TMI Blog2018 (5) TMI 1387X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Rajesh Jhaveri Stock Brokers Private Limited [2007 (5) TMI 197 - SUPREME COURT] and Raymond Woolen Mills Limited [1997 (12) TMI 12 - SUPREME COURT] reason to believe cannot be equated with finally established fact that the income chargeable to tax having escaped assessment additions will invariably be made and further, sufficiency of reasons enabling the Assessing Officer to form such a belief would not be gone into. Decided against the assessee. - R/SPECIAL CIVIL APPLICATION No. 16385 of 2017 With R/SPECIAL CIVIL APPLICATION No. 21593 of 2017 With R/SPECIAL CIVIL APPLICATION No. 21594 of 2017 With R/SPECIAL CIVIL APPLICATION No. 21595 of 2017 With R/SPECIAL CIVIL APPLICATION No. 21597 of 2017 - - - Dated:- 2-4-2018 - MR. AKIL KURESHI AND B. N. KARIA R/SPECIAL CIVIL APPLICATION No. 21598 of 2017 With R/SPECIAL CIVIL APPLICATION No. 21599 of 2017 With R/SPECIAL CIVIL APPLICATION No. 21601 of 2017 With R/SPECIAL CIVIL APPLICATION No. 21602 of 2017 With R/SPECIAL CIVIL APPLICATION No. 22937 of 2017 For The Petitioner : Mr S.N Soparkar, Sr Advocate with Mr B S Soparkar, Advocate For The Respondents : Mr Manish R Bhatt, Sr Advocate with Mrs Mauna M Bhatt, Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that unaccounted cash transactions were first recorded on cash vouchers. On the basis of recording made on these cash vouchers, the entries were recorded on the day cash book. The unaccounted cash book has transaction recorded in continuous manner without any gap. The continuity of recording of unaccounted cash transaction indicates that entries are made to record all unaccounted cash transactions of Venus Group and Vaswani family member. The cash book is written in corded from for names, amount, dates etc. On analysis of seized evidences found during the search, it has also been noticed that the Venus group was engaged in huge land dealings. Upon correlation of cash books/cash vouchers/day books with the sale deeds of land transactions, it has been noticed that there are huge transactions of unaccounted cash in these land dealings. Such cash transactions are recorded in the name of different entries in the seized cash vouchers. The amount which is legally paid for the purchase/sale of the land has been paid through banking channels. Only this amount is mentioned as the total consideration of deals in the registered sales/purchase deed of the lands. This amount paid thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total Amount 75,77,850/- The total amount of unaccounted cash transaction includes in the sale of land at Tarapur/Sargasan carried out by the group as found recorded in cash book and summary sheet is ₹ 33,24,89,500/-. This involves various survey numbers of land at Sargasan. The total area of land involved in the transaction of Tarapur/Sargasan with different entries of Venue Group and members of Vaswani Family is 84,732/- sqr. meters. Total area of lands which the assessee has purchased as joint owner at Tarapur/Sargasan is 21,651/- sqr. mtr which comes to 25.555% of total land area at Tarapur/Sargasan sold by the Venus Group. Thus the proportionate amount of cash transactions made in respect of the lands mentioned in above table comes to ₹ 8,49,58813/-. Further, in all these properties there are 10 joint purcahsers and there is no mention of the their shares in registered documents. Therefore, taking equal share for all copurchasers assessee s share comes to 10% in all the transactions. Thus, the assessee s share is the unaccounted portion of each transaction is ₹ 84,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the petitioners had paid such onmoney. He submitted that the Assessing Officer has thus proceeded on conjectures and surmises. In view of the fact that there is no material on record with the aid of which the Assessing Officer can form a belief that income chargeable to tax has escaped assessment, the question of sufficiency of the material would not arise. Counsel submitted that as per the settled law, the notice of reopening has to be evaluated on the basis of reasons recorded. The Assessing Officer cannot improve upon such reasons or deviation from such reasons to support the notice. On the other hand, learned counsel Shri Bhatt appearing for the Department opposing the petitions contended that the Assessing Officer has recorded proper reasons. There was sufficient material collected during the search operations in case of Venus Group prima facie demonstrating that huge cash transactions had taken place in sale of certain parcels of land. The petitioners had purchased four separate parcels of land from Venus group during the same period. There was further material prima facie suggesting that even in the case of such sales, there were cash transactions. At the outset, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The very fact that no opportunity of being heard is given under section 143(1)(a) indicates that the Assessing Officer has to proceed accepting the return and making the permissible adjustments only. As a result of insertion of the Explanation to section 143 by the Finance (No. 2) Act of 1991 with effect from October 1, 1991, and subsequently with effect from June 1, 1994, by the Finance Act, 1994, and ultimately omitted with effect from June 1, 1999, by the Explanation as introduced by the Finance (No. 2) Act of 1991 an intimation sent to the assessee under section 143(1)(a) was deemed to be an order for the purposes of section 246 between June 1, 1994, to May 31, 1999, and under section 264 between October 1, 1991, and May 31, 1999. It is to be noted that the expressions intimation and assessment order have been used at different places. The contextual difference between the two expressions has to be understood in the context the expressions are used. Assessment is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the tax payer. In the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aped assessment. This issue has been discussed at considerable length by this Court in the case of Inductotherm [India] Private Limited v. M. Gopalan, Deputy Commissioner of Income-Tax, reported in [2013] 356 ITR 481 [Guj]. 13. Despite such difference in the scheme between a return which is accepted under section 143(1) of the Act as compared to a return of which scrutiny assessment under section 143(3) of the Act is framed, the basic requirement of section 147 of the Act that the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment is not done away with. Section 147 of the Act permits the Assessing Officer to assess, re-assess the income or re-compute the loss or depreciation if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. This power to reopen assessment is available in either case, namely, while a return has been either accepted under section 143(1) of the Act or a scrutiny assessment has been framed under section 143(3) of the Act. A common requirement in both of cases is that the Assessing Officer should have reason to believe that any income chargeable to tax has escape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction (see ITO v. Selected Dalurband Coal Co. Pvt. Ltd. [1996 (217) ITR 597 (SC)]; Raymond Woollen Mills Ltd. v. ITO (236) ITR 34 (SC)]. In the case of Raymond Woollen Mills Limited v. Income Tax Officer Ors. [Supra], the Apex Court held and observed as under :- In this case, we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales made by the said Venus Group. To avoid detection, the dates were ante-dated by ten years and figures in cash were recorded 1/100th of the actual sum. The reasons further recorded that the assessees were the purchasers of four parcels of land of village-Sargasan sold by the Venus Group, bearing Survey No. 428/16; 430/3; 430/B and 430/J. The total sale consideration, as per the registered documents for these four land transactions, comes to ₹ 75.77 lacs [rounded off]. It was recorded that as per the cash-book and the summary sheet, a total of ₹ 33.24 Crores [rounded off] was received towards sale of Tarapur and Sargasan lands by the said Venus Group for sale of a total area of 84,732 sq meters of land. The assessees had purchased 21,651 sq meters out of the said land area which represented approximately 25.55% of the total land sold by Venus Group during the said period. The Assessing Officer for computation, therefore, apportioned proportionate amount of cash dealings. Copies of summary sheet and cash vouchers are produced in the Court. The summary sheet which was found during the search operation shows a total amount of ₹ 33,24,89,500/= [other than EC] and an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s against the total declared sale consideration of ₹ 8.21 Crores [rounded off]. The material prima facie suggests that the total cash transactions of ₹ 33.24 Crores had taken place. The Revenue argues that the entires in Summary-sheet and Vouchers carried dates which were deliberately put 10 years backward to disguise and the figures were recorded by deleting two zeroes from the actual to avoid detection and co-relation. At this stage, when we are concerned with re-opening of the assessment that too in a case where the original return filed by the assessee was accepted without scrutiny, the material at the command of the Assessing Officer is sufficient to permit the process of reopening. As held by the Supreme Court in the case of ACIT v. Rajesh Jhaveri Stock Brokers Private Limited [Supra] and Raymond Woolen Mills Limited [Supra], reason to believe cannot be equated with finally established fact that the income chargeable to tax having escaped assessment additions will invariably be made and further, sufficiency of reasons enabling the Assessing Officer to form such a belief would not be gone into. In the result, all these writ petitions are dismissed. - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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