The ACIT, Circle-6, Ahmedabad V. Shri Babubhai Jesangbhai Desai, Ahmedabad

ITA 1908/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1097 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 30-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Reopening of assessment; Opportunity of being heard; Additional evidence; Reasonable cause; Accommodation entries
• Section: 147; 69; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO. 1908/AHD/2012 / ASSESSMENT YEAR : 2005-06 ACIT, CIRCLE-6, AHMEDABAD VS SHRI BABUBHAI JESANGBHAI DESAI, A/25, BHAGWATINAGAR SOCIETY, OPP. GULAB TOWER, SOLA ROAD, BHUYANGDEV, AHMEDABAD PAN : ABOPD 5495 K ./ ITA NO. 2123/AHD/2012 / ASSESSMENT YEAR : 2004-05 ITO, WARD-6(2), AHMEDABAD VS SHRI BABUBHAI J. DESAI HUF, A/25, BHAGWATINAGAR SOCIETY, OPP. GULAB TOWER, SOLA ROAD, BHUYANGDEV, AHMEDABAD PAN : AAAHD 9979 B / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI PRASOON KABRA, SR DR ASSESSEE(S) BY : SHRI S.N. DIVATIA, AR / DATE OF HEARING : 20/07/2016 / DATE OF PRONOUNCEMENT: 20/07/2016 / O R D E R PER R.P. TOLANI, JUDICIAL MEMBER:- THESE ARE TWO REVENUES APPEALS, ONE IN THE CASE OF INDIVIDUAL AND OTHER ONE IN THE CASE OF HUF, INVOLVING COMMON ISSU ES AND ARE DIRECTED AGAINST THE ORDER OF THE CIT(A)-XI, AHMEDABAD DATED 22.06.2012 FOR ASSESSMENT YEAR 2005-06 IN THE CASE OF INDIVIDUAL A ND AGAINST THE ORDER OF CIT(A)-XI DATED 04.07.2012 FOR AY 2004-05 IN THE CA SE OF HUF. SINCE BOTH THESE APPEALS INVOLVE COMMON ISSUES, THESE WERE HEA RD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR TH E SAKE OF CONVENIENCE. 2. THE RESPECTIVE GROUNDS RAISED ARE AS UNDER:- ITA NO. 1908 & 2123/AHD/2012 DEPTT. VS. SHRI BABUBHAI JESANGBHAI DESAI & HUF AY : 2005-06 & 2004-05 2 ITA NO.1908/AHD/2012 : SHRI BABUBHAI JESANGHBHAI DE SAI AY 2005-06 I) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN QUAS HING THE RE- ASSESSMENT ORDER ON THE GROUND THAT THE NOTICE U/S 148, ISSUED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR, IS INVALID. II) THE LD. CIT(A) HAS IGNORED THE FACT THAT THE ASSESSM ENT WAS RE-OPENED ON THE BASIS OF SPECIFIC INFORMATION THAT THE ASSESSEE INDULGED IN BOGUS TRANSACTIONS THROUGH ACCOMMODATION ENTRIES, AS ADMI TTED BY THE RELATED PARTIES. III) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.50,42,474/- MADE BY THE ASSESSING OFFICER U/S 69 OF THE ACT. IV) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ACCE PTING THE CONTENTION OF THE ASSESSEE THAT THE TRANSACTIONS WERE GENUINE J UST BECAUSE THE SALES OF SHARES ARE RECORDED IN BOOKS OF ACCOUNT. V) ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. VI) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ITA NO.2123/AHD/2012: SHRI BABUBHAI J. DESAI (HUF) AY 2004-05 I) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.39,27,170/- MADE BY THE ASSESSING OFFICER U/S 69 OF THE ACT ON ACCOUNT OF BOGUS TRANSACTIONS BY OBTAINING ACCOMMOD ATION ENTRIES. II) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ACCE PTING THE CONTENTION OF THE ASSESSEE, THAT THE TRANSACTIONS WERE GENUINE ON THE BASIS OF ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE DURI NG THE APPELLATE PROCEEDINGS, WITHOUT GRANTING OPPORTUNITY TO THE AO UNDER RULE 46A OF THE IT RULES, 1962. III) ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IV) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. IN BOTH THE CASES, ASSESSMENTS WERE REOPENED U/S 147 OF THE INCOME- TAX ACT. APROPOS ITA NO.2123/AHD/2012, LD. DR ADVER TED TO THE GROUND ABOUT ADMISSION OF ADDITIONAL EVIDENCES IN CONTRAVE NTION OF RULE 46A OF IT RULES. IT IS CONTENDED THAT THE ASSESSMENT WAS FRA MED U/S 144 DUE TO NON- COOPERATION OF THE ASSESSEE. THE ASSESSEE DID NOT F ILE ANY APPLICATION FOR ITA NO. 1908 & 2123/AHD/2012 DEPTT. VS. SHRI BABUBHAI JESANGBHAI DESAI & HUF AY : 2005-06 & 2004-05 3 ADDITIONAL EVIDENCES. LD. CIT(A) RELIED ON ADDITION AL EVIDENCES AND HAS NOT OFFERED ANY COMMENTS AS TO HOW THE ASSESSEE WAS PRE VENTED BY A REASONABLE CAUSE IN NOT FILING THE RELEVANT DOCUMENTS BEFORE T HE LD. ASSESSING OFFICER. SIMILARLY, NO REMAND REPORT HAS ALSO BEEN CALLED FO R. THEREFORE, THE RELIEF AWARDED TO THE ASSESSEE IS A CLEAR VIOLATION TO RUL E 46A. THEREFORE, THE ORDER OF THE CIT(A) SHOULD BE REVERSED. IT IS FURT HER CONTENDED THAT THE FACTS BEING SAME, STRANGELY IN THE CASE OF HUF THE REOPEN ING HAS BEEN UPHELD AND IN THE CASE OF INDIVIDUAL FOR AY 2005-06 THE RE OPENING HAS BEEN QUASHED. THUS, THERE IS A CLEAR DICHOTOMY IN THE O RDERS OF THE LD. CIT(A) IN THE CASE OF INDIVIDUAL AND HUF. IT IS CONTENDED TH AT THE REASSESSMENT IN AY 2005-06 HAS BEEN QUASHED ON NON-SPECIFIC AND SELF-C ONTRADICTORY OBSERVATIONS. THEREFORE, LD. CIT(A) HAS ADOPTED TWO DIFFERENT VIEWS ON THE SAME SUBJECT MATTER WITHOUT PROPER JUSTIFICATION. 2.1 LD. COUNSEL FOR THE ASSESSEE CONCEDES THAT THE APPLICATION FOR ADDITIONAL EVIDENCES WAS NOT FILED. 2.2 APROPOS THE QUASHING OF REASSESSMENT, RELIANCE IS PLACED ON GUJARAT HIGH COURT JUDGMENT IN THE CASE OF PR. CIT VS. M/S. PANKAJ ENKA PVT LTD IN TAX APPEAL NO.967 OF 2015, HOLDING THAT THE ASSESSE E HAVING SUBMITTED RELEVANT PRIMARY FACTS IN THE ORIGINAL ASSESSMENT, REOPENING OF ASSESSMENT AFTER A PERIOD OF FOUR YEARS FROM THE END OF ASSESS MENT YEAR IS BAD IN LAW. SINCE THE REASSESSMENT NOTICE HAS BEEN ISSUED AFTER THE END OF FOUR YEARS, THE REASSESSMENT HAS BEEN VALIDLY QUASHED BY LD. CIT(A) . IT MAY BE MENTIONED THAT THE LD. CIT(A)S ORDER UPHOLDING THE REASSESSM ENT IN THE CASE OF HUF HAS BEEN ACCEPTED BY THE ASSESSEE. 2.3 LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE ORDER OF THE CIT(A) MAY BE UPHELD; IN ALTERNATIVE THEY MAY BE SET ASIDE . 3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. IN HUF ITA NO. 1908 & 2123/AHD/2012 DEPTT. VS. SHRI BABUBHAI JESANGBHAI DESAI & HUF AY : 2005-06 & 2004-05 4 CASE, THE REASSESSMENT HAS BEEN UPHELD AND RELIEF O N EX-PARTE ASSESSMENT HAS BEEN GIVEN WITHOUT FOLLOWING THE MANDATORY PROVISIO NS OF RULE 46A. CONSEQUENTLY, IN THE INTEREST OF JUSTICE, WE SET AS IDE THE ISSUE ON MERITS BACK TO THE FILE OF THE LD. CIT(A) TO PASS AN ORDER DE NOVO AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. 3.1 APROPOS ASSESSEE-INDIVIDUAL APPEAL ALSO, WE ARE ALSO INCLINED TO SET ASIDE THE MATTER BACK TO THE FILE OF CIT(A) TO RE-E XAMINE THE ISSUE ABOUT VALIDITY OF REASSESSMENT AS THE LD. SR. DR CONTENDS THAT THE ASSESSMENT WAS REOPENED AFTER FOUR YEARS BECAUSE THE ASSESSEE DID NOT DISCLOSE PRIMARY FACTS AND THE BOGUS ENTRY SCAM WAS UNEARTHED CONSEQ UENT TO SEARCH ON 25.11.2009. LD. CIT(A) SHOULD CONSIDER ALL THE FAC TUAL ASPECTS AND DECIDE THE APPEAL OF THE INDIVIDUAL FOR AY 2005-06 AFRESH, AFTER PROVIDING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. 4. IN THE RESULT, BOTH THE REVENUES APPEALS ARE AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 20 TH JULY, 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (R.P. TOLANI) JUDICIAL MEMBER AHMEDABAD; DATED 20/07/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD