ASST CIT CC 1 (3), MUMBAI v. M/S KEY TECH, MUMBAI

ITA 7456/MUM/2019 | 2008-2009
Pronouncement Date: 31-08-2021 | Result: Dismissed

Appeal Details

RSA Number 745619914 RSA 2019
Assessee PAN AAIFK9271B
Bench Mumbai
Appeal Number ITA 7456/MUM/2019
Duration Of Justice 1 year(s) 8 month(s) 26 day(s)
Appellant ASST CIT CC 1 (3), MUMBAI
Respondent M/S KEY TECH, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 31-08-2021
Last Hearing Date 03-08-2021
First Hearing Date 03-08-2021
Assessment Year 2008-2009
Appeal Filed On 05-12-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B MUMBAI BEFORE SHRI RAJESH KUMAR ACCOUNTANT MEMBER AND SHRI RAVISH SOOD JUDICIAL MEMBER ITA NO.7456/M/2019 ASSESSMENT YEAR: 2008-09 ITA NOS.7457 7458 & 7459/M/2019 ASSESSMENT YEARS: 2012-13 2013-14 & 2014-15 ITA NOS.7466 7467 & 7468/M/2019 ASSESSMENT YEARS: 2009-10 2010-11 & 2011-12 ACIT CENTRAL CIRCLE-1(3) 905 9 TH FLOOR PRATISHTHA BHAVAN OLD CGO BLDG. (ANNEXE) M.K. ROAD MUMBAI - 400020 VS. M/S. KEY TECH G/B SHIV CHAYYA CHS LTD. SIR M.V. ROAD ANDHERI(E) MUMBAI 400 069 PAN: AAIFK9271B (APPELLANT) (R ESPONDENT) ITA NOS.7475 & 7476/M/2019 ASSESSMENT YEARS: 2010-11 & 2012-13 ITA NOS.7494 7495 7496 & 7497/M/2019 ASSESSMENT YEARS: 2009-10 2011-12 2013-14 & 2014- 15 ACIT CENTRAL CIRCLE-1(3) 905 9 TH FLOOR PRATISHTHA BHAVAN OLD CGO BLDG. (ANNEXE) M.K. ROAD MUMBAI - 400020 VS. M/S. NEW INDIA CONSTRUCTION CO. G/B SHIV CHAYYA CHS LTD. SIR M.V. ROAD ANDHERI(E) MUMBAI 400 069 PAN: AAAFN0287E (APPELLANT) (R ESPONDENT) ITA NOS.7477 7478 & 7479/M/2019 ASSESSMENT YEARS: 2010-11 2013-14 & 2014-15 ITA NOS.7491 7492 & 7493/M/2019 ASSESSMENT YEARS: 2009-10 2011-12 & 2012-13 ACIT CENTRAL CIRCLE-1(3) 905 9 TH FLOOR PRATISHTHA BHAVAN OLD CGO BLDG. (ANNEXE) VS. M/S. ADITI CONSTRUCTION G/B SHIV CHAYYA CHS LTD. SIR M.V. ROAD ANDHERI(E) ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 2 M.K. ROAD MUMBAI - 400020 MUMBAI 400 069 PAN: AAIFA1679F (APPELLANT) (R ESPONDENT) ITA NO.7455/M/2019 ASSESSMENT YEAR: 2012-13 ACIT CENTRAL CIRCLE-1(3) 905 9 TH FLOOR PRATISHTHA BHAVAN OLD CGO BLDG. (ANNEXE) M.K. ROAD MUMBAI - 400020 VS. M/S. TRIUMPH BUILDERS PVT. LTD. G/B SHIV CHAYYA CHS LTD. SIR M.V. ROAD ANDHERI(E) MUMBAI 400 069 PAN: AAACT3183A (APPELLANT) (R ESPONDENT) ITA NO.7345/M/2019 ASSESSMENT YEAR: 2010-11 ACIT CENTRAL CIRCLE-1(3) 905 9 TH FLOOR PRATISHTHA BHAVAN OLD CGO BLDG. (ANNEXE) M.K. ROAD MUMBAI - 400020 VS. M/S. CHIRAG CONSTRUCTION CO. PVT. LTD. 201A VERTEX VIKAS SIR M.V. ROAD ANDHERI(E) MUMBAI 400 069 PAN: AABCC6725E (APPELLANT) (R ESPONDENT) ITA NO.7346/M/2019 ASSESSMENT YEAR: 2008-09 ACIT CENTRAL CIRCLE-1(3) 905 9 TH FLOOR PRATISHTHA BHAVAN OLD CGO BLDG. (ANNEXE) M.K. ROAD MUMBAI - 400020 VS. M/S. RUSHABH ENTERPRISES 201A VERTEX VIKAS SIR M.V. ROAD ANDHERI(E) MUMBAI 400 069 PAN: AAIFR2943K (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI MIHIR NANIWADEKAR A.R. & SHRI SUYOG BHAVE A.R. REVENUE BY : SHRI THAVIAN OOMMEN D.R. DATE OF HEARING : 29.07.2021 DATE OF PRONOUNCEMENT : 31.08.2021 ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 3 O R D E R PER RAJESH KUMAR ACCOUNTANT MEMBER: THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY THE REVENUE AGAINST DIFFERENT ORDERS DATED 23.09.2019 & 30.09.2019 & 25.09.2019 OF THE COMMISSIONER OF INCO ME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO ASSESSMENT YEARS 2008-09 2009-10 2010-11 2011-12 2012- 13 2013-14 & 2014-15. FIRST OF ALL WE WOULD TAKE T HE APPEAL IN ITA NO.7456/M/2019 A.Y. 2008-09. ITA NO.7456/M/2019 A.Y. 2008-09 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: '1. WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE REOPENING PROCEEDINGS U/S 147 OF THE I T ACT WERE WITHOUT JURISDICTION WITHOUT APPRECIATING THE FACT THAT NO REGULAR ASSESSMENT WAS DONE IN THE CASE OF THE ASSESSEE U/S 143(3) OF THE I T ACT AND THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ACTT VS RA JESH JHAVERI WAS SQUARELY APPLICABLE IN THE INSTANT CASE? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F RS. 3 83 00 000/- MADE ON ACCOUNT OF BOGUS LOAN WITHOUT APPRECIATING THE FIND INGS OF THE SEARCH AND POST SEARCH PROCEEDINGS IN THE CASE OF BHANWARLAL JAIN G ROUP OF CASES WHEREIN THE GROUP HAS ADMITTED U/S 132(4) OF THE ACT TO HAVE INDULGED IN PROVIDING ACCOMMODATION ENTRIES IN THE NATURE OF UNSECURED LOANS AND THE FI NDINGS OF THE SURVEY AND POST SURVEY 9PROCEEDINGS IN THE CASE OF THE ASSESSEE GRO UP WHEREIN IT WAS CLEARLY ESTABLISHED THAT THE ASSESSEE HAD AVAILED ACCOMMODA TION ENTRY OF BOGUS UNSECURED LOAN FROM THE BHANWARLAL JAIN GROUP WHEN STATEMENT OF SHRI BHANWARLAL JAIN RECORDED U/S 132(4) OF THE ACT CLEARLY FALLS U NDER THE PROVISIONS OF SECTION 115 OF THE INDIA EVIDENCE ACT AND HENCE THE CASE IS HI T BY PROVISION OF SECTION 115 OF THE INDIAN EVIDENCE ACT? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CFT(A) WAS JUSTIFIED IN NOT APPRECIATING THE FA CT THAT THE ASSESSING OFFICER HAD BROUGHT SUFFICIENT EVIDENCE ON RECORD TO ESTABLISH THAT THE IDENTITY GENUINENESS AND CREDITWORTHINESS OF THE LENDERS HAVE REMAINED U NEXPLAINED? 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN NOT UPHOLDING THE ADDIT ION MADE BY THE A. O. EVEN THOUGH IT IS WELL ESTABLISHED THAT THE MODUS OPERAN DI OF OBTAINING ACCOMMODATION ENTRIES OF UNSECURED LOAN HAD TO BE CONSIDERED IN T HE LIGHT OF SURROUNDING ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 4 CIRCUMSTANCES NORMAL COURSE OF HUMAN CONDUCT AND P REPONDERANCE OF PROBABILITY? 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CJT(A) WAS JUSTIFIED IN NOT UPHOLDING THE ADDITIONS MADE BY AO IN VIEW OF THE JUDGMENT BY THE APEX COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-1 VS NRA IRON & STEEL PVT. LTD (ARISING O UT OF SLP(CIVIL) NO. 29855 OF 2018) WHERE IT IS HELD BY THE APEX COURT THAT THE PRACTIC E OF CONVERSION OF UN-ACCOUNTED MONEY MUST BE SUBJECTED TO CAREFUL SCRUTINY UNDER C ASS AND STATUTORY NOTICES WERE DULY ISSUED AND SERVED UPON THE ASSESSEE. 6. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN NOT UPHOLDING THE ADDIT ION MADE BY THE A.O. IN VIEW OF THE JUDGMENT BY THE APEX COURT IN THE CASE OF COMMI SSIONER OF INCOME TAX VS GOLCHA PROPERTIES PUT LTD (IN LIQUIDATIO N) (1996) 136 CTR 222 (RAJ.) UPHOLDING THE GENUINENESS OF TRANSACTION COULD BE D ECIDED ON THE BASIS OF PRIMARY FACTS ON RECORD. THE DEPARTMENT IS NOT REQUIRED TO LEAD A CLINCHING EVIDENCE TO PROVE THAT TRANSACTION IN QUESTION IS BOGUS. 7. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW IN CONSEQUENCE TO THE QUESTION OF LAW AT 1 (SUPRA) TH E LD. QT(A) WAS JUSTIFIED IN NOT UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFIC ER AMOUNTING TO RS.8 44 416/- ON ACCOUNT OF INTEREST PAID ON BOGUS LOAN AND RS. 1 59 200/- ON ACCOUNT OF COMMISSION. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED THE RETURN OF INCOME FOR THE INSTANT ASSESSMENT YEAR BY DECLARING A LOSS OF RS.30 816/- AND THE SAME WAS DULY PROCESSE D U/S 143(1) OF THE ACT. THAT IN THE YEAR 2014 ON ACCOU NT OF INFORMATION RECEIVED FROM THE LD. DDIT MUMBAI THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT AND SUBSEQUENTLY ON 27.03.2014 A NOTICE UNDER SECTION 1 48 OF THE ACT WAS ISSUED WHICH WAS DULY SERVED TO THE ASSESSE E.THAT THE REASONS RECORDED BY THE LD. AO FOR REOPENING THE AS SESSMENT ARE EXTRACTED BELOW FOR THE SAKE OF READY REFERENCE AND CONVENIENCE: 'A SEARCH AND SEIZURE ACTION WAS CARRIED ON 03/10/2 013 IN THE CASE OF BHAWANRLAL JAIN GROUP BY THE DCIT(INV.) MUMBAI. AND INTIMATIO N WAS RECEIVED FROM DIT(INV.)-II MUMBAI CONTAINING DETAILED INFORMATION OF ACCOMMODA TION ENTRIES GIVEN BY THE GROUP COMPANIES CONTROLLED BY SHRI. RAJENDRA JAIN A ND SUBMITTED A LIST OF BENEFICIARIES. THE DATA CONTAINS THE DETAILS OF TR ANSACTIONS OF EACH BENEFICIARIES WITH THEIR NAMES ADDRESS YEAR AMOUNT PAN DETAILS AND NAME OF BOGUS COMPANIES ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 5 CONTROLLED BY BHANWARLAL JAIN AND HIS SON THROUGH W HICH THE BENEFICIARIES HAS TAKEN ACCOMMODATION ENTRIES WHO HAS TAKEN ACCOMMODATION ENTRIES LIKE BOGUS PURCHASES SALES UNSECURED LOANS ETC. FROM GROUP O F COMPANIES CONTROLLED BY SHRI. BHANWARLAL JAIN. ON PERUSAL OF DATA GIVEN BY DIT ( INV.)-II MUMBAI IT IS FOUND THAT YOU HAVE ACQUIRED ENTRY FROM ONE OF COMPANIES CONTR OLLED BY BHANWARLAL JAIN AND HIS SONS. IN ORDER TO VERIFY THE GENUINENESS OF TRANSACTION W HICH IS MORE THAN ONE LAKHS THE ASSESSMENT IS REOPENED BY THE PRIOR APPROVAL OF JOI NT CIT RANGE I MUMBAI. 4. THE ASSESSEE COMPLIED WITH THE NOTICE ISSUED UND ER SECTION 148 BY SUBMITTING THAT THE RETURN FILED ON 18.07 .2008 MAY KINDLY BE TREATED AS FILED IN RESPONSE TO NOTICE UN DER SECTION 148 OF THE ACT AND FURTHER REQUESTED FOR THE COPY OF RE ASONS RECORDED FOR THE REOPENING. THEREAFTER THE LD. AO SUPPLIED COPY OF REASONS RECORDED U/S 148(2) OF THE ACT FOR REOPENI NG ALONG WITH COPIES OF STATEMENT OF SHRI BHANWARLAL JAIN SHRI R ITESH SIROYA EMPLOYEE AND KEY PERSON OF THE BHANWARLAL JAIN GR OUP. IN PARA 4 OF THE ASSESSMENT ORDER THE AO JUSTIFIED THE REOPENING BY OBSERVING THAT DURING THE COURSE OF SEARCH AND POS T SEARCH ENQUIRY IN THE CASE OF BHANWARLAL JAIN GROUP IT WAS FOUND THAT ENTIRE GROUP WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES OF BOGUS LOANS/BOGUS SALES & PURCHASE THROUGH 70 CONCE RNS OPERATED BY THE SAID GROUP. EVEN SHRI BHANWARLAL J AIN HAS ADMITTED IN THE STATEMENT RECORDED UNDER SECTION 13 2(4) ON 11.10.2013 THAT HE IS ENGAGED IN ISSUING ACCOMMODAT ION ENTRIES THROUGH A NETWORK OF 70 CONCERNS MANAGED BY HIM. S IMILAR ADMISSION WAS MADE BY SHRI RITESH SIROYA SHRI ROHI T BIRAWAT SHRI LUNKARANA KHOTARI SHRI BASANT JAIN SHRI SHRE YASH LABCHAND JAIN SHRI MAHAVIR M JAIN AND VARIOUS OTHE R PERSONS CONNECTED WITH THE GROUP. THE AO ALSO NOTED IN PAR A 4.3 THAT AN INTIMATION WAS RECEIVED FROM DDIT (INV.) UNIT-I X(2) MUMBAI VIDE LETTER DATED 10.03.2014 THAT ASSESSEE IS ONE O F THE ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 6 BENEFICIARIES OF ACCOMMODATION ENTRIES OF LOANS TAK EN FROM ROSE IMPEX MERIDIAN GEMS AND ROSE GEMS PVT. LTD. BASED ON THESE SPECIFIC INFORMATION THE AO REOPENED THE ASSESSMEN T OF THE ASSESSEE AFTER OBTAINING APPROVAL AS PER PROVISION OF SECTION 151(2) OF THE ACT. ACCORDING TO THE AO SINCE THE A SSESSEE DID NOT DISCLOSE ALL MATERIAL FACTS FULLY AND TRULY NEC ESSARY FOR THE ASSESSMENT OF INCOME FOR THE INSTANT YEAR IN RESPEC T OF ACCOMMODATION ENTRIES FROM THE VARIOUS CONCERNS AS STATED ABOVE AND THEREFORE THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. THE AO DURING THE COURSE OF ASSESSMEN T PROCEEDINGS CALLED FOR VARIOUS DETAILS AND INFORMA TION FROM THE ASSESSE AS TO THE LOANS FROM THE FOLLOWING PARTIES: - 1. M/S. ROSE IMPEX RS.50 00 000/- 2. M/S. MERIDIAN GEMS RS.1 10 00 000/- 3. M/S. ROSE GEMS P. LTD. RS.1 00 00 000/- 4. M/S. HARSH GEMS RS.50 00 000/- 5. M/S. PANNA GEMS RS.73 00 000/- DURING THE COURSE OF THE PROCEEDINGS THE ASSESSE P ROVIDED THE DETAILS/INFORMATION BEFORE THE AO FROM TIME TO TIM E COMPRISING LOAN CONFIRMATIONS FROM THE LENDERS BANK STATEMENT S OF ALL THE LENDERS BANK STATEMENTS OF THE ASSESSEE ACKNOWLED GEMENT OF ITRS OF THE LENDERS BALANCE SHEET AND PROFIT & LOS S ACCOUNT OF THE LENDERS DETAILS OF INTEREST PAID TDS DEDUCTED TDS RETURNS OF THE ASSESSEE ETC. ALONG WITH DETAILS AS TO NAMES AND ADDRESSES OF THE LENDERS. THE AO HOWEVER WAS NOT SATISFIED WITH THE GENUINENESS OF THE LOAN TRANSACTIONS OF TH E ASSESSEE AND TREATED THE SAME AS SHAM AND NON GENUINE ACCOMM ODATION ENTIRES. THE AO ALSO DISCUSSED IN DETAIL THE MODUS OPERANDI FOLLOWED BY BHANWARLAL JAIN GROUP IN ISSUING ACCOMM ODATION ENTRIES IN PARA 5 & 6 OF THE ASSESSMENT ORDER. FIN ALLY THE AO ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 7 HELD THAT THE LOANS RAISED BY THE ASSESSEE ARE NOT GENUINE AND ACCORDINGLY ADDED A SUM OF RS.3 83 00 000/- TO THE INCOME OF THE ASSESSEE IN THE ASSESSMENT FRAMED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT VIDE ORDER DATED 3 0.03.2015. THE AGGRIEVED ASSESSE CHALLENGED THE ORDER OF AO BE FORE THE LD. CIT(A) ON THE JURISDICTIONAL ISSUE AS WELL AS ON ME RIT. 5. THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSE E ON JURISDICTIONAL ISSUE BY HOLDING THAT THERE WAS NO T ANGIBLE MATERIAL AVAILABLE BEFORE THE LD.A.O TO FORM THE RE ASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. WHILE A LLOWING THE APPEAL OF THE ASSESSE ON LEGAL ISSUE THE LD CIT(A) OBSERVED AND HELD AS UNDER: 7.0 I HAVE CONSIDERED THE FACTS OF THE CASE SUBMI SSIONS OF THE APPELLANT THE OBSERVATIONS OF THE AO CONTAINED IN THE ASSESSMENT ORDER AND THE OTHER MATERIAL ON RECORD ON THIS ISSUE. 7.1 AS PER FACTS ON RECORD THE RETURN OF INCOME F OR THE A.Y. 2008-09 HAD BEEN FILED BY THE APPELLANT U/S. 139 (1) OF THE ACT ON 1 8.07.2008 DECLARING A LOSS OF RS.30 816/-. THE SAID RETURN OF INCOME WAS DULY PRO CESSED U/S. 143(1) OF THE ACT. I HAVE NOTED THAT THE AO HAD DULY RECORDED THE REASON S FOR REOPENING BEFORE ISSUING THE NOTICE U/S. 148 OF THE ACT DATED 2 7.0 3.2014. THE REASONS RECORDED WERE ALSO COMMUNICATED TO THE APPELLANT VIDE LETTER DATED 27 .08.2014 AND THE SAME ARE REPRODUCED HEREUNDER FOR READY REFERENCE:- 'A SEARCH AND SEIZURE ACTION WAS CARRIED ON 03/10/2 013 IN THE CASE OF BHAWANRLAL JAIN GROUP BY THE DCIT(INV.) MUMBAI. AN D INTIMATION WAS RECEIVED FROM DIT(INV.)-II MUMBAI CONTAINING DETAI LED INFORMATION OF ACCOMMODATION ENTRIES GIVEN BY THE GROUP COMPANIES CONTROLLED BY SHRI. RAJENDRA JAIN AND SUBMITTED A LIST OF BENEFICIARIES . THE DATA CONTAINS THE DETAILS OF TRANSACTIONS OF EACH BENEFICIARIES WITH THEIR NAMES ADDRESS YEAR AMOUNT PAN DETAILS AND NAME OF BOGUS COMPANIES CON TROLLED BY BHANWARLAL JAIN AND HIS SON THROUGH WHICH THE BENEF ICIARIES HAS TAKEN ACCOMMODATION ENTRIES WHO HAS TAKEN ACCOMMODATION ENTRIES LIKE BOGUS PURCHASES SALES UNSECURED LOANS ETC. FROM GROUP O F COMPANIES CONTROLLED BY SHRI. BHANWARLAL JAIN. ON PERUSAL OF DATA GIVEN BY DIT (INV.)-II MUMBAI IT IS FOUND THAT YOU HAVE ACQUIRED ENTRY FROM ONE OF C OMPANIES CONTROLLED BY BHANWARLAL JAIN AND HIS SONS. ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 8 IN ORDER TO VERIFY THE GENUINENESS OF TRANSACTION W HICH IS MORE THAN ONE LAKHS THE ASSESSMENT IS REOPENED BY THE PRIOR APPR OVAL OF JOINT CIT RANGE I MUMBAI. 7.2: THE APPELLANT HAD OBJECTED TO THE REOPENING OF ASSESSMENT BY CONTENDING THAT THE ASSESSMENT CANNOT BE REOPENED FOR THE PURPOSE O F 'VERIFICATION BUT CAN ONLY BE REOPENED IF THERE IS REASON TO BELIEVE THAT THER E IS 'ESCAPEMENT OF INCOME. FURTHER THE APPELLANT HAD ASSERTED THAT THE INTIMA TION RECEIVED FROM DIT (INV.) MUMBAI IN THE EASE OF SHRI BHANWARLAL JAIN DOESN'T CONSTITUTE TANGIBLE INFORMATION TO REOPEN THE CASE OF THE APPELLANT. FURTHER THE A PPELLANT HAD STATED THAT IN SUPPORT OF THE GENUINENESS OF LOAN TRANSACTIONS TH E APPELLANT HAD PROVIDED THE FOLLOWING DOCUMENTARY EVIDENCES;- A). COPIES OF LEDGER ACCOUNTS OF ALL PARTIES WH O HAVE GIVEN UNSECURED LOANS TO THE APPELLANT FIRM. B) PHOTOCOPIES OF BANK STATEMENT SHOWING TRANSAC TION WITH THE LENDER. C) LOAN CONFIRMATION FROM THE LENDER. D) TDS RETURNS FILED FOR ALL QUARTERS FOR A.Y. 20 08-09 SHOWING TDS DEDUCTED FROM INTEREST PAID TO THE LENDERS. E) DETAILS OF INTEREST PAID AND TAX DEDUCTED AT SOURCE FOR THE A.Y. 2008- 09. 7.3 THE APPELLANT HAS ALSO CONTENDED THAT THOUGH TH E AO HAS DEALT WITH THE OBJECTIONS RAISED BY THE APPELLANT WHEREIN THE AO HAS NEITHER CONSIDERED THE DOCUMENTS FILED BY THE APPELLANT TO PROVE THE GENUI NENESS OF THE TRANSACTIONS NOR CONDUCTED ANY PRIMA-FACIE ENQUIRY FOR COMING TO AN INDEPENDENT CONCLUSION OF HIS OWN. THE AO HAS ONLY AND MERELY RELIED ON THE INFOR MATION RECEIVED FROM THE DIRECTORATE OF INVESTIGATION MUMBAI AS REGARDS TH E MODUS OPERANDI OF PROVIDING ACCOMMODATION ENTRIES AS WAS REVEALED DURING THE C OURSE OF SEARCH AND SEIZURE ACTION CONDUCTED ON THE BHANWARIAL JAIN GROUP OF CA SES. 7.4 ACCORDING TO THE AO SINCE THE APPELLANT FIRM H AD TAKEN LOANS FROM CONCERNS THAT ARE PART OF THE BHANWARLAL JAIN GROUP SUCH LO ANS ARE BOGUS/MERE ACCOMMODATION ENTRIES. IT HAD ALSO BEEN ASSERTED BY THE APPELLANT THAT M/S HARSH GEMS AND M/S PANNA GEMS ARE NOT PART OF THE BHANWAR LAL JAIN GROUP OF CASES. THUS AS PER THE APPELLANT THE AO HAS PROCEEDED TO REOPEN THE ASSESSMENT BASED ON THE INFORMATION RECEIVED FROM DIT(INV.) MUMBAI MECHANICALLY AND WITHOUT ANY APPLICATION OF MIND. IT IS ALSO A VIEW POINT OF TH E APPELLANT THAT THE REASONS RECORDED BY THE AO ARE VAGUE AND THERE IS NO SPECIF IC INSTANCE OF FAILURE POINTED OUT ON THE PART OF THE APPELLANT FOR ESCAPEMENT OF INCOME. THE APPELLANT HAD POINTED OUT THAT THE REASON RECORDED DOES NOT DEMON STRATE AS TO WHICH IS THE PARTY OR PARTIES FROM WHOM THE APPELLANT HAD TAKEN ACCOMM ODATION ENTRIES/BOGUS LOANS. THE APPELLANT HAD ALSO CONTENDED THAT THERE IS NO NEXUS BETWEEN THE MATERIAL BEFORE THE A0 AND THE FORMATION OF THE REA SON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT ON ACCOUNT OF THE FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE MATERIAL FACTS NECESSARY FOR ASSESSMENT. 7. 5 ON THE PERUSAL OF THE REASONS RECORDED BY THE AO IT IS SEEN THAT THE AO HAS MERELY RELIED ON THE INFORMATION RECEIVED FROM THE DIRECTORATE OF INVESTIGATION -II MUMBAI FOR REOPENING OF THE ASSESSMENT U/S 147 OF T HE ACT. IN THE REASONS FOR ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 9 REOPENING THE AO HAD STATED THAT THE REOPENING IS BASED ON THE DATA GIVEN BY DIRECTORATE OF INVESTIGATION II MUMBAI WHICH REVE ALS THAT THE APPELLANT HAS TAKEN ENTRY FROM ONE OF THE COMPANIES CONTROLLED BY BHANW ARLAL JAIN AND HIS SON. THE APPELLANT HAD CONTENDED THAT IN THE RETURN OF INCOM E FURNISHED U/S. 139(1) ON 18.07.2008 THE APPELLANT HAD CLEARLY DISCLOSED THE NAMES OF THE PARTIES ALONGWITH THE AMOUNTS FROM WHOM LOANS HAD BEEN TAKEN. THUS THERE WAS NO FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE ALL MATERIAL FACT S FULLY AND TRULY NECESSARY FOR ASSESSMENT. 7.6 ACCORDING TO THE APPELLANT THE AO HAD PROPOSED THE REOPENING OF ASSESSMENT U/.S 147 OF THE ACT SO AS TO VERIFY THE 'GENUINENE SS OF TRANSACTIONS'. THE PROVISIONS OF LAW EMPOWER THE AO TO ISSUE NOTICE U/S148 OF THE ACT AFTER THE EXPIRY OF 4 YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR WHEN THER E IS FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN U/S 139 OR IN RESPONSE TO NOTICES ISSUED WIDER SUBSECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FU LLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT YEAR. THE APPELLANT HAD ST ATED THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIA L FACTS TRULY & FULLY WHICH ARE NECESSARY FOR ASSESSMENT. 7.7 THE APPELLANT HAD CONTENDED THAT FOR REOPENING TO BE VALID IT HAS TO BE ON THE BASIS OF 'REASON TO BELIEVE AND NOT 'REASON TO SUSPECT'. MERE SUSPICION HOWEVER STRONG OR PROBABLE IT MAYBE IS NO EFFECTIV E SUBSTITUTE FOR THE LEGAL PROOF REQUIRED TO SUBSTANTIATE A CHARGE WHICH THE LEARNE D AO HAD FAILED TO FURNISH. THERE IS A LONG MENTAL DISTANCE BETWEEN 'MAY BE TRUE AND 'MUST BE TRUE AND THIS BASIC AND GOLDEN RULE HELPS TO MAINTAIN THE VITAL DISTANC E BETWEEN CONJECTURES AND SURE CONCLUSIONS TO BE ARRIVED AT ON THE TOUCHSTONE OF A DISPASSIONATE JUDICIAL ENQUIRY BASED UPON A COMPLETE AND COMPREHENSIVE APPRECIATIO N OF ALL FEATURES OF THE CASE AS WELL AS THE QUALITY AND CREDIBILITY OF EVIDENCE BROUGHT ON RECORD. RELIANCE IS PLACED ON ASHISH BATHAM V. STATE OF MP AIR 2002 SC 3206. 7.8 IT IS A TRITE LAW THAT THE SUSPICION HOWSOEVER STRONG CANNOT PARTAKE THE CHARACTER OF LEGAL EVIDENCE. REFERENCE IN THIS REGA RD IS MADE TO THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF LALCHAND BHAGA T AMBICA RAM VS. CIT [37 ITR 288 (SC)]. IN THIS CONTEXT FURTHER REFERENCE IS MA DE TO JUDGMENT OF HON'BLE SPECIAL BENCH OF MUMBAI TRIBUNAL IN THE CASE OF GTC INDUSTR IES LTD. V. ACIT [164 ITD 1 (MUM)(SB) WHEREIN THE HONBLE TRIBUNAL OBSERVED AS UNDER: ULTIMATELY THE ENTIRE CASE OF REVENUE HINGES UPON THE PRESUMPTION THAT ASSESSEE IS BOUND TO HAVE SOME LARGE SHARE IN SO CA LLED SECRET MONEY IN THE FORM OF PREMIUM AND ITS CIRCULATION. HOWEVER THIS PRESUMPTION OR SUSPICION HOW STRONG IT MAY APPEAR TO BE TRUE BUT NEEDS TO BE CORROBORATED BY SOME EVIDENCE TO ESTABLISH A LINK THAT GTC ACTUALLY HAD SOME KIND OF SHARE IN SUCH SECRET MONEY. IT IS QUITE TRITE SUSPICION HOWSOEVER STRONG MAY BE BUT CANNOT BE THE BASIS OF ADDITION EXCEPT FOR SOME MAT ERIAL EVIDENCE ON RECORD. THE THEORY OF PREPONDERANCE OF PROBABILITY IS APPLIED TO WEIGH THE EVIDENCE OF EITHER SIDE AND DRAW A CONCLUSION IN FA VOUR OF PARTY WHICH HAS MORE FAVOURABLE FACTORS IN HIS SIDE. THE CONCLUSIO N HAS TO BE DRAWN ON THE BASIS OF CERTAIN ADMITTED FACTS AND MATERIAL AND NO T ON THE BASIS OF PRESUMPTION OF FACTS THAT MIGHT GO AGAINST THE ASSE SSEE. ONCE NOTHING HAS ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 10 BEEN PROVED AGAINST THE ASSESSEE WITH THE AID OF AN Y DIRECT MATERIAL ESPECIALLY WHEN VARIOUS ROUND OF INVESTIGATION HAVE BEEN CARRIED OUT THEN NOTHING CAN BE IMPLICATED AGAINST THE ASSESSEE'. 7.9 FOR THE PROPOSITION THAT WHILE ISSUING NOTICE U /S. 148 OF THE ACT THE AO HAS ACTED MECHANICALLY ON THE INFORMATION SUPPLIED BY INVESTIGATION WING AND HENCE THE REOPENING IS BAD IN LAW RELIANCE HA D BEEN PLACED BY THE APPELLANT ON THE FOLLOWING JUDICIAL PRECEDENTS: I. SIGNATURE HOTELS (P) LTD. VS. INCOME TAX OFFICER & ANR 338 ITR 0051 (DELHI HIGH COURT) REASSESSMENTREASON TO BELIEVEINFORMATION RECEIVED FROM DIRECTOR OF IT (INV) VIS-A-VIS ACCOMMODATION ENTRYFOR REOPENING. AN ASSESSMENT THE AO MUST HAVE 'REASON TO BELIEVE' THAT CERTAIN INCOME C HARGEABLE TA TAX HAS ESCAPED ASSESSMENT AND SUCH REASONS ARE REQUIRED TO BE RECORDED IN WRITING BY THE AOSUFFICIENCY OF REASONS IS NOT A MATTER WH ICH IS TO BE DECIDED BY THE WRIT COURT BUT EXISTENCE OF BELIEF CAN BE SUBJE CT-MATTER OF SCRUTINY NOTICE UNDER S. 148 CAN BE QUASHED IF THE BELIEF IS NOT BONA FIDE OR ONE BASED ON VAGUE IRRELEVANT AND NON-SPECIFIC INFORMA TIONBASIS OF THE BELIEF SHOULD BE DISCERNIBLE FROM THE MATERIAL ON RECORD W HICH WAS AVAILABLE WITH THE AO WHEN HE RECORDED THE REASONTHERE SHOULD BE A LINK BETWEEN THE REASONS AND THE MATERIAL AVAILABLE WITH THE AOIN T HE INSTANT CASE THE FIRST SENTENCE OF THE REASONS RECORDED BY THE AO STATES T HAT INFORMATION HAS BEEN RECEIVED FROM DIRECTOR OF IT (INV.) THAT ASSES SEE HAS INTRODUCED UNACCOUNTED MONEY AMOUNTING TO RS. 5 LACS DURING TH E RELEVANT YEAR AS PER THE DETAILS GIVEN IN THE ANNEXURESAID ANNEXURE MEN TIONS A CHEQUE RECEIVED BY ASSESSEE FROM SS LTD. AND THE ACCOUNT N UMBERLAST SENTENCE STATES THAT AS PER THE INFORMATION THE AMOUNT RECEI VED WAS AN ACCOMMODATION ENTRYAFORESAID INFORMATION AND THE R EASONS ARE EXTREMELY SCANTY AND VAGUE AND DO NOT SATISFY THE R EQUIREMENTS OF S. 147 THERE IS NO REFERENCE TO ANY DOCUMENT OR STATEMENT EXCEPT THE ANNEXURESAID ANNEXURE CANNOT BE REGARDED AS A MATE RIAL OR EVIDENCE THAT PRIMA FACIE SHOWS OR ESTABLISHES ESCAPEMENT OF INCOME- FURTHER IT IS APPARENT THAT THE AO DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS OF THE INFORMATIONHE ACCEPTED TH E INFORMATION IN A MECHANICAL MANNERCIT ALSO ACTED ON THE SAME BASIS BY MECHANICALLY GIVING HIS APPROVALCOMPANY SS LTD. HAD APPLIED FOR AND WAS ALLOTTED SHARES IN THE ASSESSEE COMPANY ON PAYMENT OF RS. 5 LACS BY CHEQUE SS LTD. IS AN INCORPORATED COMPANY AND IT HAS BEEN ALLOTTED PAN FACTS ON RECORD DO NOT SHOW THAT SS LTD. IS A NON-EXISTING AND A FI CTITIOUS ENTITYPROCEEDING UNDER S 147 QUASHED. II. COMMISSIONER OF INCOME TAX VS. SFIL STOCK BROKI NG LTD. 325 ITR 0285 (DELHI HIGH COURT) THE FIRST SENTENCE OF THE SO-CALLED REASONS RECORDE D BY THE AO IS MERE INFORMATION RECEIVED FROM THE DY. DIRECTOR OF IT (I NV.) THE SECOND SENTENCE IS A DIRECTION GIVEN BY THE VERY SAME DY. DIRECTOR TO ISSUE A NOTICE UNDER S. 148 AND THE THIRD SENTENCE AGAIN COMPRISES OF A DIR ECTION GIVEN BY THE ADDL. ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 11 CIT TO INITIATE PROCEEDINGS UNDER S. 148 IN RESPECT OF CASES PERTAINING TO THE RELEVANT WARD. THESE THREE SENTENCE ARE FOLLOWED BY THE FOLLOWING SENTENCE WHICH IS THE CONCLUDING PORTION OF THE SO -CALLED REASONS: 'THUS I HAVE SUFFICIENT INFORMATION IN MY POSSESSION TA ISS UE NOTICE UNDER S. 148 IN THE CASE OF M/S SFIL STOCK BROKING LTD. ON THE BASI S OF REASONS RECORDED AS ABOVE. FROM THE ABOVE IT IS CLEAR THAT THE AO REF ERRED TO THE INFORMATION AND THE TWO DIRECTIONS AS REASONS ON THE BASIS OF WHICH HE WAS PROCEEDING TO ISSUE NOTICE UNDER S. 148. THESE CANNOT BE THE R EASONS FOR PROCEEDING UNDER S. 147/148. THE FIRST PART IS ONLY AN INFORMA TION AND THE SECOND AND THE THIRD PARTS OF THE BEGINNING PARA OF THE SO-CAL LED REASONS ARE MERE DIRECTIONS. FROM THE SO-CALLED REASONS IT IS NOT A T ALL DISCERNIBLE AS TO WHETHER THE AO HAD APPLIED HIS MIND TO THE INFORMAT ION AND INDEPENDENTLY ARRIVED AT A BELIEF THAT ON THE BASIS OF THE MATER IAL WHICH HE HAD BEFORE HIM INCOME HAD ESCAPED ASSESSMENT. CONSEQUENTLY T HE TRIBUNAL HAS ARRIVED AT THE CORRECT CONCLUSION ON FACTS. THERE I S NO SUBSTANTIAL QUESTION OF LAW WHICH ARISES FOR CONSIDERATION.ASSTT. CIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. (2007) 210 CTR (SC) 30 : (2007) 29 1 ITR 500 (SC) RELIED ON. III. SARTHAK SECURITIES CO. (P) LTD. VS. INCOME TAX OFFICER 329 ITR 0110 (DELHI HIGH COURT) REASSESSMENTREASON TO BELIEVEABSENCE OF MATERIAL OR RATIONAL BELIEF AO WAS MADE AWARE OF THE SITUATION BY THE INVESTIGA TION WING AND THERE IS NO MENTION THAT THE COMPANIES WHO HAD INVESTED SHAR ES IN PETITIONER COMPANY WERE FICTITIOUSWHAT IS MENTIONED IS THAT T HESE COMPANIES WERE USED AS CONDUITSASSESSEE IN HIS OBJECTIONS HAD CLE ARLY STATED THAT THE COMPANIES HAD BANK ACCOUNTS AND PAYMENTS WERE MADE TO THE ASSESSEE COMPANY THROUGH BANKING CHANNELIDENTITY OF COMPANI ES WAS NOT DISPUTEDIT WOULD NOT BE APPROPRIATE TO REQUIRE THE ASSESSE TO GO THROUGH THE ENTIRE GAMUT OF REASSESSMENT PROCEEDINGS NEIT HER THE REASONS IN THE INITIAL NOTICE NOR THE COMMUNICATION PROVIDING REAS ONS REMOTELY INDICATE INDEPENDENT APPLICATION OF MINA BY AONOTICE UNDER S. 148 QUASHED. 7.10 IN THIS CONTEXT IT IS PERTINENT TO ADVERT TO THE JUDGMENT OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF M/S RUSHABH ENT ERPRISES WHICH IS A GROUP CONCERN OF THE APPELLANT. M/S RUSHABH ENTERPR ISES HAD APPROACHED THE HON'BLE BOMBAY HIGH COURT THROUGH A WRIT PETITI ON NO. 167 OF 2015 CHALLENGING THE NOTICE ISSUED BY THE AO U/S 148 OF THE ACT ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR GENERAL OF I NCOME TAX (INV.) THAT THE ASSESSEE HAD TAKEN UNSECURED LOANS BY WAY ACCOMMODA TION ENTRIES. AFTER CONSIDERING THE ENTIRE GAMUT OF FACTS AND CIRCUMSTA NCES AND THE POSITION IN LAW THE HON'BLE HIGH COURT HAD HELD THAT THE PROPO SAL FOR REOPENING LACKS JURISDICTION. ACCORDINGLY THE HONBLE BOMBAY HIGH COURT HAD QUASHED THE NOTICE ISSUED U/S 148 OF THE ACT ISSUED BY THE AO. THE RELEVANT PARAGRAPHS FROM THE SAID JUDGMENT ARE REPRODUCED BELOW FOR RE ADY REFERENCE: 8. ON BEHALF OF THE REVENUE MRS. BHARUCHA SUBMITTE D THAT ALL THE FOUR PARTIES CONCERNED HAS FACILITATED ACCOMMODATIO N ENTRIES. THEY WERE NOT GENUINE AND BONAFIDE LOANS ADVANCED TO THE PETITIONER. SHE HAS SUPPORTED THE ORDER OF THE ASSESSING OFFICE R. THE ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 12 COMMISSIONER OF INCOME TAX WHILE REJECTING THE OBJE CTIONS ON 19TH DECEMBER 2012 ONCE AGAIN REITERATED THAT THE PETIT IONER HAS ROUTED UNACCOUNTED CASH THROUGH BOGUS LOANS AND HAS BEEN F OUND IN THE BOOKS OF ACCOUNT OF THE PETITIONER. ACCORDING TO HE R THE REVENUE HAS RECEIVED INFORMATION FROM THE DIRECTOR GENERAL OF I NCOME TAX(INV) THAT THE ASSESSEE HAS TAKEN UNSECURED LOANS FROM TH E ABOVE PARTIES BY WAY OF UNACCOUNTED CASH/ACCOMMODATION ENTRIES. W E ARE UNABLE TO AGREE SINCE THE PETITIONER HAS CLEARLY STATED TH AT ALL THE PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES WHICH WERE ENCAS HED IN THE BANK ACCOUNT OF THE PETITIONER IN THE REGULAR COURS E OF BUSINESS WE FIND THAT THE PETITIONER HAS ALSO PAID INTEREST ON THIS LOANS AFTER DEDUCTION OF TAX AT SOURCE AND TDS RETURNS ARE ALSO ACCORDINGLY FILED. THERE IS NO DISPUTE IN REGARD TO THE ABOVE. WE FIND NOTHING TO SUPPORT THE SAID CONTENTIONS OF THE REVENUE. THE RE VENUES CONTENTION IN THE AFFIDAVIT IN REPLY NO MERIT. ON T HE OTHER HAND THE LOANS APPEAR TO BE TAKEN IN THE REGULAR COURSE OF B USINESS AND WERE FOUND AMONGST THE 45 MEMBERS IN RESPECT OF WHICH AL L PARTICULARS HAVE ALREADY BEEN FURNISHED BY THE ASSESSEE TO THE ASSESSING OFFICER. THE FACT REMAINS THAT THE ASSESSING OFFIC ER HAD POWER TO REOPEN THE ASSESSMENT PROVIDED THERE WAS SOME TANGI BLE MATERIAL ON THE BASIS OF WHICH HE HAS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX CHAD ESCAPED ASSESSMENT. 9. WE FIND NO SUCH REASONS FOR THE ASSESSING OFFICE R OR THE REVENUE TO COME TO A CONCLUSION THAT INCOME HAD ESCAPED ASS ESSMENT. ALL THE COMMUNICATION AND EVIDENCE PROVIDED BY THE PETI TIONER TO THE REVENUE AUTHORITIES DISCLOSED THAT THE LOANS WERE B ONAFIDE TAKEN IN THE REGULAR COURSE OF BUSINESS THROUGH ACCOUNT PAYE E CHEQUES. IN THE CIRCUMSTANCES THE PROPOSED REOPENING IN OUR VI EW LACKS JUSTIFICATION AND THE IMPUGNED NOTICE DESERVES TO B E QUASHED HAD SET ASIDE SO ALSO THE IMPUGNED ORDER DATED 19TH DE CEMBER 2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTING THE OBJECTIONS DESERVES TO BE QUASHED AND SET ASIDE. HE NCE WE PASS THE FOLLOWING ORDER. 7.11 I HAVE NOTED THAT THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AT HAND ARE EXACTLY SIMILAR TO THAT OF M/S RUSHABH ENTERPRISES WHICH IS A GROUP CONCERN OF THE APPELLANT. FURTHER THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE DEPARTMENT HAD OBTAINED ANY STAY AGAINST THE SAID ORDER OF THE HON 'BLE BOMBAY HIGH COURT AND HENCE THE SAME NEEDS TO BE FULLY FOLLOWED IN LETTE R AND SPIRIT. SINCE THE UNDERSIGNED IS LEGALLY BOUND BY THE DECISION OF THE HON'BLE BOMBAY HIGH COURT ON THIS ISSUE THE GROUND NO. 1 & 2 OF THE PRESENT APP EAL FOR AY. 2008-09 ARE ALLOWED IN FAVOUR OF THE APPELLANT BEING FULLY COVERED BY THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT. 6. AGGRIEVED BY THE APPELLATE ORDER PASSED BY THE L D. CIT(A) THE REVENUE PREFERRED AN APPEAL BEFORE THIS TRIBUNAL AN D VIDE GROUND NO.1 OF THE APPEAL THE DEPARTMENT HAS CHALLE NGED THE ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 13 IMPUGNED ORDER PASSED BY THE LD. CIT(A) WHEREBY TH E LD. CIT(A) HAS HELD THE REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT TO BE BAD IN LAW AND FACTS AS THE RE-OPENING WA S DONE WITHOUT HAVING ANY VALID JURISDICTION. THE DR FUR THER STATED THAT THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE A SSESSE ON THIS LEGAL AND JURISDICTIONAL ISSUE BY IGNORING THE FACT THAT NO REGULAR ASSESSMENT WAS DONE IN THE CASE OF THE ASSESSEE UND ER SECTION 143(3) OF THE ACT. THE LD. D.R. SUBMITTED BEFORE THE BENCH THAT THE REOPENING OF THE ASSESSMENT HAS WRONGLY BE EN HELD TO BE INVALID BY THE LD. CIT(A) BY OVERLOOKING THE FAC TS THAT A SPECIFIC INFORMATION HAS BEEN RECEIVED BY AO FROM D DIT (INV.) UNIT-IX(2) TO THE EFFECT THAT THE ASSESSEE IS A B ENEFICIARY OF BOGUS ACCOMMODATION ENTRIES OF LOANS FROM BHANWARLA L JAIN GROUP. THE LD. D.R. FURTHER ALSO SUBMITTED THAT TH E SAID FACT HAS BEEN BROUGHT TO LIGHT DURING A SEARCH CONDUCTED ON BHANWARLAL JAIN GROUP ON 03.10.2013 AND THUS THE RE -OPENING WAS BASED UPON SUBSTANTIVE MATERIAL. THE LD. D.R. SUBMITTED THAT DURING THE COURSE OF SEARCH ON SHRI BHANWARLA L JAIN SEVERAL INCRIMINATING DOCUMENTS WERE SEIZED AND STA TEMENTS UNDER SECTION 132(4) WERE ALSO RECORDED OF SHRI BHA NWARLAL JAIN AND VARIOUS OTHER KEY PERSONS WHO WERE MANAGING THE SE CONCERNS AND ALL THESE PERSONS ADMITTED IN THEIR RE SPECTIVE STATEMENTS THAT THE ENTIRE GROUP WAS ENGAGED IN PRO VIDING ACCOMMODATION ENTRIES FOR BOGUS LOANS BOGUS SALE & PURCHASE ETC. THE LD. D.R. RE-ITERATED THAT THE DDIT (INV.) UNIT-IX(2) MUMBAI VIDE LETTER DATED 18.03.2014 INTIMATED THE A O THAT ASSESSEE IS A BENEFICIARY OF HAWALA LOAN ENTRIES FR OM THE CONCERNS RELATED TO BHANWARLAL JAIN GROUP. THE LD. D.R ALSO SUBMITTED THAT IN VIEW OF THE FACTS AND CIRCUMSTANC ES OF THE ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 14 CASE THE FINDINGS OF THE LD. CIT(A) THAT THERE W AS NO TANGIBLE MATERIAL BEFORE THE LD.A.O TO FORM REASONS TO BELIE VE IS FALLACIOUS AND WRONG AND DESERVED TO BE QUASHED T HE LD. D.R. ALSO REFERRED TO THE ASSESSMENT ORDER AND SPECIFICA LLY POINTED OUT THE VERIFICATION/INVESTIGATION CARRIED OUT BY THE A.O DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH PROVED THAT THESE WERE ACCOMMODATION ENTRIES AND WERE NOT GENUINE LO ANS. THE LD. D.R. ALSO POINTED OUT MODUS OPERANDI FOLLOWED B Y THESE ENTITIES IN PROVIDING ACCOMMODATION ENTRIES. THE L D. D.R. SUBMITTED THAT IT IS NOT NECESSARY TO ESTABLISH THE AMOUNT OF CONCEALMENT AT THE STAGE OF RECORDING OF REASONS BU T IT IS SUFFICIENT TO FORM A PRIMA FACIE BELIEF THAT INCOM E HAS ESCAPED ASSESSMENT AND THUS PRAYED BEFORE THE BENCH THAT OR DER OF LD. CIT(A) MAY BE REVERSED ON THIS ISSUE. THE LD DR AR GUED THAT WHILE ALLOWING THE APPEAL OF THE ASSESSE THE LD CIT(A) RELIED ON THE DECISION OF BOMBAY HIGH COURT IN RUSHABH ENTERPRISES VS ACIT WP 167 OF 2015 WHICH IS A SISTER CONCERN OF THE PRESENT RESPONDENT ASSESSE AND ALSO ONE OF THE RESPONDENTS IN THESE BUNCH OF APPEALS BEFORE THE BENCH. THE LD DR SUBMITTED THAT THE SAID DECISION IS DISTINGUISHABLE ON FACTS AS THERE WAS SCRUTINY ASSESSMENT UNDER 143(3) OF THE ACT IN THAT CASE W HEREAS IN SOME OF THE PRESENT CASE THERE WAS NO SCRUTINY ASS ESSMENT FRAMED UNDER S 143(3) OF THE ACT AND THE RETURN WE RE PROCESSED U/S 143(1) OF THE ACT. 7. ON THE OTHER HAND THE LD. A.R. STRONGLY RELIED ON THE ORDER OF LD. CIT(A) BY SUBMITTING THAT LD. CIT(A) HAS RIG HTLY HELD THAT THERE WERE A LACK OF TANGIBLE MATERIAL FOR FORMING REASON TO BELIEVE QUA THE ESCAPEMENT OF INCOME. THE LD. A.R. WHILE REFERRING TO THE REASON RECORDED UNDER SECTION 148( 2) OF THE ACT ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 15 DATED 24.08.2014 SUBMITTED THAT A BARE READING OF THE SAID REASONS MAKES IT ABUNDANTLY CLEAR THAT AO SOUGHT TO VERIFY THE GENUINENESS OF THE TRANSACTIONS MADE WITH BHANWARLA L JAIN GROUP BY REOPENING THE ASSESSMENT. THE LD. A.R. SU BMITTED THAT IN OTHER WORDS THE REOPENING WAS MADE JUST FOR THE PURPOSE OF VERIFICATION WHICH IS NOT PERMISSIBLE UNDER THE ACT AND THUS STRONGLY SUPPORTED THE ORDER OF LD. CIT(A) ON THIS ISSUE. THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE THE BENCH THAT REO PENING OF ASSESSMENT PROCEEDINGS OF THE ASSESSEE WAS DONE WIT HOUT VALID AND LAWFUL JURISDICTION BY THE AO AND THEREFORE THE ASSESSMENT PROCEEDINGS AS WELL AS THE CONSEQUENT ASSESSMENT FR AMED BY THE AO ARE INVALID VOID AB-INITIO AND BAD IN LAW. THE LD. A.R. VEHEMENTLY ARGUED BEFORE THE BENCH THAT THE ASSESSM ENT CAN NOT BE REOPENED JUST FOR MAKING VERIFICATION OF FAC TS AND INFORMATION WHICH HAVE BEEN RECEIVED BY THE AO. TH E LD. A.R. CONTENDED THAT THE AO IS REQUIRED TO FORM A BELIEF ON THE BASIS OF SAID INFORMATION RECEIVED THAT INCOME OF THE ASS ESSEE HAS ESCAPED ASSESSMENT FAILING WHICH THE AO HAS NO JURI SDICTION TO INITIATE THE PROCEEDINGS UNDER SECTION 147 READ WI TH SECTION 148 OF THE ACT. THE LD. A.R. ARGUED THAT THE AO IS REQUIRED TO FORM A REASONABLE BELIEF THAT THAT INCOME CHARGEABL E TO TAX HAS ESCAPED ASSESSMENT ON THE BASIS OF INFORMATION AVAI LABLE WITH HIM WHICH IS MISSING IN THE INSTANT CASE AS IS APPA RENT FROM THE REASONS REPRODUCED ABOVE. THE AO HAS RESORTED TO TH E PROVISIONS OF SECTION 147 OF THE ACT TO MERELY VERI FY THE INFORMATION RECEIVED FROM DDIT(INV) MUMBAI AND TH EREFORE THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT FOR VERI FICATION OF INFORMATION RECEIVED IS INVALID AND UNSUSTAINABLE IN THE EYES OF LAW. THE LD. A.R. ARGUED THAT AO CAN NOT BE ALLOWE D TO REOPEN ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 16 AN ASSESSMENT UNDER SECTION 147 OF THE ACT TO UNDER TAKE FISHING OR ROBBING ENQUIRY OR SEEKING TO VERIFY CLAIMS AS I F IT WERE A SCRUTINY ASSESSMENT. THEREFORE THE LD. A.R. SUBMI TTED THAT IF VERIFICATION IS PROPOSED IN THE REASONS RECORDED T HE SAME CAN NOT BE A SUBSTITUTE FOR REASON TO BELIEVE WHICH EMP OWERS THE AO TO REOPEN THE ASSESSMENT ON THE GROUND THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE LD. A.R. THEREF ORE ARGUED BEFORE THE BENCH THAT THERE IS NO FORMATION OF BELI EF OR FINDING BY THE AO THAT INCOME HAS ESCAPED ASSESSMENT AND THERE FORE THE PROCEEDINGS U/S 147 OF THE ACT AS WELL AS THE CONSE QUENT ASSESSMENT ORDER FRAMED U/S 143(3) R.W.S. 147 OF TH E ACT ARE BAD IN LAW AND WAS RIGHTLY HELD TO BE INVALID. IN DEFENCE OF HIS ARGUMENTS THE LD. A.R. RELIED ON A SERIES OF DECIS IONS AS UNDER: 1. PCIT V MANZIL DINESHKUMAR SHAH (406 ITR 326 )(GUJ) 2. SLP DISMISSED BY THE HON'BLE SUPREME COURT AGAINST THE JUDGMENT OF THE HON'BLE GUJRAT HIGH COURT IN THE CASE OF PCIT V MANZIL DINESHKUMAR SHAH 3. INDUCTOTHERAN (INDIA) P. LTD. V DCIT (356 ITR 481)( GUJ) 4. CHHUGAMAL RAJPAL V S P CHALIHA AND ORS. LTD. (416 I TR 435)(SC) 5. NIVI TRADING LTD V UNION OF INDIA (375 ITR 308)(BOM ) 6. CIT V MANIBEN LALJI SHAH (283 ITR 453)(BOM) 7. CIT V BATRA BHATIA COMPANY (321 ITR 526)(BOM) 8. THE LD. A.R. THEREFORE PRAYED THAT IN VIEW OF THE RATIO LAID DOWN BY THE APEX COURT AND VARIOUS HIGH COURTS IN T HE JUDGMENTS MENTIONED SUPRA THE ASSUMPTION OF JURISD ICTION UNDER SECTION 147 OF THE ACT FOR VERIFICATION OF FA CTS/INFORMATION RECEIVED FROM DIT(INV.) MUMBAI IS BAD IN LAW AND SO IS THE CONSEQUENT ASSESSMENT FRAMED U/S 143(3) R.W.S. 147 OF THE ACT. ACCORDINGLY THE LD. A.R. PRAYED THAT THE ORDER OF LD. CIT(A) MAY KINDLY BE AFFIRMED AND UPHELD. ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 17 9. THE LD. A.R. FURTHER ARGUED THAT IN ANY CASE THERE IS NO TANGIBLE MATERIAL FORMING THE BASIS OF REASONS TO B ELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. THE ASSESSMENT WAS S OUGHT TO BE RE-OPENED MERELY ON THE BASIS OF INFORMATION REC EIVED FROM THE INVESTIGATION WING REGARDING THE PURPORTED PRAC TICE OF THE BHANWARLAL JAIN GROUP IN PROVIDING ACCOMMODATION EN TRIES. IT IS PERTINENT TO NOTE THAT VIDE THE REMAND REPORT DATED 13.3.2018 THE ASSESSING OFFICER HAS ADMITTED THAT NO INCRIMIN ATING EVIDENCE/INFORMATION SPECIFICALLY PERTAINING TO THE RESPONDENT- ASSESSEES WERE FOUND DURING THE COURSE OF THE SEARC H OPERATION ON THE BHANWARLAL JAIN GROUP. THE LD AR ARGUED THAT THE RELIANCE PLACED ON THE STATEMENTS OF SHRI BHANWARLA L JAIN AND HIS ASSOCIATES FOR REOPENING ASSESSMENT IS ALSO MIS PLACED IN VIEW OF THE SUBSEQUENT RETRACTION OF SAID STATEMENT S. FURTHER DURING THE COURSE OF THE REASSESSMENT PROCEEDINGS THE RESPONDENT-ASSESSEE HAS PROVED THE GENUINENESS OF T HE TRANSACTIONS IN PARTICULAR EXHIBITING THAT ALL THE TRANSACTIONS HAVE BEEN CARRIED THROUGH PROPER BANKING CHANNELS AND BY ACCOUNT PAYEE CHEQUES. THE LD AR IN DEFENSE OF HIS ARGUMENTS RELIED HEAVILY ON THE DECISION OF HON'BLE BOMBAY H IGH COURT IN THE CASE OF M/S RUSHABH ENTERPRISES VS ACIT [WP 167/2015] A COPY OF WHICH IS FILED AT PAGE 1 OF THE PB WHICH IS A GROUP CONCERN OF THE RESPONDENT ASSESSEE HEREIN AND ALSO A RESPONDENT IN ONE OF THE APPEALS IN THIS GROUP HAS QUASHED THE NOTICE U/S 148 OF THE ACT AND HELD IN THE ASSESSEE' S FAVOUR. THE LD AR SUBMITTED THAT THE FACTS OF THE CASE ARE IDE NTICAL AS THE SAID REOPENING WAS ALSO PURPORTEDLY BASED ON THE ST ATEMENTS MADE BY THE BHANWARLAL JAIN GROUP. THE LD AR WHILE REFERRING TO THE REMAND REPORT DATED MARCH 13 2018 SOUGHT BY TH E LD. ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 18 CIT(A) SUBMITTED THAT IT QUITE CLEAR THAT NO APPE AL HAS BEEN FILED AGAINST THE JUDGMENT IN THE CASE OF RUSHABH ENTERPRISES VS ACIT (SUPRA) AND CONSEQUENTLY NO STAY HAS BEEN GRANTED A GAINST THE SAID JUDGMENT. THE LD AR ARGUED THAT THUS THE LD. CIT(A) HAS RIGHTLY HELD THAT THE PRESENT ISSUE IS SQUARELY COVERED BY THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN RUSHABH ENTERPRISES VS ACIT AND ACCORDINGLY HELD THE REOPENING IS LIABLE TO BE HELD AS INVALID. 10. ON THE ARGUMENTS OF LD DR THAT THE JUDGMENT OF THE BOMBAY HIGH COURT IN RUSHABH ENTERPRISES VS ACIT (SUPRA) IS DISTINGUISHABLE ON FACTS ON THE GROUND THAT IN RUSHABH ENTERPRISES THERE WAS SCRUTINY ASSESSMENT UNDER 14 3(3) OF THE ACT WHILE IN SOME OF THE PRESENT CASES BEFORE THE BENCH THERE WAS NO SCRUTINY ASSESSMENT COMPLETED UNDER S 143(3) OF THE ACT. THE LD AR REBUTTING THE ARGUMENTS OF THE LD DR SUBMITTED THAT THE HON'BLE BOMBAY HIGH COURT HAS NOT BASED IT S JUDGMENT ON THE NON-COMPLIANCE WITH PROVISO TO SECTION 147 ( APPLICABLE TO CASES OF REOPENING BEYOND 4 YEARS WHEN THERE HAS BE EN A SCRUTINY ASSESSMENT EARLIER). THE JUDGMENT IS NOT S IMPLY BASED ON THE REASONING THAT THE ASSESSEE IN THAT CASE HAD FULLY AND TRULY DISCLOSED THE RELEVANT MATERIALS AND HENCE R EOPENING BEYOND FOUR YEARS IS BARRED. INSTEAD THE JUDGMENT PROCEEDS ON A FAR MORE FUNDAMENTAL ASPECT OF TOTAL LACK OF JURI SDICTION TO REOPEN. THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COU RT PROCEEDS ON THE BASIS OF LACK OF TANGIBLE MATERIAL AND ON THE BASIS OF LACK OF 'REASON TO BELIEVE' AND THESE JUR ISDICTIONAL REQUIREMENTS APPLY TO ALL CASES OF REOPENING EVEN W HEN THERE IS NO SCRUTINY ASSESSMENT EARLIER. ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 19 11. AS REGARDS THE RELIANCE SOUGHT TO BE PLACED BY THE APPELLANT REVENUE ON THE DECISION IN ACIT V. RAJESH JHAVERI STOCK BROKERS PVT. LTD. [(2007) 29 ITR 500 (SC)] TH E LD AR SUBMITTED THAT THE HON'BLE BOMBAY HIGH COURT IN ANKITA A. CHOKSEY V. ITO [(2019) 411 ITR 207 (BOM)] (PG. 9 OF THE COMPILATION OF CASE LAW) TAKING INTO ACCOUNT THE D ECISION IN RAJESH JHAVERI HAS CATEGORICALLY HELD THAT IRRESPECTIVE OF WHETHER THE RETURN OF INCOME WAS PROCESSED BY INTIM ATION UNDER SECTION 143(1) OR BY SCRUTINY ASSESSMENT UNDER SECT ION 143(3) OF THE ACT THE ASSESSING OFFICER HAS NO JURISDICTION TO ISSUE A REOPENING NOTICE WITHOUT SATISFACTION OF THE CONDIT ION PRECEDENT OF HAVING THE 'REASON TO BELIEVE' THAT INCOME HAS E SCAPED ASSESSMENT. IN THIS REGARD RELIANCE IS ALSO PLACED ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN CIT V. ORIENT CRAFT LTD. [(2013) 354 ITR 536 (DEL)]. 12 . THE LD. AR FINALLY PRAYED BEFORE THE BENCH THAT KEE PING IN VIEW THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN RUSHABH ENTERPRISES (WHICH ADMITTEDLY IS BASED ON SIMILAR UNDERLYING FACTS AND PERTAINING TO THE VERY SAME GR OUP) THE REOPENING OF THE CASE MAY KINDLY BE DECLARED TO BE INVALID AND DONE WHOLLY WITHOUT JURISDICTION AND THE ORDER OF T HE LD CIT(A) MAY KINDLY BE UPHELD. 13. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD INCLUDING THE REASONS RECORDED UNDER SECTION 148(2) OF THE ACT WE NOTE THAT THE CASE HAS BEEN REOPENED BY THE AO IN ORDER TO VERIFY THE GENUINENESS OF THE LOAN TRANSAC TIONS OF THE ASSESSEE WITH BHANWARLAL JAIN GROUP. THE SAID REOP ENING WAS DONE FOLLOWING RECEIPT OF INFORMATION FROM DDIT (IN V.) UNIT-IX(2) ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 20 MUMBAI VIDE LETTER DATED 18.03.2014 VIDE WHICH THE AO WAS INFORMED THAT THE ASSESSEE IS A BENEFICIARY OF HAWA LA LOAN TRANSACTIONS TAKEN FROM BHANWARLAL JAIN GROUP AND F ROM VARIOUS ENTITIES AS DETAILED HEREINABOVE. FOR THE SAKE OF CONVENIENCE THE REASONS RECORDED AS UNDER: 'A SEARCH AND SEIZURE ACTION WAS CARRIED ON 03/10/2 013 IN THE CASE OF BHAWANRLAL JAIN GROUP BY THE DCIT(INV.) MUMBAI. AN D INTIMATION WAS RECEIVED FROM DIT(INV.)-II MUMBAI CONTAINING DETAI LED INFORMATION OF ACCOMMODATION ENTRIES GIVEN BY THE GROUP COMPANIES CONTROLLED BY SHRI. RAJENDRA JAIN AND SUBMITTED A LIST OF BENEFICIARIES . THE DATA CONTAINS THE DETAILS OF TRANSACTIONS OF EACH BENEFICIARIES WITH THEIR NAMES ADDRESS YEAR AMOUNT PAN DETAILS AND NAME OF BOGUS COMPANIES CON TROLLED BY BHANWARLAL JAIN AND HIS SON THROUGH WHICH THE BENEF ICIARIES HAS TAKEN ACCOMMODATION ENTRIES WHO HAS TAKEN ACCOMMODATION ENTRIES LIKE BOGUS PURCHASES SALES UNSECURED LOANS ETC. FROM GROUP O F COMPANIES CONTROLLED BY SHRI. BHANWARLAL JAIN. ON PERUSAL OF DATA GIVEN BY DIT (INV.)-II MUMBAI IT IS FOUND THAT YOU HAVE ACQUIRED ENTRY FROM ONE OF C OMPANIES CONTROLLED BY BHANWARLAL JAIN AND HIS SONS. IN ORDER TO VERIFY THE GENUINENESS OF TRANSACTION W HICH IS MORE THAN ONE LAKHS THE ASSESSMENT IS REOPENED BY THE PRIOR APPR OVAL OF JOINT CIT RANGE I MUMBAI. 14. THUS WE NOTE THAT AO HAS MENTIONED IN THE REAS ONS RECORDED THAT THE GENUINENESS OF THE LOAN TRANSACTI ONS ARE TO BE VERIFIED WHICH IN OUR OPINION IS OBVIOUSLY NOT THE FORMATION OF BELIEF AS THE REOPENING OF ASSESSMENT CAN NOT BE RE SORTED TO FOR JUST VERIFICATION OF GENUINENESS OF THE LOAN TRANSA CTIONS. THUS WE FIND MERIT IN THE CONTENTIONS AND ARGUMENTS OF T HE LD. A.R. THAT AO HAS NOT FORMED ANY INDEPENDENT BELIEF OR RE CORDED A FINDING THAT INCOME OF THE ASSESSEE HAS ESCAPED ASS ESSMENT BUT MERELY STATED THAT IN ORDER TO VERIFY THE GENUINENE SS OF THE LOAN TRANSACTIONS THE ASSESSMENT IS REOPENED. IN OUR O PINION REOPENING OF THE ASSESSMENT IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTION IS NOT PERMISSIBLE UNDER THE ACT. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY A SERIES OF DECISIO NS REFERRED TO BY THE LD. COUNSEL DURING THE HEARING: ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 21 (A) IN THE CASE OF PCIT VS MANZIL DINESH KUMAR SHAH (SUPRA) THE HONBLE GUJRAT HIGH COURT HAS HELD THA T FORMATION OF INDEPENDENT OPINION BY THE AO IS MANDA TORY CONDITION AND MERE MENTIONING OF NEED FOR DEEP VERI FICATION OF INFORMATION RECEIVED IS NOT A VALID GROUND FOR R EOPENING. THE HON'BLE COURT HAS HELD THAT REOPENING OF ASSESS MENT COULD NOT BE PERMITTED FOR FISHING OR ROBBING ENQUI RY AS IT WOULD NOT SATISFY THE REQUIREMENT OF THE AO HAVING REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPE D ASSESSMENT. IN THIS CASE THE AO HAS RECORDED TH AT I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR 2009-10 DUE TO OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR AS SESSMENT AND THUS THE CASE NEEDS TO BE REOPENED AS THE INFOR MATION RECEIVED BY THIS OFFICE NEEDS DEEP VERIFICATION. T HE HONBLE COURT HAS HELD THAT HAD THE AO ON THE BASIS OF INFO RMATION MADE AVAILABLE TO HIM AND UPON APPLYING HIS MIND TO SUCH INFORMATION FORMED A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT THE COURT WOULD HAVE RIGHTL Y ALLOWED HIM TO REASSESS THE INCOME BUT IN THE PRESE NT CASE HE RECORDED THAT INFORMATION REQUIRED DEEP VERIFICA TION AND LATER RECONSTITUTION OF MANDATORY WORDS THAT HE BEL IEVED THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMEN T WOULD NOT CURE THIS FUNDAMENTAL DEFECT. THE HONBL E SUPREME COURT HAS DISMISSED THE SPECIAL LEAVE PETIT ION FILED BY THE REVENUE IN THE ABOVE CASE AS REPORTED IN (2019) 101 TAXMANN.COM 259 (SC) WHEREIN THEREBY UPHOLDING THE ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 22 VIEW TAKEN BY THE HONBLE GUJARAT HIGH COURT IN THE ABOVE CASE. (B) IN THE CASE OF INDUCTOTHERAN (INDIA) P. LTD. V DCIT (SUPRA) THE HONBLE GUJARAT HIGH COURT HAS HELD THA T THE REASSESSMENT NOTICE IS NOT PERMISSIBLE MERELY FOR VERIFICATION OF CLAIM MADE UNDER SECTION 80HHC OF T HE ACT. THE RELEVANT EXTRACT OF THE DECISION OF THE HONBLE GUJARAT HIGH COURT IS REPRODUCED BELOW: 18. REVERTING TO THE FACTS OF THE PRESENT CASE WE NOTICE THAT IN TWO OUT OF THE FOUR REASONS RECORDED BY THE ASSESSING OFFIC ER FOR REOPENING THE ASSESSMENT HE STATED THAT HE NEED TO VERIFY THE CL AIMS. IN THE SECOND GROUND HE HAD RECORDED THAT THE ADMISSIBILITY OF T HE BAD DEBTS WRITTEN OFF REQUIRED TO BE VERIFIED. IN THE FOURTH GROUND ALSO HE HAD RECORDED THAT THE ADMISSIBILITY OF ROYALTY CLAIM WAS REQUIRED TO BE V ERIFIED. WE ARE IN AGREE- MENT WITH THE CONTENTION OF THE COUNSEL FOR THE PET ITIONER THAT FOR A MERE] VERIFICATION OF THE CLAIM THE POWER FOR REOPENING OF ASSESSMENT COULD NOT BE EXERCISED. THE ASSESSING OFFICER IN THE GUISE OF POWER TO REOPEN AI ASSESSMENT CANNOT SEEK TO UNDERTAKE A FISHING OR R OVING INQUIRY AND SEE] TO VERIFY THE CLAIMS AS IF IT WERE A SCRUTINY ASSESSME NT. (C) IN THE CASE OF CHHUGAMAL RAJPAL V S P CHALIHA A ND ORS. LTD. (SUPRA) THE HONBLE SUPREME COURT HAS HE LD THAT THE AO MUST HAVE PRIMA FACIE GROUNDS FOR ISSUING NO TICE U/S 148. THE OPERATIVE PART IS REPRODUCED AS UNDE R: HELD (I) THAT THE INCOME-TAX OFFICER HAD NOT EVEN COME TO A PRIMA FADE CONCLUSION THAT THE LOAN TRANSACTIONS TO WHICH HE R EFERRED WERE NOT GENUINE TRANSACTIONS : HE APPEARED TO HAVE ONLY A VAGUE FEE LING THAT THEY MIGHT BE BOGUS TRANSACTIONS. SUCH A CONCLUSION DID NOT FULFI L THE REQUIREMENTS OF SECTION 151(2). UNDER THAT SECTION HE HAD TO GIVE R EASONS FOR ISSUING A NOTICE UNDER SECTION 148. HE SHOULD HAVE SOME PRIMA FACIE GROUNDS BEFORE HIM FOR TAKING ACTION UNDER SECTION 148. HIS CONCLUSION THA T THERE WAS A CASE FOR INVESTIGATING THE TRUTH OF THE ALLEGED TRANSACTIONS WAS NOT THE SAME THING AS SAYING THAT THERE WERE REASONS FOR THE ISSUE OF THE NOTICE. THE COMMISSIONER HAD MECHANICALLY ACCORDED PERMISSION. THE IMPORTANT SAFEGUARDS PROVIDED IN SECTIONS 147 AND 151 WERE LI GHTLY TREATED BY THE OFFICER AND THE COMMISSIONER. THE INCOME-TAX OFFICE R COULD NOT HAVE HAD REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMEN T BY REASON OF THE APPELLANT-FIRM'S FAILURE TO DISCLOSE MATERIAL FACTS AND IF THE COMMISSIONER HAD READ THE REPORT CAREFULLY HE COULD NOT HAVE COM E TO THE CONCLUSION THAT ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 23 THIS WAS A FIT CASE FOR ISSUING A NOTICE UNDER SECT ION 148. THE NOTICE ISSUED UNDER SECTION 148 WAS THEREFORE INVALID. THUS THE COURT OBSERVED THAT AO HAS RECORDED IN HI S REPORT THAT THERE IS A CASE FOR INVESTIGATION AS TO THE TR UTH OF THE ALLEGED BOGUS TRANSACTIONS AND COURT HELD THAT THIS DOES N OT MEET THE REQUIREMENTS TO ISSUE NOTICE UNDER SECTION 148 OF T HE ACT. (D) IN THE CASE OF NIVI TRADING LTD V UNION OF INDI A (SUPRA) & OTHERS (SUPRA) THE HONBLE BOMBAY HIGH COURT HAS HE LD THAT IF MORE DETAILS ARE SOUGHT OR SOME VERIFICATION IS PRO POSED THAT CAN NOT BE A SUBSTITUTION FOR REASON WHICH LED THE AO T O BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. T HE COURT HAS HELD AS UNDER: HELD ALLOWING THE PETITION THAT THE RETURN OF INCOME WA S FILED. THERE WAS A PROCESSING AND VERIFICATION THEREOF. IN THE RETURN OF INCOME AND ON THE RESPONDENTS' OWN SHOWING ON ITS VERIFICATION THE LONG-TERM CAPI TAL GAINS AND DIVIDEND INCOME IN THE SUM CAME TO BE DISCLOSED AND EQUALLY ANOTHER SU M (RS. 1 21 33 429) AS GIFT. THE REVENUE PROCEEDED ON THE FOOTING THAT THESE SHARES WERE GIFTED WITHOUT CONSIDERATION. IT WAS THIS FACT WHICH IT WANTED TO VERIFY AND PARTICULARLY WHETHER THE VALUE OF THESE SHARES HAD BEEN COMPUTED ON THE MARK ET VALUE. THE TAX AUTHORITIES DID NOT STATE THAT ANY INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT: ALL THAT THE REVENUE DESIRED WAS VERIFICATION OF CERTAIN DET AILS AND PERTAINING TO THE GIFT. THAT WAS NOT FOUNDED ON THE BELIEF THAT ANY INCOME WHICH WAS CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT AND HENCE SUCH VERIFICATIO N WAS NECESSARY. THAT BELIEF WAS NOT RECORDED. THE NOTICE OF REASSESSMENT WAS NO T VALID. (E) IN THE CASE OF OF CIT V MANIBEN LALJI SHAH (SUP RA) THE HONBLE BOMBAY HIGH COURT HAS HELD THAT THE REOPENI NG OF ASSESSMENT UNDER SECTION 147 TO SCRUTINIZE THE INVE STMENT MADE IN THE FLAT PURCHASED IS NOT VALID AS THE AO O NLY SEEKS TO FIND OUT THE SOURCE OF FUNDS AND SAME DOES NOT CONS TITUTE ANY REASON FOR BELIEF THAT INCOME HAS ESCAPED ASSESSMEN T SO AS TO INVOKE SECTION 148 OF THE ACT AND ACCORDINGLY THE A PPEAL OF THE REVENUE WAS DISMISSED. ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 24 (F) IN THE CASE OF CIT V BATRA BHATIA COMPANY (SUPR A) THE HONBLE DELHI HIGH COURT HAS HELD WHILE DISMISSING THE APPEAL OF THE REVENUE THAT LD. CIT(A) AS WELL AS TRIBUNAL HAD GIVEN A CONCURRENT FINDING THAT THERE WAS NO MATERIAL BEFOR E THE AO ON THE BASIS OF WHICH THE AO WOULD HAVE HAD A BELIEF THAT AGRICULTURAL LAND SOLD BY THE ASSESSEE WAS A CAPITA L RECEIPT WITHIN THE MEANING OF SECTION 2(14) OF THE ACT AND EXPRESSION OF THE AO REQUIRES MUCH DEEPER SCRUTINY INDICATED TH AT HE WAS MERE EMBARKING ON MERE PRESUMTIONS WITHOUT ANY BELI EF MUCH LESS BELIEF BASED ON REASON AND MATERIAL AND THUS T HE REASSESSMENT WAS NOT VALID. 15. IN VIEW OF THE RATIO LAID DOWN IN THE VARIOUS D ECISIONS AS DISCUSSED ABOVE VIS A VIS FACTS OF THE ASSESSEE CAS E WE ARE OF THE CONSIDERED VIEW THAT THE AO HAS NOT FORMED A PRIMA FACIE AND INDEPENDENT BELIEF ON THE REASONS RECORDED THAT INC OME HAS ESCAPED ASSESSMENT BUT REOPENED THE ASSESSMENT ONLY FOR CARRYING OUT THE VERIFICATION OF FACTS/INFORMTION Q UA THE UNSECURED LOANS RAISED BY THE ASSESSEE. UNDER THES E FACTS AND CIRCUMSTANCES WE ARE IN AGREEMENT WITH THE FINDIN GS/DECISION OF THE LD. CIT(A) HOLDING THE RE-OPENING OF ASSESS MENT AS INVALID. UNDER THESE FACTS AND CIRCUMSTANCES THE ORDER OF LD. CIT(A) NEEDS TO BE AFFIRMED ON THE JURISDICTIONAL ISSUE THAT REASSESSMENT PROCEEDINGS ARE INVALID AND SO IS THE ASSESSMENT FRAMED UNDER SECTION 143(3) READ WITH SECTION 147 O F THE ACT. 16. WE ALSO NOTE THAT THE CASE OF THE ASSESSEE IS S QUARELY COVERED BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S. RUSHABH ENTERPRISES VS. ACIT IN WP NO. 167 OF 2015 DATED 15.04.2015 WHICH IS A GROUP CONCERN OF T HE ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 25 RESPONDENT ASSESSEE AND ALSO RESPONDENT IN ITA NO.7345/M/2019 A.Y. 2008-09 WHICH IS ALSO HEARD BY US WITH THE PRESENT APPEAL WHEREIN THE HONBLE BOMBAY HIGH COURT HAS QUASHED THE NOTICE UNDER SECTION 148 OF THE ACT. U NDER SIMILAR FACTS IN THIS CASE ALSO THE CASE OF THE ASSESSEE W AS REOPENED PURPORTEDLY ON THE BASIS OF STATEMENT MADE BY SHRI BHANWARLAL JAIN. WE ALSO FIND THAT THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE ABOVE DECISION OF HIGH COURT IN THE CAS E OF ABOVE SISTER CONCERN. THE SAID DECISION OF THE HONBLE B OMBAY HIGH COURT WAS SOUGHT TO BE DISTINGUISHED BY THE LD. D.R . BY SUBMITTING THAT IN THE CASE OF M/S. RUSHABH ENTERPR ISES THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE A CT WHEREAS IN THE PRESENT CASE NO SCRUTINY ASSESSMENT HAS BEEN DONE. WE FIND THAT THE HONBLE BOMBAY HIGH COURT HAS HELD TH AT THERE WAS A LACK OF TANGIBLE MATERIAL AND THE BASIS FOR R EASONS TO BELIEVE AND THEREFORE WE ARE OF THE OPINION THAT IN ALL REOPENING OF CASES EVEN IF THERE IS NO SCRUTINY PROCEEDINGS T HESE REQUIREMENTS HAVE BEEN SATISFIED. THE DECISION REL IED UPON BY THE LD. D.R. IN THE CASE OF ACIT V. RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) HAS BEEN CONSIDERED BY THE HONBL E BOMBAY HIGH COURT IN ANKITA A. CHOKSEY V. ITO (SUPRA) WHER EIN THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF A CIT V. RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) HAS BEEN CO NSIDERED AND HELD THAT IRRESPECTIVE OF WHETHER THE INCOME WAS PR OCESSED BY THE INTIMATION UNDER SECTION 143(1) OR BY SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT THE AO HAS NO JURI SDICTION TO REOPEN THE ASSESSMENT WITHOUT SATISFACTION OF CONDI TION OF HAVING THE REASONS TO BELIEVE THAT INCOME HAS ESCAP ED ASSESSMENT. THE CASE OF THE ASSESSEE IS ALSO SUPPO RTED BY THE ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 26 HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. ORI ENT CRAFT LTD. (SUPRA) RELIED BY THE LD. COUNSEL OF THE ASSESSEE. IN VIEW OF THESE FACTS WE ARE INCLINED TO HOLD THAT ORDER OF LD. CIT(A) DOES NOT SUFFER FROM ANY LEGAL INFIRMITY AND THEREFORE T HE GROUND NO.1 OF THE REVENUES APPEAL IS DISMISSED. 17. IN THE GROUND NO.2 TO 6 THE REVENUE HAS CHALLE NGED THE ORDER OF LD. CIT(A) ON MERIT WHEREIN THE LD. CIT(A) HAS DELETED THE ADDITION OF RS.3 83 00 000/- ON ACCOUNT OF BOGU S LOANS ON THE GROUND THAT THE ASSESSE HAS DISCHARGED ITS ONUS BY FILING NECESSARY EVIDENCES AND AO HAS NOT BROUGHT ANY SUBS TANTIVE EVIDENCES TO PROVE TO CONTRARY. 18. THE FACTS OF THE CASE HAVE BEEN DISCUSSED WHILE DECIDING THE LEGAL ISSUE (SUPRA) HOWEVER THE MAIN FACTS AR E BEING REITERATED AND DISCUSSED FOR READY REFERENCE. DURI NG THE YEAR THE ASSESSEE RAISED LOAN FROM 5 PARTIES NAMELY M/S. ROSE IMPEX RS.50 00 000/- M/S. MERIDIAN GEMS RS.1 10 00 0 00/- M/S. ROSE GEMS P. LTD. RS.1 00 00 000/- M/S. HARSH GE MS RS.50 00 000/- AND M/S. PANNA GEMS RS.73 00 000/- AGGREGATING TO RS.3 83 00 000/-. ALL THESE LENDERS ARE GROUP CONCERNS OF BHANWARLAL JAIN GROUP. ACCORDING TO TH E AO THESE LOANS ARE NON GENUINE AS BROUGHT OUT BY THE SEARCH ACTION ON THE BHANWARLAL JAIN GROUP CONDUCTED ON 03.10.2013 W HEREIN A LOT OF INCRIMINATING MATERIALS WERE FOUND AND SEIZE D WHICH PROVED BEYOND DOUBT THAT BHANWARLAL GROUP IS ONLY E NGAGED IN ADVANCING ACCOMMODATION ENTRIES. BESIDES SHRI BHA NWARLAL JAIN AND OTHER VARIOUS KEY PERSONS ALSO ADMITTED TH AT ALL THESE CONCERNS WERE ENGAGED IN PROVIDING ACCOMMODATION EN TRIES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO CALLED ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 27 UPON THE ASSESSEE TO PROVE THE IDENTITY AND CREDITW ORTHINESS OF THE LENDERS AND GENUINENESS OF THE TRANSACTIONS. T HE ASSESSEE REPLIED THE VARIOUS NOTICES ISSUED AND QUERIES RAIS ED BY THE AO BY FILING VARIOUS DOCUMENTS SUCH AS NAMES ADDRESSE S OF THE LENDERS LOAN CONFIRMATIONS FROM LENDERS BANK STAT EMENT OF THE LENDERS BANK STATEMENT OF THE ASSESSEE ITRS BALA NCE SHEET AND PROFIT & LOSS ACCOUNT OF THE LENDERS AND DETAIL S OF INTEREST PAID TDS DEDUCTED DEPOSITED AND TDS RETURNS ETC. FILED BY THE ASSESSEE. THE ASSESSE EVEN SUBMITTED THE DETAILS AN D EVIDENCES OF REPAYMENT OF THESE LOANS. ALL THESE LOANS WERE R ECEIVED THROUGH BANKING CHANNELS. HOWEVER THE AO WAS NOT CONVINCED WITH THE CONTENTIONS OF THE ASSESSEE QUA THE GENUIN ENESS OF THESE LOANS AND ULTIMATELY THE AO TREATED ALL THESE LOANS AS NON GENUINE AND ADDED THE SAME TO THE INCOME OF THE ASS ESSEE. 19. IN THE APPELLATE PROCEEDINGS THE LD. CIT(A) AL LOWED THE APPEAL OF THE ASSESSEE AFTER CALLING FOR THE REMAND REPORT ON THE ADDITIONAL EVIDENCES FILED BY THE ASSESSE BEFORE LD CIT(A). THE AO FILED THE REMAND REPORT BEFORE THE LD. CIT(A) ON 13.03.2018. THEREAFTER THE LD. CIT(A) RECORDED A FINDING OF FA CT THAT AO HAS NOT DONE ANY QUERY OR VERIFICATION ON THE EVIDENCES FILED BY THE ASSESSEE. THEREFORE THE AO HAS FAILED TO REVERT T HE EVIDENCES PRODUCED BEFORE HIM BY THE ASSESSEE. IN PARA 11.17 LD. CIT(A) NOTED THAT SURVEY UNDER SECTION 133A OF THE ACT WAS CARRIED OUT ON THE RESPONDENT HOWEVER THERE IS NO MENTION OF THE SAME IN THE ASSESSMENT ORDER OF ANY INCRIMINATING DOCUMENTS OR IMPOUNDED MATERIAL DURING THE SAID SURVEY ACTION. THE LD. CIT(A) ALSO NOTED THAT NO INCRIMINATING MATERIAL HA S BEEN BROUGHT ON RECORD BY THE AO EITHER IN THE ASSESSMEN T ORDER OR IN THE REMAND REPORT WHICH IS FOUND DURING THE COURSE OF SEARCH ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 28 ACTION CONDUCTED ON SHRI BHANWARLAL JAIN AND RELATE D ENTITIES. THE LD. CIT(A) ALSO NOTED THAT AO HAS MENTIONED IN THE REMAND REPORT THAT THERE IS NO SEIZED MATERIAL OR INCRIMIN ATING MATERIAL FOUND DURING THE COURSE OF SEARCH ON BHANWARLAL JAI N GROUP RELATING TO THE ASSESSEE. FINALLY THE LD. CIT(A) DELETED THE ADDITION BY NOTING THAT ASSESSEE HAS PROVED IDENTIT Y CREDITWORTHINESS OF THE PARTIES AND GENUINENESS OF THE TRANSACTIONS BY FURNISHING NECESSARY EVIDENCES AS S TATED HEREINABOVE AND THEREFORE THE BURDEN SHIFTS TO THE AO WHICH HAS NOT BEEN DISCHARGED BY MAKING FURTHER ENQUIRIES OR INVESTIGATION TO DISAPPROVE THE EVIDENCES FILED BY THE ASSESSEE. THE LD. CIT(A) RELIED ON A SERIES OF DECISIONS FROM PARA 11.21 TO 11.60 AND FINALLY ALLOWED THE APPEAL OF THE ASSESSEE ON MERIT ALSO. 20. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD WE ALSO NOTE THAT THE ASSESSEE HAS FILED AL L THE EVIDENCES RELATING TO THE LENDERS AS STATED HEREINABOVE. HOW EVER THE AO HAS NOT CONDUCTED ANY ENQUIRY TO FIND OUT THESE LOA N TRANSACTIONS. MOREOVER WE FIND THAT LD. CIT(A) HA S GIVEN A FINDING OF FACT THAT THERE IS NO INCRIMINATING MATE RIAL FOUND DURING THE SURVEY CONDUCTED UNDER SECTION 133A ON T HE ASSESSEE OR DURING THE COURSE OF SEARCH CONDUCTED O N BHANWARLAL JAIN GROUP. WE NOTE THAT ALL THE TRANSA CTIONS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES AND INTEREST HAS BEEN PAID TO THE LENDERS AFTER DEDUCTION OF TAX AT SOURC E AND ASSESSEE HAS FILED ALL THE TDS RETURNS AFTER DEPOSITING THE TAX IN THE GOVERNMENT TREASURY. WE ALSO NOTE THAT THE STATEME NTS RELIED UPON BY THE AO OF SHRI BHANWARLAL JAIN AND OTHER KE Y PERSONS OF THE GROUP WERE SUBSEQUENTLY RETRACTED AND AO HAS FAILED TO BRING ANY MATERIAL ON RECORD TO CORROBORATE THE EVI DENCE ON ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 29 RECORD IS PROVING THE CLAIM OF GENUINENESS OF THE L OANS RAISED BY THE ASSESSEE. THE CASE OF THE ASSESSEE IS COVERED BY THE CBDT CIRCULAR NO.F. NO.286/2/2003-IT (INV.) DATED MARCH 10 2003 WHEREIN THE CBDT HAS GIVEN INSTRUCTION TO ITS OFFIC ER TO GATHER EVIDENCE IN ADDITION TO STATEMENTS RECORDED AND BAS E THE ASSESSMENT ON SUCH INDEPENDENT ASSESSMENTS. BESIDE S WE ALSO FIND THAT THE DECISION IN THE CASE OF PCIT VS. NRI IRON 103 TAXMANN.COM 48 IS NOT APPLICABLE IN THE PRESENT CAS E AS IN THAT CASE THE AO HAD MADE INDEPENDENT AND DETAILED ENQUI RY INCLUDING SURVEY OF THE SO CALLED INVESTOR COMPANIE S FROM MUMBAI KOLKATA GUAHATI TO VERIFY THE CREDITWORTHI NESS OF THE PARTIES SOURCE OF FUNDS AND GENUINENESS OF THE TRA NSACTIONS AND THE FIELD REPORT REVEALED THAT SHAREHOLDERS WER E NOT NON EXISTENT OR LACKED WORTHINESS BUT THIS IS NOT THE C ASE BEFORE US AS THE AO HAS NOT CARRIED OUT ANY ENQUIRY. MOREOVE R THE STATEMENT OF SHRI BHANWARLAL JAIN WHICH HAS NOT BEE N RETRACTED LATER ON DOES NOT SPECIFICALLY SPEAK ABOUT THE LOAN S TAKEN BY THE ASSESSEE AS BOGUS. THE CASE OF THE ASSESSEE IS SUP PORTED BY A SERIES OF DECISIONS AS UNDER: 1. DCIT VS. M/S. JAINAM INVESTMENTS (ITA NOS.4286 & 4474/M/2019) 2. M/S. PABAL HOUSING PVT. LTD. & ORS VS DCIT (ITA NO.2687 2688 & 2689/M/2018) & ORS. 3. DCIT VS. M/S. MANISH FLOUR MILLS (ITA NO.6729/M/2016) 4. DCIT VS. M/S. JAINAM INVESTMENTS (ITA NO.6099/M/2016) 5. ITO VS. ABHAY KUMAR DAGA HUF (ITA NO.6983/M/2018) 6. ACIT VS. M/S. H.K. PUJARA BUILDERS (ITA NO.5307/M/2017) ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 30 CONSIDERING THESE FACTS AND CIRCUMSTANCES WE ARE I NCLINED TO UPHOLD THE ORDER OF LD. CIT(A) EVEN ON MERIT BY DIS MISSING THE GROUND NO.2 TO 6 OF THE REVENUE. 21. THE ISSUE RAISED IN GROUND NO.7 IS AGAINST THE DELETION OF RS.8 44 416/- ON ACCOUNT OF INTEREST AND RS.1 59 20 0/- ON ACCOUNT OF COMMISSION AS ADDED BY THE AO ON THESE B OGUS LOANS. 22. THE ADDITION OF INTEREST AND COMMISSION ARE CON SEQUENTIAL TO THE ISSUE AS DECIDED BY US (SUPRA) BY HOLDING TH AT THE LOAN TAKEN BY THE ASSESSEE ARE GENUINE AND DIRECTED THE AO TO DELETE THE ADDITION UNDER SECTION 68 OF THE ACT. CONSEQUE NTLY THE INTEREST ON COMMISSION DISALLOWANCES AS DEDUCTED BY THE LD. CIT(A) ALSO UPHELD BY DISMISSING THE GROUND NO.6 OF THE REVENUE. 23. ACCORDINGLY THE APPEAL OF THE REVENUE IS DISMI SSED. ITA NO.7457/M/2019 A.Y. 2012-13; ITA NO.7491 7492 7477 & 7493/M/2019 A.Y. 2009-10 2010-11 2011-12 & 2012-13; ITA NO.7476/M/2019 A.Y. 2012-13 ITA NO.7345 & 7346/M/2019 A.Y. 2008-09 & 2010-11 24. THE ISSUE INVOLVED IN THESE APPEALS IS IDENTICA L TO THE ONE AS STATED ABOVE IN ITA NO.7456/M/2019 FOR A.Y. 2008 -09. THEREFORE OUR FINDING IN ITA NO.7456/M/2019 FOR A. Y. 2008-09 MUTATIS MUTANDIS WOULD APPLY TO THESE APPEALS AS W ELL. ACCORDINGLY THE APPEALS OF THE REVENUE ARE DISMISS ED. ITA NO.7466 7467 7468 7458 & 7459/M/2019; ITA NO.7478 & 7479/M/2019; ITA NO.7494 7475 7495 7496 & 7497/M/2019 & ITA NO.7455/M/2019 ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 31 25. AT THE OUTSET IT IS BROUGHT TO THE NOTICE OF T HE BENCH BY THE LD A.R. THAT THE CBDT RECENTLY HAS AMENDED THE CBDT CIRCULAR NO. 3/2018 DATED 11.07.2018 VIDE CIRCULAR NO. 17/20 19 F.NO. 279/MISC.142/2007-ITJ(PT.) DATED 08.08.2019 INCREAS ING THE LIMIT FOR FILING OF APPEAL BEFORE INCOME TAX APPELL ATE TRIBUNAL I.E. RS.50 LACS IN EACH OF THE CASE. WE NOTED THAT EARLI ER CIRCULAR NO. 3 OF 2018 WAS MADE APPLICABLE TO PENDING APPEALS AL SO AND THIS CLAUSE OF THE CIRCULAR REMAINS UNCHANGED EVEN AFTER THE AMENDMENT. ADMITTEDLY IN THIS CASE TAX EFFECT IS B ELOW THE PRESCRIBED LIMIT FOR FILING THE APPEAL BEFORE THE T RIBUNAL BY THE REVENUE I.E. RS.50 LACS. 26. WHEN THIS WAS CONFRONTED TO THE LEARNED DEPARTM ENTAL REPRESENTATIVE HE COULD NOT POINT OUT THAT THIS AP PEAL FALLS UNDER ANY OF THE EXCEPTION AS PROVIDED IN CIRCULAR NO. 17 OF 2019. ADMITTEDLY THE TAX EFFECT IN THIS APPEAL OF REVENUE IS MUCH BELOW THE PRESCRIBED LIMIT OF RS.50 LACS AS PE R CBDT CIRCULAR NO. 17 OF 2019. IN VIEW OF THE ABOVE THIS APPEAL OF REVENUE IS DISMISSED AS WITHDRAWN IN VIEW OF CIRCUL AR NO. 17 OF 2019. 27. NOW BEFORE US THE LEARNED CIT DEPARTMENTAL REPRESENTATIVE ONLY REQUESTED THAT HE WANTS TO VERI FY WHETHER THIS APPEAL FALLS UNDER ANY OF THE EXPLANATION PROV IDED IN CBDT CIRCULAR NO. 3/2018. HERE WE ARE GIVING LIBERTY TO REVENUE THAT IN CASE AFTER PASSING OF THE ORDER IT COMES TO THE NOTICE OF THE REVENUE THAT THIS APPEAL DOES NOT FALL UNDER ANY EX PLANATION OF THE CBDT BY 3/18 THE AO CAN MOVE FOR RECALLING OF THE ORDER WITHIN THE PRESCRIBED TIME LIMIT UNDER SECTION 254 OF THE ACT. ITA NO.7456/M/2019 & ORS M/S. KEY TECH & ORS 32 HENCE THIS APPEAL IS DISMISSED AS LOW TAX EFFECT C OVERED BY CBDT CIRCULAR NO. 17/2019. 28. IN THE RESULT ALL THE APPEALS OF THE REVENUE A RE DISMISSED. 29. IN THE RESULT ALL THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.08.2021. SD/- SD/- ( RAVISH SOOD) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 31.08.2021. * KISHORE SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT (A) CONCERNED MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR ITAT MUMBAI.