P.T. Engineers Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 86/DEL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7142 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 01-09-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 06-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Assessee Lawyers: LALITHA KRISHNAMURTHY; VIDHI AGRAWAL
• Keywords: Income from undisclosed sources; Question of law; Tangible material; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC-2 : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NOS. 86 & 87/DEL/2015 ASSESSMENT YEARS: 2006-07 & 2009-10 M/S PT ENGINEERS PRIVATE LIMITED, VS. DCIT, CI RCLE-14 C-125, DEFENCE COLONY, NEW DELHI NEW DELHI 110 024 (PAN: AADCP4222B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. LALITHA KRISHNAMURTHY, CA & SMT. VIDHI AGRAWAL, CA REVENUE BY : SH. AMRIT LAL, SR. DR DATE OF HEARING : 06-09-2016 DATE OF ORDER : 14-09-2016 ORDER PER H.S. SIDHU, J.M. THE ASSESSEE HAS FILED THESE TWO APPEALS AGAINST THE SEPARATE ORDERS BOTH DATED 7.10.2014 OF THE LD. CIT(A)-XVII, NEW DELHI PERTAINING TO ASSESSMENT YEARS 2006-07 & 2009-10 R ESPECTIVELY. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMM ON AND IDENTICAL, HENCE, THE APPEALS WERE HEARD TOGETHER AND ARE BEIN G DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE , BY DEALING WITH ITA NO. 86/DEL/2015 (AY 2006-07). 2 2. THE GROUNDS RAISED IN ITA NO. 86/DEL/2015 (AY 20 06-07) READ AS UNDER:- 1. THE ASSUMPTION OF JURISDICTION UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 IS WITHOUT AUTHORITY OF LA W AND IS VOID. 2. THAT THE LD. ASSESSING OFFICER HAS NO VALID MAT ERIAL TO ASSUME JURISDICTION UNDER SECTION 147 OF THE INC OME TAX ACT, 1961 AND CONSEQUENTIALLY REASONS SO FRAMED IS NULL, VOID AND BAD IN LAW. IN THE ABSENCE OF VALID MATERIAL AVAILABLE ON RECORD FOR FORMATION OF REASON TO BELI EVE THAT THER HAS BEEN AN ESCAPEMENT OF INCOME BY THE L D. ASSESSING OFFICER THE REOPENING IS BAD IN LAW. 3. THAT THERE WAS NO REASON TO BELIEVE AS CONTEMPLATED UNDER SECTION 147 OF THE INCOME TAX AC T, 1961 THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT AND HENCE THE ASSESSMENT AS FRAMED BY TH E LD. ASSESSING OFFICER IS NOT VALID IN LAW AND DESER VES TO BE QUASHED. 4. THAT THE REASONS ALLEGED TO HAVE BEEN RECORDED A RE NOT BASED ON FACTS BUT ON SUSPICION WHICH CANNOT BE THE FOUNDATION FOR FORMATION OF REASON TO BELIEVE AS CONTEMPLATED UNDER THE PROVISIONS OF SECTION 147 OF THE INCOME TAX ACT, 1961 AND HENCE THE REOPENING IS BAD IN 3 LAW AND REASSESSMENT AS FRAMED DESERVES TO BE QUASHED. 