Habib Khan S/o Sh. Bashir Khan, Dewas V. The CIT, Ujjain

ITA 214/IND/2012

• Counselvise Citation: 21422714 RSA 2012
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 20-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B P JAIN
• Assessee Lawyers: MOHD RAFIQ; P K GUPTA
• Keywords: Revision of order
• Section: 143(3); 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNALINDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 214/IND/2012 A.Y. 2008-09 HABIB KHAN S/O SH. BASHIR KHAN DEWAS PAN ADEPK-8853E :: APPELLANT VS COMMISSIONER OF INCOME TAX UJJAIN :: RESPONDENT APPELLANT BY P.K. GUPTA AND MOHD RAFIQ RESPONDENT BY SHRI B.P. JAIN DATE OF HEARING 12.9.212 DATE OF PRONOUNCEMENT 1 3 .9.2012 O R D E R PER SHRI R.C. SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT U/S 263 OF THE ACT FOR THE ASSESSMENT Y EAR 2008-09. 2 2. IN THE GROUNDS OF APPEAL, IT WAS ALLEGED BY THE ASSESSEE THAT THE ORDER PASSED BY THE AO U/S 143(3) WAS NOT ERRON EOUS OR PREJUDICIAL TO THE INTERESTS OF THE REVENUE. ACCOR DINGLY, THERE WAS NO VALID REASON IN PASSING AN ORDER U/S 263 BY THE CIT . SHRI P.K. GUPTA AND SHRI MOH. RAFIQ APPEARED ON BEHALF OF THE ASSES SEE AND CONTENDED THAT AFTER PASSING OF THE ORDER U/S 263 O F THE ACT, THE AO HAS ALREADY PASSED AN ORDER U/S 143(3) OF THE ACT G IVING EFFECT TO THE ORDER OF THE CIT U/S 263 WHEREIN ONLY ADDITION OF R S. 50,000/- WAS MADE TO THE RETURNED INCOME. AS PER THE LEARNED CO UNSEL FOR THE ASSESSEE, SINCE NO ADDITION OR DISALLOWANCE WAS MAD E BY THE AO IN PURSUANCE WITH THE DIRECTIONS OF THE CIT U/S 263, T HERE APPEARS TO BE NO VALID REASON FOR PASSING THE ORDER U/S 263 OF TH E ACT. 3. ON THE OTHER HAND, SHRI B.P. JAIN, LEARNED CIT DR, APPEARED ON BEHALF OF THE REVENUE AND CONTENDED THAT WHILE PASS ING ORDER U/S 143(3) THE AO HAS NOT MADE PROPER INQUIRY NOR APPLI ED HIS MIND WITH RESPECT TO DEDUCTION OF TAX AT SOURCE IN RESPECT OF TRANSPORT CHARGES PAID BY THE ASSESSEE IN RESPECT OF GROSS CONTRACT R ECEIPTS FROM BUSINESS OF TRANSPORT AT RS. 67,85,800/-, THEREFORE , THE LEARNED CIT 3 WAS JUSTIFIED IN INVOKING THE PROVISIONS U/S 263 OF THE ACT AND DIRECTING THE AO TO REFRAME THE ASSESSMENT AFTER MA KING NECESSARY INQUIRY AND INVESTIGATION. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FIN D FROM RECORD THAT DURING THE COURSE OF PROCEEDINGS U/S 263 OF TH E ACT, THE CIT FOUND THAT OUT OF THE TOTAL CONTRACT RECEIPTS OF RS . 67.85 LACS, THE MAJOR PART OF RS. 65.02 LACS WAS ON TRANSPORT CONTR ACT RECEIPT FROM ANIL INDUSTRIES. THE ASSESSEE HAS ALSO PAID CORRES PONDING TRANSPORT CHARGES TO THE TRANSPORTER ON WHICH NO TDS WAS DEDU CTED AND WHILE FRAMING THE ASSESSMENT, THE AO HAS NOT APPLIED HIS MIND TO THE ISSUE. IT WAS FURTHER OBSERVED BY THE CIT THAT THE ASSESSEE HAS DEBITED TRUCK OPERATING EXPENSES IN THE PROFIT AND LOSS ACCOUNT WHICH WERE MUCH HIGHER THAN THE SIMILAR EXPENDITURE DEBITED IN EARLIER YEAR AND THERE WAS NOTHING ON RECORD TO SHO W THAT ANY INQUIRY WAS CARRIED OUT AND THE REASONS CALLED FOR MAKING SUCH EXPENSES FOR THE YEAR UNDER CONSIDERATION. IT WAS ALSO OBSERVED BY CIT THAT THE ASSESSEE HAS NOT PLACED ON RECORD THE DETAILS OF TRUCK 4 OPERATING EXPENSES AND JUSTIFICATION FOR INCURRING SUCH EXPENSES IN THE YEAR, UNDER CONSIDERATION, WHEN THERE WAS NO SU CH REQUIREMENT IN EARLIER YEAR WHILE THE BUSINESS REMAINED THE SAM E. ACCORDINGLY, THE NET PROFIT SHOWN BY THE ASSESSEE WAS FOUND TO B E UNREASONABLE AND UNACCEPTABLE. IN VIEW OF THESE FACTS, THE ORDE R PASSED BY THE AO WAS CONSIDERED TO BE ERRONEOUS AS WELL AS PREJUDICI AL TO THE INTERESTS OF REVENUE. THERE IS NO DISPUTE TO THE WELL SETTLE D LEGAL POSITION THAT IF THE AO HAS NOT APPLIED HIS MIND WHILE PASSING TH E ORDER U/S 143(3) OF THE ACT OR FAILED TO MAKE PROPER INQUIRY WITH RE SPECT TO THE EXPENDITURE SHOWN TO BE INCURRED, WHICH WAS NOT INC URRED IN EARLIER YEAR EVEN WHEN THE NATURE OF BUSINESS REMAINED THE SAME, IT CAN SAFELY BE SAID THAT THE ORDER PASSED BY THE AO IS E RRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF REVENUE. MERELY BE CAUSE AN ADDITION OF RS. 50,000/- WAS MADE WHILE GIVING EFFECT TO THE ORDER OF THE CIT U/S 263 OF THE ACT, IT CANNOT BE SAID TO BE A VALID REASON FOR HOLDING THAT THE ORDER PASSED BY THE LEARNED CIT U/S 263 WA S WRONG. AS PER THE OBSERVATIONS OF THE LEARNED CIT, WE ARE INCLINE D TO AGREE WITH THE LEARNED CIT DR, SHRI B.P. JAIN THAT THE AO HAS NOT APPLIED HIS MIND 5 NOR MADE ANY INQUIRY WITH RESPECT TO THE EXPENDITUR E CLAIMED IN THE PROFIT AND LOSS ACCOUNT AND DEDUCTION OF TDS THEREO N. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON 13 TH SEPTEMBER, 2012 SD SD (JOGINDER SINGH) (R.C. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER SEPTEMBER 13TH , 2012 COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR DN/-1212