Mr. Tara Chand Choraria, L/R of Late Pana Devi Choraria, Kolkata V. CIT, Kol - XVI, Kolkata, Kolkata

ITA 1116/KOL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59649 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 02-06-2010
• Court: TRIBUNAL
• Department Lawyers: L K S DEHIYA
• Assessee Lawyers: O P BAID
• Section: 263; 143(3); 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- A , KOLKATA [ . .. . , ,, , . .. . ! ! ! !. .. . , , , , '# ] [BEFORE SHRI N.VIJAYAKUMARAN , JUDICIAL MEMBER & SRI C.D.RAO , ACCOUNTANT MEMBER] $ $ $ $ / ITA NO. 1116/(KOL) OF 2010 %& '(/ ASSESSMENT YEAR : 2003-04 MR.TARA CHAND CHORARIA, L/R OR LATE PANNA DEVI CHORARIA, KOLKATA (PAN: ACIPC 6054 E) C.I.T., KOL-XVI,KOLKATA (+, / APPELLANT ) - - VERSUS - (/0+,/ RESPONDENT ) +, 1 2 '/ FOR THE APPELLANTS: / SHRI O.P.BAID /0+, 1 2 '/ FOR THE RESPONDENT: / SHRI L.K.S.DEHIYA 3 1 !# /DATE OF HEARING : 20.02.2012. 4' 1 !# /DATE OF PRONOUNCEMENT : 22.03.2012. '5 / ORDER ' ' ' ' . .. . ! ! ! !. .. . , , , , '# PER C.D.RAO, AM THE ABOVE APPEAL FILED BY THE ASSESSEE IS AGAINST O RDER OF THE LD. C.I.T-KOLKATA- XVI, KOLKATA DATED 16.03.2010 RELATING TO ASSESSMEN T YEAR 2003-04. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS A PPEAL IS AGAINST THE ORDER PASSED BY THE LD. CIT-ADMINISTRATION U/S 263 OF THE I.T.AC T. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE LD. CIT-ADMINISTRATION INITIALLY PASSED ORDER U/S 263 OF THE IT ACT ON SIMILAR GROUNDS DATE D 05.11.2008. ON APPEAL THIS TRIBUNAL HAS SET ASIDE THE ORDER FOR FRESH CONSIDER ATION KEEPING IN VIEW OF THE FACT THAT THE ASSESSEE HAS NOT BEEN PROVIDED WITH ANY OPPORTU NITY OF BEING HEARD. WHILE PASSING THE CONSEQUENTIAL ORDER THE LD. CIT-ADMINISTRATION HAS OBSERVED AS UNDER :- 2 IN THE WRITTEN SUBMISSION, THE AR WANTED TO EXPLA IN THAT THE FRESH INTRODUCTION OF CAPITAL IN THE. CAPITAL ACCOUNTS DID NET REPRESENT FRESH FUNDS BROUGHT BY ASSESSEE FROM EXTERNAL SOURCES, BUT WERE MERELY TRANSFER ENTRIES BEING FUNDS .TRANSFERRED FROM DELHI TO JODHPUR AND VICE VERSA. SIMILARLY, THE AR CLAIME D THAT THE AO HAD DULY VERIFIED THE CLAIMS MADE U/S .80 HHC AND 80 IB AND SINCE THE . ASSESSEES UNITS WERE OLD CONTINUING UNITS, THE ELIGIBILITY HAD BEEN DETERMIN ED IN THE EARLIER SCRUTINY ASSESSMENTS (ORDER PASSED FOR A/Y 2001-02 U/S 143(3 )). I HAVE. GONE THROUGH THE EXPLANATION OF THE AR VIS- A-VIS, THE FACTS DISCUSSED IN THE ORDER U/S 263 OF MY PREDECESSOR AND THE FACTS CONTA INED ON RECORDS. MY PREDECESSOR HAS RAISED THE FOLLOWING FIVE ISSUES. (I) ALLOWANCE U/S 80 HHC HAD NOT BEEN PROPERLY VERI FIED OR ENQUIRED INTO. (2) ALLOWANCE U/S 80 LB HAD NOT BEEN PROPERLY VERIF IED OR ENQUIRED INTO. (3) VARIOUS FRESH INTRODUCTION OF FUNDS AMOUNTING T O RS. 1.8 CRORES IN THE PERSONAL ACCOUNTS WERE NOT ENQUIRED INTO. (4) PURCHASE OF PLOT WORTH RS.19 LAKHS IS MENTIONED IN THE SCHEDULE-B OF THE AUDITED ACCOUNT BUT NO SUCH INDICATION IS SEEN AT ANNEXURE- K FILED WITH THE RETURN OF INCOME, (5) SUBSTANTIAL EXPENSES INCURRED UNDER THE HEADS O F PROCESSING CHARGES, SAMPLING AND TRAVELING EXPENSES HAVE NOT BEEN SCRUTINIZED PROPER LY. CONSIDERING THE EVIDENCE PLACED IN THE RECORDS, I F ULLY AGREE WITH MY PREDECESSOR THAT THE MINIMUM MANDATORY REQUIREMENTS OF CALLING FOR DETAILS AND CROSS-VERIFYING THE SAME FROM THE PARTIES CONCERNED AND FROM OTHER RELEVANT RECORDS, HAS NOT BEEN DONE AT ALL BY THE AO. THIS INADEQUACY OF ENQUIRY BY ITSELF CONSTITUTED AN ERROR IN THE ASSESSMENT ORDER AS UNDERSTOOD U/S 263 WHICH WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ON BEHALF OF THE ASSESSEE, ELABORATE EXPLANATIONS ARE BEING SOUGHT TO BE ADDUCED DURING THE PRESENT PROCEEDINGS . HOWEVER, THESE CAN NOT RECTIFY THE ERROR WHICH WAS COMMITTED BY THE AO AT THE STAG E OF THE ORIGINAL ASSESSMENT SECONDLY. ELABORATE SCRUTINY IS NECESSARY FOR VERIF ICATION OF ALL THESE CLAIMS NOW BEING ADDUCED BEFORE ME WHICH SHOULD HAVE BEEN DONE AT THE FIRST PLACE BY THE AO. IN VIEW OF THE ABOVE MENTIONED INADEQUACY OF ENQUIRY, WHICH HAS RENDERED THE ORIGINAL ASSESSMENT ORDER TO ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE, 1 DEEM IT PROPER TO SET ASIDE THE ASSESSMENT, RESTORING THE I SSUES TO THE AO FOR MAKING PROPER ENQUIRIES AND CROSSVERIFICATION. WHILE PASSING THE 1ESH ASSESSMENT ORDER, HE SHOULD GIVE INDIVIDUAL FINDINGS IN RESPECT OF EACH OF THE. AFORESAID ISSUES. 3.1. AGGRIEVED BY THIS THE ASSESSEE IS IN FURTHER A PPEAL BEFORE THIS TRIBUNAL. 4. AT THE TIME OF HEARING BEFORE US THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE BY REFERRING TO THE FOLLOWING PAGES IN THE PAPER BO OK A) PAGE 14 WHICH CONTAINS NOTICE ISSUED BY THE TH EN LD.CIT MR.K.MOHAN RAO, B) PAGES 18, 29,30, 35,37 AND 41 TO 43 WHICH CONT AIN THE SUBMISSIONS OF THE ASSESSEE DT.08.03.2008, C) PAGE 53 WHICH IS A COPY OF ORDER SHEET OF THE L D. A.O., D) PAGES 55,57,61,62,71, 73 & 74 WHICH CONTAIN A CO PY OF THE QUESTIONNAIRE DT. 26.08.2005 AND ASSESSEES REPLY DT.17.01.2006, 3 SUBMITTED THAT THE AO WHILE PASSING THE ASSESSMENT ORDER U/S 143(3) OF THE IT ACT HAS TAKEN INTO CONSIDERATION ALL THE ISSUES RAISED BY T HE LD. CIT-ADMINISTRATION. HE CONTENDED THAT THE ORDER PASSED BY THE AO IS NEITHE R ERRONEOUS AND NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE FURTHER RELIED ON S OME OF THE JUDICIAL PRONOUNCEMENTS IN SUPPORT OF HIS SUBMISSIONS. THEREFORE HE REQUEST ED TO SET ASIDE THE ORDER OF THE LD. CIT-ADMINISTRATION. 5. ON THE OTHER HAND, THE LD. DR APPEARING ON BEHAL F OF THE REVENUE BY POINTING OUT THE ORDER OF LD. AO CONTENDED THAT THOUGH ASSES EE HAS SUBMITTED RELEVANT DETAILS THE AO BEING QUASI JUDICIAL AUTHORITY HAS NOT EXERC ISED HIS POWERS BY ENQUIRING INTO THE GENUINENESS OF THE INFORMATION FILED. THEREFORE HE SUBMITTED THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AS WELL AS PREJUDICIAL TO TH E INTEREST OF THE REVENUE. THEREFORE HE REQUESTED TO UPHELD THE ORDER OF THE LD. CIT-ADM INISTRATION. THE LD. DR FOR THE REVENUE ALSO RELIED ON SEVERAL JUDICIAL PRONOUNCEME NTS AND FURTHER DISTINGUISHED THE JUDICIAL PRONOUNCEMENTS RELIED ON BY THE LD. COUNSE L FOR THE ASSESSEE. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD AND AFTER TAKING INTO CONSIDERA TION OF THE VARIOUS JUDICIAL PRONOUNCEMENTS RELIED ON BY BOTH THE PARTIES, THERE IS NO DISPUTE THAT THE AO HAS CALLED FOR RELEVANT INFORMATION AND IT IS FURTHER O BSERVED THAT THERE IS NO EVIDENCE ON RECORD THAT HE MADE FURTHER ENQUIRIES IN SUPPORT OF THE SUBMISSIONS MADE BY THE ASSESSEE WHICH IS EVIDENT FROM THE ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) WHICH READS AS UNDER :-. THE RETURN OF INCOME DISCLOSING TOTAL INCOME OF R. 5,66,580/- WAS FILED ON 31.3.2004. THE CASE WAS SELECTED FOR SCRUTINY AS PE R PROVISION OF PARE II( C) OF THE INSTRUCTION NO. N/204 OF C. B.D.T. ACCORDINGLY NOTI CES U/S 143(2) AND 142(1) WERE ISSUED AND DULY SERVED ON THE ASSESSEE. IN RESPONSE SRI SUSHIL KURNAR JAIN A/R OF THE ASSESSEE APPEARED, PRODUCED BOOKS OF A/CS AND OTHER DETAILS WHICH WERE EXAMINED AND TEST CHECKED. IN THE COMPUTATION OF TOTAL INCOME FI LED ALONG WITH THE RETURN OF INCOME IT WAS FOUND THAT ACCOUNTING AND LEGAL CHARGES PAID WAS TO THE EXTENT OF RS.9,500/- BUT THE A/R OF THE ASSESSEE FAILED TO FURNISH ANYTHING IN REGARD TO THE EXPENDITURE REGARDING LEGAL CHARGES AND THEREFORE RS. 7,000/- I S DISALLOWED ON THAT ACCOUNT. 4 6.1. FROM THE ABOVE IT IS APPARENT THAT THE AO HAS DISALLOWED ONLY AN AMOUNT OF RS.2,500/- ON ACCOUNT OF LEGAL CHARGES BY OBSERVIN G THAT THE ASSESSEE HAS FAILED TO FURNISH ANYTHING IN REGARDING TO THE SAID EXPENDITU RE THOUGH THE AO HAS RECORDED THAT THE ASSESSEE HAS PRODUCED BOOKS OF ACCOUNT AND HE EXAMINED ON TEST CHECK BASIS, AO BEING A QUASI JUDICIAL AUTHORITY IT IS NOT SUFFI CIENT FOR HIM TO SIMPLY ACCEPT THE SUBMISSIONS OF THE ASSESSEE WITHOUT ANY CORROBORATI VE EVIDENCES THAT MINIMUM ENQUIRIES REQUIRED IN THE FACTS AND CIRCUMSTANCES O F THE CASE. IN THIS CASE THE LD. CIT- ADMINISTRATION HAS CATEGORICALLY POINTED OUT THAT T HE AO HAS FAILED TO DO SUFFICIENT ENQUIRIES AS REQUIRED TO DO. EVEN WHEN THE BENCH QU ESTIONED THE LD. COUNSEL FOR THE ASSESSEE REGARDING THE CRITERIA FOR COMPUTATION OF EXEMPTION U/S 80HHC/80 IB OF THE IT ACT THE LD. COUNSEL FOR THE ASSESSEE IS UNABLE T O EXPRESS THE BASIS FOR COMPUTATION OF EXEMPTION. FROM THIS ALSO IT IS EVIDENT THAT THE AO HAS NOT MADE MINIMUM ENQUIRIES REQUIRED IN THE FACTS AND CIRCUMSTANCES O F THE CASE. THEREFORE WE ARE OF THE VIEW THAT THE LD. CIT-ADMINISTRATION HAS RIGHTLY PO INTED OUT THE LAPSES COMMITTED BY THE AO AND INVOKED THE PROVISION OF SECTION 263 OF THE IT ACT. THEREFORE WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT-ADMINISTRATIO N TO BE INTERFERED WITH AND WE DISMISS THE APPEAL OF THE ASSESEE. 7. IN THE RESULT THE APPEAL OF ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 22.03.2012. SD/- SD/- . .. . , , , , % % % % N.VIJAYAKUMARAN, JUDICIAL MEMBER . .. . ! ! ! !. .. . , ,, , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 22.03.2012. R.G.(.P.S.) 5 '5 1 /%% 6''7- COPY OF THE ORDER FORWARDED TO: 1. MR.TARA CHAND CHORARIA, L/R OF LATE PANNA DEVI CHORARIA, C/O BAID & COMPANY, MANGALAM APTT.,GROUND FLOOR, 2, ROWLAND ROAD, KOLKA TA-700020. 2. C.I.T.,-XVI, KOLKATA 3. CIT- 4. CIT(A), 5. DR, KOLKATA BENCHES, KOLKATA 0 /%/ TRUE COPY, '5/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES