M/s. U P Mines Management Services Pvt. Ltd., Saharanpur V. CIT, Muzaffarnagar

ITA 1101/DEL/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5879 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 27-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Section: 143(3); 263

Judgement Text

1 ITA NO. 1101/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 1101/DEL/2017 ( A.Y 2012-13) U P MINES MANAGEMENT SERVICES PVT. LTD. HOUSE NO. 4407/3, BEHIND M. M. RESIDENCE, NEW BHAGAT SINGH COLONY, BAJORIA ROAD SAHARANPUR AABCU1050B (APPELLANT) VS CIT(A) AAYAKAR BHAWAN, MEERUT ROAD MUZAFFARNAGAR (RESPONDENT) APPELLANT BY SH. ANIL JAIN, ADV RESPONDENT BY SH. S. S. RANA, CIT(DR) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 27/12/2016 PASSED BY PR. CIT, MUZAFFARNAGAR FOR ASSESSMENT YEA R 2012-13. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. CIT HAS ERRED IN CANCELING THE ASSESSMENT O RDER U/S 143(3) DATED 27/06/2014 PASSED BY ASSESSING OFFICER AND THEREBY ORDERING FRESH ASSESSMENT AND HAS ERRED IN HOLDING THAT THE ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE IGNORING THE FACT THAT ALL THE ISSUES HAS DULY BEEN REPLIED AND CONSIDERED DURING THE ASS ESSMENT STAGE. DATE OF HEARING 30.05.2018 DATE OF PRONOUNCEMENT 30.05.2018 2 ITA NO. 1101/DEL/2017 2. THE ORDER OF THE LD. CIT IS AGAINST LAW AND FACTS OF THE CASE. 3. THE APPELLANT CRAVES THE RIGHT TO ADD, AMEND OR WI THDRAW ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AT SAHARA NPUR. THE RETURN OF INCOME WAS FILED ON 21-03-2013 AT THE INCOME OF RS. 23,05,032/-. THE ASSESSING OFFICER AFTER CAREFULLY CONSIDERING THE S UBMISSIONS OF THE ASSESSEE PASSED ASSESSMENT ORDER DATED 27/06/2014 AND ASSESS ED THE TOTAL INCOME OF THE ASSESSEE AT RS. 23,05,032/-. THE SHOW CAUSE NOT ICE U/S 263 DATED 20/10/2016 WAS ISSUED BY THE PR. CIT, MUZAFFARNAGAR ON THE GROUND THAT ASSESSMENT WAS DONE WITHOUT ANY INQUIRIES ON CLAIMS OF ASSESSEE WITH RESPECT TO THE BALANCES AS APPEARING IN BALANCE SHEET AND E XPENSES DEBITED TO PROFIT AND LOSS ACCOUNT. THE PROCEEDINGS BEFORE THE PR. CI T, MUZAFFARNAGAR WERE ATTENDED BY THE ASSESSEE AND THE SUBMISSIONS WERE F ILED CLARIFYING THAT ALL SUBMISSIONS AND EXPLANATION WERE FILED BEFORE THE A SSESSING OFFICER. THE ASSESSEE SUBMITTED BEFORE THE PR. CIT THAT THE ASSE SSING OFFICER PROPERLY EXAMINED AND TAKEN ALL STEPS BY WAY OF NOTICE U/S 1 42(1) TO RAISE QUERY FOR THESE ISSUES AND WHICH WAS DULY REPLIED DURING THE ASSESSMENT STAGE AND DULY CONSIDERED BEFORE PASSING THE ASSESSMENT ORDER. THE PR. CIT PASSED THE ORDER U/S 263 DATED 27/12/2016 CANCELING THE ASSESSMENT O RDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT 1961 THEREBY HOLDING THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 4. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER IN RESPECT OF ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT HAS ALREADY RAISED QUERY REGARDING SHARE PREMIUM OF RS.7,49,76,000/- VIDE QUESTIONNAIRE DATE D 16/6/2014. THE LD. AR FURTHER SUBMITTED THAT THE SHOW CAUSE NOTICE U/S 263 WAS ISSUED REGARDING THE ADVANCES PAID TO THE PERSONS MENTIONED IN BALAN CE-SHEET AND FURTHER STATING THAT THERE WAS NO INCOME FROM BUSINESS DURI NG THE RELEVANT YEAR. BUT WHILE PASSING ORDER U/S 263 THE PR. CIT HAS DEALT W ITH THE LARGE SHARE 3 ITA NO. 1101/DEL/2017 PREMIUM RECEIVED BY THE ASSESSEE. THUS, THE NOTICE U/S 263 AND THE FINAL ORDER U/S 263 ARE NOT IN CONSONANCE WITH. BESIDES, THAT THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE HAS GIVEN PROFIT AND LO SS ACCOUNT AND BALANCE- SHEET BEFORE THE ASSESSING OFFICER IN REGULAR ASSES SMENT U/S 143(3) WHEREIN IT HAS BEEN REFLECTED THAT SHARE PREMIUM HAS NOT BEEN ACQUIRED DURING THE YEAR AND THEREFORE, THE ASSESSING OFFICER HAS MADE FULL AND APPROPRIATE ENQUIRY AND PASSED THE ORDER U/S 143(3). THERE IS NO NEW M ATERIAL AVAILABLE BEFORE THE PR. CIT. 5. THE LD. DR RELIED UPON THE DECISION OF THE HON'B LE SUPREME COURT IN CASE OF DENIEL MERCHANTS PVT. LTD VS. ITO APPEAL NO . 2396/2017 DATED 29/11/2017 HELD THAT WHERE ASSESSING OFFICER DID NO T MAKE ANY PROPER ENQUIRY WHILE MAKING THE ASSESSMENT AND ACCEPTING T HE EXPLANATION OF THE ASSESSEE IN SO FAR AS RECEIPT OF SHARE APPLICATION MONEY IS CONCERNED, THE CIT HAS POWER TO INVOKE SECTION 263 OF THE ACT. THE PR . CIT IS CORRECT IN INVOKING SECTION 263 AND DIRECTING THE ASSESSING OFFICER TO CARRY THOROUGH AND DETAILED ENQUIRY. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IN COMPLETED ASSESSMENT U/S 143(3) DURING T HE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS SPECIFICALLY RAISED QUERY REGARDING SHARE PREMIUM AND HAS OBTAINED REPLY OF THE ASSESSEE ALO NG WITH RELEVANT DOCUMENTS IN FACT THE BALANCE-SHEET HAS REFLECTED T HE SHARE PREMIUM FROM THE LAST YEAR FIGURE TO BE THE SAME TO THE PRESENT ASSE SSMENT YEAR. THE STAND OF THE LD. AR THAT NO NEW SHARE PREMIUM WAS ACQUIRED B Y THE ASSESSEE SUSTAINS AFTER GOING THROUGH THE BALANCE-SHEET WHICH WAS BEF ORE THE ASSESSING OFFICER. THE DETAILS OF THE SAID SHARE PREMIUM WERE ALSO GIV EN IN NOTES AND THERE WAS FULL AND FINAL DISCLOSURE FROM THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER ALSO MADE FULL ENQUIRY AND AF TER TAKING COGNIZANCE OF THE REPLY OF THE ASSESSEE DURING THE ASSESSMENT PROCEED INGS HAVE ARRIVED THE CONCLUSION. THOUGH ON THE SURFACE THE ASSESSING OF FICERS ORDER MAY LOOK 4 ITA NO. 1101/DEL/2017 SHORT BUT IT IS PASSED WITH DUE DILIGENCE AND THERE IS NO NEED TO INVOKE SECTION 263 BY THE PR. CIT. AS REGARD THE CASE LAWS SUBMIT TED BY THE LD. DR OF THE APEX COURT AS WELL AS OF THE JURISDICTIONAL HIGH CO URT THE SAME ARE APPLICABLE IN THE CASE WERE THE ASSESSING OFFICER FAILS IN HIS /HER DUTY TO ASSESS THE INCOME PROPERLY AND BECAUSE OF THAT THERE IS A PREJ UDICIAL INTEREST OF THE REVENUE. BUT IN THE PRESENT CASE THE ASSESSING OFF ICER HAS TAKEN COGNIZANCE OF ALL THE MATERIAL PROVIDED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND AFTER VERIFYING THE SAME HAS PASSED JUST AND PR OPER ORDER. THEREFORE, IN LIGHT OF THE ABOVE FINDINGS, THE ORDER U/S 263 OF T HE ACT PASSED BY THE PR. COMMISSIONER OF INCOME TAX IS SET ASIDE. 7. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30 ST MAY, 2018 . SD/- SD/- (N. K. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 30/05/2018 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 1101/DEL/2017 DATE 1. DRAFT DICTATED ON 30/05/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 30/05/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 31.05.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 3 1 .05.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.