Shri Vijay Prasad, West Singhbhum V. Pr. CIT, Patna

ITA 130/RAN/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9602 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 27-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K SUTARIYA CITA JSR
• Assessee Lawyers: S K PODDAR
• Section: 40(a)(ia); 263

Judgement Text

1 ITA NO. 13 0 /RAN/ 201 6 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S.SAINI , ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 13 0 /RAN/201 6 A .Y. : 201 2 - 201 3 SRI VIJAY PRASAD, 161, THANA NO.745, BALIJHORAN, NOWAMUNDI, WEST SINGHB UM - 711102 V S THE PRINCIPAL CIT, CENTRAL, PATNA P AN NO. : A ILPP 0228 L (APPELLANT ) . RESPONDENT ASSESSEE BY : SHRI S.K.PODDAR & DEVESH PODDAR , ADV. REVENUE BY :SHRI D.K.SUTARIYA, CIT(A), JSR DATE OF HEARING : 2 2 . 05 .201 8 DATE OF PRONOUNCEMENT : 25.05 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT (CENTRAL) , PATNA , DATED 04.03.2016 , FOR THE ASSESSMENT YEAR 2012 - 2013. 2. THE SUBSTANTIVE GROUN D OF APPEAL RAISED BY THE ASSESSEE IS AGAINST THE ORDER PASSED BY THE CIT U/S.263 OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ELECTRONICALLY ON 11.09.2012 DECLARING TOTAL INCOME AT RS. 14 ,32, 834 / - . THE CASE WAS SELECT ED FOR SCRUTINY UNDER CASS. THE AO COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT, DATED 28.03.2014 DETERMINING TOTAL 2 ITA NO. 13 0 /RAN/ 201 6 INCOME AT RS. 15 , 43 , 400 / - AND MADE ADDITION OF RS.1, 10 , 569 / - AS 5% OF THE TOTAL EXPENDITURE ON ACCOUNT OF REPAIR AND MAINTENANCE. 4. SUBS EQUENTLY, THE CIT HAVING POWERS VESTED U/S.263 OF THE ACT CALLED FOR THE RECORDS OF THE ASSESSMENT PROCEEDINGS AND AFTER EXAMINATION THE CIT FOUND THE ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, THEREFORE, SHOW CAUSE NOT ICE WAS ISSUED TO THE ASSESSEE UNDER THE PROVISIONS OF SECTION 263 OF THE ACT AND THE CIT FOUND THAT THE AO HAD NOT EXAMINED/INVESTIGATED THE VARIOUS EXPENSES CLAIMED IN THE PROFIT AND LOSS ACCOUNT AND ALSO THE AO HAS NOT EXAMINED THE APPLICABILITY OF SE CTION 40(A)(IA) OF THE ACT ON PAYMENT OF TRANSPORTATION/HIRE CHARGES. THEREFORE, THE CIT HELD THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND DIRECTED THE AO TO DO DENOVO ASSESSMENT AND PASSED ORDER U/S.263 OF TH E ACT DATED 04.03.2016 . 5. BEFORE US, THE LD. AR OF THE ASSESSEE ARGUED THAT THE ORDER OF THE CIT U/S.263 OF THE ACT IS BAD IN LAW AND DOES NOT SATISFY THE TWIN CONDITION, SINCE THE EXPENDITURE DEBITED BY THE ASSESSEE AS TRANSPORTATION/HIRE CHARGES IN THE PROFIT AND LOSS ACCOUNTS AGAINST WHICH THE PAYMENT WERE MADE TO TRANSPORTER HAS ALSO SHOWN THEIR INCOME IN THEIR INCOME TAX RETURN, THEREFORE ASSESSMENT ORDER CANNOT BE CONSIDERED AS ERRONEOUS AND PRAYED FOR ALLOWING THE APPEAL. 6. LD. DR RELIED ON THE ORD ER OF CIT. 3 ITA NO. 13 0 /RAN/ 201 6 7. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE THE LD. ARS CONTENTION IS THAT THE AO HAS MADE ENQUIRIES AND BASED ON MATERIAL INFORMATION ASSESSMENT WAS COMPLETED. T HE CIT OBSERVED THAT THE ASSESSEE IS IN TH E BUSINESS OF TRANSPORTATION/HIRING OF VEHICLES AND HAS DEBITED SUBSTANTIAL AMOUNT IN THE PROFIT AND LOSS ACCOUNT UNDER THE HEAD TRANSPORTATION /HIRE CHARGES , THEREFORE, THE CIT OBSERVED THAT FAILURE ON THE PART OF AO TO APPLY SECTION 40(A)(IA) OF THE ACT HAS MADE THE ASSESSMENT ORDER BOTH ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. BEFORE US T HE LD. AR COULD NOT CONTROVERT THE FINDING OF THE CIT THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE . WE ARE IN AGR EEMENT WITH THE ORDER PASSED BY THE CIT. OUR VIEW IS SUPPORTED WITH RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF DENIEL MERCHANTS P. LTD. & ANR. VS. ITO, SLP(C) NO(S). 23976/2017, DATED 29.11.2017, WHEREIN THE HONBLE APEX COURT HAS HE LD AS UNDER : - DELAY CONDONED. IN ALL THESE CASES, WE FIND THAT THE COMMISSIONER OF INCOME TAX HAD PASSED AN ORDER UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 WITH THE OBSERVATIONS THAT THE ASSESSING OFFICER DID NOT MAKE ANY PROPER INQUIRY WHILE MAKING THE ASSESSMENT AND ACCEPTING THE EXPLANATION OF THE ASSESSEE(S) INSOFAR AS RECEIPT OF SHARE APPLICATION MONEY IS CONCERNED. ON THAT BASIS THE COMMISSIONER OF INCOME TAX HAD, AFTER SETTING ASIDE THE ORDER OF THE ASSESSING OFFICER, SIMPLY DIRECTED THE ASSES SING OFFICER TO CARRY THOROUGH AND DETAILED INQUIRY. IT IS THIS ORDER WHICH IS UPHELD BY THE HIGH COURT. WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE HIGH COURT. THE SPECIAL LEAVE PETITIONS ARE DISMISSED. PENDING APPLICATION(S), IF ANY, STANDS D ISPOSED OF ACCORDINGLY . 4 ITA NO. 13 0 /RAN/ 201 6 8. WE CONSIDERING THE FACT S AND CIRCUMSTANCES OF THE CASE AND RELYING ON THE DECISION OF HONBLE SUPREME COURT, FOUND THAT THE CIT HAS DEALT ON THE DISPUTED ISSUE AND CONSIDERED THE JUDICIAL DECISION AND PASSED A REASONED ORDER. A CCORDINGLY, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE CIT AND WE UPHELD THE SAME AND DISMISSED THE GROUND OF APPEAL OF THE ASSESSEE. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 / 05 /2 01 8 SD/ - SD/ - ( N.S.SAINI ) ( PAVAN KUMAR GADALE ) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED 25 / 05 /201 8 PRAKASH KUMAR MISHRA , SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COPY// SR.PS, ITAT, RANCHI 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, IT AT, RANCHI 6. GUARD FILE.