The Tribunal held that the Assessing Officer had not mentioned on what account or transactions the assessee had taken the accommodation entry. The Assessing Officer had just narrated the contents as received by him from the Investigation Wing without having all the details and investigation report. The Assessing Officer had not conducted any enquiry in respect of the information from the party who had allegedly made the statement of providing accommodation entries. Nor was there an allegation that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Thus, the reopening of the assessment after four years from the end of the AY. was not permitted. When finally the accommodation entries were found to be on account of sales made by the assessee which formed the primary record as part of the profit and loss account as well as computation of income, in the absence of any allegation by the Assessing Officer, Explanation 1 to section 147 could not be pressed into service. All the sales including the sales in dispute were duly accounted for in the books of account which were audited and subject to scrutiny of the Commercial Taxes Department. Therefore, the assessee could not be held guilty of not furnishing all the information necessary for assessment. The Tribunal also held that    the issue of the validity of reopening under rule 27 of the Income-tax (Appellate Tribunal) Rules, 1963 was to be decided in favour of the assessee. Since this issue went to the root of the matter and the reassessment having been quashed the only consequence of deciding this issue in favour of the assessee was that the appeal of the Department would fail and the order of the Commissioner (Appeals) was upheld. (AY. 2011-12)