Shri Sandeep Sudhakarbhai Patel, Baroda V. The The Principal Commissioner of Income Tax, Vadodara

ITA 1228/AHD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9856 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Keywords: Gift; Source of fund; Corroborative evidences
• Section: 143(3); 263

Judgement Text

I.T.A. N O. 1228 /AHD/201 6 ASSESSMENT YEAR: 2007 - 08 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR , AM AND MAHAVIR PRASAD , JM ] I.T.A. NO. 1228 /AHD/201 6 ASSESSMENT YEAR: 2007 - 08 SANDEEP SUDHAKARBHAI PATEL ..... ...... . ... . . APPELLANT 20, GREEN PARK SOCIETY, B/H. AS SOCIATED SOCIETY, NEAR AKOTA STADIUM, AKOTA, BARODA. [ PAN: A GWPP 7896 B ] VS. PRINCIPAL COMMISSIONER OF INCOME TAX, VADODARA - 1. ............... . RESPONDENT APPEARANCES BY: SUNIL TALATI FOR THE A PPELLANT RAJESH MEENA FOR THE RE SPONDENT DATE OF CONCLUDING THE HEARING : 2 4 .0 8 .2016 DATE OF PRONOUNC ING THE ORDER : 22 . 1 1 .2016 O R D E R PER PRAMOD KUMAR , AM : 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 17.03.2016 , PASSED BY THE LEARNED PRINCIPAL CIT , UNDER SECTION 263 OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2007 - 08 . 2. GRIEVANCE S RAISED BY THE APPELLANT ARE AS FOLLOWS : - APPELLANT BEING DISSATISFIED WITH THE ORDER PASSED BY HON 'BLE PRINCIPAL COMMISSIONER OF INCOME TAX, VADODARA - 1, DATED 17.03.2016 U/S 263 OF IT ACT RECEIVED BY US ON 21.03.2016 PRESENTS THIS APPEAL AGAINST THE SAID ORDER ON THE FOLLOWING AMONGST OTHER GROUNDS: I.T.A. N O. 1228 /AHD/201 6 ASSESSMENT YEAR: 2007 - 08 PAGE 2 OF 4 1. THE ORDER PASSED BY THE LEARNED PRINCIPAL COMMIS SIONER OF INCOME TAX, VADODARA - 1, IS BAD IN LAW, CONTRARY TO LEGAL PRONOUNCEMENTS AND SAME BE QUASHED. THE LEARNED PRINCIPAL COMMISSIONER HAS INVOKED PROVISIONS OF SECTION 263 AND HAS SET ASIDE THE ASSESSMENT DONE U/S 143(3) R.W.S. 147 OF THE ACT WITHOUT B RINGING OUT ANYTHING WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AMONG OTHER, VARIOUS DETAILS AND INFORMATION CALLED HAVE BEEN PRODUCED AND INQUIRED BY THE ASSESSING OFFICER. THE LEARNED PR INCIPAL COMMISSIONER OF INCOME TAX HAS APPLIED HIS OWN VERSION OF LAW AND INVOKED PROVISIONS OF SECTION 263 OF THE ACT WHICH IS UNJUST AND BAD IN LAW. THE ORDER PASSED U/S 263 OF THE ACT BE DIRECTED TO BE QUASHED AND THAT OF THE ASSESSING OFFICER U/S 143(3 ) R.W.S. 147 OF THE ACT BE RESTORED. 2. THE ISSUE FORMED THE REASON FOR INVOKING PROVISIONS OF SECTION 263 OF THE ACT HAS ALREADY BEEN EXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. DURING THE COURSE OF YEAR UNDER CONSIDERATION THE APPELLANT HAS I NVESTED SUM OF RS.7,41,342/ - AS CAPITAL IN PARTNERSHIP FIRM M/S POLY PLAST INDUSTRIES AND THE SOURCE OF INVESTMENT WAS EXPLAINED WITH DOCUMENTARY EVIDENCES BEFORE THE ASSESSING OFFICER. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS DISREGARDED THE D OCUMENTARY EVIDENCES AND HAS ASSUMED JURISDICTION U/S 263 OF THE ACT WHICH IS CAPRICIOUS AND ARBITRARY. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS FAILED TO APPRECIATE THE FACTS THAT THE ORDER IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF T HE REVENUE. THE ORDER PASSED U/S 263 OF THE ACT DIRECTED TO BE QUASHED AND THAT OF THE ASSE SSING OFFICER U/S 143(3) R.W.S. 147 OF THE ACT BE RESTORED. 3 . BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE AS FOLLOWS. IT IS A CASE IN WHICH ASSESSMENT UNDER S ECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2007 - 08 , WAS COMPLETED ON 07.03.2014. AS FOR THE INDUCTION OF FRESH CAPITAL OF RS.7,41,352/ - , THE ASSESSING OFFICER, INTER ALIA, OBSERVED AS FOLLOWS : - 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF M/S. PLOY PLAST INDUSTRIES FOR THE ASSESSMENT YEAR 2007 - 08, IT WAS NOTICED THAT DURING THE YEAR THE ASSESSEE WHO IS A PARTNER OF THE SAID FIRM HAS MADE ADDITION TO PARTNER S CAPITAL OF RS.7,41,352/ - . THE ASSESSEE S SH OWN INCOME WAS ONLY RS.95,620/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED TO EXPLAIN WITH SUPPORTING EVIDENCE WITH REGA RD TO THE SOURCE OF FUND INTRODUCED AS HIS CAPITAL IN THE SAID FIRM. IN RESPONSE, THE AR OF THE ASSESSEE SUBMITTED THAT THE FUND RECEIVED BY THE ASSESSEE IS THE GIFT RECEIVED BY HIM F ROM I.T.A. N O. 1228 /AHD/201 6 ASSESSMENT YEAR: 2007 - 08 PAGE 3 OF 4 HIS FATHER. THE AR FURTHER SUBMITTED THAT FATHER OF THE ASSESSEE IS CARRYING OUT AGRICULTURAL ACTIVITY IN THE LAND JOINTLY HELD BY ASSESSEE, HIS FATHER/MOTHER. THE ASSESSEE HAS MADE CAPITAL INTRODUCTION IN THE FIRM AMOUNTING TO RS.7,41,352/ - OUT OF THE AMOUNT SO RECEIVED FROM HIS FATHER. 4 . YET, THE SAID ASSESSMENT ORDER HAS BEEN SUBJECTED TO REVISION PROCEEDINGS FOR WANT OF MAKING PROPER ENQUIRIES, EXAMINING THE RECORDS AND APPRECIATING THE FACTS AND LAW , IN VIEW OF THE FOLLOWING : - 2.1 ON VERIFICATION OF RECORD IT IS OBSERVED THAT CAPITAL OF RS.7,41,342/ - WAS INTRODUCED DURING THE YEAR, COMPRISING OF RS.3,43,852/ - BY CHEQUE & RS.3,97,500/ - BY CASH IN THE PARTNERSHIP FIR M M/S POLY PLAST INDUSTRIES. FURTHER, FROM THE SUPPORTING EVIDENCES PRODUCED WITH REGARD TO THE SOURCE FROM WHICH SUCH CAPITAL WAS INTRODUCED IS NOT FOUND GENUINE & CONVINCING DUE TO THE FOLLOWING FACTS: (I) NO FORM NO.12 GIVING DETAILS VIZ. NAME/TYPE O F CROPS CULTIVATED & ACTUAL CULTIVATOR OF LAND. (II) ONLY FORM 7 & 8A OF THREE PIECES OF AGRICULTURAL LAND FURNISHED. FORM 7 ONLY INDICATES OWNERSHIP OF LAND AS ON DATE OF OBTAINING COPY, I.E. 05.09.2013 AND FORM 8A INDICATES AREA OF LAND. (III) ONL Y FORM 7/12 OF THE LAND ADMEASURING 1.0218 HECTARE OWNED BY FATHER & MOTHER, ON WHICH SUGARCANE WAS CULTIVATED BY ONE SONABEN DAHYABHAI PATEL FURNISHED. (IV) BANK ACCOUNT FROM WHICH RS.3,50,000/ - CLAIMED TO BE RECEIVED AS GIFT IS JOINTLY HELD WITH FATH ER. NO DOCUMENTARY EVIDENCE WITH REGARD TO SUCH GIFT, VIZ. GIFT DEED/ACCEPTANCE FURNISHED. (V) EVIDENCE OF LAND OWNERSHIP DURING THE YEAR CONCLUSIVELY INDICATE OWNERSHIP OF ONLY ONE PIECE OF LAND ADMEASURING 1.0218 HECTARE WITH FATHER & MOTHER, ON WHICH S UGARCANE WAS CULTIVATED BY OTHER PERSON. (VI) SAMPLE COPIES OF BILL OF AGRICULTURAL PRODUCE FURNISHED EXHIBITS THAT PRODUCES (NAME OF PRODUCES NOT MENTIONED IN THE BILL) WERE SOLD TO KASAR GINNING FACTORY, IT IS UNCLEAR AS TO WHY A GINNING FACTORY WHICH N ORMALLY PROCURES COTTON FOR ITS END USE, HAS PROCURED, IF INDEED, SUGARCANE AND HOW IS IT POSSIBLE TO GROW SUGARCANE WORTH RS.3.5 LAKHS ON A LAND ADMEASURING JUST OVER ONE HECTARE. I.T.A. N O. 1228 /AHD/201 6 ASSESSMENT YEAR: 2007 - 08 PAGE 4 OF 4 5 . THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFORE US. 6 . WE HAVE HEARD THE RIVAL CONTENTIONS , PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 7 . UNDOUBTEDLY, WHEN AN ASSESSING OFFICER REMAINS PASSIVE ON THE FACTS WHICH CALL FOR FURTHER ENQUIRY, SUCH AN ORD ER CAN INDEED BE SUBJECTED TO REVISION UNDER SECTION 263. THAT , HOWEVER, IS NOT THE CASE HERE. THE ASSESSING OFFICER, AS EVIDENT FROM THE EXTRACTS FROM THE ASSESSMENT ORDER, AS REPRODUCED EARLIER, HAS CONDUCTED THE ENQUIRIES , BUT THE CIT FEELS THAT THE A SSESSING OFFICER SHOULD HAVE CONDUCTED MERE THOROUGH ENQUIRIES. IT IS, THEREFORE, NOT A CASE OF LACK OF, BUT INADEQUACY OF, ENQUIRIES DURING ASSESSMENT. SUCH A LAPSE EVEN IF THAT BE SO, CANNOT BE VISITED WITH REVISION PROCEEDINGS. IN ANY CASE, IN OUR CO NSIDERED VIEW, THE ASSESSING O FFICER HAD CONDUCTED REASONABLE ENQUIRIES AS EVIDENT FROM THE MATERIAL BEFORE US , AND JUST BECAUSE ASSESSING O FFICER HAS NOT ESTABLISHED EVERYTHING TO THE HILT, REVISION CANNOT BE JUSTIFIED. WE, THEREFORE, VACATE THE IMPUGNED ORDER. 8 . IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON 22 ND DAY OF NOVEMBER , 2016. SD/ - SD/ - MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 22 ND DAY OF NOVEMBER , 2016. COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABA D