M S Rishipal Investments And Finance P Ltd New Delhi v. Ito New Delhi

In The Income Tax Appellate Tribunal Delhi Bench Smc New Delhi Before Shri R K Panda Accountant Member Ita No 2424 Del 2017 Assessment Year 2007 08 Rishipal Investments And Finance P Ltd 25 31 Ambros House East Patel Nagar New Delhi Vs Ito Ward 21 3 New Delhi Pan Aabcr 5971 K Appellant Respondent Assessee By Shri V K Tulsiyan Ca Department By Ms Yamini Sr Dr Date Of Hearing 01 12 2017 Date Of Pronouncement 22 12 2017 O R D E R Per R K Panda Am This Appeal Filed By The Assessee Is Directed Again St The Order Dated 06 02 2017 Of Cit A 36 New Delhi Relating To Asse Ssment Year 2007 08 2 Although A Number Of Grounds Have Been Raised By The Assessee However They All Relate To The Order Of The Ld Ci T A In Confirming The Addition Of Rs 44 34 500 Made By The Assessing Officer U S 68 Of The I T Act 3 Facts Of The Case In Brief Are That The Assess Ee Is A Private Limited Company And Had Filed Its Return Of Income On 30 10 2007 Declaring Nil Income The Same Was Processed U S 143 1 Of The I T Act Subsequently On The Basis Of Information Received From The Investig Ation Wing Of The 2 Ita No 2424 Del 2017 Department The Assessing Officer Reopened The Asse Ssment By Issuing Notice U S 148 After Recording The Following Reasons The Assessee E Filed Return Of Its Income For The A Y 2007 08 On 30 10 2007 Declaring Income Of Rs Nil The Return Was Process Ed U S 143 1 On 03 09 2008 At The Return Income Information Was Received From Dit Inv Through Add L Cit Range 15 New Delhi That Mukesh Gupta S K Gupta Group Along With Its Close Confidants Shri Rajan Jassal And Shri Surinder Pal Singh Operated Multipl E Bank Accounts In Various Branches To Plough Back Unaccounted Black Money For The Purpose Of Business Or For Personal Needs Such As Purchase Of Assets Etc In T He Form Of Gifts Share The Assessees Who Have Unaccounted Money Hereinafter Called As E Ntry Takers Or Beneficiaries And Want To Introduce The Same In The Books Of Account Without Paying Tax Approach Another Person Entry Operator And Hand Over Cash Plus Commission And Take Cheques Dds Provisions Of Section The Cash Is Dep Osited By The Entry Operator In A Bank Account Of Dummy Companies Controlled By Him T Hem Directly Or Indirectly For The Purpose Of Providing Accommodation Entries Who Are In Need Of Such Adjustment Entries The Entry Operator Thereafter Issues Cheq Ue Dd Po In The Name Of Beneficiary From The Same Account In Which The Cas H Is Deposited Or Another Account In Which Funds Are Transferred Through Clea Ring In Two Or More Stages The Beneficiary In Turn Deposits There Instruments In H Is Bank Accounts And The Money Comes To His Regular Books Of Account In The Form O F Gift Share Application Money Loan Etc Through Banking Channels And The Transact Ion Looks Genuine It Is Noticed From The List Of Entries That The Ass Essee M S Rishipal Investment Finance P Ltd Has Taken Following Accommodation Entries From The Following Parties Conduits As Per Details Here Under Amount Ch No Po Ddch And Date Conduit Companies Through Which Cheque Issued Name Of Bank 10 00 000 Po No 016951 Dtd 06 06 06 Zenith Estates Ipsb 50 000 Ch On 816758 Dtd 23 12 06 Vishrut Syndicate In View Of The Above Facts And Findings And Reports Received From The Investigation I Have Verified The Records And It I S Evident That The Assessee Company Has Not Disclosed Fully And Truly All Material Fact S Necessary For Its Assessment For The Assessment Year Under Consideration I Am In Posse Ssion Of Some Materials As Per Cd One Of Them Is The Sworn Statement Of Sh S K Gupta Dtd 20 11 2007 At Page 5 Mentioning Name Of The Assessee As Beneficiary Tha T Discredits And Impeaches The Particulars Furnished By The Assessee Company And A Lso Establishes The Link With The Self Confessed Accommodation Entry Providers Who Se Business Is To Help Assessees Bring Back Their Unaccounted Money Into Their Books Of Account Thus There Is A Direct Link Between The Information Available With The Department And The Income Escaping Assessment I Have Therefore Reasons To Believe That Income T O Be Extent Of Rs 10 50 000 Has Escaped Assessment For A Y 2007 08 Thus The Same Is To Be Brought To Tax Under Section 147 148 Of The I T Act 1961 Notice U S 148 May Be Issued If Approved 3 Ita No 2424 Del 2017 4 The Assessee In Response To The Same Filed A Let Ter Stating That The Original Return Filed Earlier May Be Treated As Return Filed In Response To Notice U S 148 Of The I T Act 5 During The Course Of Assessment Proceedings The Assessing Officer Asked The Assessee To File Necessary Fresh Evidence Docum Ents To Prove The Existence Creditworthiness Of The Creditors And Gen Uineness Of The Transactions In Support Of Share Capital Share Premium Share A Pplication Money And Unsecured Loans Received By The Assessee Company Fo R The Year Under Consideration The Assessee In Response To The Sa Me Filed Certain Photocopies Of The Old And Ineligible Copies Of The Confirmatio N From The Creditors In The Mean Time The Assessing Officer Had Issued Notices U S 133 6 To The Subscribers Of Share Capital Share Application Mon Ey Share Premium And Unsecured Loan Creditors At The Addresses Provided By The Assessee Through The Ward Inspector And Notice Server The Assessing Of Ficer Had Also Issued The Notices By Speed Post At The Addresses Provided By The Assessee The Ward Inspector And Notice Server In Their Respective Rep Orts Submitted That No Such Companies Were Found At The Given Addresses Simil Arly The Notices Issued By Speed Post Were Received Back Unserved With The Pos Tal Remark No Such Person The Assessing Officer Therefore Confron Ted The Same To The Assessee Who Filed The Present Addresses Of The Subscribers Creditors The Assessing Officer Again Issued Notices U S 133 6 Which Were Duly Served By The Inspector 4 Ita No 2424 Del 2017 And Notice Server Of The Ward On 18 03 2015 Requiri Ng The Creditors To File Necessary Details To Prove Their Existence Creditwo Rthiness And Genuineness Of The Transactions The Assessing Officer Also Issue D Summons U S 131 To The Principal Officers Of All The Five Subscriber Compa Nies For Personal Deposition And To File The Necessary Details Documents To Pro Ve Their Existence Creditworthiness And Genuineness Of The Transaction S However No Compliance To The Summons Issued U S 131 Was Made By The Subsc Riber Companies 6 From The Details Filed Earlier By The Assessee The Assessing Officer Observed That All The Five Private Limited Companie S Having Balance Sheet Worth Crores Of Rupees Are Functioning From Single Premis E And Having Common Caretakers The Temporary Staff Is Deployed Only T O Receive The Mail He Therefore Came To The Conclusion That All The Subs Cribers Of Funds Are Paper Companies In View Of The Above And Rejecting The Explanation Given By The Assessee The Assessing Officer Made Addition Of Rs 39 50 000 Received By The Assessee Company Towards Share Application Money Similarly The Assessing Officer Also Added An Amount Of Rs 4 45 000 Towar Ds Unsecured Loan Received From The Different Persons The Assessing Officer Further Added An Amount Of Rs 39 500 Being Unaccounted Cash Paid As Commissi On For Obtaining The Unexplained Share Application Money The Assessing Officer Accordingly Determined The Total Income Of The Assessee At Rs 4 4 34 500 5 Ita No 2424 Del 2017 7 Since There Was Non Compliance Before The Ld Ci T A He Dismissed The Appeal Filed By The Assessee While Deciding The A Ppeal The Ld Cit A Rejected The Grounds Raised By The Assessee Challenging The Validity Of The Reopening Of The Assessment He Also Decided The Issue On Merit And Confirmed The Addition Made By The Assessing Officer 8 Aggrieved With Such Order Of The Ld Cit A The Assessee Is In Appeal Before The Tribunal By Challenging The Validity Of The Reopening Of The Assessment As Well As The Addition On Merit 9 Ld Counsel For The Assessee Referring To Page 2 3 Of The Paper Book Drew The Attention Of The Bench To The Share Application Money Received By The Assessee From Different Persons The Details Of Whi Ch Are As Under Date Name Of The Applicant Credit Amount Rs 01 04 06 Opening Share Application Money 8 338 000 29 05 06 Agm Holdings Pvt Ltd 100 000 08 06 06 Agm Holdings Pvt Ltd 1 000 000 27 12 06 Vishrut Marketing Pvt Ltd 50 000 12 01 07 Tejasvi Investment Pvt Ltd 750 000 13 01 07 Tejisvi Investment Pvt Ltd 250 000 29 014 07 Tejisvi Investment Pvt Ltd 500 000 15 02 07 Tejisvi Investment Pvt Ltd 500 000 27 02 07 Maya Industries Ltd 500 000 19 03 07 Isham Photo Colour Lab Pvt Ltd 400 000 Total Application Money During 2006 07 4 050 000 10 Referring To The Above He Submitted That The A Ssessing Officer Has Already Allowed The Amount Of Rs 1 00 000 Received From Agm Holding Pvt Ltd And Has Made Addition Of Only Rs 39 50 000 I N Respect Of Remaining Persons Referring To The Reasons Recorded By The Assessing Officer Copy Of 6 Ita No 2424 Del 2017 Which Is Placed At Page 1 And 2 Of The Paper Book He Submitted That The Assessing Officer Had Re Opened The Assessment By R Ecording Reasons On Account Of Accommodation Entries Received By The As Sessee From Zenith Estates And Vishrut However There Is No Addition On Acco Unt Of Zenith Estates He Further Submitted That Although In The Reasons Reco Rded The Assessing Officer Has Mentioned The Name Of Vishrut However The Ass Essee Has Received The Share Application Money From Vishrut Marketing Pvt Ltd He Submitted That Vishrut Is Different From Vishrut Marketing Pvt Lt D He Accordingly Submitted That No Addition Has Been Made By The Ass Essing Officer On The Basis Of Which The Reasons Were Recorded And The Assessin G Officer Has Made Some Other Additions Without Issuing Separate Notice U S 148 Of The I T Act 11 Referring To The Decision Of The Honble Bombay High Court In The Case Of Cit Vs Jet Airways I Ltd Reported In 331 Itr 236 He Submitted That The Honble High Court In The Said Decision Has Held Th At The Assessing Officer May Assess Or Re Assess Such Income Which He Has Reaso N To Believe Has Escaped Assessment And Also Any Other Income Chargeable To Tax Which Has Escaped Assessment And Which Comes To His Notice Subsequent Ly In The Course Of The Proceedings Under The Section It Is Only When In Proceedings U S 147 The Assessing Officer Assesses Or Re Assesses Any Incom E Chargeable To Tax Which Has Escaped Assessment For Any Assessment Year With Respect To Which He Had Reason To Believe To Be So Then Only In Additio N He Can Also Put To Tax The 7 Ita No 2424 Del 2017 Other Income Chargeable To Tax Which Has Escaped Assessment And Which Has Come To His Notice Subsequently In The Course Of P Roceedings U S 147 Of The I T Act 12 Referring To The Decision Of The Honble Delhi High Court In The Case Of Ranbaxy Laboratories Ltd Supra He Submitted Tha T The Honble High Court Following The Above Decision And Various Other Deci Sions Has Upheld The Decision Of The Tribunal In Holding That The Assess Ing Officer Had The Jurisdiction To Re Assess Issues Other Than The Iss Ues In Respect Of Which Proceedings Are Initiated But He Was Not So Justifi Ed When The Reasons For Initiation Of Those Proceedings Ceased To Survive 13 Ld Counsel For The Assessee Further Challenged The Validity Of The Assumption Of Jurisdiction On The Ground That In Cl Ause 7 Of The Reasons Prima Facie Shows That Assessment Is Proposed To Be Made For The First Time Whereas In The Same Page Below Clause 10 The Assessing Office R Mentions That The Assessee Has Filed Its Return Of Income For The Assessment Y Ear 2007 08 On 30 10 2007 Declaring Total Income At Nil Which Was Processed U S 143 1 On 03 09 2008 At The Returned Income Thus There Is Complete Non A Pplication Of Mind By The Assessing Officer He Also Relied On The Following Decisions To Substantiate His Case On Merit As Well As Validity Of The Re Assessm Ent Proceedings I Pr Cit Vs Meenakshi Overseas P Ltd Ita No 692 Del 2016 Order Dated 26 05 2017 8 Ita No 2424 Del 2017 Ii G G Pharma 384 Itr 147 Iii Orient Craft In Ita No 555 2012 Order Dated 12 12 2016 Iv V S Capital Ita No 6162 2012 Order Dated 03 03 2016 V Touchwood Projects Ita No 619 2012 Order Date D 05 09 2016 Vi Shraddha Jain Ita No 3280 2015 Order Dated 2 4 02 2016 Vii Pr Cit Vs N C Cables Ltd Ita No 335 2015 Order Dated 11 01 2017 Viii N C Cables Ltd Vs Ito Ita No 4122 2009 Order Dated 22 10 2014 Ix Ito Vs Kaane Packaging Pvt Ltd Ita No 4850 Del 2010 Order Dated 11 05 2017 X Sabh Infrastructure Ltd Vs Acit W P C 135 7 2016 Order Dated 25 09 2017 14 He Accordingly Submitted That Since The Additio N Has Not Been Made On The Basis Of Which Reopening Was Made Therefore T He Other Additions Made By The Assessing Officer Without Issuing Fresh Notice U S 148 By Initiating Re Assessment Proceedings Does Not Survive And Therefo Re The Assessment Order Has To Be Quashed 15 Ld Dr On The Other Hand Relied On The Order Of The Assessing Officer And The Ld Cit A He Submitted That The Assessee Had Obtained Accommodation Entries From The Paper Companies Which Has Been Est Ablished By The Assessing Officer The Assessee Was Unable To Satisfy The In Gredients Of Provisions Of Section 68 For Which The Assessing Officer Made The Addition Which Has Been 9 Ita No 2424 Del 2017 Sustained By The Ld Cit A Referring To The Deci Sion Of The Honble Supreme Court In The Case Of Raymond Woollen Mills Ltd Vs Ito Reported In 236 Itr 34 He Submitted That The Honble Supreme Court In The Said Decision Has Held That In Determining Whether Commencement Of Reasses Sment Proceedings Was Valid Or Not It Has Only To Be Seen Whether There W As Prima Facie Some Material On The Basis Of Which The Department Could Reopen T He Case The Sufficiency Or Correctness Of The Material Is Not A Thing To Be Co Nsidered At This Stage 16 Referring To The Decision Of The Honble Delhi High Court In The Case Of Paramount Intercontinental Pvt Ltd Vs Ito Report Ed In 2017 Tiol 376 Hc It He Submitted That The Honble High Court In The Said Decision Has Held That When The Assessee Himself Is Unable To Satisfactori Ly Explain Correctness Of The Entries Made In His Books He Cannot Challenge The Reassessment Notice Issued U S 147 Of The I T Act 17 Referring To The Decision Of The Honble Suprem E Court In The Case Of Thakorbhai Maganbhai Patel Vs Ito Reported In 78 T Axmann Com 201 He Submitted That The Honble Supreme Court In The Sai D Decision Has Dismissed The Slp Against High Courts Ruling Where Reopening Of Assessment U S 147 Was Held To Be Valid Despite The Assessing Officer Not Passing Speaking Order Against Objections Filed By The Assessee 18 Referring To The Decision Of The Honble Delhi High Court In The Case Of Pcit Vs Paramount Communication P Ltd Reported In 79 Taxmann Com 409 10 Ita No 2424 Del 2017 He Submitted That The Honble High Court In The Sai D Decision Has Held That Information Regarding Bogus Purchase By Assessee Re Ceived By Dri From Cce Which Was Passing On To Revenue Authorities Was Ta Ngible Material Outside Record To Initiate Valid Re Assessment Proceedings 19 Referring To The Decision Of The Honble Delhi High Court In The Case Of Indu Lata Rangwala Vs Dcit Reported In 384 Itr 337 He Submitted That The Honble High Court In The Said Decision Has Held Th At Where Initial Return Of Income Is Processed U S 143 1 It Is Not Necessary In Such A Case For Assessing Officer To Come Across Some Fresh Tangible Material To Form Reasons To Believe That Income Has Escaped Assessment 20 Referring To The Decision Of The Honble Suprem E Court In The Case Of Acit Vs Rajesh Jhaveri Stock Brokers P Ltd Rep Orted In 291 Itr 500 He Submitted That The Honble Supreme Court In The Sai D Decision Has Held That So Long As The Conditions Of Section 147 Are Fulfilled The Assessing Officer Is Free To Initiate Proceedings Under Section 147 And Failu Re To Take Steps Under Section 143 3 Will Not Render The Assessing Officer Powerl Ess To Initiate Re Assessment Proceedings Even When Intimation Under Section 143 1 Has Been Issued 21 Referring To The Decision Of The Honble Gujara T High Court In The Case Of Ankit Financial Services Ltd Vs Dcit Reported In 2017 78 Taxmann Com 58 He Submitted That The Honble High Court In The Sai D Decision Has Held That When The Material Recovered In Search Of Another Person Indicated That Assessee Had 11 Ita No 2424 Del 2017 Received Bogus Share Applications Through Accommoda Tion Entries And Since Assessee Was Beneficiary Therefore Initiation Of Re Opening Was Justified 22 Referring To The Decision Of The Honble Gujara T High Court In The Case Of Murlibhai Fatandas Sawlani Vs Ito Reported In 2016 Tiol 370 Hc Ahm It He Submitted That The Honble High Court In The Sai D Decision Has Held That It Is Not Open To The Assessee To Object To The Reopening By Asking The Assessing Officer To Produce The Source From Where The Assess Ing Officer Has Gathered The Information For Forming A Belief That Income Charge Able To Tax Has Escaped Assessment 23 Referring To The Decision Of The Honble Delhi High Court In The Case Of Paramount Intercontinental Pvt Ltd Vs Ito In Ita No 348 2016 Order Dated 07 02 2017 He Submitted That The Honble High Cour T In The Said Decision Has Held That The Reopening Of The Assessment On The Ba Sis Of Report Of The Investigation Department Is Valid He Also Relied On The Decision Of The Co Ordinate Bench Of The Tribunal In The Case Of Tarun Goyal Vs Acit And Bunch Of Other Appeals Vide Consolidated Order Dated 18 1 0 2013 Wherein The Addition Made U S 68 On Account Of Accommodation Entries Was Upheld He Accordingly Submitted That The Order Of The Ld Cit A Be Uphel D And The Grounds Raised By The Assessee Be Dismissed 24 I Have Considered The Rival Arguments Made By B Oth The Sides Perused The Orders Of The Assessing Officer And The Cit A And The Paper Book Filed On 12 Ita No 2424 Del 2017 Behalf Of The Assessee I Have Also Considered The Various Decisions Cited Before Me I Find The Assessing Officer On The Basis Of The Information Received From The Investigation Wing That Assessee Is The Benefic Iary Of Accommodation Entries Of Rs 10 50 000 Received From Zenith Esta Tes And Vishrut Reopened The Assessment By Issuing Notice U S 148 Of The I T Ac T From The Details Furnished By The Assessee I Find The Assessee Has Received S Hare Application Money Of Rs 40 50 000 From 9 Subscribers The Details Of W Hich Are Given As Per Page 23 Of The Paper Book The Above Details Were Also Fil Ed Before The Assessing Officer And The Ld Cit A Which Were Perused By Th Em From The Said Details I Find The Assessing Officer Has Accepted An Amount Of Rs 1 00 000 And Has Made Addition Of Rs 39 50 000 On Account Of The R Emaining 8 Subscribers A Perusal Of The Reasons Recorded Vis Vis The Detai Ls Of Parties From Whom The Assessee Has Received Share Application Money Shows That No Addition Has Been Made On Account Of Zenith Estate Similarly Addit Ion Of Rs 50 000 Has Been Made As The Unaccounted Share Application On Accoun T Of Vishrut Marketing Pvt Ltd Whereas The Reasons Show That The Share Application Money Has Been Received From Vishrut I Find Merit In The Argum Ent Of The Ld Counsel For The Assessee That The Vishrut Marketing Pvt Ltd A Private Limited Company Is Separate And Distinct From Vishrut As Appears In The Reasons Recorded By The Assessing Officer Thus In Effect No Addition Has Been Made On The Basis Of 13 Ita No 2424 Del 2017 Which The Assessment Was Reopened And Addition Has Been Made On Account Of Share Application Money Received From Some Other Co Mpanies 25 The Honble Bombay High Court In The Case Of Je T Airways I Ltd Supra Has Observed As Under Explanation 3 Lifts The Embargo Which Was Inserte D By Judicial Interpretation On The Making Of An Assessment Or Reassessment On Grou Nds Other Than Those On The Basis Of Which A Notice Was Issued Under Section 148 Se Tting Out The Reasons For The Belief That Income Had Escaped Assessment Those Judicial D Ecisions Had Held That When The Assessment Was Sought To Be Reopened On The Ground That Income Had Escaped Assessment On A Certain Issue The Assessing Office R Could Not Make An Assessment Or Reassessment On Another Issue Which Came To His Not Ice During The Proceedings This Interpretation Will No Longer Hold The Field After The Insertion Of Explanation 3 By The Finance No 2 Act Of 2009 However Explanation 3 Does Not And Cannot Override The Necessity Of Fulfilling The Conditions Set Out In The Substantive Part Of Section 147 An Explanation To A Statutory Provision Is Intended To Explain Its Contents And Cannot Be Construed To Override It Or Render The Substance And Core Nugatory Section 147 Has This Effect That The Assessing Officer Has To A Ssess Or Reassess The Income Such Income Which Escaped Assessment And Which Was The Basis Of The Formation Of Belief And If He Does So He Can Also Assess Or Rea Ssess Any Other Income Which Has Escaped Assessment And Which Comes To His Notice Du Ring The Course Of The Proceedings However If After Issuing A Notice Un Der Section 148 He Accepted The Contention Of The Assessee And Holds That The Incom E Which He Has Initially Formed A Reason To Believe Had Escaped Assessment Has A Mat Ter Of Fact Not Escaped Assessment It Is Not Open To Him Independently To Assess Some Other Income If He Intends To Do So A Fresh Notice Under Section 148 Would Be Necessary The Legality Of Which Would Be Tested In The Event Of A Challenge B Y The Assessee 26 I Find Following The Above Decision And Host Of Other Decisions The Honble Delhi High Court In The Case Of Ranbaxy Lab Oratories Ltd Supra Has Held As Under 18 We Are In Complete Agreement With The Reasonin G Of The Division Bench Of Bombay High Court In The Case Of Jaganmohan Rao Su Pra We May Also Note That The Heading Of Section 147 Is Income Escaping Asse Ssment And That Of Section 148 Issue Of Notice Where Income Escaped Assessmen T Sections 148 Is Supplementary And Complimentary To Section 147 Sub Section 2 Of Section 148 Mandates Reasons For Issuance Of Notice By The Assessing Officer And Sub Section 1 Thereof Mandates Service Of Notice To The Asses See Before The Assessing Officer 14 Ita No 2424 Del 2017 Proceeds To Assess Reassess Or Re Compute Escaped Income Section 147 Mandates Recording Of Reasons To Believe By The Assessing Of Ficer That The Income Chargeable To Tax Has Escaped Assessment All These Conditions Ar E Required To Be Fulfilled To Assess Or Reassess The Escaped Income Chargeable To Tax A S Per Explanation 3 If During The Course Of These Proceedings The Assessing Officer C Omes To Conclusion That Some Items Have Escaped Assessment Then Notwithstanding That Those Items Were Not Included In The Reasons To Believe As Recorded For Initiation Of The Proceedings And The Notice He Would Be Competent To Make Assessment Of Those Items However The Legislature Could Not Be Presumed To Have Intended To Give Blanket Powers To The Assessing Officer That On Assuming Jurisdiction Und Er Section 147 Regarding Assessment Or Reassessment Of Escaped Income He Wo Uld Keep On Making Roving Inquiry And Thereby Including Different Items Of In Come Not Connected Or Related With The Reasons To Believe On The Basis Of Which He As Sumed Jurisdiction For Every New Issue Coming Before Assessing Officer During The Co Urse Of Proceedings Of Assessment Or Reassessment Of Escaped Income And Which He Int Ends To Take Into Account He Would Be Required To Issue A Fresh Notice Under Sec Tion 148 19 In The Present Case As Is Noted Above The Ass Essing Officer Was Satisfied With The Justifications Given By The Assessee Regarding The Items Viz Club Fees Gifts And Presents And Provision For Leave Encashment But H Owever During The Assessment Proceedings He Found The Deduction Under Section 8 0 Hh And 80 I As Claimed By The Assessee To Be Not Admissible He Consequently Whil E Not Making Additions On Those Items Of Club Fees Gifts And Presents Etc Proce Eded To Make Deductions Under Section 80 Hh And 80 I And Accordingly Reduced The Claim On These Accounts 20 The Very Basis Of Initiation Of Proceedings For Which Reasons To Believe Were Recorded Were Income Escaping Assessment In Respect Of Items Of Club Fees Gifts And Presents Etc But The Same Having Not Been Done The Assessing Officer Proceeded To Reduce The Claim Of Deduction Under Section 80 Hh A Nd 80 I Which As Per Our Discussion Was Not Permissible Had The Assessing O Fficer Proceeded Not To Make Disallowance In Respect Of The Items Of Club Fees Gifts And Presents Etc Then In View Of Our Discussion As Above He Would Have Been Just Ified As Per Explanation 3 To Reduce The Claim Of Deduction Under Section 80 Hh A Nd 8 I As Well 21 In View Of Our Above Discussions The Tribunal Was Right In Holding That The Assessing Officer Had The Jurisdiction To Reassess Issues Other Than The Issues In Respect Of Which Proceedings Are Initiated But He W As Not So Justified When The Reasons For The Initiation Of Those Proceedings Cea Sed To Survive Consequently We Answer The First Part Of Question In Affirmative In Favour Of Revenue And The Second Part Of The Question Against The Revenue 27 Since In The Instant Case Admittedly No Additio N Has Been Made On Account Of Which The Assessment Was Reopened And Addition H As Been Made On Account Of Share Application Money Received From Certain Ot Her Companies Other Than The Names Appearing In The Reasons Recorded Therefore Respectfully Following The 15 Ita No 2424 Del 2017 Above Decisions Cited Supra I Hold That The Asses Sing Officer Is Not Justified In Making The Various Other Additions And The Ld Cit A Was Not Justified In Sustaining Such Addition The Ground Raised By The Assessee On The Issue Of Validity Of Re Assessment Proceedings Is Accordingl Y Decided In Its Favour 28 Since The Assessee Succeeds On The Legal Ground Raised By It Therefore The Grounds Relating To The Merit Of The Addition Becom E Academic In Nature And Therefore Are Not Being Adjudicated 29 In The Result The Appeal Filed By The Assessee Is Allowed Order Pronounced In The Open Court On This 22 Nd Day Of December 2017 Sd R K Panda Accountant Member Dated 22 12 2017 Sujeet Copy Of Order To 1 The Appellant 2 The Respondent 3 The Cit 4 The Cit A 5 The Dr I T A T New Delhi By Order True Copy Assistant Registrar Itat New Delhi