SILVERWING PATEL CARRIERS, Jaipur V. ITO, Jaipur

ITA 1027/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2115 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 24-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 1027/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 M/S SILVERWING PATEL CARRIERS, A-3, SAIN COLONY, POWER HOUSE ROAD, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD 3(5), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABJFS 1218 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28/04/2017 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 15/05/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES F ROM THE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 27/09/2016 FOR THE A. Y. 2008-09, WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE DIRECTION GIVEN BY THE LD. CIT(A) U/S 150(1) OF THE IT ACT TO CONSIDER THE RECEIPTS OF RS. 24,20,688/- ON ACCO UNT OF ALLEGED UNACCOUNTED CONTRACT RECEIPTS IN THE HANDS OF THE ASSESSEE IN THE STATUS OF FIRM AND TO MAKE FRES H ASSESSMENT THEREOF IS ILLEGAL AND BAD IN LAW. ITA 1027/JP/2016_ SILVERWING PATEL CARRIERS VS ITO 2 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NO T ACCEPTING THE CONTENTION OF THE ASSESSEE THAT THE S AID RECEIPT IS ALREADY CONSIDERED BY THE FIRM IN ITS RE GULAR RETURN. 2. THIS CASE WAS REOPENED FOR RECORDING THE REASONS T HAT DURING THE FINANCIAL YEAR 2007-08, THE ASSESSEE HAD RECEIVED R S. 24,20,688/- FROM THE VARIOUS PARTIES AND TDS WAS ALSO DEDUCTED U/S 194 C OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) AND ON THE EXAMINATION, IT WAS FOUND THAT NO RETURN OF INCOME BY THE ASSESSEE C OMPANY WAS FILED FOR ASSESSMENT YEAR 2008-09. 3. THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE ON THE SUBMISSION OF THE ASSESSEE THAT THE TOTAL RECEIPT DECLARED BY THE ASSESSEE FIRM IS RS. 74,10,868/-. THE RELEVANT PORTION OF THE LD. CIT(A) S ORDER IS AS UNDER:- (I) DURING THE APPELLATE PROCEEDING, IT WAS SUBMIT TED BY THE APPELLANT THAT IT WAS ALLOTTED PAN AAHCS3115J IN THE YEAR 2001 AND IN THE YEAR 2007, IT REALIZED THAT THE PAN WAS ALLOTTED IN THE STATUS OF THE 'COMPANY THOUGH IT IS A FIRM. CONSEQUENTLY, IT SURRENDERED THIS PAN AND APPLIED FOR A NEW PAN IN AUGUST 2007 IN THE STATUS OF FIRM AND A NEW PAN ABJFS1218G WAS ALLOTTED TO IT IN THE STATUS OF FIR M AND IT WAS FILING ITS RETURN OF INCOME BY USING THIS NEW PAN. IT WAS FURT HER SUBMITTED THAT IN ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON, IT HAS CONSIDERED THE ENTIRE RECEIPT INCLUDING RECEIPT ASPER 26AS OF OLD PAN, WHICH IS EVIDENT FROM THE FOLLOWING FACTS:- ITA 1027/JP/2016_ SILVERWING PATEL CARRIERS VS ITO 3 THE RECEIPT DECLARED BY THE ASSESSEE FIRM IS RS. 7 4,10,868/- WHEREAS THE RECEIPT AS PER 26AS OF NEW PAN IS RS. 26,12,850/- ( 52257/ 2%) AND RECEIPT AS PER 26AS OF OLD PAN IS RS. 24,20,688/- A GGREGATING TO RS. 50,33,538/-. THE NAME OF PARTIES APPEARING WHO DEDUCTED TDS AS PER BOTH THE PAN ARE ALMOST SAME. SINCE THE NAME OF OLD CONCERN AND NEW CONCERN WAS SAME, THE PARTIES UNDER THE CONFUSION DEDUCTED TAX AT SOURCE BY MENTI ONING OLD PAN. (II) IT WAS THE CONTENTION OF THE APPELLANT THAT IN VIEW OF THE ABOVE FACTS, NO CARGO RECEIPT REMAINED ESCAPED ASSESSMENT. IT WAS F URTHER SUBMITTED THAT EVEN OTHERWISE WHEN ALL THE ABOVE FACTS WERE S UBMITTED BEFORE THE AO IN REASSESSMENT PROCEEDING, THE AO SHOULD NOT HA VE PASSED THE ORDER UNDER THE STATUS OF THE COMPANY WHICH IS A NON-EXISTING PERSON. IT IS A SETTLED LAW THAT ASSESSMENT MADE ON NON EXI STING PERSONS IS ILLEGAL AND BAD IN LAW AND IN SUPPORT OF ITS CONTEN TION, THE APPELLANT PLACED RELIANCE UPON A NUMBER OF JUDICIAL PRONOUNCE MENTS. (III) I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ASSESSMENT ORDER, THE MATERIAL PLACED ON RECORD AND THE JUDICI AL PRONOUNCEMENTS RELIED UPON BY THE APPELLANT. IT WAS THE CONTENTION OF THE APPELLANT THAT IT HAS INCLUDED THE RECEIPTS OF RS. 24,20,688/- IN ITS TOTAL RECEIPTS OF RS. 74,10,868/- FOR THE YEAR UNDER CONSIDERATION. HOWEV ER, IT IS NOTED THAT DURING THE ASSESSMENT PROCEEDINGS, THE AO REQUIRED THE APPELLANT TO GET VERIFIED THAT THE RECEIPTS AMOUNTING TO RS. 24, 20,688/- SHOWN IN 26AS CONTAINING THE OLD PAN WAS REFLECTED IN ITS BO OKS OF ACCOUNTS, BUT THE APPELLANT DID NOT COMPLY WITH THE SAME BECAUSE OF THE OBVIOUS REASONS THAT THE SAME HAS NOT BEEN INCLUDED IN ITS DECLARED RECEIPTS FOR THE YEAR UNDER CONSIDERATION. THUS, THE CLAIM OF TH E APPELLANT THAT NO ITA 1027/JP/2016_ SILVERWING PATEL CARRIERS VS ITO 4 INCOME HAD ESCAPED ASSESSMENT HAS NO WEIGHT AND DES ERVES TO BE REJECTED. (IV) IT WAS THE CONTENTION OF THE APPELLANT THAT TH E AO MADE THE ASSESSMENT IN THE NAME OF A NON-EXISTING PERSON AND THUS IS BA D IN LAW. IT IS TO BE NOTED THAT THE OLD PAN WAS ALLOTTED TO THE APPELLAN T FIRM IN THE STATUS OF A COMPANY IN 2001 WHICH WAS CONTINUED TILL 200 7. THEN THE APPELLANT SURRENDERED THE SAME AND GOT A NEW PAN IS SUED IN THE STATUS OF A FIRM. HOWEVER, IT IS TO BE NOTED THAT THE F IRM CONTINUED TO BE THE SAME AND THERE WAS NO CHANGE IN THE FIRM EXCEPT T HE CHANGE OF PAN. THE FIRM CONTINUED THE SAME BUSINESS OF CARGO WITH THE NEW PAN. THUS, IT IS EVIDENT THAT PRACTICALLY, THERE WAS NO CHANGE IN THE BUSINESS, PARTNERS ETC. OF THE APPELLANT FIRM BUT ONLY CHAN GE IN PAN. THE FIRM WAS NOT EVEN DISSOLVED AS IS EVIDENT FROM THE MATER IAL PLACED ON RECORD. THEREFORE, MERE CHANGE OF PAN OF THE APPELLANT FIRM DOES NOT INVALIDATE THE ASSESSMENT PROCEEDINGS. THE JUDICIAL PRONOUNCEM ENTS AS RELIED UPON BY THE APPELLANT ARE DISTINGUISHABLE ON FACTS AS IN THESE CASES, THE ASSESSMENT WAS MADE ON A DEAD OR NON-EXISTING PERSO N. FOR INSTANCE IN ONE CASE, THE COMPANY WAS AMALGAMATED INTO ANOTHER COMPANY AND ASSESSMENT WAS MADE IN THE NAME OF AMALGAMATING COM PANY. IN ANOTHER CASE, A PARTNERSHIP FIRM WAS CONVERTED INTO A COMPANY AND THUS THE FIRM BECAME NON-EXISTENT. BUT, IN THE INST ANT CASE UNDER CONSIDERATION, AS NOTED ABOVE, THE FIRM REMAINS THE SAME, CONTINUED THE SAME BUSINESS ETC. EXCEPT WITH A NEW PAN. IN FA CT, THE APPELLANT FIRM EVEN OWNED UP THE TRANSACTION STATED IN 26AS P ERTAINING TO OLD PAN. (V) HOWEVER, IT IS TO BE NOTED THAT THERE CAN BE ON LY ONE ASSESSMENT ORDER FOR AN ASSESSEE FOR ONE ASSESSMENT YEAR. HERE, THE ASSESSMENT WAS FRAMED BY THE AO IN THE NAME OF THE APPELLANT BUT I N THE STATUS OF A ITA 1027/JP/2016_ SILVERWING PATEL CARRIERS VS ITO 5 COMPANY WHICH IS NOT A CORRECT PROPOSITION OF LAW AS THE INCOME IS NOT ONLY TO BE ASSESSED CORRECTLY IN THE HANDS OF THE C ORRECT PERSON BUT IN THE CORRECT STATUS ALSO. THEREFORE, THE ASSESSMENT ORDER PASSED BY THE AO IN THE STATUS OF COMPANY CANNOT BE ALLOWED TO EXIST AND HENCE QUASHED. HOWEVER, THE AO IS DIRECTED TO CONSIDER TH E RECEIPTS UNDER CONSIDERATION IN THE HANDS OF THE APPELLANT IN THE STATUS OF FIRM AND TO MADE FRESH ASSESSMENT THEREOF. IT MAY BE MENTIONED THAT THE FIRM HAS CLAIMED ALL THE INDIRECT EXPENSES IN ITS PROFIT AND LOSS ACCOUNT, THEREFORE, ONLY DIRECT EXPENSES RELATING TO EARNING OF CONTRACT RECEIPTS OF RS. 24,20,688/- ARE TO BE ONLY ALLOWED. THESE DI RECTIONS ARE BEING ISSUED UNDER THE EXPRESS PROVISIONS OF SECTION 150( 1) OF THE IT ACT. THUS, THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSES SEE ON THE BASIS OF THE PLEADINGS OF THE ASSESSEE THAT THE AMOUNT OF RS . 74,10,868/- DECLARED BY THE ASSESSEE FIRM INCLUDES RS. 24,20,68 8/-, WHICH WAS SHOWN IN 26AS IN OLD PAN NUMBER ALLOTTED IN COMPANY STATU S. NOW THE ASSESSEE CHALLENGES THE ORDER OF THE LD. CIT(A) THAT HE SHOUL D NOT HAVE ISSUED DIRECTION TO THE ASSESSING OFFICER THAT TO CONSIDER THE RECEIPTS OF RS. 24,20,688/- IN THE HANDS OF THE ASSESSEE IN THE STA TUS OF THE FIRM AND TO MAKE FRESH ASSESSMENT THEREON. WHEN THE ASSESSEE HI MSELF HAS STATED IN HIS PLEADINGS THAT THE TOTAL RECEIPTS OF RS. 74, 10,868/- INCLUDES RECEIPT OF RS. 24,20,688/- ALSO THEN WHAT GRIEVANCE REMAINS . THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IN THE STATUS OF THE COMPANY WAS QUASHED BY THE LD. CIT(A) THEN IN MY CONSIDERED VIEW, THERE IS NO ITA 1027/JP/2016_ SILVERWING PATEL CARRIERS VS ITO 6 GRIEVANCE REMAINS AND THE PLEA OF THE ASSESSEE IS UNFAIR AND UNJUSTIFIED. THEREFORE, I DISMISS ALL THE GROUNDS RAISED IN THIS APPEAL. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED ORDER PRONOUNCED IN THE OPEN COURT ON 15/05/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15 TH MAY, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S SILVERWING PATEL CARRIERS, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 3(5), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1027/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR