Seema Gupta, New Delhi v. ITO, New Delhi

ITA 2194/DEL/2011 | 2004-2005
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 219420114 RSA 2011
Assessee PAN AAEPG2428G
Bench Delhi
Appeal Number ITA 2194/DEL/2011
Duration Of Justice 10 month(s) 27 day(s)
Appellant Seema Gupta, New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 30-03-2012
Date Of Final Hearing 12-01-2012
Next Hearing Date 12-01-2012
Assessment Year 2004-2005
Appeal Filed On 03-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `G: NEW DELHI BEFORE SMT. DIVA SINGH JUDICIAL MEMBER AND SHRI K.D. RANJAN ACCOUNTANT MEMBER I.T. A. NO.2192/DEL/2011 ASSESSMENT YEAR : 2002-03 SONIA GUPTA INCOME-TAX OFFICER W 6/24 SAINIK FARM VS. WARD 23(3) NEW DELHI. NEW DELHI. PAN: AAEPG2428G I.T. A. NOS.2193 & 2194/DEL/2011 ASSESSMENT YEARS : 2002-03 & 2004-05 SEEMA GUPTA INCOME-TAX OFFICER W 6/24 SAINIK FARM VS. WARD 23(3) NEW DELHI. NEW DELHI. PAN: AAEPG2430J (APPELLANTS) (RESPONDE NT) APPELLANTS BY: SHRI VED JAIN CA & SMT. RANO JAI N. RESPONDENT BY: SHRI ROHIT GARG DR. O R D E R PER K.D. RANJAN ACCOUNTAT MEMBER: THESE APPEALS BY TWO DIFFERENT ASSESSEES ARISE OUT OF SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XXIII NEW DELHI. THESE APPEALS WERE HEARD TOGETHER AND FOR THE SAKE OF CON VENIENCE ARE DISPOSED OF BY THIS COMMON ORDER. I.T. A. NO.2192 2193 & 2194/D EL/2011 2 2. THE FIRST ISSUE FOR CONSIDERATION WHICH IS COMMO N IN ALL THE THREE APPEALS RELATES TO REOPENING OF ASSESSMENT UNDER SE C. 147 OF THE INCOME-TAX ACT 1961 (THE ACT). THE GROUNDS RAISED BY BOTH TH E ASSESSEES REGARDING REOPENING OF ASSESSMENT ARE IDENTICAL AND FOR THE S AKE OF CONVENIENCE ARE REPRODUCED AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE ORD ER PASSED BY THE LEARNED CIT(A) IS BAD BOTH IN THE EYE OF LAW AN D ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE REOPENING OF THE ASSESSMENT AND THE CONSEQUENT REASSESSMENT ORDER IGNORING THE FACT THAT STATUTORY CONDITIONS PRESCRIBED UNDER SECTION 147 R EAD WITH SECTION 148 HAVE NOT BEEN COMPLIED WITH BY THE AO. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECT ING THE CONTENTION OF THE ASSESSEE THAT THE REOPENING OF AS SESSMENT IS BAD AND LIABLE TO BE QUASHED AS THE REASONS RECORDE D FOR REOPENING THE ASSESSMENT DOES NOT MEET THE REQUIREM ENTS OF THE SECTION 147 OF THE ACT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN IGNO RING THE CONTENTION OF THE APPELLANT THAT THE AO HAS REOPENE D THE ASSESSMENT EVEN 3WITHOUT LOOKING AT THE RETURN FILE D BY THE ASSESSEE AND AS SUCH BELIEF FORMED BY HIM IS ERRONE OUS AND UNTENABLE. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN IGNO RING THE CONTENTION OF THE APPELLANT THAT THE REASONS RECORD ED FOR REOPENING ARE VAGUE AND THERE IS NO LIVE NEXUS BETW EEN THE REASONS RECORDED AND THE INCOME ESCAPING ASSESSMENT . I.T. A. NO.2192 2193 & 2194/D EL/2011 3 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN IGNO RING THE CONTENTION OF THE ASSESSEE THAT THE REOPENING IS BA D AND LIABLE TO BE QUASHED AS THE SAME HAS BEEN MADE WITHOUT THE RE BEING ANY ADVERSE MATERIAL BROUGHT ON RECORD BY THE A.O. ITA NO.2192/DEL/2011 (MRS. SONIA GUPTA) : 3. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT T HE ASSESSING OFFICER RECEIVED INFORMATION FROM THE JOINT DIRECTOR OF INC OME-TAX (INVESTIGATION) UNIT-V NEW DELHI WHEREIN DETAILS OF BENEFICIARIES AND ACCOMMODATION ENTRY PROVIDERS WERE GIVEN. THE ASSESSING OFFICER REOPENED THE ASSESSMENT UNDER SEC. 147 AND ISSUED NOTICES UNDER SEC. 148 ON 28 TH MARCH 2007 THROUGH SPEED POST. THE AO COMPLETED ASSESSMENT UN DER SEC. 143(3)/147 ON 31 ST DECEMBER 2007. 4. BEFORE THE CIT(A) THE ASSESSEE CHALLENGED THE AS SESSMENT ORDER ON ASSUMPTION OF JURISDICTION U/S 147 AS WELL AS ON ME RITS. AS REGARDS REOPENING OF ASSESSMENT IT WAS SUBMITTED THAT THE A O HAD CLEARLY RECORDED IN HIS NOTE THAT THE ASSESSMENT RECORD FOR ASSESSME NT YEAR 2002-03 WAS NOT READILY AVAILABLE BEING VERY OLD AND THEREFORE IT WAS THEREFORE DIFFICULT TO FIND OUT IF THE ASSESSMENT HAD BEEN FRAMED UNDER SE C. 143(1) OR 143(3). IT I.T. A. NO.2192 2193 & 2194/D EL/2011 4 WAS CONTENDED THAT THE AO HAD NO BASIS TO COMPARE T HE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT AS TH E ASSESSMENT RECORD ADMITTEDLY WAS NOT AVAILABLE. THE AUTHORIZED REPRE SENTATIVE RELYING ON VARIOUS JUDICIAL PRONOUNCEMENTS SUBMITTED THAT REAS ONS TO BELIEVE CANNOT BE EQUATED WITH REASONS TO SUSPECT. THE LEARNED CIT(A ) HOWEVER NOTED THAT THE INFORMATION RELATED TO AN ACCOMMODATION ENTRY T AKEN BY THE ASSESSEE WAS BORNE OUT OF THE INVESTIGATION REPORT RECEIVED BY T HE ASSESSING OFFICER. IT WAS NOT OUT OF PLACE TO PLACE ON RECORD THAT REPORT OF THE INVESTIGATION WING OF THE DEPARTMENT HAD BEEN PREPARED AFTER DETAILED ENQUIRIES CONDUCTED IN THAT REGARD ON A VERY LARGE SCALE LEADING TO THE CO NCLUSION THAT ENTRIES GIVEN BY M/S. MKM FINSEC PVT. LTD. WERE IN NATURE OF ACCO MMODATION ENTRIES. ONCE THE AO WAS CONVINCED WITH THE LOGIC OF INVESTI GATION REPORT THEN THE VERIFICATION WITH REFERENCE TO ASSESSMENT RECORD WO ULD NOT HAVE ALTERED HIS FORMATION OF BELIEF REGARDING ESCAPEMENT OF INCOME. THE NATURE OF INFORMATION TO BE CROSS-VERIFIED WITH THE ASSESSMEN T RECORD WAS SUCH THAT EVEN IN THE ABSENCE OF SUCH CROSS VERIFICATION A RE ASONABLE BELIEF COULD BE MADE REGARDING ESCAPEMENT OF INCOME. THEREFORE TH E OBJECTION RAISED BY THE ASSESSEE WAS NOT VALID. THE LEARNED CIT(A) THE REFORE UPHELD THE REOPENING OF ASSESSMENT IN THE CASE OF SONIA GUPTA. I.T. A. NO.2192 2193 & 2194/D EL/2011 5 ITA NO.2193/DEL/2011 (SEEMA GUPTA) 5. SIMILARLY IN THE CASE OF SEEMA GUPTA FOR ASSESSM ENT YEAR 2002-03 ON IDENTICAL FACTS ASSESSMENT WAS REOPENED BY ISSUE OF NOTICE UNDER SEC. 148 ON 28 TH MARCH 2007. VERBATIM THE SAME ORDER HAS BEEN PAS SED BY THE LEARNED CIT(A) UPHOLDING THE ISSUE OF NOTICE UNDER SEC. 148 OF THE ACT. IN ASSESSMENT YEAR 2004-05 IN THE CASE OF SEEMA GUPTA (ITA NO.2194/DEL/2011) THE AO ISSUED NOTICE UNDER SEC. 1 48 ON 28 TH MARCH 2007. THE LEARNED CIT(A) PASSED ORDER UPHOLDING TH E REOPENING OF ASSESSMENT UNDER SEC. 147 OF THE ACT. 6. AGGRIEVED BY THE ORDERS OF THE LEARNED CIT(A) BOTH THE ASSESSEES ARE IN APPEAL BEFORE THIS TRIBUNAL. 7. BEFORE US THE LEARNED AR OF THE ASSESSEES REFERR ING TO REASONS RECORDED IN THE CASE OF SEEMA GUPTA AND SONIA GUPTA FOR ASSESSMENT YEAR 2002-03 SUBMITTED THAT ASSESSMENT RECORDS WERE NOT AVAILABLE AT THE TIME OF REASONS RECORDED BY THE AO AND THEREFORE THERE CAN NOT BE ANY REASONABLE BELIEF IN ABSENCE OF ASSESSMENT RECORD THAT THE INC OME HAS ESCAPED I.T. A. NO.2192 2193 & 2194/D EL/2011 6 ASSESSMENT. IT IS THE ASSESSMENT RECORD WHICH IS T O BE VERIFIED WITH REFERENCE TO INFORMATION RECEIVED AND ON SATISFACTI ON THE AO CAN FORM A BELIEF THAT A PARTICULAR INCOME HAS ESCAPED ASSESSM ENT. HOWEVER IN A CASE WHERE RETURN OF INCOME IS NOT SEEN RECORDING OF RE ASONS IN THE ABSENCE OF ASSESSMENT RECORD WOULD AMOUNT TO REASONS TO SUSPEC T WHICH IS NOT PERMISSIBLE UNDER SEC. 147 OF THE ACT. THEREFORE T HE ASSESSMENTS MADE BY THE AO FOR BOTH THE ASSESSEES FOR ASSESSMENT YEAR 2 002-03 ARE BAD IN LAW. 7.1 ON THE OTHER HAND THE LEARNED SR. DR SUPPORTED THE ORDERS OF THE CIT(A). IT WAS SUBMITTED THAT THE AO HAD RECEIVED INFORMATION FROM INVESTIGATION WING WHEREIN THE MODUS OPERANDI OF EN TRY PROVIDER HAS BEEN EXPLAINED. THE INFORMATION WAS RECEIVED FROM INVES TIGATION WING OF THE DEPARTMENT AND THEREFORE THE INFORMATION RECEIVED WAS RELIABLE. THE LEARNED SR. DR RELYING ON THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF RAYMOND WOOLLEN MILLS VS. ITO & OTHERS 236 ITR 34 SUBMITTED THAT SUFFICIENCY OF REASONS CANNOT BE CHALLENGED AT THE TIME OF REOPENING OF ASSESSMENT. THERE WAS SUFFICIENT MATERIAL ON RECOR D FOR FORMING THE BELIEF BY THE AO THAT THE INCOME HAS ESCAPED ASSESSMENT. HE ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. 291 ITR 500. I.T. A. NO.2192 2193 & 2194/D EL/2011 7 8. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER HAD REOP ENED ASSESSMENT U/S 147 OF THE ACT WHICH READS AS UNDER: 147. IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THA T ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY A SSESSMENT YEAR HE MAY SUBJECT TO THE PROVISIONS OF SECTIONS 148 T O 153 ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE T O TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION OR RECOMPUTED THE LOSS OR THE DEPRECIATION ALLOWANCE O R 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 SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER T HE 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 ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE T O A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT FOR THAT ASSESSMENT YEAR. I.T. A. NO.2192 2193 & 2194/D EL/2011 8 FROM PLAIN READING OF PROVISIONS OF SECTION 147 IT IS CLEAR THAT IF THAT ASSESSING OFFICER HAS REASONS TO BELIEVE THAT ANY I NCOME CHARGEABLE TAX HAS ESCAPED ASSESSMENT HE MAY SUBJECT TO PROVISIONS OF SECTION 148 TO 153 REOPEN ASSESSMENT. HOWEVER IN A CASE WHERE ASSESSME NT IS MADE U/S 143(3) OR U/S 147 AND REOPENING OF THE ASSESSMENT BEING M ADE AFTER EXPIRY OF FOUR YEARS PROVISO TO SECTION 147 IS TRIGGERED OFF AND ASSESSING OFFICER CAN INITIATE REASSESSMENT PROCEEDINGS IF ANY INCOME CHA RGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY RE ASON OF THE FAILURE ON THE PART OF THE ASSESSEE (I)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 (II) TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECE SSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. FURTHER THE ACTION U/S 147 IS SUBJECT TO FULFILLMENT OF CERTAIN CONDITIONS STIPULATED IN SECTIONS 148 TO 15 3. 9. IN THE REASONS IN THE CASE OF SMT. SONIA GUPTA AND SMT SEEMA GUPTA FOR ASSESSMENT YEAR 2002-03 THE ASSESSING OFFICER INTER-ALIA HAD RECORDED AS UNDER:- THE ASSESSMENT RECORDS OF THE ASSESSEE FOR A.Y. 20 02-03 IS NOT READILY AVAILABLE BEING VERY OLD. THUS IT IS DIFF ICULT TO ASCERTAIN WHETHER THE ASSESSMENT FOR THE A.Y.2002-0 3 HAS BEEN COMPLETED U/S 143(1) OR 143(3) OF THE INCOME TAX AC T. HENCE THE APPROVAL OF ADDL. CIT RANGE 23 NEW DELHI MAY A LSO BE OBTAINED. FROM THIS PART OF REASONS RECORDED IT IS CLEAR THA T WHEN THE ASSESSING OFFICER RECORDED REASONS THE ASSESSMENT RECORDS OF BOTH THE ASSESSEES FOR RELEVANT ASSESSMENT YEAR WERE NOT AVAILABLE. THE AS SESSING OFFICER COULD I.T. A. NO.2192 2193 & 2194/D EL/2011 9 HAVE REOPENED THE ASSESSMENT UNDER MAIN PROVISION O F SECTION 147 IF NO ASSESSMENT WAS MADE U/S SECTION 143(3) OR SECTION 1 47. BUT IN A CASE WHERE ASSESSMENT WAS COMPLETED U/S 143(3) OR U/S 147 AFT ER EXPIRY OF FOUR YEARS HE COULD HAVE REOPENED ASSESSMENT IF THERE WAS A FA ILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR HIS ASSESSMENT. IN THE ABSENCE OF ASSESSMENT RECORDS THE ASSESSING OFFICER WAS NOT AWARE OF THE FACT WHETHER THE ESCAPEMENT OF INC OME FELL IN MAIN PROVISION OF SECTION 147 OR UNDER PROVISO TO IT. MOREOVER THE INFORMATION RECEIVED FROM INVESTIGATION WING WAS NOT SUBJECT OF VERIFICATION WITH THE RETURN OF INCOME AS TO WHETHER THERE WAS ESCAPEMENT OF INCOME. THE RECEIPT OF ANY INFORMATION WOULD NOT AUTOMATICALLY MEAN THA T THERE IS ESCAPEMENT OF INCOME. THE INFORMATION RECEIVED HAS TO BE VERIFIED WITH THE RETURN OF INCOME ON THE BASIS OF WHICH THE ASSESSING OFFICER WILL FORM A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. IT IS SETTLED LAW T HAT THE ASSESSING OFFICER WHILE EXERCISING JURISDICTION UNDER SECTION 147 M UST ON THE BASIS OF MATERIAL FACTS ON RECORD PRIMA FACIE BE SATISFIED THAT THE INCOME OF THE ASSESSEE WAS LIABLE TO TAX FOR THAT RELEVANT ASSESS MENT YEAR AND THAT HE HAD REASON TO BELIEVE THAT IT HAD ESCAPED ASSESSMENT. H OWEVER IN A CASE REOPENING OF ASSESSMENT IS UNDER PROVISO TO SECTION 147 THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT THE ESCAPE MENT OF INCOME WAS ON ACCOUNT OF THE OMISSION OR FAILURE ON THE PART OF T HE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. BOTH THE CONDITIONS ARE CONDITIONS PRECEDENT TO THE EXERCISE OF THE JURISDICTION UNDER PROVISO TO SECTION 147 READ WITH SECTION 148. THIS IS SO LAID DOWN BY HONBLE SUPREME COURT IN CALCUTTA DISCOUNT CO. LTD. V. ITO [1961] 41 ITR 191 (SC) AND A HOST OF LATER DECISIONS. SECTION 151(1) OF THE ACT REQUIRES THE SANCTION OF JOINT/ADDITIONAL COMMISSIONER OF INCOME TAX IN A CASE WHERE AN I.T. A. NO.2192 2193 & 2194/D EL/2011 10 ASSESSMENT WAS MADE UNDER SECTION 143(3) OR SECTION 147 IF THE ASSESSING OFFICER IS BELOW THE RANK OF ASSISTANT COMMISSIONER OR DEPUTY COMMISSIONER. FURTHER PROVISO TO SECTION 151(1) PR OVIDES THAT AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR NO SUCH NOTICE SHALL BE ISSUED UNLESS THE CHIEF COMMISSIONE R OR COMMISSIONER IS SATISFIED ON THE REASONS RECORDED BY THE ASSESSING OFFICER AFORESAID THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. UNDER S ECTION 151(2) IN A CASE NOT FALLING U/S 153(1) THE ASSESSING BELOW THE RANK OF JOINT COMMISSIONER OF INCOME CANNOT ISSUE NOTICE U/S 148 AFTER EXPIRY OF FOUR YEARS UNLESS APPROVAL IS GRANTED BY THE JOINT COMMISSIONER OF INCOME TAX. IN THE PRESENT CASE FROM THE REASONS RECORDED IT NOT CLEAR WHETHER APPR OVAL WAS SOUGHT UNDER SECTION 151(1) OR 151(2) OR IT WAS REQUIRED FROM CI T/CCIT. THUS THERE WAS NO VERIFICATION OF LEGAL REQUIREMENTS OF SECTION 15 3 OF THE ACT BY THE ASSESSING OFFICER. HE HAS SIMPLY OBTAINED APPROVAL OF JOINT/ADDITIONAL COMMISSIONER AS AN ABUNDANT CAUTION PRESUMING AS IF PROVISIONS OF SECTION 153(2) WERE ATTRACTED. 