TMI Blog2018 (10) TMI 1724X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO prior to the completion of the reassessment. Hence, we set aside this matter to the record of the AO for denovo assessment after conducting a proper enquiry and investigation and allowing a proper opportunity of hearing to the assessee. - ITA No. 289/JP/2016, ITA No. 290/JP/2016, ITA No. 560/JP/2016, ITA No. 561/JP/2016, ITA No. 562/JP/2016 And ITA No. 563/JP/2016 - - - Dated:- 31-10-2018 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri P. C. Parwal (CA) For The Revenue : Shri J.C. Kulhari (JCIT) ORDER PER BENCH : These 6 appeals are directed against 6 separate orders of the ld. CIT (A) in respect of the connected assessments framed by the AO under section 147 read with section 143(3) of the IT Act for the assessment year 2006-07. Since the substantive assessment and addition was made by the AO in case of Shri Subhash Singh in ITA No. 289/JP/2016 and in the remaining cases only protective assessments were framed, therefore, for the purpose of recording facts, this appeal is taken as a lead case. The grounds raised in the appeal in ITA No. 289/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at House No. 20/147, Kaveri Path, Mansarover, Jaipur, cash of ₹ 5,53,335/- was found at House No. 20/148, Kaveri Path, Mansarover, Jaipur and ₹ 70,32,900/- was found at House No. 11, Kaveripuram, Dayal Bagh, Agra. The ACB recorded the statements of various persons including the assessee. Consequently, the DIT Investigation also taken up the case of tax evasion on account of the seizure of cash of more than ₹ 1.21 crores by the ACB and issued summon to the assessee under section 131 on 15.12.2008. The statement of the assessee was recorded on 7th February, 2009 wherein the assessee has denied the allegations of seizure of cash and submitted that he has nothing to do with the said cash as it was found from the relatives of the assessee and belong to them. The DIT Investigation has also obtained the relevant documents and report of the ACB Jaipur. Consequently, the DIT Investigation has prepared the report on 28th March, 2011 which was sent to the AO for necessary action. The AO consequently reopened the assessments of all these persons. In the reassessment, the AO has made the addition on substantive basis of the said amount of ₹ 1,21,60,335/- in the hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be quashed. 4. On the other hand, the ld. D/R has submitted that it is not the case of reopening of the assessment merely on the basis of report of the Investigation Wing as a result of investigation carried out at a third party but the investigation was done first by the ACB, Jaipur and thereafter by the Investigation Wing of the Department in the case of the assessee himself. Various documents, the cash of ₹ 1,21,60,335/- seized by the ACB as well as the statements of the assessee and other relatives recorded by the Investigation Wing constitute a tangible material to form the belief that the income assessable to tax has escaped assessment. He has relied upon the orders of the authorities below. 5. We have considered the rival submissions as well as the relevant material on record. There is no dispute that there was a search by the ACB Jaipur on 22nd May, 2005 at the various premises belonging to the assessee and his relatives. Though the premises House No. 20/147 Kaveri Path, Mansarover, Jaipur and House No. 20/148, Kaveri Path, Mansarover, Jaipur are in the names of the father of the assessee and sister of the assessee, however, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxpayer (Asst. CIT v. Rajesh Jhaveri Stock Brokers (P) Ltd. (2007) 291 ITR 500 (SC). In determining whether commencement of reassessment proceedings is valid, the court has only to see whether there is prima facie some material on the basis of which the Department opened the case. The sufficiency or correctness of the material is not a thing to be considered at this stage as held by the Supreme Court in the case of Raymond Woollen Mills Ltd. v. ITO (1999) 236 ITR 34 (SC), Great Arts (P) Ltd. v. ITO (2002) 257 ITR 639 (Delhi). The assessee cannot challenge sufficiency of belief- ITO v. Lakhmani Mewal Das (1976) 103 ITR 437 (SC). 4.7. Thus, in view of these facts, I hold that AO had rightly initiated the proceedings u/s 147/148 of the IT Act. Hence, in view of the above discussion, we do not find any reason to interfere with the impugned order of the ld. CIT (A), qua this issue. 6. On merits of the addition, the ld. A/R of the assessee has submitted that the addition was made on the basis of a ACB Report and not on the basis of any material to establish that the cash found during the search belongs to the assessee. He has referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at House No. 11, Kaveripuram, Dayal Bagh, Agra being the cash belonging to the said partnership firm. The AO while completing the assessment in case of M/s. Kaveri Cold Storage Ice Factory, has accepted that the cash of ₹ 70,32,900/- pertains to the partnership firm and no addition was made in the hands of the said partnership firm. Hence, the ld. A/R has submitted that the addition made is without any evidence and based on the report of the Investigation Wing is not sustainable. 7. On the other hand, the ld. D/R has relied upon the orders of the authorities below and submitted that in the report of the ACB, the fact was clearly established that the cash were found from the various bags and suitcases which were opened only taking the locking code from the assessee which shows that entire cash found during the search belongs to the assessee though it was kept at different places. He has further contended that the ld. CIT (A) has examined this issue after considering the remand report of the AO and, therefore, there is a finding based on the relevant facts and evidence that the cash of ₹ 1,21,60,335/- found during the search by the ACB Jaipur belongs t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is only a report and not a decision as the same is subjected to scrutiny of the court of law in the trial which is yet to be conducted and, therefore, until and unless the fate of the report of the ACB is decided by the court of law, the said report cannot be the sole basis of the assessment framed by the AO. We further note that the report of the Investigation Wing has not brought any new fact but it is just reproduction of the facts as recorded by the ACB in the search memo. Thus the report of the ACB has to be tested the scrutiny of the court of law in the trial and, therefore, the said report can be relevant material but cannot be a sole basis for assessment. Accordingly, we are of the considered view that the AO has not conducted a proper enquiry in this matter as no independent examination or investigation was carried out by the AO prior to the completion of the reassessment. Hence, we set aside this matter to the record of the AO for denovo assessment after conducting a proper enquiry and investigation and allowing a proper opportunity of hearing to the assessee. ITA Nos. 290 560 to 563/JP/2016. 9. In these cases the AO has made the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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