Bhagwant Trading Company, Pandharpur V. Pr. Commissioner of Income-Tax - 4, Pune

ITA 126/PUN/2021

AI Insights

The case involves Bhagwant Trading Company, which appealed against the order of the Pr. Commissioner of Income Tax-4, Pune, concerning the Assessment Year 2017-18. The PCIT had revised the Assessing Officer's regular assessment, claiming it was erroneous and prejudicial to the Revenue's interests due to insufficient inquiries into the assessee's cash withdrawals and low profit margins. However, the Tribunal found that the Assessing Officer had indeed conducted thorough inquiries and recorded findings that the cash withdrawals were used for payments to farmers, thus not warranting the PCIT's revision.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 137869 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2022
• Appeal Filed By: Assessee
• Order Result: AllowedAllowed
• Bench Allotted: A
• Next Hearing Date: 28-11-2022
• Assessment Year: misc
• Appeal Filed On: 15-10-2022
• Other Referred Cases: Malabar Industrial Company Limited vs. CIT [2000] 243 ITR 83 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 263; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “A” : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI G.D. PADMASHALI, ACCOUNTANT MEMBER ITA.No.126/PUN/2021 Assessment Year 2017-2018 Bhagwant Trading Company, 1200/B, Bhagwant Complex, Navi Peth, Pandharpur-413304 PAN AADFB9776F vs The Pr. Commissioner of Income Tax-4, Pune. Applicant Respondent Assessee by : Shri S.N. Puranik Revenue by : Shri Pankaj Kumar Date of hearing : 29.11.2022 Date of pronouncement : 12.12.2022 ORDER PER SATBEER SINGH GODARA, J.M. : This assessee’s appeal for Assessment Year 2017-18 is directed against the Pr. Commissioner of Income Tax [“in short “PCIT”] Pune-4, Pune’s order dated 31.03.2021, passed in case No. ITBA/REV/F/REV5/2020-21/1032120667(1), in proceedings u/s. 143(3) of the Income Tax Act, 1961 [in short “the Act”]. 2. Heard both the parties. Case file perused. 3. It emerges dh that the learned PCIT’s revision direction herein term the Assessing Officer’s regular assessment dated 28.03.2019 as an erroneous one causing prejudice to the interest of Revenue on account of his failure to make necessary enquiries for ascertaining reasons for withdrawals of huge cash, low profit, 2 ITA.No.126/PUN/2021 Bhagwant Trading Company, Pandharpur. correctness and genuineness of cash payments made to farmers etc. 4. We find with the able assistance coming from both the learned representatives’ side that the Assessing Officer’s assessment herein had indeed examined the assessee's cash withdrawals at length. Learned CIT-DR could hardly dispute that this assessee is a firm engaged in general merchant commission agent [Kacchi Adat] of “Bedana” wherein the Assessing Officer has duly recorded his findings after issuing section 143(2) r.w.s.142(1) notice(s) that the alleged huge cash withdrawals had been mainly used for payments to farmers for “Bedana” transactions. And that this is an instance of cash withdrawals than cash deposits. That being the case, we find no merit in the Revenue’s stand supporting the PCIT’s revision directions that the Assessing Officer had accepted the assessee's explanation without carrying-out detailed enquiries. We quote hon'ble apex court landmark decision in Malabar Industrial Company Limited vs. CIT [2000] 243 ITR 83 (SC) that an assessment has to be both an erroneous one as well as causing prejudicial to the interests of Revenue, simultaneously before the prescribed authority i.e., CIT or PCIT, as the case may be, decides to set his section 263 revision jurisdiction in motion. We are of the opinion that the Assessing Officer’s assessment herein could hardly be held as satisfying both the foregoing parameters once he has not only carried-out detailed enquiries but also given 3 ITA.No.126/PUN/2021 Bhagwant Trading Company, Pandharpur. finding of the assessee having made cash payments to farmers. We thus reverse the PCIT’s impugned revision directions and restore the Assessing Officer’s regular assessment dated 28.03.2019 as the necessary corollary. 5. This assessee’s appeal is allowed in above terms. Order pronounced in the open Court on 12 th December, 2022. Sd/- Sd/- (GD PADMASHALI) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 12 th December, 2022 VBP/- Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5 . DR, ITAT, “A” Bench, Pune. 6. Guard File. BY ORDER, // TRUE COPY // Senior Private Secretary ITAT, Pune.