON 31.03.2006] H AS ESCAPED ASSESSMENT IN THE HANDS OF SMT. DIPTI DATTARAJ SALGAOCAR, FOR AY 2006 -07 WITHIN THE MEANING OF SECTION 147 OF THE IT ACT. FURTHER, THE ASSESSEE'S CASE FALLS UNDER CLAUSE (C) OF SUB- SECTION (1) OF SECTION 149 OF THE IT ACT...' ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 4 4. THUS IT IS CLEAR FROM THE REASONS RECORDED THAT THE INVESTMENTS IN FOREIGN BANK ACCOUNT AND INTEREST AC CRUING THEREON HAVE NOT BEEN DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME AND THEREFORE THE AO HAS REASONS TO BELIEVE THAT US$ 51,78,668 EQUIVALENT TO RS.23,09,68,630/- BY APPLYI NG EXCHANGE RATE OF RS.44.60 ON 31.3.2006 HAS ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE IN AY 2006- 07. IN RESPONSE TO NOTICE ISSUED UNDER SECTION 148 OF T HE ACT, THE ASSESSEE FILED THE RETURN OF INCOME ON 1.7.2014 DECLARING SAME INCOME AS IN THE ORIGINAL RETURN OF RS. 1,26,2 5,760/- AND REQUESTED FOR SUPPLYING THE REASONS RECORDED FOR R E-OPENING THE ASSESSMENT VIDE LETTER DATED 27.6.2014 FILED ON 1.7 .2014 WHICH WERE SUPPLIED BY THE DCIT ON 2.9.2014.THE AO ISSUED NOTICE U/S 143(2) OF THE ACT ON 2.9.2014 WHICH WAS DULY SE RVED UPON THE ASSESSEE. 5. THE ASSESSEE OBJECTED TO THE REASONS RECORDED FO R RE- OPENING VIDE LETTER DATED 2.1.2015 FILED 5.1.2015 I N WHICH ASSESSEE STATED AS UNDER:- A. NO INCOME HAS ESCAPED ASSESSMENT: ASSESSEE SUBMITTED THAT '...THE ASSESSEE HAS NEITHER UNDERSTATED HER INCOME NOR HAS CLAIMED EXCE SSIVE DEDUCTION. THE ASSESSEE HAS ALL ALONG MAINTAINED THAT SHE DOES NOT HOLD ANY SUCH ACCOUNTS ABROAD,- NOR IS SHE AWARE ABOUT THE EXISTENCE OF ANY SUCH ACCOUNT. EARLIER, WHILE EXAMINING HIM ON OATH, THE ASSESSEE'S HUSBAND, SHRI. DATTARAJ SALGAO CAR WAS GIVEN TO UNDERSTAND BY THE DY DIRECTOR OF INCOME TAX (INV), BANGALORE, TH AT AN AMOUNT OF USD 51,78,668/- HAS BEEN DEPOSITED IN HSBC BANK, GENEVA ACCOUNT HEL D BY HIM ALONG WITH HIS WIFE AND CHILDREN. ALTHOUGH THE ALLEGATION WAS NOT ACCE PTED BY HIM, HE PAID THE TAX IN ORDER TO BUY PEACE AND TO AVOID PROTRACTED LITIGATI ON, FILED THE RETURN AND SAME WAS ALSO ACCEPTED BY THE DCIT IN HIS ORDER U/S 143(3) R .W.S 147 DATED ON MARCH 14, 2012. THUS IT IS NOT VERY CLEAR ON WHAT BASIS YOUR GOODSELF IS SEEKING TO REOPEN THE ASSESSEE'S ASSESSMENT ON THE VERY SAME AMOUNT ON WH ICH TAXES HAVE BEEN DULY PAID BY THE ASSESSEE'S HUSBAND AND ASSESSED AS SUCH ... IT IS FURTHER SUBMITTED THAT THE INFORMATION PROVID ED BY YOUR GOOD SELF IN YOUR REASON FOR REOPENING, NOWHERE SHOWS THAT ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 5 (I) THE ASSESSES OPENED AN ACCOUNT IN THE H SBC BANK IN GENEVA; OR (II) THE ASSESSEE IS THE ACCOUNT HOLDER OR THE BENEFICIAL OWNER OR THE AUTHORIZED SIGNATORY OF ANY ACCOUNT IN THAT BANK; O R (III) THE ASSESSEE HAS AUTHORIZED ANY TRANSACTION T HROUGH ANY ACCOUNT IN THAT BANK; OR (IV) THE ASSESSEE HAS RECEIVED ANY BENEFIT OUT OF A NY ACCOUNT IN THAT BANK. 6. THE SAID OBJECTIONS WERE REJECTED BY THE AO BY O RDER DATED 10.2.2015 AS UNDER: (A) INCOME HAS INDEED ESCAPED ASSESSMENT: INFORMATION WAS RECEIVED FROM THE UNDER THE DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA ) REGARDING EXISTENCE OF CERTAIN BANK ACCOUNTS WITH HSBC BANK, GENEVA IN T HE NAME OF SMT. DIPTI DATTARAJ SALGAOCAR AND WAS PASSED FROM THE JOINT COMMISSIONE R OF INCOME TAX, MARGAO RANGE, MARGAO TO THE ASSESSING OFFICER. AS PE R THE INFORMATION, SMT. DIPTI DATTARAJ SALGAOCAR HAS A BANK ACCOUNT WITH HSBC BAN K, GENEVA WHICH HAS AMOUNTS UNDISCLOSED IN HER ORIGINAL RETURN OF INCOME FILED ON 31.07.2006. THE SAME RETURN WAS TAKEN UP FOR SCRUTINY AND THE RETURNED INCOME W AS ACCEPTED. BUT NEITHER IN THE ORIGINAL RETURN OF INCOME NOR DURING SCRUTINY PRO CEEDINGS, HAD THE ASSESSEE, SMT. DIPTI DATTARAJ SALGAOCAR, DISCLOSED THE SAID F OREIGN BANK IF THE DETAILS OF THE BANK ACCOUNT. ON PERUSAL OF THE DETAILS OF THE BANK ACC OUNT AND RETURN OF INCOME OF THE ASSESSEE FOR A.Y. 2006-07, IT WAS EVIDENTLY CLEAR T HAT THE ASSESSEE HAS NOT DISCLOSED THE ABOVE SAID DEPOSIT IN THE BANK ACCOUNT IN HER R ETURN OF INCOME. HENCE ASSESSEES CLAIM THAT NO INCOME HAS ESCAPED ASSESSM ENT WAS REJECTED. 7. THE ASSESSEE AGAIN OBJECTED TO THE REASONS RECO RDED FOR RE- OPENING THE ASSESSMENT VIDE LETTER DATED 12.3.2015 FILED ON 18.3.215 FOR THE SECOND TIME WHICH WERE DISPOSED OF BY THE AO VIDE ORDER DATED 23.32015. IN THE SECOND OBJECTIONS IT WAS STATED THAT THE AMOUNT OF US$51,78,668/-(RS.23,09,6 8,630/-) HAS ALREADY BEEN ASSESSED TO TAX ON SUBSTANTIVE BAS IS IN THE HAND OF SHRI DATTARAJ SALGAOCAR HUSBAND OF THE ASSE SSEE. BUT THE AO OBSERVED THAT THE RE-OPENING WAS BASED UPON SPECIFIC INFORMATION RECEIVED FROM GOVT. OF FRANCE UNDER DTA A THAT SMT DIPTI DATTARAJ SALGOCAR JOINTLY WITH HER HUSBAND AN D CHILDREN HAS A BANK ACCOUNT IN HSBC BANK, GENEVA. THE AO NOT ED THAT SINCE THE ASSESSEE AND HER HUSBAND ARE TWO DISTINCT AND SEPARATE, THUS ASSESSEES CASE WAS RE-OPENED. ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 6 8. THE ASSESSEE ALSO CLAIMED VIDE LETTER DATED 24.3 .2015 FILED ON 27.3.2015 AS FOLLOWS: '..THE ASSESSEE HAS ALL ALONG MAINTAINED THAT SHE D OES NOT HOLD ANY SUCH ACCOUNT ABROAD, NOR IS SHE AWARE ABOUT THE EXISTENC E OF ANY SUCH ACCOUNT. EARLIER WHILE EXAMINING HIM ON OATH, THE ASSESSEE'S HUSBAND, SHRI, DATTARAJ V SALGAOCAR WAS GIVEN TO UNDERSTAND BY THE DY. DIRE CTOR OF INCOME TAX (INV.), BANGALORE, THAT AN AMOUNT OF USD 51,78,668 HAS BEEN DEPOSITED IN HSBC BANK, GENEVA ACCOUNT HELD BY HIM ALONG WITH HI S WIFE AND CHILDREN. ALTHOUGH THE ALLEGATION WAS NOT ACCEPTED BY HIM, HE PAID THE TAX IN ORDER TO BUY PEACE AND TO AVOID PROTRACTED LITIGATIONS, FILE D THE RETURN AND SAME WAS ALSO ACCEPTED BY THE DCIT IN HIS ORDER UNDER SECTIO N 243(3) R.W.S. .247 DATED MARCH 14, 2022. THUS IT IS NOT CLEAR ON WHAT BASIS YOUR GOOD SELF WANTS TO ASSESS THE SAME AMOUNT ON WHICH TAXES HAVE BEEN DUL Y PAID BY THE ASSESSEE'S HUSBAND ASSESSED AS SUCH...' 9. THE ASSESSEES HUSBAND VIDE LETTER DATED 23.3.20 15 FILED BEFORE THE AO ON 27.3.2015 STATED THAT THE SAID A LLEGED INCOME DENIED BY ME HAS ALREADY BEEN ASSESSED TO TAX IN MY HANDS AND THEREFORE IT CAN NOT BE TAXED AGAIN IN THE HANDS OF HIS WIFE THE PRESENT ASSESSEE BEFORE US AS IT IS WELL SETTLED PR INCIPLE OF LAW THAT SAME INCOME CAN NOT BE TAXED TWICE. 10. THE LD AO REJECTED THE VARIOUS CONTENTIONS RAI SED AGAINST THE RE-OPENING OF THE ASSESSMENT BY OBSERVING THAT THE DEPTT. HAS SPECIFIC INFORMATION FROM GOVT OF FRANCE QUA TH E ASSESSEE HAVING A BANK ACCOUNT IN HSBC BANK, GENEVA AND THUS JUSTIFIED THE RE-OPENING WHILE OBSERVING THAT THE ASSESSMENT OF INCOME IN THE HANDS OF ASSESSEES HUSBAND WAS DONE ON THE BASIS OF HIS VOLUNTARY ADMISSION TO PAY TAXES ON TH E SAID AMOUNT OF INCOME AT THE TIME OF CONFRONTATION OF F ACTS DURING RECORDING OF HIS SWORN IN STATEMENT U/S 131 OF THE INCOME TAX ACT BEFORE THE INVESTIGATION WING. THEREAFTER THE A O WENT AHEAD WITH THE RE-ASSESSMENT PROCEEDINGS WHICH CULMINATED INTO ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 7 FRAMING OF ORDER U/S 143(3) R.W.S 147 OF THE ACT WH EREIN THE AO ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE ALSO. 11. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) UPH ELD THE ORDER OF AO ON THE ISSUE OF RE-OPENING AFTER CONSIDERING THE SUBMISSIONS AND CONTENTIONS OF THE ASSESSEE BY OBSE RVING AND HOLDING AS UNDER:- 5.1.2 I HAVE GIVEN DUE CONSIDERATION TO THE ARGUME NTS AND CONTENTIONS OF THE APPELLANT AS REPRODUCED ABOVE, IN THE INSTANT CASE, THE ASSESSING OFFICER HAD AUTHENTIC INFORMATION FROM A FOREIGN GOVERNMENT UND ER DTAA TREATIES RELATING TO THE EXISTENCE OF THE ABOVE-MENTIONED ACCOUNTS, WHIC H HAD NOT BEEN DISCLOSED BY THE APPELLANT ACCORDING TO THE ASSESSING OFFICER. T HIS REASON IS ENOUGH TO FORM OBJECTIVE SATISFACTION BY ANY HONEST AND REASONABLE PERSON AND SUCH FORMATION REASON CANNOT BE CHALLENGED. AT THE TIME OF RECORDI NG OF REASONS, THE ASSESSING OFFICER IS ONLY REQUIRED TO HAVE SUFFICIENT RELIABL E AND NEW TANGIBLE MATERIAL TO LEAD HIM TO A PRIMA FACIE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. IN THE INSTANT CASE, THE ASSESSING OFFICER HAD NO REASON TO DOUBT THE VA LIDITY OF A FOREIGN AUTHORITY RECEIVED UNDER INTERNATIONAL TREATIES WITH INDIAN G OVERNMENT. HENCE, THIS OBJECTION OF THE APPELLANT IS ALSO NOT SUSTAINABLE. THE ASSESSING OFFICER HAS FOLLOWED DUE PROCEDURE BY MEETING THE OBJECTION RAISED FOR R EOPENING AND I DO NOT FIND ANY PROCEDURAL DEFECT IN THE ACTION OF THE ASSESSING OF FICER. THIS CONCLUSION DRAWS STRENGTH FROM THE FOLLOWING DECISION OF HON'BLE DEL HI HIGH COURT. THE RELEVANT EXTRACT IS REPRODUCED BELOW: MITSUI & COMPANY INDIA (P.) LTD. VERSUS INCOME-TAX OFFICER WP(C) S/ . NO. 1121 OF 2012 AND CM NO. 2447 OF 2012 DT. SEPTEMBER 26, 2012. THIS INFORMATION IS STATED TO HAVE BEEN RECEIVED UNDER T HE EXCHANGE OF INFORMATION CONTEMPLATED BY ARTICLE 26 OF THE INDO- JAPANESE AGREEMENT FOR THE AVOIDANCE OF DOUBLE TAXATION. THERE IS NOTHING ON RECORD TO DOUBT THE FACT THAT THE INFORMATION WAS SO RECEIVED. AT THE S TAGE WHEN REASONS ARE RECORDED UNDER SECTION 148(2), THE ASSESSING OFFICE R IS NOT EXPECTED TO HOLD AN ENQUIRY, WITH THE PARTICIPATION OF THE ASSESSES, AND COME TO A FINAL DETERMINATION THAT THE AMOUNT IN QUESTION REPRESENT ED THE INCOME OF THE ASSESSEE: CIT V. MAHALIRAM RAMJIDAS [1940] 8 ITR 44 2 (PC) AND NARAYANAPPA V. CIT [1967] 63 ITR 219. HE IS REQUIRED ONLY TO RE ACH PRIMA FACIE OR TENTATIVE BELIEF. THE FORMATION OF THE BELIEF MUST BE BASED O N SOME VALID MATERIAL IT CANNOT BE DISPUTED THAT THE INFORMATION RECEIVED FR OM A GOVERNMENTAL AGENCY CONSTITUTES VALID MATERIAL ON THE BASIS OF W HICH THE ASSESSING OFFICER COULD FORM A TENTATIVE OR PRIMA FACIE BELIEF REGARD ING ESCAPEMENT OF INCOME. 12. THE LD AR VEHEMENTLY ARGUED THAT THE RE-OPENING OF ASSESSMENT IN THE CASE OF THE ASSESSEE IS NOT VALID AT ALL BY THE ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 8 DCIT FOR THE REASON THAT NO INCOME HAS ESCAPED. TH E LD AR SUBMITTED THAT THE AMOUNT DEPOSITED IN THE HSBC BAN K ACCOUNT, GENEVA STOOD ASSESSED TO TAX IN THE HANDS OF THE ASSESSEE MR DATTARAJ SALGAOCAR WHICH WAS ALSO SOUG HT TO BE ASSESSED AS ESCAPED INCOME IN THE HANDS OF THE ASS ESSEE. THE LD AR ARGUED THAT THE FACT THE SAID AMOUNT OF DEPOS ITS IN HSBC BANK, GENEVA HAS BEEN ASSESSED TO TAX IN THE HANDS OF THE HUSBAND OF THE ASSESSEE WHEN HE WAS CONFRONTED BY DY. DIRECTOR OF INCOME TAX(INV) BANGALORE THAT THERE WA S A BANK ACCOUNT IN THE NAME MR DATTARAJ SALGOCAR, HIS WIFE MRS. DIPTI DATTARAJ SALGAOCAR AND THEIR CHILDREN WHO, WITHOUT OWNING THE SAID BANK ACCOUNT ,OFFERED TO PAY TAX ON THE SAID DEPOSITS . THE LD AR STATED THAT LD DR. FAILED TO BRING ANY EVIDEN CE ON RECORDS THAT THE REVENUE HAS SAME INFORMATION ABOUT THE HUS BAND OF THE ASSESSEE. THE LD AR SUBMITTED THAT IT NOT PERMISSIB LE UNDER THE INCOME TAX ACT TO ASSESS THE SAME AMOUNT OF INCOME TWICE. THE LD AR CONTENDED THAT THE SAID DEPOSIT WAS ASSESSED IN THE HANDS SHRI DATTARAJ SALGOCAR THE HUSBAND OF THE ASSESSE E ON SUBSTANTIVE BASIS AND THEREFORE THE ASSESSMENT IN T HE CASE OF ASSESSEE CAN NOT BE RE-OPENED TO ASSESS THE SAME I NCOME WHEN AO WAS VERY MUCH IN THE KNOWLEDGE THAT SAID AMOUNT STOOD ASSESSED IN THE HAND S OF THE MR DATTARAJ SLGAOCAR AS STATED ABOVE. THE LD AR REFERRED TO THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S.147 DATED 14.3.2012 FILED AT PAGE NO. 7-12 OF THE PB. THE LD COUNSEL WHILE ARGUING AT LENGTH THE PROV ISIONS OF SECTION 147 OF THE ACT AND CIRCUMSTANCES UNDER WHIC H THE RE- OPENING CAN BE RESORTED TO BY THE AO TO ASSESS THE ESCAPED INCOME. THE LD AR CONTENDED THAT THE RE-OPENING CAN NOT BE MADE WHERE THERE IS NEXUS BETWEEN THE REASONS RECOR DED AND ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 9 BELIEF OF THE AO THAT INCOME HAS ESCAPED INCOME BUT THESE PROVISIONS COULD NOT BE TAKEN ASSISTANCE OF WHERE AO IS IN THE KNOWLEDGE THAT INCOME HAS BEEN ASSESSED IN SOME OTH ER HANDS WHICH HAS BEEN ACCEPTED BY THE REVENUE BUT IT SHOUL D HAVE BEEN ASSESSED IN THE HANDS OF THE ASSESSEE. IN DEFENSE O F HIS ARGUMENTS THE LD AR RELIED ON A SERIES OF DECISIONS NAMELY:- A)DCIT VS. BULLION INVESTMENTS & FINANCIAL SERVICES (P) LTD (2010) 123 ITD 568(BANG) B)M.P.RAMACHANDRAN VS. DCIT(2010) 129 TTJ (MUMBAI) 190 C) KIIC INVESTMENT COMPANY VS DCIT (2019) 101 TAXMANN.COM 19 (MUMBAI-TRI) 13. THE D.R. ON THE OTHER HAND RELIED HEAVILY ON TH E ORDERS OF AUTHORITIES BELOW. THE LD DR SUBMITTED THAT THE RE- OPENING WAS DONE ON THE BASIS OF SPECIFIC INFORMATION FROM GOVT . OF FRACE UNDER DTAA THAT ASSESSEE IS HOLDING BANK ACCOUNT IN HSBC BANK GENEVA JOINTLY WITH HER HUSBAND, AND CHILDREN IN WHICH THE US$ 51,78,668/- (RS.23,09,68,630/-) WERE DEPOSI TED DURING FY 2005-06 AND THE PEAK CREDIT WAS US$ 51,78,668/-. THE LD DR SUBMITTED THAT THOUGH INCOME WAS ASSESSED IN THE HAND OF THE HUSBAND OF THE SAME AND EQUAL AMOUNT WHEN HE WA S ENCOUNTERED WITH THE INFORMATION OF HAVING A BANK A CCOUNT IN HSBC BANK GENEVA WITH HIS WIFE AND CHILDREN BY DY D IRECTOR INCOME TAX (INV) BANGALORE. THOUGH HE DID NOT OWN U P THE ACCOUNT BUT IN TO BUY PEACE MIND AND AVOID LITIGATI ON HE OFFERED THE SAID DEPOSIT IN THE RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S 148 OF THE ACT AND DEPARTMENT ACCEPTED THE RETU RN. THE LD DR ARGUED THAT IT IS ALSO POSSIBLE THAT THE HUSBAND HAS SEPARATE FOREIGN ACCOUNT. THE DR PRAYED BEFORE THE BENCH THA T ASSESSEE ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 10 AND HER HUSBAND ARE TWO SEPARATE AND DISTINCT ASSES SEE AND THUS JUSTIFIED THE RE-OPENING ON THE SPECIFIC INFOR MATION. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIALS ON RECORDS CAREFULLY INCLUDING THE DECISI ONS CITED BY THE LD AR DURING THE COURSE OF HEARING. THE UNDISP UTED FACTS ARE THAT THE GOVT OF FRANCE PASSED ON SOME INFORMAT ION UNDER DTAA THAT THE ASSESSEE SM DIPTI DATTARAJ SALGOCAR HAS A FOREIGN BANK ACCOUNT WITH HSBC BANK GENEVA JOINTLY WITH HER HUSBAND AND CHILDREN IN WHICH THE PEAK DEPOSITS WER E TO THE TUNE OF US$ 51,78,668/-(RS. 23,09,68,630/-) IN FY 2 005-06 RELEVANT TO AY 2006-07. THE HUSBAND OF THE ASSESSEE WAS CONFRONTED THE SAID INFORMATION BY THE DY DIRECTOR INCOME TAX (INV) BANGALORE THAT HE ALONG WITH HIS WIFE (THE P RESENT ASSESSEE) AND CHILDREN HAVE A BANK ACCOUNT IN HSBC BANK GENEVA AND HIS STATEMENT WAS RECORDED U/S 131 OF TH E ACT ON 19.8.2011. THOUGH HE DID NOT OWN THE BANK ACCOUNT B UT OFFERED THE BALANCE IN THE SAID ACCOUNT TO TAX IN ORDER TO BUY PEACE OF MIND AND AVOID LITIGATION. THE REASONS U/S 148 OF T HE ACT RECORDED IN HUSBAND CASE ARE EXTRACTED BELOW:- 'AS PER THE INFORMATION RECEIVED BY THE DIRECTORATE OF INCOME TAX, BANGALORE, SHRI DATTARAJ VASSUDEV SALGAOCAR, HIS WIFE SMT DIPTI SAL GAOCAR, HIS SON MR. VASUDEV VIKRAM AND HIS DAUGHTER ISHETA HAVING BANK ACCOUNTS IN THEIR NAMES IN HSBC BANK, GENEVA. AS PER THE INFORMATION, A SUM OF USD $ 51,7 8,668 HAS BEEN DEPOSITED DURING THE PERIOD FROM JULY'2005 ONWARDS TO 2007 TO THE SAID ACCOUNT. IN THIS REGARD THE DEPUTY DIRECTOR OF INCOME TAX (INVESTIGA TION), UNIT-11(3), BANGALORE HAS RECORDED SWORN STATEMENT FROM MR.DATTARAJ V. SALGAO CAR U/S 131 OF THE INCOME TAX ACT IN THE CHAMBER OF ADDITIONAL DIRECTOR OF INCOME TAX (INVESTIGATION), UNIT-11, BANGALORE OH 19.08.2011. DURING THE COURSE OF SWORN STATEMENT RECORDED, MR.DATTARAJ V. SALGAOCAR HAS DISCLOSED AN AMOUNT OF RS.23,01,91,793/- AS HIS ADDITIONAL INCOME IN HIS INDIVIDUAL CAPACITY BEING THE VALUE OF THE DEPOSIT MADE IN USD$ TO THE SAID ACCOUNT FOR THE ASSESSMENT YEAR 20 06-07 AND PAID RS.13,07,13,077/- AS TAXES AND INTEREST THEREON. SINCE, THE ASSESSEE DEPOSITED THE MONEY DURING THE PERIOD FROM JULY'2005 TO 2007, AND THE ASSESSEE HAS DISCLOSED AN AMOUNT OF RS.23,0 1,91,793/- FOR THE ASSESSMENT ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 11 YEAR 2006-07 ON ACCOUNT OF THE DEPOSIT MADE IN USD TO THE SAID ACCOUNT, HE SHOULD HAVE FIELD THE REVISED RETURN OF INCOME DECLARING A BOVE UNDISCLOSED INCOME. FURTHER, THE DETAILS OF DEPOSITS MADE TO THE SAID A CCOUNT ALSO HAVE TO BE EXAMINED WITH REFERENCE TO THE PARTICULAR BANK ACCOUNT. DURI NG THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS ALSO, THE ASSESSEE FAILED TO DISCLOSE THE SAID BANK ACCOUNT MAINTAINED IN ABROAD ALONG WITH THE SOURCES OF DEPO SITING THE MONEY. THEREFORE, THE ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION. THEREFORE, I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPE D ASSESSMENT WITHIN THE MEANING OFSEC.147 OF THE IT ACT.' 15. THUS, IT IS CLEAR FROM THE ABOVE THE BANK ACCOU NT WITH HSBC GENEVA BELONGING TO THE FAMILY OF MR DATTARAJ SALGAOCAR WAS ASSESSED TO TAX IN HIS HAND AND HE PAID DUE TA XES THEREON. NOW THE CASE OF THE ASSESSEE WAS RE-OPENED BY THE A O ON THE BASIS OF SPECIFIC INFORMATION FROM GOVT. OF FRANCE THAT A BANK ACCOUNT IN HSBC BANK GENEVA IS OWNED BY THE ASSESSE E, HER HUSBAND AND HER CHILDREN WITH SAME FACTS. THE ASSES SEE OBJECTED TO THE RE-OPENING PROCEEDINGS BY SUBMITTI NG BEFORE THE AO THAT THE INCOME WHICH IS SOUGHT TO BE ASSESSED A S ESCAPED INCOME IN HER HANDS HAS BEEN ASSESSED TO TAX IN THE HAND OF MR. DATTARAJ SALGOCAR HER HUSBAND AND HE HAS PAID THE I NCOME TAX THEREON. THE HUSBAND OF THE ASSESSEE ALSO BY WAY O F LETTER DATED 23.3.2015 INFORMED THE AO THAT THE SAID DEPO SIT IN HSBC BANK GENEVA HAS ALREADY BEEN ASSESSED IN HIS HANDS VIDE ORDER DATED 14.3.2012 PASSED U/S 143(3) R.W.S. 147 OF THE ACT. THE REVENUE HAS NOT BROUGHT ANY EVIDENCE ON RECORDS TO CONTROVERT FACTS ON RECORDS AND SUBMISSIONS OF THE ASSESSEE AN D THAT OF HER HUSBAND ON THE ISSUE. UNDER THE PRESENTS FACTS BEFO RE US WE HAVE ALL THE REASONS TO BELIEVE AND CONCLUDE THAT T HE FAMILY HAS ONLY BANK ACCOUNT WITH HSBC BANK GENVA. AFTER TAKI NG INTO ACCOUNT FACTS AND CIRCUMSTANCES IN TOTALITY, WE ARE OF THE VIEW THAT AO CAN ONLY TAKE HELP OF THE PROVISIONS OF 147 OF THE ACT TO ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 12 ASSESS THE INCOME