Sh. Ramesh Prasad, HUF., Agra V. I.T.O., Ward-1(3), Agra

ITA 99/AGR/2013

• Counselvise Citation: 9920314 RSA 2013
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-09-2013
• Assessment Year: misc
• Appeal Filed On: 09-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: K C AGARWAL
• Keywords: Reopening of assessment; Gift; Depreciation; Income from undisclosed sources; Share purchase agreement; Question of law; Tangible material; Difference of opinion; Accommodation entries; Competent authority; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 147; 68; 148; 139; 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, SMC, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO.99/AGRA/2013 ASSESSMENT YEAR: 2002-03 SHRI RAMESH PRASAD, HUF, VS. INCOME TAX OFFICER, 1/192, PROFESSOR COLONY, WARD 1(3), AGRA. AGRA. (PAN : AAFHR 3651 B). ITA NO.100/AGRA/2013 ASSESSMENT YEAR: 2002-03 SHRI PIYUSH PRASAD, HUF, VS. INCOME TAX OFFICER, 1/192, PROFESSOR COLONY, WARD 1(3), AGRA. AGRA. (PAN : AAEHP 9175 R). (APPELLANTS) (RESPONDENTS) APPELLANTS BY : SHRI K.C. AGARWAL, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 03.09.2013 DATE OF PRONOUNCEMENT : 05.09.2013 ORDER THIS ORDER SHALL DISPOSE OF BOTH THE APPEALS FILED BY THE ASSESSEE ON IDENTICAL ISSUES. FOR THE SAKE OF CONVENIENCE, BOTH THE PART IES HAVE ARGUED THE APPEAL IN THE CASE OF SHRI RAMESH PRASAD, HUF AND HAVE STATED THA T THE FACTS AND ISSUES ARE SIMILAR IN OTHER APPEAL OF SHRI PIYUSH PRASAD, HUF. THEREFORE, FOR THE PURPOSE OF 2 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 DISPOSAL OF BOTH THE APPEALS, I DECIDE THE APPEAL I N THE CASE OF SHRI RAMESH PRASAD, HUF AS UNDER :- ITA NO.99/AGRA/2013 (SHRI RAMESH PRASAD, HUF) 2. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-I, AGRA DATED 09.10.2012 FOR THE A.Y. 2002-03. IN THI S APPEAL THE ASSESSEE HAS CHALLENGED THE INITIATION OF THE REASSESSMENT PROCE EDINGS UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) AS WEL L AS ADDITIONS ON MERIT I.E. RS.2,99,212/- AND RS.29,921/-. 3. THE FACTS OF THE CASE ARE THAT AN INFORMATION WA S RECEIVED THAT THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRY OF RS.2,99,212/- ON 1 8.07.2001 FROM M/S. SINGHMAN FINANCIAL SERVICES LIMITED IN THE FORM OF CAPITAL GAIN. AFTER RECORDING THE REASONS TO BELIEVE AND AFTER GETTING SANCTION U NDER SECTION 151 OF THE ACT FROM THE COMPETENT AUTHORITY, THE NOTICE UNDER SECTION 1 48 OF THE ACT WAS ISSUED ON 27.03.2009. IN COMPLIANCE TO THE NOTICE, THE ASSES SEE FILED WRITTEN REPLY ON 21.04.2009 IN WHICH IT WAS SUBMITTED THAT THE RETUR N FILED ORIGINALLY ON 01.08.2002 MAY BE TREATED TO HAVE BEEN FILED IN COMPLIANCE TO NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE ALSO SUBMITTED BEFORE THE A.O. TH AT REASONS ARE RECORDED IN MECHANICAL MANNER WITHOUT APPLYING MIND. THERE ARE NO MATERIAL IN THE 3 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 POSSESSION OF THE DEPARTMENT TO PROVE THE CASE. TH E ASSESSEE HAS PURCHASED SHARES WHICH WERE SOLD AND EARNED LONG TERM CAPITAL GAINS. IT IS FURTHER STATED THAT THE ASSESSMENT WAS REOPENED UNDER SECTION 147 OF THE AC T ON INFORMATION RECEIVED FROM D.D.I.T., INVESTIGATION WING, AGRA DATED 13.03 .2009 THAT THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRY AS ABOVE. THE ASSESSEE E XPLAINED THAT HE HAS PURCHASED 1500 SHARES OF M/S. GOYAL ACHAL SAMPATI V IKAS & NIYOJAN NIGAM LIMITED FOR RS.4,893/- AND SOLD ON 18.04.2001 FOR R S.2,99,213/- AND EARNED LONG TERM CAPITAL GAINS OF RS.2,99,310/- AND THIS AMOUNT OF CAPITAL GAIN HAS BEEN CLAIMED EXEMPT UNDER SECTION 54EC OF THE ACT AS THE AMOUNT OF RS.3,00,000/- WAS INVESTED IN RURAL ELECTRIFICATION BOND. HOWEVER, T HE A.O. HAS DISCUSSED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS FILED PHOTOC OPIES OF THE PURCHASE BILL, SALE BILL AND SHARE CERTIFICATES BUT DID NOT PRODUCE THE BROKER. THE A.O. HAS FURTHER DISCUSSED THE MATTER THAT LETTER WAS SENT TO THE CO MPANY TO FURNISH THE DETAILS OF SALES AND PURCHASE OF THE SHARES BUT THE ENVELOP HA S BEEN RECEIVED BACK WITH THE POSTAL REMARK LEFT. THEREFORE, THE A.O. CONCLUDE D THAT IT IS CLEAR THAT THE COMPANY WHOSE SHARES ARE TRADED IS NOT A GENUINE CO MPANY AND IT IS ONLY A PAPER ENTITY AND IN VIEW OF THE A.O. SINCE THE GENUINENES S AND EXISTENCE OF THE COMPANY WHOSE SHARES ARE PURCHASED/SOLD ARE NOT PROVED, THE WHOLE TRANSACTION CLAIMING PURCHASE AND SALE OF SHARES BECOME ACCOMMODATION EN TRY AND FOUND THAT THE ASSESSEE HAS ARRANGED AN ACCOMMODATION ENTRY OF RS. 2,99,212/- WHICH WAS ADDED UNDER SECTION 68 OF THE ACT. THE A.O. ALSO COMPUTE D AN AMOUNT OF RS.29,921/- @ 4 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 10% OF THE ABOVE SAID ACCOMMODATION ENTRY AS COMMIS SION PAID BY HIM FOR OBTAINING THE ABOVE ACCOMMODATION ENTRY AND ADDITIO N OF BROKERAGE WAS MADE IN THE SOME OF RS.29,921/-. THE TOTAL INCOME WAS COMP UTED AT RS.4,97,943/-. 4. THE ASSESSEE HAS CHALLENGED INITIATION OF THE AS SESSMENT PROCEEDINGS AND BOTH THE ADDITIONS BEFORE THE LD. CIT(A). IT WAS S UBMITTED THAT THE A.O. HAS SIMPLY RELIED UPON THE INFORMATION SENT BY THE INVESTIGATI ON WING WHICH HAS NO BASIS FOR REASON TO BELIEVE AS THE LONG TERM CAPITAL GAIN W AS AN ACCOMMODATION ENTRY. THEREFORE, BASIS IS NOT CORRECT. THE CIT(A) DID NO T ACCEPT THE CONTENTION OF THE ASSESSEE BECAUSE WHATEVER CASE LAWS WERE RELIED UPO N BY THE ASSESSEE BELONGED TO CHANGE OF OPINION OR SUSPICION TO BELIEVE. THE CIT (A) RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. R AJESH JHAVERI STOCK BROKERS PVT. LTD, 161 TAXMAN 316 AND CONFIRMED THE REOPENIN G OF THE ASSESSMENT. ON MERIT ALSO, THE CIT(A) CONFIRMED THE ADDITION AND D ISMISSED THE APPEAL OF THE ASSESSEE. 5. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE H AS DISCLOSED ALL THE PRIMARY FACTS OF LONG TERM CAPITAL GAIN IN THE RETURN OF IN COME WHICH HAVE BEEN ACCEPTED IN PROCEEDINGS UNDER SECTION 143(1) OF THE ACT. NO RE PORT DATED 13.03.2009 WAS BROUGHT ON RECORD OR PROVIDED TO THE ASSESSEE WHICH IS STATED TO HAVE BEEN RECEIVED 5 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 FROM THE D.D.I.T., AGRA. THE A.O. DID NOT APPLY HI S MIND TO ANY INFORMATION. ALL INFORMATION WERE VAGUE AND GENERAL AND EVEN THE COL UMNS OF THE REASONS RECORDED UNDER SECTION 148 ARE BLANK. NO TANGIBLE MATERIAL HAD COME IN TO THE POSSESSION OF THE DEPARTMENT TO RECORD REASONS FOR REOPENING OF A SSESSMENT. THERE IS NO REASON TO HAVE LIVE LINK WITH THE FORMATION OF BELIEF. THE A.O. DID NOT EXAMINE ANY INFORMATION, THEREFORE, REOPENING OF THE ASSESSMENT IS BAD IN LAW. HE FILED COPY OF REASONS UNDER SECTION 148 OF THE ACT AT PAGE NO.40 OF THE PAPER BOOK. HE HAS RELIED UPON DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ATUL JAIN, 212 CTR 42 (DEL), DECISION OF HONBLE DELHI HIGH CO URT IN THE CASE OF CIT VS. SFIL STOCK BROKING LIMITED, 233 CTR 69 (DEL), DECIS ION OF HONBLE SUPREME COURT IN THE CASE OF CHHUGAMAL RAJPAL VS. S.P. CHAL IHA & OTHERS, 79 ITR 603 (SC), DECISION OF HONBLE DELHI HIGH COURT IN THE C ASE OF CIT VS. ORIENT CRAFT LIMITED, 354 ITR 536 (DELHI) AND THE DECISION OF HO NBLE GUJARAT HIGH COURT IN THE CASE OF INDUCTOTHERM (INDIA) P. LTD. VS. M. GOP ALAN, DCIT, 356 ITR 481 (GUJ) AND DECISION OF HONBLE SUPREME COURT IN THE CASE O F ITO VS. MADNANI ENGINEERING WORKS LIMITED, 118 ITR 1 (SC). HE HAS ALSO RELIED UPON CERTAIN DECISIONS OF I.T.A.T., AGRA BENCH, COPIES OF WHICH ARE FILED IN THE PAPER BOOK. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE RELIED UPON THE ORDERS OF AUTHORITIES BELOW AND THE DECISION OF OF HONBLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS P. LT D., 291 ITR 500 (SC) IN WHICH 6 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 IT WAS HELD THAT THERE BEING NO ASSESSMENT UNDER SE CTION 143(1)(A), THE QUESTION OF CHANGE OF OPINION FOR THE PURPOSES OF SECTION 147, AS CONTENDED, DID NOT ARISE. HE HAS ALSO RELIED UPON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF BALBIR CHAND MALNI VS. CIT, 12 TAXMANN.COM 276 (P&H) ON MERITS OF THE ADDITION. 7. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MATE RIAL AVAILABLE ON RECORD. DIVISIONAL BENCH OF I.T.A.T., AGRA IN THE GROUP CAS E OF DCIT VS. LATE SHRI SATISH PRAKASH MITTAL & OTHERS IN ITA NO.560/AGRA/2012 & C .O. NO.06/AGRA/2013 VIDE ORDER DATED 04.04.2013 HAS CONSIDERED IDENTICAL ISS UE AND IN PARAGRAPH NOS.5 TO 8.4 HELD AS UNDER :- 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MA TERIAL AVAILABLE ON RECORD. 6. BEFORE CONSIDERING THE ISSUE ON MERIT, IT WOULD BE APPROPRIATE TO TAKE UP THE LEGAL ISSUE FIRST REGARDING VALIDITY OF INIT IATION OF PROCEEDINGS U/S. 148 OF THE IT ACT, WHICH IS RAISED IN THE CROSS-OBJ ECTION OF THE ASSESSEE. 6.1. AFTER HEARING THE ARGUMENTS OF LD. REPRESENTAT IVES OF BOTH THE PARTIES, WE FIND THAT FOUR POINTS HAVE ARISEN FOR CONSIDERAT ION AND ADJUDICATION WITH REGARD TO VALIDITY OF THE REASSESSMENT PROCEEDINGS U/S. 147/148 OF THE IT ACT, WHICH WE DEAL WITH THEM AS UNDER : (1). WHETHER THE AO HAS VALIDLY INITIATED THE RE-A SSESSMENT PROCEEDINGS U/S. 147/148 OF THE IT ACT. (2). WHETHER THE CASE OF THE ASSESSEE WOULD FALL I N PROVISO TO SECTION 147 OF THE IT ACT. 7 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 (3). WHETHER NOTICE U/S. 148 DATED 30.03.2007 WAS ISSUED WITHIN SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT Y EAR AS PER SECTION 149 OF THE IT ACT. (4). WHETHER THERE WAS ANY VALID SERVICE OF NOTICE U/S. 148 OF THE IT ACT UPON THE ASSESSEE. 7. IT WOULD BE RELEVANT TO REPRODUCE THE RELEVANT P ROVISIONS OF LAW DEALING WITH THE ABOVE LEGAL ISSUE OF VALIDITY OF I NITIATION OF RE-ASSESSMENT PROCEEDINGS U/S. 147/148 OF THE IT ACT. 7.1. SECTION 147 OF THE IT ACT PROVIDES AS UNDER : 147. IF THE ASSESSING OFFICER, 1523[HAS REASON TO B ELIEVE] THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSME NT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURS E OF THE PROCEEDINGS UNDER THIS SECTION, OR RECOMPUTE THE LO SS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS T HE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTE R IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS T HE RELEVANT ASSESSMENT YEAR: PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE R ELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THI S SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REAS ON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETUR N UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FU LLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR: PROVIDED FURTHER THAT THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVI NG MATTERS WHICH ARE THE SUBJECT MATTER OF ANY APPEAL, REFEREN CE OR 8 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 REVISION, WHICH IS CHARGEABLE TO TAX AND HAS ESCAPE D ASSESSMENT. EXPLANATION 1 : PRODUCTION BEFORE THE ASSESSING OFF ICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY TH E ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE W ITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2 : FOR THE PURPOSES OF THIS SECTION, T HE FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARG EABLE 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 INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE I S ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME TAX. (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 UNDERSTATED 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. 9 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 EXPLANATION 3 : FOR THE PURPOSE OF ASSESSMENT OR RE ASSESSMENT UNDER THIS SECTION, THE ASSESSING OFFICER MAY ASSES S OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAP ED ASSESSMENT, AND SUCH ISSUE COMES TO HIS NOTICE SUBS EQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAV E NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUB-SECTION (2) OF SECTION 148. EXPLANATION 4 . FOR THE REMOVAL OF DOUBTS, IT IS HEREBY CLARIFIED THAT THE PROVISIONS OF THIS SECTION, AS A MENDED BY THE FINANCE ACT, 2012, SHALL ALSO BE APPLICABLE FOR ANY ASSESSMENT YEAR BEGINNING ON OR BEFORE THE 1ST DAY OF APRIL, 2 012. 7.2 SECTION 148 OF THE IT ACT PROVIDES AS UNDER : 148 (1). BEFORE MAKING THE ASSESSMENT, REASSESSMENT O R RECOMPUTATION UNDER SECTION 147, THE ASSESSING OFFI CER SHALL SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM TO FUR NISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, A R ETURN OF HIS INCOME OR THE INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR CORRESPONDING TO THE RELEVANT ASSESSMENT YEAR, IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED; AND THE PROVISION S OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SU CH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTIO N 139: PROVIDED THAT IN A CASE (A) WHERE A RETURN HAS BEEN FURNISHED DURING THE PE RIOD COMMENCING ON THE 1ST DAY OF OCTOBER, 1991 AND ENDI NG ON THE 30TH DAY OF SEPTEMBER, 2005 IN RESPONSE TO A NOTICE SERVED UNDER THIS SECTION, AND (B) SUBSEQUENTLY A NOTICE HAS BEEN SERVED UNDER SUB - SECTION (2) OF SECTION 143 AFTER THE EXPIRY OF TWEL VE MONTHS SPECIFIED IN THE PROVISO TO SUB-SECTION (2) OF SECT ION 143, AS IT STOOD IMMEDIATELY BEFORE THE AMENDMENT OF SAID SUB- SECTION BY THE FINANCE ACT, 2002 (20 OF 2002) BUT BEFORE THE E XPIRY OF THE TIME LIMIT FOR MAKING THE ASSESSMENT, REASSESSMENT OR 10 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 RECOMPUTATION AS SPECIFIED IN SUB-SECTION (2) OF SE CTION 153, EVERY SUCH NOTICE REFERRED TO IN THIS CLAUSE SHALL BE DEEMED TO BE A VALID NOTICE: PROVIDED FURTHER THAT IN A CASE (A) WHERE A RETURN HAS BEEN FURNISHED DURING THE PE RIOD COMMENCING ON THE 1ST DAY OF OCTOBER, 1991 AND ENDI NG ON THE 30TH DAY OF SEPTEMBER, 2005, IN RESPONSE TO A NOTIC E SERVED UNDER THIS SECTION, AND (B) SUBSEQUENTLY A NOTICE HAS BEEN SERVED UNDER CLA USE (II) OF SUB-SECTION (2) OF SECTION 143 AFTER THE EX PIRY OF TWELVE MONTHS SPECIFIED IN THE PROVISO TO CLAUSE (II) OF S UB-SECTION (2) OF SECTION 143, BUT BEFORE THE EXPIRY OF THE TIME L IMIT FOR MAKING THE ASSESSMENT, REASSESSMENT OR RECOMPUTATION AS SP ECIFIED IN SUB-SECTION (2) OF SECTION 153, EVERY SUCH NOTICE R EFERRED TO IN THIS CLAUSE SHALL BE DEEMED TO BE A VALID NOTICE. EXPLANATION : FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT NOTHING CONTAINED IN THE FIRST PROVISO OR THE SECOND PROVISO SHALL APPLY TO ANY RETURN WHICH HAS BEEN FURNISHED ON OR AFTER THE 1ST DAY OF OCTOBER, 2005 IN RESPONSE TO A NOTIC E SERVED UNDER THIS SECTION. (2) THE ASSESSING OFFICER SHALL, BEFORE ISSUING AN Y NOTICE UNDER THIS SECTION, RECORD HIS REASONS FOR DOING SO. 7.3 SECTION 149 OF THE IT ACT PROVIDES AS UNDER : 149. (1) NO NOTICE UNDER SECTION 148 SHALL BE ISSUED FOR THE RELEVANT ASSESSMENT YEAR, (A) IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE CASE FALLS UNDER CLAUSE (B) OR CLA USE (C); (B) IF FOUR YEARS, BUT NOT MORE THAN SIX YEARS, HA VE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCOME C HARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR IS LIKEL Y TO AMOUNT TO ONE LAKH RUPEES OR MORE FOR THAT YEAR;] 11 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 (C) IF FOUR YEARS, BUT NOT MORE THAN SIXTEEN YEARS, HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCO ME IN RELATION TO ANY ASSET (INCLUDING FINANCIAL INTEREST IN ANY ENTI TY) LOCATED OUTSIDE INDIA, CHARGEABLE TO TAX, HAS ESCAPED ASSESSMENT.] EXPLANATION.IN DETERMINING INCOME CHARGEABLE TO TA X WHICH HAS ESCAPED ASSESSMENT FOR THE PURPOSES OF THIS SUB-SEC TION, THE PROVISIONS OF EXPLANATION 2 OF SECTION 147 SHALL APPLY AS THEY APPLY FOR THE PURPOSES OF THAT SECTION. (2) THE PROVISIONS OF SUB-SECTION (1) AS TO THE ISS UE OF NOTICE SHALL BE SUBJECT TO THE PROVISIONS OF SECTION 151 . (3) IF THE PERSON ON WHOM A NOTICE UNDER SECTION 148 IS TO BE SERVED IS A PERSON TREATED AS THE AGENT OF A NON-RESIDENT UND ER SECTION 163 AND THE ASSESSMENT, REASSESSMENT OR RECOMPUTATION TO BE MADE IN PURSUANCE OF THE NOTICE IS TO BE MADE ON HIM AS THE AGENT OF SUCH NON- RESIDENT, THE NOTICE SHALL NOT BE ISSUED AFTER THE EXPIRY OF A PERIOD OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMEN T YEAR. EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y CLARIFIED THAT THE PROVISIONS OF SUB-SECTIONS (1) AND (3), AS AMEN DED BY THE FINANCE ACT, 2012, SHALL ALSO BE APPLICABLE FOR ANY ASSESSM ENT YEAR BEGINNING ON OR BEFORE THE 1ST DAY OF APRIL, 2012. POINT NO. 1 : WHETHER THE AO HAS VALIDLY INITIATED THE RE-ASSES SMENT PROCEEDINGS U/S. 147/148 OF THE IT ACT. 8. ACCORDING TO THE AO, THE ASSESSEE FILED ORIGINAL RETURN OF INCOME ON 28.03.2001 AT INCOME OF RS.3,68,969/-. COPY OF THE ACKNOWLEDGEMENT OF THE RETURN OF INCOME ALONG WITH ANNEXURES ARE FILED IN THE PAPER BOOK AT CPB- 119 TO 122, IN WHICH THE ASSESSEE HAS DECLARED ALL THE PARTICULARS AND INFORMATION OF RECEIPT OF GIFT OF RS.15,00,000/-. T HE ASSESSMENT WAS COMPLETED AT INCOME OF RS.8,68,969/- U/S. 143(3)/14 7 VIDE ORDER DATED 30.03.2006 AFTER MAKING ADDITION OF RS.5,00,000/- O N ACCOUNT OF UNEXPLAINED GIFT RECEIVED FROM SH. SANJAY MOHAN AGA RWAL. THE SAID ADDITION WAS DELETED BY THE LD. CIT(A)-II, AGRA VID E ORDER DATED 24.04.2008. IT IS NOTED IN THIS ASSESSMENT ORDER THAT INFORMATI ON WAS RECEIVED FROM ADIT (INV.) THAT SHRI SANJAY MOHAN AGARWAL OF NEW DELHI IS INVOLVED IN GIVING BOGUS GIFTS BY CHEQUES/DDS IN LIEU OF CASH RECEIVED FROM THE INTENDED BENEFICIARIES. IN THE SUBSEQUENT IMPUGNED REASSESSM ENT ORDER, UNDER 12 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 APPEAL, DATED 10.12.2008 THE SAME FACT FINDS MENTIO N THAT INFORMATION WAS RECEIVED FROM THE INVESTIGATION WING, GHAZIABAD THA T THE ASSESSEE HAS TAKEN GIFT OF RS.10,00,000/- FROM SIMILAR DONOR SHRI SANJ AY MOHAN AGARWAL, NEW DELHI IN RESPECT OF THE SAME ASSESSMENT YEAR UNDER APPEAL. THEREFORE, ALL THE FACTS OF DECLARATION OF GIFT FROM THE SAME DONO R WERE AVAILABLE TO THE REVENUE DEPARTMENT PRIOR TO INFORMATION RECEIVED FR OM THE INVESTIGATION WING, GHAZIABAD. APART FROM THE ABOVE, SINCE, THE A SSESSEE HAS ALREADY DECLARED RECEIPT OF GIFT OF RS.15,00,000/- IN THE O RIGINAL RETURN OF INCOME FROM THE SAME DONOR SHRI SANJAY MOHAN AGARWAL, THER EFORE, ALL THE DETAILS AND RELEVANT FACTS OF RECEIPT OF GIFT AMOUNT OF RS. 15,00,000/- WERE DISCLOSED TO THE REVENUE DEPARTMENT EVEN PRIOR TO THE INITIAT ION OF THE RE-ASSESSMENT PROCEEDINGS. THUS, THE ASSESSEE DISCLOSED ALL THE P RIMARY FACTS OF RECEIPTS OF GIFT FROM THE DONOR. WHEN FIRST RE-ASSESSMENT ORDER FOR THE SAME ASSESSMENT YEAR UNDER APPEAL DATED 30.03.2006 WAS PASSED, THE INFORMATION OF RECEIPT OF GIFT FROM THE SAME DONOR SHRI SANJAY MOHAN AGARW AL WAS IN ISSUE AND AT THAT TIME THE INFORMATION WAS RECEIVED OF THE GIFT IN QUESTION FROM ADIT (INV.), AGRA THROUGH JCIT, RANGE-5, FIROZABAD. IT I S, THUS, UNBELIEVABLE THAT THE AO AT THE TIME OF PASSING OF THE FIRST RE-ASSES SMENT ORDER DATED 30.03.2006 WAS NOT AWARE OF THE ENTIRE GIFT AMOUNT OF RS.15,00,000/- RECEIVED BY THE ASSESSEE FROM THE DONOR SHRI SANJAY MOHAN AGARWAL. THE AO THUS EXAMINED ALL THE MATERIAL BEFORE HIM AT THE ORIGINAL RE-ASSESSMENT PROCEEDINGS IN RESPECT OF THE GIFT RECEIVED FROM SH RI SANJAY MOHAN AGARWAL AND THE ISSUE WAS ALSO CONSIDERED IN DETAIL BY THE LD. CIT(A) WHILE DELETING THE IMPUGNED ADDITION OF RS.5,00,000/- ON ACCOUNT O F GIFT RECEIVED FROM THE SAME DONOR VIDE APPELLATE ORDER DATED 24.04.2008. T HE AO ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING, GHAZI ABAD INTENDED TO AGAIN RE-ASSESS THE INCOME OF ASSESSEE ON ACCOUNT OF PART OF THE GIFT OF RS.10,00,000/- RECEIVED FROM SAME DONOR IN SAME AS SESSMENT YEAR, AND THE LETTER OF ADIT (INV.), GHAZIABAD WAS RECEIVED ON 21 .03.2007. THE AO ASKED THE BRANCH MANAGER, VIJAYA BANK TO GIVE SOME DETAIL S AND THEREAFTER ON 30.03.2007 ALLEGEDLY ISSUED NOTICE U/S. 148 OF THE IT ACT AGAINST THE ASSESSEE. THE AO RECORDED THE FOLLOWING REASONS FOR RE-OPENING OF THE ASSESSMENT WHICH ARE REPRODUCED AS UNDER : REASONS THE ADDL. DIRECTOR OF INCOME TAX (INV.),GHAZIABAD V IDE LETTER F. NO. ADDL. DIT (INV.)/GZB/AES/SM/BOGUS GIFTS/1/2006-07/796 DATED 16.03.2007 ENDORSED VIDE F.NO. ADDL. CIT/R-5/FIROZABAD /INFORMATION/2006-07 DATED 21.03.2007 OF THE ADDL. COMMISSIONER OF INCOME-TAX, RANGE-5, 13 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 FIROZABAD HAS INFORMED THAT ONE SH.SANJAY MOHAN AGARWAL, 4674, SHORA KOTHI, PAHAR GANJ, NEW DELHI WAS ENGAGE D IN PROVIDING ACCOMMODATION ENTRIES BY WAY OF GIFT TO T HE NEEDY PERSONS. A LIST OF THE PERSONS WHO HAVE TAKEN ACCOM MODATION ENTRIES FROM HIM WAS ALSO ENCLOSED WITH THE SAID LE TTER OF ADDL. DIT(INV). CONSEQUENTLY, INQUIRIES WERE CONDUCTED FR OM VIJAYA BANK, FIROZABAD AND IT WAS GATHERED THAT THE ASSESS EE HAS TAKEN ACCOMMODATION ENTRY OF RS.10,00,000/- BY WAY OF GIFT VIDE D.D. NO.005105 DATED 04.11.99.THE SAID D.D. HA S BEEN CREDITED TO THE SAVING BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH ORIENTAL BANK OF COMMERCE, FIROZABAD. THE ASSE SSEE HAS THUS INTRODUCED HIS OWN UNACCOUNTED INCOME IN THE G ARB OF A GIFT JUST TO GET AWAY FROM PAYMENT OF TAX ON THAT U NACCOUNTED INCOME, WHICH WAS CLEARLY LIABLE TO TAX AS PER PROV ISIONS OF I.T. ACT. NO AMOUNT OF DD CREDITED TO THE BANK ACCOUNT O F THE ASSESSEE HAS BEEN ADDED TO THE INCOME OF THE ASSESS EE AS PER ORDER U/S. 143(3) DATED 27.03.2006. I HAVE, THEREFO RE, IN VIEW OF THE INFORMATION AVAILABLE WITH THIS OFFICE, REASON TO BELIEVE THAT INCOME TO THE EXTENT OF RS.10,00,000/- HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME-TAX ACT. ACIT, CIRCLE-5, FIROZABAD. 8.1 THE ORDER SHEET RECORDED BY THE AO FROM 21.03.2 007 TO 09.04.2007 IS FILED AT PAGE 53 OF THE PAPER BOOK AND IS REPRODUCE D AS UNDER : 21.3.2007. THE LETTER F.NO. CIT-II/AGRA/ACIT (HQ.) MISC./2006- 07/6660 DATED 19.03.2007 REGARDING ACCOMMODATION ENTRIES TOGETHER WITH COPY OF LETTER DATED 16.03.20 07 OF ADDL. DIT (INV.), GHAZIABAD RECEIVED. 22.03.2007. THE BRANCH MANAGER, VIJAYA BANK, FIROZA BAD REQUIRED TO FURNISH DETAILS OF D.D. THROUGH WHICH ACCOMMODAT ION ENTRY WAS TAKEN. 23.03.2007. LETTER REF. NO.- NIL DATED 23.03.2007 E NCLOSING COPY OF D.D. NO.005375 DATED 18.11.1999 RECEIVED FROM VIJAY A BANK AND PLACED ON FILE. 14 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 REPORT REGARDING CORRECT NAME OF PERSONS WHO HAVE TAKEN ACCOMMODATION ENTRIES SUBMITTED TO THE ADDL. CIT, RANGE-5, FIROZABAD. ON VERIFICATION FROM DEMAND AND COLLECTION REGISTE R ASSESSMENT IN THIS CASE WAS COMPLETED U/S. 143(3)/1 47 ON 27.03.2006. PROPOSAL U/S. 151 SEEKING APPROVAL FOR ISSUE OF NOT ICE U/S. 148 SENT TO CIT-II AGRA VIDE LETTER F.NO. ACIT /CIR.- 5/FZD/151/2006-07/DATED 23.03.2007. 30.03.2007. APPROVAL U/S. 151 OF CIT-II FOR ISSUE O F NOTICE U/S. 148 VIDE LETTER F.NO. PROPOSAL U/S.148/ADDL. CIT/R- 5/FZD/2006-07/827 DATED 29.03.2007. NOTICE U/S. 148 ISSUED. THE INSPECTOR OF INCOME-TAX REPORTED THAT ASSESSEE DOES NOT RESIDE AT THE GIVEN ADDRESS I.E., 33, CIRCULAR ROAD, FIROZABAD. HE IS ACCORDINGLY DIRECTED TO EFFECT SER VICE BY AFFIXTURE. 03.04.2007. THE INSPECTOR OF INCOME-TAX RETURNED NO TICE WITH A REPORT THEREON AFTER HAVING AFFIXED COPY OF NOTICE U/S. 148. 09.04.2007. ENVELOP CONTAINING NOTICE U/S. 148 RECE IVED BACK AND PLACED ON RECORD. 8.2 THE LD. CIT(A) AT PAGE 40 OF THE APPELLATE ORDE R AFTER GOING THROUGH THE ASSESSMENT RECORD OF ALL THE ABOVE ASSESSEES NO TED THAT AS PER RECORD, LETTER DATED 19.03.2007 WAS RECEIVED BY THE AO ON 2 1.03.2007 FORWARDING REPORT OF ADDL. DIT (INV.), GHAZIABAD DATED 16.03.2 007 PROVIDING THE DETAILS OF ACCOMMODATION ENTRIES OF BOGUS GIFTS REC EIVED BY ALL EIGHT ASSESSEES. THOUGH NAMES OF SOME OF THESE PERSONS WE RE NOT MENTIONED CORRECTLY IN THE SAID REPORT, THESE NAMES WERE GOT VERIFIED BY THE AO FROM 15 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 THE CONCERNED BANK, IN WHICH THE BANK ACCOUNT OF TH ESE PERSONS WERE MAINTAINED AND IT HAS BEEN CONFIRMED BY THE BENCH T HAT ALL THE EIGHT ASSESSEES HAVE RECEIVED GIFT AMOUNTS. FROM THE FIN DINGS OF THE LD. CIT(A), IT IS CLEAR THAT ADIT (INV.), GHAZIABAD HAS PROVIDED S OME VAGUE INFORMATION REGARDING ACCOMMODATION ENTRIES RECEIVED BY THE ASS ESSEES. THE ASSESSEE HAS FILED COPY OF THE REMAND REPORT DATED 30.04.201 2 ISSUED BY DCIT (INV.), GHAZIABAD (PB-141), IN WHICH WHILE FILING THE REMAN D REPORT REGARDING THE ASSESSEES, THE DCIT HAS MENTIONED THAT RECORD OF IN VESTIGATION WING HAVE BEEN VERIFIED AND NO SUCH RECORDS REGARDING INVESTI GATION IN THE CASE OF S.M. AGARWAL HAVE BEEN FOUND. HE HAS REFERRED TO LE TTER OF ADIT (INV.), GHAZIABAD DATED 16.03.2007 ADDRESSED TO CIT(A)-II, AGRA THAT DD/CHEQUES HAVE BEEN ISSUED TO THE BENEFICIARIES THROUGH VIJAY A BANK, ANASARI ROAD, NEW DELHI AND THAT THE ASSESSING OFFICER CAN CALL F OR THE RECORD FROM THE BANK. THE LD. CIT(A) WHILE FINALIZING OF THE APPEAL S OF THE ASSESSEE RECORDED THE ORDER SHEET AND THE RELEVANT ORDER SHEET OF DT. 20.06.2012 IS FILED BY THE ASSESSEE AT PAGE 148 OF THE PAPER BOOK AND THE RELE VANT ENTRY CONTAINED IN THE ORDER SHEET DATED 20.06.2012 IS REPRODUCED AS U NDER : AS REGARD TO MERIT OF CASE, THE ASSESSEE HAS FILED PAN CARD AND VOTER IDENTITY CARD TO ESTABLISH THE IDENT ITY OF THE DONOR, ASSESSMENT ORDER U/S. 143(3) ASSESSING AT CR ORES OF RUPEES TO PROVE THE CREDITWORTHINESS AND GIFT DEED HAS BEEN FILED TO PROVE THE GENUINENESS OF THE GIFT. AO COUL D NOT PRODUCE ANY EVIDENCE TO PROVE THESE DOCUMENTS FILED BY THE ASSESSEE AS FALSE. EVEN THE MATERIALS CLAIMED TO HAVE BEEN COLL ECTED DURING THE INVESTIGATION OF SANJAY MOHAN AGARWAL SHOWING T HAT GIFT WAS GIVEN TO THE ASSESSEE OUT OF CASH DEPOSITED BY HIM IN THE ACCOUNT OF SHRI AGARWAL. IT WAS SHOWN THAT IN THE A CCOUNT FROM WHICH GIFT WAS ISSUED , THERE WAS NO CASH DEPOSIT. AO EXPRESSED HIS INABILITY TO PROVIDE ANY EVIDENCE TO SHOW THAT GIFT WAS GIVEN OUT OF CASH DEPOSIT MADE BY THE ASSESSEE BECAUSE SU CH DETAILS ARE NEITHER AVAILABLE WITH THE INVESTIGATION WING, GHAZIABAD WHEN ENQUIRY WAS CONDUCTED OR IN OF THE CIT-II, WHE RE THE SAID MATERIAL WAS CLAIMED TO HAVE BEEN SENT. 8.3 THE AO AT THE ASSESSMENT STAGE ISSUED LETTER U/ S. 142(1) DATED 07.11.2008 (COPY FILED AT PAGE 44 OF THE PAPER BOOK ) IN WHICH THE AO CALLED FOR INFORMATION OF THE GIFT BY THE DONOR FROM THE A SSESSEE. THESE FACTS, THEREFORE, WOULD CLEARLY SHOW THAT ALL INFORMATION AND DETAILS OF GIFT RECEIVED FROM SHRI SANJAY MOHAN AGARWAL, DONOR WERE FURNISHED TO THE 16 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 REVENUE DEPARTMENT NOT ONLY IN THE ORIGINAL RETURN OF INCOME, BUT IN THE FIRST RE-ASSESSMENT PROCEEDINGS U/S. 148 OF THE IT ACT WHICH CULMINATED INTO ASSESSMENT ORDER DATED 30.03.2006. THUS, INFORMATIO N OF GIFTS WERE VERIFIED AND EXAMINED BY THE AO AND PART ADDITION WAS MADE O F GIFT OF RS.5,00,000/- WHICH WAS ULTIMATELY DELETED BY THE LD. CIT(A). THE AO IN THE REMAND REPORT DATED 30.04.2012 CONFIRMED THAT NO RECORD RELATING TO INVESTIGATION IN THE CASE OF SANJAY MOHAN AGARWAL HAVE BEEN FOUND IN THE OFFICE OF INVESTIGATION WING, GHAZIABAD. THE LD. CIT(A) IN THE ORDER SHEET DATED 20.06.2012 ON FILING THE EVIDENCE BY THE ASSESSEE FOUND THAT THE ASSESSEE SUITABLY ESTABLISHED IDENTITY OF THE DONOR, HIS CREDITWORTHI NESS AND GENUINENESS OF THE GIFT IN THE MATTER. IT WAS ALSO FOUND THAT THE AO COULD NOT PRODUCE ANY EVIDENCE TO PROVE THAT THE EVIDENCE FILED BY THE AS SESSEE WERE FALSE. FROM THE MATERIAL CLAIMED TO BE COLLECTED FROM THE INVES TIGATION OF SHRI SANJAY MOHAN AGARWAL ALSO MADE IT CLEAR THAT NO CASH WAS D EPOSITED IN HIS ACCOUNT PRIOR TO GIVING OF THE GIFT. THE AO AT THE APPELLATE STAGE EXPRESSED HIS INABILITY TO PROVIDE ANY EVIDENCE TO SHOW THAT THE GIFT WAS GIVEN OUT OF CASH DEPOSIT MADE BY THE ASSESSEE BECAUSE NO SUCH D ETAILS WEE AVAILABLE WITH THE INVESTIGATION WING, GHAZIABAD. THESE FACTS WOULD, THEREFORE, CLEARLY SUPPORT THE CONTENTION OF THE LD. COUNSEL FOR THE A SSESSEE THAT THE REASONS FOR REOPENING OF ASSESSMENT WERE INCORRECT AND WITHOUT ANY BASIS OR MATERIAL. THE ASSESSEE HAS NOT INTRODUCED ANY UNACCOUNTED INC OME FOR ISSUE OF DD OF GIFT. WHATEVER INFORMATION WAS RECEIVED FROM THE IN VESTIGATION WING, GHAZIABAD, AS PER REASONS RECORDED BY THE AO, WAS A LSO INCORRECT BECAUSE THESE INFORMATION WERE ALREADY ON RECORD OF THE AO AS ON EARLIER OCCASION, RE-ASSESSMENT PROCEEDINGS WERE FINALIZED VIDE ASSES SMENT ORDER DATED 30.03.2006. THERE WAS NOTHING NEW WITH THE AO TO S HOW THAT THE ASSESSEE HAS RECEIVED ANY BOGUS ACCOMMODATION ENTRIES OR HAS INTRODUCED ANY UNACCOUNTED MONEY. THUS, THE REASONS RECORDED FOR R EOPENING OF THE ASSESSMENT WERE VAGUE, INCORRECT AND BASED ON NO MA TERIAL OR EVIDENCE. WHATEVER IS RECORDED IN THE REASONS FOR REOPENING O F ASSESSMENT WAS NOT SUPPORTED BY THE REMAND REPORT DATED 30.04.2012 FIL ED BY THE INVESTIGATION WING, GHAZIABAD. THE AO WAS THUS, HAVING NO INFORMA TION OR MATERIAL TO PROVE THAT THE GIFT RECEIVED BY THE ASSESSEE WERE M ERE ACCOMMODATION ENTRIES BECAUSE AT THE APPELLATE STAGE, THE AO WAS NOT ABLE TO CONTRADICT THE EVIDENCES FILED BY THE ASSESSEE FOR RECEIPT OF GENU INE GIFT IN THE MATTER AND HAS EXPRESSED HIS INABILITY TO PROVIDE ANY EVIDENCE TO CONTRADICT THE CLAIM OF THE ASSESSEE. HONBLE DELHI HIGH COURT IN THE CASE OF SIGNATURE HOTELS P. LTD. VS. ITO, 338 ITR 51 HELD HELD, ALLOWING THE PETITION, THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMAT ION RECEIVED 17 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 FROM THE DIRECTOR OF INCOME-TAX (INVESTIGATION) THA T THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS.5 L AKHS DURING FINANCIAL YEAR 2002-03 AS STATED IN THE ANNE XURE. ACCORDING TO THE INFORMATION, THE AMOUNT RECEIVED F ROM A COMPANY, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. THE REASONS DID NOT S ATISFY THE REQUIREMENTS OF SECTION 147 OF THE IT ACT. THERE WA S NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEPT THE ANNEXURE. THE ANNEXURE COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHES NEXUS OR LIN K WHICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNEXURE WAS NO T A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, THE ASSESSING OFFICER DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATI ON. THERE WAS NO DISPUTE THAT THE COMPANY, S, HAD A PAID UP C APITAL OF RS.90 LAKHS AND WAS INCORPORATED ON JANUARY 4, 1989 , AND WAS ALSO ALLOTTED A PERMANENT ACCOUNT NUMBER IN SEPTEMB ER, 2001. THUS, IT COULD NOT BE HELD TO BE A FICTITIOUS PERSO N. THE REASSESSMENT PROCEEDINGS WEE NOT VALID AND WERE LIA BLE TO BE QUASHED. 8.4 CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF ABOVE DECISION, IT IS CLEAR THAT THERE WAS NO SPECIFIC OR RELIABLE INFORM ATION RECEIVED FROM INVESTIGATION WING, GHAZIABAD ABOUT ESCAPEMENT OF I NCOME AND NO RECORD OF THE DONOR WAS AVAILABLE WITH THE INVESTIGATION WING TO PROVE THAT HE WAS PROVIDING ACCOMMODATION ENTRIES. EVEN ACCORDING TO THE LD. CIT(A), THE NAMES OF SOME OF THE ASSESSEES WERE NOT CORRECTLY M ENTIONED IN THE REPORT OF INVESTIGATION WING, GHAZIABAD. THE AO MERELY CALLED FOR THE NAMES OF THE ASSESSEES FROM VIJAYA BANK. THEREFORE, THE INFORMAT ION RECEIVED FROM THE INVESTIGATION WING, GHAZIABAD WAS NOTHING. THE REAS ONS DID NOT SATISFY THE REQUIREMENT OF SECTION 147 OF THE IT ACT. THERE WAS NO REFERENCE TO ANY DOCUMENT OR MATERIAL WITH THE REPORT OF INVESTIGATI ON WING, GHAZIABAD. THUS, THE SAME COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED NEXUS OR LINK WHICH DISCLOSES THE ESCA PEMENT OF INCOME. THE LETTER OF INVESTIGATION WING, GHAZIABAD DID NOT POI NT OUT THE FACT THAT THERE WAS ANY ESCAPEMENT OF INCOME IN THE CASE OF ASSESSE E. THEREFORE, IT IS CLEAR THAT THE AO DID NOT APPLY HIS OWN MIND TO THE VAGUE INFORMATION AND DID NOT EXAMINE THE BASIS OR MATERIAL, IF ANY, TO SUPPORT S UCH INFORMATION. THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SIGNATURE HOTELS PVT. LTD. (SUPRA), THUS, SQUARELY APPLY TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 18 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 THE LD. DR, HOWEVER, RELIED UPON THE DECISION OF HO NBLE DELHI HIGH COURT IN THE CASE OF RAJAT EXPORT IMPORT INDIA PVT. LTD. VS. ITO, 18 TAXMAN.COM 311, IN WHICH THE ASSESSEE WAS NOT IN A POSITION TO DENY THAT THE MATERIAL RELIED UPON BY THE AO AT THE TIME OF RECORDING THE REASONS FOR REOPENING OF ASSESSMENT DID NOT CONTAIN ENTRY LINKING S. LTD. WI TH THE ASSESSEE, ISSUE OF NOTICE U/S. 148 ON PRIMA FACIE BELIEF THAT THE INCO ME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT WAS HELD TO BE VALID. THE DECISI ON RELIED UPON BY THE LD. DR IS CLEARLY DISTINGUISHABLE ON FACTS OF THE PRESE NT CASE AS NOTED ABOVE BECAUSE IN THE REMAND REPORT OF THE INVESTIGATION W ING, THE INVESTIGATION WING, GHAZIABAD DID NOT FIND ANY RECORD OF INVESTIG ATION CONDUCTED IN THE CASE OF DONOR SHRI SANJAY MOHAN AGARWAL OF GIVING B OGUS ACCOMMODATION ENTRY AND THE ORDER SHEET OF THE LD. CIT(A) DATED 2 0.12.2012 (SUPRA) SUPPORTS THE CASE OF THE ASSESSEE THAT THERE WAS GE NUINE GIFT IN THE MATTER. IN OTHER CASES WHERE 143(1) IS DONE ALL INFORMATION OF GIFT DISCLOSED IN ORIGINAL RETURN. THEREFORE, THERE WAS NO PRIMA FACIE BELIEF AVAILABLE TO THE AO TO SAY THAT THERE WAS ANY ESCAPEMENT OF INCOME. THERE IS N O REASON TO BELIEVE AS REQUIRED BY SECTION 147. CONSIDERING THE ABOVE DISC USSION, WE ARE OF THE VIEW THAT THERE WAS NO JUSTIFICATION FOR THE AO TO HAVE INITIATED THE RE- ASSESSMENT PROCEEDINGS U/S. 147/148 OF THE IT ACT. THE RE-ASSESSMENT ORDER IS, THEREFORE, LIABLE TO BE QUASHED. THIS POINT IS, THEREFORE, DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST REVENUE. 8. THE ASSESSEE HAS FILED COPY OF REASONS RECORDED UNDER SECTION 148 OF THE ACT AT PAGE NO.40 OF THE PAPER BOOK AND THE SAME READS AS UNDER :- TO RAMESH PRASAD, HUF PROFESSOR COLONY, AGRA. ASSESSMENT YEAR 2002-03 REASONS FOR ISSUE OF NOTICE U/S 148 OF THE I.T. ACT , 1961 THE ASSESSEE HAS TAKEN THE FOLLOWING ENTRIES OF LON G TERM CAPITAL GAIN/SHORT TERM CAPITAL GAIN. THE REPORT R ECEIVED FROM THE DDI WING VIDE F.NO.ADIT(INV.)/AGRA/ACCOM.ENTRIES/20 08-09/290 DATED 13.3.2009 ALSO CONFIRMS THE FACT THAT ON ENQU IRIES IT HAS BEEN FOUND THAT THE BANK ACCOUNTS FROM WHICH MONEY HAS B EEN TRANSFERRED 19 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 TO VARIOUS BENEFICIARIES HAVE BEEN OPERATED BY CERT AIN STOCK BROKERS WHO HAVE BEEN PROVIDING ENTRIES TO THE BENEFICIARIE S BY SHOWING THE TRANSACTION MADE BY THEM IN PURCHASE & SALE OF SHAR ES OF CERTAIN COMPANIES FROM CERTAIN PERSONS, WHICH IN FACT NEVER TOOK PLACE. THESE AMOUNTS ARE FOUND CREDITED IN THE BANK ACCOUN T NO-------- --------- OF ------------------ BANK ON ----------- -----. THESE TRANSACTIONS SHOWN BY BANK DRAFT FROM ONE OF SUCH BROKERS ARE AC TUALLY THE ASSESSEES INCOME FROM UNDISCLOSED SOURCES IN THE F ORM OF FICTITIOUS ENTRIES IN THE FORM OF CAPITAL GAINS BY ARRANGING B OGUS DOCUMENTS FROM ENTRIES PROVIDERS AT DELHI. BROKER NAME AMT. OF ENTRY DATE OF ENTRY SINGHMAN FINANCIAL 2,99,212.00 18.07.01 SERVICES LIMITED THEREFORE, I HAVE REASONS TO BELIEVE THAT TOTAL AMO UNT OF RS.2,99,212.00 CHARGEABLE TO TAX HAS ESCAPED ASSESS MENT FOR A.Y. 2002-03 FOR WHICH NOTICE U/S 148 MAY BE ISSUED. SD/- (G.D. VALECHA) INCOME TAX OFFICER-1(3) AGRA 9. IT IS NOT IN DISPUTE THAT THE ASSESSEE ORIGINALL Y FILED RETURN OF INCOME ON 01.08.2002 FOR THE ASSESSMENT YEAR UNDER APPEAL DIS CLOSING ALL THE INFORMATION REGARDING LONG TERM CAPITAL GAIN. THE A.O. PROCESS ED THE RETURN UNDER SECTION 143(1) OF THE ACT. IT IS NOTED IN THE REASONS FOR REOPENING OF THE ASSESSMENT AND ASSESSMENT ORDER THAT INFORMATION WAS RECEIVED FROM DDIT, AGRA DATED 13.03.2009 REGARDING ACCOMMODATION ENTRY TAKEN BY T HE ASSESSEE OF LONG TERM CAPITAL GAIN/SHORT TERM CAPITAL GAIN AND HAS RECEIV ED SOME DRAFT IN LIEU OF THE SAME. 20 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 THEREFORE, ALL THE FACTS REGARDING CAPITAL GAINS WE RE AVAILABLE TO THE A.O. IN THE ORIGINAL RETURN OF INCOME. THE ASSESSEE HAS DISCLO SED ALL THE PRIMARY FACTS TO THE REVENUE DEPARTMENT. THE A.O. HOWEVER, DID NOT DISC USS THE REPORT DATED 13.03.2009 IN THE REASSESSMENT ORDER. EVEN DURING THE COURSE OF ARGUMENT, REPORT DATED 13.03.2009 MENTIONED IN THE REASONS HAVE NOT BEEN PRODUCED BY THE REVENUE DEPARTMENT BEFORE ME. THE REASONS RECORDED BY THE A.O. WERE THUS VAGUE AND BASED UPON GENERAL INFORMATION. EVEN SOME OF THE C OLUMNS IN THE REASONS HAVE BEEN LEFT BLANK BY THE A.O. NO TANGIBLE MATERIAL H AD COME IN THE POSSESSION OF THE REVENUE TO PROVE THAT THE ASSESSEE HAD RECEIVED ANY ACCOMMODATING ENTRY WITH REGARD TO LONG TERM CAPITAL GAIN. THE REASONS HAVE NO LIVE LINK WITH THE FORMATION OF BELIEF. THE A.O. DID NOT EXAMINE ANY REPORT OR INFORMATION BEFORE RECORDING THE REASONS FOR INITIATION OF REASSESSMENT PROCEEDINGS. EVEN IT IS NOT CLEAR AS TO IN WHICH BANK ACCOUNT THROUGH WHICH MODE ACCOMMODATION ENTRY HAS BEEN RECEIVED. IT IS, THEREFORE, CLEAR THAT DDIT, AGRA MIGHT HAVE PROVIDED SOME VAGUE INFORMATION REGARDING THE CLAIM OF THE ASSESSEE WHI CH HAVE NOT BEEN VERIFIED BY THE A.O. BEFORE TAKING STEPS IN THE MATTER. THE A. O. ALSO DID NOT BRING ON RECORD ANY EVIDENCE TO PROVE THAT THE EVIDENCES FILED BY T HE ASSESSEE WERE FALSE. THESE FACTS, THEREFORE, CLEARLY SUPPORT THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE REASONS FOR REOPENING OF THE ASSESSMENT WE RE INCORRECT AND WITHOUT ANY BASIS OR MATERIAL. THE ASSESSEE HAS NOT INTRODUCED ANY UNACCOUNTED INCOME IN THE FORM OF LONG TERM CAPITAL GAIN. THERE WAS NO NEW I NFORMATION AVAILABLE TO THE 21 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 A.O. TO PROVE THAT THE ASSESSEE HAS RECEIVED ANY BO GUS ACCOMMODATION ENTRY OR HAS INTRODUCED ANY UNACCOUNTED MONEY. THUS, THE RE ASONS RECORDED FOR REOPENING OF THE ASSESSMENT WERE INCORRECT AND BASED ON NO MA TERIAL. WHATEVER IS RECORDED IN THE REASONS FOR REOPENING OF THE ASSESSMENT WAS NOT SUPPORTED BY ANY TANGIBLE MATERIAL. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS :- I) DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ATUL JAIN, 212 CTR 42 (DEL) IN WHICH IT WAS HELD AS UNDER :- THE ONLY INFORMATION WITH THE AO IS THAT THE ASSES SEES HAD TAKEN A BOGUS ENTRY OF CAPITAL GAINS BY PAYING CASH ALONG WITH SOME PREMIUM FOR TAKING A CHEQUE OF THAT AMOUNT. THE IN FORMATION DOES NOT INDICATE THE SOURCE OF THE CAPITAL GAINS (WHICH IN THIS CASE ARE SHARES). ONE DOES NOT KNOW WHICH SHARES HAVE BEEN TRANSACTED AND WITH WHOM HAS THE TRANSACTION TAKEN PLACE. THESE A RE ABSOLUTELY NO DETAILS AVAILABLE AND THE INFORMATION SUPPLIED IS E XTREMELY SCANTY AND VAGUE. INSOFAR AS THE BASIS FOR THE REASONS IS CON CERNED, EVEN THIS IS ABSENT. THE AO DID NOT VERIFY THE CORRECTNESS OF T HE INFORMATION RECEIVED BY HIM BUT MERELY ACCEPTED THE TRUTH OF TH E VAGUE INFORMATION IN A MECHANICAL MANNER. THE AO HAS NOT EVEN RECORDED HIS SATISFACTION ABOUT THE CORRECTNESS OR OTHERWISE OF THE INFORMATION OR HIS SATISFACTION THAT A CASE HAS BEEN MADE OUT F OR ISSUING A NOTICE UNDER S.148. READ IN THIS LIGHT, WHAT HAS BEEN REC ORDED BY THE AO AS THE REASONS TO BELIEVE IS NOTHING MORE THAN A REP ORT GIVEN BY HIM TO THE CIT. THE SUBMISSION OF A REPORT IS NOT THE SAM E AS RECORDING OF REASONS TO BELIEVE FOR ISSUING A NOTICE. THE AO HA S CLEARLY SUBSTITUTED FORM FOR SUBSTANCE AND, THEREFORE, THE ACTION OF TH E AO FALLS FOUL OF THE LAW. THERE IS NO ERROR IN THE DECISION RENDERED BY THE TRIBUNAL AND NO SUBSTANTIAL QUESTION OF LAW HAS ARISEN FOR CONSI DERATION. THEREFORE, THE APPEALS ARE DISMISSED. 22 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 II) DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. SFIL STOCK BROKING LIMITED, 233 CTR 69 (DEL) IN WHICH IT WAS H ELD AS UNDER :- CONCLUSION: MERE INFORMATION RECEIVED FROM THE DY . DIRECTOR OF IT (INV.) AND DIRECTIONS OF THE SAID OFFICER AND THE A DDL. CIT TO INITIATE PROCEEDINGS UNDER SECTION 148 CANNOT CONSTITUTE VAL ID REASONS FOR INITIATING REASSESSMENT PROCEEDINGS IN THE ABSENCE OF ANYTHING TO SHOW THAT THE AO HAS INDEPENDENTLY APPLIED HIS MIND TO ARRIVE AT A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. III) DECISION OF HONBLE SUPREME COURT IN THE CASE OF CHHUGAMAL RAJPAL VS. S.P. CHALIHA & OTHERS, 79 ITR 603 (SC) IN WHICH IT WAS HELD AS UNDER :- HELD, THAT THE INCOME TAX OFFICER HAD NOT EVEN COM E TO A PRIMA FACIE CONCLUSION THAT THE LOAN TRANSACTIONS T O WHICH HE REFERRED WERE NOT GENUINE TRANSACTIONS: HE APPEARED TO HAVE ONLY A VAGUE FEELING THAT THEY MIGHT BE BOGUS TRANSACTIONS. SUC H A CONCLUSION DID NOT FULFILL THE REQUIREMENTS OF SECTION 151(2). UN DER THAT SECTION HE HAD TO GIVE REASONS FOR ISSUING A NOTICE UNDER SECT ION 148. HE SHOULD HAVE SOME PRIMA FACIE GROUNDS BEFORE HIM FOR TAKING ACTION UNDER SECTION 148. HIS CONCLUSION THAT THERE WAS A CASE FOR INVESTIGATING THE TRUTH OF THE ALLEGED TRANSACTIONS WAS NOT THE S AME THING AS SAYING THAT THERE WERE REASONS FOR THE ISSUE OF THE NOTICE . THE COMMISSIONER HAD MECHANICALLY ACCORDED PERMISSION. THE IMPORTANT SAFEGUARDS PROVIDED IN SECTION 147 AND 151 WERE LIGHTLY TREATE D BY THE OFFICER AND THE COMMISSIONER. THE INCOME TAX OFFICER COULD NOT HAVE HAD REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMEN T BY REASON OF THE APPELLANT-FIRMS FAILURE TO DISCLOSE MATERIAL F ACTS AND IF THE COMMISSIONER HAD READ THE REPORT CAREFULLY HE COULD NOT HAVE COME TO THE CONCLUSION THAT THIS WAS A FIT CASE FOR ISSU ING A NOTICE UNDER SECTION 148. THE NOTICE ISSUED UNDER SECTION 148 W AS THEREFORE INVALID. IV) DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. ORIENT CRAFT LIMITED, 354 ITR 536 (DELHI) IN WHICH IT WAS HELD A S UNDER :- 23 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 HELD, DISMISSING THE APPEAL, THAT THE REASONS DISC LOSED THAT THE ASSESSING OFFICER REACHED THE BELIEF THAT THERE WAS ESCAPEMENT OF INCOME ON GOING THROUGH THE RETURN OF INCOME FILE D BY THE ASSESSEE AFTER HE ACCEPTED THE RETURN UNDER SECTION 143(1) W ITHOUT SCRUTINY, AND NOTHING MORE. THIS WAS NOTHING BUT A REVIEW OF THE EARLIER PROCEEDINGS AND AN ABUSE OF POWER BY THE ASSESSING OFFICER. THE REASONS RECORDED BY THE ASSESSING OFFICER DID CONFI RM THE APPREHENSION ABOUT THE HARM THAT A LESS STRICT INTE RPRETATION OF THE WORDS REASON TO BELIEVE VIS--VIS AN INTIMATION I SSUED UNDER SECTION 143(1) COULD CAUSE TO THE TAX REGIME. THER E WAS NOTHING IN THE REASONS RECORDED TO SHOW THAT ANY TANGIBLE MATE RIAL HAD COME INTO THE POSSESSION OF THE ASSESSING OFFICER SUBSEQ UENT TO THE ISSUE OF THE INTIMATION. THE NOTICE REFLECTED AN ARBITRARY EXERCISE OF THE POWER CONFERRED UNDER SECTION 147. V) DIVISION OF HONBLE GUJARAT HIGH COURT IN THE CA SE OF INDUCTOTHERM (INDIA) P. LTD. VS. M. GOPALAN, DCIT, 356 ITR 481 (GUJ) IN WHICH IT WAS HELD AS UNDER :- THE POWER TO REOPEN AN ASSESSMENT IS AVAILABLE EIT HER IN A CASE WHERE A RETURN HAS BEEN ACCEPTED UNDER SECTION 143(1) OF THE INCOME-TAX ACT, 1961, OR A SCRUTINY ASSESSMENT HAS BEEN FRAMED UNDER SECTION 143(3) OF THE ACT. A COMMON REQUIREM ENT IN BOTH CASES IS THAT THE ASSESSING OFFICER SHOULD HAVE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. T HERE SHOULD BE TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT TH ERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIV E LINK WITH THE FORMATION OF THE BELIEF. VI) DIVISION OF HONBLE SUPREME COURT IN THE CASE O F ITO VS. MADNANI ENGINEERING WORKS LIMITED, 118 ITR 1 (SC) IN WHICH IT WAS HELD THAT MERE DISCLOSURE OF BELIEF WITHOUT SETTING OUT MATERIAL O N THE BASIS OF WHICH BELIEF WAS ARRIVED AT - NOT SUFFICIENT. 24 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 VII) ORDER OF I.T.A.T., AGRA BENCH IN THE CASE OF M /S AGRA CHEMICALS VS. ACIT IN ITA NO.134/AGRA/2006 IN WHICH REOPENING OF THE A SSESSMENT WAS NOT FOUND JUSTIFIED BECAUSE THERE WAS NO MATERIAL BEFOR E THE A.O. EXCEPT TO SUSPECT ON THE BASIS OF VAGUE AND GENERAL INFORMATI ON BUT NO MATERIAL TO ESTABLISH THAT TRANSACTION OF TAKING OF LOAN WAS BO GUS. (COPY FILED ON RECORD) VIII) ORDER OF I.T.A.T., AGRA BENCH IN THE CASE OF SMT. JAYA BHATIA VS. ITO IN ITA NO.201/AGRA.2007 IN WHICH ALSO REOPENING OF THE ASSESSMENT WAS NOT FOUND JUSTIFIED BECAUSE THERE WAS NO RELATED MATERI AL IN THE POSSESSION OF THE A.O. ON THE BASIS OF WHICH HE COULD HAVE FORMED HIS OPINION AS HAS BEEN FORMED BY HIM. (COPY FILED ON RECORD) 10. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF ABOVE DECISIONS, IT IS CLEAR THAT THERE WERE NO SPECIFIC RELIABLE INFORMATION RE CEIVED FROM INVESTIGATION WING ABOUT ESCAPEMENT OF INCOME ON ACCOUNT OF LONG TERM CAPITAL GAIN. THE A.O., WITHOUT EXAMINING ANY REPORT OR INFORMATION, ACTED UPON THE SAID VAGUE AND GENERAL INFORMATION WHICH IS BAD IN LAW. THERE WAS NO REFERENCE TO ANY DOCUMENT OR MATERIAL WITH THE ALLEGED REPORT OF THE INVESTIG ATION WING, THUS THE SAME COULD NOT BE REGARDED AS MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED NEXUS OR LIVE LINK, DISCLOSES ESCAPEMENT OF INCOME. IT IS, THEREFORE, CLEAR THAT THE A.O. DID NOT APPLY 25 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 HIS OWN MIND TO THE VAGUE INFORMATION AND DID NOT E XAMINE THE BASIS OR MATERIAL, IF ANY, TO SUPPORT SUCH INFORMATION. THE ABOVE DECISI ONS SQUARELY APPLY IN FAVOUR OF THE ASSESSEE IN PROVING REASSESSMENT IS BAD IN LAW INCLUDING DECISION OF DIVISION BENCH OF I.T.A.T., AGRA IN THE CASE OF DCIT VS. LAT E SHRI SATISH PRAKASH MITTAL & OTHERS (SUPRA). THE DECISIONS RELIED UPON BY THE L D. DEPARTMENTAL REPRESENTATIVE WOULD NOT SUPPORT THE CASE OF THE REVENUE AS THE SA ME ARE CLEARLY DISTINGUISHABLE ON FACTS OF THE CASE. THEREFORE, THERE WAS NOT PRI MA FACIE BELIEF AVAILABLE TO THE A.O. TO SAY THAT THERE WAS ANY ESCAPEMENT OF INCOME . THERE IS NO REASON TO BELIEVE AS REQUIRED UNDER SECTION 147 OF THE ACT. CONSIDERING THE ABOVE DISCUSSION, I AM OF THE VIEW THAT THERE WAS NO JUST IFICATION FOR THE A.O. TO HAVE INITIATED REASSESSMENT PROCEEDINGS UNDER SECTION 14 7/148 OF THE ACT. THE REASSESSMENT ORDER IS LIABLE TO BE QUASHED. I ACCO RDINGLY SET SIDE AND QUASH THE REASSESSMENT PROCEEDINGS UNDER SECTION 148 OF THE A CT. THEREFORE, ALL THE RESULTANT ADDITION MADE BY THE A.O. WOULD STAND DELETED. IN VIEW OF THE ABOVE, THERE IS NO NEED TO CONSIDER THE ADDITIONS ON MERIT. IN THE RE SULT, APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.100/AGRA/2013 (SHRI PIYUSH PRASAD, HUF) 11. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-I, AGRA DATED 08.10.2012 FOR THE A.Y. 2002-03 CHALLENG ING INITIATION OF THE 26 ITA NOS.99 & 100/AGRA/2013 A.Y. 2002-03 REASSESSMENT PROCEEDINGS UNDER SECTION 148 OF THE A CT AND THE SIMILAR ADDITION ON MERIT. 12. THE CASE IS IDENTICAL AS CONSIDERED IN THE CASE OF SHRI RAMESH PRASAD, HUF. THEREFORE, BY FOLLOWING THE REASONS FOR THE DECISIO N IN THAT CASE, I SET ASIDE AND QUASH THE REASSESSMENT PROCEEDINGS UNDER SECTION 14 8 OF THE ACT AND ALSO DELETE THE ADDITIONS ON MERIT AS DONE IN THE CASE OF SHRI RAMESH PRASAD, HUF. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 13. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE S ARE ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- (BHAVNESH SAINI) JUDICIAL MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT (APPEALS) CONCERNED/CIT CO NCERNED/ D.R., ITAT, AGRA BENCH, AGRA/ GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY