M/s Walia & Co., Amritsar. V. The Income Tax Officer, Amritsar.

CO 33/ASR/2015

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3135 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 15-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P N ARORA LD
• Assessee Lawyers: RAHUL DHAWANLD
• Keywords: Business income
• Section: 143(3); 133A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K. CHOUDHRY, JUDICIAL MEMBER ITA NO.636/(ASR)/2015 ASSESSMENT YEAR: 2008-09 PAN: AAAAT5385J ASSTT. C. I. T., CIRCLE-IV, AMRITSAR. VS. M/S THE MATTEWAL CO-OP L/C SOCIETY, 143-GOLDEN AVENUE, AMRITSAR. (APPELLANT) (RESPONDENT) CROSS OBECTION NO. 02/(ASR)/2016 (ARISING OUT OF ITA NO. 636/ASR/2015) ASSESSMENT YEAR: 2008-09 M/S THE MATTEWAL CO-OP L/C SOCIETY, 143-GOLDEN AVENUE, AMRITSAR. VS. ASSTT. C. I. T., CIRCLE-IV, AMRITSAR. (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : SH. RAHUL DHAWAN (LD. D.R.) RESPONDENT BY: SH. P. N. ARORA (LD. ADV.) DATE OF HEARING : 08/08/2017 DATE OF PRONOUNCEMENT : 31 /08/2017 ORDER PER N. K. CHOUDHRY (JM): THE REVENUE DEPARTMENT PREFERRED THE INSTANT APPEAL BY FEELING AGGRIEVED AGAINST THE ORDER DATED 15.09.2015 PASSED I N APPEAL NO. 283/2013-14 RELEVANT TO THE ASST. YEAR 2008-09 BY TH E LD. CIT(A)-2 AMRITSAR. ITA NO.636/ASR/2015 & C.O. NO. 02/ASR/2016 ASS T. YEAR: 2008-09 2 2. THE ASSESSEE ALSO PREFERRED TO FILE C.O. AS AGAINST THE A PPEAL OF THE REVENUE DEPARTMENT IN SUPPORT OF AFORESAID ORDER UNDE R CHALLENGE. 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE DEPARTME NT ARE REPRODUCED HEREIN BELOW: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-2, AMRITSAR ERRED BY TREATING THE AMOUNT OF RS.1,30,00,000/- SU RRENDERED DURING THE SURVEY, AS INCOME UNDER THE HEAD PROFITS & GAI NS FROM BUSINESS & PROFESSION IN SPITE OF THE FACT THAT ASSESSEE COUL D NOT FURNISH SATISFACTORY EXPLANATION/SOURCE OF THE ADDITIONAL I NCOME. THE AFORESAID SURRENDER AMOUNT NOT PART OF CONTRACT RECEIPTS AND SHOWN SEPARATELY IN THE INCOME AND EXPENDITURE ACCOUNT. 2. THE APPELLANT CRAVES LEAVE TO AMEND OR ADD ANY O R MORE GROUND(S) OF APPEAL. 4. THE GROUNDS OF CROSS OBJECTION RAISED BY THE ASSESSEE ARE R EPRODUCED HEREIN BELOW: 1. THAT THE ORDER OF LEARNED CIT(A) IS CORRECT ON THE FACTS AS WELL AS ON THE LAW. 2. THAT THE LD. CIT(A) WAS CORRECT ON THE FACTS AS WEL L AS ON LAW IN TREATING THE AMOUNT OF RS.1,30,00,000/- SURRENDERED DURING THE SURVEY AS INCOME UNDER THE HEAD PROFIT & GAINS FRO M BUSINESS & PROFESSION. 3. THAT THE DEPARTMENT HAS GOT NO BASIS AND REASONS FO R COMING IN APPEAL BEFORE THE LEARNED TRIBUNAL. AS SUCH THE APP EAL OF THE DEPARTMENT MAY BE DISMISSED 4. THAT THE ORDER OF THE LD. CIT(A) IS WELL REASONED D ETAILED ORDER AND THE SAME MAY KINDLY BE ACCEPTED AND THE DEPARTMENT APPEAL MAY BE DISMISSED. 5. ANY OTHER GROUND OF CROSS-OBJECTION WHICH MAY BE UR GED AT THE TIME OF HEARING OF THE APPEAL. 5. IN SHORT THE FACTS OF THE CASE ARE AS UNDER THAT THE RE TURN DECLARING AN INCOME OF RS.1,38,52,720/- WAS FILED ON 30.09.2008 BY THE ASSESSEE AND THE SAME WAS PROCESSED U/S 143(3) AND DURING THE PERIOD OF SU RVEY U/S 133A WAS CONDUCTED ON 27 TH MARCH, 2008 AT THE BUSINESS PREMISES OF THE ASSESSEE ITA NO.636/ASR/2015 & C.O. NO. 02/ASR/2016 ASS T. YEAR: 2008-09 3 NET A SURRENDERED OF ADDITIONAL INCOME OF RS.1.30 CRORE S QUA ASST. YEAR UNDER CONSIDERATION. IN ADDITION, THE ASSESSEE HAD ALSO SUR RENDERED AN ADDITIONAL INCOME OF RS.70 LACS FOR THE PRECEDING YEAR I .E. ASST. YEAR 2007- 08. FINALLY THE ASSESSING OFFICER ADDED RS.1,26,64,680/- IN T HE RETURN OF INCOME SHOWN THAT IS RS.1,38,52,715/- AND DETERMINED T HE LIABILITY, THEREAFTER THE QUANTUM ORDER WAS CHALLENGED UP TO THE ITAT LEVEL AND ORDER WAS PASSED BY ITAT, DIRECTING THE ASSESSING OFFICER TO COMPU TE NET INCOME @ 5% OF THE CONTRACT RECEIPTS, THEREFORE AN APPLICATION U/S 154 WAS FILED BY THE ASSESSEE FOR GIVING EFFECT TO THE ORDER PASSED BY THE ITAT AND WHILE PASSING AN ORDER U/S 154 OF THE ACT , THE ASSESSING OFFICER OBSERVED THAT THE SURRENDERED INCOME OF RS.1,30,00,000/- DOES NOT FORMS PA RT OF THE CONTRACT INCOME AND HAS TO BE SEPARATELY ADDED IN THE COMPUTATIO N AND FINALLY THE DISCLOSURE OF RS.1,30,00,000/- WAS TREATED AS SEPARATE INCO ME. FINALLY THE ASSESSING OFFICER WHILE GIVING EFFECT TO THE ORDER PASSED BY THE HON'BLE ITAT COMPUTED INCOME AT RS.2,68,84,955/- AF TER INCLUDING THE FOLLOWING: (I) NET PROFIT @5% RS.1,38,84,955/- (II) DISCLOSURE OF INCOME OF IN CONSEQUENCE RS.1,30,00 ,000/- TOTAL RS.2,68,84,955/- 6. FEELING AGGRIEVED AGAINST THE ORDER PASSED BY THE ASS ESSING OFFICER U/S 154, THE ASSESSEE PREFERRED THE FIRST APPEAL BEFORE THE LD. CIT(A) AND LD. CIT(A) WHILE CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE DELETED THE SAID ADDITION. ITA NO.636/ASR/2015 & C.O. NO. 02/ASR/2016 ASS T. YEAR: 2008-09 4 7. FEELING AGGRIEVED AGAINST THE ORDER PASSED BY THE LD . CIT(A), THE REVENUE DEPARTMENT PREFERRED THE INSTANT APPEAL AND SUBMITTED THAT THE LD. CIT(A) ERRED BY TREATING THE AMOUNT OF RS.1,30,00,00 0/- SURRENDERED DURING THE SURVEY AS INCOME UNDER THE HEAD PROFITS AND GAINS FR OM BUSINESS AND PROFESSION IN SPITE OF THE FACT THAT THE ASSESSEE COULD NOT FURNISH SATISFACTORY EXPLANATION/ SOURCE OF ADDITIONAL INCOME. THE AFORESAID SURRENDERED AMOUNT DOES NOT FORMS PART OF THE CONTRACT RECEIPTS AND SHOWN SEP ARATELY INCOME AND EXPENDITURE ACCOUNT. 8. ON THE CONTRARY, THE LD. AR SUBMITTED THAT THE ORDER PASSED BY THE LD. CIT(A) IS A WELL REASONED ORDER BASED ON FACTS AND M ATERIALS ON RECORD AND THE LD. ASSESSING OFFICER CANNOT SIT ON THE JUDGMENT OF THE HON'BLE ITAT AND IT IS HIS DUTY TO GIVE EFFECT TO THE ORDER OF THE TRIBUNAL IN ITS TRUE SPIRIT AND HE CAN NOT CHANGE THE JUDGMENT IN HIS OWN RYTHAM AND EVEN OTHERWISE IN THE SAME AND SIMILAR CIRCUMSTANCE, THE CASE OF THE ASSESSE E HAS ALREADY BEEN ACCEPTED IN THE IMMEDIATELY PRECEDING YEAR I.E. A SSESSMENT YEAR 2007-08 AND IF THE AMOUNT OF RS.1,30,00,000/- HAS BEE N TAKEN SEPARATELY OUT OF BUSINESS INCOME THEN CERTAINLY THAT TANTAMOUNT GREAT IN-JUSTICE AS WELL AS DOUBLE TAXATION. 9. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES A ND PERUSED THE MATERIAL ON RECORD AND ORDERS PASSED BY AUTHORITIES BELOW. THE LD. CIT(A) DELETED THE ADDITION UNDER DISPUTE , BY OBSER VING THAT A COPY OF INCOME AND EXPENDITURE ACCOUNT OF THE ASSESSEE OF THE YEAR ENDED 31 ST MARCH, 2008 REVEALED THAT THE CREDITS OF CONTRACT INCOME OF RS.27,76,99,115 AND MISCELLANEOUS INCOME OF RS.160/-, DISCLOSURE OF RS.1,3 0,00,000/- AND CLOSING STOCK OF RS.43,88,453/- AND AFTER DEBITING THE EXPENSES, THE EXCESS OF INCOME OVER EXPENDITURE WORKED OUT TO RS.1,38,27,7 15/-. THIS NET INCOME AS PER INCOME & EXPENDITURE ACCOUNT WAS INCLUDED IN THE N ET INCOME OF RS.1,38,52,720/- DECLARED BY THE ASSESSEE IN ITS RETURN OF INCOME FOR A.Y. ITA NO.636/ASR/2015 & C.O. NO. 02/ASR/2016 ASS T. YEAR: 2008-09 5 2008-09, AND TAXES WERE PAID ON IT. THE LD. CIT(A) A LSO OBSERVED THAT WHILE FRAMING THE ASSESSMENT ORDER DATED 27.12.2010 U/S 143(I II), THE ASSESSING OFFICER HAD SEPARATELY INCLUDED THE SURRENDERED AMOUNT IN THE INCOME AS SHOWN IN THE RETURN TO THE TUNE OF RS.1,38,52,715/-, AND ASSESSED THE GROSS INCOME AT RS.2,65,17,397/-. THE LD. CIT(A) ALSO OBSERVED THAT ASSESSING OFFICER HAS NOT APPRECIATED THAT WHILE GIVING EFFECT TO THE ORDER OF HON'BLE ITAT, BY ADDING THE SURRENDERED INCOME OF RS.1,30,00,000/- IN THE SHOWN INCOME COMES TO RS. 2,68,84,955/- WHICH IS CERTAINLY MORE THAN THE ASSESSE E INCOME AND THEREFORE BEYOND THE JURISDICTION OF THE ASSESSING OFFICE R. HOWEVER THE ASSESSING OFFICER ALSO FAILED TO NOTE THAT THE SAID SURREN DERED AMOUNT OF RS.1,30,00,000/-AS A CONSEQUENCE OF SURVEY U/S 133A HAD A LREADY BEEN CREDITED IN THE INCOME AND EXPENDITURE ACCOUNT OF THE Y EAR ENDED 31.03.2008 AND FORMS PART OF THE NET INCOME OF RS.1,38 ,52,720/- AS DECLARED BY THE ASSESSEE FOR A.Y. 2008-09 AND RELEVANT TAXES HAS ALREADY BEEN PAID THEREON. HOWEVER, NON-CONSIDERATION OF SURREN DERED AMOUNT AS PART OF THE INCOME WHILE GIVING EFFECT TO THE ORDER O F HON'BLE ITAT AMOUNTS TO DOUBLE ADDITION, THEREFORE ON THE AFORESAID REASON S THE LD. CIT(A) WAS PLEASED TO HOLD THE IMPUGNED ORDER DATED 24.01.2014 U/S 154 OF THE ACT. PASSED BY THE ASSESSING OFFICER AS ERRONEOUS QUA UPHOLDING OF THE SAID ADDITION OF SURRENDERED INCOME AND FINALLY THE ADDITI ON OF RS.1,30,00,000/- ADDED BACK WHILE GIVING EFFECT TO APPEAL'S ORDER DATED 30.09.2013. CONSIDERING THE REASONING GIVEN BY LD. CIT (A) AND AL SO APPLYING OUR INDEPENDENT MIND, WE DO NOT HAVE ANY HESITATION TO H OLD THAT THE LD. CIT(A) HAS CORRECTLY DEALT WITH THE FACTS AND CIRCUMSTANCES OF THE CA SE AND RIGHTLY GIVEN EFFECT TO THE ORDER PASSED BY THE HON'BLE ITAT. HE NCE IN OUR CONSIDERED OPINION DOES NOT SUFFER FROM ANY ILLEGALITY, PERVERSITY OR IMPROPRIETY , THEREFORE DOES NOT REQUIRE ANY INTERF ERENCE FROM THIS COURT. ITA NO.636/ASR/2015 & C.O. NO. 02/ASR/2016 ASS T. YEAR: 2008-09 6 10. IN THE RESULT, THE APPEAL FILED BY REVENUE DEPARTMEN T STAND DISMISSED. 11. AS WE ARE OF THE OPINION THAT CROSS OBJECTIONS FILED BY THE ASSESSE ARE MORE OR LESS IN SUPPORT OF THE ORDER OF THE LD. CI T(A), HENCE DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. ORDER PRONOUNCED IN THE OPEN COURT ON 31 .08.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED:31.08.2017. /GP/ SR.PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER