No.- I. T. A. No. 109/Ahd/2016

S. S. Godara (Judicial Member) And Manish Borad (Accountant Member)

For the Appellant : Sashi Tulsiyan, Authorised Representative
For the Respondent : R. I. Patel, Departmental Representative

ORDER

The order of the Bench was delivered by

S. S. Godara (Judicial Member)- This assessee's appeal for the assessment year 2009-10, arises from the order of the Commissioner of Income- tax (Appeals)-I, Vadodara dated October 29, 2015, in Appeal No. CAB-1/187/2014-15, in proceedings under section 143(3) read with section 148 of the Income-tax Act, 1961 in short "the Act".

2. We come to pleadings portion first. The instant appeal raises I to VIII grounds. The sum and substantive thereof is that the Commissioner of Income-tax (Appeals) has erred in confirming the Assessing Officer's action in making addition of Rs. 7.52 crores vide impugned reassessment framed on March 31, 2014 after treating the share premium subscribed by different companies in the assessee's share capital as re-investment of latter's unaccounted money itself.

3. The assessee instituted the instant appeal on January 15, 2016 before this Tribunal. It filed an application on March 28, 29, 2016 under rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963 seeking to raise an additional ground challenging validity of the reopening taken recourse to by the Assessing Officer without indicating any reliable material and information establishing that any taxable income had in fact escaped assessment. This is followed by its yet another application under the very rule averring that the above additional ground sought to be raised needs to be revised to the following effect :

"(1) On the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in framing assessment framed under section 143(3) read with section 147 of the Income-tax Act, 1961 even though the reopening of the assessment is not in conformity with the express legal provisions in view of the following :

(a) The Assessing Officer has not established a live link between material being relied upon to reopen the assessment proceedings and the escapement of chargeable income in the hands of the appellant.

(b) Reopening of the assessment is done without application of mind since the Assessing Officer has not carried out honest and unbiased exercise to look into material available before him.

(c) The Assessing Officer has initiated the reassessment proceedings on the basis of incorrect facts and irrelevant material.
(d) The Assessing Officer has initiated the reassessment proceedings without any fresh tangible material in his possession to show that the income of the appellant had escaped assessment.

(e) The legality and validity of the reopening of the assessment has to be adjudged on the basis of reasons recorded and it cannot be supplemented by further reasons."

These pleadings draw support from the Hon’ble apex court decision in National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) holding that this Tribunal does have a discretion as to whether or not a new ground is to be allowed to be raised. Their Lordships clarify that there is no reason in not allowing such an additional ground in the nature of a question of law when the relevant facts are already on record and it is necessary to consider the same in order to determine the correct tax liability of an asses see. Next judicial precedent quoted is All Cargo Global Logistics Ltd. v. Deputy CIT [2012] 18 ITR (Trib) 106 (Mum) [SB] ; [2012] 137 ITD 287 (Mum) (SB) relying on the Hon’ble apex court view here-in-above to conclude that a pure question of law is to be allowed to be raised for which the relevant facts are already on record.

4. We granted sufficient opportunity to both the parties on this additional ground aspect. The assessee relies on its pleadings in light of the above two decisions. The Revenue on the other hand inter alia submits that this additional ground is not admissible since the assessee has not challenged validity of the impugned reopening till date, it did not respond to section 148 notice, no such plea has been raised before the lower authorities despite the fact that the Commissioner of Income-tax (Appeals) had called for a remand report which was submitted by the Assessing Officer and this additional plea is otherwise not maintainable as the impugned reopening deserves to be upheld on "pith and substance" rule.

5. Heard both sides on admissibility of this additional ground challenging validity of reopening. There is no dispute about the above two case law holding that this Tribunal can exercise its discretion for raising of a legal question in case the relevant facts are already on record. This is not the Revenue's case that the impugned additional ground involves complicated facts which are not available on record. Or that it does not decide upon the issue of correct tax liability of the assessee/appellant. It raises hyper-technical objections narrated hereinabove. We further find no merit in its pith and substance plea since the same arises when the question is determining as to whether a particular law falls in one head or the other which is to be adjudicated keeping in mind "pith" meaning "true nature" or essence of something and "substance" to be interpreted as the "most important or essential part of something". Our view is that this plea is hardly germane to the legal question of validity of reopening. We accordingly seek guidance from the above two legal precedents and allow the assessee's application dated March 28/29, 2016 seeking to raise an additional ground for challenging validity of reopening. We further accept the assessee's plea by way of an application dated June 24, 2016 and revise the additional ground hereinabove as extracted in the preceding paragraphs in larger interest of justice. The assessee accordingly succeeds in its both of the petitions. Its net effect is that we are now to adjudicate the correctness of the impugned addition of Rs. 7.25 crores on legal aspect of reopening as well as on merits.

6. We advert to the relevant facts now. The assessee-company trades in ferrous and non-ferrous metals. It filed return on September 13, 2009 stating income of Rs. 78, 46,640. The same was processed on March 22, 2011. The Department carried out a survey thereafter at its premises. Case record reveals that the Assistant Commissioner of Income-tax, Circle-1(2), Vadodara passed section 133A(3)(ia) order impounding assessee's books of accounts/documents BF-1 to BF-15 found in the course of survey. One of the assessee's director Shri Parasmal Jain got recorded his statement during survey on August 30, 2012. This forms part of case records before us at pages 624 to 629 of the paper book. We deem it appropriate to reiterate that the instant lis pertains to share application money aspect only. Shri Jain was put total 21 questions. This statement terminated at 6.30 p.m. due to his ill health. None of these 21 queries touched upon the issue of share application money. Shri Jain's statement resumed thereafter on September 3, 2012 at the Income-tax office, Vadodara. Pages 630 to 644 comprise a copy thereof involving 71 questions ranging from Shri Jain's DOB, marriage and other aspects of private life. Some of the queries sought light on the assessee's entity incorporation and its conversion from a proprietary concern to a company. The survey authorities put up a specific query at serial No. 68 qua nine investor companies of the impugned share premium allegedly exceeding the assessee's entire income. They sought to know the names of the actual investors along with telephone numbers etc. Shri Jain expressed his inability to recall the same. The Departmental authorities further asked him as to whether these investors ever asked for anything after making the impugned investments. Again came the reply, "I do not remember".

7. We proceed further to notice that Shri Jain's statement again terminated after being reminded about the fact that it was a survey exercise. This followed Shri Jain's hand written letter on the very day addressed to the Deputy Commissioner of Income-tax-Company Circle-1(2), Vadodara quoting assessee's company directors' mutual consultation to declare an unaccounted income of Rs. 9 crores (pages 645 and 646 of the paper book). The assessee thereafter filed a letter dated September 4, 2012 before the Assistant Commissioner of Income-tax-1(2), Vadodara declaring gross income of Rs. 9 crores as under :

"To,
The Assistant Commissioner of Income-tax,
Circle - 1(2), Aayakar Bhavan,
Vadodara.

Sub : Survey proceedings under section 133A of the Income-tax Act

Kindly refer to the captioned subject and the survey conducted at our business premises on 30th August 2012.

In the course of survey, various documents were found and impounded. Further proceeding with respect thereto is pending. In the meantime, the company has verified its records for various years, it is felt that there are certain issues/transactions recorded in the regular books of account which may not be possible to substantiate as required under law and that it may take lot of efforts and also substantial time, persuasion with other parties to provide information and details which may or may not be possible to obtain due to lapse of time.

The company had a reasonable growth in the past and do not foresee same trend in the coming times due to overall recession and slow down and during this time, the management of the company desires to focus all its energies and attention in the preservation and maintenance of the company's business without diverting its attention to protracted litigation with the Income-tax Department and also to avoid undesired confrontation and involvement of time and energy.

With the above intention and also with a desire to buy peace, avoid litigation and also any penalty, the company is voluntarily disclosing an amount of Rs. 9 crores, as income disclosed during the said proceedings, represented by the following :

The company may submit that during the assessment year 2009-10, after complying all the provisions and laws, the company had issued and allotted shares of Rs. 75.20 lakhs numbering 7,52,000 shares with a premium of Rs. 676.80 lakhs to various companies as under,

1. Shrikant Broking Pvt. Ltd.
2. Bhandari Glasses Pvt. Ltd.
3. Facsel Contech Pvt. Ltd.
4. Chirag Call Shop Pvt. Ltd.
5. Angelica Comm Trade Pvt. Ltd.
6. Anti Clock Wyaper P. Ltd.
7. Veronica Commerce Pvt. Ltd.
8. Muse Dealers Pvt. Ltd.
9. Medlar Delcom Pvt. Ltd.
10. Winter Fresh Food Pvt. Ltd.

Above, these companies are registered with Registrar of Companies and as per the information available with the assessee- company, they are regularly filing their returns and also complying with the statutory requirements and assessed to income tax. The capital was subscribed by genuine shareholders by account payee cheques/drafts and the reporting of the allotment is also made to the concerned authorities. Even their source is impeccable and beyond any doubt. We are, however, informed that the source of the source or even the further source may be matter of dispute. According to our understanding it is not an obligation to prove any such details. How ever, in order not to raise controversies and only in order to buy peace, and without prejudice to contention that share capital raised is duly explained, we agree with an understanding that there would be no penal consequences, we shall pay applicable tax with interest thereon on such share capital and share premium amounting to Rs. 7.52 crores and the accordingly income may be taken into account.

For the year under consideration, the company expects an estimated profit of Rs. 148 lakhs on which appropriate tax would be paid in accordance with law. Further, the assessee-company desires to fulfil its tax obligations, in accordance with the law, through e-payment at the earliest. To show its commitment we are attaching here with post-dated cheques as under and the same is to be returned to us, on production of proof of e-payment by us :

We trust you will find the above offer of the assessee-company as genuine, voluntary and with an intention to buy peace and co-operate with the Department with an understanding and a condition that in doing so, the company shall not be levied any penalty under the Act.

Thanking you,

Yours faithfully,
For Laxmiraj Distributors Pvt. Ltd.
Director."

8. We find that the matter did not rest up to this stage. The Assessing Officer issued section 148 notice dated February 13, 2013 after forming reasons to believe that the assessee's taxable income liable to be assessed had escaped assessment. The instant case record contains copy of these reasons at pages 622 to 623 reading as under :

"A survey under section 133A was carried out in the case of Laxmiraj Distributors Private Limited, Baroda on August 30, 2012. During survey proceedings some incriminating documents were found, which are inventoried and impounded as annexure BF-1 to BF-15.

On scrutinising the annexure BF-1, it was noticed that the assessee had introduced unaccounted capital through share capital and share premium. The assessee-company raised an amount of Rs. 7,52,00,000 by allotting its shares to 10 different companies, located at Surat, Ahmedabad and Kolkata. The assessee-company had allotted total 7,52,000 shares with face value of Rs. 10 at a premium of Rs. 90 in financial year 2008-09. Later in financial year 2009-10, the assessee purchased back these shares from these 10 companies at a rate of Rs. 10 each share. The assessee-company paid back Rs. 75,20,000 to purchase the allotted shares. The details working is as under :

During survey proceedings, the statement of Shri Parasmal Jain, director of the company was also recorded. But the statement left unconcluded, due to his health reasons. Accordingly, the assessee was summoned under section 131 of Income-tax Act on August 31, 2012 to attend the office of the Assistant Commissioner of Income- tax, Circle-1(2), Baroda on September 3, 2012.

In compliance to summon issued, the assessee attended the office of the undersigned, where his statement under section 131 was recorded. While recording statement, the director of the company was asked vide question Nos. 57 to 70 of the statement recorded under section 131 of the Act on September 3, 2012 about details of investors of the company and the investments made by them. But the director Shri Parasmal Jain who is the only beneficiary to enjoy the profits of the company and who take care all the matters of the company, was unable to give any detail in respect of investors. Even he was not able to name any one of investors who made such huge investments in the company.

Later, on the same day the director of the company Shri Parasmal Jain, vide his hand written letter admitted Rs. 9 crores as his unaccounted income. He also stated in the letter that the break-up and the nature of this unaccounted income will be submitted in short duration of time.

Accordingly, the assessee-company vide its submission dated September 4, 2012 received this 1,2012, through the director Shri Rarasmal V. Jain, submitted the year-wise nature of the unaccounted income, which is as under :

Regarding unaccounted income on account of bogus share capital the assessee vide above mentioned letter, submitted the following names of companies through which unaccounted money was introduced :

1. Shrikant Broking Pvt. Ltd.
2. Bhandari Glasses Pvt. Ltd.
3. Flacsel Contech Pvt. Ltd.
4. Chirag Call Shops Pvt. Ltd.
5. Angelica Commotrade Pvt. Ltd.
6. Anticlock Vyapaar Pvt. Ltd.
7. Veronica Commerce Pvt. Ltd.
8. Muse Dealers Pvt. Ltd.
9. Medler Dealcom Pvt. Ltd.
10. Winter Fresh Food Pvt. Ltd.

Vide this submission, the company had claimed to have allotted shares of Rs. 75.20 lakhs numbering to 7,52,000 shares with a premium of Rs. 676.80 lakhs to various companies numbering 10 in numbers. The assessee had surrendered this share capital along with share premium amounting to Rs. 7.52 crores. He had also furnished a computation of income for the purpose, wherein this income has been shown as additional income. Wherefore since the income disclosed as a result of survey at Rs. 7.52 crores over and above Rs. 78,46,643 returned in the original return filed on September 13, 2009. In view of the above facts, I have reason to believe that income of Rs. 7.52 crores have been escaped from assessment. Therefore notice under section 148 is being issued for the assessment year 2009- 10."

9. The assessee sought for photocopy of Shri Jain statements along with the other material impounded during survey. The Assessing Officer was fair enough in furnishing the same. He thereafter issued notices to all investor companies subscribing to the assessee's share capital. Eight such notices came back with "left" or "not known" remarks or that these investor company did not reside at the given addresses. One of the investor company M/s. Winter Fresh Foods Pvt. Ltd. replied to have purchased the assessee's shares in the financial year 2008-09 relevant to the impugned assessment year 2009-10. It furnished the relevant copy of bank statement and balance-sheet as on March 31, 2009. The latter document allegedly did not reflect its investment in the assessee's share capital. This company had paid Rs. 10 lakhs, 25 lakhs, 8 lakhs and 2 lakhs on May 10, 2008, May 15, 2008, June 17, 2008 and June 24, 2008 respectively through banking channel. It filed its bank statement reflecting the above stated payments. The Assessing Officer would notice that this entity had introduced similar sums in bank accounts within a day or two before the payments in question. He sought to know the source thereof. This query seems to have been never responded. The Assessing Officer observed that this company's balance- sheet inter alia indicated debtors at a negate figure of 1,11,80,888, loans and advances of Rs. 3,19,45,522 increasing from Rs. 1,54,68,468 in the immediate previous year. Its return stated gross total income of Rs. 7,79,572. And that it was further not clear under in which asset side of the balance-sheet had this company shown the impugned investment. The Assessing Officer accordingly asked for further details of source of the credit entry in the above stated bank entity leading to investment being made in the assessee's share capital in question.

10. We stay back on the impugned reassessment order dated March 31, 2014. The Assessing Officer issued a commission to the assessing authority of above investor companies to investigate and conduct inquiry about source of these bank credit as invested in the assessee's share capital within a few days. He adopted a similar course of action for all other entities. A perusal of the reassessment order indicates that one of the investor companies M/s. Shrikant Broking Pvt. Ltd. was found to be having Surat address in one of the residential colony. A tenant living at the said address allegedly deposed to have been staying there for around 8 years and no such entity occupied the premises in question. Another Income-tax Officer of Ward-3 Himatnagar intimated that one Shri Pravinbhai Modi was a director in another investor entity M/s. Flascel Pvt. Ltd. denied any transaction with the assessee making share capital investment. The Assessing Officer further observed in his order that the assessee had availed of numerous opportunities in order to prove genuineness/creditworthiness of the impugned share investment by the above investor entities. He recorded that the assessee had resorted to piecemeal filling of the relevant evidence in February and March, 2014. And the same indicated that directors in some of the these investor company has changed. The Assessing Officer accordingly termed the assessee's details to be not verifiable at such belated stage. He accused the assessee to have adopted well calculated dilatory tactics in prolonging reassessment despite the fact that the onus was off course fell on it to verify the impugned share capital investments by various investor company based at Surat, Ahmedabad and Calcutta at an unlikely premium of Rs. 90 per share and that too in a private limited company doing a business of less than 100 crores and having a surplus of Rs. 3.5 cores only. He drew adverse inference of the fact that no Vadodara based investor had come forward to purchase assessee's share capital. The assessing authority was further of the view that the impugned share investment have been made in the assessee's share capital on private placement meaning thereby that it had access to share applicants' details since enjoying close relationship therewith. It opined that the assessee's delaying tactics were a well calculated move to guard itself against any finding holding the impugned share capital as sham transaction. The Assessing Officer came to a conclusion that the assessee had not discharged its onus of proving that its investor companies had made the impugned share transactions out of their own capital since it was beyond common prudence as to why would anyone invest in an unknown company shares and buy them back at a heavy loss as done in the instant case. He recorded a finding of fact the assessee had purchased back the very share capital from the ten investor companies in question at Rs. 10 per share. He prepared a chart thereof as extracted hereinabove in his reassessment order. The Assessing Officer then quoted Shri Jain's written statement dated September 4, 2012, his survey statement and deliberations in the entire reassessment exercise to conclude that all this was a sham arrangement lacking the genuineness/creditworthiness. All this made him to make the impugned addition of Rs. 7.52 crores in the nature of the assessee's unaccounted income.

11. The assessee preferred appeal. It filed additional submissions in course of the lower appellate proceedings by pleading that Shri Jain suffered from health complication during reassessment. The Commissioner of Income- tax (Appeals) called for a remand report. The same came on June 11, 2015 reading as under :

"5.1.2 In response, the Assessing Officer submitted his remand report as follows :

'2. As desired, vide letter dated May 25, 2015, the assessee was given opportunity to prove the identity and creditworthiness of all the 10 companies from whom the assessee-company has received share capital of Rs. 7.52 crores including share premium of Rs. 676.70 lakhs during the year under consideration and also to prove, the genuine ness of transaction. The relevant portion of the letter dated May 25, 2015 of this office is reproduced as under :

"Please refer to the appellate proceeding in the case of M/s. Laxmiraj Distributors Pvt. Ltd. for the assessment year 2009-10. The learned Commissioner of Income tax (Appeals)-I, Baroda has directed the undersigned to examine the identity and creditworthiness of all the 10 companies from whom you have received share capital of Rs. 7.52 crores including share premium of Rs. 6.76 crores during the year under consideration and also to examine the genuineness of transaction. In this regard, you are required to comply with the following :

'1. File confirmations, copies of acknowledgment of returns, computation of income, copies of the bank accounts of all the 10 companies for the financial years 2008-09 and 2009-10 as these companies allegedly invested capital in the financial year 2008-09 at Rs. 100 per share including premium of Rs. 90 per share and sold the same shares to M/s. Laxmiraj Distributors Pvt. Ltd. itself at Rs. 10 per share only on heavy loss of Rs. 90 per share during the financial year 2009-10. Please mark and highlight the relevant entries of the bank account.

2. Copy of the bank accounts of M/s. Laxmiraj Distributors Pvt. Ltd. for the financial year 2008-09 and financial year 2009-10 in which the share capital of Rs. 7.52 crores is deposited during the financial year 2008-09 and amounts have been debited to buy back the same shares during the financial year 2009-10 marking/highlighting the relevant entries.

3. As per the Inspector's report the company M/s. Shrikant Broking Pvt. Ltd. was not located at the given address of Trupti Society, Surat, please explain.

4. As per the letter of the Income-tax Officer, Ward-4(3), Ahmedabad the director of M/s. Flacsel Contech Pvt. Ltd. Sh. Pravinbhai Modi, had denied any link/transaction ever with M/s. Laxmiraj Distributors Pvt. Ltd., please explain.

5. Produce the managing director or main director of all the companies for examination along with the proof of their identity, copies of bank accounts, return filing proof, computation of income, Audit reports, balance-sheets, profit and loss account and shareholding pattern of the companies for the financial years 2008-09 and 2009-10.'

You are requested to comply with the above on June 2, 2015 at 11.30 a.m. Please note, if you remain fail to comply with the above, on the given date and time, it will be presumed that you have nothing to say in this regard and the report will be submitted to the Commissioner of Income-tax (Appeals)-I, accordingly." '

'3. In response to the above notice the assessee has filed replies on June 2, 2015 and June 11, 2015. The relevant portion of the reply of the assessee dated June 2, 2015 is as under :

"With reference to above, I am submitting as under :

'1. To prove the identity and creditworthiness of all ten companies from whom share capital has been received, the relevant documents are enclosed herewith as Annexure 1.

2. Copy of bank account of M/s. Laxmiraj Distributors Pvt. Ltd., in which the share capital of Rs. 7.52 crores is deposited, is enclosed herewith as annexure 2.

Further, in respect of buy back of shares, M/s. Laxmiraj Distributors Pvt. Ltd. has not done buy back of shares. However, copy of bank statements of the persons who had bought back the shares is enclosed herewith as Annexure-3.

3. Further, in respect of the address of M/s. Shrikant Broking Pvt. Ltd., the company is trying to locate their address. However, as per our information available with them, it may be presently located at 311, Sahajan and Complex, Off. C. G. Road, Swastic Char Rasta, Navrangpura, Ahmedabad, Gujarat 380 009.

4. The director of M/s. Flacsel Contech Pvt. Ltd., Mr. Pravinbhai Modi had denied any link/transaction ever with M/s. Laxmiraj Distributors Pvt. Ltd. However, the assessee-company had received confirmation from them and also received a copy of PAN card, Certificate of Incorporation, MOA and AOA, etc. Further, the amount of share capital received from them is also reflected in the bank statement of the assessee-company. The director of M/s. Flacsel Contech Pvt. Ltd., Mr. Pravinbhai Modi may not be aware of the same.

5. In respect of the documents of the managing director or main director of all the companies, since the money has been received from the company, the directors are reluctant to pass on their personal information.'

I would now request you to kindly take the above information on record and let me know if any further information is required." '

'4. The relevant portion of the reply of the assessee filed on May 11, 2015 is reproduced as under :
"With reference to above and in continuation of earlier, I am submitting as under :

'1. To prove the identity and creditworthiness of the companies, the copies of confirmation of accounts, bank statement and Income-tax acknowledgment of Angelica Commo Trade Pvt. Ltd., Anti Clock Vyapar Pvt. Ltd., Medler Delcom Pvt. Ltd., Muse Dealers Pvt. Ltd., Veronica Commerce Pvt. Ltd. and Winter Fresh Food Pvt. Ltd. is enclosed herewith for your kind perusal.

2. Further, in respect of bank statement and Income-tax acknowledgement of Shrikant Broking Pvt. Ltd., Bhandari Glasses Pvt. Ltd., Flacsel Contech Pvt. Ltd. and Chirag Call Shops Pvt. Ltd., the assessee-company was not able to collect that data as the directors of those companies are not co-operating.

3. The assessee has made communication with regards to the documents of the managing directors of all ten companies but they have denied to give any personal data to the assessee-company. They have denied to produce before your kind honour along with the required documents as the investment was made by the companies and hence, giving their personal data is not justifiable."

4. The assessee has filed confirmations, copies of return filing proof, and copies of bank statements in respect of the following 6 companies to whom the shares are sold on premium :

i. M/s. Angelica Commotrade Pvt. Ltd.
ii. M/s. Anticlock Vyapar Pvt. Ltd.
iii. M/s. Medlar Dealcom Pvt. Ltd.
iv. M/s. Muse Dealers Pvt. Ltd.
v. M/s. Veronica Commerce Pvt. Ltd.
vi. M/s. Winter Fresh Foods Pvt. Ltd.

Although, the assessee filed confirmations, copies of return filing proof, and copies of bank statements for the assessment year 2009-10 but could not produce the main directors or managing directors of those above 6 companies for examination. Secondly, on perusal of acknowledgements of the returns filed by these 6 companies namely M/s. Angelica Commotrade Pvt. Ltd., M/s. Anticlock Vyapaar Pvt. Ltd., M/s. Medlar Dealcom Pvt. Ltd., M/s. Muse Dealers Pvt. Ltd., M/s. Veronica Commerce Pvt. Ltd. and M/s. Winter Fresh Foods Pvt. Ltd., it has been noticed that these companies have declared total income of Rs. 760, Rs. 530, (-) Rs. 30,220, (-) Rs. 30,493, Rs. 2,550 and Rs. 7,79,580 respectively. Thus the incomes of 5 companies out of the above 6 companies is either in loss or is below Rs. 3,000. And the income of the rest of one company named M/s. Winter Fresh Foods Pvt. Ltd is Rs. 7,79,580 only. Thirdly, on careful perusal of the bank statements of these companies filed by the assessee, it has been noticed that before the amount was transferred there are immediate credit entries in the account. Apart from these entries the regular balances in these accounts of the alleged companies are very meagre which does not prove the creditworthiness of the company. Fourthly, the same 5,10,000 shares have been purchased by the related persons of the assessee-company's directors namely Smt. Priyanka Sanghvi, Ravi Snghvi, Shantaben P. Jain and Vimla P. Sanghvi in the month of August 2009 from the above said 6 companies on face value of Rs. 10 per share only. No prudent investor will sell the shares on loss of Rs. 90 per share within a year. This shows, in real, there was no sale purchase of the shares but the asses see has taken accommodation entries only. Fifthly, during the survey proceedings conducted under section 133A of the Income-tax Act at the business premises of the assessee on August 30, 2012 the managing director of the company Sh. Parasmal Jain admitted that he himself introduced unaccounted income of the assessee-company in the form of share capital through some of the unscrupulous entry providers located at Ahmedabad, Surat and Kolkata. Sixthly, as given finding by the Assessing Officer in the assessment order on the ground vividly narrated in the assessment order that the assessee itself introduced its own money through sham transactions in the garb of sale of shares on huge premium. In view of the above, to sum up, the assessee has failed to satisfy the three main parameters i.e. identity, creditworthiness and genuineness of the transaction in respect of alleged sale of shares on heavy premium. Therefore, the addition made by the Assessing Officer deserves to be sustained in respect of above 6 companies.

5. The assessee has filed copies of confirmations in respect of the following companies-

i. M/s. Shrikant Broking Pvt. Ltd.
ii. Bhandari Glasses Pvt. Ltd.
iii. M/s. Flacsel Contech Pvt. Ltd.
iv. Chirag Call Shops Pvt. Ltd.

Except the copies of confirmations, the assessee could not file any other evidences like copies of return filing proof, and copies of bank statements etc. Secondly, the assessee could not produce the main directors or managing directors of the above 4 companies for examination. Thirdly, the same 1,52,000 shares have been purchased by the related company of the assessee M/s. Laxmiraj Infrastructure Pvt. Ltd. in the month of December 2009 from the above-said 4 companies on face value of Rs. 10 per share only. No prudent investor will sell the shares on loss of Rs. 90 per share within so short span of time. The director of M/s. Flacsel Contech Pvt. Ltd., Sh. Pravinbhai Modi, has already denied any link/transaction ever with M/s. Laxmiraj Distributors Pvt. Ltd. This shows, in real sense, there was no sale purchase of the shares but the assessee has taken accommodation entries only. Fourthly, during the survey proceedings conducted under section 133A of the Income-tax Act at the business premises of the assessee on August 30, 2012 the managing director of the company Sh. Parasmal Jain himself admitted that he himself introduced unaccounted income of the assessee-company in the form of share capital through some of the unscrupulous entry providers located at Ahmedabad, Surat and Kolkata. Fifthly, as given finding by the Assessing Officer in the assessment order on the ground vividly narrated in the assessment order that the assessee itself introduced its own money through sham transactions in garb of sale of shares on huge premium. In view of the above, to sum up, the assessee has failed to satisfy the three main parameters i.e. identity, creditworthiness and genuineness of the transaction in respect of alleged sale of shares on heavy premium. Therefore, the addition made by the Assessing Officer deserves to be sustained in respect of above 4 companies.'

In view of the above facts, the entire addition of Rs. 7.52 crores deserves to be sustained. The report is submitted for your kind perusal and necessary action at your end."

12. The Commissioner of Income-tax (Appeals) thereafter rejects the assessee's arguments challenging the impugned addition by placing reliance on Shri Jain's survey statement followed by written correspondence, contents of the above-stated remand report so as to confirm the Assessing Officer's findings. The only exception in the lower appellate order and the above extracted remand report going against the Assessing Officer's observations in his reassessment and one of the reasons stated in reopening exercise is that earlier the assessee was alleged to have purchased back the impugned share capital from the investor companies itself wherein the latter developments indicate that the said share capital was purchased by Smt. Priyanka Sanghvi, Ravi Sanghvi, Santaben P. Jain and Vimala P. Sanghvi. The Assessing Officer's remand report as fortified in the lower appellate order holds that all these four share capital purchasers are related persons of the assessee's directors. This leaves the assessee aggrieved.

13. The learned authorised representative opens up the assessee's arguments. He comes to legal ground first challenging validity of the impugned reopening. Our attention is invited to reopening reasons extracted hereinabove. Learned counsel states that the Assessing Officer has exercised section 148 jurisdiction on four counts i.e., scrutiny of the impounded documents BF-01 indicated the assessee to have introduced its unaccounted capital through share capital and premium, it thereafter repurchased the very share from investor companies, Shri Jain's statements did not disclose investors' entities' names and that he himself had admitted unaccounted income on assessee's behalf respectively.

14. The assessee comes to first reason of reopening. It invites our attention to the impounded document(s) BF-01 at pages 1 to 620 of the paper book including annual statements, reports and share transfer forms etc. It submits that the Assessing Officer's reassessment order does not refer to any document forming part of this compilation. It contends that all the relevant details of the impugned share capital transfer are already recorded in its regular books as enclosed with the original return. And that there is nothing in BF-01 so as to form reasons to believe that any income taxable has escaped assessment. The assessee refers to case law ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) to buttress its submission that there ought to be a live nexus between such impounded or other material and reasons of reopening. The assessee pleads that the Assessing Officer has merely drawn an inference of its unaccounted income without even referring to any of the impounded documents. It then quotes case law Principal CIT v. G and G Pharma India Ltd. [2016] 384 ITR 147 (Delhi) ; [2015] 94 CCH 39 to strengthen its plea that an Assessing Officer must state the relevant material resulting in formation of its plea that any taxable income has escaped assessment. It accordingly concludes first facet of its argument challenging validity of impugned reopening on the ground that the Assessing Officer's reliance on BF-01 is entirely ill-founded.

15. Next come the assessee's contentions on second facet of the reopening reasons that it repurchased the very share capital in question from the above-stated investor company. It refers to deviation of the lower authorities right from the Assessing Officer's reopening reasons alleging the assessee to have re-parted the share capital followed by his remand report that relatives of its directors who have purchased back the share capital. The Commissioner of Income-tax (Appeals) admittedly approves the same. The assessee's plea is that the impugned reopening is accordingly based on incorrect facts and deserves to be declared invalid as per case law Prashant S. Joshi v. ITO [2010] 324 ITR 154 (Bom), Dr. Ajit Gupta v. Asst. CIT [2016] 383 ITR 361 (Delhi) and Mahadev Trading Company v. ITO [2012] 17 ITR (Trib) 332 (Ahd).

16. The assessee comes to the third submission challenging validity of the impugned reopening for the reason that its director Shri Parasmal Jain had simply not remembered the representatives or negotiators of the investor companies and their names in the survey statement. It refers to Shri Jain's survey statement that he had replied to all queries and a mere lapse of memory at some point of time ; even if taken as admission, is not sufficient for making the impugned addition in absence of any corroborative evidence as per Central Board of Direct Taxes Circular dated March 10, 2003. Case law of Kailashben Manharlal Chokshi v. CIT [2010] 328 ITR 411 (Guj) ; [2008] 174 Taxman 466 (Guj) is quoted in support.

17. The assessee's last argument qua fourth facet of the impugned reopening comes to both the lower authorities findings relying on Shri Jain's statement to have introduced unaccounted share capital. It invites our attention to written correspondence dated September 3, 4, 2012 hereinabove that the same had in fact claimed the share capital purchase instances to be genuine. We put a specific query as to whether the survey authorities ever made a suggestion that these were sham share capital transfers. The assessee in reply takes us to all of the survey queries not demonstrating any such suggestion even. It thereafter reiterates the fact that it had only offered to pay taxes after treating the impugned transactions as genuine ones. It submits that the Assessing Officer's all four reasons forming foundation of the impugned reopening are liable to be reversed rendering the entire reassessment invalid.

18. The assessee comes to merits of the impugned addition as well. It takes us to the Commissioner of Income-tax (Appeals)'s order page 32 para 6 onwards therein inter alia quoting Shri Jain's survey statement under oath, his finding that relatives of its directors had in fact purchased the impugned share capital, six investor companies had meager incomes, placing reliance on the Hon’ble Delhi High Court judgment in CIT v. MAF Academy P. Ltd. [2014] 361 ITR 258 (Delhi) ; [2014] 42 taxmann.com 377 (Delhi) instead of the other case law quoted and CIT v. Lovely Exports P. Ltd. [2008] 299 ITR 268 (Delhi). The assessee accordingly submits that there is no material in the instant case pointing out to any unaccounted income in scrutiny, survey statement, reassessment, etc.
19. Learned counsel thereafter states that the assessee has filed all relevant details of the investor companies before the lower authorities i.e. PAN details, Income-tax acknowledgments, bank statements, confirmations, share transfer documents etc. It argues that the mere fact of six investor companies having meager income is no ground to make the impugned addition in the assessee's hands as per the Hon’ble Delhi High Court decision in CIT v. Vrindavan Farms P. Ltd. [2016] 6 ITR-OL 502 (Delhi) I. T. A. No. 71 (along with a batch of appeals) of 2015 decided on August 12, 2015 holding that if identity and other details of the share applicants are available, share application money in question is not to be treated as undisclosed income in the hands of the transferor entity and the same is to be added in case of the applicant-company concerned. It is further pleaded that the repurchase instance of the share capital in question is not relevant in such a case as per CIT v. Five Vision Promoters Pvt. Ltd. [2016] 380 ITR 289 (Delhi).

20. The learned counsel continues his arguments in the same breadth against the impugned addition on merits. He avers that both the lower authorities are fair enough in not questioning genuineness of the evidence on record not suggesting that any of the six investor companies have ever deposited any cash in their accounts since it is an instance of cash being credited only. The assessee takes us to page 31 of its written submissions qua four remaining entities to state that all the share application money has come through banking channel only. It relies upon the Hon’ble Gauhati High Court decision in Nemi Chand Kothari v. CIT [2003] 264 ITR 254 (Gauhati) observing that only onus of an assessee in such a case is to the extent of proving source of the amount received. It is reiterated that all cheque payments in question are followed by confirmations not involving any identity dispute of the share applicant companies. A co-ordinate Bench decision of the Tribunal ITO v. Neelkanth Finbuild Ltd. [2015] 40 ITR (Trib) 665 (Delhi) is further relied upon.

21. The assessee comes to one of the share applicant entity M/s. Shrikant Brokerage. The Assessing Officer holds this company to be not available (supra). The same is stated to be contradicted in his own remand report extracted hereinabove that this time the said company has been found to be available.

22. The assessee takes us to statement of Shri Pravin Modi. It pleads that all the overwhelming documents available in the case file proving this company to have made the impugned investment prevails over such an oral assertion. It refers to the Commissioner of Income-tax (Appeals)'s findings as per the Hon’ble Delhi High Court's decision in MAF Academy case (supra) and seeks to distinguish the same ; more particularly paras 7 to 10 thereof by stating that no such evidence of sham share capital transaction exists in facts of the instant case since there is no basis of any finding of accommodation entry supported from the case record before us. The assessee accordingly argues that it had discharged all its onus on merits as well in proving genuineness/creditworthiness of the impugned share capital transfers. It prays for acceptance of the instant appeal therefore.

23. Shri R. I. Patel is the learned Commissioner of Income-tax-Departmental representative appearing at the Revenue's behest. He strongly supports both the lower authorities' findings on legality as well merits. He inter alia submits that the assessee is a privately held company. Its director's survey statement has already admitted the impugned unaccounted income by way of introduction of share capital as followed by the letter dated September 4, 2012 (supra). Shri Patel contends that all this overwhelming material on record formed sufficient reasons under for the Assessing Officer for exercising section 148 jurisdiction. He invites our attention to the fact that the assessee's return was in fact processed only under section 143(1) of the Act.

24. Shri Patel thereafter comes to the merits of the issue. He reiterates the assessee's status of a privately held company under the Companies Act and its admission during survey in absence of any undue influence. He highlights that the Assessing Officer had conducted dual exercise during reassessment and remand proceedings to find out genuineness/creditworthiness element. He takes us to page 69 of the paper book demonstrating share application forms followed by transfer receipts thereof at page 709 shown to be blank. Shri Patel submits mere filing of document is not sufficient to prove genuineness of the transaction in question.

25. The Revenue thereafter quotes the following case law on legality of reopening as well as merit aspect :

Validity of reopening :
"Case law under section 147
(1) Olwin Tiles India P. Ltd. v. Deputy CIT [2016] 382 ITR 291 (Guj) ; [2016] 66 taxmann.com 8 (Guj).
(2) Yogendrakumar Gupta v. ITO [2014] 51 taxmann.com 383 (SC).
(3) Yogendrakumar Gupta v. ITO [2014] 366 ITR 186 (Guj) ; [2014] 46 taxmann.com 56 (Guj).
(4) Deputy CIT v. Zuari Estate Development and Investment Co. Ltd. [2015] 373 ITR 661 (SC) ; [2015] 63 taxmann.com 177 (SC).
(5) Sun Pharmaceutical Industries Ltd. v. Deputy CIT (No. 1) [2013] 353 ITR 450 (Guj) ; [2013] 29 taxmann.com 262 (Guj).
(6) Sun Pharmaceutical Industries Ltd. v. Deputy CIT (No. 2) [2013] 353 ITR 474 (Guj) ; [2012] 25 taxmann.com 509 (Guj).
(7) Lalita Ashwin Jain v. ITO [2014] 363 ITR 343 (Guj) ; [2014] 45 taxmann.com 404 (Guj).
(8) Naren Sadashiv Burade v. ITO [2015] 5 ITR-OL 76 (Guj) ; [2015] 61 taxmann.com 182 (Guj).
(9) Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500 (SC) ; [2007] 161 Taxman 316 (SC).
(a) Case law under section 68
(1) Navodaya Castle (P.) Ltd. v. CIT [2015] 56 taxmann.com 18 (SC).
(2) CIT v. Navodaya Castles P. Ltd. [2014] 367 ITR 306 (Delhi) ; [2014] 50 taxmann.com 110 (Delhi).
(3) N. Tarika Property Invest. (P.) Ltd. v. CIT [2015] 371 ITR (St.) 369 (SC) ; [2014] 51 taxmann.com 387 (SC).
(4) CIT v. N. Tarika Properties Investment (P.) Ltd. [2013] 40 taxmann.com 525 (Delhi).
(5) CIT v. Nipun Builders and Developers P. Ltd. [2013] 350 ITR 407 (Delhi) ; [2013] 30 taxmann.com 292 (Delhi).
(6) Riddhi Promoters P. Ltd. v. CIT [2015] 377 ITR 641 (Delhi) ; [2015] 58 taxmann.com 367 (Delhi).
(7) CIT v. N. R. Portfolio (P.) Ltd. [2013] 29 taxmann.com 291 (Delhi).
(8) CIT v. MAF Academy (P.) Ltd. [2014] 361 ITR 258 (Delhi) ; [2014] 42 taxmann.com 377 (Delhi)."
The Revenue accordingly prays for rejection of the instant appeal.

26. We afforded rebuttal opportunity to the assessee. It reiterates its earlier submissions that the main reason for the Assessing Officer in invoking section 148 jurisdiction was on an assumption that it had repurchased the impugned share capital since there is no identity issue of the investor companies. The assessee thereafter invites our attention to pages 701, 708 and 709 of the paper book to rebut the Revenue's contention that its share application/transfer form are blank. Its case is that the same are mere sample copies whereas the original documents from pages 382, 385, 388, 391, 394, 397, 487, 489, 491 and 493 of the paper book. The assessee therefore states that all these documents duly rebut the Revenue's contentions in question.

27. We have heard both the parties at considerable length. Case file perused. The instant appeal raises two questions before us. First one is as to whether the assessing authority has rightly taken recourse to the impugned reopening in above narrated facts of the case. Latter issue is about correctness of the impugned share application money addition of Rs. 7.5 crores. We proceed to examine the legal issue first. There is no quarrel between the parties that the assessee's return was processed only under section 143(1) of the Act instead of a regular assessment being framed. And that the impounded material during survey is BF-01 comprise of the assessee's annual statements, return, annual report what was already enclosed with the return.

28. We deem it appropriate at this stage to refer to some landmark judicial precedents qua significance of the relevant reasons leading to a reopening under section 148 of the Act. The Hon’ble Bombay High Court in case of Hindustan Lever Ltd. v. R. B. Wadkar, Asst. CIT (No. 1) [2004] 268 ITR 332 (Bom) holds that ". . . It is needless to mention that reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No addition could be made to those reasons. No inference is allowed to be drawn on the basis of reasons not recorded. It is for the Assessing Officer to disclose and open his mind through the reasons recorded by him. He has to speak through the reasons". Their Lordships further emphasise that the reasons should be self explanatory and should not keep on assessee guessing for the reasons. And that reasons provide link between conclusions and evidence. The very Hon’ble court in Prashant S. Joshi v. ITO [2010] 324 ITR 154 (Bom) is of the view that Assessing Officer must have reasons to believe of any taxable income having escaped assessment before he proceeds to issue reopening notice and the relevant reasons recorded are the only reasons which can be considered unless formation of this belief is impugned.

29. The Hon’ble apex court similarly in case law of ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) holds that reasons for the formation of belief must have rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be direct nexus or live link between the material coming to notice of the Income-tax Officer and formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully or truly all relevant facts. It is no doubt true that the court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the Income-tax Officer on the point as to whether action should be initiated for reopening assessment. At the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and far-fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. Their Lordships then consider section 147 of the Income-tax Act, 1961 as well to conclude in para 11 that this formation of belief should not be mere pretence.

30. We further deem it appropriate at this stage to deal with the Revenue's preliminary argument that instant caseinvolves processing only under section 143(1) of the Act and not a case of a regular assessment under section 143(3) being framed. It quotes case law of Rajesh Jhaveri Stock Brokers P. Ltd. (supra) drawing fine distinction between the two assessment concepts to conclude that the former one is a mere intimation as against the latter being treated as an assessment. Their Lordships clarify in para 16 of the judgment that reasons to believe in the relevant context mean cause or jurisdiction and if the Assessing Officer has such a cause or justification to know or suppose that an income has escaped assessment, it can be said to have reasons to believe that an income has escaped. Their Lordships observe that only question at the stage of issuance of notice required that there is relevant material on which a reasonable person could form a requisite belief of any taxable income to have escaped assessment. And that conclusive proof of such material is not the concern at such stage. The Hon’ble jurisdictional High Court in the case of Inductotherm (India) P. Ltd. v. M. Gopalan, Deputy CIT [2013] 356 ITR 481 (Guj) also reiterates the very legal proposition propounded by the Hon’ble apex court that an Assessing Officer has to have reasons to believe even if it is a case of section 143(1) intimation and such a course cannot be taken recourse in order to conduct a finishing or roving inquiry seeking to verify the claims as if it were a regular assessment. The Hon’ble jurisdictional High Court in a very recent judgment post facto hearing of the instant case i.e., Sheth Multilink Pvt. Ltd. v. ITO SCA No. 14353/2016 decided on August 29, 2016 has declined to interfere in a challenge to reopening of a section 143(1) processing in case wherein the Assessing Officer had collected sufficient material before forming reasons to believe that the assessee's income had liable to be assessed had escaped assessment.

31. We keep in mind the above legal principles inter alia that an Assessing Officer's reopening reasons cannot be improved upon, they have to have cause and effect relationship between reopening reasons and escapement of taxable income, an Assessing Officer cannot resort to reopening in absence of material leading to formation of reasons to believe as per reasonable prudence that any taxable income has escaped assessment and that the same is not in the nature of a fishing or roving inquiry, respectively and proceed to examine the validly of the impugned reopening before us.

32. The assessee's plea is that the impounded document annexure BF-01 is its annual statement/report at pages 1 to 620 of the paper book already filed with the return. The Assessing Officer's first reason is that a scrutiny thereof indicates the assessee to have introduced unaccounted capital through share capital and premium. The same is nowhere even referred to in the body of assessment order containing 13 pages of the Assessing Officer's findings. We afforded sufficient opportunity to Shri Patel to take us to any such material in BF-01 forming part of the paper so as to even prima facie indicate at slightest pretext that there is even any evidence much less a conclusion indicating the assessee's unaccounted income have been invested in the share capital in question. He fails to refer to any such material. We accordingly observe that the impugned reopening reasons nowhere indicate any live nexus between the income sought to be reassessed. Our view therefore is that the Assessing Officer has proceeded on a mere apprehension leading to the impugned long drawn process of roving inquiry which has held to be not permissible by the Hon’ble apex court. This first reason accordingly fails the test of cause-effect relationship as discussed in the preceding paras. The assessee's first limb of argument is thus accepted.

33. We come to second reason of the impugned reopening that the assessee-company bought back the share capital in question from the ten investor companies by paying them a sum of Rs. 75.20 lakhs. This reason no more survives in view of the Assessing Officer's remand report as well as the Commissioner of Income-tax (Appeals)'s lower appellate findings that it is the relatives of the assessee's directors who have been found to be the purchasers of the share capital in question. We put up a specific query to Shri Patel to point out that the above four share capital purchasers are in any way related to the assessee's directors. His case is that the assessee is a closely held company and it is not possible for the Department to prove this relationship. This plea does not impress upon us. We notice from Shri Jain's survey statement that he was put up a very specific query about his family members and the assessee's other directors. The same were sufficiently replied. There is no evidence in the case file linking the said persons with those investors found in the remand report. Our view is that neither there is any material on record to point out specified relationship under section 40A(2)(b) of the Act nor are their assessment records placed in the case file to prove this crucial relationship. We are also of the opinion that this negative burden that these purchasers are not its relatives cannot be put to the assessee. Nor the Department in instant case made any effort to find about finding of the assessment in cases of investor companies as well as the four individual assessee who have repurchased the share capital despite that the fact it itself is the assessing authority of all of them. We rely on the case law in preceding paragraphs that the basic tenet of cause-effect relation between the reopening reasons and taxable income having escaped assessment is accordingly not made out. The assessee succeeds in the instant argument as well.

34. We now come to the assessee's third limb of argument that the mere fact of Shri Jain's statement not being able to furnish names of the investor companies or their negotiators cannot form the reason to believe of its taxable income having escaped assessment. We notice that page 644 contains survey party's specific queries as to whether he remembered the above state particulars of the investors. His reply was that he did not remember. We reiterate that the assessee transferred its share capital in financial year 2008-09 and this survey statement is dated September 3, 2012 i.e. after a time gap of four years. There is further no issue that the Department had already impounded BF-01 on August 31, 2012 stating all details of the assessee's companies contained in its annual statement and other documents. The same was furnished back only after issuance of reopening notice (supra). There is thus nothing in Shri Jain's statement which could be held to be treated as an admission or that it is pointing towards introduction any unaccounted income in share capital. The Central Board of Direct Taxes Circular dated March 10, 2003 (as reiterated on December 18, 2014 vide clarification No. 286/98/2013-IT (Inv-II)) has already clarified that search/survey teams have to collect evidence instead of obtaining confessions of the concerned assessee. The Hon’ble jurisdictional High Court in Kailashben's case (supra) takes notes of the same in para 13 of the judgment to conclude that an addition in absence of corroborative evidence ought not to be made merely on the basis of the assessee's admission. We accordingly reject the Revenue's contentions supporting this third limb of the impugned reopening as well.

35. This leaves us with the last reason of reopening stated to be based on assessee's written correspondence dated September 3, 2012 and September 4, 2012 disclosing names of ten investor companies through whom it had allegedly introduced the impugned unaccounted money. We revert back to page 648 of the paper book. Shri Jain submitted a hand written letter dated September 3, 2012 that the assessee's director had consulted the matter to agree for disclosing an unaccounted income of Rs. 9 crores. This followed the assessee's retraction on the very next day i.e., September 4, 2012 claiming that its share transfer were very much genuine under the company law agreed at the same time for declaring taxable income of Rs. 9 crores. The Assessing Officer did not collect any material even up to section 148 notice on February 13, 2013 despite the fact that he was having at his disposal all the impounded material coupled with details of the ten investor companies. The Revenue at this stage seeks to involve estoppel principle. Its case is that the above correspondence binds the assessee since filed during survey or under section 131 of the Act as the case may be. We do not agree with this plea either way. We quote the Board's circular hereinabove to hold that the same hardly carries any significance in absence of corroborative evidence. The Revenue's latter limb of argument is also devoid of merits because if this admission is not even admissible in special provisions of search or survey, it can be safely held that the very analogy covers section 131 proceedings for general provisions as well. We have already indicated many a times that there is no corroborative evidence casting doubts on the assessee's share capital transfer up to the date of reopening notice. We further quote a co-ordinate Bench decision of this Tribunal in ITO v. Ghanshyambhai R. Thakkar [1996] 56 TTJ (Ahd) 460 rejecting a similar argument that a statement made during survey cannot be accepted in piecemeal. We adopt the very reasoning to observe that the Revenue's approach in seeking to assess the assessee's amount declared of Rs. 9 crores and at the same time questioning genuineness thereof by adopting pick and choose method is accordingly rejected. The assessee therefore succeeds in its fourth argument as well.

36. We have already discussed in preceding paragraphs that Shri Patel has also filed a catena of case law supporting the impugned reopening. First one of Olwin Tiles (supra) upholding the Assessing Officer's action issuing section 148 notice since the assessee therein had received huge premiums having regard to its net worth. We reiterate that there is no such reason in the impugned reopening before us. The same can also not be allowed to be substituted at this stage. We find the Revenue's judgments on this legal aspect are not germane to the issue since the reopenings therein fulfilled all relevant parameters as per facts involved therein. The same are accordingly distinguished.
37. We rely upon our detailed discussion hereinabove to finally conclude that all four reasons of the impugned reopening recorded by the Assessing Officer have to be held as not sustainable as per the settled law. We accordingly quash the impugned reopening. The assessee's additional ground is accepted. All other arguments advanced at both parties' behest qua merits of the case are rendered academic.

38. This assessee's appeal is allowed.

The order pronounced in the open court on October 13, 2016.