WHICH HE HAS REASONS TO BELIEVE T HAT IT HAS ESCAPED ASSESSMENT BUT NOT A SCENARIO WHERE THE INC OME IS ALREADY ASSESSED IN THE HAND OF ANOTHER PERSON. THE REVENUE HAS ACCEPTED THE SAME AMOUNT IN THE ASSESSMENT OF T HAT OTHER PERSON WHICH WAS VERY MUCH IN THE KNOWLEDGE OF THE AO AT THE TIME OF RECORDING THE REASONS FOR RE-OPENING U/S 1 47 OF THE ACT IN THE CASE OF THE ASSESSEE. THE CASE OF THE ASSES SEE IS SUPPORTED BY A SERIES OF DECISIONS WHERE THE RE-OP ENING WAS HELD TO BE INVALID AND BAD IN LAW WHERE AO HAS NO R EASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. IN THE CASE OF DCIT VS. BULLION INVESTMENTS & FINANCIAL SERVICES (P ) LTD. (SUPRA) UNDER SIMILAR FACTS THE ISSUE WAS DECIDED I N FAVOUR OF THE ASSESSEE.. THE OPERATIVE PART IS REPRODUCED BELOW: 2.5 WE HAVE HEARD BOTH THE PARTIES. THE FACT OF UN DISCLOSED INVESTMENT IN THE SHARE CAPITAL OF THE ASSESSEE-COMPANY WAS FOUND DUR ING THE COURSE OF SEARCH AND MATERIAL WAS COLLECTED DURING THE COURSE OF SEARCH THAT SUCH INVESTMENT BELONGED TO D SHRI G.P. GOYAL. IF SUCH INCOME WAS TO BE ASSE SSED IN THE HANDS OF A PERSON OTHER THAN SHRI G.P. GOYAL, THEN REVENUE SHOULD HAV E TAKEN RECOURSE UNDER SECTION 158BD. IF THE REVENUE WAS NOT SURE AS ON WHICH HAND S THE ASSESSMENT IS TO BE MADE, THEN THE REVENUE COULD HAVE INITIATED PROCEED INGS AGAINST BOTH THE ASSESSEES. IN THE INSTANT CASE, ASSESSMENT IN THE C ASE OF SHRI G.P. GOYAL WAS COMPLETED ON 31-7-1997. NOTICE UNDER SECTION 148 HA D BEEN ISSUED TO THE ASSESSEE-COMPANY ON 27-7-1998. ONCE THE REVENUE D T AKEN ITS STAND THAT SUCH INVESTMENT IN THE SHARE CAPITAL BELONG TO SHRI G.P. GOYAL AND THE ASSESSMENT ORDER WAS PASSED, EN IT CANNOT BE SAID THAT THE ASSESSING OFFICER WAS HAVING REASON TO BELIEVE THAT INCOME HAS, ESCAPED IN THE HANDS OF TH E ASSESSEE-COMPANY. REASSESSMENT CANNOT BE MADE ON MERE SUSPICION. THE ASSESSING OFFICER HAS TO FORM A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE. ONCE IT HAS BEEN HELD THAT SUCH INVESTMENT BELONGED TO SHRI G.P. GOYAL, THEN THERE WAS NO FURTHER MATERIAL TO COME TO THE CONCLUSION T HAT SUCH ESCAPED INCOME BELONGED TO THE ASSESSEE. 2.6 THE APEX COURT IN THE CASE OF LALJI HARIDAS V. ITO [1961] 43 ITR 387 OBSERVED AT PAGE 392 AS UNDER:- 'IN CASE WHERE IT APPEARS TO THE INCOME-TAX AUTHORI TIES THAT CERTAIN INCOME HAS BEEN RECEIVED DURING THE RELEVANT ASSESSMENT YE AR BUT IT IS NOT CLEAR WHO HAS RECEIVED THAT INCOME AND PRIMA FACIE, IT APPEARS THAT THE INCOME MAY HAVE BEEN RECEIVED EITHER BY 'A' OR 'B' OR BY B OTH TOGETHER. IT WOULD BE OPEN TO THE RELEVANT INCOME-TAX AUTHORITIES TO DETE RMINE THE SAID QUESTION BY TAKING APPROPRIATE PROCEEDINGS BOTH AGAINST 'A' AND 'B'.' ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 13 BUT IN THE INSTANT CASE, THE REVENUE HELD THAT SUCH UNDISCLOSED INCOME BELONGED TO SHRI G.P. GOYAL AND ASSESSMENT WAS MADE IN THE HAND S OF SHRI G.P. GOYAL ON SUBSTANTIVE BASIS. THE CASE OF THE ASSESSEE-COMPAN Y WAS NOT REOPENED DURING THE PENDENCY OF PROCEEDINGS IN THE CASE OF SHRI GOYAL. HAD THE REVENUE MADE PROTECTIVE ASSESSMENT IN THE CASE OF SHRI G.P. GOYA L, THEN IT COULD HAVE TAKEN ACTION AGAINST THE ASSESSEE-COMPANY. THUS, THE BASIC REQUI REMENT FOR REOPENING THE ASSESSMENT IS THAT THE ASSESSING OFFICER SHOULD HAV E REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, IS NOT SATISFIED IN THIS CA SE. HENCE, WE ARE SATISFIED THAT THE LEARNED CIT(A) WAS JUSTIFIED IN HOLDING THAT AS SESSMENT CANNOT BE REOPENED FOR MAKING PROTECTIVE ADDITION. IN THE CASE OF M.P. RAMACHANDRAN VS. DCIT (SUPRA) A SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AS UNDER:- THE AO, DURING THE BLOCK ASSESSMENT PROCEEDINGS, F ORMED HIS OPINION THAT ADDITION OF RS.527.85 LAKHS WAS WARRANTED AS UNDISC LOSED INCOME IN THE BLOCK ASSESSMENT AND HE ACTUALLY MADE SUCH ADDITION. WHEN THE MATTER WAS PENDING BEFORE THE CIT(A), THE AO CHANGED HIS OPINION AND C AME TO THE CONCLUSION, ON THE STRENGTH OF THE ASSESSEE'S VIEW THAT THE DISALLOWAN CE OF ADVERTISEMENT EXPENDITURE WAS NOT CALLED FOR IN THE BLOCK ASSESSMENT PROCEEDI NGS. THE DEPARTMENTAL REPRESENTATIVE HAS FAIRLY CONCEDED THAT THE TRIBUNA L DELETED THE SAID ADDITION FROM THE BLOCK ASSESSMENT AND THE DEPARTMENT HAS CARRIED THE MATTER BEFORE THE HIGH COURT BY ASSAILING THAT THE ADDITION WAS TO BE MADE IN THE BLOCK ASSESSMENT. AN ITEM OF INCOME IS SAID TO HAVE ESCAPED ASSESSMENT I F IT IS NOT CHARGED TO TAX. IF ON THE OTHER HAND AN INCOME HAS ALREADY BEEN CHARGED T O TAX IN THE HANDS OF THE SAME ASSESSEE AND FOR THE SAME PERIOD, ALBEIT IN THE PRO CEEDINGS UNDER SOME DIFFERENT SECTION, IT CANNOT BE SAID THAT AN INCOME CHARGEABL E TO TAX HAS ESCAPED ASSESSMENT. IT CANNOT BE SO MORE PARTICULARLY WHEN NO DECISION HAS BEEN GIVEN BY ANY APPELLATE AUTHORITY REVERSING THE ADDITION MADE BY THE AO. HO W THE DISALLOWANCE OF RS. 527.85 LAKHS OUT OF THE ADVERTISEMENT EXPENSES CAN BE A REASON TO BELIEVE FOR THE AO THAT THE INCOME HAS ESCAPED ASSESSMENT, WHEN HE HAD HIMSELF TAXED THE SAME IN THE BLOCK ASSESSMENT OF THIS VERY ASSESSEE FOR T HE PERIOD WHICH ALSO COVERS THE YEAR IN QUESTION. FURTHER, THE TAKING UP THE APPEAL BEFORE THE HIGH COURT AGAINST THE ORDER OF THE TRIBUNAL DELETING THE ADDITION IN THE BLOCK ASSESSMENT CLEARLY INDICATES THAT THE DEPARTMENT IS STILL OF THE OPINI ON THAT THE INCOME HAS BEEN RIGHTLY PUT TO TAX IN THE BLOCK ASSESSMENT. ONCE TH IS IS THE VIEW OF THE DEPARTMENT, THEN HOW CAN IT ENTERTAIN A DIAGONALLY OPPOSITE VIE W THAT THIS INCOME HAS ESCAPED ASSESSMENT. THERE CANNOT BE ANY INITIATION OF REASS ESSMENT PROCEEDINGS ON THE BASIS OF AN ITEM OF INCOME OR DISALLOWANCE WHICH HA S BEEN MADE IN ANOTHER PROCEEDINGS OF THE SAME ASSESSEE FOR THE SAME YEAR. SMT. MIRA ANANTA NAIK & ORS: VS DY. CIT(LNV.)(2008) 15 DTR (BOM) 8 RELIED O N. IN THE CASE OF KIIC INVESTMENT COMPANY VS DCIT (SUP RA) WITH SIMILAR FACTS THE ISSUE WAS DECIDED IN FAVOUR OF TH E ASSESSEE. THE OPERATIVE PARA IS AS UNDER: ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 14 14. IN THIS BACKGROUND, NOW WE HAVE TO CONSIDER TH E FORMATION OF BELIEF ABOUT ESCAPEMENT OF INCOME QUA THE AFORESAID AMOUNT IN THE HANDS OF THE ASSESSEE- COMPANY ON THE DATE OF RECORDING REASONS, I.E. 18.0 7.2014. QUITE CLEARLY, ON THE DATE OF RECORDING REASONS, ASSESSMENT OF RS. 13 CRO RES AS 'DEEMED DIVIDEND' IN TERMS OF SEC. 2(22 )(E) OF THE ACT STOOD FINALISED ON SUBSTANTIVE BASIS IN THE HANDS OF VIDEOJET AND, OF COURSE, ON PROTECTIVE BASIS TOO, I N THE HANDS OF PORTESCAP. THE REASONS RECORDED ALSO BRING OUT THAT THEY WERE BASE D ON THE INFORMATION PROVIDED BY THE DCLT-8(2), MUMBAI VIDE COMMUNICATION DATED 0 3.07.2013, WHO WAS THE ASSESSING AUTHORITY FOR PORTESCAP. THE MOOT QUESTIO N IS WHEN THE SAME INCOME PURPORTED TO BE TAXABLE U/S 2(22)(E) OF THE ACT IS ALREADY LYING TAXED, CAN IT BE SAID THAT IT CONSTITUTED AN ESCAPEMENT OF INCOME SO AS T O BE THE BASIS FOR ASSESSING OFFICER IN THE INSTANT CASE TO INITIATE PROCEEDINGS UNDER SECTIONS 147/148 OF THE ACT. OSTENSIBLY, THE REASONS FOR REASSESSMENT SHOUL D NOT ONLY HAVE A RATIONAL NEXUS BUT ALSO AN INTELLIGIBLE NEXUS TO FORM A BELIEF THA T CERTAIN INCOME HAD ESCAPED ASSESSMENT. IN THE FACTUAL MATRIX WHICH IS PREVALEN T IN THE INSTANT CASE, IT COULD NOT BE SAID THAT THE SAID INCOME HAD ESCAPED ASSESSMENT INASMUCH THE SAME WAS ALREADY SUBJECTED TO ASSESSMENT ON A SUBSTANTIVE AS WELL AS ON PROTECTIVE BASIS IN THE HANDS OF OTHER TWO ENTITIES. WE MAY AGAIN HASTE N TO ADD HERE THAT WE ARE NOT ON THE CORRECTNESS OF ASSESSING THE IMPUGNED 'AMOUN T IN THE HANDS OF ASSESSEE U/S 2(22)(E) OF THE ACT, BUT MERELY EXAMINING THE VALID ITY OF THE ASSUMPTION OF JURISDICTION U/S 147 OF THE ACT, WHICH HAS TO BE AD JUDICATED HAVING REGARD TO THE PRESCRIPTION OF THE SAID SECTION. AT THE TIME OF HE ARING, THE LEARNED REPRESENTATIVE ALSO MADE A REFERENCE TO THE DECISION OF THE BANGAL ORE BENCH OF THE TRIBUNAL IN THE CASE OF DY. CITV. BULLION INVESTMENT & FINANCIAL SERVICES ( P.) LTD [2010] 123 ITD 568 WHEREIN ALSO A SOMEWHAT SIMILAR SITUATION HAS BEEN DEALT WITH. IN THE CASE BEFORE THE BANGALORE BENCH PROCEEDING UNDER SECTIONS 147/1 48 OF THE ACT WAS INITIATED IN THE CASE OF A COMPANY IN ORDER TO TAX AN INCOME WHI CH HAD ALREADY BEEN SUBJECTED TO ASSESSMENT IN THE HANDS OF ANOTHER COMPANY. AS P ER OUR CO-ORDINATE BENCH, SUCH INITIATION WAS IMPERMISSIBLE AS ONCE THE REVEN UE TAKES A STAND THAT AN INCOME IS ASSESSABLE IN THE HANDS OF AN ASSESSEE AND PASSE S AN ASSESSMENT ORDER, THEN IT COULD NOT BE SAID THAT SAME INCOME HAD ESCAPED ASSE SSMENT IN THE HANDS OF ANOTHER ASSESSEE. IN OUR CONSIDERED OPINION, THE ME ANING OF EXPRESSION 'ESCAPED ASSESSMENT' APPEARING IN SEC. 147 OF THE ACT IS QUITE CLEAR AND DOES NOT ENTAIL ANY AMBIGUITY INASMUCH AS IT CANNOT COVER WITHIN ITS FO LD AN INCOME WHICH HAS ALREADY BEEN TAXED. QUITE CLEARLY, IN THE INSTANT CASE, NOT ONLY THE INCOME TAXED IN OTHER HAND IS SAME, BUT IT HAS ALSO BEEN ASSESSED IN THE OTHER HAND BY INVOKING THE VERY SAME SECTION WHICH IS SOUGHT TO BE INVOKED IN THE P RESENT CASE, NAMELY, SEC. 2(22)(E) OF (HE ACT. THEREFORE, CONSIDERING THE ENT IRETY OF FACTS AND CIRCUMSTANCES, WE ARE UNABLE TO UPHOLD THAT THERE WAS ANY RATIONAL OR INTELLIGIBLE NEXUS BETWEEN THE REASONS AND FORMATION OF BELIEF BY THE ASSESSIN G OFFICER ABOUT THE IMPUGNED ESCAPEMENT OF INCOME. THUS, ON THIS ASPECT, WE UPHO LD THE PLEA OF THE ASSESSEE THAT THE INITIATION OF PROCEEDINGS UNDER SECTIONS 1 47/148 OF THE ACT IS UNTENABLE IN THE EYES OF LAW AND, CONSEQUENTLY THE ASSESSMENT IS LIABLE TO BE QUASHED. WE HOLD SO. 16. IN THE PRESENT CASE ALSO THE AO WAS HAVING THE KNOWLEDGE THAT THE BALANCE IN HSBC BANK ,GENEVA HAS ALREADY B EEN TAXED ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 15 IN THE HANDS OF ASSESSEES HUSBAND AND THEREFORE RE ASONS RECORDED BY THE AO FOR RE-OPENING THE ASSESSMENT OF THE ASSESSEE ARE NOT VALID AS THERE WAS NO INCOME WHICH HAS ESCAPED THE ASSESSMENT. CONSEQUENTLY THE RE-OPENING U/S 147 OF THE ACT AND THE CONSEQUENT ASSESSMENT ORDER HA VE TO GO. WE, THEREFORE, RESPECTFULLY FOLLOWING THE ORDERS OF THE COORDINATE BENCHES, QUASH THE PROCEEDINGS U/S 147 R.W.S. 148 A ND ALSO THE CONSEQUENT ORDER. ITA NO.7403/M/2017 (REVENUES APPEAL) 17. THIS IS THE CROSS APPEAL OF THE REVENUE ON MERI TS AGAINST THE ORDER OF CIT(A). SINCE WE HAVE HELD IN THE ASSE SSEES APPEAL THAT RE-ASSESSMENT PROCEEDINGS ARE INVALID AND BAD IN LAW, THE APPEAL OF THE REVENUE BECOMES INFRUCTUOUS AND IS DI SMISSED. 18. IN RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.03.2019. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 20.03.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI ITA NO.7403/M/2017 ITA NO.7404/M/2017 SMT. DIPTI DATTARAJ SALGAOKAR 16 THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.
