DEPUTY COMMISSIONER OF INCOME TAX, CHANDIGARH vs. WINSOME TEXTILE INDUSTRIES LTD, CHANDIGARH

"That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the initiation of proceedings under section 148 in as much as there was no escapement of income leading to a reason to belief and as such the re-opening is illegal, arbitrary and unjustified.

That there was no reason to believe that the income already assessed under section 143(3) of the Act had escaped assessment and as such the assessment framed and upheld by the Commissioner of Income Tax(Appeals) based on a mere change of opinion is illegal, arbitrary and unjustified.

That the Ld. Assessing Officer has erred in law as well as on facts in as much as there has been no reason to believe that there was an escapement of income in as much as the reasons recorded are based only on borrowed information and as such the assessment order passed is illegal, arbitrary and unjustified.

Without prejudice to the above, the Ld. Commissioner of Income Tax (Appeals) has erred in sustaining the addition of Rs.61,54,754/- out of total addition of Rs.82,06,338/- made on account of alleged unexplained purchases from M/s Rohit Trading Company and M/s Vijay Trading Company treating them to be non-genuine which is arbitrary and unjustified.

That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.

That the order of the Ld. Commissioner of Income Tax is erroneous, arbitrary, opposed to law and facts of the case and is, thus untenable.

In ITA No. 556/Chd/2024, the Revenue has raised the following grounds of appeal: 1. “The Ld. CIT(A) erred on the facts and circumstances of the case in deleting the addition of Rs.44,75,88,075/- made on account of failure of the assessee to establish identity, creditworthiness and genuineness of transaction of the investors in GDRS (Global Depository Receipts).

The Ld. CIT(A) erred on the facts and circumstances of the case in deleting the addition of Rs.44,75,88,075/- when the circumstances established that the assessee could not explain the sources of investment of Rs.44,75,88,075/- in its books of accounts as Share Application Money/Share Premium/Global Depository Receipts.

Briefly the facts of the case are that the assessee company was engaged in the business of manufacturing and sale of yarns during the F.Y 2010-11 relevant to impugned A.Y 2011-12. The assessee company filed its return of income on 28/09/2011 declaring profit of Rs.21,05,09,768/- which was set off against the brought forward losses and thereby NIL income was reported under the normal provisions. However, the tax liability was discharged by paying taxes under section 115JB of the Act. The return of income was processed under section 143(1), thereafter the case of the assessee was reopened under section 147 after recording reasons relating to taxability of exchange rate gains earned by the assessee on GDR proceeds which were not repatriated to India immediately and thus income has escaped assessment and notice under section 148 was issued on 26/03/2017. Thereafter after considering the submissions filed by the assessee, the AO framed the assessment under section 143(3) r.w.s 147 vide order dt. 12/10/2017 accepting the return of income, without providing any adverse inference or finding.

Thereafter, information was received by the AO from DDIT(Investigation) Unit-71, Delhi vide letter dt. 26/03/2018 that the assessee has undertaken transaction with the some proprietary concerns which on investigation were found to be paper concern and are used to provide bogus bills of purchases to the beneficiaries company. Basis the same, reasons were recorded by the AO that income to the extent of Rs.2,29,15,034/- has escaped assessment within the meaning of Section 147 of the Act and another notice under section 148 was issued on 31/03/2018 which was served on the assessee on the said date.

In response to the notice under section 148, the assessee filed its return of income on 19/04/2018 declaring total income as declared as per original return of income filed on 28/09/2011. Thereafter, the assessee sought copy of the reasons so recorded vide its letter dt. 15/12/2018 and which were provided to the assessee on 17/12/2018 and thereafter, the assessee filed its objection to the initiation of reassessment proceedings under section 147 vide letter dt. 19/12/2018 which were disposed off by the AO by passing a separate order dt. 19/12/2018. Thereafter, after issuance of notice under section 143(2) and 142(1) and after calling for necessary information and documentation as well as issue of specific show cause notice, the AO made an addition of Rs.82,06,338/- being 20% of the total purchase of Rs.4,10,31,689/- made from M/s Rohit Trading Company (Rs.3,44,37,684/-) and M/s Vijay Trading Company (Rs.65,94,005/-). In addition, the AO also treated the GDR receipt of Rs.6,45,00,000/-being share capital and Rs.38,30,88,075/- being security premium totaling to Rs. 44,75,88,075/- as income from undisclosed sources and which was brought to tax by invoking the provisions of Section 68 of the Act. The AO further did not allow the set off of the income so assessed against the brought forward losses/ unabsorbed depreciation and as against the returned income of Rs. 21,05,09,769/-, the assessed income was determined at Rs.44,75,88,075/- under the normal provision and income under section 115JB at Rs.12,83,97,342/-.

Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) wherein the order so passed by the AO under section 143(3) r.w.s 147 dt. 28/12/2018 was challenged both in terms of assumption of juri iction under section 147 of the Act as well as on the merits of the addition so made by the AO. As far as the assessee's challenge to the assumption of juri iction under section 147 of the Act, the Ld. CIT(A) did not agree with the various contentions so raised by the assessee and the grounds of appeal so raised by the assessee were dismissed. Against the said findings, the assessee has again challenged the assumption of juri iction by the AO before us.

As far as the addition of Rs.82,06,338/- made by the AO @ 20% of the total purchase, the Ld. CIT(A) allowed part relief to the assessee wherein as against 20% applied by the AO, 15% of the purchase price was found reasonable to cover the extra profit and as a result, the addition of Rs.61,54,745/- was confirmed and the balance addition of Rs.20,51,585/- was directed to be deleted. Against the addition so sustained by the Ld. CIT(A), the assessee is in appeal before us.

As far as the addition on account of GDR receipt under section 68 of the Act, the Ld. CIT(A) has given his reasoning and findings in para 8.1 to 8.29 in the impugned order and held that the addition under section 68 on account of share capital and share premium through issuance of GDR is not sustainable by invoking the provisions of Section 68 of the Act and the AO was directed to delete the addition so made in the hands of the assessee and the grounds of appeal so taken by the assessee be allowed. Against the said action of the Ld. CIT(A) in terms of deleting the addition under section 68 on account of GDR receipt, the Revenue is in appeal before us.

As we have noted above, the assessee has challenged the findings of the Ld. CIT(A) in respect of assumption of juri iction under section 147 of the Act. Both the parties fairly submitted and it was also deemed appropriate that the said grounds of appeal be taken up first for adjudication, thereafter, the merit of the addition so sustained and deleted by the Ld CIT(A) may be considered.

In this regard, during the course of hearing, the Ld. AR submitted that the appellant had filed its original return of income on 28.09.2011 declaring profit of Rs 21,05,90,768/- which was set off against the brought forward losses. However, tax was paid under sections 115JB of Income Tax Act, 1961. Thereafter, notice under section 148 of Income Tax Act, 1961 dated 26.03.2017 was issued after approval from the Worthy Pr. Commissioner of Income Tax and thereafter, the assessment was completed on 12.10.2017. The Assessing officer during the course of assessment proceedings for Assessment Year 2013-14 had referred the matter regarding receipt of GDRs to the Foreign Tax Department (FTD), the information of which was received from them before the completion of assessment and even before the issue of original notice under section 148 of Income Tax Act, 1961 on 26.03.2017 for Assessment Year 2011-12. This fact emerges from the rebuttal to the order disposing off the objections dated 19.12.2018 filed by the assessee and is incorporated in the assessment order. The averments in respect of the information being available from Singapore and UK authorities with the department have not been denied. Thus, details in entirety in respect of GDR issue was available with the Assessing Officer at the time when the assessment proceedings in respect of original notice issued under section 148 on 26.03.2017. Thereafter, another notice u/s 148 of Income Tax Act, 1961 dated 31.03.2018 has been issued on the basis of information received from investigation wing of department, New Delhi regarding certain non-genuine purchases by the appellant vide letter dated 26.03.2018 as mentioned in the reasons recorded. The appellant filed all documents regarding purchase bills, transport receipts, material inward register, payment of entry tax to Government. The assessee even requested for cross examination of the party concerned on whose statement the Income Tax Department was relying regarding non-supply of goods by them. The Assessing Officer has accepted the books of accounts and has made an adhoc addition of 20 percent of the purchase to cover any kind of extra profit. The action of the Assessing Officer in the absence of reliance on any credible evidence is unjustified and legally not tenable. The Assessing Officer has infact accepted the purchases but has taken 20 percent of the purchase price as extra profit in the absence of any evidence for reasons best known to him. The Assessing Officer has further extended the scope of enquiry regarding issue of GDR receipts credited in the assessee's books of accounts when all the material relied upon by him was available in the assessment records at the time of issuance of notice under section 148 of Income Tax Act, 1961 dated 26.03.17 and the returned income was accepted by the then Assessing Officer. The reasons recorded in the present proceedings pertained only to alleged bogus purchases and not in respect of GDR issue. Rather, the Assessing Officer mentions in the reasons in Para 1 that earlier the case was reopened under section 148 on the issue of GDR receipts. The assessee had filed objections clearly stating that the basis of the information received from U.K Authorities in the month of April 2018 appears contrary to the material on record. The information received from U.K Authorities in April 2018 was the same as intimated by them to Foreign Tax Department to the Assessing Officer in June/July, 2016 on the basis of the documents shown to the authorized representative of the assessee. The extension of the scope of the proceedings under section 147 is against the provisions of law in view of the various judicial pronouncements specially when the information was on record at the time of issuance of original notice under section 148 of Income Tax Act, 1961. The Assessing Officer has only tried to justify extending the scope of his enquiry and has remained silent on the receipt of information from U.K Authorities in June/July, 2016 and from Singapore Authority on 03.06.2016. The addition on account of GDR proceeds under section 68 Income Tax Act, 1961 are without any basis and on the reliance of SEBI investigation of the lead manager to the issue, the SEBI report was also available on record as shown to the Authorised Representative of the assessee before the issue of the first notice of reassessment on 26.03.2017. As such, the assessment framed in respect of both the issues i.e. alleged bogus purchases and GDR issue is nothing but a change of opinion. All the details in respect of sales/purchases were on record during the course of earlier proceedings initiated vide issuance of notice under section 148 on 26.03.2017 and subsequent assessment framed. The assessee had filed its objections before the Assessing Officer vide letter dated 19.12.2018 and contents thereof read as under: “Objection to the initiation of proceedings U/s.147 of the Income Tax Act for A.Y. 2011-12 pursuant to the copy of the reasons recorded for initiation of proceedings supplied on 15th December, 2018 and both Notice No. ITBA/AST/F/142(1)/2018- 19/1014084611(1)and Notice No. ITBA/AST/F/142(1)/2018-19/1014102487(1) issued on 7th December, 2018 further expanding the scope of the proceedings to the issue relating to the GDR receipts for which no reasons have been recorded and which have been subject matter of extensive inquiry U/S 147 and 143(3) for A.Ys. 2011-12, 2012-13, 2013-14 and 2014-15. The assumption of juri iction and the extension of scope of inquiry beyond the reasons recorded deserves to be set aside on the following grounds:- i) The assessee company filed its return of income on 29th September, 2011 at nil income after set- ting of brought forward losses to the tune of Rs.210509768/-. The said return was accepted and a notice was issued U/s.147 on 26th March, 2017. The reasons recorded for initiation of proceedings U/s.147 indicated that during the course of assessment proceedings for A.Y. 2013-14, the amount raised after the issue of GDRs during the FY 2010-11, was not immediately repatriated to India. It was invested in Aries Capital Fund Ltd. and subsequently repatriated to India over a period of four years which during F.Y. 2010-11 resulted in a foreign exchange gain of Rs.11,99,000/- which was not treated as a revenue receipt and thus in terms of the reasons recorded escaped in-come for A.Y. 2011-12. The assessee submitted its reply and after due application of mind, the re- turned income was accepted in terms of order passed under Section 143(3) read with Section 147 on 12.10.2017. The present notice U/s.147 has been issued on 31st March, 2018 on the ground that certain purchases made from M/s Rohit Trading Company were bogus purchases and thus income had escaped assessment for which reasons were recorded for initiating the present proceedings. That since the present proceedings have been initiated after a period of four years, and all material facts relating to the purchases made had been duly disclosed in the profit and loss account and balance sheet there being no failure to disclose truly all material facts, the pre- sent reassessment proceedings are bad in law in terms of the ratio of the following judgments: c) Navkar share and stock brokers Vs. ACIT 390 ITR 362 & proceedings, a notice was issued U/s 142(1) was issued on 4th July, 2018 asking the undersigned to provided information and copies of accounts of i) Rohit Trading Company 2) Mahalakshmi and others. The assessee furnished all information on 11th September, 2018 alongwith requisite proof. The same was followed by show cause notice on 1st October, 2018 also relating to the purchases made by the company which was the only ground for initiating the reassessment proceedings for A.Y. 2011-12 as is evident from the reasons recorded. The Assessee furnished reply on 17th October, 2018 and was thereafter issued other notices on 7th December, 2018. The said notices related to the issue pertaining to GDR amounting to Rs.6,45,00,000/- shown as credit in share capital account and Rs. 38,30,88,075/- in securities premium account pertaining to five parties for which details were sought by the Assessing Officer. The assessee furnished information on 14th December, 2018. However, it is relevant to point out that the issue relating to GDR receipts is not part of the reasons recorded for reassessment proceeding against which notice u/s 148 issued on 31st March, 2018 since the issue of GDR receipts was already subject matter of reassessment proceedings initiated for the present year vide reasons recorded and notice issued on 14th July, 2017 culminating in an assessment order on 12th October, 2017. The same is clear from para lof reasons recorded which reads as “The case was reopened u/s 148 on the issue of GDR receipts. The assessment proceedings were completed on 12.10.2017”. The assessment year 2012-13, the issue regarding GDR receipts was subject matter of proceeding U/s.147 on 26th March, 2017 and final orders were also passed on 12th October, 2017 for A.Y. 2012-13. It is also relevant to point out that the issue regarding GDR was subject matter of proceeding for Α.Υ. 2013-14 and 2014-15 in which detailed queries were raised to the assessee on the GDR issue and the company has appropriately replied with relevant information and documents on the GDR issue and final assessment orders were passed on 29th February, 2016 and 31st October, 2016 respectively. Similar information is now being sought again.

It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope of proceedings to the issue relating to the GDR receipts for which no reasons were recorded and which have been subject matter of extensive inquiry u/s 147 and 143(3) for A. Ys.2011-12 to 2014-15. In this regard, it is pertinent to mention here the provisions of Section 147 which reads as under: "If the assessing office has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Section 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the A.Y. concerned". A bare perusal of the above provisions the AO has power to extend his enquiry beyond reasons recorded on the issue which came to his knowledge during the course of pending proceedings. During the course of pending proceedings it came to the notice of the undersigned that during assessment proceedings for the A.Y. 2013-14 enquiries about receipts of GDRs during A.Y. 2011-12 was initiated through Foreign Tax Division of the department resulting some information received in respect of 03 entries from whom assessee claimed to have receipts of GDR. The information so received prima facie disapproves the genuineness of the claim of money through GDR by the assessee. Therefore, since the proceedings for the A.Y. 2011-12 were pending and information so received are related to A.Y. 2011-12 has been taken into consideration for further inquiry. It is pertinent to mention here that information so received have already been confronted to the assessee vide order sheet entry dated 19.12.2018.

It was submitted that rebuttal to the order disposing off the objections dated 24.12.2018 was thereafter filed by the assessee and the contents thereof read as under : “Rebuttal to the order disposing off the objections dated 19th December, 2018: As per your order disposing assessee's objections vide letter no ITBA/AST/F/17/2018- 19/1014424606(1) dtd 19/12/18: a) You have stated that “In this regard it is pertinent to mention here that on 12/10/2017 only details from Singapore authority was received. Information from UK was received in the month of April 2018. Therefore it is incorrect to say that all information was available on records when order dt. 12.10.2017 for AY 2011-12 was passed". The letters shown to the A.R. regarding the information received from the U.K. Authority was dated 30th June, 2016 and 19th July 2016 which was received by AO vide covering letters dtd. 27th July 2016 and April 2018. Thus the letter dtd 30th June, 2016 which was shown to the Authorised Representative of the Assessee on 19th December, 2018 clearly indicates that the information sent by the U.K. Authorities was part of the Assessment record when the re-assessment proceedings for the Assessment year 2011-12 on the issue regarding the receipt of GDR were considered and concluded on 12th October, 2017. The information from the U.K. Authority which was received in April, 2018 is just reiteration of the material already on record prior to conclusion of first reassessment proceedings for AY 2011-12 on the GDR issue in October, 2017. Therefore your assertion that information was received from the U.K. Authorities in the month of April, 2018 appears contrary to the material on record. b) Further you have also stated that “Moreover it is also being mentioned here that in the AY 2013-14, the then AO specifically given office note about the reference to foreign authorities and about remedial action to be taken on the basis of information received till that date from Singapore Authority" and also stated that “In this regard, it is pertinent to mention here that on 12.10.2017 only Details from Singapore Authority was received "..

Since no new material has come to the possession of the Assessing Officer during present proceedings regarding the issue relating to GDR receipts, thus, the extension of inquiry beyond the reasons recorded on the basis of existing information which was already part of the Assessment record and is deemed to have been considered by your predecessors amounts to review and change of opinion which is impermissible in law. This is clearly contrary to the ratio of the Apex Court in CIT v Kelvinator of India Ltd. reiterated in Techspan India P Itd. v ITO enclosed as Annexure D (page nos.1 to 5). That the objections to the extension of the scope of inquiry when the material has been discussed in the reassessment for the A.Y. 2011-12, 2012-13 and 2013-14 have been brushed aside by stating that the amount claimed from the issue of GDR was credited in the Assessee's books for the Assessment Year 2011-12 and the Assessing Officer had specific information from Foreign Authorities and had recommended remedial action in the office note while passing the assessment order for the Assessment year 2013-14 shows that all information presently being used to expand scope of inquiry to present issues of GDR was there on file. prior to initiation of first reassessment proceedings by the present Assessment Year 2011- 12 on the GDR issue the relevant material being part of the record thus the Assessing Officer is deemed to have applied his mind thereto prior to conclusion of reassessment proceedings in October, 2017. Further as per your notice no. ITBA/AST/F/142(1)/2018-19/1014102487(1)dtd. 07/12/2018 it is informed that M/s Scholari Investment Itd., Albarma Ltd. of Singapore and M/s Cruise Waterford, UK are not traceable at the addresses of the same provided by the assessee during assessment proceedings for AY 2013-

Since the matter was examined thread bare by the Assessing Officer during the previous assessment proceedings for AY 2011-12 and all information regarding the same was furnished, the present inquiry vide notices dated 7th December 2018 and show cause dtd 19th December, 2018 is beyond the reasons recorded and clearly based on change of opinion and without any new material coming to the knowledge of the Assessment Officer and the rebuttal of objections vide order dated 19th December, 2018 is contrary to law and facts. The present proceedings thus constitute a review of the order passed by the preceding Assessing Officer on the basis of material already existing when the final order was passed on 12th October, 2017. 15. It was submitted that the objection were disposed off by the AO vide order dt. 19/12/2018 and the contents thereof read as under: "The assessee Winsome Textile Industries Limited is in the business of manufacturing and sale of yarn. During the year under consideration the assessee company had filed return of income on 28.09.2011 declaring current year profit of Rs.21,05,09,768/- which was further set off against brought forward losses. This return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act). The case was reopened under Section 147 by recording reasons that after the issue of GDR during the F.Y. 2010-11, the amount raised was not repatriated to India resulting exchange rate gain which escaped assessment. The reassessment proceedings were completed on 12.10.2017. Subsequent to that information was received from the DDIT (Inv) Unit 7(1) Delhi vide letter F.No. DDIT(INV.)/U-7(1)/2017-18/539 dated 26.03.2018 that the assessee has undertaken transactions with some proprietary concerns which on investigation were found to be paper concerns. The said concerns were operated by some entry operators used to provide bogus bills of purchase (cotton purchases) to the beneficiary companies/entities who in turn purchase the raw material in cash from other persons. The modus operandi involved in these cases is that these proprietary concerns receive payments from the beneficiary companies through various modes like RTGS/ CHEQUES/BANK TRASNFERS/ and the amount is immediately withdrawn as cash and returned to the beneficiaries after charging certain commission from the beneficiaries. Therefore, after analyzing the information with the records of the assessee proceeding u/s 147 of the I.T. Act in this case was initiated and notice u/s 148 of the I.T. Act was issued on 31.03.2018 after recording reasons as per relevant provisions of the Income Tax Act. Vide letter dated 20.04.2018, the assessee informed that it had filed its retum in response to notice u/s 148. The assessee did not asked for providing the copy of reasons recorded for initiating proceedings U/s 147. Subsequent to that notice(s) u/s 142(1)/show cause notice(s) were issued to the assessee. However, on 17.12.2018, the assessee through its AR filed a letter dated 15.12.2018 and asked for the copy of reasons recorded. The reasons were provided to him on 17.12.2018 itself. Thereafter, the assessee vide letter dated 19.12.2018 filed its objections to the initiation of proceedings u/s 147. I have gone through the submission of the assessee. The objections raised by the assessee to the reopening of the assessment are disposed off in the following paras: The first objection is about the extension of the scope