HARSH COMTRADE PVT LTD,SURAT vs. INCOME TAX OFFICER, WARD 5(4), KOLKATA

All the above limbs of arguments are mutually exclusive and even if the assessee succeeds in one of the argument, the re-assessment is liable to be quashed and thus each discrepancy has to be dealt with separately.

In view of the above, this cannot be stated to be a valid case of re- opening where the Assessing Officer has reasons to believe that the income has escaped assessment.

There is complete non-application of mind by the Assessing Officer to the information received, prior the re-opening of the assessment. This fact is clear from the facts and figures given in the reasons recorded are wrong. Such non-application of mind to the information received by the Assessing Officer prior to recording of reasons for re- opening of assessment makes the reopening bad in law.

The provisions of Section 142(3) of the Income Tax Act, 1961 clearly states that -"The assessee shall, except where the assessment is made under section 144, be given an opportunity of being heard in respect of any material gathered on the basis of any inquiry under sub-section (2) or any audit under sub-section (2A) and proposed to be utilized for the purposes of the assessment."

The main thrust of our argument is the fact that the information coming in possession of the Assessing Officer is not a credible piece of information and the Assessing Officer has not done any exercise to verify the genuineness of the information and thus, the said information of some debit from a bank account has no nexus with escapement of income. Thus, the crucial link between the information made available to the AO and the formation of belief is absent in this case. The reasons must be self evident, they must speak for themselves. The tangible material which forms the basis for the belief that income has escaped assessment must be evident from a reading of the reasons.

It is submitted that the Assessing Officer has observed in the reasons for re-opening that an amount of Rs. 20,00,000/- has 5 escaped income being undisclosed however nothing was brought by the Assessing Officer with respect to the amount received as alleged to the tune of Rs. 20,00,000/- viz. date of credit entry or mode of payment or even nature of payment or destination of payment though the burden primarily lies upon him. It is thus submitted that the Assessing Officer before issuing notice u/s. 148 had to verify the genuineness of the alleged credible information but the AO did not do so. Even though summons were issued to the bank manager u/s 131, the only purpose of issuing summons was to get access to the bank statement which is not a credible piece of information leading to independent belief for escapement of income. Hence, accordingly the issuance of notice u/s. 148 of the Act is bad in law.

It is further submitted that the Assessing Officer had no information of receipt of Rs. 20,00,000/- from M/s. Fastmove Merchants Pvt. Ltd. though in reality there was a receipt of total amount Rs. 36,00,000/- only from the said party. Further, the assessee has filed the statement of bank account that goes to show that the receipt of Rs. 36,00,000/- from M/s. Fastmove Merchants Pvt. Ltd. in two separate transaction on 03.05.2011 & 06.05.2011 is not a new loan but repayments of earlier advances given. However, the Assessing Officer in the reasons recorded for re-opening has not mentioned any nature of the transaction. On the sole ground of incorrect reason also, the notice u/s 148 is liable to be quashed although in the present case, the facts are more favourable because the facts of incorrect information is coupled with the fact that case is re-opened on basis of non-credible information without taking any efforts to check the veracity of the information.

Reliance is placed on the decision of Honourable High Court of Punjab & Haryana in the case of Commissioner of Income Tax v. Atlas Cycle Industries [1989] 180 ITR 319 (Punjab & Haryana) wherein it was held that -

It is well settled that the reopening of assessment under Section 147 is a potent power not to be lightly exercised. It certainly cannot be invoked casually or mechanically. The heart of the provision is the formation of belief by the AO that income has escaped assessment. The reasons so recorded have to be based on some tangible material 6 and that should be evident from reading the reasons. It cannot be supplied subsequently either during the proceedings when objections to the reopening are considered or even during the assessment proceedings that follow. This is the bare minimum mandatory requirement of the first part of Section 147 (1) of the Act

