Sh. Sandeep Kumar Aggarwal, New Delhi V. ITO, New Delhi

ITA 2321/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3136 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 12-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 16-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Reassessment proceedings
• Section: 143(3); 133A; 263

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI BEFORE SHRI H.S.SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2321/DEL/2014 (ASSESSMENT YEAR: 2009 - 10 ) SANDEEP KUMAR AGGARWAL, B - 16, VISHAL ENCLAVE, NEW DELHI PAN:AAEPA1449F VS. ITO, WARD - 26(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHOK KHANDELWAL, CA REVENUE BY: SHRI SS RANA, CIT DR DATE OF HEARING 20/09 / 2017 DATE OF PRONOUNCEMENT 13 / 12 / 2017 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS APPEAL IS PREFERRED BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 263 OF THE INCOME TAX ACT DATED 18/0 2/2014 FOR ASSESSMENT YEAR 2009 - 10. 2. THOUGH ASSESSEE HAS RAISED 8 DIFFERENT GROUNDS OF APPEAL IN APPEAL MEMO. T HE ONLY ISSUE IN APPEAL BEFORE US IS WHETHER THE LD. CIT IS JUSTIFIED IN INVOKING THE JURISDICTION UNDER SECTION 263 OF THE INCOME TAX ACT IN THE PRESENT CASE. 3. THE BRIEF FACTS OF THE CASE IS THAT ASSESSEE IS AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME ON 29/09/2009 DECLARING INCOME OF RS. 1023140/ A ND ASSESSMENT UNDER SECTION 143 (3) OF THE ACT WAS COMPLETED ON 0 6/ 0 7/2011 AT INCOME OF RS. 1106240/ - . THE MAIN REASON FOR INVOKING THE JURISDICTION UNDER SECTION 263 OF THE INCOME TAX ACT BY THE LD. CIT WAS THAT AS SURVEY OPERATION UNDER SECTION 133A WAS CONDUCTED ON SH. KK AGGARWAL, FATHER OF THE ASSESSEE , ON 19/9/2008, WHEREIN IT HAS COME TO THE NOTICE THAT ASSESSEE WAS THE PROPRIETOR OF 2 FIRM S AND BOOKS OF ACCOUNTS AND DOCUMENTS PERTAINING TO THE ABOVE FIRMS WERE FOUND DURING THE COURSE OF SURVEY OPERATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE GENUINENESS OF THE SUNDRY CREDITORS OF RS. 1.40 CRORE WAS NOT PROPERLY ENQUIRED BY THE ASSESSING OFFICER AND A SUBSTANTIAL FALL IN THE GROSS PROFIT AS ASSESSEE HAS DECLARED THE GROSS PROFIT OF RS. 5.20 CRORES ON TOTAL TURNOVER OF RS. 9.38 CRORES WHILE IN THE SAME YEA R UNDER CONSIDERATION, IT WAS RS. 3.58 CRORES ON TOTAL TURNOVER OF RS. 14.02 CRORES, WAS ALSO NOT ENQUIRED. IT WAS FURTHER NOTED THAT DURING THE YEAR THE TOTAL WITHDRAWAL FOR HOUSEHOLD EXPENDITURE WAS SHOWN BY THE ASSESSEE OF RS. 137930, WHICH WAS NOT COMM ENSURATING WITH SANDEEP KUMAR AGGARWAL VS. ITO, ITA NO. 2321/DEL/2014 (ASSESSMENT YEAR: 2009 - 10) PAGE | 2 THE SIZE AND FAMILY STATUS OF THE ASSESSEE. THEREFORE, THE LD. ASSESSING OFFICER MOVED PROPOSAL BEFORE THE LD. CIT STATING THAT THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREFORE, THE LD. CIT ISSU ED A SHOW CAUSE NOTICE ON 12/08/2013. AFTER EXAMINING THE EXPLANATION OF THE ASSESSEE, THE LD. CIT WAS OF THE VIEW THAT THE ORDER PASSED BY THE LD. ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AS NO ENQUIRIES WERE CONDUCTED BY THE ASSESSING OFFICER IN RESPECT OF SUNDRY CREDITORS OF RS. 1.40 CRORES. THE ASSESSING OFFICER HAS FURTHER NOT EXAMINED THE GENUINENESS OF THE COMMISSION EXPENSES. THE ASSESSEE HAS SHOWN A MEAGER WITHDRAWAL OF RS. 137930/ - DURING THE YEAR WHICH IS NOT COMM ENSURATE WITH THE SIZE, STATUS, AND LIVING STANDARD OF THE FAMILY OF THE ASSESSEE. THE LD. CIT PASSED ORDER UNDER SECTION 263 OF THE INCOME TAX ACT ON 18/2/2014 ANNULLING THE ASSESSMENT WITH DIRECTION THAT FRESH ASSESSMENT BE MADE AS PER THE PROVISIONS O F THE ACT AFTER EXAMINING THE MATERIAL AVAILABLE WITH THE ASSESSING OFFICER AS WELL AS THE IMPUGNED MATERIAL FOUND DURING THE SURVEY OPERATION AND PROPERLY EXAMINING THE FACTS AS WELL AS LEGAL POSITIONS. THIS ORDER IS UNDER CHALLENGE BEFORE US. 4. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED A PAPER BOOK. HE REFERRED TO THE ASSESSMENT ORDER PASSED U/S 143 (3) OF THE ACT FOR ASSESSMENT YEAR 2009 - 10, DATED 06/07/2011 WHICH WAS SUBJECT TO PROCEEDINGS UNDER SECTION 263 OF THE INCOME TAX ACT . HE SUBMITTED THAT A SSESSEE IS DERIVING INCOME FROM BUSINESS , A MANUFACTURER , RETAILER AND EXPORTER OF READY - MADE GARMENTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE DETAILS REQUIRED TO HAVE BEEN FILED ALONG WITH THE BILLS AND VOUCHERS, WHICH WERE DULY VERIFIED BY THE LD. ASSESSING OFFICER. HE THEREFORE SUBMITTED THAT DURING REASSESSMENT PROCEEDINGS COMPLETE ENQUIRY WAS CARRIED ON BY THE LD. ASSESSING OFFICER. FOR THIS HE REFERRED TO THE QUESTIONNAIRE ISSUED BY THE LD. ASSESSING OFFICER WHICH IS PLACED AT PAGE NO. 45 - 46 OF THE PAPER BOOK WHEREIN COMPLETE DETAILS OF THE SUNDRY CREDITORS AND DEBTORS AS WELL AS THE DETAILS OF THE HOUSEHOLD EXPENDITURE WERE ENQUIRED BY THE LD. ASSESSING OFFICER. HE FURTHER STATED THAT V IDE LETTER OF THE LD. ASSESSING OFFICER THE COMPLETE DET AILS OF THE GROSS PROFIT COMPARISON FOR LAST 3 YEARS WAS ASKED FOR AND SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE FURTHER STATED THAT THE COMPLETE CONFIRMATION AND THE BOOKS OF ACCOUNTS OF THE VARIOUS CREDITORS WERE ALSO CALLED FOR BY THE AS SESSING OFFICER. HE FURTHER SUBMITTED THE ASSESSMENT HISTORY OF THE ASSESSEE FOR ASSESSMENT YEAR 2007 - 08 AND 2008 - 09 WHEREIN HE SUBMITTED THAT THERE IS NO SUCH ADDITION, AS PROPOSED BY THE LD. CIT WERE AGITATED BY THE REVENUE. HE FURTHER REFERRED TO DETAIL S OF THE HOUSEHOLD EXPENDITURE OF SH. KK AGGARWAL THE FATHER OF THE ASSESSEE PLACED AT PAGE NO. 65 TO 67 OF THE PAPER BOOK WHICH IS RS. 4.49 LAKHS. HE FURTHER REFERRED TO THE SANDEEP KUMAR AGGARWAL VS. ITO, ITA NO. 2321/DEL/2014 (ASSESSMENT YEAR: 2009 - 10) PAGE | 3 DETAILS OF THE ASSESSEE FOR VARIOUS YEARS SUBMITTED. WITH RESPECT TO THE DETAILS OF THE SUNDRY CREDITORS , H E STATED THAT THE PAGE NO. 71 TO 76 OF THE PAPER BOOK SUBMITTED BEFORE THE ASSESSING OFFICER SHOWS THE NAME, ADDRESS, AMOUNT OUTSTANDING AND PERMANENT ACCOUNT NUMBER OF ALL THE CREDITORS. HE FURTHER STATED THAT COMMISSION PAID OF RS. 2439314 / - IS ALSO SUBMITTED TO THE L D ASSESSING OFFICER WHICH IS AT PAGE NO. 85 TO 86 OF THE PAPER BOOK. HE FURTHER REFERRED TO THE SUBMISSION MADE BEFORE THE LD. CIT, DATED 10/9/2013 WHEREIN HE SUBMITTED VARIOUS DETAILS SUBMITTED BEFORE THE LD. ASSESS ING OFFICER AND STATED THAT THE COMPLETE ENQUIRY HAS BEEN MADE BY THE LD. ASSESSING OFFICER. IN THE END HE RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF PR . COMMISSIONER OF INCOME TAX VS. DELHI AIRPORT METRO EXPRESS PRIVATE LIMITED DA TED 05/09/2017 WHEREIN THE HONBLE DELHI HIGH COURT HAS HELD THAT WHERE THE LD. ASSESSING OFFICER HAS MADE ENQUIRIES REGARDING THE ADDITION FOR WHICH THE REVISION HAS BEEN MADE BY THE LD. CIT, THE ASSESSMENT ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH THE LAW. IT FURTHER HELD THAT THE LD. CIT HAS NOT MADE ANY ENQUIRY HIMSELF WHICH IS NECESSARY FOR HIM TO ESTABLISH AND SHOW THE ERROR OR MISTAKE MADE BY THE LD. ASSESSING OFFICER MAKING THE ASSESSMENT ORDER UNSUSTAINABLE IN LAW, AND SUCH FINDING MUST BE CLEAR, UNAMBIGUOUS AND NOT DEBATABLE. THEREFORE, HE SUBMITTED THAT ORDER U/S 263 OF THE ACT IS NOT SUSTAINABLE. 5. THE LD DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE LD CIT STATING THAT SURVEY WAS CARRIED OUT ON 1 9.09.2008, WHERE THE PAPERS WERE FOUND. IT WAS FURTHER STATED THAT SUNDRY CREDITORS OF RS. 1.40 CRORES WERE NOT PROPERLY EXAMINED. FURTHER, THE CLAIM OF COMMISSION EXPENSES AS WELL AS VERY LOW HOUSEHOLD EXPENDITURE SHOWN BY THE ASSESSEE WAS NOT ENQUIRED, T HEREFORE, IT IS A CASE OF CLEAR CUT LACK OF ENQUIRY BY THE LD AO AND HENCE, LD CIT HAS CORRECTLY ASSUMED THE JURISDICTION U/S 263 OF THE INCOME TAX ACT. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDER OF THE LD AO PASSED U/S 143(3) DATED 06.07.2011 WHICH WAS SUBJECT TO REVISION PROCEEDINGS U/S 263 CULMINATING INTO ORDER PASSED BY THE LD CIT ANNULLING THE ORDER PASSED BY THE LD ASSESSING OFFICER HOLDING IT ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LD ASSESSING OFFICER ENQUIRED ABOUT DETAILS OF SUNDRY CREDITORS WITH THEIR NAMES, ADDRESS AND CONFIRMATION. IT WAS FURTHER ASKED TO SHOW THE GROSS PROFIT COMPARISON FOR LAST THREE YEARS AND REASONS FOR ANY DOWNFALL. FURTHER, THE DETAILS OF HOUSEHOLD EXPENSES WERE ALSO ASKED ACCORDING TO THE SIZE AND STATUS OF THE FAMILY. FURTHER, DETAILS OF THE VARIOUS EXPENDITURE CLAIMED BY THE ASSESSEE WAS ALSO ASKED . UNDOUBTEDLY ASSESSEE SUBMITTED ALL THESE DETAILS WHICH ARE PLAC ED AT PAGE NO. 68 TO 70, 71 TO 76, 77 TO 79, SANDEEP KUMAR AGGARWAL VS. ITO, ITA NO. 2321/DEL/2014 (ASSESSMENT YEAR: 2009 - 10) PAGE | 4 80 WITH RESPECT TO THE CLAIM OF GROSS PROFIT AND SUNDRY CREDITORS. WITH RESPECT TO THE SUNDRY CREDITORS NAME, ADDRESS, AMOUNT OUTSTANDING AND PAN ALONG WITH THE CONFIRMATION WERE FILED. SAME ARE PLACED AT PAGE N O. 115 TO 133 OF THE PAPER BOOK. FURTHER WITH RESPECT TO THE COMMISSION EXPENDITURE OF RS. 2439314/ - THE DETAILS WERE SUBMITTED AS PER PAGE NO. 85 TO 86 OF THE PAPER BOOK. WITH RESPECT TO THE SURVEY CONDUCTED IT WAS STATED THAT ASSESSEE HAS SHOWN INCOME FR OM SIVA INTERNATIONAL APPARELS IN HIS COMPUTATION OF TOTAL INCOME AND DURING THE COURSE OF SURVEY NO INCRIMINATING EVIDENCE WERE FOUND. THESE PROPRIETORSHIP CONCERN OF THE ASSESSEE WAS DISCLOSED BY THE ASSESSEE IN HIS RETURN OF INCOME. FURTHER, THE JOB WORK INCOME AND EXPENDITURE OF OTHER CONCERN WERE INCORPORATED IN PROFIT AND LOSS ACCOUNT. HE STATED THAT COMPLETE EXAMINATION OF DETAILS WERE MADE BY THE LD ASSESSING OFFICER OF THE BUSINESS TRANSACTIONS OF THE ASSESSEE. FURTHER, WITH RE SPECT TO ABC ENTERPRISE HE SUBMITTED THAT ASSESSEE HAS COMPLETELY INCORPORATED THE INCOME OF RS. 4099538/ - AND EXPENSES OF RS. 7842730/ - IN THE PROFIT AND LOSS ACCOUNT. THEREFORE, ALL THESE DETAILS/ FACTS WERE DULY EXAMINED BY THE LD ASSESSING OFFICER. HE FURTHER TOOK US TO THE DETAILS OF THE TDS CLAIMED BY THE ASSESSEE OF RS. 121068/ - FOR WHICH CREDIT HAS ALREADY BEEN GIVEN TO THE ASSESSEE. IN VIEW OF THIS HE SUBMITTED THAT THE LD ASSESSING OFFICER HAS MADE THE COMPLETE ENQUIRY. ON PERUSAL OF THE ORDER OF THE LD CIT, IT IS NOTICED THAT IT HAS NOT STATED HOW THE ORDER OF THE LD ASSESSING OFFICER IS ERRONEOUS AS COMPLETE INCOME INCLUDING THE JOB WORK INCOME WAS SHOWN . IT WAS ALSO NOT STATED THAT HOW THE SURVEY OF THE PREMISES OF THE FATHER OF THE ASSESSEE HAS MADE THE ORDER ERRONEOUS. THE LD CIT HAS STATED THAT WHY THE TAX HAS NOT BEEN DEDUCTED AT SOURCE ON PAYMENTS TO ABC ENTERPRISE. HOWEVER, IN THE SAME ORDER THE LD CIT HIMSELF HAS STATED THAT ASSESSEE WAS THE PROPRIETOR OF ABC ENTERPRISE AND M/S. SHIVA INTE RNATIONAL. AS THE PAYMENT IS MADE FROM ONE PROPRIETARY CONCERN TO ANOTHER PROPRIETARY CONCERN OF THE SAME ASSESSEE, LD DR COULD NOT SHOW ANY PROVISION OF TAX DEDUCTION AT SOURCE APPLICABLE. FURTHERMORE, THE LD CIT HAS NOT CARRIED OUT ANY ENQUIRY TO SHOW TH AT ORDER PASSED BY THE LD ASSESSING OFFICER IS ERRONEOUS. IN VIEW OF THIS HON'BLE DELHI HIGH COURT IN PR.CIT VS. DELHI AIRPORT METRO PVT. LTD IN ITA NO. 705/2017 DATED 0 5.09.2017 HAS HELD THAT WHEN NO ENQUIRY WAS UNDERTAKEN BY THE PR. CIT TO COME TO THE CO NCLUSION THAT THE ORIGINAL ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, IT CANNOT BE SUSTAINED. THE HON'BLE HIGH COURT FURTHER STATED THAT WHEN THE LD CIT HAS SENT THE ENTIRE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR FR ESH ASSESSMENT CAN ALSO BE DONE ONLY AFTER HE UNDERTAKES AN ENQUIRY. APPARENTLY, SAME IS MISSING IN THIS CASE . THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT AND IN VIEW OF THE COMPLETE ENQUIRY SANDEEP KUMAR AGGARWAL VS. ITO, ITA NO. 2321/DEL/2014 (ASSESSMENT YEAR: 2009 - 10) PAGE | 5 MADE BY THE LD ASSESSING OFFIC ER THE ORDER PASSED BY THE LD CIT U/S 263 OF THE ACT CANNOT BE SUSTAINED, HENCE, QUASHED. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 3 / 12 / 2017 . - S D / - - S D / - ( H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 / 12 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI