TMI Blog2016 (9) TMI 1374X X X X Extracts X X X X X X X X Extracts X X X X ..... red the material available on record. Ld. Representatives of both the parties mainly argued in the case of the assessee Shri Prem Sagar Jain and submitted that issue is same in remaining appeals. The appeals are decided as under. ITA 71/2015: Shri Prem Sagar Jain 3. This appeal by assessee has been directed against the order of ld. CIT (Appeals) Panchkula dated 15.12.2014 for assessment year 2006-07. 4. In this appeal, assessee challenged the order of the ld. CIT (Appeals) in confirming the action of the Assessing Officer in initiating the proceedings under section 147/148 of the Income Tax Act and confirming the addition under section 68 of the Act amounting to ₹ 25,19,697/- as undisclosed income. 5. Brief facts of the case are that assessee filed return of income on 31.10.2006 declaring income of ₹ 1,72,524/- + ₹ 25,19,697/- from short term capital gain. The Assessing Officer completed the assessment under section 143(3) on 06.05.2008 at an income of ₹ 27,57,000/- after making addition of ₹ 16,780/- and ₹ 48,000/- on account of interest and low household withdrawals respectively. An information was received by the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer was not competent to re-assess the case. The assessee relied upon several decisions in support of the contention including decision of the Delhi High Court in the case of Signature Hotels Pvt. Ltd. 338 ITR 51. The assessee also submitted that there is no reference in the statement of Shri Mukesh Choksi and same is also not corroborated by any tangible material nor there is a mention of assessee's name in any such information. Therefore, the information was non-specific and not reliable. No transaction was found to be bogus as all transactions were carried through banking channel and through D-MAT account. The Assessing Officer was requested many times to produce Shri Mukesh Choksi for cross-examination which was never done. The submissions of the assessee were forwarded to the Assessing Officer and Assessing Officer in his remand report, reiterated that information was received that assessee had business dealings with an entry operator, therefore, re-opening is valid. The assessee further submitted that reasons recorded by the Assessing Officer are incorrect as they have made payment to M/s. Maha Sagar group of cases and never received back even a penny from them. So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d through D-MAT account. The purchase of shares have been accepted by ld. CIT (Appeals) on which there is no departmental appeal. The details of sale proceeds of assessee have been filed to show that sales of the shares have been made through brokers Ashish Stock Broking Pvt. Ltd. and M/s. S.P. Jain Securities Pvt. Ltd. He has, therefore, submitted that the addition on merit is also wholly unjustified. He has relied upon several decisions in support of the contention. 8(i) On the other hand, ld. DR relied upon orders of the authorities below. 9. I have considered rival submissions. The validity of re-assessment proceedings shall have to be determined with reference to the reasons recorded by the Assessing Officer. The assessee has filed copy of the reasons recorded under section 148 of the Income Tax Act at page 14 of the Paper Book. The same reads as under: Annexure. A Name Address of the assessee : Shri Prem Sagar Jain C/o M/s Kaia Mandir, D.C. Road Ambala Cantt. PAN : ABLPJ2713K Assessment Year : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record and copy of the D-MAT account, contract notes and bank statements etc. found that sale of shares have been made through M/s. S.P. Jain Securities. Thereafter, the Assessing Officer recorded the same reasons for re-opening of the assessment. The assessee filed objections to the re-opening of the assessment but the same have not been decided by the Assessing Officer. It is, therefore, fatal for the re-opening of the assessment. The Assessing Officer has not recorded in the reasons for re-opening of assessment whether there was any failure on the part of the assessee to disclose truly and fully material facts necessary for assessment. 10(i) The assessee filed details of sale proceeds of the shares and ld. counsel for the assessee highlighted that assessee made sale of shares through M/s. Ashish Stock Broking Pvt. Ltd. and M/s. S.P. Jain Securities Pvt. Ltd. The same fact was pleaded before Assessing Officer at the original assessment stage. The assessee also pleaded before ld. CIT (Appeals) that assessee has not received any payment from M/s. Maha Sagar group Securities of cases and have never received back even a penny from them. It was also pleaded that reasons recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons for re-opening of assessment from anybody including M/s. Maha Sagar group of cases. There was no reason to believe that income of the assessee chargeable to tax has escaped assessment. The Assessing Officer recorded wrong and incorrect facts in the reasons recorded for re-opening of the assessment. The reasons did not clarify how it was a failure on the part of the assessee to disclose fully and truly all material facts. No information was provided by DIT (System) to Assessing Officer about any accommodation entry received from M/s. Maha Sagar group of cases despite the assessee made specific explanation before the authorities below in the original assessment proceedings as well as in the reassessment proceedings that shares have been sold through different brokers but the authorities below failed to consider the explanation of the assessee which is supported by the evidences and material on record. There was no material available with the Assessing Officer to make out a case of escapement of income in the case of the assessee. A valid re-opening of the assessment had to be based only on tangible material to justify the conclusion that there was escapement of income. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, it is a case of mere change of opinion for initiating re-assessment proceedings. I am fortified in my view by the judgments of Hon'ble full Bench of Delhi High Court in the case of Kelvinator of India 256 ITR 1, decision of Supreme Court in the case of Kelvinator of India 320 ITR 561, decision of Gujrat High Court in the case of Garden Silk Mills Pvt. Ltd. 237 ITR 668, decision of Calcutta High Court in the case of Berger Paints India Ltd. 245 ITR 648 and decision of Supreme Court in the case of CIT V Foramer France 264 ITR 566. Hon'ble Supreme Court in the case of Indian Oil Corporation 156 ITR 956 held that, No case under section 148 is made out when facts were known all along with to the revenue while making original assessment . Hon'ble Supreme Court in the case of Associated Stone Industries Ltd. 224 ITR 560 held that, assessee shall have to disclose only the primary facts . Hon'ble Bombay High Court in the case of Titanor Components Ltd. Vs. ACIT 343 ITR 183 held as under: Where a reassessment is sought to be made after four years the power conferred by section 147 of the Income-tax Act, 1961, does not provide a fresh opportunity to the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-opening is done merely on change of opinion which is not permissible under the law. I have already noted above that even in the reasons the facts have been wrongly recorded, therefore, re-opening of the assessment is clearly bad in law and cannot be sustained. I, accordingly, set aside the orders of authorities below qua the initiation of re-assessment proceedings and quash re-opening of the assessment in the matter. Resultantly, the additions made in reassessment order of ₹ 25,19,697 is deleted. In this view of the matter, there is no need to decide the addition on merit. 13. In the result, appeal of the assessee is allowed. ITA 70/2015 (Shri Kamal Kant Jain) ITA 72/2015 (Shri Narinder Kumar Jain, through LR) 14. Both the appeals by different assessees are directed against different orders of ld. CIT (Appeals), Panchkula dated 22.12.2014 for assessment year 2006-07 in which the assessees have challenged initiation of re-assessment proceedings under section 147/148 of the Income Tax Act and additions under section 68 of the Income Tax Act of ₹ 21,98,180/- and ₹ 20,22,785/- as undisclosed income respectively on account of short term capital gain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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