JUDGMENT : Akil Abdul Hamid Kureshi, J. 1. Petitioner has challenged a notice dated 16.4.2015 issued by the respondent Assessing Officer seeking to re-open the assessment of the petitioner for the assessment year 2008-2009. 2. Brief facts are as under:- The petitioner is a company registered under the Companies Act. For the assessment year 2008-2009, the petitioner had filed a return of income disclosing gross receipts from business and profession at Rs. 166.89 crores which included the long time capital gain arising out of the sale of landed properties. One of the sale transactions executed by the petitioner company was of sale of a non-agricultural land situated at Bhavnagar under registered sale deed dated 4.12.2007 for a sale consideration of Rs. 98 lacs. 3. The return of the assessee was taken in scrutiny. The Assessing Officer passed scrutiny assessment order under section 143(3) of the Income Tax Act, 1961 ("the Act" for short) on 30.12.2010. In such assessment order, the Assessing Officer did not disturb the claim of capital gain arising out of the sale transaction for a disclosed sale consideration of Rs. 98 lacs. To re-open such assessment, the Assessing Officer issued the impugned order. At the request of the petitioner, he supplied reasons recorded by him for such purpose which read as under: "Reasons recorded under section 148(2) of the I.T. Act. In this case the return of income for A.Y. 2008-2009 of Rs. 10,34,32,100/- was filed by the assessee on 27.10.2009 (sic). Further assessment proceedings were completed vide order dated 30.12.2010 assessing the income at Rs. 16,08,84,047/-. As per the information received from ITO Wd. 3(1)(1), Vadodara vide letter dated 16.3.2015, Kamal Gohil has entered into a purchase transaction with M/s. Palitana Sugar Mills Pvt. Ltd. (PSPL) of land of area 4946 sq. mtrs. Situated at Plot No. 17, 18, 61 and 64, ward No. 7, City Survey No. 3036/1/139, Moje Vadva, Bhavnagar registered on 4.12.2007. The deed is signed as purchaser by Shri Kamal M. Gohil and as seller by Jayeshbhai Talakshi Kotak, Executive Director of PSPL Shri Alok Gunvaantray Upadhyay as POA (power of attorney) Holder of Shri Jayeshbhai Talakshi Kotak. The Assessee has allegedly paid Rs. 98,00,000/- to M/s. Palitana Sugar Mills Pvt. Ltd. (PSPL). The payment of Rs. The deed is signed as purchaser by Shri Kamal M. Gohil and as seller by Jayeshbhai Talakshi Kotak, Executive Director of PSPL Shri Alok Gunvaantray Upadhyay as POA (power of attorney) Holder of Shri Jayeshbhai Talakshi Kotak. The Assessee has allegedly paid Rs. 98,00,000/- to M/s. Palitana Sugar Mills Pvt. Ltd. (PSPL). The payment of Rs. 98,00,000/- is reflected in books of M/s. J.P. Infrastructure Pvt. Ltd., PAN AABCJ-4936C, JP ISC On Ltd.-IMC-Bhavnagar (ledger Plot Unit Holders A/c) as well as in books of accounts of PSPL (Ledger ISCON Mega City Scheme Deposit A/c. As per order dated 11.8.2008 of the Hon'ble High Court of Gujarat for scheme of amalgamation, M/s. Palitana Sugar Mills Pvt. Ltd. Has been emerged and Iscon Megacity Division and Sundervans Bungalow land-Hotel Project Division of Palitana Sugar Mills Pvt. Ltd. Has been merged into M/s. J.P. Infrastructure Pvt. Ltd. w.e. From appointed date 1.4.2007. Subsequently, after a short period of 3 months on 5.3.2008, Shri Kamal M. Gohil sold the alleged land to M/s. Sterling Addlife India Pvt. Ltd. For a sum of Rs. 7,09,85,880/-. The deed is signed as seller by Shri Kamal M. Gohil and Shri Jayeshbhai Talakshi Kotak and as purchaser by Shri Girishbhai Naranbhai Patel (Director, Sterling Adlife India Limited). The amount of Rs. 7,09,85,880/- received by Shri Kamal M. Gohil is withdrawn from his A/c No. 003138230009754 maintained with Nutan Nagrik Sahakari Bank Ltd. (NNSBL) through Shroffs by issuing cheques of different amount. The ISCON group (M/s. PSPL is part of this group) has also used the same person i.e. Kamal M. Gohil in its transaction of land in A.Y. 2009-10, which caused escapement of capital gain tax on amount of Rs. 8,44,69,500/-. During the assessment proceedings in the case of Shri Kamal Gohil for A.Y. 2009-10, the A.O. Has observed that:- Discrete Field enquiries carried out in Baroda and Ahmedabad revealed that Shri Kamal M. Gohil is front man of ISCON group headed by Shri Pravin Kotak and Shri Amit Gupta. The group is using Shri Kamal Gohil as a "confirming party" in group's land activities. Once a land deal is made with a seller, Shri Kamal Gohil made a agreement with seller for "rights of purchase of said land" for a petty sum as compared to actual value of land. The group is using Shri Kamal Gohil as a "confirming party" in group's land activities. Once a land deal is made with a seller, Shri Kamal Gohil made a agreement with seller for "rights of purchase of said land" for a petty sum as compared to actual value of land. The land is then acquired by the group from Kamal Gohil and payments are made to Kamal Gohil's Bank account. Kamal Gohil makes payments to original land holders and original seller pays tax on the petty sum as decided in the agreement to sale. The substantial amount of capital gain tax was shifted in the hands of Kamal Gohil who is absconder as far as income tax proceedings are concerned." Thus, transaction undertaken by J.P. Infrastructure Pvt. Ltd. With Kamal Gohil is a sham transaction to evade tax in A.Y. 2008-2009. Moreover, J.P. Infrastructure Pvt. Ltd. Has shown sale consideration of land at Rs. 98,00,000/- in December, 2007 whereas on March, 2008, Stamp Duty Valuation of land sold by Shri Kamal M. Gohil to M/s. Sterling Add life India Limited is of Rs. 7,09,85,880/-. In view of the above, I am of the opinion that Rs. 6,11,85,880/- of income has escaped assessment for A.Y. 2008-2009 and this is a fit case for reassessment by invoking the provisions of section 147 of the Income Tax Act, 1961." 4. The petitioner raised objections in the process of re-opening under communications dated 4.6.2015 and 15.7.2015 and followed up with further objections dated 27.7.2015. Such objections were however rejected by the Assessing Officer by an order dated 27.10.2015. Hence the petition. 5. Inviting our attention to the reasons recorded by the Assessing Officer, learned counsel for the petitioner raised following contentions:- (1) That the issue of capital gain arising out of sale of the said land was examined by the Assessing Officer in the original assessment proceedings. It was thereafter not open for him to re-visit this issue by re-opening the assessment. (2) Further notice for re-opening have been issued beyond period of four years after the end of relevant assessment year. There was no failure on the part of the petitioner to disclose truly and fully, all facts necessary for the assessment. Notice for re-opening therefore, could not have been issued. (3) Even otherwise reasons recorded by the Assessing Officer lack validity. There was no failure on the part of the petitioner to disclose truly and fully, all facts necessary for the assessment. Notice for re-opening therefore, could not have been issued. (3) Even otherwise reasons recorded by the Assessing Officer lack validity. From such reasons, it cannot be gathered in what manner income chargeable to tax in the hands of the petitioner can be stated to have escaped assessment. There was no material with Assessing Officer to form a belief that there has been an escapement of assessment of income. 6. On the other hand, learned counsel Shri Bhatt after taking us minutely through the recorded reasons submitted that the modus operandi employed by the petitioner in collusion with Kamal Gohil is apparent. The close proximity within which the land was purchased and re-sold and enormous difference between sale considerations disclosed in the said two transactions coupled with other material on record would indicate that through this device, the petitioner had avoided a sizeable capital gain tax. He submitted that such activities of Kamal Gohil were noticed by the Assessing Officer while carrying out assessment in his case for the assessment year 2009-2010. The fact that said Kamal Gohil is now absconding and has not discharged huge capital gain liabilities to the department is yet another relevant aspect. 7. Having heard learned counsel for the parties and having perused materials on record, we may notice that as per reasons recorded by the Assessing Officer, the land in question was sold by the petitioner to Kamala Gohil under registered sale deed dated 4.12.2007 for a sale consideration of Rs. 98 lacs. Within just about three months on 5.3.2008, Kamal Gohil re-sold this land to one M/s. Sterling Addlife India Private Ltd. for a sale consideration of Rs. 7.09 crores. The sale consideration of Rs. 7.09 crores was withdrawn by Kamal Gohil from his bank account maintained with Nutan Nagrik Sahakari Bank Ltd. through Shroff by issuing cheques of different amounts. Within just about three months on 5.3.2008, Kamal Gohil re-sold this land to one M/s. Sterling Addlife India Private Ltd. for a sale consideration of Rs. 7.09 crores. The sale consideration of Rs. 7.09 crores was withdrawn by Kamal Gohil from his bank account maintained with Nutan Nagrik Sahakari Bank Ltd. through Shroff by issuing cheques of different amounts. It is further recorded in the reasons that during assessment proceedings, in case of Kamal Gohil in the assessment year 2009-2010, upon discreet inquiry, it was found that the Iscon Group of companies had used Kamal Gohil as a confirming party in the group's land activities where the Iscon group would ensure that there would be sale of land to Kamal Gohil for fraction of the actual value of the land, who, in turn, would sale the land to Iscon. Payments to Kamal Gohil would be routed to original land owner who in turn, would transfer capital gain liability on Kamal Gohil who is absconding. 8. Few facts are not disputable. The petitioner sold land to Kamal Gohil under registered deed dated 4.2.2007 at a sale consideration of Rs. 98 lacs. The land was re-sold by Kamal Gohil barely three months later for a sale consideration of Rs. 7.09 crores. Thus, there was more than seven times jump in the value of the land in about three months. As per the department, such amount was withdrawn by Kamal Gohil from his bank account through Shroffs under different cheques. The department has prima facie information at its command to believe that Kamal Gohil was also used by Iscon group of companies for routing cash sale considerations to the original land owners-sellers reducing their capital gain tax liability and that Kamal Gohil is absconding. 9. In our opinion, the reasons cannot be said to be not germane to the question of assessable capital gains in the hands of the petitioner for the sale of the land in question. The Supreme Court in the case of Assistant Commissioner of Income-Tax vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. reported in 291 ITR 500 in the context of "reason to believe" held that if the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. It was observed as under: "16. Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Manganese Ore Co. Ltd. vs. ITO (1991) 191 ITR 662 , for intimation of action under section 147(a) (as the provision stood at the relevant time) fulfillment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is "reason to believe" but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concerned at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction - ITO vs. Selected Dalurband Coal Co. P. Ltd. (1996) 217 ITR 597 (SC) and Raymond Woolen Mills Ltd. v. ITO, (1999) 236 ITR 34 (SC)." 10. Coming to the question of true and full disclosure, the contention needs summary rejection. If prima facie, the facts stated in the reasons recorded by the Assessing Officer are accepted, surely there was total lack on the part of the assessee to disclose true and full facts. Similarly the contention that the issue was examined during original assessment also needs to be rejected. It is true that the question of capital gain came up for consideration before Assessing Officer. Similarly the contention that the issue was examined during original assessment also needs to be rejected. It is true that the question of capital gain came up for consideration before Assessing Officer. It is also true that the assessee had placed the materials with respect to sale of land before Assessing Officer during such assessment proceedings. However, the question of true value of the land not being reflected in the sale consideration and the transaction itself not reflecting the correct value received by the petitioner, obviously were not part of assessment proceedings. At that stage, the Assessing Officer cannot be said to have applied his mind to these aspects of the matter which emerged later on. The sale of land by Kamal Gohil three months after his purchase from the petitioner at a value more than seven times of the purchase cost was also not before the Assessing Officer. 11. In the case of Yogendrakumar Gupta vs. Income-Tax Officer, reported in 366 ITR 186 in the context of Assessing Officer's reasons to believe and also in the context of inquiries made by the Assessing Officer when new material was revealed later on, the Court held and observed as under:- "20. The Assessing Officer required jurisdiction to reopen under section 147 read with section 148 of the Act, where the information must be specific and reliable. As held by the apex court in the case of Phool Chand Bajrang Lal (supra), since the belief is that of the Income-tax Officer, the sufficiency of reasons for forming the belief, is not for the court to judge but is open to an assessee to establish that there exists no belief or that the belief is not at all a bona fide one or based on vague, irrelevant and non-specific information. To that limited extent, the court may look at the view taken by the Income-tax Officer and can examine whether any material is available on record from which the requisite belief could be formed by the Assessing Officer and whether that material has any rational connection or a life link with the formation of the requisite belief. It is also immaterial that at the time of making the original assessment, the Assessing Officer could have found by further inquiry or investigation as to whether the transactions were genuine or not. It is also immaterial that at the time of making the original assessment, the Assessing Officer could have found by further inquiry or investigation as to whether the transactions were genuine or not. If on the basis of subsequent valid information, the Assessing Officer forms a reason to believe on satisfying the twin conditions prescribed under section 147 of the Act that no full and true disclosure of facts was made by the assessee at the time of original assessment and, therefore, the income chargeable to tax had escaped assessment, his belief and the notice of reassessment based on such belief/opinion needs no interference. In the present case, since both the necessary conditions have been fulfilled, sufficiency of the reasons is not to be gone into by this Court. The information furnished at the time of original assessment, when by subsequent information received from the Deputy Commissioner of Income-tax, Kolkatta, itself found to be controverted, the objection to the notice of reassessment under section147 of the Act must fail. At the costs of ingemination, it needs to be mentioned that at the time of scrutiny assessment, a specific query was raised with regard to unsecured loans and advances received from the said company, namely Basant Marketing Pvt. Ltd. Based at Kolkatta. These being the transactions through the cheques and drafts, there would arise no question of the Assessing Officer not accepting such version of the assessee and not treating them as genuine loans and advances. Furnishing the details of names, addresses, PANs, etc. also would lose its relevance if subsequently furnished information, which has been made basis for issuance of notice impugned, concludes that Basant Marketing Pvt. Ltd. Is merely a dummy company of one Shri Arun Dalmia, which provided the accommodation entries to various beneficiaries." 12. In the result, the petition is dismissed.