5. THAT THE ADDITION SUSTAINED OF RS.27 ,50,000 / - UNDER SECTION 68 OF IT ACT BEING SHARE APPLICATION MONEY AND ADDITION SUSTAINED OF RS. 68,750 AS ESTIMATED COMMISSION IS ARBITRARY, UNJUST AND BAD IN LAW. 6. THE SHARE APPLICANT BEING IDENTIFIABLE PERSON DU LY ASSESSED TO INCOME TAX, GENUINE HENCE THE ADDITION OF RS.27,50,000 / - BEING SHARE APPLICATION MONEY, UND ER SECTION 68 OF IT ACT AND ADDITION SUSTAINED OF RS 6 8,750 AS ESTIMATED COMMISSION IS ARBITRARY AND BAD IN LAW . 7. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. 8. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME O F HEARING. 3. THE GROUNDS RAISED IN ITA NO 87/DEL/2015 (AY 200 9-10) READ AS UNDER:- 1. THE ASSUMPTION OF JURISDICTION UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 IS WITHOUT AUTHORITY OF LA W AND IS VOID. 2. THAT THE LD. ASSESSING OFFICER HAS NO VALID MAT ERIAL TO ASSUME JURISDICTION UNDER SECTION 147 OF THE INC OME TAX ACT, 1961 AND CONSEQUENTIALLY REASONS SO FRAMED IS 4 NULL, VOID AND BAD IN LAW. IN THE ABSENCE OF VALID MATERIAL AVAILABLE ON RECORD FOR FORMATION OF REASON TO BELI EVE THAT THER HAS BEEN AN ESCAPEMENT OF INCOME BY THE L D. ASSESSING OFFICER THE REOPENING IS BAD IN LAW. 3. THAT THERE WAS NO REASON TO BELIEVE AS CONTEMPLATED UNDER SECTION 147 OF THE INCOME TAX AC T, 1961 THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT AND HENCE THE ASSESSMENT AS FRAMED BY TH E LD. ASSESSING OFFICER IS NOT VALID IN LAW AND DESER VES TO BE QUASHED. 4. THAT THE REASONS ALLEGED TO HAVE BEEN RECORDED A RE NOT BASED ON FACTS BUT ON SUSPICION WHICH CANNOT BE THE FOUNDATION FOR FORMATION OF REASON TO BELIEVE AS CONTEMPLATED UNDER THE PROVISIONS OF SECTION 147 OF THE INCOME TAX ACT, 1961 AND HENCE THE REOPENING IS BAD IN LAW AND REASSESSMENT AS FRAMED DESERVES TO BE QUASHED. 5. THAT THE ADDITION SUSTAINED OF RS.20 ,00,000 / - UNDER SECTION 68 OF IT ACT BEING SHARE APPLICATION MONEY AND ADDITION SUSTAINED OF RS. 50,000 AS ESTIMATED COMMISSION IS ARBITRARY, UNJUST AND BAD IN LAW. 6. THE SHARE APPLICANT BEING IDENTIFIABLE PERSON DU LY ASSESSED TO INCOME TAX, GENUINE HENCE THE ADDITION OF RS.20,00,000 / - BEING SHARE APPLICATION MONEY, UND ER 5 SECTION 68 OF IT ACT AND ADDITION SUSTAINED OF RS 5 0,000 AS ESTIMATED COMMISSION IS ARBITRARY AND BAD IN LAW . 7. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. 8. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME O F HEARING. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS RETURN OF INCOME ON 30.11.2006 DECLARING NIL INCOME. SUBS EQUENTLY, THE AO RECEIVED INFORMATION FROM THE DIRECTORATE OF INC OME TAX (INV.) OF THE INCOME TAX DEPARTMENT THAT M/S PT ENGINEERS PVT . LTD. WAS A BENEFICIARY OF ACCOMMODATION ENTRIES DURING THE PER IOD OF FY 2005- 06 RELEVANT TO THE AY 2006-07. THE ENTRIES WERE R ECEIVED FROM ESTABLISHED ENTRY OPERATORS IDENTIFIED BY THE INVES TIGATION WING ON THE BASIS OF SEARCH / SURVEY CONDUCTED ON SH. SK JA IN, CA. THE CASE WAS REOPENED U/S. 148 OF THE I.T. ACT, 1961 AND NOT ICE WAS ISSUED TO THE APPELLANT ON 18.3.2013 WHICH WAS DULY SERVED UPON THE ASSESSEE AND IN RESPONSE TO THE SAME, ASSESSEES CO UNSEL ATTENDED THE PROCEEDINGS AND FILED THE DOCUMENTS. THEREAFTE R, THE AO MADE THE ADDITION OF RS. 28,18,750/- AND ASSESSED THE IN COME OF THE ASSESSEE AT THE SAME AMOUNT I.E. RS. 28,18,750/- VI DE HIS ORDER DATED 10.2.2014 PASSED U/S. 147/143(3) OF THE I.T. ACT, 1961. 5. AGAINST THE ORDER OF THE LD. AO, ASSESSEE APPEAL ED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 7.10.2014 HAS DISMISSED 6 THE APPEAL OF THE ASSESSEEE AND AFFIRMED THE ACTION OF THE AO ON THE LEGAL ISSUE I.E. REOPENING OF THE CASE U/S. 147/148 OF THE I.T. ACT, 1961 AS WELL AS ON MERITS. 6. AGGRIEVED WITH THE AFORESAID ORDER OF THE LD. C IT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. LD. COUNSEL OF THE ASSESSEE HAS FILED THE TWO PA PER BOOKS ONE IS CONTAINING PAGES 1 TO 30 ATTACHING THEREWITH TH E COPY OF LETTER TO AO DATED 6.1.2014 WITH ITS ENCLOSURES; LETTER TO AO DATED 16.1.2016 REQUESTING THE AO TO ISSUE NOTICE UNDER SECTION 133 (6) OF THE I.T. ACT TO VOGUE LEASING AND FINANCE PRIVATE LIMITED AND S R CABLES PRIVATE LIMITED; LETTER TO AO DATED 5.2.2014 WITH ITS ENCL OSURES; LETTER TO CIT(A) DATED 25.7.2014 WITH ITS ENCLOSURES; REASON S FOR REOPENING UNDER SECTION 147/148 OF THE I.T. ACT AND NOTICE OF REASSESSMENT. THE ANOTHER PAPER BOOK IS CONTAINING THE COPIES O F THE ITAT ORDERS AND HONBLE HIGH COURT ORDERS IN THE CASE OF G&G PH ARMA INDIA LTD. (DELHI HIGH COURT) ITA NO. 545/2015; G&G PHARMA IND IA LTD. (DELHI TRIBUNAL) ITA NO. 3149DEL/2013; VINEY AUTO PVT. L TD. (DELHI TRIBUNAL)- ITA NO. 291/DE;/2010; MKM FINSEC (P) LTD . (DELHI TRIBUNAL) ITA NO. 5203/DEL/2013 AND LAVITRA TECHN OLOGIES PVT. LTD. (DELHI TRIBUNAL) ITA NO. 2912/DEL/2013 AND RELIED UPON THE SAME. SHE STATED THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN ASSUMING JURISDICTION U/S. 147 AND THAT TOO W ITHOUT COMPLYING WITH THE MANDATORY CONDITIONS AS PRESCRIBED UNDER S ECTION 147 TO 151 OF THE I.T. ACT, 1961 AND THE REASONS RECORDED ARE INVALID AND 7 CONTRARY TO LAW AND FACTS AND THERE IS NO SATISFACT ION AS PER LAW U/S. 151 OF THE ACT. SHE FURTHER DRAW OUR ATTENTION T OWARDS THE COPY OF REASONS FOR REOPENING THE CASE U/S. 148 AND STATED THAT NO PROPER REASONS WERE RECORDED; NO NEXUS BETWEEN THE MATERIA LS RELIED UPON AND THE BELIEF FORMED FOR ESCAPEMENT OF INCOME; NO APPLICATION OF MIND; NO PROPER SATISFACTION WAS RECORDED BEFORE IS SUE OF NOTICE U/S. 148; NO INDEPENDENT CONCLUSION THAT THERE WAS ESCAP EMENT OF INCOME. IT WAS FURTHER STATED THAT THE CASE WAS R EOPENED ONLY ON THE BASIS OF INVESTIGATION WING INFORMATION WHICH S UFFERS WITH SERIOUS DEBILITY AND LACKS DEFINITENESS, WITHOUT DESCRIBING THE BASIC ASPECTS OF ALLEGED TRANSACTION AND IN THE ABSENCE OF THE S AME, WHOLE ACTION OF THE AO GETS VITIATED. TO SUPPORT HER CONTENTIO N SHE SUBMITTED THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FA VOUR OF THE ASSESSEE BY THE ITAT DECISION DATED 09.1.2015 IN THE CASE OF G&G PHARMA INDIA LIMITED VS. ITO PASSED IN ITA NO. 3149/DEL/20 13 (AY 2003-04) IN WHICH THE JUDICIAL MEMBER IS THE AUTHOR. SHE FURTHER STATED THAT THE ABOVE DECISION OF THE ITAT DATED 9.1.2015 HAS BEEN UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN ITS DECISI ON DATED 08.10.2015 IN ITA NO. 545/2015 IN THE CASE OF PR. CIT-4 VS. G& G PHARMA INDIA LTD. IN VIEW OF THE ABOVE, SHE REQUESTED THAT BY FO LLOWING THE AFORESAID PRECEDENTS THE REASSESSMENT PROCEEDINGS OF THE AO MAY BE QUASHED BY ACCEPTING THE APPEAL FILED BY THE ASS ESSEE. 8. ON THE CONTRARY, LD.DR RELIED UPON THE ORDER PAS SED BY THE AUTHORITIES BELOW AND STATED THAT THE AO HAS PROPER LY RECORDED THE 8 REASONS FOR REOPENING BY DUE APPLICATION OF MIND, H ENCE, THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. 9. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES AND THE CASE LAW CITED BY THE ASSESSEE S COUNSEL ON THE ISSUE IN DISPUTE. IN MY VIEW, IT IS VERY M UCH NECESSARY TO REPRODUCE THE REASONS RECORDED BY THE AO BEFORE IS SUE OF NOTICE TO THE ASSESSEE U/S. 148 OF THE I.T. ACT, 1961 WHIC H IS REPRODUCED HEREUNDER:- REASONS FOR RE-OPENING THE CASE U/S 147/148 IN TH E CASE OF M/S P T ENGINEERS PVT. LTD. (PAN: AADCP4222B) A. Y. 2006-07 IN THIS CASE, THE RETURN INCOME WAS ON 30.112006 A ND SHOWING TOTAL INCOME OF RS. NIL' WHICH WAS PROCESSED/ASSES SED ULS 143(1) ON 24.03.2008. SUBSEQUENTLY, INFORMATION HAS BEEN R ECEIVED FROM THE DIRECTORATE OF INCOME TAX (INVESTIGATION) OF TH E INCOME TAX DEPARTMENT THAT MIS P T ENGINEERS PVT. LTD. IS A BE NEFICIARY OF ACCOMMODATION ENTRIES DURING THE PERIOD OF F. Y. 20 05-06 RELEVANT TO THE A.Y.2006-07 RECEIVED FROM ESTABLISHED, ENTRY -OPERATORS IDENTIFIED BY THE INVESTIGATION WING ON THE BASIS O F SEARCH/SURVEY CONDUCTED BY IT ON SHRI S.K. JAIN, CA. A COMPREHENS IVE 9 INVESTIGATION WAS CARRIED OUT BY THE INVESTIGATION WING IN THIS REGARD AND ON THE BASIS OF INVESTIGATION CARRIED OU T AND EVIDENCES COLLECTED, EXAMINATION MADE A REPORT HAS BEEN FORWA RDED WHICH SHOWS THAT THE ABOVE NAMED PERSON FLOATED A NUMBER OF CONCERNS PVT LTD. COMPANIES FOR PROVIDING ACCOMMODATION ENTR IES TO VARIOUS DESIROUS PERSONS. THESE CONCERNS/COMPANIES WERE FOU ND TO BE ONLY PAPER ENTITIES PROVIDING ACCOMMODATION ENTRIES AND NOT DOING ANY OTHER REAL BUSINESS. ALL THESE PERSONS WERE CON TROLLING VARIOUS CONCERNS/COMPANIES/ENTITIES THROUGH WHICH THEY HAD BEEN PROVIDING ACCOMMODATION ENTRIES TO SEVERAL PERSONS/COMPANIES/ENTITIES. THE ASSESSEE IS ONE OF THE BENEFICIARIES OF ACCOMMODATION ENTRIES. THEY HAVE B EEN DOING THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES THROUGH THESE CONCERNS BY GIVING CHEQUES/PO/DD IN LIEU OF CASH WI TH/WITHOUT THE HELP OF SOME AGENTS/MEDIATORS BY CHARGING CERTA IN COMMISSION FOR PROVIDING THESE ENTRIES WHICH USUALLY VARIED FR OM 1.5% TO 3.5%. A PERUSAL/EXAMINATION OF REPORT/RELATED DOCUMENTS/R ELATED RECORDS SHOW THAT M/S P.T. ENGINEERS PVT. LTD. BEIN G ASSESSED WITH CIRCLE- 14(1), NEW DELHI HAS ALSO RECEIVED A SUM OF RS.27,50,OOO/- AS ACCOMMODATION ENTRIES BY WAY OF SHARE CAPITAL SH ARE PREMIUM FROM THE FOLLOWING S.K. JAIN GROUP COMPANIES:- 10 S.NO. DATE INFORMATION/ENTRY PROVIDER AMOU NT 1. 20.02.2006 M/S VOGUE LEASING & FINANCE PVT. 15,00,000/- LTD. 2.20.03.2006 M/S S.R. CABLE P. LTD. 12,50,000 /- TOTAL AMOUNT 27,50,000/- THESE ENTRIES ARE BUT ON ACCOMMODATION ENTRIES IN T HE GRAB OF SHARE CAPITAL / SHARE APPLICATION MONEY /LOAN /SHAR E PREMIUM ETC. PERUSAL/EXAMINATION OF REPORT / DOCUMENTS /RECORDS SHOW THAT THE ENTIRE TRANSACTIONS ARE LACK INGREDIENTS OF GENUINE NESS OF TRANSACTIONS. IDENTITY OF DIRECTORS OF COMPANY AND CREDITWORTHINESS WITHIN MEANING OF PROVISIONS OF SECTION 68 OF THE A CT. IT IS THEREFORE, HELD THAT THE AMOUNT INTRODUCED AS SHARE CAPITAL! S HARE APPLICATION MONEY/SHARE PREMIUM IS UNACCOUNTED MONEY OF ASSESSE E COMPANY INTRODUCED IN ITS ACCOUNT BOOKS THROUGH CON DUITS AFTER ROUTING THROUGH THE GROUP COMPANIES OF SH. S.K. JAI N. FURTHER ENQUIRIES WERE CONDUCTED BY THIS OFFICE ULS 131 IN MANY OTHER CASES DURING ASSESSMENT PROCEEDING FOR A Y. 2 005-06, TO EXAMINE GENUINENESS OF TRANSACTION, TO VERIFY IDENT ITY OF SHARE SUBSCRIBERS AND THEIR CREDITWORTHINESS IN RESPECT O F ENTITIES/COMPANIES FLOATED/CONTROLLED BY SH. S.K. J AIN, CA IT HAS BEEN REVEALED THAT ALL THESE ENTITIES ARE PAPER ENT ITIES AND COULD NOT STAND FOR VERIFICATION UNDER PROVISIONS SECTION 68 OF THE INCOME 11 TAX ACT. 1961 REGARDING A:EDITS IN THE BOOKS OF ASS ESSEE COMPANY. THE ENTITIES NAMED ABOVE HAVE BEEN FOUND TO BE NON- EXISTENT AT THE ADDRESSES AS REPORTED ON INDEPENDENT ENQUIRY CONDUC TED BY THIS OFFICE. IN VIEW OF THE ABOVE RECORDED REASONS, I HAVE REASO N TO BELIEVE THAT THE ASSESSEE COMPANY HAS BEEN BENEFITED ON ACCOUNT OF BOGUS/ACCOMMODATION ENTRIES TO THE TUNE OF RS. 27,5 0,000/- DURING THE PERIOD 01-04-05 TO 31-03-06 RELEVANT TO THE A.Y . 2006-07. THEREFORE, INCOME TO THE EXTENT OF RS. 27,50,000/- HAS ESCAPED ASSESSMENT BEING UNACCOUNTED INCOME OF THE ASSESSEE COMPANY. APART FROM THIS, AS MENTIONED ABOVE, COMMISSION PAI D OUTSIDE THE BOOKS OF ACCOUNT ALSO ESCAPED ASSESSMENT. THEREFORE , INCOME TO THE EXTENT OF COMMISSION AS RS. 27,50,000/- HAS ALS O ESCAPED ASSESSMENT BEING FAILURE ON THE PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSME NT FOR A.Y. 2006- 07. ACCORDINGLY, ACTION ULS 147 IS PROPOSED TO BE TAKEN AS PROVIDED UNDER LAW. NECESSARY APPROVAL TO ISSUE NOTICE ULS 1 48 IS SOLICITED FROM THE CIT, DELHI- V, NEW DELHI AS PROVIDED IN SU B-SECTION OF SECTION 151 OF THE ACT. NOTICE ULS 148 IS TO BE ISS UED TO BRING THIS ESCAPED INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH 12 HAS ESCAPED ASSESSMENT AND WHICH COMES TO NOTICE SU BSEQUENTLY IN THE COURSE OF PROCEEDINGS. SUBMITTED FOR KIND PERUSAL AND APPROVAL PLEASE. SD/- DCIT, CIRCLE 14(1), NEW DELHI 10. AFTER GOING THROUGH THE REASONS RECORDED BY THE AO, AS AFORESAID, I AM OF THE VIEW THAT AO HAS NOT APPLIE D HIS MIND SO AS TO COME TO AN INDEPENDENT CONCLUSION THAT HE HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED DURING THE YEAR. IN MY VIEW THE REASONS ARE VAGUE AND ARE NOT BASED ON ANY TANGIBLE MATERIAL AS WELL AS ARE NOT ACCEPTABLE IN THE EYES OF LAW. THE AO HAS MECHANICALLY ISSUED NOTICE U/S. 148 OF THE ACT, ON THE BASIS OF INFORMATION ALLEGEDLY RECEIVED BY HIM FROM THE DIRE CTORATE OF INCOME TAX (INVESTIGATION), NEW DELHI. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE A ND THE CASE LAW APPLICABLE IN THE CASE OF THE ASSESSEE, I AM OF TH E CONSIDERED VIEW THAT THE REOPENING IN THE CASE OF THE ASSESSEE FOR THE ASSTT. YEAR IN DISPUTE IS BAD IN LAW AND DESERVES TO BE QUASHED . MY VIEW IS SUPPORTED BY THE FOLLOWING JUDGMENT/DECISION:- PR. CIT VS. G&G PHARMA INDIA LTD. IN ITA NO. 545/2015 DATED 8.10.2015 OF THE DELHI HIGH COURT 13 WHEREIN THE HONBLE COURT HAS ADJUDICATED THE ISSUE AS UNDER:- 12. IN THE PRESENT CASE, AFTER SETTING OUT FOUR EN TRIES, STATED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON A S INGLE DATE I.E. 10TH FEBRUARY 2003, FROM FOUR ENTITIES WH ICH WERE TERMED AS ACCOMMODATION ENTRIES, WHICH INFORMATION WAS GIVEN TO HIM BY THE DIRECTORATE OF INVESTIGATION, THE AO STATED: 'I HAVE ALSO PERUSED VARIOUS MATERIALS AND REPORT FROM INVESTIGATION WING AND ON THAT BASIS IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK ACCOUNT BY WAY OF ABOVE ACCOMMODATION ENTRIES.' THE ABOVE CONCLUSION IS UNHELPFUL IN UNDERSTANDING WHET HER THE AO APPLIED HIS MIND TO THE MATERIALS THAT HE TA LKS ABOUT PARTICULARLY SINCE HE DID NOT DESCRIBE WHAT T HOSE MATERIALS WERE. ONCE THE DATE ON WHICH THE SO CALLE D ACCOMMODATION ENTRIES WERE PROVIDED IS KNOWN, IT WO ULD NOT HAVE BEEN DIFFICULT FOR THE AO, IF HE HAD IN FA CT UNDERTAKEN THE EXERCISE, TO MAKE A REFERENCE TO THE MANNER IN WHICH THOSE VERY ENTRIES WERE PROVIDED IN THE ACCOUNTS OF THE ASSESSEE, WHICH MUST HAVE BEEN TEND ERED ALONG WITH THE RETURN, WHICH WAS FILED ON 14TH NOVE MBER 2004 AND WAS PROCESSED UNDER SECTION 143(3) OF THE ACT. WITHOUT FORMING A PRIMA FACIE OPINION, ON THE BASIS OF SUCH MATERIAL, IT WAS NOT POSSIBLE FOR THE AO TO HA VE SIMPLY CONCLUDED: 'IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BAN K BY WAY OF ACCOMMODATION ENTRIES'. IN THE CONSIDERED VI EW OF THE COURT, IN LIGHT OF THE LAW EXPLAINED WITH SUFFI CIENT CLARITY BY THE SUPREME COURT IN THE DECISIONS DISCU SSED HEREINBEFORE, THE BASIC REQUIREMENT THAT THE AO MUS T APPLY HIS MIND TO THE MATERIALS IN ORDER TO HAVE RE ASONS 14 TO BELIEVE THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT IS MISSING IN THE PRESENT CASE. 13. MR. SAWHNEY TOOK THE COURT THROUGH THE ORDER OF THE CIT(A) TO SHOW HOW THE CIT (A) DISCUSSED THE MATERI ALS PRODUCED DURING THE HEARING OF THE APPEAL. THE COUR T WOULD LIKE TO OBSERVE THAT THIS IS IN THE NATURE OF A POST MORTEM EXERCISE AFTER THE EVENT OF REOPENING OF THE ASSESSMENT HAS TAKEN PLACE. WHILE THE CIT MAY HAVE PROCEEDED ON THE BASIS THAT THE REOPENING OF THE ASSESSMENT WAS VALID, THIS DOES NOT SATISFY THE REQUIREMENT OF LAW THAT PRIOR TO THE REOPENING OF T HE ASSESSMENT, THE AO HAS TO, APPLYING HIS MIND TO THE MATERIALS, CONCLUDE THAT HE HAS REASON TO BELIEVE T HAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. UNLE SS THAT BASIC JURISDICTIONAL REQUIREMENT IS SATISFIED A POST MORTEM EXERCISE OF ANALYSING MATERIALS PRODUCED SUBSEQUENT TO THE REOPENING WILL NOT RESCUE AN INHE RENTLY DEFECTIVE REOPENING ORDER FROM INVALIDITY . 14. IN THE CIRCUMSTANCES, THE CONCLUSION REACHED BY THE ITAT CANNOT BE SAID TO BE ERRONEOUS. NO SUBSTANTIAL QUESTION OF LAW ARISES. 15. THE APPEAL IS DISMISSED. 11. IN VIEW OF ABOVE, I AM OF THE CONSIDERED VIEW T HAT THE AFORESAID ISSUE IN DISPUTE IS EXACTLY THE SIMILAR A ND IDENTICAL TO THE ISSUE INVOLVED IN THE PRESENT APPEAL AND IS SQU ARELY COVERED BY THE AFORESAID DECISION OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF G&G PHARMA (SUPRA). HENCE, RESPECTFULLY FO LLOWING THE ABOVE PRECEDENT IN THE CASE OF PR. CIT-4 VS. G&G PH ARMA INDIA 15 LTD. (SUPRA) I DECIDE THE LEGAL ISSUE IN DISPUTE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE AND ACCORDINGLY QU ASH THE REASSESSMENT PROCEEDINGS AND ALLOW THE LEGAL ISSUE. SINCE I HAVE ALREADY QUASHED THE REASSESSMENT PROCEEDINGS, AS AF ORESAID, THE OTHER ISSUES ARE NOT BEING DEALT WITH BEING ACADEMI C IN NATURE. 12. AS FAR AS ITA NO. 87/DEL/2015 (AY 2009-10) IS C ONCERNED, FOLLOWING THE CONSISTENT VIEW AS TAKEN IN ITA NO. 8 6/DEL/2015 (AY 2006-07), AS AFORESAID, THE ITA NO. 87/DEL/2015 (AY 2009-10) FILED BY THE ASSESSEE ALSO STAND ALLOWED. 13. IN THE RESULT, BOTH THE ASSESSEES APPEAL ARE A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 14-09-2016. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED : 14-09-2016 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.