10. THUS IN A CASE WHERE ASSESSMENT RECORD IS NOT REFER RED TO WHILE RECORDING REASONS THE ASSESSING OFFICER CANNOT BE SAID TO HAVE APPLIED HIS MIND TO THE FACTS OF THE CASE AND CONSEQUENTLY THERE WILL BE LACK OF PRIMA FACIE SATISFACTION ABOUT THE CONDITIONS PRECEDENT REACHI NG THE CONCLUSION FOR REOPENING THE ASSESSMENT. IF IT SO IT WILL BE A CAS E OF MERE SUSPICION OR PRESUMPTION EVEN THOUGH THERE IS FRESH INFORMATION IN THE POSSESSION OF THE ASSESSING OFFICER. REOPENING OF ASSESSMENT ON SUSP ICION OR FOR MAKING ROVING/FISHING INQUIRIES IS NOT PERMISSIBLE UNDER S EC. 147 OF THE ACT. THUS IN THE ABSENCE OF ASSESSMENT RECORDS INITIATION OF PR OCEEDINGS UNDER SEC. 147 IS I.T. A. NO.2192 2193 & 2194/D EL/2011 11 NOT BASED ON APPLICATION OF MIND IN FORMATION OF BE LIEF THAT INCOME CHARGEABLE TO TAX UNDER SEC. 147 HAD ESCAPED ASSESS MENT. MOREOVER IT IS NOT A CASE OF SUFFICIENCY OF REASONS OR SUFFICIENCY OF MATERIAL ON RECORD BUT IT IS A CASE IN-APPLICATION OF MIND AND NON VERIFICATION OF INFORMATION FROM ASSESSMENT RECORDS AT THE TIME FORMATION OF BELIEF. THEREFORE THE DECISIONS IN THE CASES OF RAJESH JHAVERI STOCK BROKERS (P) LT D. (SUPRA) AND RAYMOND WOOLLEN MILLS LTD. (SUPRA) ARE NOT APPLICABLE TO TH E FACTS OF THE ASSESSEES CASES. WE THEREFORE HOLD THAT REOPENING OF ASSESS MENT BASED ON REASONS TO SUSPECT OR FOR MAKING ROVING INQUIRIES IS BAD IN LA W. ACCORDINGLY THE ASSESSMENTS MADE IN THE CASES OF SONIA GUPTA AND SE EMA GUPTA FOR ASSESSMENT YEAR 2002-03 ARE ANNULLED. 11. SINCE WE HAVE ANNULLED THE ASSESSMENT FOR A.Y. 2002-03 IN CASE OF BOTH THE ASSESSEES THE OTHER GROUNDS ARE NOT DECID ED ON MERITS. 12. IN THE RESULT THE APPEALS FILED BY MRS. SONIA G UPTA AND MRS. SEEMA GUPTA FOR A.Y. 2003-04 ARE ALLOWED. ITA NO.2194/DEL/2011 (SEEMA GUPTA) 13. IN THE CASE OF SEEMA GUPTA FOR ASSESSMENT YEAR 2004-05 THERE IS NO ALLEGATION THAT THE ASSESSMENT RECORDS WERE NOT AVA ILABLE. HENCE IT CANNOT BE SAID THAT THE AO IN THE REASONS RECORDED HAS NOT VE RIFIED THE INFORMATION I.T. A. NO.2192 2193 & 2194/D EL/2011 12 RECEIVED AS IN THE ASSESSMENT YEAR 2002-03 WITH THE ASSESSMENT RECORDS. THEREFORE REOPENING OF ASSESSMENT CANNOT BE CHALLE NGED IN ASSESSMENT YEAR 2004-05. AT THE TIME OF REOPENING OF ASSESSME NT SUFFICIENCY OF REASONS IS NOT TO BE SEEN. WHAT IS TO BE SEEN IS T HAT THERE SHOULD BE SOME INFORMATION IN THE POSSESSION OF THE AO ON THE BASI S OF WHICH HE COULD FORM A BELIEF THAT INCOME HAD ESCAPED ASSESSMENT. IN TH IS CASE THE ASSESSEE RECEIVED INFORMATION FROM INVESTIGATION WING THAT M RS. SEEMA GUPTA HAD TAKEN ACCOMMODATION ENTRY OF RS.1 00 000/- FROM ONE SHRI ASHOK KUMAR GUPTA THROUGH INSTRUMENT DRAWN ON CORPORATION BANK NIT FARIDABAD. THEREFORE RE-OPENING OF ASSESSMENT CANNOT BE CHALL ENGED ON THE GROUND OF INSUFFICIENCY OF REASONS. WE THEREFORE UPHOLD THE REOPENING OF ASSESSMENT IN THE CASE OF SEEMA GUPTA FOR ASSESSMENT YEAR 2004 -05. 14. ON MERITS THE ONLY ISSUE FOR CONSIDERATION IN T HE CASE OF SEEMA GUPTA FOR ASSESSMENT YEAR 2004-05 RELATES TO CONFIRMING T HE ADDITION OF RS.1 00 000/- MADE ON ACCOUNT OF GIFT RECEIVED FROM SHRI ASHOK KUMAR GUPTA. THE RELEVANT GROUNDS OF APPEAL ARE REPRODUC ED AS UNDER:- 7(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN CONFIRMING TH E ADDITION OF AN AMOUNT OF RS.1 00 000/- MADE ON ACCOUNT OF GI FT RECEIVED FROM SH. ASHOK GUPTA. I.T. A. NO.2192 2193 & 2194/D EL/2011 13 (II) THAT THE ADDITION HAS BEEN MADE DESPITE THE AS SESSEE BRINGING ON ALL MATERIAL AND EVIDENCE ON RECORD TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE DONOR AND THE GENUINENESS OF THE TRANSACTION. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECT ING THE CONTENTION OF THE ASSESSEE THAT THE AOS ORDER IS B AD & LIABLE TO BE QUASHED AS THE SAME HAS BEEN MADE ON THE BASIS O F MATERIAL COLLECTED AT THE BACK OF THE ASSESSEE WITHOUT GIVIN G ASSESSEE AN OPPORTUNITY TO REBUT THE SAME. 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECT ING THE CONTENTION OF THE ASSESSEE THAT THE AOS ORDER IS B AD & LIABLE TO BE QUASHED AS THE SAME HAS BEEN MADE ON THE BASIS O F STATEMENT OF SOME PERSON WITHOUT GIVING ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE THE SAME IN GROSS VIOL ATION OF PRINCIPLES OF NATURAL JUSTICE. 15. FACTS OF THE CASE RELATING TO THIS GROUND ARE T HAT THE ASSESSEE RECEIVED A GIFT OF RS.1 00 000/- FROM SHRI ASHOK KUMAR GUPTA . DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE SHRI ASHOK KUMAR GUPTA. THE ASSESSEE FAILED TO PRO DUCE THE DONOR. THE I.T. A. NO.2192 2193 & 2194/D EL/2011 14 AO OBTAINED COPY OF BANK STATEMENT OF SHRI ASHOK KU MAR GUPTA ACCOUNT NO.15427 WITH CORPORATION BANK PASCHIM VIHAR. ON P ERUSAL OF BANK ACCOUNT IT REVEALED THAT CASH WAS DEPOSITED AND DEM AND DRAFT WAS ISSUED. IN THE CASE OF ASHOK KUMAR GUPTA A SUM OF RS.1 00 000/ - WAS DEPOSITED IN CASH AT THE TIME OF ISSUE OF CHEQUE/DEMAND DRAFT. ANOTHER CHEQUE OF RS.2 50 000/- WAS ISSUED IN THE NAME OF ONE AKSHAY BANSAL. THE ASSESSING OFFICER ALSO NOTED THAT ANOTHER CHEQUE OF RS.2 00 0 00/- WAS ISSUED IN SOMEBODY ELSES NAME. THE ASSESSING OFFICER THEREF ORE CAME TO THE CONCLUSION THAT IN THE BANK ACCOUNT SHRI ASHOK KUMA R GUPTA DEPOSITED CASH BEFORE ISSUE OF CHEQUE/DEMAND DRAFT/PAY ORDER. ON A QUERY BY THE ASSESSING OFFICER THE ASSESSEE VIDE LETTER DATED 18 TH OCTOBER 2007 STATED THAT HE HAD RECEIVED A GIFT FROM SHRI ASHOK KUMAR GUPTA S/O SH RI HANS RAJ GUPTA RESIDENT OF WZ-48 BASAI DHARA PUR NEW DELHI FOR R S.1 00 000/- OUT OF NATURAL LOVE AND AFFECTION. THE ABOVE AMOUNT WAS R ECEIVED AND ACCEPTED THROUGH A/C PAYEE CHEQUE BEARING NO.239520 DATED 23 RD MAY 2003 DRAWN ON CORPORATION BANK NEW DELHI. THE AMOUNT WAS GIF TED OUT OF HIS SELF- ACQUIRED FUND. THE DONOR WAS AN INCOME-TAX AS WELL AS WEALTH-TAX ASSESSEE HAVING PAN NO. AGCOG4856G. THE ASSESSEE AGAIN VIDE LETTER DATED 12.11.2008 HAD STATED THAT SHE WAS NOT AFFORDED AN OPPORTUNITY TO CROSS- EXAMINE AND ALSO NOT SUPPLIED THE RELEVANT DOCUMENT S. THE AO REJECTED THE I.T. A. NO.2192 2193 & 2194/D EL/2011 15 CONTENTION OF THE ASSESSEE ON THE GROUND THAT BENEF ICIARY HAD RECEIVED RS.1 00 000/- WHICH HAS BEEN DETECTED BY THE DEPART MENT. SECONDLY THE DECLARATION OF GIFT AND AFFIDAVIT FILED BY THE ASSE SSEE WERE NOT STAMPED BY THE NOTARY. THE GIFT DEED WAS ALSO NOT NOTARIZED B Y THE NOTARY. THEREFORE THE GIFT DEED WAS INVALID. THE ASSESSING OFFICER R ELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SAJAN DASS & SONS VS. CIT 264 ITR 435 WHEREIN IT HAS BEEN HELD THAT THE MERE IDEN TIFICATION OF THE DONOR AND THE RECEIPT OF THE GIFT AMOUNT THROUGH BANKING CHANNEL WAS NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE GIFT. S INCE THE CLAIM OF GIFT WAS MADE BY THE ASSESSEE THE ONUS WAS ON HIM NOT ONLY TO ESTABLISH THE IDENTITY OF THE PERSON MAKING THE GIFT BUT ALSO HIS CAPACITY TO MAKE THE GIFT. THE AO ALSO REFERRED TO THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI TIRATH DASS GUPTA VS. CIT 197 TAX ATION 533. THE ASSESSING OFFICER THEREFORE TREATED THE AMOUNT OF RS.1 00 000/- AS UNDISCLOSED INCOME OF THE ASSESSEE. 16. BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE ASS ESSEE HAD SUBMITTED ALL DOCUMENTS REQUIRED TO PROVE THE IDENTITY THE GENUI NENESS AND CREDITWORTHINESS OF DONOR DURING THE ASSESSMENT PRO CEEDINGS. THE DONOR SHRI ASHOK KUMAR GUPTA WAS NOT MADE AVAILABLE FOR C ROSS-EXAMINATION AND I.T. A. NO.2192 2193 & 2194/D EL/2011 16 THEREFORE THE ASSESSMENT MADE UNDER SEC. 143(3) WA S NOT VALID. THE LEARNED CIT(A) ON CONSIDERATION OF FACTS OBSERVED THAT THE ASSESSING OFFICERS CONCLUSION WAS BASED UPON A SYSTEMATIC AND LOGICAL APPRECIATION OF SEQUENCE OF EVENTS AS CLAIMED BY THE ASSESSEE. IT WAS NOT A CASE WHERE THE ASSESSEE HAD BEEN ASKED BY THE AO TO PROVE THE GENU INENESS OF CREDIT ENTRY IN A WAY AS HIGHLIGHTED BY THE AUTHORIZED REPRESENT ATIVE. THE ASSESSING OFFICER HAS DISCHARGED THE ONUS CAST UPON HIM UNDER SEC. 68 IN THE ASSESSMENT PROCEEDINGS. AS REGARDS CROSS-EXAMINATI ON OF SHRI ASHOK KUMAR GUPTA THE LEARNED CIT(A) HAS HELD THAT THE A SSESSING OFFICER HAD NOT RELIED UPON ANY STATEMENT RECORDED BY THE INVES TIGATION WING OF THE DEPARTMENT IN THE CASE OF SHRI ASHOK KUMAR GUPTA TO CONCLUDE THAT THE ENTRY CLAIMED TO BE ON ACCOUNT OF GIFT WAS ACTUALLY ACCOMMODATION ENTRY. THEREFORE NON-SUPPLY OF THE DOCUMENTS/STATEMENTS T O THE ASSESSEE HAD IN NO WAY CONTRAVENED THE PRINCIPLE OF NATURAL JUSTICE. THE LEARNED CIT(A) ALSO NOTED THAT THE ASSESSEE HAD RECEIVED GIFT FROM TOTA LLY UNRELATED PERSON WHICH WHOM NO SPECIFIC RELATIONSHIP HAS BEEN CLAIMED. TH E AO HAD OBTAINED THE COPY OF THE BANK ACCOUNT OF THE ALLEGED DONOR WHERE IN CASH HAD BEEN DEPOSITED JUST BEFORE THE ISSUE OF CHEQUES TO THE E VENTUAL BENEFICIARIES WHICH FURTHER THREW AMPLE LIGHT ON THE NATURE OF AC COUNT OPERATOR. THE LEARNED CIT(A) RELIED ON THE DECISION OF HONBLE DE LHI HIGH COURT IN THE I.T. A. NO.2192 2193 & 2194/D EL/2011 17 CASE OF SANDEEP KUMAR (HUF) VS. CIT 293 ITR 294 FO R THE PROPOSITION THAT WHERE THERE WAS NOTHING ON RECORD TO SHOW THE FINAN CIAL CAPACITY OF THE DONOR THE CREDITWORTHINESS OF THE DONOR RELATIONS HIP OF THE DONOR WITH THE ASSESSEE WHAT WERE THE SOURCES OF FUNDS GIFTED TO THE ASSESSEE AND WHETHER THEY HAD THE CAPACITY OF GIVING LARGE AMOUNTS OF GI FT TO THE ASSESSEE. THEREFORE GIFT RECEIVED BY THE ASSESSEE FROM THE D ONOR COULD NOT BE HELD TO BE GENUINE GIFT AND THE AUTHORITIES BELOW WERE FULL Y JUSTIFIED IN TREATING THE AMOUNT RECEIVED AS GIFT AS REPRESENTING THE CONCEAL ED INCOME OF THE ASSESSEE. THE LEARNED CIT(A) ALSO RELIED ON THE DE CISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANIL KUMAR 292 I TR 552 FOR IDENTICAL PROPOSITION. THE LEARNED CIT(A) ACCORDINGLY UPHELD THE ADDITION OF RS.1 00 000/-. 17. BEFORE US THE LEARNED AUTHORIZED REPRESENTATIV E OF THE ASSESSEE SUBMITTED THAT THERE WAS NO RELATIONSHIP BETWEEN TH E DONOR AND THE DONEE. HOWEVER HE SUBMITTED THAT SHRI ASHOK KUMAR GUPTA THE DONOR HAD GIVEN THE GIFT OUT OF NATURAL LOVE AND AFFECTION. THE AS SESSEE HAD FILED PHOTO COPIES OF DECLARATION OF GIFT COPY OF ITR COPY OF WEALTH-TAX RETURN COPY OF PAN CARD AND RATION CARD IN SUPPORT OF HER CONTENTI ON THAT TRANSACTION OF GIFT WAS GENUINE AND WAS NOT AN ACCOMMODATION ENTRY . ON THE OTHER HAND I.T. A. NO.2192 2193 & 2194/D EL/2011 18 THE LEARNED SR. DR SUPPORTED THE ORDER OF THE CIT(A ) RELYING ON THE FOLLOWING DECISIONS:- (I) RAJIV TANDON VS. ACIT 294 ITR 488; & (II) JASPAL SINGH VS. CIT 290 ITR 306. 18. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE CASE BEFORE US THE ASS ESSING OFFICER HAD POINTED OUT VARIOUS DEFECTS IN THE GIFT DEED WHICH WAS ALSO NOT NOTARIZED. THE AFFIDAVIT FILED BY THE ASSESSEE IS NOT STAMPED. TH ERE IS NO RELATIONSHIP BETWEEN THE DONOR AND DONEE. THE CREDITWORTHINESS OF THE DONOR IS ALSO NOT PROVED. THE CASH OF RS.1 00 000/- WAS DEPOSITED PR IOR TO ISSUE OF CHEQUE BY THE DONOR. MOREOVER THERE WAS NO OCCASION ON WHIC H GIFT OF RS.1 00 000/- WAS MADE. IN VIEW OF ABOVE IN OUR CONSIDERED OPIN ION THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V DURGA PRASAD MORE 82 ITR 540 AND SUMATI DAYAL V CIT 214 ITR 801 WHERE IN IT HAS BEEN HELD THAT SURROUNDING CIRCUMST ANCES AND PREPONDERANCE OF HUMAN PROBABILITIES HAVE TO CONSIDERED WHILE DEC IDING THE REAL ISSUE BETWEEN PARTIES. THE ISSUE IS ALSO COVERED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF RAJIV TANDON VS. ACIT (SU PRA) WHEREIN IT HAS BEEN HELD THAT WHERE DONOR HAD ABSOLUTELY NO CONNEC TION WITH THE ASSESSEE I.T. A. NO.2192 2193 & 2194/D EL/2011 19 AND THEY HAD MADE GIFT TO THE ASSESSEE ONLY BECAUSE HE NEEDED MONEY TO BUY A HOUSE AND THEY WANTED TO HELP HIM. THIS WAS NOT ONLY UNNATURAL BUT ALSO QUITE UNUSUAL. THE HONBLE DELHI HIGH COURT HAS AL SO HELD THAT IT WAS INCREDIBLE THAT A COMPLETE STRANGER WOULD WANT TO G IFT LAKHS OF RUPEES TO A PERSON ONLY BECAUSE THAT PERSON WANTED AMOUNT FOR P URCHASE OF HOUSE. IN THE CASE OF ASSESSEE THE GIFT OF RS.1 00 000/- HAS BEEN MADE BY A COMPLETELY UNKNOWN PERSON HAVING NO RELATIONSHIP AND THEREFORE IN OUR CONSIDERED OPINION THE LEARNED CIT(A) WAS JUSTIFIED IN CONFIR MING THE ADDITION OF RS.1 00 000/-. 19. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE MRS. SEEMA GUPTA FOR ASSESSMENT YEAR 2004-05 IS DISMISSED AND THE APPEAL S IN THE CASES OF MRS. SONIA GUPTA AND SMT. SEEMA GUPTA FOR ASSESSMENT YEA R 2002-03 ARE ALLOWED. 20. PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH 2012. SD/- SD/- (DIVA SINGH) (K.D. RANJAN) JUDICIAL MEMBER ACOUNTANT MEMBER DATED: 30 TH MARCH 2012. I.T. A. NO.2192 2193 & 2194/D EL/2011 20 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR ITAT.