Das Cold Storage Pvt. Ltd., Agra V. Asstt. C.I.T., Cricle-3(1), Etah

ITA 88/AGR/2011

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0381 (ITAT-AGRA)
• Duration Of Justice: 8 year(s) 1 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-01-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 28-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Depreciation; Loose papers; Difference of opinion; Accommodation entries; Assessment record; Change of opinion; Set aside
• Section: 143(3); 142(1); 133A; 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 88/AGRA/2011 ASSTT. YEAR : 2002-03 DAS COLD STORAGE PVT. LTD., VS. A.C.I.T., CIRCL E 3(1), D-15, KAMLA NAGAR, AGRA. ETAH. (PAN : AAACD 5670 N) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANURAG SINHA, ADVOCATE RESPONDENT BY : SHRI WASEEM ARSHAD, SR. D.R. DATE OF HEARING : 17.01.2013 DATE OF PRONOUNCEMENT OF ORDER : 29.01.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A), GHAZIABAD DATED 12.01.2011 FOR THE ASSESSMENT YEAR 2002-03. 2. THE ASSESSEE IN THE PRESENT APPEAL CHALLENGED TH E REOPENING OF THE ASSESSMENT U/S. 147/148 OF THE IT ACT AND ADDITION OF RS.3,00,000/- ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM M/S. AAYUSHI STOCK BROKERS PVT. LTD. 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE COMPANY FILED ITS ORIGINAL RETURN OF INCOME ON 29.10.2002 DECLARING INCOME OF RS.8,68,338/-. THE ORIGINAL ITA NO. 88/AGRA/2011 2 ASSESSMENT WAS MADE U/S. 143(3) ON 30.03.2005 ON TO TAL INCOME OF RS.27,95,510/- MAKING AN ADDITION OF RS.18,77,174/- ON ACCOUNT OF RENTAL CHARGES ON MERCANTILE BASIS AS AGAINST THE ASSESSEE DECLARING THE SAME ON CASH BASIS. SUBSEQUENTLY, THIS ADDITION WAS DELETED BY THE LD. CIT(A)-I, KANPUR VI DE ORDER DATED 07.03.2006. 3.1 ON 31.03.2009, THIS ASSESSMENT WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED THAT A SURVEY U/S. 133A HAD BEEN CONDUCTED ON 24.04.2001 IN THE CASE OF M/S. AAYUSHI STOCK BROKERS PVT. LTD. AND THE SAID P ARTY HAD ACCEPTED TO BE INVOLVED IN MONEY LAUNDERING BUSINESS AND IN PROVID ING ACCOMMODATION ENTRIES IN THE SHAPE OF BOGUS SHARE MONEY, SHARE APPLICATIONS, LONG-TERM CAPITAL GAINS AND SHORT TERM CAPITAL GAINS ETC. ONE OF THE BENEFICIAR IES WAS THE ASSESSEE. ON THE BASIS OF THIS INFORMATION, THE AO TO WHOM THE CASE HAD BE EN TRANSFERRED/ASSIGNED FORMED A REASONABLE BELIEF THAT INCOME HAD ESCAPED ASSESSM ENT AND THEREFORE, AFTER TAKING APPROVAL OF THE COMPETENT AUTHORITIES, NOTICE U/S. 148 WAS ISSUED ON 31.03.2009. THE ASSESSEE OBJECTED TO THE ISSUANCE OF THE NOTICE U/S. 148 BEFORE THE AO, IN RESPONSE TO WHICH A DETAILED ORDER DATED 19.11.2009 HAS BEEN PASSED BY THE AO DISMISSING THE CONTENTIONS RAISED BY THE ASSESSEE O N THE ISSUE OF VALIDITY OF NOTICE U/S. 148 OF THE IT ACT. THE ASSESSEE WAS ASKED TO J USTIFY AND PROVE THE GENUINENESS OF VARIOUS LOANS/SHARE CAPITAL INCLUDING THAT OF RS .3,00,000/- TAKEN FROM M/S. AAYUSHI STOCK BROKERS PVT. LTD. CONFIRMATIONS WERE FILED