A search operation under section 132 was conducted at the assessee’s premises. during which certain material and evidences were gathered which contained the name of the assessee and the symbols like Square/Rectangle/Triangle/Star/Circle/TickMark/Roman ‘V’ i.e. the coded language reflecting that the assessee was involved in taking cash loans. The modus operandi adopted was that the loan recipient acknowledged the receipt of cash loan through a paper popularly known as ‘Rukka’. The loans were squared off or carried forward for a further specified period as per the mutual decisions of the parties involved and thereafter Rukka was destroyed on repayment of loan. Certain documents established the involvement of the assessee in such type of transactions with the broker and there were names of many other persons who were involved in this type of transactions adopting same modus operandi.

On the basis of such documents and evidences, it was considered that income chargeable to tax had escaped assessment for the assessment year under consideration and therefore, a reopening notice under section 148 was issued. On writ  dismissing the petition the Court held that documents gathered during search were forwarded by investigation wing to relevant authorities and documents were also shared with assessee. Order was passed based on investigation and evidence collected. All  findings in the order were based on material evidence which could not be scrutinised by a writ Court in exercise of its writ jurisdiction.  Court also observed that  considering nature of huge financial scam Principal CIT is  directed to refer this case along with all other involving same broker where similar modus operandi was adopted relating to unaccounted cash loan to Enforcement Directorate (ED). (AY. 2019-20)