KDH Investments Pvt. Ltd., Mumbai V. DCIT, CHENNAI

ITA 1212/CHNY/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4966 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 16-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: G P MEHTA
• Keywords: Additional evidence
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1212/MDS/2017 ( )( / ASSESSMENT YEAR : 2012-13 M/S KDH INVESTMENTS PVT. LTD., C/O G.P. MEHTA & CO., CAS, 807, TULSIANI CHAMBERS, 212, NARIMAN POINT, MUMBAI 400 021. PAN : AACCK 8982 C V. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(2), CHENNAI. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI G.P. MEHTA, CA -.+, / 0 / RESPONDENT BY : SH. D. PRABHU MUKUNTH ARUN KUM AR, JR. STANDING COUNSEL 1 / 2% / DATE OF HEARING : 11.01.2018 3') / 2% / DATE OF PRONOUNCEMENT : 18.01.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX, CHENNAI-4 , CHENNAI, DATED 09.03.2017 AND PERTAINS TO ASSESSMENT YEAR 20 12-13. 2 I.T.A. NO.1212/MDS/17 2. SHRI G.P. MEHTA, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE CLAIMED NON-OPERATIONAL INCOME OF 2,47,500/- AND THE EXPENDITURE OF 1,88,33,946/-. THE ASSESSING OFFICER, IN FACT, ALLOWED THE CLAIM OF THE ASSESSEE AFTER VERIFYING ALL THE MATERIAL AVAILABLE ON RECORD. ACCORDING TO THE LD. REPRESENTATIVE, THE PRINCIPAL COMMISSIONER IN THE G UISE OF EXERCISING HIS POWER UNDER SECTION 263 OF THE INCOM E-TAX ACT, 1961 (IN SHORT 'THE ACT'), FOUND THAT THE ASSESSEE HAS N O TRADING ACTIVITY OR ANY BUSINESS TRANSACTION, WHICH WAS NOT CONSIDER ED BY THE ASSESSING OFFICER. ACCORDING TO THE LD. REPRESENTA TIVE, THE ASSESSING OFFICER HAS CONSIDERED ALL THE MATERIAL A VAILABLE ON RECORD AND ALLOWED THE CLAIM OF THE ASSESSEE, THERE FORE, THE PRINCIPAL COMMISSIONER IS NOT JUSTIFIED IN REVISING THE ORDER OF THE ASSESSING OFFICER UNDER SECTION 263 OF THE ACT. 3. WE HEARD SHRI D. PRABHU MUKUNTH ARUN KUMAR, JR. STANDING COUSEL ALSO. ACCORDING TO THE LD. JR. STANDING COU NSEL, THE ASSESSING OFFICER HAS SIMPLY ACCEPTED THE RETURN FI LED BY THE ASSESSEE WITHOUT ANY DISCUSSION IN THE ASSESSMENT O RDER. THE PRINCIPAL COMMISSIONER AFTER EXAMINING THE ASSESSME NT ORDER, FOUND THAT THERE WAS NO TRADING ACTIVITY DURING THE YEAR UNDER 3 I.T.A. NO.1212/MDS/17 CONSIDERATION. THEREFORE, ACCORDING TO THE LD. JR. STANDING COUSEL, THE CLAIM OF EXPENDITURE CANNOT BE ALLOWED. THE ON LY OBJECTION OF THE LD. REPRESENTATIVE FOR THE ASSESSEE IS THAT THE ASSESSING OFFICER CALLED FOR ALL THE DETAILS. HOWEVER, THE ASSESSING OFFICER HAS NOT CONSIDERED THE DETAILS SAID TO BE FILED BY THE ASSE SSEE. ACCORDING TO THE LD. JR.STANDING COUSEL, THERE IS NO ERROR MU CH LESS PRIMA FACIE ERROR IN THE ORDER OF THE PRINCIPAL COMMISSIONER. 4. HAVING HEARD THE LD. REPRESENTATIVE FOR THE ASSE SSEE AND THE LD. JR.STANDING COUSEL FOR THE REVENUE, WE FIND FROM A BARE READING OF THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE MATERIAL AVAILABLE ON RECOR D. MERELY BECAUSE THE ASSESSING OFFICER CALLED FOR DETAILS, T HERE IS NO PRESUMPTION THAT THE ASSESSING OFFICER HAS CONSIDER ED ALL THE MATERIALS FILED BY THE ASSESSEE. THE ASSESSMENT PR OCEEDING BEFORE THE ASSESSING OFFICER IS A JUDICIAL PROCEEDING UNDE R SECTION 136 OF THE ACT. THEREFORE, THE ASSESSING OFFICER HAS TO A PPLY HIS MIND TO THE MATERIAL AVAILABLE ON RECORD AND PASS A SPEAKIN G ORDER BY RECORDING HIS OWN REASONING FOR ALLOWING OR DISALLO WING THE CLAIM OF THE ASSESSEE. UNFORTUNATELY, THE ASSESSING OFFICER HAS NOT RECORDED ANY REASONING. 4 I.T.A. NO.1212/MDS/17 5. WHETHER THE PROCEEDING IS ADMINISTRATIVE PROCEED ING OR JUDICIAL PROCEEDING, IT IS IMPERATIVE ON THE PART O F THE ASSESSING OFFICER TO GIVE REASONS FOR THE CONCLUSION REACHED IN THE ASSESSMENT ORDER. THE REASONING FOR THE CONCLUSION REACHED IN THE ASSESSMENT ORDER EITHER WAY HAS TO BE REFLECTED IN THE ASSESSMENT ORDER ITSELF. THE ASSESSING OFFICER CANNOT SUBSTIT UTE THE REASON FOR CONCLUSION BY WAY OF ADDITIONAL EVIDENCE OR MATERIA L IN THE COURSE OF APPELLATE OR REVISIONAL PROCEEDING. UNLESS THE ASS ESSING OFFICER RECORDS THE REASONS FOR CONCLUSION REACHED IN THE A SSESSMENT ORDER, THE APPELLATE OR REVISIONAL AUTHORITY MAY NO T BE ABLE TO APPRECIATE THE ASSESSMENT ORDER. 6. MOREOVER, RECORDING OF REASONS WOULD REMAIN AS L IVE LINK BETWEEN THE MATERIAL AVAILABLE ON RECORD AND THE MI ND OF THE DECISION MAKER. THIS WILL DEFINITELY ENABLE THE AP PELLATE AUTHORITY OR REVISIONAL AUTHORITY TO APPRECIATE THE ASSESSMENT O RDER WHEN IT WAS CHALLENGED BEFORE THEM. MOREOVER, RECORDING OF REA SONING WOULD AVOID ARBITRARY DECISION ON THE PART OF THE DECISIO N MAKER. SINCE THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND AND HAS NOT PASSED A SPEAKING ORDER, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE PRINCIPAL COMMISSIONER HAS RIGHTLY EXERCISED HIS PO WER UNDER 5 I.T.A. NO.1212/MDS/17 SECTION 263 OF THE ACT. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 18 TH JANUARY, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 18 TH JANUARY, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. PRINCIPAL CIT, CHENNAI-4, CHENNAI-34 4. 79 -2 /DR 5. :( ; /GF.