ALONG WITH OTHER DETAILS. THE AO MADE INDEPENDENT ENQUIRIES. THE LETTERS TO M /S. AAYUSHI STOCK BROKERS ITA NO. 88/AGRA/2011 3 PVT. LTD. CAME BACK UN-SERVED. THE ASSESSEE WAS ASK ED TO PRESENT THE DIRECTORS OF THIS COMPANY, BUT THE ASSESSEE COULD NOT DO SO. THE AO, ACCORDINGLY, MADE ADDITION OF RS.3,00,000/- AND FURTHER ADDITION OF R S.7,00,000/- AND RS.10,00,000/- WERE ALSO MADE AGGREGATING TO RS.20 LACS ON THE GRO UND THAT ASSESSEE WAS NOT ABLE TO FURNISH ANY EVIDENCE TO PROVE THAT THE SHARES WE RE ACTUALLY TRANSFERRED IN THE NAME OF THE PURCHASERS AND HENCE, IT WAS A COLOURAB LE DEVICE OF THE ASSESSEE TO INTRODUCE ITS UNACCOUNTED MONEY THROUGH SHARE APPLI CATION MONEY. ADDITION OF RS.20,00,000/- WAS ACCORDINGLY MADE IN THE RE-ASSES SMENT ORDER DATED 29.12.2009. THE ASSESSEE CHALLENGED THE REOPENING OF ASSESSMENT BEFORE THE LD. CIT(A) AS WELL AS THE ADDITION OF RS.20,00,000/- ON ACCOUNT OF UNE XPLAINED SHARE APPLICATION MONEY. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT THE ADDITION OF RS.7,00,000/- PERTAINED TO M/S. GURUKUL TECHNOLOGIE S LTD. AND RS.10,00,000/- PERTAINED TO M/S. PEE MEDICA HEALTHCARE LTD. ON WHI CH THE LD. CIT(A) ON MERITS, ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THESE ADDITIONS ARE EXPLAINED AND ACCORDINGLY, ADDITION OF RS.17,00,000/- HAVE BEEN D ELETED IN THE IMPUGNED ORDER. IT IS STATED THAT THE REVENUE DEPARTMENT HAS NOT PREFE RRED ANY APPEAL BEFORE THE TRIBUNAL, CHALLENGING THE DELETION OF ADDITION OF R S.17,00,000/-. THE LD. CIT(A) CONFIRMED THE ORDER OF THE AO WITH REGARD TO INITIA TION OF PROCEEDINGS U/S. 148 OF THE IT ACT AS WELL AS CONFIRMED THE ADDITION OF RS. 3,00,000/- RECEIVED FROM M/S. AAYUSHI STOCK BROKERS PVT. LTD., ON WHICH THE ASSES SEE IS IN APPEAL BEFORE US. ITA NO. 88/AGRA/2011 4 4. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND MAINLY ARGUED THAT THE ASSESSEE HAD PLACED ON RECORD FULLY AND TRULY ALL RELEVANT MATERIAL AND THEREAFTER, ORIGINAL ASSE SSMENT HAD BEEN COMPLETED U/S. 143(3) VIDE ORDER DATED 30.03.2005. COPY OF THE ORI GINAL ASSESSMENT IS FILED IN PAPER BOOK AT PAGE 4 IN WHICH THE AO ON FILING THE CONFIRMATION AND OTHER DETAILS WITH REGARD TO GENUINENESS OF THE SHARE CAPITAL, AC CEPTED THE CLAIM OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMIT TED THAT SUCH ASSESSMENT CANNOT BE REOPENED U/S. 147 UNLESS THERE IS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS AS ARE RELEVANT FOR COMPLETION OF ASSESSMENT AND THAT IN THE REASONS RECORDED, THERE IS NO SPECIFIC MENTION OF ANY SUCH FAILURE ON THE PART OF THE ASSESSEE. SINCE, THERE IS NO FAILURE ON THE PART OF ASSESSEE, THEREFORE, ASSESSMENT REOPENED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND THE AO WAS NOT JUSTIFIED IN REO PENING THE ASSESSMENT. HE HAS FILED COPY OF THE ORDER DATED 19.11.2009 THROUGH WH ICH OBJECTIONS OF THE ASSESSEE REGARDING REOPENING OF ASSESSMENT WERE DISPOSED OF IN WHICH THE AO HAS MENTIONED THE REASONS FOR INVOKING THE PROVISIONS O F SECTION 147 / 148 OF THE IT ACT. HE HAS SUBMITTED THAT SINCE THE AO ON THE ORIG INAL STAGE VERIFIED THE RECEIPT OF SHARE APPLICATION MONEY FROM M/S. AAYUSHI STOCK BRO KERS PVT. LTD. AFTER VERIFYING THE EVIDENCE AND FACTS, THEREFORE, THE AO WAS NOT J USTIFIED IN REOPENING OF ASSESSMENT. HE HAS RELIED UPON THE DECISION OF ALLA HABAD HIGH COURT IN THE CASE OF VISHWANATH PRASAD ASHOK KUMAR SARRAF VS. CIT 327 IT R 191 AND THE DECISION OF ITA NO. 88/AGRA/2011 5 BOMBAY HIGH COURT IN THE CASE OF IPCA LABORATORIES LTD. VS. GAJANAND MEENA, DCIT, 251 ITR 416 AND ALSO RELIED UPON OTHER DECISI ONS WHICH ARE INCORPORATED IN THE APPELLATE ORDER. ON MERIT ALSO, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE FILED CONFIRMATION FROM M/S. AAYUSHI S TOCK BROKERS PVT. LTD., COPY OF RESOLUTION, COPY OF SHARE APPLICATION, COPY OF THE BANK ACCOUNT AND BALANCE SHEET OF THE ABOVE COMPANY BEFORE THE AO, WHICH CLEARLY P ROVE THAT THE ASSESSEE HAS GENUINELY RECEIVED SHARE APPLICATION MONEY. BY REFE RRING TO THE BANK ACCOUNT OF THIS COMPANY, HE HAS SUBMITTED THAT THERE ARE NO CA SH DEPOSITS IN THE BANK ACCOUNT OF THIS COMPANY BEFORE ISSUE OF CHEQUE IN FAVOUR OF THE ASSESSEE, AS OBSERVED BY THE LD. CIT(A), THEREFORE, ADDITION ON MERITS IS AL SO LIABLE TO BE DELETED. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF TH E AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE RECEIVED ACCOMMODATION ENTRIES, THEREFORE, THE ASSESSMENT WAS CORRECTLY REOPENED AND THERE ARE SEV ERAL CASH DEPOSITS PRIOR TO ISSUE OF CHEQUE IN FAVOUR OF THE ASSESSEE. THEREFOR E, THE ADDITION ON MERITS IS ALSO JUSTIFIED. THE LD. DR RELIED UPON THE DECISION OF H ONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTERS AND FINLEASE PVT. LT D., 18 TAXMAN.COM 217. THE LD. DR ALSO FILED COPY OF THE REASONS RECORDED ON 3 1.03.2009 AND COPIES OF THE ORDER SHEET FROM THE ORIGINAL ASSESSMENT RECORD PRO DUCED DURING THE COURSE OF HEARING. ITA NO. 88/AGRA/2011 6 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. SECTION 147 OF THE IT ACT PROVIDES AS UNDER : 147. IF THE ASSESSING OFFICER HAS REASON TO BELI EVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY A.Y., HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 1 53, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHAR GEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF PROCEEDINGS UNDER THI S SECTION, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT Y EAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 1 53 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR). PROVIDED THAT WHERE AN ASSESSMENT UNDER SUBSECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE R ELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION A FTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE AS SESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DIS CLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. EXPLANATION 1.- PRODUCTION BEFORE THE ASSESSING OFF ICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENC E COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY THE ASSESSING OFF ICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2- FOR THE PURPOSES OF THIS SECTION, TH E FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT NAMELY:- (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INC OME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSAB LE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXI MUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME TAX. ITA NO. 88/AGRA/2011 7 (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS UNDE RSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOSS, DEDUCTION , ALLOWANCE OR RELIEF IN THE RETURN. (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT- (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSESSED; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RATE; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THIS ACT; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED. 5.1 HONBLE BOMBAY HIGH COURT IN THE CASE OF IPCA L ABORATORIES LTD. VS. GAJANAND MEENA, DCIT, 251 ITR 416 HELD HELD, ALLOWING THE PETITION, THAT, ON THE FACTS, THE PERI OD OF FOUR YEARS CAME TO AN END ON MARCH 31, 1997. THE AF FIDAVIT IN REPLY CLEARLY INDICATED THAT THE PREDECESSOR OF RESPONDEN T NO. 1 HAD COMPLETED THE ASSESSMENT UNDER SECTION 143(3) ON MA RCH 31, 1995, BY COMPUTING THE TOTAL INCOME AT RS.2.86 CRORES AND, S UBSEQUENTLY ON MARCH 16, 1999, ANOTHER PREDECESSOR IN OFFICE OF RE SPONDENT NO. 1 FORMED AN OPINION THAT THE INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. THIS SHOWED THAT REOPENING WAS SOUGHT O N THE BASIS OF CHANGE OF OPINION. THERE WAS NOTHING IN THE AFFIDAV IT-IN-REPLY TO INDICATE THAT THE RE-OPENING WAS SOUGHT ON THE GROU ND OF THE FAILURE ON THE ART OF THE ASSESSEE TO DISCLOSE FULLY AND TR ULY ALL MATERIAL FACTS. IN THE CIRCUMSTANCES, THE PROVISION IN EXPLANATION 2 TO SECTION 147 HAD NO APPLICATION. THE NOTICE WAS LIABLE TO BE SET ASIDE. 5.2 HONBLE ALLAHABAD HIGH COURT IN THE CASE OF VIS HWANATH PRASAD ASHOK KUMAR SARRAF VS. CIT 327 ITR 191 HELD ITA NO. 88/AGRA/2011 8 HELD, ALLOWING THE PETITION, (I) THAT THE NOTICES FOR BO TH YEARS WERE ISSUED AFTER THE EXPIRY OF FOUR YEARS. THE NOT ICES UNDER SECTION 148 OF THE ACT COULD BE ISSUED BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR ONLY WHERE THE INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OF THE ACT OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1 ) OF SECTION142 OR SECTION 148 OF THE ACT, OR TO DISCLOSE FULLY AND TR ULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. NEITHER HAD ANY FINDI NG IN THIS REGARD BEEN RECORDED IN THE REASONS RECORDED NOR HAD ANY S UCH CASE BEEN MADE OUT. (II). THAT MOREOVER, THE AMOUNTS ALLEGED TO HAVE E SCAPED ASSESSMENT HAD BEEN DULY CONSIDERED IN THE BLOCK AS SESSMENT IN WHICH THEY WERE ASSESSED TO TAX AS UNDISCLOSED INCOME. IN APPEAL, THE TRIBUNAL HAD HELD THAT SUCH AMOUNTS