ASSISTANT COMMISSIONER OF INCOME TAX 4(1)(1), MUMBAI vs. ANKUR AGRAWAL, MUMBAI

Fact in brief is that return of income declaring total income of Rs. 1,12,522/- was filed on 28.07.2011. The return was processed u/s 143(1) of the Act. Thereafter, the case was selected for scrutiny u/s 143(3) of the Act and assessment u/s 143(3) of the Act was completed on 30.03.2014 and total income was determined at Rs. Ankur Agrawal A.Y. 2011-12 8,10,990/-. Subsequently, the case was reopened u/s 147 of the Act by issuing of notice u/s 148 of the Act on 30.03.2017. The reassessment proceedings were completed on 19.12.2017 and AO has made total addition of Rs. 26,70,49,716/- to the total income of the assessee by treating long term capital gain earned from sales of shares of JMD Telefilms Ltd. Rs. 25,14,62,940/-, Splash Media and Infra Limited Rs. 1,55,70,963/- and Adani Power Limited Rs. 15,813/- as suspicious LTCG and added to the total income of the assessee u/s 68 of the Act as unexplained cash credits and treated the same under the head income from other sources.

Mr. Hossain’s submissions relating to the startling spike in the share price and other factors may be enough to show circumstances that might create suspicion; however the Court has to decide an issue on the basis of evidence and proof, and not on suspicion alone. The theory of human behavior and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by the Respondent. With regard to the claim that observations made by the CIT(A) were in conflict with the Impugned Order, we may only note that the said observations are general in nature and later in the order, the CIT(A) itself notes that the broker did not respond to the notices. Be that as it may, the CIT(A) has only approved the order of the AO, following the same reasoning, and relying upon the report of the Investigation Wing. Lastly, reliance placed by the Revenue on Suman Poddar v. ITO (supra) and Sumati Dayal v. CIT (supra) is of no assistance. Upon examining the judgment of Suman Poddar (supra) at length, we find that the decision therein was arrived at in light of the peculiar facts and circumstances demonstrated before the ITAT and the Court, such as, inter alia, lack of evidence produced by the Assessee therein to show actual sale of shares in that case. On Ankur Agrawal A.Y. 2011-12 such basis, the ITAT had returned the finding of fact against the Assessee, holding that the genuineness of share transaction was not established by him. However, this is quite different from the factual matrix at hand. Similarly, the case of Sumati Dayal v. CIT (supra) too turns on its own specific facts. The above-stated cases, thus, are of no assistance to the case sought to be canvassed by the Revenue.

The learned ITAT, being the last fact-finding authority, on the basis of the evidence brought on record, has rightly come to the conclusion that the lower tax authorities are not able to sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order.

In this view of the matter, no question of law, much less a substantial question of law arises for our consideration.”

The A.O. did not accept respondent's claim of long term capital gain and added the same in respondent's income under Section 68 of the Act. While allowing the appeal filed by respondent, the CIT[A] deleted the addition made under Section 68 of the Act. The CIT[A] has observed that the A.O. himself has stated that SEBI had conducted independent enquiry in the case of the said broker and in the scrip of RFL through whom respondent had made the said transaction and it was conclusively proved that it was the said broker who had inflated the price of the said scrip in RFL. The CIT[A] also did not find anything wrong in respondent doing only Purti Parab 3/4 3-ITXA-454-2018.doc one transaction with the said broker in the scrip of RFL. The CIT[A] came to the conclusion that respondent brought 3000 shares of RFL, on the floor of Kolkata Stock Exchange through registered share broker. In pursuance of purchase of shares the said broker had raised invoice and purchase price was paid by cheque and respondent's bank account has been debited. The shares were also transferred into respondent's Demat account where it remained for more than one year. After a period of one year the shares were sold by the said broker on various dates in the Kolkata Stock Exchange. Pursuant to sale of shares the said broker had also issued contract notes cum bill for sale and these contract notes and bills were Ankur Agrawal A.Y. 2011-12 made available during the course of appellate proceedings. On the sale of shares respondent effected delivery of shares by way of Demat instructions slip and also received payment from Kolkata Stock Exchange. The cheque received was deposited in respondent's bank account. In view thereof, the CIT[A] found there was no reason to add the capital gains as unexplained cash credit under Section 68 of the Act. The tribunal while dismissing the appeals filed by the Revenue also observed on facts that these shares were purchased by respondent on the floor of Stock Exchange and not from the said broker, deliveries were taken, contract notes were issued and shares were also sold on the floor of Stock Exchange. The ITAT therefore, in our view, rightly concluded that there was no merit in the appeal.

We also find no infirmity in the order passed by the ITAT and no substantial questions of law as proposed in the appeal arises.” 16.4 The Hon’ble jurisdictional Bombay High Court has considered an identical issue in case of PCIT vs Ziauddin A Siddique (Income tax appeal No.2012 of 2017 dated 4th March, 2022) and relevant discussions made by Hon’ble Bombay High Court are extracted below:- “2. We have considered the impugned order with the assistance of the learned Counsels and we have no reason to interfere. There is a finding of fact by the Tribunal that the transaction of purchase and sale of the shares of the alleged penny stock of shares of Ramkrishna Fincap Ltd. (“RFL”) is done through stock exchange and through the registered Stock Brokers. The payments have been made through banking channels and even Security Transaction Tax (“STT”) has also been paid. The Assessing Officer also has not criticized the documentation involving the sale and purchase of shares. The Tribunal has also come to a finding that there is no allegation against assessee that it has participated in any price rigging in the market on the shares of RFL.

Therefore we find nothing perverse in the order of the Tribunal.

Regarding the statement of Shri Anil Khemka, alleged entry provider, which is reproduced in Assessment Order at Page 8, we note that said statement recorded neither implicate Sun & Shine Worldwide Ltd nor the broker Trade bulls Securities Pvt Ltd and nor the assessee. We note that physical delivery of shares is proved by the memorandum of transfer of shares stated in the Ankur Agrawal A.Y. 2011-12 share certificate being registered on 30.10.2012. Regarding the escalation of prices of shares of M/s Sun & Shine Worldwide Ltd., that is, the prices have increased by 140 times over the period of 17 months. At this juncture, it is submitted by ld Counsel that prices of shares are determined by the market forces and not solely on the basis of financial statements.

We also note that Assessing officer and CIT(A) has relied on the case of Sumati Dayal vs. CIT (214 ITR 801) (SC). We are of the view that said decision is not applicable to the assessee under consideration, as the assessee has successfully demonstrated with help of evidences on record to have made the transaction of purchase and sale of alleged shares. No single material was brought on record indicating name of any of the entry provider taking assessee's name or assessee's broker name. We note that assessee has submitted enough evidences such as: (a) Ledger Account of Jainam Share Consultancy Securities Pvt. Ltd, (b) Contract Notes of Jainam Share Consultancy Securities Pvt. Ltd. (c) Relevant Bank Statement showing that all transactions were through banking channel. (d) Contra confirmation of broker M/s Corporate Commodity Broker Private Ltd. (e) Share Certificate, (f). Share Transfer Form, (g). Debit Note and (h) Cash Receipt etc. Therefore, addition in assessee's case cannot be made on generalization, human probabilities, suspicion, conjectures and surmises.

We note that assessee submitted before lower authorities the share brokers contract note in dicating name of the scrip which was traded on the stock exchange; quantity of equity shares sold; date and time on which such shares had been sold, rate at which sale was executed; stock exchange at which such share had been dealt with; amount of brokerage charged; amount of service tax charged; amount of Securities Transaction Tax charged; amount of BSE transaction charges paid; amount of stamp duty paid. Therefore, evidence with regard to source and purpose for which amount had been received and credited in the books has been submitted and which has not been found false, forged and fabricated. The Identity of the party is established from the contract note itself wherein it has been prominently stated that name of the Share Broker is Mrs. Tradebulls Securities Pvt Ltd and that they are member of the Bombay Stock Exchange Ltd. The Decial Account statement evidencing holding of equity shares of Company of which shares have been dealt with at Bombay Stock Exchange and also the quantity which has been sold and the date Ankur Agrawal A.Y. 2011-12 on which such quantity was sold. The demat account statement, contains BSE settlement number which is very much matching with settlement number appearing in the contract note issued by the share broker. The Bank statement evidencing receipt of funds from the Share Broker has already been furnished in the course of assessment proceedings. The AO have not brought any material indicating that said amount proposed to be taxed has not been received from the Share Broker or the sum received is from the sources other than the sale consideration claimed against sale of shares. In view of these facts, we are of the view that addition should not be made under section 68 of the Act.

In the light of the documents and evidences submitted by the assessee, we find that there is absolutely no adverse material to implicate the assessee to the entire gamut of unfounded/unwarranted allegations leveled by the AO against the assessee, which in our considered opinion has no legs to stand and therefore has to fall. We take note that Id. DR could not controvert the facts which are supported with material evidences furnished by the assessee. We note that the allegations that the assessee/brokers got involved in price rigging/manipulation of shares must therefore consequently fail. At the cost of repetition, we note that the assessee had furnished all relevant evidences in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and sale of shares resulting in long term capital gain. Neither these evidences were found by the AO nor by the Id. CIT(A) to be false or fictitious or bogus. The facts of the case and the evidences clearly support the claim of the assessee that the transactions of the assessee were genuine and the authorities below was not justified in rejecting the claim of the assessee exempted u/s 10(38) of the Act on the basis of suspicion, surmises and conjectures. It is to be kept in mind that suspicion how so ever strong, cannot partake the character of legal evidence. In the aforesaid facts and circumstance, for allowing the appeal we rely on the decision of the Hon'ble Calcutta High Court in the case of M/s Alipine Investments in of 2008 dated 26th August, 2008 where in the High Court held as follows: "It appears that there was loss and the whole transactions were supported by the contract notes, bills and were carried out through recognized stock broker of the Calcutta Stock Exchange and all the bills were received from the share broker through account payee which are also filed in accordance with the assessment. It appears Ankur Agrawal A.Y. 2011-12 from the facts and materials placed before the Tribunal and after examining the same, the tribunal allowed the appeal by the assessee. In doing so the tribunal held that the transactions cannot be brushed a side on suspicion and surmises. However, it was held that the transactions of the shares are genuine. Therefore, we do not find that there is any reason to hold that there is no substantial question of law held in this matter. Hence the appeal being is dismissed."

In the aforesaid facts and circumstances of the case, we hold that the Id.CIT(A) was not justified in upholding the addition of sale proceeds of the shares as undisclosed income of the assessee u/s 68 of the Act. We therefore delete the addition of Rs.33,15,263.

Since, we have deleted the main addition of Rs.33,15,263/-, therefore, the addition on account of commission payment of Rs.3,29,188, which is consequential in nature, and hence the same is here by deleted."

The AO has not mentioned in the assessment order that what further documents/information regarding the claiming of LTCG were asked for from the appellant, which were not produced by him. The Appellant discharged his primary onus by submitting the documents which were called for by the AO. Now, it was the onus on the AO to prove that the transactions were not genuine by making appropriate enquiry and outlining the transactions trails. Assessment order doesn't mention any such enquiry/ verification by the AO. There is no cash trail mentioned in the assessment order. There is no de- layering of the banking transactions mentioned in the assessment order. The AO didn't find any amount was deposited in cash by the Appellant in the account of dummy entities and same were transferred to the account of Appellant in the form of consideration from sale of shares. There is no finding in the assessment order that the Appellant has undisclosed money which has been introduced in the banking channel and routed through the bank accounts of so called Exit- providers. The Assessing Officer has not made any such enquiry at all, which is evident from the assessment order. Thus, secondary onus of AO has not been discharged and only on the basis of doubts & surmises, the genuineness of the transactions have been suspected. No material, whatsoever, has been brought on record (in the form of assessment order) by the AO to prove that the transactions of purchases and sales of shares by the Appellant are not genuine. Only on the basis of doubts & suspicions of the AO, the submissions of the Appellant can't be rejected. Therefore, the view taken by the AO that the transactions are not genuine is not sustainable.

Judgement of Hon'ble Apex Court in case of NRA Iron & Steel Pvt. Ltd. vs PCIT:- The relevant part is reproduced below:- "8.2 As per settled law, the initial onus is on the Assessee to establish by cogent evidence the genuineness of the transaction, and credit-worthiness of the investors under Section 68 of the Act. The assessee is expected to establish to the satisfaction of the Assessing Officer. - Proof of Identity of the creditors: - Capacity of creditors to advance money, and - Genuineness of transaction This Court in the land mark case of Kale Khan Mohammad Hanif v. C11 and, Roshan Di Hatti v. CIT laid down that the onus of proving the source of a sum of money found to have been received by an assessee, is on the assessee. Once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness, then the AO must conduct an inquiry, and call for more details before invoking Section 68. If the Assessee is not able to provide a satisfactory explanation of the nature and source, of the investments made, it is open to the Revenue to hold that it is the income of the assesse, and there would be no further burden on the revenue to show that the income is from any particular source. ……. 8.4. Reliance was also placed on the decision of CIT v. Kamdhenu Steel & Alloys Limited and Others wherein the Court that:

The principles which emerge where sums of money are credited as Share Capital/ Premium are:

Having discussed above the analysis of the assessment order, contentions of the Appellant and legal positions in case of penny stocks and section 68, l find that additions made by the AO in respect of LTCG claimed by the Appellant are not substantiated with any cogent evidences, I further find that the conclusion of the AO is void of any real evidences. The entire assessment order is based only on analysis of weak financials of M/s JMD Telefilms Ltd. and M/s Splash Media & Infra Ltd. & unusual price variation of its shares and the statements of two share brokers namely Shri Anuj Agrawal & Shri Anil Agrawal. However, the weak financials of the listed Companies and unusual spike of its share price may be enough to show circumstances that might create suspicion and doubt, which may be the starting point of investigation by the AO but can't, at the final stage of the assessment, take the place of credible evidence, particularly when deeming provision is sought to be invoked. The suspicion/doubts may be the reasons to believe for reopening the cases, but once it is reopened, the AO has to substantiate his believe with conclusive enquiries and bringing documents on record that the claim of the Appellant is not correct. Further, Shri Anuj Agrawal has not even stated that he has given any accommodation entries for the Appellant or the Appellant is one of the beneficiaries of the accommodation entries of bogus LTCG. Further, Shri Anil Agrawal, share Broker of the Appellant, also has nowhere stated that M/s JMD Telefilms Ltd. and M/s Splash Media & Infra Ltd. were involved in price rigging or any manipulation have been made in these two scrips. He has also not stated that his broker company has given any accommodation entries of bogus LTCG to the Appellant. Therefore, in the instant case, I find that the statement of shri Anil Agrawal is unsubstantiated and irrelevant to justify the impugned addition of LTCG as far as the Appellant is concerned. Further, the AO has not given any cash trail of sale of shares of M/s JMD Telefilms Ltd. and M/s Splash Media & Infra Ltd. by the Appellant to prove that any unaccounted money has been routed in the garb of LTCG. Though, the AO discussed the findings of SEBI, but the AO has nowhere mentioned that SEBI has found involvement of M/s JMD Ankur Agrawal A.Y. 2011-12 Telefilms Ltd. and M/s Splash Media & Infra Ltd. in price rigging and providing accommodation entries to the beneficiaries. No evidence whatsoever was brought on record by the AO that the alleged entities mentioned in the assessment order were Exit-providers to the sale of shares of M/s JMD Telefilms Ltd. and M/s Splash Media & Infra Ltd. by the Appellant. No link whatsoever between the Appellant and alleged Exit-providers could be established by the A0. The AO has not shown with any shred of evidence that the unaccounted cash of Appellant was moved to the account of so-called Exit-providers. The AO has neither examined any of the Exit-providers nor the share Brokers of the Exit-providers. The AO even has not named who were the Share Brokers of Exit-providers through which funds have flown to the Broker of Appellant. Further, the AO has not examined the bank accounts of Exit- providers for its source of funds for purchase of shares from the Appellant, then how AO concluded that unaccounted money of the Appellant has ploughed back. No enquiry whatsoever was made by the AO as to how the so-called Exit-providers got the required fund to purchase the shares from the Appellant. The AO even has not examined any of the entry operators and also AO had no material to prove that any unaccounted money has been flown to the account of so-called Exit providers. The AO didn't bring any material on record whatsoever that the Appellant had generated huge unaccounted cash, same was given to entry provider/any persons and same was ploughed back to the Appellant. The AO has not shown anywhere in the assessment order as to how, if any, unaccounted cash was introduced in the banking channel. The AO even has not indicated anywhere in the assessment order that the Appellant had any unknown sources of income generating any unaccounted cash. Further, the AO didn't contradict any supporting, documents submitted by the Appellant relating to purchases and sales of shares of M/s JMD Telefilms Ltd. and M/s Splash Media & Infra Ltd. by the Appellant. The Appellant has discharge his primary onus, thereafter, it is AO who had to bring the material on record to disprove the claim of the Appellant. The onus is placed on the AO to disprove the claim of the Appellant and establish with cogent evidence that transactions were non-genuine through which unaccounted money of the Appellant has routed back to the Appellant in the garb of bogus Capital Gain. However, the AO has not discharged his initial and basic onus. In the case of CIT vs. Daulat Ram Ankur Agrawal A.Y. 2011-12 Rawatmull (1973) 87 ITR 349 (SC) it was held that the onus to prove that apparent is not real is on the person who claims it to be so. The source of credit received in the bank account could not be held to be unexplained unless it was established that any unaccounted money was routed in his bank account of the Appellant in the garbs of capital gain. Further, not a shred of evidence was placed on record by the AO regarding involvement of Appellant in getting accommodation entries of LTCG. Unless, the evidences, whatever, in the possession of the AO directly or indirectly linked to the Appellant, it is difficult to implicate the appellant in the alleged scam. This is because, suspicion however strong, cannot take place of evidence as held by the Hon'ble Supreme Court in the case of Umacharan Shaw & Bros vs, CIT(1959) 37 ITR 271(SC). Therefore, in view of the above factual matrix and circumstances in respect of purchases Splash Media & and sales of shares of M/s JMD Telefilms Ltd. and M/s Infra Ltd. by the Appellant and also in view of the decisions of Hon'ble Supreme Courts and various High Courts including binding decisions of the jurisdictional High Courts and a plethora of decisions of various benches of ITATs including binding decision of jurisdictional ITAT, as discussed in foregoing paragraphs, I find that the addition of Rs. 25,14,62,940/- in respect of LTCG claimed on sale of shares of M/s. JMD Telefilms Ltd. and Rs. 1,55,70.963/- in respect of LTCG claimed on sale shares of M/s Splash Media & Infra Ltd. u/s 68 of the IT Act made by the AO is unsustainable and unjustified and therefore, the said additions of LTCG made by the AO are hereby deleted and is directed the AO to accept the LTCG income shown as exempt u/s 10(38) of the Income Tax Act. Accordingly, the Appellant gets relief and thus, ground nos. 3, 4, 5 & 6 of appeal are allowed.

On the other hand, ld. DR submitted that information relating to accommodation entries availed by the assessee were not Ankur Agrawal A.Y. 2011-12 disclosed in the original assessment proceedings. He also submitted that reopening of the assessment was based on fresh tangible material and there was no change of opinion made by the AO.

Arguments of both the sides have been heard at length on the Rule 27 of the ITAT Rules contested by the assessee and perused the material on record. During the course of appellate proceedings before us in support of application filed by the assessee under Rule 27 of the ITAT Rule the ld. Counsel has pointed out various defects in the reasons recorded as discussed supra in this order. We have perused the Form for recording the reasons for initiating proceedings u/s 147 of the Act and for obtaining approval. It is evident from the reasons recorded that assessing officer has categorically mentioned at column no. 8 of the form for reasons recorded that assessment in the case of the assessee is proposed to be made for the first time on 08.09.2011. In the said Form at column No.8 there is specific question that “whether assessment is proposed to be made for first time if the reply is in affirmative please state.” In response to said question, the AO has mentioned “yes” which is factually incorrect because in the case of the assessee assessment proceedings u/s 143(3) of the Act has already been completed on 30.04.2014 assessing total income of the assessee at Rs.8,10,990/- under section 143(3) of the Act. Therefore, material fact in the case of the assessee show that assessment in the case has originally been completed u/s 143(3) of the Act on 30.03.2014 and the AO has formed belief for reopening of the case without application of mind and reopened assessment Ankur Agrawal A.Y. 2011-12 proceedings on factually incorrect grounds which make the assessment proceedings void. In the Forms for recording the reasons for initiating proceedings u/s 147 of the Act at Column No.6 it is required to specify the quantum of income escaped assessment. However, without specifying the amount of income escaped, the assessing officer has only mentioned more than Rs. 1 lakh. Therefore, it is evident that the AO has not complied with the mandatory requirement of quantifying the escaped assessment and merely stated that income escaping assessment was more than Rs.1 lakh. Similarly, in the other column i.e. 9 in the Form For recording the Reasons the AO considered that assessment in the case of the assessee to be made for the first time as no prescribed information specified by the AO against the required particulars. It is also evident that noticed u/s 148 of the Act was issued in the case of the assessee on 03.03.2017 pertaining to the A.Y. 2011-12 after the expiry of four years from the end of relevant assessment year. As per section 147 of the Act, no action can be initiated under section 147 of the Act after the expiry of 4 years from the end of the relevant assessment year unless the income chargeable to tax has escaped assessment for the reason of failure on the part of the tax payer to disclose fully all material facts necessary for assessment. Nowhere the assessing officer has brought on record in the reasons recorded the fault of the assessee in not disclosing the true and full facts of the case. During the original assessment order passed u/s 143(3) of the Act, the assessing officer has also made verification on the issue of exemption claimed by the assessee in respect of long term capital “During the year, assessee has declared income from Short Term Capital Gain of Rs. 35,695/- & Long Term Capital Gain of Rs. 26,70,49,717/- which is claimed as exempted u/s 10(38) of the I.T. Act 1961 and income from other sources of Rs. 1,51,879/-. Assessee’s AR Shri Pradeep Chaudhary filed details of bank accounts, details of investments, details of long term and short term capital gain and exempt income claimed with supporting evidences. All the relevant details have been scrutinized and kept on record.” It is evident that the relevant information and detail on the issue was filed before the assessing officer at the time of original assessment proceedings as discussed above.

We have also perused the decision of Hon’ble Bombay High Court in the case of PCIT vs Shodiman Investments Pvt. Ltd. as referred by the Ld. Counsel wherein it is held that reopening notice has to be issued by assessing officer on his own satisfaction and not on borrowed satisfaction. We have also perused the decision of Hon’ble Bombay High Court in the case of Survival Technologies Pvt. Ltd., relied upon by the Ld. Counsel wherein the Hon’ble High Court held that AO to disclose as to which facts or material was not disclosed by the assessee fully and truly for the purpose of assessment of that assessment order so as to establish a vital links between the reasons and evidences. Similarly, we consider that in the case of the assessee the assessing officer has failed to establish that there was any failure on the part of the assessee to disclose fully and truly any material fact in the case before reopening of the completed assessment after the 4 years from the end of the relevant assessment year. We have also gone through Ankur Agrawal A.Y. 2011-12 the decision of Hon’ble Bombay High Court in the case of Tanhee Heights referred above wherein the Hon’ble Court held that for reopening of the assessment beyond 4 years from the end of the relevant assessment year, the assessing officer has to additionally satisfied that in a case where assessment u/s 143(3) of the Act had been completed, the assessee had failed to disclose fully and truly of material fact necessary for assessment during the original assessment proceedings.

We have also perused the decision of ITAT, Mumbai in the case of Ankur Power Projects Pvt. Ltd. vs ITO (15)(1)(1) referred by the Ld. Counsel wherein the reopening of assessment held as bad in law because of various defects in the reasons recorded i.e. the assessment had earlier been completed u/s 143(3) but the AO referred only to the intimation issued u/s 143(1) in the reasons recorded, in the application submitted to JCIT seeking his approval, the AO has stated that assessment was proposed as first assessment etc. In the light of the above facts and findings, we find that in the case of the assessee, it is evident from the material and information as discussed above in this case that there is no application of mind at the level of assessing officer as in the reasons recorded the assessing officer has stated that assessment is proposed for the first time whereas the case of the assessee was already originally assessed u/s 143(3) of the Act. Further the AO has also not specified the amount of escapement of income in the form for recording the reasons as discussed supra in the order. Even the case of the assessee was reopened after end of 4 years from the relevant assessment year however as required in the Ankur Agrawal A.Y. 2011-12 provisions of Act, the assessing officer has failed to specify how the assessee has failed to disclose fully and truly the material facts in the original assessment proceedings. In the light of the facts and findings of the various judicial pronouncements as discussed above in this case, we consider that the reopening of assessment is not valid because of various defects and irregularities evident in the reassessment proceedings initiated in the case of the assessee as demonstrated from the material facts discussed supra in this order. As a result, the objection raised by the assessee (Respondent) under Rule 27 of the Income Tax Appellate Tribunal Rules 1963 is allowed. As a consequence thereto, the appeal of the Revenue is dismissed and issues raised on merit are left open.

In the result, the appeal of the revenue is dismissed.