Nikhilesh Mallick , Bankura V. Principal CIT, Durgapur

ITA 2257/KOL/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 4967 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-09-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 02-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHRI A K NAYAK CIT LD
• Assessee Lawyers: S M SURANA LD
• Keywords: Difference of opinion; Corroborative evidences; Assessment record; Change of opinion
• Section: 143(3); 201; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, KOLKATA BEFORE SHRI S.S.GODARA, JM & DR. A.L. SAINI, AM ITA NO. 2257/KOL/2018 A.Y 2014 - 15 NIKHILESH MALLICK PAN: AECPM8747C VS. PR. CIT, DURGAPUR ( / APPELLANT) .. ( / RESPO NDENT) APPELLANT BY : SHRI S.M.SURANA, ADVOCATE, LD. AR RESPONDENT BY : DR. (SHRI) A.K. NAYAK, CIT, LD.DR / DATE OF HEARING : 04 - 09 - 2019 / DATE OF PRONOUNCEMENT: 15 - 11 - 201 9 / O R D E R PER DR. A. L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEAR 2014 - 15, IS DIRECTED AGAINST THE ORDER DATED 06 - 09 - 2018 PASSED BY THE PR. COMMISSIONER OF INCOME TAX, DURGAPUR DATED 22 - 12 - 201 6. 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: - 1. FOR THAT THE LD. PRINCIPAL COMMISSIONER OF INCOME TAX, DURGAPUR IN CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE MATTER, ERRED IS CONCLUDING THE ORDER PASSED U/S. 143(3) BY THE LD. A O AS ERRONEOUS IS SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2. FOR THAT THE LD. PR. CIT, DURGAPUR, IN CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE MATTER IS NOT JUSTIFIED IN CONSIDERING THE SUBMISSION OF THE APPELLANT WITH NON - SPEA KING ORDER BY SIMPLY STATING THAT THE SUBMISSION WERE WITHOUT CONCLUSIVE SUPPORTING EVIDENCE. 3. FOR THAT THE APPELLANT RESERVES HIS RIGHT TO ADD, TO, TO ALTER AND/OR TO AMEND THE GROUND/S TAKEN AND TO ADDUCE PAPER/S AND DOCUMENT/S AT THE TIME OF HEARING . ITA NO. 2257 /KOL/201 8 NIKHILESH MALLICK L 2 3. BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR THE AY 2014 - 15 ON 27.10.2014 DECLARING TOTAL INCOME OF RS.3,20,830/ - . SCRUTINY ASSESSMENT WAS COMPLETED IN THIS CASE ON 22.12.2016 ON AN ASSESSED INCOME OF RS.8,03,620/ - . LAT ER ON, THE ASSESSMENT RECORD FOR AY 2014 - 15 AND THE ASSESSMENT ORDER DATED 22/12/2016, PASSED U/S 143(3) HAS BEEN EXAMINED BY LD. PCIT AND HE NOTICED THAT THE FOLLOWING ERROR HAS BEEN COMMITTED BY THE AO IN THE ASSESSMENT ORDER IN DETERMINING THE ASSESSED INCOME. UNDER ASSESSMENT OF INCOME : 4. THE ASSESSEE IS ENGAGED IN TRADING BUSINESS WITH A TURNOVER OF RS.3,54,67,840/ - AS PER THE RETURN OF INCOME OF THE ASSESSEE. THE BOOKS OF THE ASSESSEE IS AUDITED CONSIDERING THE TURNOVER OF RS. 3,54,67,840/ - . IT IS FOUND THAT THE DEPOSIT OF THE ASSESSEE IN THE BANKS WERE AS UNDER: - SL NO. NAME OF THE BANK BRANCH A/C NO AMOUNT DEPOSITED 1 STATE BANK OF INDIA KOTULPUR 11052939049 1,36,07,836.00 2. STATE BANK OF INDIA KOTULPUR 31904604166 93,08,378.00 3. BDCC KO TULPUR 606105033258 0 4. UNITED COMMERCIAL BANK KOTULPUR 23430210000045 1,94,87,290.00 5 STATE BANK OF INDIA KOTULPUR 334222221596 1,43,44,400.00 TOTAL DEPOSIT IN THE BANK ACCOUNTS 5,67,47,904.00 5. HENCE THERE IS DISCREPANCY OF RS. 2,12,80,064/ - (R S.5,67,47,904/ - MINUS RS. 3,46,78,400/ - ) BETWEEN THE DISCLOSED TURNOVER AND DEPOSIT IN BANK ACCOUNTS. THIS PART OF RECEIPT OF THE ASSESSEE HAS NOT BEEN REPORTED AS TURNOVER IN THE AUDIT REPORT. THE AO MERELY ESTIMATED INCOME @ 1.94% ON THE UNDISCLOSED RE CEIPT WITHOUT PROPER VERIFICATION AND/OR ENQUIRY OF THE UNDISCLOSED CREDIT, WITH RESPECT TO SCOPE OF THE TAXATION. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS DID NOT MAKE ANY ENQUIRY IN THIS REGARD WHICH RENDERS THE ASSESSMENT PREJUDICIAL TO TH E INTEREST OF REVENUE. THEREFORE, THE CASE OF THE ASSESSEE SATISFIES EXPLANATION 2(A) OF SECTION 263 OF THE IT ACT, 1961 WHICH IS AS UNDER: - EXPLANATION 2 - FOR THE PURPOSE OF THIS SECTION' IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFF ICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE' IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER' - (A) THE ORDER IS PASSED WITHOUT MAKING ENQUIRIES OR VERIFICATION WHICH SHOULD HAVE B EEN MADE' ITA NO. 2257 /KOL/201 8 NIKHILESH MALLICK L 3 4. NOTICE FOR PROCEEDINGS U/S 263 OF THE IT ACT, 1961 WAS ISSUED BY THE LD PCIT TO THE ASSESSEE ON 29.11.2017. IN RESPONSE, THE ASSESSEE SUBMITTED WRITTEN SUBMISSIONS BEFORE THE LD PCIT. THE ASSESSEE`S WRITTEN SUBMISSIONS WERE CONSIDERED BY TH E LD. PCIT AND IT WAS NOTICED BY THE LD. PCIT THAT ASSESSEE`S SUBMISSIONS WERE WITHOUT ANY CONCLUSIVE SUPPORTING EVIDENCES, THEREFORE, LD. PCIT HELD THAT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 5. AGG RIEVED BY THE IMPUGNED ORDER OF LD. PCIT, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE BEGINS BY POINTING OUT THAT THE ASSESSEE HAD SUBMITTED EVERY KIND OF EVIDENCES AND DOCUMENTS, AS REQUIRED BY AO, DURING THE ASSESSMENT STAG E U/S 143(3) OF THE ACT. THE AO EXAMINED EACH AND EVERY DETAILS OF SALES/PURCHASES AND THEN REACHED ON A DEFINITE CONCLUSION. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS A CASE OF CHANGE OF OPINION THEREFORE THE ORDER PASSED BY THE AO IS NEITHER ERRONEOUS NOR IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HENCE THE ORDER OF LD PCIT SHOULD BE QUASHED. 7. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE IMPUGNED ORDER OF THE LD. PCIT AND STATED BEFORE THE BENCH THAT THE ORDER PASSED BY THE AO IS ERRONEOUS. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT DURING THE ASSESSMENT PROCEEDINGS THE AO EXAMINED THE BANK ACCOUNTS, TURNOVER AND OTHER DOCUMENTS OF THE ASSESSEE. RELEVANT PART OF THE ASSESSMENT OR DER, (WHICH IS RELEVANT FOR OUR DISCUSSION) IS REPRODUCED BELOW: - INCOME FROM BUSINESS 2.2 IT IS OBSERVED FROM AUDITED BALANCE SHEET THAT THE ASSESSEE MAINTAINED 05 BANK ACCOUNTS DURING THE RELEVANT ASSESSMENT YEAR. TOTAL DEPOSITS IN THESE FIVE BANK A CCOUNTS WERE AS UNDER: ITA NO. 2257 /KOL/201 8 NIKHILESH MALLICK L 4 SI NAME OF BANK BRANCH NAME ACCOUNT NO AMOUNT DEPOSITED (RS.) 1 STATE BANK OF INDIA KOTULPUR 11052939049 1,36,07,836/ - 2 STATE BANK OF INDIA KOTULPUR 31904604166 93,08,378/ - 3 BDCC KOTULPUR 606105033258 0 4 UNITED COMMERCIAL BANK KOTULPUR 23430210000045 1,94,87,290/ - 5 STATE BANK OF INDIA KOTULPUR 334222221596 1,43,44,400/ - TOTAL DEPOSITS 5,67,47,904/ - 2.3 FROM THE PROFIT & LOSS ACCOUNT IT IS OBSERVED THAT TOTAL TURNOVER OF THE ASSESSEE DURIN G THE RELEVANT PERIOD WAS AMOUNTING TO RS.3,54,67,840/ - . THUS, TOTAL DEPOSITS IN BANK ACCOUNTS DURING THE RELEVANT PERIOD EXCEEDED TOTAL TURNOVER OF THE ASSESSEE BY AN AMOUNT OF RS.2,12,80,064/ - . 