WERE NOT UNDISC LOSED INCOME. ONCE THE TRIBUNAL HAD ARRIVED AT THE CONCLUSION THA T THE AMOUNTS WERE NOT UNDISCLOSED INCOME, THEY COULD NOT BE TREA TED AS INCOME CHARGEABLE TO TAX UNDER THE PROVISIONS OF SECTION 1 47 OF THE ACT. IT WAS NOT OPEN TO THE ASSESSING AUTHORITY TO CIRCUMVE NT THE ORDER OF THE TRIBUNAL AND TO TAKE A DIFFERENT VIEW. THE ORDER OF THE TRIBUNAL WAS BINDING ON THE ASSESSING AUTHORITY. THEREFORE, INIT IATION OF PROCEEDINGS UNDER SECTION 147 READ WITH SECTION 148 OF THE ACT FOR THE ASSESSMENT YEARS 1996-97 AND 1997-98 WAS BARRED, ER RONEOUS AND BAD IN LAW. 5.3 HONBLE GUJRAT HIGH COURT IN THE CASE OF SAYAJI INDUSTRIES LTD. VS. JCIT, 336 ITR 360 HELD HELD, ALLOWING THE PETITION, THAT EXCEPT FOR THE STATEMEN T THAT THERE WAS OMISSION ON THE PART OF THE ASSESSEE TO F URNISH THE TRUE AND CORRECT AFFAIRS OF THE COMPANY, THERE WAS NOTHING W HATSOEVER IN THE REASONS RECORDED TO INDICATE THE NATURE OF THE OMIS SION AND AS TO WHICH FACTS HAD NOT BEEN TRULY AND FULLY DISCLOSED. HENCE, ON A PLAIN READING OF THE REASONS RECORDED, IT WAS APPARENT TH AT THERE WAS NO MATERIAL ON RECORD ON THE BASIS OF WHICH THE ASSESS ING OFFICER COULD HAVE RECORDED THE SATISFACTION AS REGARDS INCOME HA VING ESCAPED ASSESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO FURNISH ITA NO. 88/AGRA/2011 9 TRUE AND CORRECT AFFAIRS OF THE COMPANY. THE NOTICE UNDER SECTION 148 WAS NOT VALID. 5.4 HONBLE MADRAS HIGH COURT IN THE CASE OF SHRI S HAKTHI TEXTILES LTD. VS. JCIT, 340 ITR 144 HELD THAT THE NOTICES IN RESPECT OF ASSESSMENT YEARS 199 1-92 AND 1992-93 WERE ISSUED AFTER FOUR YEARS. THERE WAS NO MENTION IN THE RECORDED REASONS THAT THE ESCAPEMENT OF CHARGEABLE INCOME FROM TAX WAS DUE TO OMISSION OR FAILURE ON THE PART OF THE A SSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR TH E ASSESSMENT. THE NOTICES IN RESPECT OF THE ASSESSMENT YEARS 1991-92 AND 1992-93 ISSUED UNDER SECTION 148 READ WITH SECTION 147 OF THE ACT WERE WHOLLY WITHOUT JURISDICTION AND, THEREFORE, THEY WERE LIAB LE TO BE QUASHED. 5.5 CONSIDERING THE PROVISIONS OF SECTION 147 IN TH E LIGHT OF THE ABOVE DECISIONS, IT IS CLEAR THAT PROVISO TO SECTION 147 OF THE IT A CT PROVIDES THAT WHERE AN ASSESSMENT U/S. 143(3) HAS BEEN MADE FOR THE RELEVA NT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN U/S. 147 OF THE ACT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCOME CHARGEAB LE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF FA ILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN U/S. 139 OR IN RESPONSE TO NOTICE ISSUED U/S. 142(1) OR 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. THE LD. DR PROVIDED COPY OF THE RE ASONS RECORDED BY THE AO ON 31.03.2009, WHICH IS REPRODUCED AS UNDER : AN INFORMATION HAS BEEN RECEIVED FROM THE ADIT, UNI T-I, AGRA THROUGH THE ADDL. CIT, RANGE-3, MATHURA ON 30.03.20 05 AT 5.30 P.M. ALONG WITH A LIST OF BENEFICIARIES. ITA NO. 88/AGRA/2011 10 M/S. DAS COLD STORAGE P. LTD. IS ONE OF THE BENEFI CIARY WHO HAD TAKEN ACCOMMODATION ENTRY OF RS.13.00LAKH ON 01.02. 02. THE ITI OF CIRCLE INFORMED THAT THE SAID CASE WAS COMPLETED U/S. 143(3) ON 30.03.2005. I.T.I. IS IN TRANSIT WITH THE ASSESSMENT FOLDER. THIS IS A TIME BARRING MATTER. PROPOSAL U/S. 147/148 ALONG WITH REASON IS PUT UP FOR KIND PERUSAL AND APPROVAL. SD/- 31/3 ACIT, ETAH. ADDL. CIT, RANGE-3. 5.6 THE LD. COUNSEL FOR THE ASSESSEE FROM THE ORDER DATED 19.11.2009 PASSED BY THE AO DISMISSING ALL THE CONTENTIONS OF THE ASSESS EE REGARDING VALIDITY OF NOTICE U/S. 148, REFERRED TO THE REASONS QUOTED BY THE AO IN THIS ORDER (PB-8) IN WHICH THE AO REPRODUCED THE REASONS FOR INVOKING OF THE PROVI SIONS OF SECTION 147/148 WHICH WERE PROVIDED TO THE ASSESSEE ON 06.11.2009, WHICH READS AS UNDER : AN INFORMATION HAS BEEN RECEIVED FROM ADI(INV.) UN IT-1, AGRA THROUGH THE ADDL. COMMISSIONER OF INCOME-TAX, RANGE -3, MATHURA THAT A SURVEY U/S. 133A OF THE ACT WAS CONDUCTED ON 24.04.2001 IN THE CASE OF M/S. AAYUSHI STOCK BROKER P. LTD. COSMOS FI NANCIAL (FORMERLY KNOWN AS COSMOS FINANCIAL SERVICES PVT. LTD.) 39-4B , IST FLOOR, FRIENDS TOWER, AGRA. DURING THE COURSE OF SURVEY A LARGE NUMBER OF INCRIMINATING BOOK OF ACCOUNTS, BILLS, LOOSE PAPERS , DIARIES ETC. WERE FOUND AND IMPOUNDED. THE SAID ASSESSEE IS ACTUALLY INVOLVED IN MONEY LAUNDERING BUSINESS ON A VERY LARGE SCALE AND IN TH E GARB OF SHARE BROKER BUSINESS. THE ALLEGED ASSESSEES ARE ACTUALLY PROVIDING ACCOMMODATION ENTRIES IN THE SHAPE OF BOGUS SHARE M ONEY, SHARE APPLICATION MONEY, LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN ETC. TO THE VARIOUS BENEFICIARY. ENQUIRY HAVE BEEN CONDUCTED BY THE ADI (INVESTIGATION) AGRA AND IT HAS BEEN FOUND THAT NO GENUINE TRANSACTION IN SALE/PURCHASE OF SHARE HAS TAKEN PLA CE. THE BENEFICIARIES HAVE TAKEN ONLY ENTRIES. THE ADIT (IN VESTIGATION) AGRA HAS PROVIDED SUCH NAME OF BENEFICIARY AS PER ANNEXU RE-B ADDUCED TO LETTER DATED 26.02.2009 HAS TAKEN THE ACCOMMODATION ENTRIES BY ITA NO. 88/AGRA/2011 11 ARRANGING/OBTAINING BOGUS DOCUMENTS ETC. IN THE FOR M OF SHARE APPLICATION MONEY ETC. IN THE SAME ANNEXURE-B, NAME OF ASSESSEE M/S. DASS COLD STORAGE PVT. LTD. D-15, KAMLA NAGAR, AGRA WHICH FALLS UNDER THE JURISDICTION OF THE UNDERSIGNED HAS TAKEN ACCOMMODATION ENTRIES IN THE FORM OF SHARE APPLICATION MONEY ETC. THE ASSESSEE M/S. DAS COLD STORAGE PVT. LTD. HAS TAKEN THE ENTRY IN T HE FINANCIAL YEAR 2001-02 AND RECEIVED AN AMOUNT OF RS.3,00,000/- THR OUGH INST. NO. 35377 DATED 01.02.2002 FROM M/S. AAYUSHI STOCK BROK ERS PVT. LTD. AND RS.10,00,000/- ON 02.02.2002 WHICH WAS DEPOSITE D IN ITS BANK ACCOUNT MAINTAINED WITH CANARA BANK, KAMLA NAGAR, A GRA. THE INSTRUMENT HAS BEEN REVEALED THAT THE AFORESAID TRA NSACTION IS PRIMA FACIE UNEXPLAINED. IN VIEW OF THE INFORMATION RECEIVED FROM THE INVES TIGATION WING AND ADVERSE MATERIAL IN POSSESSION OF THE DEPARTMEN T AS MENTIONED ABOVE, I HAVE REASONS TO BELIEVE THAT M/S. DASS COL D STORAGE PVT. LTD., ASSESSEE HAS ESCAPED THE INCOME OF RS.13,00,0 00/-. SO TO VERIFY THE CORRECTNESS OF ESCAPED INCOME, IT REQUIRES TO R EOPEN THE ASSESSMENT UNDER SECTION 147(A) / 148 OF THE IT ACT , 1961 FOR THE A.Y. 2002-03. 5.7 CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE REASONS, IT IS CLEAR THAT WHEN ORIGINAL ASSESSMENT WAS FRAMED U/S. 143(3 ) ON 30.03.2005, THE ASSESSEE FILED CONFIRMATION AND ALL OTHER RELEVANT DETAILS I N RESPECT OF THE SHARE HOLDERS WHO HAVE INVESTED THEIR MONEY IN SHARE APPLICATIONS OF ASSESSEE COMPANY AND THE AO AFTER VERIFICATION OF THE SAME ACCEPTED THE GENUINE NESS OF THE SHARE APPLICATION MONEY INVESTED BY ALL PARTIES. THE LD. COUNSEL FOR THE ASSESSEE FILED COPIES OF THE CONFIRMATION, BOARDS RESOLUTION, SHARE ALLOTMENT A ND COPIES OF BANK ACCOUNT AND BALANCE SHEET OF M/S. AAYUSHI STOCK BROKERS IN PAPE R BOOK AT PAGE 21 TO 25 WHICH WERE FILED BEFORE THE AO AT THE ORIGINAL ASSESSMENT STAGE. ALL THESE DOCUMENTS WERE EXAMINED BY THE AO AND THE AO WAS SATISFIED WI TH THE GENUINE SHARE ITA NO. 88/AGRA/2011 12 APPLICATION MONEY DEPOSITED BY M/S. AYUSHI STOCK BR OKERS PVT. LTD. WITH THE ASSESSEE COMPANY. THUS, AT THE ORIGINAL ASSESSMENT STAGE, THE ASSESSEE HAD DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS NECESS ARY FOR ASSESSMENT. THUS, THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RE TURN U/S. 139, 142 OR 148. THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. THE ASSESSMENT IS REO PENED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. FROM THE ORDER DATED 19.11.2009, IT IS CLEAR THAT THE AO HAS NOWHERE MENTIONED IN THE R EASONS RECORDED THAT ESCAPEMENT OF CHARGEABLE INCOME FROM TAX WAS DUE TO OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY AL L MATERIAL FACTS NECESSARY FOR ASSESSMENT. THUS, THE NECESSARY INGREDIENTS OF PROV ISO TO SECTION 147 ARE NOT SATISFIED IN THE CASE OF ASSESSEE FOR REOPENING OF THE ASSESSMENT IN QUESTION. FURTHER, THE AO IN THE REASONS RECORDED, AS NOTED I N ORDER DATED 19.11.2009, MERELY STATED THAT IN ORDER TO VERIFY THE CORRECTNE SS OF ESCAPED INCOME, HE IS REOPENING THE ASSESSMENT. SUCH A COURSE ADOPTED BY THE AO IS NOT PERMISSIBLE UNDER LAW TO VERIFY THE INFORMATION BECAUSE THE AO HAS TO VERIFY THE CORRECTNESS OF THE INFORMATION PRIOR TO SATISFYING HIMSELF THAT IN COME ESCAPED ASSESSMENT. CONSIDERING THE ABOVE DISCUSSION, WE ARE OF THE VIE W THAT THE REOPENING OF ASSESSMENT U/S. 147/148 OF THE IT ACT IS NOT JUSTIF IED IN THE MATTER. THUS, THE AO HAS NOT CORRECTLY ASSUMED JURISDICTION U/S. 148 OF THE IT ACT. WE ACCORDINGLY, SET ASIDE AND QUASH THE REOPENING OF ASSESSMENT U/S. 14 7/148 OF THE IT ACT. ITA NO. 88/AGRA/2011 13 5.8 IN VIEW OF THE ABOVE FINDINGS, WHEN REOPENING O F THE ASSESSMENT HAS BEEN QUASHED, ALL ADDITIONS MADE IN THE SAME ORDER WOULD STAND DELETED. THEREFORE, WE DO NOT PROPOSE TO DECIDE THE ADDITION ON MERITS, AS IT IS LEFT ONLY FOR ACADEMIC DISCUSSION. ACCORDINGLY, THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY