The ITO, Ward-8(4),, Surat v. M/s. Rameshwar Hardware Mart, Surat

ITA 3895/AHD/2007 | 2000-2001
Pronouncement Date: 26-03-2010 | Result: Dismissed

Appeal Details

RSA Number 389520514 RSA 2007
Bench Ahmedabad
Appeal Number ITA 3895/AHD/2007
Duration Of Justice 2 year(s) 5 month(s) 7 day(s)
Appellant The ITO, Ward-8(4),, Surat
Respondent M/s. Rameshwar Hardware Mart, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 26-03-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 26-03-2010
Date Of Final Hearing 16-02-2010
Next Hearing Date 16-02-2010
Assessment Year 2000-2001
Appeal Filed On 19-10-2007
Judgment Text
ITA.3895/07-DCA IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI T. K. SHARMA JM AND D.C.AGRAWAL AM INCOME-TAX OFFICER WARD 8(4) SURAT. V/S . M/S RAMESHWAR HARDWARE MART 1 ANAND MANGAL APARTMENT KATARGAM ROAD SURAT. PAN NO.AADFR 1413 P (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SMT. NEETA SHAH SR.DR RESPONDENT BY:- SHRI R. N. VEPARI AR O R D E R PER D.C.AGRAWAL ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) DATED 6.8.2007 WHEREIN HE HAS ANNULLED THE A SSESSMENT ON THE GROUND THAT REOPENING OF THE ASSESSMENT UNDER SECTI ON 147(A) WAS BAD IN LAW. 2. THE FACTS OF THE CASE ARE THAT ASSESSEE IS TRADI NG IN HARDWARE ITEMS. A SURVEY UNDER SECTION 133A WAS CARRIED OUT ON 23.0 2.2000 AT THE BUSINESS PREMISES OF THE ASSESSEE AS WELL AS BUSINE SS PREMISES OF ASSOCIATE CONCERN WITH THE NAME M/S RAMESHWAR PLY W OOD. 3. IN THE CASE OF THIS ASSESSEE A DISCLOSURE OF RS. 97 490/- WAS MADE. THE RETURN FOR ASST. YEAR 2000-01 WAS FILED ON 25.1 0.2000 DECLARING TOTAL ITA NO.3895/AHD/2007 ASST. YEAR :2000-01 2 INCOME OF RS.80 760/-. IT DID NOT APPARENTLY CONTAI N DISCLOSURE MADE BY THE ASSESSEE IN THE COURSE OF SURVEY. SUBSEQUENTLY REVISED RETURN SHOWING TOTAL INCOME OF RS.82 527/- WAS FILED WHICH APPAREN TLY CONTAINED THE DISCLOSURE SO MADE BUT DISCLOSED INCOME WAS BELOW T HE AMOUNT OF DISCLOSURE MADE BY THE ASSESSEE. INCOME WAS HOWEVER FINALLY ASSESSED UNDER SECTION 143(3) ON 15.7.2002 ON AN INCOME OF R S.87 258/-. SUBSEQUENTLY THE AO RECORDED FOLLOWING REASONS FOR REOPENING THE ASSESSMENT:- THE ASSESSES FILED ITS ORIGINAL RETURN ON 25.10.20 00 DECLARING TOTAL INCOME OF RS.80 760/- THEREAFTER THE ASSESSEE HAS F ILED A REVISED RETURN ON 17 04.2001 DECLARING TOTAL INCOME OF RS. 82.527/ - BUT NO REASON HAS BEEN ASSIGNED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME FOR FILING SUCH RETURN WHICH WAS FIFED AFTER ISSUANCE OF NOTI CE U/S. 143(2) OF THE LT. ACT- SURVEY U/S. 133A OF THE ACT WAS CARRIED OUT ON 23.02.2000 AT THE BUSINESS PREMISES THE ASSESSES HAS ACCEPTED EXCESS STOCK FOUND OF RS.52 415/- AND RS. 45.075/- IN RESPECT OF UNACCOUN TED PURCHASE THE SAME HAS NOT BEEN REFLECTED IN THE RETURN OF INCOME . I HAVE THEREFORE REASON TO BELIEVE THAT INCOME OF THE ASSESSEE HAS B EEN UNDER ASSESSED TO THE EXTENT OF MORE THAN RS. 1 LAC WITHIN THE MEANIN G OF SECTION 147 OF THE ACT. AFTER REOPENING OF THE ASSESSMENT A FRESH ASSESSMEN T WAS COMPLETED ON 29.12.2006 DETERMINING TOTAL INCOME AT RS.6 68 324/ - WHEREIN AN ADDITION OF RS.5 81 066/- WAS MADE ON ACCOUNT OF NON-GENUINE PURCHASES SAID TO HAVE BEEN MADE BY THE ASSESSEE FROM M/S JAYSHREE TI MBER AHMEDABAD. DURING THE COURSE OF REASSESSMENT PROCEEDINGS THE A O ASKED THE ASSESSEE TO FURNISH COPIES OF ACCOUNTS PAN PROOF OF HAVING INCOME-TAX RETURN FILED BY M/S JAYSHREE TIMBER WHICH SEEMS TO HAVE B EEN NOT PROVIDED AND ACCORDINGLY PURCHASES FROM THAT PARTY WERE HELD BOGUS. 4. WHEN THE MATTER CAME BEFORE LD. CIT(A) HE STRUCK DO WN THE REOPENING OF ASSESSMENT. HE HELD THAT ASSESSMENT HA S BEEN REOPENED AFTER A PERIOD OF FOUR YEARS FROM THE END OF ASSESSMENT 3 YEAR WHOSE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) AND THERE IS NO ALLEGATION THAT INCOME HAS ESCAPED ASSESSMENT DUE TO OMISSION OR FAILURE OF THE ASSESSEE TO DISCL OSE ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. FURTHER INCOME ALLE GED TO HAVE ESCAPED ASSESSMENT WAS LESS THAN RS.1 LAC. WE IN TH IS REGARD REPRODUCE FOLLOWING PORTION OF THE ORDER OF LD. CIT (A):- IT IS ALSO SEEN THAT IN THE APPELLANTS CASE ASSESSMENT H AS BEEN REOPENED AFTER A PERIOD OF FOUR YEARS FROM THE END OF THE AS SESSMENT YEAR WHERE THE ASSESSMENT U/S 143(3) HAS BEEN COMPLETED AND THEREF ORE IT IS A REQUISITE CONDITION THAT SUCH ESCAPEMENT OF INCOME IS PRIMARI LY DUE TO THE REASON OF THE FAILURE ON THE PART OF THE ASSESSES TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SEC TION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL M ATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR.' IN T HE INSTANT CASE THE AQ HAS NOT BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT SUCH INCOME HAD ESCAPED THE ASSESSMENT ON ACCOUNT OF ASSESSEE'S FAI LURE ON THE PART OF ASSESSES TO TRULY DISCLOSE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT AND THEREFORE IN ABSENCE OF SUCH FINDINGS NOTICE IS BAD IN LAW IT IS PERTINENT TO NOTE THAT EVEN IN REMAND REPORT THE AO HAS CONVE NIENTLY IGNORED THIS GROUND RAISED BY THE APPELLANT WHICH CLEARLY MEANS THAT AO HAS NOTHING TO SAY IN THIS REGARD. ALSO LOOKING TO THE FACT THA T EVEN IN THE ASSESSMENT MADE U/S 143(3) R.W.S. 147 THE AO HAS NOT CONSIDERE D THE MAIN GROUND FOR WHICH THE ASSESSMENT WAS REOPENED SINCE THERE I S NO MENTION OF SUCH ESCAPEMENT IN THE ASSESSMENT ORDER. EVEN OTHERWISE THE NOTICE ISSUED IN THIS REGARD IS BARRED BY LIMITATION SINCE THE INCOM E ALLEGED TO HAVE ESCAPED THE ASSESSMENT WAS LESS THAN RS. 1 LAKH WHI CH IS PREREQUISITE CONDITION FOR ISSUING NOTICE U/S 149 WHICH READS AS (1) NO NOTICE UNDER SECTION 148 SHALL BE ISSUED FOR THE RELEVANT ASSESSMENT YEAR; (A) IF YOUR YEARS HAVE ELAPSED FROM THE END OF THE REL EVANT ASSESSMENT YEAR UNLESS THE CASE FALLS UNDER CLAUSE (B); (B) IF FOUR YEARS BUT NOT MORE THAN SIX YEARS HAV E ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCO ME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR I S LIKELY TO AMOUNT TO ONE LAKH RUPEES OR MORE FOR THAT YEAR. 4 EXPLANATIONIN DETERMINING INCOME CHARGEABLE TO TAX WHICH HAS. ESCAPED ASSESSMENT FOR THE PURPOSES OF THIS SUB-SECTION THE PROVISIONS OF EXPLANATION 2 OF SECTION 147 SHALL AP PLY AS THEY APPLY FOR THE PURPOSES OF THAT SECTION. THEREFORE CONSIDERING THE OVERALL FACTS OF THE CASE I AM CONSTRAINED TO ANNUL THE ORDER OF THE ASSESSMENT PA SSED BY THE AO. 5. LD. DR SUBMITTED THAT COPY OF THE REASONS ARE NO T ON RECORD AND WHATEVER IS PROVIDED BY THE ASSESSEE CANNOT BE RELI ED UPON. LD. DR SOUGHT TO SUPPORT THE REOPENING OF THE ASSESSMENT B Y THE ADDITION MADE BY THE AO IN REASSESSMENT PROCEEDINGS TO IMPRESS UP ON US THAT IF ADDITION MADE IS ABOVE RS.1 LAC THEN IT WOULD MEAN THAT ESCA PEMENT IS ALSO ABOVE RS.1 LAC EVEN THOUGH IT MIGHT NOT HAVE BEEN SO MENT IONED IN THE REASONS RECORDED BY THE AO. 6. THE LD. AR ON THE OTHER HAND STATED ON THE BAR T HAT REASONS ARE CONTAINED IN THE LETTER ISSUED BY THE AO TO HIM VID E LETTER DATED 29.12.06 ISSUED BY THE ITO WD-8(4) SURAT AND CONTAINS STAMP OF THAT WARD. A COPY OF THAT LETTER IS ALSO FILED ON RECORD OF TRIB UNAL. THIS LETTER READS AS UNDER :- OFFICE OF THE INCOME-TAX OFFICER WARD 8(4) AAYKAR BHAVAN ROOM NO.514 5 TH FLOOR MAJURA GATE SURAT NO.SRT/WD-8(4)/REASON TO A/2006-07 DATE 29.12.20 06 M/S. RAMESHWAR HARDWARE MART 1 ANAND MANGAL APARTMENT KATARGAM ROAD SURAT. 5 SIR R SUB : PROVIDING REASON RECORDED U/S. 147 OF THE INC OME-TAX ACT 1961 IN THE CASE OF M/S. RAMESHWAR HARDWARE MART - SURAT - A.Y. 2000-2001 - REG. PLEASE REFER TO THE ABOVE. 2. YOUR AUTHORISED REPRESENTATIVE SHRI N.V BUNHA DULY AUTHORIZED ITP VIDE LETTER DT 29.12 06 HAS ASKED TO PROVIDE T HE REASON RECORDED FOR REOPENING THE ASSESSMENT FOR A.Y- 2000-01 IN YOUR C ASE. THE REASON RECORDED ARE REPRODUCED 'THE ASSESSEE FILED ITS ORIGINAL RETURN ON 25. 10. 2000 DECLARING TOTAL INCOME OF RS.80 760/- THEREAFTER THE ASSESSEE HAS F ILED A REVISED RETURN ON 17.04.2001 DECLARING TOTAL INCOME OF RS.. 82 527/- BUT NO REASON HAS BEEN ASSIGNED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME FOR FILING SUCH RETURN WHICH WAS FILED AFTER ISSUANCE OF NOTI CE U/S. 143(2) OF THE I T. ACT. SURVEY U/S. 133A OF THE ACT WAS CARRIED OUT ON 23.02.2000 AT THE BUSINESS PREMISES THE ASSESSEE HAS ACCEPTED EXCESS STOCK FOUND OF RS.52 415/- AM/ RS.45 075/- IN RESPECT OF UNACCOUNT ED PURCHASE THE SAME HAS NOT BEEN REFLECTED IN THE RETURN OF INCOME . I HAVE THEREFORE REASON TO BELIEVE THAT INCOME OF THE ASSESSEE HAS B EEN UNDER ASSESSED TO THE EXTENT OF MORE THAN RS. 1 LAC WITHIN THE MEANIN G 147 OF THE ACT.' YOURS FAITHFULLY SD/- (BATTILAL MEENA) INCOME-LAX OFFICER WARD-8(4) SURAT 7. IN REJOINDER LD. DR ARGUED AT LENGTH AND S TRONGLY SUBMITTED THAT REASONS RECORDED AS CONTAINED IN THE LETTER DATED 2 9.12.2006 ISSUED BY THE ITO WD-8(4) SURAT TO THE ASSESSEE CANNOT BE RELIED UPON. THE LD.D.R. SUBMITTED THAT SHE HAS BEEN ABLE BRING OUT THE REAS ONS RECORDED BY THE A.O. AS PER THE RECORD OF THE A.O. WHICH ARE AS UND ER :- 6 REASONS RECORDED FOR RE-OPENING OF ASSESSMENT. IT HAS BEEN SEEN THAT SURVEY WAS CARRIED OUT ON 23- 2-2000 ASSESSEE HAS DISCLOSED RS.52 415 AND RS.74 108/- OF EXCESS S TOCK OF M/S.RAMESHWAR HARDWARE MART AND M/S. RAMESHWAR PLYW OOD CENTRE. STATEMENT RECORDED ON 25-2-2000 THE ASSESSE E OFFERED RS.74 140/- AS DISCLOSURE. ASSESSEE LATER ON BIFURC ATED THE AMOUNT UNDER UNACCOUNTED PURCHASES OF RS.1 03 032/-. IN M/ S. RAMESHWAR HARDWARE MART RS.15 075/-. M/S.RAMESHWAR PLYWOOD CE NTRE NOTHING..(NOT LEGIBLE) HOW IT HAS BEEN ARRIVED AT. THE ASSESSEE HAS SHOWN PURCHASES AND SALE UP TO THE .(NOT LEGIBLE) PURCHASES RS.12 37 335/- SALE RS. 11 46 48 7. HOWEVER THE AUDIT REPORT FILED WITH THE RETURN OF INCOME.(NOTL EGIBLE) FIGURES PURCHASES RS.22 91 021/- SALE RS.18 54 642/-. THE HUGE PURCHASES AND SALES HAVE NOT BEEN VERIFIED. 2. I HAVE REASON TO BELIEVE THAT INCOME HAS ESCAP ED.(NOT LEGIBLE) PERTAINING TO A.Y. 2000-01. THE ASSESSMENT OF A.Y. 2000- 01.(NOT LEGIBLE). 3. ISSUE NOTICE U/S. 148 OF THE I.T. ACT. 4. NECESSARY APPROVAL OF THE CIT..(NOT LEGIBLE) 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THERE IS NO CASE FOR INTERFERENCE IN THE ORDER OF LD. CIT(A). EVEN IN THE REASONS SUPPLIED B Y THE LD.D.R. WHICH ARE CLAIMED TO HAVE BEEN RECORDED BY THE A.O. AND N OT THE ONE AS SUBMITTED BY LD. A.R AND WHICH ARE ALSO REPRODUCED ABOVE BUT STILL THERE IS NO MENTION IN THIS REASON AS TO HOW MUCH INCOME AS ESCAPED ASSESSMENT FOR THE A.Y. 2000-01. EVEN THOUGH IT IS MENTIONED THAT UNACCOUNTED PURCHASES ARE OF RS.1 03 032/- IN M/S. RAMESHWAR HARDWARE MART BUT THERE IS NO INFERENCE THAT ENTIR E PURCHASES OF 7 RS.1 03 032/- REPRESENTING CONCEALED INCOME WHICH H AS ESCAPED ASSESSMENT. IT WAS NOT THE CASE THAT ALL THE PURCH ASES WERE MADE AT A TIME ON SINGLE DAY REQUIRING THE INVESTMENT AT ONE POINT OF TIME. AS THE ASSESSEE IS REGULARLY INDULGED IN UNACCOUNTED SALE AND PURCHASE AND THEREFORE UNACCOUNTED SALES ARE INVESTED IN UNACCO UNTED PURCHASES AND ALSO THE PROFIT EARNED ON UNACCOUNTED SALES ARE ALS O INVESTED IN UNACCOUNTED PURCHASES RESULTING IN NET UNACCOUNTED INVESTMENT AT A FIGURE LESS THAN RS.1 03 032/-. EVEN IF A.O. THOUGH T THAT THE ENTIRE UNACCOUNTED PURCHASE REPRESENTED ESCAPED INCOME HE OUGHT TO HAVE MENTIONED SO IN THE REASONS RECORDED. FURTHER THER E IS DIFFERENCE IN THE REASONS SUPPLIED BY THE LD. D.R. THAN WHAT WAS SUPP LIED BY THE LD. A.R. IT REQUIRES SOME INVESTIGATION ON THE PART OF THE R EVENUE AUTHORITIES AS TO HOW THERE COULD BE TWO SET OF REASONS ONE GIVEN TO THE ASSESSEE A COPY OF WHICH RECORD IS PRODUCED BEFORE US AND OTHER WHAT I S PRODUCED BY THE LD. D.R. BEFORE US. EVEN PRESUMING THAT REASONS SUPPLI ED BY THE LD.D.R. ARE CORRECT STILL IT DOES NOT MAKE OUT A CASE IN FAVOU R OF REVENUE. IN ADDITION TO WHAT WE HAVE STATED ABOVE MENTION OF ESCAPED INC OME IN THE ABOVE REASONS. THERE IS ONE MORE SERIOUS DEFICIENCY IN TH EM. THERE IS NO MENTION THAT INCOME HAS ESCAPED ASSESSMENT ON ACCOU NT OF OR OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCHARGE PR IMARY REQUIREMENT OF JURISDICTION FOR REOPENING THE ASSESSMENT AFTER 4 Y EARS. IT IS BEING MENTIONED THAT ASSESSMENT WAS ORIGINALLY COMPLETED U/S. 143(3) ON 15.7.2002 FOR A.Y. 2000-01 AND NOTICE U/S. 148(1) I S ISSUED ON 28.3.2006 AND SERVED ON THE ASSESSEE ON 30.3.2006 I.E. AFTER 4 YEARS OF RELEVANT ASSESSMENT YEAR. FOR THE SAKE OF CONVENIENCE WE REP RODUCE SECTION 147 AS UNDER :- SECTION 147 147. INCOME ESCAPING ASSESSMENT.--IF THE ASSESSING OFFICER H AS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY A SSESSMENT YEAR HE MAY SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER 8 INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER TH IS SECTION OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE AS TH E CASE MAY BE FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 153 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 SHAL L BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVAN T ASSESSMENT YEAR UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSM ENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTIO N 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. 9. THUS A BEAR READING OF SECTION CLEARLY INDICATES THAT JURISDICTION FOR REOPENING THE ASSESSMENT CAN BE ASSUMED BY THE A.O. ONLY WHEN THERE IS ESCAPEMENT OF INCOME ON ACCOUNT OF OMISSION OR FAIL URE ON THE PART OF THE ASSESSEE IN DISCLOSING MATERIAL FACTS NECESSARY FOR ASSESSMENT. IN FACT THERE IS NO ALLEGATION IN THE REASONS RECORDED THAT THERE WAS ANY OMISSION OR FAILURE OF THE ASSESSEE IN DISCLOSING ANY MATERI AL FACT. THE HONBLE S.C. IN THE CASE OF ITO VS. LAKMANI MEWALDAS (1976) 103 ITR 437 HELD THAT REASONS FOR FORMATION OF BELIEF U/S.147(A) WH ICH IS PARI-MATERIA WITH THE PRESENT PROVISO TO SECTION 147 FOR REOPENING A SSESSMENT MUST HAVE RATIONAL CONNECTION OR RELEVANT BEARING ON THE FORM ATION OF THE BELIEF. THERE MUST BE A DIRECT NEXUS OR LIVE-LINK BETWEEN M ATERIAL COMING TO THE NOTICE OF THE A.O. AND THE FORMATION OF THE BELIEF THAT THERE HAS BEEN ESCAPEMENT OF INCOME OF THE ASSESSEE FROM ASSESSMEN T IN A PARTICULAR YEAR BECAUSE OF HIS FAILURE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS. WHEN ALL THE MATERIALS ARE ALREADY AVAILABLE ON REC ORD AND NO ACTION IS TAKEN BY THE A.O. IN THE RELEVANT ASSESSMENT YEAR B UT ACTION IS TAKEN AFTER EXPIRY OF 4 YEARS THEN RE-ASSESSMENT PROCEEDINGS WI THOUT THERE BEING ANY NEW FACTS FOUND WILL NOT BE VALID. IN FACT THE MAT ERIAL SUBSEQUENTLY COMING TO THE KNOWLEDGE OF THE A.O. MUST SHOW THAT INCOME SO ESCAPED (I) BELONGED TO THE ASSESSEE (II) IT PERTAINED TO T HE ASSESSMENT YEAR SOUGHT TO BE REOPENED (III) AMOUNT OF INCOME ESCAPING ASS ESSMENT IS ABOVE RS.1 LAKH (IN CASE ORIGINAL ASSESSMENT IS COMPLETED U/S. 143(3)) AND (IV) NON- 9 DISCLOSURE OF THE INCOME OR FACTS MATERIAL TO TAXIN G SUCH INCOME WAS ON ACCOUNT OF FAILURE OR OMISSION OF THE ASSESSEE. THO UGH SUFFICIENCY OF REASONS ARE NOT FOR THE COURTS TO LOOK INTO BUT CO NNECTIVITY OF THE REASONS WITH THESE FOUR INGREDIENTS IS NECESSARY. ALL THE F OUR INGREDIENTS MUST BE SIMULTANEOUSLY AND CUMULATIVELY SATISFIED AND ALSO SHOULD BE SO MENTIONED IN THE REASONS. 10. IN THE PRESENT CASE NOT ONLY THERE IS NO REFER ENCE TO ANY OMISSION OR FAILURE ON THE PART OF THE ASSESSEE THERE IS AL SO NO CONNECTIVITY AND REFERENCE OF AMOUNT OF INCOME ESCAPED ASSESSMENT. T HOUGH ASSESSMENT YEAR AND ASSESSEE ARE CLEARLY CONNECTED WITH THE RE ASONS RECORDED BUT OTHER TWO INGREDIENTS ARE CLEARLY MISSING. THEREFOR E A.O. COULD NOT HAVE ASSUMED JURISDICTION TO REOPEN THE ASSESSMENT. 11. THE LD. D.R. POINTED OUT THAT INCOME ASSESSED IS MORE THAN RS.1 LAC. THEREFORE THE A.O. WAS JUSTIFIED IN REOPENING THE ASSESSMENT. IN OUR CONSIDERED VIEW THE CONTENTION OF LD. DR IS NOT REA LLY SOUND BECAUSE REASONS RECORDED HAS TO BE EXAMINED ON THE BASIS OF WHAT HAS BEEN ACTUALLY RECORDED AND NOT WHAT COULD HAVE BEEN RECO RDED AND SECONDLY REASONS COULD NOT BE SUPPORTED BY THE ADDITIONS FIN ALLY MADE IN THE RE- ASSESSMENT ORDER. REASONS RECORDED ARE BASED ON THE MATERIAL AVAILABLE BEFORE THE AO ON WHICH HE HAS APPLIED HIS MIND AND CAME TO THE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMEN T. THESE REASONS CANNOT BE SUPPORTED OR NULLIFIED BY ADDITIONS MADE OR NOT MADE IN THE REASSESSMENT PROCEEDINGS. THE LIVE NEXUS OF THE MAT ERIAL WITH THE REASONS HAS TO BE EXAMINED ON THE BASIS OF MATERIAL AVAILAB LE AND SATISFACTION ARRIVED THEREON BY THE AO. THIS LIVE NEXUS CANNOT B E EXAMINED WITH THE ADDITIONS FINALLY MADE OR MATERIAL SUBSEQUENTLY COL LECTED. THEREFORE WE REJECT THE ARGUMENT OF LD. DR THAT IF ADDITION PROP OSED IN THE REASSESSMENT ORDER IS MORE THAN RS.1 LAC THEN REOPE NING IS SAVED BY SECTION 149. THE EVALUATION OF REASONS RECORDED HAS TO BE SOLELY AND 10 EXCLUSIVELY ON THE BASIS OF WHAT HAS BEEN RECORDED BY THE AO IN THE REASONS AND A LIVE NEXUS OF SUCH REASONS HAS TO BE EVALUATED ONLY ON THE BASIS OF MATERIAL AVAILABLE ON THE RECORD AND USED BY THE AO FOR RECORDING REASONS. IF AO HAS NOT CONSIDERED ANY MAT ERIAL AVAILABLE ON RECORD THEN IT CANNOT BE SAID THAT HE HAD IN FACT A PPLIED HIS MIND ON SUCH MATERIAL. ESCAPEMENT OF INCOME HAS ONLY TO BE SEEN FROM WHAT HAS BEEN CONSIDERED BY THE AO IN THE RECORDED REASONS AND NO T BEYOND. 12. IN VIEW OF THE ABOVE WE HELD THAT THE A.O. WAS ILLEGALLY NOT CORRECT IN REOPENING THE ASSESSMENT U/S. 147 OF THE ACT. AS A RESULT WE UPHOLD THE ORDER OF THE LD. CIT (A) AND DISMISS THE APPEAL OF THE REVENUE. SD/- SD/- (T. K. SHARMA) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED :26-03-2010 COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD ORDER PRONOUNCED IN OPEN COURT ON 26 -03-2010