2.4 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSES SEE WAS ASKED TO EXPLAIN WHY HIS TOTAL DEPOSITS IN BANK ACCOUNTS SHOULD NOT BE CONSIDERED AS HIS TOTAL TURNOVER DURING THE RELEVANT PERIOD. THE A/R OF THE ASSESSEE FURNISHED HIS REPLY WHICH IS AS UNDER: 2.5 THAT FROM TOTAL DEPOSIT IN BANK ACCOUNT ASCERTA INED DISCREPANCY OF RS.2,12,08,064.00 (RS5,67,47,904 - 3,54,67,840.00). ACTUALLY ALL DEPOSITS ARE NOT RELATED TO TURNOVER. AT TIMES, THE ASSESSEE USED TO MAKE DEPOSIT AFTER WITHDRAWAL. STILL FOR THE SAKE OF SETTLEMENT OF DISPUTE I ACCEPT YOUR FINDINGS. S UPPRESSION IN PURCHASE ENTAILS SUPPRESSION IN SALE TOO. WHAT ESCAPED FOR TAXATION IS THE GROSS PROFIT ELEMENT. 9. WE NOTE THAT THE LD. CIT HAS NOT POINTED OUT ANY SPECIFIC MISTAKE IN THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143 (3) OF THE ACT. THE ASSESSING OFFICER HAS EXAMINED ALL FIVE BANK ACCOUNTS AND THE TURNOVER OF THE ASSESSEE. THE AO NOTICED THAT TOTAL DEPOSITS IN SAID FIVE BANK ACCOUNTS WERE TO THE TUNE OF RS.5,67,47,904/ - , WHEREAS TOTAL TURNOVER OF THE ASSESSEE WAS TO TH E TUNE OF RS.3,54,67,840/ - THUS HE WORKED OUT THE DIFFERENCE AT RS. 2,12,80,064/ - ( RS.5,67,47,904 - RS.3,54,67,840). THE AO CONSIDERED RS. 2,12,80,064/ - AS SUPPRESSED INCOME OF THE ASSESSEE AND MADE ADDITION @ 1.94% ( BEING RATE OF GROSS PROFIT). WE NOTE THAT LD PCIT HAS EXERCISED HIS JURISDICTION UNDER SECTION 263 OF THE ACT ON THE SAME ISSUE WHICH HAD BEEN EXAMINED BY ASSESSING OFFICER PROPERLY DURING ASSESSMENT SATGE, HENCE WE NOTE THAT LD PCIT HAS FAILED TO POINT OUT ANY SPECIFIC ERROR IN THE ASSESSMEN T ORDER, THEREFORE ORDER PASSED BY AO IS NEITHER ERRONEOUS NOR PREJUDICIAL TO ITA NO. 2257 /KOL/201 8 NIKHILESH MALLICK L 5 THE INTEREST OF THE REVENUE. WE NOTE THAT ON SAME IDENTICAL FACTS, THE CO - ORDINATE BENCH OF ITAT, KOLKATA, B BENCH, IN ITA NO. 783/KOL/2013 FOR THE A.Y. 2008 - 09 IN SETHIA FINAN CE TRADING CO. HAS QUASHED THE ORDER OF LD PCIT U/S 263, OBSERVING THE FOLLOWINGS: 8.HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORDS, WE ARE OF THE VIEW THAT THE ISSUE UNDER CONSIDERATION IS NOT A CASE OF LACK OF ENQUIRY. SIM PLY BECAUSE THE ORDER IS NOT A SPEAKING ORDER DOES NOT MEAN THAT THE AO HAS NOT APPLIED HIS MIND. THE HON'BLE KOLKATA HIGH COURT IN THE CASE OF J.L.MORRISON (INDIA) LTD. REPORTED IN 366 ITR 593, WHEREIN IT HAS BEEN HELD THAT IF THE ASSESSEE HAS SUBMITTED T HE ENTIRE DETAILS AND DOCUMENTS AS REQUIRED BY THE AO AND BECAUSE THE AO DOES NOT BRING EACH AND EVERY DOCUMENT IN THE ASSESSMENT ORDER, DOES NOT MEAN THAT THERE IS A LACK OF ENQUIRY. THE ASSESSEE HAD SUBMITTED THE DETAILS ASKED BY THE AO DURING THE ASSESS MENT PROCEEDINGS. THE AO ISSUED NOTICE U/S.142(1), CALLING DETAILS FROM THE ASSESSEE, LIKE DETAILS OF PURCHASES, DETAILS OF SALES, EVIDENCE OF SECURED LOAN, LOAN CONFIRMATIONS FROM LOAN CREDITORS, DETAILS OF INTEREST PAID WITH EVIDENCE, DETAILS OF CUSTOM D UTY PAID, BANK STATEMENT OF ALL THE BANKS AND ENTIRE BOOKS OF ACCOUNTS, AND THE ASSESSEE SUBMITTED THESE ENTIRE DETAILS/DOCUMENTS BEFORE THE AO. THEREFORE, EVERY KIND OF DETAIL AND DOCUMENTS WERE SUBMITTED BY THE ASSESSEE, DURING THE ASSESSMENT PROCEEDINGS , BEFORE THE AO, THEREFORE, IT CAN BE SAFELY ASSUMED THAT THE AO HAS ACCEPTED THE CLAIM MADE BY THE ASSESSEE AFTER GOING THROUGH THE EXPLANATION AND MATERIALS SUBMITTED BY THE ASSESSEE, PURSUANT TO THE STATUTORY NOTICES ISSUED BY HIM. SO, THE AO HAS DISCHA RGED THE ROLE OF INVESTIGATOR BY SEEKING DETAILS AND QUERIES IN RESPECT TO THE ISSUES RAISED BY THE ID. CIT AND AFTER GOING THROUGH THE REPLIES AND DOCUMENTS SUBMITTED TO SUBSTANTIATE THE CLAIM BY THE ASSESSEE, THE AO HAS CONSCIOUSLY AFTER APPLYING HIS MI ND AS AN ADJUDICATOR HAS TAKEN A PLAUSIBLE VIEW ON THE ISSUES WHICH CANNOT BE TERMED AS UNSUSTAINABLE IN LAW. MOREOVER, THE ASSESSEE CANNOT DICTATE TO THE AO HOW TO WRITE THE ASSESSMENT ORDER, THEREFORE, IT IS NOT A MISTAKE ON THE PART OF THE ASSESSEE, THE REFORE, THE ASSESSEE SHOULD NOT BE HARASSED. MERELY BECAUSE THAT THE AO DID NOT DISCUSS THESE DETAILS IN THE ASSESSMENT ORDER DOES NOT MEAN THAT HE HAS NOT APPLIED HIS MIND. THEREFORE, CONSIDERING THE FACTUAL POSITION, WE ARE OF THE VIEW THAT THE ORDER P ASSED BY THE AO U/S.143(3) IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. THEREFORE, WE QUASH THE ORDER PASSED BY THE CIT U/S.263 OF THE ACT. 10. WE NOTE THAT ASSESSEE SUBMITTED BANK STATEMENTS OF ALL FIVE BANK ACCOUNTS AND ALSO SUB MITTED THE TURNOVER DETAILS. THE AO HAS COMPUTED THE DISALLOWANCE AND MADE ADDITION AFTER GOING THROUGH THE EXPLANATION AND MATERIALS SUBMITTED BY THE ASSESSEE, PURSUANT TO THE STATUTORY NOTICES ISSUED BY AO. SO, THE AO HAS DISCHARGED THE ROLE OF INVESTIGA TOR BY SEEKING DETAILS AND QUERIES IN RESPECT TO THE ISSUES RAISED BY THE ID. PCIT ITA NO. 2257 /KOL/201 8 NIKHILESH MALLICK L 6 AND AFTER GOING THROUGH THE REPLIES AND DOCUMENTS SUBMITTED TO SUBSTANTIATE THE CLAIM BY THE ASSESSEE, THE AO HAS CONSCIOUSLY AFTER APPLYING HIS MIND AS AN ADJUDICATOR HAS TAKEN A PLAUSIBLE VIEW ON THE ISSUES WHICH CANNOT BE TERMED AS UNSUSTAINABLE IN LAW.THEREFORE, WE NOTE THAT THE ORDER PASSED BY THE AO U/S. 143(3) IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. HENCE, WE QUASH THE IMPUGNED ORDER PASSE D BY THE LD. PCIT U/S. 263 OF THE ACT. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 / 11 /2019 SD/ - (S.S.GODARA ) SD/ - (A. L. SAINI) / JUDICIA L MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED: 15 / 11 /2019 *PP, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - NIKHILESH MALLICK P.O. KOTULPUR, DIST BANKURA, PIN 722141. 2. / THE RESPONDENT. - THE PR. CIT, DURGAPUR, AAYKAR BHAWAN, CITY CENTRE, DURGAPUR - 713216. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT , KOLKATA 6. / GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA .