Shri Nareshbhai Muljibhai Vyas, Ahmedabad V. The Income tax Officer,Ward-2(2), Ahmedabad

ITA 2198/AHD/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50759 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 13-10-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 13-07-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MEENA
• Assessee Lawyers: ANIL R SHAH
• Keywords: Depreciation; Opportunity of being heard
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. L. GEHL OT, AM) ITA NO.2198/AHD/2009 A. Y.: 2001-02 NARESHBHAI MULJIBHAI VYAS, PLOT NO.3, PARASMANI SOCIETY PART- 1, B/H UMIYA VIJAY SOCIETY, SATELLITE ROAD, AHMEDABAD 15 VS THE INCOME TAX OFFICER, WARD 2 (2), VADODARA, AAYAKARVHAN, VADODARA PA NO. AAWPV 6809 L (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ANIL R. SHAH, AR RESPONDENT BY SHRI S. K. MEENA, SR. DR DATE OF HEARING: 13-10-2011 DATE OF PRONOUNCEMENT: 20-10-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-II , BARODA DATED 19 TH MARCH, 2009, FOR ASSESSMENT YEAR 2001-02. 2. THE ASSESSEE FILED ARGUMENTATIVE GROUNDS OF APPE AL AND LATER ON FILED REVISED GROUNDS OF APPEAL. 3. ON THE REVISED GROUNDS OF APPEAL, THE ASSESSEE C HALLENGED THE REOPENING OF THE ASSESSMENT U/S 148 OF THE IT ACT. THE RETURN OF INCOME WAS FILED ON 27-10-2001 DECLARING INCOME AT RS.3,66,063/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE IT ACT. NOTICE U/S 148 OF THE IT ACT WAS ISSUED ON 07-03-2006. THE REOPENING WAS CHALLENGED ITA NO.2198/AHD/2009 NARESHBHAI MULJIBHAI VYAS VS THE ITO, WARD 2(2), BA RODA 2 BEFORE THE LEARNED CIT(A) AND IT WAS SUBMITTED THAT THE ASSESSEE IS DOING BUSINESS AS GOVERNMENT CONTRACTOR IN THE FIEL D OF WATER AND DRAINAGE PIPE LINE AND CONSTRUCTION OF PUMP HOUSE A T VARIOUS SITES LOCATED THROUGH OUT THE STATE OF GUJARAT. THE ASSES SEE OBJECTED TO THE REASONS FOR REOPENING WHICH WAS RELATED TO THE AMOUNT OF RS.1,00,000/- HAVING BEEN INVESTED IN FDRS WITH PAT NI COOPERATIVE BANK DURING THE FINANCIAL YEAR 2000-01. THE ASSESSE E STATED SINCE THE BASIS OF THE REOPENING ITSELF WAS WRONG AS THE AMOUNT WAS INVESTED OUT OF SALE PROCEEDS OF AGRICULTURAL INCOM E OF HUF; THERE WAS NO QUESTION OF INCOME DECLARATION IN PERSONAL S TATEMENT OF ACCOUNT. THEREFORE, THE REOPENING IS INVALID. THE L EARNED CIT(A) HOWEVER, CONSIDERING THE DECISION OF THE HONBLE SU PREME COURT IN THE CASE OF ACIT VS RAJESH JHAVERI STOCK BROKERS (P ) LTD., 291 ITR 500 FOUND THAT SINCE THE RETURN WAS PROCESSED U/S 1 43(1) OF THE IT ACT, THEREFORE, THERE IS NO QUESTION OF FORMATION O F OPINION AND ACCORDINGLY THIS GROUND WAS DISMISSED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED CIT(A) AND SUBM ITTED THAT REOPENING OF THE ASSESSMENT WAS MADE ON ACCOUNT OF THE FACT THAT FDRS WERE NOT SHOWN IN THE RETURN OF INCOME FOR WHI CH SOURCES OF THE FDRS REQUIRED VERIFICATION. HE HAS REFERRED TO THE REASONS RECORDED BY THE AO FOR REOPENING OF THE ASSESSMENT ON 28-02-2006, COPY OF WHICH IS FILED AT PAGE 60 OF THE PAPER BOOK AND SUBMITTED THAT SINCE NO ADDITION IS MADE ON ACCOUNT OF FDRS AND FU RTHER THE GROUND WAS INCORRECT AND WRONG FOR REOPENING OF THE ASSESS MENT, THEREFORE, REOPENING IS INVALID. HE HAS ALSO SUBMITTED THAT TH ERE IS NO NEXUS ITA NO.2198/AHD/2009 NARESHBHAI MULJIBHAI VYAS VS THE ITO, WARD 2(2), BA RODA 3 BETWEEN THE REASONS RECORDED FOR REOPENING AND COMP LETION OF REASSESSMENT U/S 148 OF THE IT ACT. HE HAS FURTHER SUBMITTED THAT FOR RE-ASSESSMENT PROCEEDING U/S 148 OF THE IT ACT FISH ING ENQUIRIES CANNOT BE THE REASONS FOR REOPENING OF THE ASSESSME NT. HE HAS SUBMITTED THAT THE LEARNED CIT(A) DID NOT PASSED SP EAKING ORDER ON THE CONTENTION OF THE ASSESSEE, THEREFORE, THE MATT ER REQUIRES RECONSIDERATION AT THE LEVEL OF THE LEARNED CIT(A). THE LEARNED DR ALSO SUGGESTED THAT SINCE THE LEARNED CIT(A) HAS NO T DECIDED THE ISSUE AS PER THE SUBMISSIONS OF THE ASSESSEE, THERE FORE, THE MATTER MAY BE RESTORED TO THE FILE OF THE LEARNED CIT(A) F OR DECISION AFRESH. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THE MATTER REQUIRES RECONSIDERATION OF THE ISSUE AT THE LEVEL OF THE LEARNED CIT(A). THE REASONS FOR REOPENING OF THE AS SESSMENT ARE FILED IN THE PAPER BOOK WHICH SHOWS THAT THE AO ON PERUSAL OF THE RETURN FILED FOUND THAT FDRS HAVE NOT BEEN SHOWN IN THE RETURN OF INCOME. IT WAS FURTHER FOUND THAT WHILE DOING ASSES SMENT FOR THE SUBSEQUENT ASSESSMENT YEAR INFORMATION WAS RECEIVED THAT THE ASSESSEE GOT MATURITY VALUE OF 10 FDRS OF RS.10,000 /- EACH IN THE ASSESSMENT YEAR UNDER APPEAL. THE AO WAS, THEREFORE , OF THE OPINION THAT SOURCES OF THE FDRS REQUIRE VERIFICATION. THER EFORE, HE HAS FORMED HIS OPINION THAT INCOME ESCAPED ASSESSMENT. THE AO ULTIMATELY DID NOT MAKE ANY ADDITION ON ACCOUNT OF SOURCE OF THE FDRS. THEREFORE, THE ASSESSEE RIGHTLY CONTENDED BEF ORE THE LEARNED CIT(A) THAT THE BASIS OF REASSESSMENT ITSELF WAS WR ONG. THE ASSESSEE HAS, THEREFORE, RIGHTLY CONTENDED THAT THE RE WAS NO NEXUS BETWEEN THE REASONS RECORDED AND ULTIMATELY REASSES SMENT MADE BY ITA NO.2198/AHD/2009 NARESHBHAI MULJIBHAI VYAS VS THE ITO, WARD 2(2), BA RODA 4 THE AO. THE LEARNED CIT(A) HAS NOT RECORDED ANY FIN DINGS ON THE SUBMISSIONS OF THE ASSESSEE AND MERELY HELD THAT SI NCE ORIGINALLY RETURN WAS PROCESSED U/S 143(1) OF THE IT ACT, THER EFORE, THERE WAS NO FORMATION OF OPINION. HENCE, THIS GROUND WAS REJECT ED. THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, THEREFORE, RIG HTLY SUGGESTED THAT THE LEARNED CIT(A) SHOULD HAVE DECIDED THIS ISSUE O N THE SUBMISSION OF THE ASSESSEE, WHICH THE LEARNED CIT(A) FAILED TO DO SO. WE ACCORDINGLY, SET ASIDE THE ORDER OF THE LEARNED CIT (A) AND RESTORE THIS ISSUE TO HIS FILE WITH DIRECTION TO RE-DECIDE THIS GROUND BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LEARNED CIT(A) SHALL GIVE SPECIFIC FINDING IN THE A PPELLATE ORDER ON THE SUBMISSIONS AND POINTS RAISED BY THE LEARNED COUNSE L FOR THE ASSESSEE BEFORE HIM DURING THE COURSE OF ARGUMENTS. 6. IN THE RESULT, GROUND NO.1 OF THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. ON GROUND NO.2, THE ASSESSEE CHALLENGED THE ADDI TION OF RS.3,58,955/-. THE AO VERIFIED THE RECORDS OF THE A SSESSEE AND ALSO VERIFIED 3 BILLS ISSUED BY ONE SHRI NARESH GENERATO RS AND FARASKHANA. TWO BILLS OF RS.96,000/- RELATED TO PUR CHASE OF GENERATORS AND RS.5,500/- WAS FOR PURCHASE OF WELDI NG MACHINE. ON VERIFICATION BY THE INSPECTOR, THE OWNER OF SHRI NA RESH GENERATORS AND FARASKHANA STATED THAT HE HAD NOT SOLD ANY TYPE OF GOODS TO THE ASSESSEE. THE AO, THEREFORE, CONCLUDED THAT THE ASS ESSEE SUBMITTED BOGUS BILLS TO CLAIM HIGHER DEPRECIATION. IT WAS A LSO NOTED THAT THERE WAS NO BIFURCATION OF LABOURERS INVOLVED IN THE CON TRACT WORK AND JOB. ITA NO.2198/AHD/2009 NARESHBHAI MULJIBHAI VYAS VS THE ITO, WARD 2(2), BA RODA 5 SINCE THE JOB WORK DOES NOT REQUIRE PURCHASE OF MAT ERIAL ETC., THE AO ESTIMATED THE PROFIT RATE AT 8% OF CONTRACT RECEIPT S AND MADE THE ADDITION OF RS.3,58,955/-. THE LEARNED CIT(A) ON CO NSIDERATION OF THE SUBMISSION OF THE ASSESSEE CONFIRMED THE ADDITION. 8. THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT ARG UE THIS GROUND OF APPEAL OF THE ASSESSEE. 9. SINCE THE ASSESSEES LEARNED COUNSEL DID NOT POI NT OUT ANY INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELOW IN MAKING THIS ADDITION, THEREFORE, WE DO NOT FIND ANY JUSTIFICATION TO INTE RFERE WITH THE ORDER OF THE LEARNED CIT(A). WE CONFIRM HIS FINDINGS AND DIS MISS GROUND NO.2 OF THE APPEAL OF THE ASSESSEE. 10. NO OTHER POINT IS ARGUED OR PRESSED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A. L. GEHLOT) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- ITA NO.2198/AHD/2009 NARESHBHAI MULJIBHAI VYAS VS THE ITO, WARD 2(2), BA RODA 6 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD