JCIT, Noida V. Sri Ved Prakash Sachdeva, Gautam Budh Nagar

ITA 1468/DEL/2013

• Counselvise Citation: 146820114 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 26-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 12-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: V S RASTOGI DATES OF HEARING
• Section: 143(3); 133(6)

Judgement Text

I.T.A. NO.: 1468/DEL/2013 ASSESSMENT YEAR: 2009 - 10 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI H BENCH, NEW DELHI [CORAM : IC SUDHIR JM AND PRAMOD KUMAR AM ] I.T.A. NO.: 1468 /DEL/2013 ASSESSMENT YEAR: 2009 - 10 JOINT COMMISSIONER OF INCOME TAX RANGE 1, NOIDA .APPELLANT VS. VED PRAKASH SACHDEVA RESPONDENT PROP SAM OVERSEAS B 83, PHASE II, NOIDA 201 305 [ PAN: ABDPS5802N ] APPEARANCES BY: SAMEER SHARMA , FOR THE APPELLANT V S RASTOGI , FOR THE RESPONDENT DATES OF HEARING OF APPEALS : AUGUST 2 6 , 2014 DATE OF PRONOUNCING THE ORDER : SEPT 05 , 2014 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED THE CORRECTNESS OF ORDER DATED 7 TH DECEMBER 2012, PASSED BY THE LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT,1961, FOR THE ASSESSMENT YEAR 2009 - 10. 2. GRIEVANCES, AS SET OUT IN THE MEMORANDUM OF APPEAL, RAISED BY THE ASSESSING OFFICER ARE AS FOLLOWS: 1. THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.39 ,21,124/ - BEING BOGUS/NON - GENUINE/INFLATED FABRICATION CHARGED IN THE NAME OF M/S SHAKIR ZARI ARTS [RS.6,67,195/ - ] AND M/S ASHU GARMENTS [RS.32,53,929/ - ] RELYING I.T.A. NO.: 1468/DEL/2013 ASSESSMENT YEAR: 2009 - 10 PAGE 2 OF 5 ON THE LAST YEARS ORDER WHERE DISALLOWANCE WAS MADE AT RS.1,40,84,333/ - BEING @ 2.5% ON TOTAL DYING & PRINTING WORK, FABRICATION CHARGES AND RAW MATERIAL EXPENSES AMOUNTING TO RS.56,33,73,329/ - . 2. THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN BRUSHING ASIDE THE FACTS PUT FORTH BY THE AO IN THE ASSESSMENT ORDER NAMELY: - A) M/S SHAKIR ZARI ARTS NEITHER SUBMITTED CONFIRMATION CALLED FOR U/S 133(6) NOR ASSESSEE PRODUCED THE PROPRIETOR FOR EXAMINATION REGARDING GENUINENESS OF JOB WORK OF RS.6,67,195/ - B) STATEMENT ON OATH OF THE PROPRIETOR M/S ASHU GARMENTS WAS RECORDED TO EXAMINE THE GENUINENESS O F FABRICATION CHARGES OF RS.32,53,929/ - ; AND IT WAS FOUND THAT HE DID NOT HAVE THE INFRASTRUCTURE OR ANY ALLIED FACILITIES TO DO FABRICATION WORK. C) PAYMENT MADE THROUGH BANKING CHANNEL DOES NOT SUFFICE THAT THE TRANSACTION IS GENUINE ONE AS HAS BEEN HELD IN THE CASE OF CIT VS. UNITED COMMERCIAL & IND CO. PVT. LTD 187 ITR 596 (CAL). D) THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN IGNORING THE FACT M/S ASHU GARMENTS DID NOT POSSESS THE INFRASTRUCTURE FACILITY AND OTHER ALLIED ELEMENTS TO EXECUTE THE JOB WORK, WHICH LEAD BELIEF THAT APPARENT IS NOT REAL, AS HAS BEEN HELD BY THE SUPREME COURT IN THE CASE OF M/S CIT VS. DURGA PRASAD MORE, 82 ITR 540 (SC). 3. WHEN THIS MATTER WAS CALLED OUT FOR HEARING, LEARNED COUNSEL FOR THE ASSESSEE RAISED A PRELIMINARY OBJECTION. HE INVITED OUR ATTENTION TO THE FACT THAT, ON EXACTLY THE SAME FACTS AND IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, IDENTICAL RELIEF GIVEN BY THE CIT(A) HAS BEEN ACCEPTED BY THE ASSESSING OFFICER BY NOT CHALLENGING THE MATTER IN FURTHER APPE AL, AND YET, THE SAME ISSUE IS BEING AGITATED BEFORE US IN THIS ASSESSMENT YEAR. IT WAS CONTENDED THAT , IN VIEW OF THE LAW LAID DOWN BY HONBLE COURTS ABOVE, SUCH AN APPROACH BY THE REVENUE AUTHOR ITIES IS NOT PERMISSIBLE IN LAW. LEARNED COUNSEL FOR THE ASS ESSEE TOOK US THROUGH THE ORDERS PASSED BY THE CIT(A) IN THE PRESENT YEAR, AS ALSO IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR - WHICH HAS BEEN ACCEPTED BY THE COMMISSIONER, TO I.T.A. NO.: 1468/DEL/2013 ASSESSMENT YEAR: 2009 - 10 PAGE 3 OF 5 DEMONSTRATE CORRECTNESS OF FACTUAL ELEMENTS EMBEDDED IN HIS CONTENTIONS. LEARNE D DEPARTMENTAL REPRESENTATIVE PLACED HIS RELIANCE ON THE GROUNDS OF APPEAL BEFORE US, JUSTIFIED THE STAND TAKEN BY THE REVENUE AUTHORITIES FOR THIS YEAR AND SUBMITTED THAT IT IS NOT CLEAR WHETHER THE PARTIES IN QUESTION, IN RESPECT OF WHOM THE EXPENSES HA VE BEEN DISALLOWED, ARE THE SAME. HE SUBMITTED THAT FURTHER FACTUAL VERIFICATIONS ARE NECESSARY BEFORE AD JUDICATION ON THE LEGAL ASPECT AS TO WHETHER ONCE STAND OF THE CIT(A) ON AN ISSUE IS ACCEPTED IN ONE ASSESSMENT YEAR WHETHER THE SAME ISSUE CAN BE CHAL LENGED IN THE SUBSEQUENT ASSESSMENT YEAR. LEARNED COUNSEL FOR THE ASSESSEE, IN BRIEF REJOINDER, MADE A STATEMENT THAT PARTIES TO WHOM THE PAYMENTS WERE MADE ARE THE SAME AS COVERED BY THE ORDER OF THE CIT(A), IN PRECEDING ASSESSMENT YEAR, ACCEPTED BY THE R EVENUE AUTHORITIES. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. 5. WE FIND THAT HONBLE SUPREME COURT, IN THE OFT QUOTED CASE OF RADHASWAMI S ATSANG VS CIT (193 ITR 321) , HAS, INTER ALIA , OBSERVED AS FOLLOWS: 8. ONE OF THE CONTENTIONS WHICH LEARNED SENIOR COUNCIL FOR THE ASSESSEE - APPELLANT RAISED AT THE HEARING WAS THAT, IN THE ABSENCE OF ANY CHANGE IN THE CIRCUMSTANCES, THE REVENUE SHOULD HAVE FELT BOUND BY THE PREVIOUS DECISIONS AND NO ATTEMPT SHOULD HAVE BEEN MADE TO REOPEN THE QUESTION. HE RELIED UPON SOME AUTHORITIES IN SUPPORT OF HIS STAND. A FULL BENCH OF THE MADRAS HIGH COURT CONSIDERED THIS QUESTION IN T.M.M. SANKARALINGA NADAR & BROS. V S. CIT (1929) 4 ITC226. AFTER DEALING WITH THE CONTENTION, THE FULL BENCH EXPRESSED THE FOLLOWING OPINION : 'THE PRINCIPLE TO BE DEDUCTED FROM THESE TWO CASES IS THAT WHERE THE QUESTION RELATING TO ASSESSMENT DOES NOT VARY WITH THE INCOME EVERY YEAR BUT DE PENDS ON THE NATURE OF THE PROPERTY OR ANY OTHER QUESTION ON WHICH THE RIGHTS OF THE PARTIES TO BE TAXED ARE BASED, E.G., WHETHER A CERTAIN PROPERTY IS TRUST PROPERTY OR NOT, IT HAS NOTHING TO DO WITH THE FLUCTUATIONS IN THE INCOME; SUCH QUESTIONS, IF DECI DED BY A COURT ON A REFERENCE MADE TO IT WOULD BE RES JUDICATA IN THAT THE SAME QUESTION CANNOT BE SUBSEQUENTLY AGITATED.' I.T.A. NO.: 1468/DEL/2013 ASSESSMENT YEAR: 2009 - 10 PAGE 4 OF 5 ONE OF THE DECISIONS REFERRED TO BY THE FULL BENCH WAS THE CASE OF HOYSTEAD VS. COMMISSIONER OF TAXATION (1926) AC 155 (PC). SPEAKING FOR THE JUDICIAL COMMITTEE, LORD SHAW STATED : 'PARTIES ARE NOT PERMITTED TO BEGIN FRESH LITIGATIONS BECAUSE OF NEW VIEWS THEY MAY ENTERTAIN OF THE LAW OF THE CASE, OR NEW VERSIONS AS TO WHAT SHOULD BE A PROPER APPREHENSION BY THE COURT OF THE LEGAL RESUL T EITHER OF THE CONSTRUCTION OF THE DOCUMENTS OR THE WEIGHT OF CERTAIN CIRCUMSTANCES. IF THIS WERE PERMITTED LITIGATION WOULD HAVE NO END, EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED. IT IS A PRINCIPLE OF LAW THAT THIS CANNOT BE PERMITTED, AND THERE IS ABUNDA NT AUTHORITY REITERATING THAT PRINCIPLE. THIRDLY, THE SAME PRINCIPLE NAMELY, THAT OF A SETTING TO REST RIGHTS OF LITIGANTS, APPLIES TO THE CASE WHERE A POINT, FUNDAMENTAL TO THE DECISION TAKEN OR ASSUMED BY THE PLAINTIFF AND TRAVERSABLE BY THE DEFENDANT, H AS NOT BEEN TRAVERSED. IN THAT CASE ALSO A DEFENDANT IS BOUND BY THE JUDGMENT, ALTHOUGH IT MAY BE TRUE ENOUGH THAT SUBSEQUENT LIGHT OR INGENUITY MIGHT SUGGEST SOME TRAVERSE WHICH HAD NOT BEEN TAKEN.' THESE OBSERVATIONS WERE MADE IN A CASE WHERE TAXATION WA S IN ISSUE. THIS COURT IN PARASHURAM POTTERY WORKS CO. LTD. VS. ITO 1977 CTR (SC) 32 : (1977) 106 ITR 1 (SC) STATED : 'AT THE SAME TIME, WE HAVE TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI - JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY.' ASSESSMENTS ARE CERTAINLY QUASI - JUDICIA L AND THESE OBSERVATIONS EQUALLY APPLY. 9. WE ARE AWARE OF THE FACT THAT, STRICTLY SPEAKING, RES JUDICATA DOES NOT APPLY TO IT PROCEEDINGS. AGAIN, EACH ASSESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITI ON TO BE CHANGED IN A SUBSEQUENT YEAR. ONE THESE REASONINGS, IN THE ABSENCE OF ANY MATERIAL CHANGE JUSTIFYING THE REVENUE TO TAKE A DIFFERENT VIEW OF THE MATTER AND, IF THERE WAS NO CHANGE, IT WAS IN SUPPORT OF THE ASSESSEE WE DO NOT THINK THE QUESTION SHO ULD HAVE BEEN REOPENED AND CONTRARY TO WHAT HAD BEEN DECIDED BY THE CIT IN THE EARLIER PROCEEDINGS, A DIFFERENT AND CONTRADICTORY STAND SHOULD HAVE BEEN TAKEN . (EMPHASIS B Y UNDERLINING SUPPLIED BY US ) I.T.A. NO.: 1468/DEL/2013 ASSESSMENT YEAR: 2009 - 10 PAGE 5 OF 5 6. WE HAVE NOTED THAT ON MATERIALLY IDENTICAL SET OF F ACTS, SIMILAR RELIEF GRANTED BY THE CIT(A) WAS ACCEPTED BY THE REVENUE AUTHORITIES AND THE MATTER WAS ALLOWED TO REACH FINALITY BY NOT CHALLENGING THE SAME IN APPEAL. WE HAVE ALSO NOTED THAT IT IS A FACTUAL ISSUE AND THERE IS NO CHANGE IN THE FACTS OR IN T HE LEGAL POSITION. IN THESE CIRCUMSTANCES, AND IN THE ABSENCE OF ANY SPECIFIC REASONS FOR DEVIATION OF STAND BY THE REVENUE AUTHORITIES FOR THIS ASSESSMENT YEAR, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER WAS INDEED NOT JUSTIFIED IN RAISING T HESE GRIEVANCES AGAINST CORRECTNESS OF LEARNED CIT(A)S ORDER. WE, THEREFORE, DISMISS THE GRIEVANCES RAISED BY THE ASSESSING OFFICER FOR THESE SHORT REASONS ALONE , AND DECLINE TO DEAL WITH THE MERITS OF THESE GRIEVANCES. THE PRELIMINARY OBJECTION RAISED BY THE LEARNED COUNSEL IS INDEED WELL TAKEN AND WE APPROVE THE SAME. 7. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 5 TH DAY OF SEPTEMBER, 2014. SD/ - SD/ - I C SUDHIR PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NEW DELHI, THE 5 TH DAY OF SEPTEMBER , 2014 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC DE PUTY/ ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI