The ITO, Patan V. M/s. Patel Kantilal Jivramdas & Co., Unjha

ITA 1957/AHD/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8640 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-01-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 08-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Assessee Lawyers: S N DIVETIA A R
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion
• Section: 143(3); 147

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.1957/AHD/2011 [ASSTT.YEAR : 2005-2006] ITO, WARD-2 PATAN. /VS. M/S.PATEL KANTILAL JIVRAMDAS & CO. 19, CATTLE SHED, OLD GANJ BAZAR UNJHA. PAN : AACFP 0047 H ( (( ( -. -. -. -. / APPELLANT) ( (( ( /0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 ) / REVENUE BY : SHRI ROOPCHAND, SR.DR 4& 1 2 ) / ASSESSEE BY : SHRI S.N. DIVETIA, AR 5 1 &(* / DATE OF HEARING : 6 TH JANUARY, 2015 678 1 &(* / DATE OF PRONOUNCEMENT : 02-02-2015 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSTT.YEAR 2005-2006 IS DIRECTED AGAINST TH E ORDER OF THE CIT(A). 2. ONLY EFFECTIVE GROUND OF THE APPEAL OF THE REVEN UE IS GROUND NO.1, WHICH IS REPRODUCED AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN TREATING THE REOPENING OF THE CASE AND ASSESSMENT PROCEEDINGS IN VALID. ITA NO.1957/AHD/2011 -2- 3. THE LEARNED DR SUBMITTED THAT REOPENING OF THE A SSESSMENT IS MADE WITHIN FOUR YEARS FROM THE END OF THE RELEVANT ASST T.YEAR 2005-06. HE SUBMITTED THAT REASONS WERE DULY RECORDED AND THAT SHORTAGE IN VARIOUS COMMODITIES DEALT WITH BY THE ASSESSEE WAS ON THE H IGHER SIDE DURING THE YEAR AS COMPARED TO EARLIER YEARS. OVERALL SHORTAG E IN VARIOUS COMMODITIES IS 2.52% AS AGAINST 0.36% IN THE IMMEDI ATELY PRECEDING ASSESSMENT YEAR. HE SUBMITTED THAT IN THESE FACTS, REOPENING WAS VALIDLY MADE BY THE AO. 4. THE LEARNED COUNSEL FOR THE ASSESSEE HAS OPPOSED THE SUBMISSIONS OF THE LEARNED DR. HE SUBMITTED THAT ORIGINAL ASSESSM ENT WAS FRAMED UNDER SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT . HE SUBMITTED THAT IT IS CLEAR CASE OF CHANGE OF OPINION ON THE PART OF T HE AO WHICH IS NOT PERMISSIBLE UNDER THE PROVISION OF THE ACT. HE SUB MITTED THAT IT IS NOW WELL SETTLED THAT REASSESSMENT CANNOT BE MADE ON ME RE CHANGE OF OPINION. HE REFERRED TO TABLE GIVEN IN THE APPELLATE ORDER O F THE CIT(A) AT PAGE NO.8, WHICH SHOWS THAT MAIN COMMODITIES PURCHASED A ND SOLD BY THE ASSESSEE DURING THE YEAR SHOWS BETTER PROFIT IN PER CENTAGE AS COMPARED TO EARLIER ASSTT.YEAR 2003-04 AND 2004-05. HE SUBMITT ED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VIJAY RAME SHBHAI GUPTA VS. ACIT, 215 TAXMANN 465 (GUJ) AND JAGAT JAYANTILAL PA RIKH VS. DCIT, 355 ITR 400 (GUJ). 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ORIGINAL ASSES SMENT IN THIS CASE WAS FRAMED IN SCRUTINY ASSESSMENT. WE FIND THAT A BARE READING OF COMPARATIVE SHORTAGE IN VARIOUS COMMODITIES DEALT WITH BY THE A SSESSEE, AS REPRODUCED BY THE CIT(A) AT PAGE NO.8 OF HIS APPELLATE ORDER S HOWS THAT THERE WAS PRACTICABLY NO EXCESSIVE SHORTAGE DURING THE RELEVA NT PERIOD AS COMPARED ITA NO.1957/AHD/2011 -3- TO THE SHORTAGE IN THE EARLIER ASSESSMENT YEARS 200 3-04 AND 2004-05. THE INCREASE IN SHORTAGE DURING THE RELEVANT PERIOD WAS MAINLY IN SOME COMMODITIES WHOSE TOTAL TURNOVER WAS VERY LESS, AT A FIGURE LESS THAN RS.1.00 LAKH IN THE ENTIRE YEAR. WE FIND THAT THE AO HAS CALCULATED THE AVERAGE SHORTAGE IN VARIOUS COMMODITIES PURCHASED A ND SOLD BY THE ASSESSEE AT 2.52% BY TAKING AVERAGE OF THE SHORTAGE IN VARIOUS COMMODITIES, WHICH INCLUDES THE COMMODITIES WHEREIN THE ASSESSEE HAS A VERY INSIGNIFICANT TURNOVER. IN THESE FACTS, WE AR E OF THE VIEW THAT EVEN ON MERITS, THERE WAS NO JUSTIFICATION FOR REOPENING OF ASSESSMENT BY INVOKING SECTION 147 OF THE ACT. WE FIND THAT NO COMPARABLE CASE OF LESSER SHORTAGE IN VARIOUS COMMODITIES DEALT WITH BY THE ASSESSEE H AS BEEN CITED BY THE AO IN THE ASSESSMENT ORDER. THE CASE LAW CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTS THE CASE OF THE ASSESSEE. IT IS A CASE OF CHANGE OF OPINION ON THE PART OF THE AO WHICH WAS NOT PERMISS IBLE FOR INVOKING PROVISIONS OF SECTION 147 OF THE ACT. IN THESE FAC TS, WE ARE OF THE VIEW THAT THE CIT(A) WAS JUSTIFIED IN STRIKING DOWN THE REOPE NING IN THIS CASE, AS THERE WAS NO NEW INFORMATION WITH THE AO FOR CHANGE OF OPINION EXCEPT A NOTE OF AUDIT PARTY. ACCORDINGLY, WE CONFIRM THE O RDER OF THE CIT(A) ON THIS ISSUE, AND THE GROUNDS OF THE APPEAL OF THE RE VENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT