M/s Salarpuria Properties Pvt Ltd., Kolkata V. CIT, KOLKATA-1, Kolkata

ITA 1123/KOL/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7860 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Assessee Lawyers: S JHAJHARIA
• Keywords: Corroborative evidences; Assessment record
• Section: 143(3); 142(1); 80IB; 263; 154

Judgement Text

I.T.A. NO . 1123 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER) , AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 1123 /KOL . / 20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 M/S. SALARPURIA PROPERTIES PVT. LTD., ..... ............ .. .APP ELL ANT C/O. SALARPURIA JAJODIA & CO., 7, C.R. AVENUE, KOLKATA - 700 072 [PAN : A A GCS 8492 P ] - VS. - COMMISSIONER OF INCOME TAX, ... ............................ . RESPONDENT KOLKATA - I , KOLKATA , P - 7, CHOWRINGHEE SQUARE, AAYAKAR BHAW AN, KOLKATA - 700 069 APPEARANCES BY: SHRI S . JHAJHARIA , C.A. , FOR THE ASSESSEE SHRI RAVI JAIN , CIT (D.R.) , FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : DEC EM BER 15 , 2 01 4 DATE OF PRONOUNCING THE ORDER : DEC EM BER 18 , 201 4 O R D E R PER GEORGE MATHAN : THIS IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX , KOLKATA - I , KOLKATA UNDER SECTION 263 DATED 2 6 .03.2014 IN M. NO. CIT. KOL - I . KOL /263/2013 - 14/ 10816 - 1 8 FOR THE ASSESSMENT YEAR 2009 - 10. 2 . SHRI S . JHAJHARIA , C.A. , REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI RAVI JAIN , CIT (D.R.) , REPRESENTED ON BEHALF OF THE REVENUE. 3. THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING 434 PAGES. AT THE OUTSET, IT WAS MENTIONED THAT THE LD. CIT, D.R. H AS FILED A LETTER DATED I.T.A. NO . 1123 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 2 OF 6 27.10.2014 INTIMATING THAT THE GENERAL VOUCHERS AND OTHER VOUCHERS WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT. THIS WAS POINTED OUT TO THE LD. A.R. ON BEHALF OF THE ASSESSEE. IT WAS SUBMITTED BY THE L D. A.R. THAT IN THE CERTIFICATE TO THE PAPER BOOK IN ITEM NO. 3, IT HAS BEEN SPECIFICALLY MENTIONED THAT THE SAID VOUCHERS WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER BUT WAS PRODUCED BEFORE THE LD. CIT DURING THE COURSE OF 263 PROCEEDINGS AS THE Y WERE SPECIFICALLY REQUISITIONED BY THE LD. CIT. WHEN THIS WAS POINTED OUT TO THE LD. CIT, D.R. SAID LETTER DATED 27.10.2014 AS SUBMITTED BY THE LD. CIT, D.R. WAS REQUESTED TO BE NOT CONTESTED AS IN THE CERTIFICATE FILED BY THE ASSESSEE THE CLARIFICATION HAS BEE N PROVIDED. 4. IT WAS SUBMITTED BY THE LD. A.R. ON MERITS THAT THE ORIGINAL ASSESSMENT ORDER CAME TO BE PASSED UNDER SECTION 143(3) ON 29.12.2011. IT WAS THE SUBMISSION THAT THE ASSESSEE IS A COMPANY WHICH IS DOING THE BUSINESS OF CONSTRUCTION AND DEVELOP MENT OF PROPERTIES. THE ASSESESE HAD ALSO CLAIMED DEDUCTION UNDER SECTION 80IA AND 80IB OF THE ACT. IT WAS THE SUBMISSION THAT THE SAID ASSESSMENT ORDER WAS THE SUBJECT MATTER OF THE REVISION UNDER SECTION 263. IT WAS THE SUBMISSION THAT IN THE ORDER PASSE D UNDER SECTION 263, LD. CIT HAS SET ASIDE THE ASSESSMENT ORDER AS THE ASSESSMENT PROCEEDINGS DID NOT SHOW PROPER VERIFICATION/SCRUTINY OF THE IMPORTANT ASPECTS OF THE ACCOUNTS AND THE ACTUAL BUSINESS OF THE ASSESSEE. IT WAS THE SUBMISSION THAT THERE IS NO FINDING OF THE LD. CIT THAT THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. LD. A.R. DREW OUR ATTENTION TO PAGE 1 OF THE PAPER BOOK, WHICH WAS THE COPY OF THE SHOW - CAUSE NOTICE ISSUED UNDER SECTION 263. IT WAS THE SUBMISSION THAT THE SAME WAS ALSO EXTRACTED IN THE ORDER UNDER SECTION 263 AT PARAGRAPH 2 OF THE ORDER. IT WAS THE SUBMISSION THAT THE ASSESESE HAD REPLIED TO THE VARIOUS ISSUES RAISED IN THE SHOW - CAUSE NOTICE AND VARIOUS DETAILS CALLED FOR BY THE LD. CIT HAD ALSO B EEN PLACED BEFORE HIM. IT WAS THE SUBMISSION THAT AFTER EXAMINATION OF ALL THE DETAILS PRODUCED BY THE ASSESESE, THE LD. CIT WITHOUT REBUTTING ANY OF THE I.T.A. NO . 1123 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 3 OF 6 CONTENTIONS OF THE ASSESSEE HAD PROCEEDED TO SET ASIDE THE ASSESSMENT FOR DE NOVO ASSESSMENT BY ALLEGI NG THAT THE ASSESSMENT PROCEEDINGS DID NOT SHOW PROPER VERIFICATION/SCRUTINY OF THE IMPORTANT ASPECTS OF ACCOUNTS AND THE ACTUAL BUSINESS OF THE ASSESSEE. ON A SPECIFIC QUERY BY THE BENCH AS TO WHEN THE LAND WAS ACQUIRED IN RESPECT OF THE PROJECTS, IT WAS THE SUBMISSION BY THE LD. A.R. THAT THE LAND FOR THE PROJECTS HAD BEEN ACQUIRED IN THE EARLIER YEARS AND THERE WAS NO LAND ACQUISITION DURING THE RELEVANT ASSESSMENT YEAR. ON THE QUESTION AS TO WHO HAD CONSTRUCTED THE BUILDING, IT WAS THE SUBMISSION THAT T HE ASSESSEE WAS A BUILDER AND CONSTRUCTIONS WERE ALSO DONE BY THE ASSESSEE. IT WAS THE FURTHER SUBMISSION THAT EVEN THE ASSESSEE S CLAIM FOR DEDUCTION UNDER SECTION 80IA AND 80IB HAD ALSO BEEN VERIFIED BY THE ASSESSING OFFICER AND SUCH DEDUCTION UNDER SECT ION 80IA AND 80IB COULD NOT HAVE BEEN GRANTED TO THE ASSESSEE WITHOUT VERIFICATION OF THE ACCOUNTS OF THE ASSESSEE. IT WAS THE SUBMISSION THAT AS THE ORDER DID NOT SHOW NOR WAS THERE ANY RECORDING BY THE LD. CIT THAT THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, THE ORDER UNDER SECTION 263 WAS LIABLE TO BE CANCELLED. FOR THIS PROPOSITION, LD. A.R. RELIED UPON THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF ITO VS. - DG HOUSING PROJECTS LIMITED REPORTED IN [2012] 343 ITR 329 (DELHI), WHEREIN HON BLE DELHI HIGH COURT HAS HELD AS FOLLOWS: - THE SAID FINDING WILL BE CORRECT, IF THE COMMISSIONER OF INCOME TAX HAD EXAMINED AND VERIFIED THE SAID TRANSACTION HIMSELF AND GIVEN A FINDING ON THE MERITS. AS HELD ABOVE, A DIST INCTION MUST BE DRAWN IN THE CASES WHERE THE ASSESSING OFFICER DOES NOT CONDUCT AN ENQUIRY, AS LACK OF ENQUIRY BY ITSELF RENDERS THE ORDER BEING ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND CASES WHERE THE ASSESSING OFFICER CONDUCTS ENQUIR Y BUT FINDING RECORDED IS ERRONEOUS AND WHICH IS ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IN LATTER CASES, THE COMMISSIONER OF INCOME TAX HAS TO EXAMINE THE ORDER OF THE ASSESSING OFFICER ON THE MERITS OR THE DECISION TAKEN BY THE ASSESSING OFFICE R ON THE MERITS AND THEN HOLD AND FORM AN OPINION ON THE MERITS THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IN THE SECOND SET OF CASES, I.T.A. NO . 1123 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 4 OF 6 THE COMMISSIONER OF INCOME TAX CANNOT DIRECT THE ASSESS ING OFFICER TO CONDUCT FURTHER ENQUIRY TO VERIFY AND FIND OUT WHETHER THE ORDER PASSED IS ERRONEOUS OR NOT . 5 . IN REPLY, LD. CIT, D.R. SUBMITTED THAT THERE WAS NO EVIDENCE THAT THE ASSESSING OFFICER HAD APPLIED HIS MIND AND THERE WERE NO DETAILS OF THE E XAMINATION BY THE ASSESSING OFFICER OF THE EVIDENCES PRODUCED. LD. CIT, D.R. VEHEMENTLY SU PPORT ED THE ORDER OF THE LD. CIT PASSED UNDER SECTION 263. 6 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HAVE ALSO VERIFIED THE ASSESSMENT RECORDS AS PRODUCED BY T HE LD. CIT , D.R. THE ORDER - SHEET RECORDINGS OF THE ASSESSING OFFICER HAD BEEN CALLED FOR AND THE SAME READS AS FOLLOWS: - 18/08/2010 : THIS CASE HAS BEEN SELECTED FOR SCRUTINY THROUGH CASS. ISSUE NOTICE U/S. 143(2) & 115WE(2)OF THE I.T. ACT, 1961 FIXING TH E CASE FOR HEARING ON 24.09.10 AT 11.30 P.M. NOTICE U/S. 142(1) IS ALSO ISSUED REQUIRING THE ASSESSEE TO PRODUCE SPECIFIC EVIDENCES/DOCUMENTS. SD/ - DCIT, CIRCLE - 1, KOLKATA 26.07.2011 : THE HEARING OF THE CASE IS FIXED AGAIN ON 03.08.2011 AT 2 P.M. 21.10.2011: SRI R. SALARPURIA, ONE OF THE DIRECTORS APPEARS AND SUBMITS CERTAIN DETAILS AS ASKED FOR. THE CASE IS DISCUSSED. THE LETTER DATED 20.10.2011 AND 21.10.2011, AS SUBMITTED ARE KEPT ON RECORD. HE IS REQUESTED TO PRODUCE CERTAIN OTHER DETAILS AS PER 142(1). RE - FIXED FOR HEARING ON 25.10.2011. SD/ - 25.10.2011 : SRI RAKESH SALARPURIA APPEARS AND FILES THE LETTER DATED 25.10.2011 WHICH IS KEPT ON RECORD. THE CASE IS DISCUSSED AND PARTLY EXAMINED WITH INFORM TO THE BOOKS OF A/C. PRODUCED ALONGWITH THE FEW SUPPORTING EVIDENCE. AS THE DIRECTOR WILL BE OUT OF STATION ON HEALTH GROUND THE CASE IS FIXED FOR FURTHER HEARING ON 15.11.2011. SD/ - I.T.A. NO . 1123 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 5 OF 6 15.11.2011 : SRI R. SALARPURIA APPEARS. THE LETTER DATED 15.11.2011 AS FILED BY HIM IS PLACED O N RECORD. THE CASE IS FURTHER DISCUSSED WITH REFERENCE TO THE BANK STATEMENT AND EVIDENCES PRODUCED. THE BOOKS OF ACCOUNT RELATED TO THE BUSINESS, AS MENTIONED IN PREVIOUS LETTERS, ARE ALSO EXAMINED WITH REFERENCE TO EVIDENCES PROVIDED. SD/ - 21.03.2012 : ORDER PASSED U/S. 154 OF THIS ACT, VIDE SEPARATE ORDER. ISSUED NOTICE & COPY OF THE ORDER. SD/ - THE SAME WAS CONSIDERED WITH THE PAPERS FOUND IN THE PAPER BOOK , FOR EXAMPLE THE LETTER OF THE ASSESSEE DATED 25.10.2011 FILED BEFORE THE A SSESSING OFFICER TALKS OF THE VARIOUS DETAILS IN RESPECT OF THE COMPENSATION RECEIVED, SALE OF THE BUILDINGS AND VARIOUS EXPENSES . THIS IS IN THE FORM OF REPLIES TO QUESTIONNAIRES RAISED BY THE ASSESSING OFFICER. ANOTHER IS A LETTER DATED 15.11.2011 FILED BEFORE THE ASSESSING OFFICER WHICH GIVES FURTHER BREAK - UP OF THE EXPENSES IN RESPECT OF VARIOUS PROJECTS. A PERUSAL OF THE ABOVE SAID DETAILS ALONGWITH THE LETTERS AND THE ORDER - SHEET RECORDINGS CLEARLY SHOW THAT THE ASSESSING OFFICER HAS DONE SUBSTANTIAL VERIFICATION AND EXAMINATION IN THE COURSE OF ASSESSMENT. HOWEVER, A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE SAME DOES NOT TALK OF ALL THE EXAMINATION DONE BY THE ASSESSING OFFICER. ADMITTEDLY THE ASSESSMENT ORDER IS WRITTEN BY THE ASSESSING OFFICE R AND NOT THE ASSESSEE. WHAT IS WRITTEN IN THE ASSESSMENT ORDER IS PURELY P REROGA TIVE OF THE ASSESSING OFFICER BUT WHEN A COMMISSIONER INVOKES HIS POWERS UNDER SECTION 263 HE IS EXPECTED TO VERIFY THE ASSESSMENT RECORDS BEFORE REVISION IS DONE. ADMITTEDLY ALL THESE EVIDENCES WERE AVAILABLE IN THE ASSESSMENT RECORDS. EVEN IN THE COURSE OF REVISION PROCEEDINGS, THE ASSESSEE HAD PRODUCED ALL THESE EVIDENCES AND FURTHER EVIDENCES AS WERE SPECIFICALLY REQUISITIONED BY THE LD. CIT. NO DEFECT IN ANY OF THE SUBMISS IONS MADE BY THE ASSESSEE HAS BEEN POINTED OUT BY THE LD. CIT. WHAT IS THE EXACT ERROR WHICH HAS CAUSED PREJUDICED TO THE REVENUE IS NOT POINTED OUT IN THE ORDER PASSED UNDER SECTION 263. IN THESE I.T.A. NO . 1123 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 6 OF 6 CIRCUMSTANCES, ON MERITS , WE FIND NO REASON TO UPHOLD THE O RDER OF THE LD. CIT IN DIRECTING DE NOVO ASSESSMENT BY INVOKING HIS POWERS UNDER SECTION 263 AND QUASH THE SAME . EVEN ON ISSUE OF TECHNICALIT Y CLEARLY LD. CIT HAS NOT POINTED OUT MUCH LESS MENTION THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF REVENUE. IN THE CIRCUMSTANCES, R ESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF DG HOUSING PROJECTS LIMITED [2012] 343 ITR 329, THE ORDER OF THE LD. CIT PASSED UNDER SECTION 263 IS UNSUSTAINABLE AND CONSEQUE NTLY QUASHED. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DEC EM BER, 2014. SD/ - SD/ - SHAMIM YAHYA GEORGE MATHAN ( ACCOUNTANT MEMBER) ( JUDICIAL MEM BER) KOLKATA, THE 18 TH D AY OF DEC EM B ER , 201 4 COPIES TO : (1) M/S. SALARPURIA PROPERTIES PVT. LTD., C/O. SALARPURIA JAJODIA & CO., 7, C.R. AVENUE, KOLKATA - 700 072 (2) COMMISSIONER OF INCOME TAX, KOLKATA - I, KOLKATA, P - 7, CHOWRINGHEE SQUARE, AAYAKAR BHAWAN, KOLKATA - 700 069 (3) COMMISSIONER OF INCOME - T AX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER AS SISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.