Reliance is also placed on the decision of High Court of Delhi in the case of PCIT vs. Meenakshi Overseas Pvt. Ltd. [2017] 82 taxmann.com 300 wherein it was held that "There is no independent application of mind by Assessing officer to tangible material which forms the basis of reasons to believe that income has escaped assessment and, conclusions of Assessing officer were reproduction of conclusion in investigation report, so indeed it was a 'borrowed satisfaction. The reasons fail to demonstrate link between tangible material and formation of reason to believe that income had escaped assessment and consequently, reassessment was unjustified." Perusing the reasons for re-opening of the assessment in the above case, the ITAT came to the conclusion that it was apparent that the AO proceeded to send a notice under Section 147/148 of the Act "solely on the basis of information received from the DIT(I). After writing about information received, the AO "jumped to the conclusion that said tabulated instrument are in the nature of accommodation entry." This was done without further verification, examination or any other exercise. The ITAT also noted that the AO "has not mentioned nature of transaction which was effected for alleged accommodation entry and even without mentioning the date of recording of reasons". Following the decision of this Court in Commissioner of Income Tax v. G&G Pharma (2015) 384 ITR 147 (Del.), the ITAT held that "The AO had not applied his mind at the time of initiating the proceedings of reassessment under Section 147 of the Act. The ground Nos. 1(a) to 1(d) of the Assessee's appeal were, accordingly, allowed."

Relying the said decision as supra, the Co-ordinate Kolkata Bench in Ashika Stocking Broking Ltd v. DCIT, Central Circle-2(1), Kolkata in ITA No.390/Kol/2022 for A.Y.2011-12 dated 31.08.2023 ruled the decision in favour of the assessee by stating that "Similar ratio has been laid down by the Co-ordinate Benches in the case of DCIT vs Great Wall Marketing Pvt. Ltd. (supra) and in the case of Balaji Health Care Pvt Ltd.Vs ITO. (supra). Under this circumstances, we are not in a position to sustain the order of Ld. CIT(A) on the legal issue and accordingly we set aside the order of Ld. CIT(A) by allowing the appeal of the assessee on legal issue."

Further, there is a direct judgement of Co-ordinate Kolkata Bench on this issue passed in the case of Sundip Kumar Gupta v. DCIT, Circle-47, Kolkata in I.T.A. Nos. 1170 to1173/Kol/2023 dated 02.07.2024, wherein it was held that-"We have heard the rival submissions and gone through the record. In this case, firstly, the reopening has been made merely on suspicion and solely on the basis of report of Investigation Wing by the Assessing Officer without correlating the said information with the accounts/assessment records of the assessee. As pointed out, had the Assessing Officer 7 correlated the information with the accounts of the assessee, he would have mentioned in the reasons recorded that the assessee had received a fund of Rs. 80,00,000/- instead of Rs. 70,00,000/- as mentioned in the reasons recorded. Secondly, the Assessing Officer himself has mentioned in the reasons recorded that the pattern of the transaction indicated that there was a possibility of routing of unlawful money and probably with intention to convert black money into white money. Thus even in the investigation report, there was suspicion only. Hence, the information from the investigation wing, at the most can be said to be a reason to suspect only. The Assessing officer did not corelate the said information with the accounts of the assessee. There was no credible information available with the Assessing Officer to form the belief that the income of the assessee has escaped assessment. It has been held time and again that the reasons to believe regarding the escapement of the income should be based on certain tangible material and it should not be mere pretence of the Assessing Officer. The reasons to believe does not mean reason to suspect. Reopening of the assessment is not permitted for making fishing and roving enquiries. The Assessing Officer, after receipt of alleged information received from the Investigation Wing was supposed to corelate the same with the records and other facts of the case and thereafter should have satisfied himself of escapement of income. Reopening is not permissible on the basis of borrowed satisfaction of the Assessing Officer. Therefore, reopening of the assessment in this case is held as bad in law. Reliance in this respect can be placed on the decision of Hon'ble Supreme Court in the case of 'ITO vs. Lakhmani Mewal Das' reported in (1976) 103 ITR 437 (SC), of the Hon'ble Delhi High Court in the case of 'PCIT Vs. Meenakshi Overseas Ltd.' reported in 395 ITR 677 (Del.) and in the case of 'CIT vs. Atul Jain' reported in [2008] 299 ITR 383 (Delhi), further of the Hon'ble Punjab and Haryana High Court in the case of 'CIT vs. Paramjit Kaur reported in (2009) 311 ITR 38 (P&H)."

There is one more dimension to our main limb of argument. It is pertinent to note that the reason for re-opening talks about income escaping assessment of Rs. 20,00,000/- which the Assessing Officer has assumed to be undisclosed. However, he has made addition on the basis of entry in the bank account amounting to Rs. 36,00,000/- which was already disclosed in the audit report and ITR. Thus, there is difference in amount as well as nature of amount. This shows that alleged income of Rs. 20,00,000/- on basis of suspicion which was purportedly undisclosed and the actual addition made of credit entry in disclosed bank statement are entirely different.

it can thus be said that the re-opening is made on the grounds of Rs. 20,00,000/- being amount attributable to the assessee as some beneficiary however in the assessment order, the Assessing Officer has made addition on account of other grounds on basis of some entry in bank account. 8 17. The provisions of Explanation 3 to Section 147 of the Act are reproduced as under: "For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148."

In such scenario, the courts have held that Explanation 3 to section 147 cannot be read as conjunctive but has to be read as disjunctive. Evidently, the assessee received a sum of Rs. 36,00,000/- is as per the statement submitted by the assessee during assessment proceedings whereas the Assessing Officer did not inquire any entries of bank statement of the assessee at the time of re-opening. There is nothing brought by the Assessing Officer with regard to the receiving of Rs. 20,00,000/-, save and except this fact that he received some information from Investigation Wing which was not eventually verified. The Assessing Officer failed to provide any details of the alleged receipt of Rs. 20,00,000/- from the said party at any point of time at the time of re-opening or even during assessment.

Reliance is placed on the following decisions as discussed below:

There are few other cases on which the assessee would like to rely upon on this issue- a. M/s Infinity Infotech Parks Ltd. ITAT No. 60 of 2014, GA No. 1736 of 2014 (Calcutta-HC) b. Artex Property Consultants Pvt. Ltd. vs. ITO [ITA No. 798/Kol/2023] dated 16.10.2023 c. Babita Devi Kajoria vs. ITO [ITA No. 54/Kol/2020] dated 22.12.2022

There is another direct judgement on this issue of the Co-ordinate Kolkata Bench passed in ITA No. 265/Kol/2024 dated 02.05.2024 in the case of M/s. R.S. Darshan Singh Motor Car Finance Pvt. Ltd. v. ITO, Ward-11(3), Kolkata wherein it was adjudicated as under -7. We are of this view that A/O did not apply his own mind to the information and examine the basis and material of the information. 13 He(AO) accepted the plea in a mechanical manner. It is settled law that mere reliance on the information received, without having acted there on before recording the reason, showing non application of mind on the part of the A/O., is unsustainable in law. Accordingly, we hold that the issuance of notices u/s 148 of the Act is illegal, wrong and it is hereby quashed. The entire proceedings held after that has also been quashed.

In the result, the appeal filed by the assessee is allowed"

Even otherwise, it is submitted that it is well settled law that the case cannot be re-opened for the sake of inquiry or on the basis of suspicion.

The Apex Court in the case of Calcutta Discount Co. Ltd. v. ITO (1961) [41 ITR 191] (SC) analyzed the Phrase "reason to believe" and observed that - "It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else to tell the assessing authority what inferences, whether of facts or law, should be drawn."

In ITO vs. Lakhmani Mewal Das (1976) 103 ITR 437 (SC), the Supreme Court held that the powers of the ITO to reopen the assessment, though wide are not plenary. The words used by the statute are "reasons to believe" and not "reasons to suspect".

Even on merits of the case, the undisputed facts of the case as can be culled are that on perusal of information received from Investigation Wing, the Assessing Officer observed that assessee had received Rs.36,00,000/- from M/s. Fast Move Merchants Pvt. Ltd. and presumed that the assessee was beneficiary of unaccounted black money routed through various shell companies maintained and controlled by entry operator. Therefore, the Assessing Officer issued notices u/s 143(2) and 142(1), however the assessee could not reply to the above notices due to family issues. Thereafter, a show cause notice dated 19.11.2019 was issue to the assessee as to why the said amount of Rs. 36,00,000/- as received through accommodation entry through layering of funds should not be added to the total income. In response to the above show cause notice, the assessee submitted a reply on 21.11.2019 through e- compliance, wherein it was stated that the amount of Rs. 36,00,000/- was received from Fastmove Merchants Pvt Ltd against the unsecured loan given by the assessee in previous years. The assessee had also submitted documents called for along with the above reply as follow: 14 a. Tax audit report b. Bank statement c. Fastmove merchants Pvt Ltd master data from MCA d. Fastmove merchants Pvt Ltd certificate of incorporation e. Confirmation from Fastmove merchants Pvt. Ltd

It is to be noted that through e-compliance portal the assessee complied to various notices issued, however the Assessing Officer failed to consider any of the reply submitted by the assessee. Therefore, the Assessing Officer proceeded to make an addition of Rs. 36,00,000/- by treating it as unaccounted money, without considering the reply of the assessee.

Further, it is submitted that it is not discernable from the assessment order as to how the Assessing Officer has arrived at the figure of Rs. 36,00,000/- as regard to the date of transaction in the bank and the amount.

Infact, the bank statement is filed in the Paperbook and there is no single entry of Rs. 36,00,000/- identified by the Assessing officer from the bank statement. The copy of the bank statement is filed in the Paper Book. Further, the assessee is not provided any opportunity of cross examination nor supplied any copy of material which is relied upon by the Assessing Officer while making the additions which is in violation to Section 142(3) as stated supra.

Hence, even on merits, the submissions at Para 23 to 30 are relied upon and hence such adhoc additions without any basis should be deleted. On perusal of the audit report, it can be seen that there is liquidation of equity shares standing on the asset side of the balance sheet which is undisputed and the same amount is advanced to various concerns viz. Roopam Sarees Pvt. Ltd. and Roopam Designer Sarees Pvt. Ltd. as loan given of Rs. 97,00,000/- and Rs. 1,67,00,000/- respectively and hence there is no introduction of new credit in the books of accounts of Harsh Comtrade Pvt. Ltd. which can represent unaccounted money. Infact, there were corresponding addition in the assessment order of Roopam Sarees Pvt. Ltd. for AY 2012-13 wherein the source in the hands of Harsh Comtrade Pvt. Ltd. is accepted as genuine and the copy of appellate order of Ld. CIT(A) in order dated 12.12.2019 vide Appeal No. CIT(A)/Surat-2/10367/15-16 [DIN ITBA/APL/M/250/2019- 20/1022212767(1)] is filed in the Paper Book. On perusal of the order, it can be seen that in hands of Roopam Sarees Pvt. Ltd, the Ld CIT(A) using his power co-terminus with the power of AO has scrutinized the source of source in the hands of Roopam Sarees Pvt Ltd and such source of source in the bank account of Harsh Comtrade Pvt Ltd and has given relief to Roopam Sarees Pvt Ltd considering the said transaction as genuine. The Revenue has not filed further any appeal and thus the issue has attained finality. Thus, no adverse view is called for and the addition made in the hands of assessee company Harsh Comtrade Pvt. Ltd. is also liable to be deleted. 15 30. Further, as an alternative argument, it is submitted that this is undisputedly the case of repayment of loan given in earlier years as is evident from the ledger account and not a case of fresh cash credit in the books of accounts and in such scenario, the Courts have clearly held that no additions can be made of any cash credits u/s 68 or unexplained money.

The issue is directly covered by the decision of Hon'ble Bombay High Court in the case of Veedhata Tower Pvt. Ltd. [ITA No. 819 of 2015] dated 17.04.2018, wherein it was held that, "The tribunal have heard the rival submissions and concluded that since this is a case of repayment of loan given by the assessee, there is no requirement on the part of the assessee to prove the source of funds in the hands of assessee. There cannot be any dispute on the above reasoning."

Reliance is therefore placed on the decision of ITAT, Mumbai in the case of ITO vs. M/s. Vijay Dwellers Pvt. Ltd. [ITA No. 141/Mum/2018] dated 30.01.2019, wherein it was held that; "We have heard the rival submission and perused the relevant materials on record. So far as receipt of Rs. 13,48,50,000/- from Prakruti Infrastructure P. Ltd. is concerned the Ld. CIT(A) has rightly observed that since this is a case of repayment of loan given by the assessee, there is no requirement on the part of the assessee to prove the source of funds in the hands of Prakruti Infrastructure P. Ltd. There cannot be any dispute on the above reasoning. We are supported by the decision in Veedhata Tower Pvt. Ltd. (supra) and M/s B Estate Pvt. Ltd. (supra)."

In view of the above and relying on the submissions filed before Ld. CIT(A) and case laws filed, the Honourable Tribunal is please requested to delete the addition and oblige.

It was the submission that the assessee is challenging the reopening of the assessment on multiple grounds as has been mentioned in para 2 of his written submission. it was the submission that primarily the reopening is being challenged on the ground that the reopening has been done only on the basis of suspicion, secondly that the amount mentioned in the reasons recorded are incorrect and the addition made in the assessment is totally a different figure, thirdly was that even after the introduction o the Explanation 3 to Section 147 of the Act, when the substantive addition has not been made on the basis of the reasons recorded no other addition can 16 be made in the assessment. The ld.AR drew my attention to the reasons recorded for reopening which was at page 105 & 106 of the paper book, which reads as under :- 17

It was the submission that the AO in his reasons recorded mentions that he has received information from the ADIT(Investigation), Unit-2(2), Kolkata vide letter dated 16.03.2018 that the assessee has received Rs.51 lakhs from M/s First Move Merchant Pvt. Ltd. It was the submission that the AO has extracted the copy of the information received in which it also shows the break up of Rs.51 lakhs as having been hand written. It was submitted that subsequently the AO holds that the assessee has received Rs.20 lakhs as unaccounted black money. The ld. AR further drew my attention the assessment order wherein the assessing officer mentions that the information received is in regard to Rs.36 lakhs received by the assessee during the financial year 2011-2012 and the AO has made addition on Rs.36 lakhs. It was the submission that in the reasons recorded the AO has mentioned Rs.20 lakhs and the addition made in the assessment is not of Rs.20,00,000/- but of Rs.36 lakhs. It was further submitted that in view of the decision of the coordinate bench of this Tribunal in the case of Sundip Kumar Gupta, passed in Ita No.1170/Kol/2023, dated 02.07.2024, wherein the coordinate bench has held that on similar circumstances the reopening is liable to be quashed. The finding of the Tribunal in this regard is as follows:- 7. We have heard the rival submissions and gone through the record. In this case, firstly, the reopening has been made merely on suspicion and solely on the basis of report of Investigation Wing by the Assessing Officer without correlating the said information with the 18 accounts/assessment records of the assessee. As pointed out, had the Assessing Officer correlated the information with the accounts of the assessee, he would have mentioned in the reasons recorded that the assessee had received a fund of Rs.80,00,000/- instead of Rs.70,00,000/- as mentioned in the reasons recorded. Secondly, the Assessing Officer himself has mentioned in the reasons recorded that the pattern of the transaction indicated that there was a possibility of routing of unlawful money and probably with intention to convert black money into white money. Thus even in the investigation report, there was suspicion only. Hence, the information from the investigation wing, at the most can be said to be a reason to suspect only. The Assessing officer did not corelate the said information with the accounts of the assessee. There was no credible information available with the Assessing Officer to form the belief that the income of the assessee has escaped assessment. It has been held time and again that the reasons to believe regarding the escapement of the income should be based on certain tangible material and it should not be mere pretence of the Assessing Officer. The reasons to believe does not mean reason to suspect. Reopening of the assessment is not permitted for making fishing and roving enquiries. The Assessing Officer, after receipt of alleged information received from the Investigation Wing was supposed to corelate the same with the records and other facts of the case and thereafter should have satisfied himself of escapement of income. Reopening is not permissible on the basis of borrowed satisfaction of the Assessing Officer. Therefore, reopening of the assessment in this case is held as bad in law. Reliance in this respect can be placed on the decision of Hon'ble Supreme Court in the case of 'ITO vs. Lakhmani Mewal Das' reported in (1976) 103 ITR 437 (SC), of the Hon'ble Delhi High Court in the case of 'PCIT Vs. Meenakshi Overseas Ltd.' reported in 395 ITR 677 (Del.) and in the case of 'CIT vs. Atul Jain' reported in [2008] 299 ITR 383 (Delhi), further of the Hon'ble Punjab and Haryana High Court in the case of 'CIT vs. Paramjit Kaur' reported in (2009) 311 ITR 38 (P&H).

It was further submitted that in regard to the issue of amounts being not correctly considered, the assessee relied upon the decision of the Hon’ble Punjab & Haryana High Court in the case of Atlas Cycle Industries, reported in [1989] 180 ITR 319 (P&H) as also the decision of the Hon’ble Bombay High Court in the case of Jet Airways (I) Limited, reported in (2011) 331 ITR 236 (Bom), wherein it has been held that where the AO does not assess or, as the case may be, reassess the income which he has reason to believe had escaped assessment and which formed the basis of a notice 19 u/s.148 of the Act, it is open to the AO to assess or reassess independently any other income which does not form the subject matter of the notice. Basically, the contention of the assessee is that if no addition has been made on the basis of the reasons recorded, then without issuing a fresh notice for reopening, after recording the valid reasons of reopening, the AO cannot make additions on other issues. In regard to the assessment order also on merits, it was submitted by the ld. AR that the assessee had responded to the notice issued even through the AO mentions that the assessee has not responded. The ld. AR drew my attention to the pages 22 & 23 of the paper book which reads as follows :- 20

It was the submission that the AO had also not provided adequate time to the assessee to respond to the notice. It was the further submission that even before the ld. CIT(A), the assessee had produced various details and the ld. CIT(A) in pages 16 & 17 at para 5 to 5.2 of his order, had held that evidences have been produced in violation of Rule 46A of the IT Rules, 1962. It was the submission that the reopening of the assessment is liable to be quashed at the outset. Secondly, even on merits, no addition was called for and thirdly, the issues may be restored to the file of AO for readjudication. 21 8. In reply to a specific query as to what was the transaction with M/s Fast Move Merchants Pvt. Ltd., it was submitted by the ld.AR that the amount received by the assessee from M/s Fast Move Merchants Pvt. Ltd. was an amount of Rs.36 lakhs, which the assessee had given to M/s Fast Move Merchants Pvt. Ltd. in the earlier years and this amount was received back during the impugned assessment year and it was also evident from the ledger account in respect of M/s Fast Move Merchants Pvt. Ltd. It was also the submission of the ld.AR that this amount received by the assessee have also been paid to the sister concerns of the assessee being M/s Roopam Sarees Pvt. Ltd. And M/s Roopam Designer Sarees Pvt. Ltd.. It was the submission that the amounts given to M/s Roopam Sarees Pvt. Ltd. And M/s Roopam Designer Sarees Pvt. Ltd. had been accepted by the ld. CIT(A) and consequently the transaction in respect of the assessee is also liable to be accepted. 9. In reply, ld.Sr. DR submitted that the provisions of Section 148 of the Act require only information that suggests that income liable to be taxed has escaped assessment. It was submitted that the reasons recorded by the ld.AO clearly gives the suggestion. It was, thus, submitted that the order of the AO and ld. CIT(A) deserve to be upheld. 10. I have considered the rival submissions. A perusal of the facts of the present case clearly shows that the AO has recorded the reasons which has been extracted above. A perusal of the assessment order also shows that the said notice u/s.148 of the Act was made available to the assessee. The notices were also issued to the assessee. The assessee chose not to 22 respond to the AO. The assessment order is dated 22.11.2019. The first response made by the assessee to the AO is on 21.11.2019. Second response is on 22.11.2019. A perusal of the reply filed by the assessee which has also been extracted above, shows that the assessee is seeking time for replying to the notices. Surprisingly a perusal of the reply filed by the assessee also shows that the assessee is providing Mobile Number of the assessee for correspondence. When it is well-known that the correspondence is to be made on the online method, using wrong method will give rise to suspicion. Admittedly, before the AO the assessee has been non-cooperative. A perusal of the reasons recorded clearly shows that the AO has mentioned that he has received information from the Investigation Wing. He also categorically mentioned that he has gone through the above information and has come to the conclusion that there is escapement of income to an extent of Rs.20 lakhs. Just because the AO in the assessment order has made an addition of Rs.36 lakhs as against Rs.20 lakhs mentioned in the reasons recorded, could not make the reasons recorded invalid, insofar as, the amount of Rs.36 lakhs far exceeds Rs.20 lakhs. The reasons for reopening of the assessment shows that there is escapement of income. The exact quantification of the amount which has escaped assessment is not an absolute necessity. The AO has been able to point out how the income has escaped assessment and this was also brought to the attention of the assessee when notice for reopening was issued and the assessee did not respond to it. Liberty was always available to the assessee to respond. The assessee having chosen one path cannot now 23 say that he has been denied justice or that the path chosen by the officer was wrong. 11. Now, coming to the decision quoted by the ld. AR in respect of Sundip Kumar Gupta, supra, in the said case the coordinate bench of the Tribunal mentioned that the reasons to believe does not mean reasons to suspect. In the present case, a perusal of the reason shows that the suspicion part is in regard to the information which has been given by the ADIT(Inv.), Unit- 2(2), Kolkata. The finding of the AO for the purpose of reopening clearly uses the words “I have gone through the above information and the details and I am satisfied that Rs.20,00,000/- is unaccounted black money routed through various shell companies, in order to look to be genuine transaction. Thus, Rs.20,00,000/- has remained undisclosed”. What more clarity is being called for in the reasons recorded. The AO had gone through the information provided to him. He has verified the details and has recorded his satisfaction in regard to income escaping assessment. In these circumstances, the decision relied upon by the ld. AR in the case of coordinate bench of the Tribunal in the case of Sundip Kumar Gupta, referred to supra, does not apply to the facts of the present case. 12. Coming to the decision relied upon by the ld. AR in the case of Atlas Cycle Industries (supra) and in the case of Jet Airways (supra), a perusal of the assessment order shows that the AO has brought to tax the amount received by the assessee from M/s Fast Move Merchants Pvt. Ltd. The reasons recorded clearly show that the transactions on the basis of which the AO has reopened the assessment relates to M/s Fast Move Merchants 24 Pvt. Ltd.. The addition made in the assessment order are in relation to the same transaction and there is no variation except for the amount of alleged income which has escaped assessment. The amount brought to tax in the assessment order far exceeds the amount mentioned in the reasons recorded. Consequently, the decision of the Hon’ble Punjab & Haryan High Court in the case of Atlas Cycle Industries (supra) so also the decision of the Hon’ble Bombay High Court in the case of Jet Airways (supra) have no applicability to the facts of the present case. 13. In regard to the Explanation 3 to Section 147 of the Act, as I have already held above that reopening is valid and the reasons recorded are also valid, the applicability of Explanation 3 to Section 147 of the Act would not have any effect. 14. Now, coming to the merits of the addition, admittedly, the assessee has clarified that the amount of Rs.36 lakhs received by the assessee from M/s Fast Move Merchants Pvt. Ltd. is a part of an amount which was earlier given and it was returned. Admittedly, this information has not been produced before the AO. It is also an admitted fact that the ld. CIT(A) has not admitted the additional evidence in regard to Rule 46A of IT Rules, 1962. In these circumstances, I am of the view that on merits, the issue needs verification and therefore is required to be restored to the file of Assessing Officer for denovo assessment, and I do so. The assessee has to produce the concerned officers/responsible persons of M/s Fast Move Merchants Pvt. Ltd. before the AO to substantiate his case that this amount is received from the said company through proper banking channels and 25 these are accounted income and also the details of the transaction with M/s Fast Move Merchants Pvt. Ltd. The AO shall have the liberty to cross- examine the concerned authority of M/s Fast Move Merchants Pvt. Ltd. once the assessee produces the said authorities before the AO for verification. 15. In the result, appeal of the assessee is partly allowed for statistical purposes.