Madan Lal And Party, Hanumangarh V. Pr. CIT, Bikaner

ITA 233/JODH/2018

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9714 (ITAT-JODHPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 15-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C BADHOK LD
• Assessee Lawyers: RAJENDRA JAIN LD
• Section: 40A(3); 143(3); 263

Judgement Text

1 ITA NO.233 & 234/JODH/2018 M/S MADAN LAL AND PARTY ASSESSMENT YEARS: 2013-14 & 2014-15 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR , , BEFORE HONBLE SHRI SANDEEP GOSAIN, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) 1. ./ I.T.A. NO.233/JODH/2018 ( / ASSESSMENT YEAR: 2013-14) & 2. ./ I.T.A. NO.234/JODH/2018 ( / ASSESSMENT YEAR: 2014-15) MADA N LAL AND PARTY ( HANUMANGARH TOWN) C/O NEERAJ CHAWLA CA 55, ADARSH NAGAR, SRI GANGANAGAR RAJASTHAN-335 001. / VS. PR. CIT INCOME TAX OFFICE RANI BAZAAR, BIKANER RAJASTHAN. ./ ./PAN/GIR NO. AACAM-3229-Q ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI RAJENDRA JAIN (ADVOCATE)-LD. AR REVENUE BY : SHRI K.C. BADHOK- LD. CIT- DR / DATE OF HEARING : 02/11/2020 / DATE OF PRONOUNCEMENT : 21/12/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. BY WAY OF THESE APPEALS, THE ASSESSEE CHALLENGES THE VALIDITY OF REVISIONAL JURISDICTION U/S. 263 AS EXERCISED BY LEARNED PR. 2 ITA NO.233 & 234/JODH/2018 M/S MADAN LAL AND PARTY ASSESSMENT YEARS: 2013-14 & 2014-15 COMMISSIONER OF INCOME-TAX, BIKANER, [PR.CIT], FOR ASSESSMENT YEARS [AY] 2013-14 AND 2014-15 VIDE SEPARATE ORDE RS DATED 07/03/2018. THE REVISIONAL JURISDICTION HAS BEEN IN VOKED ON SIMILAR FACTS AND THEREFORE, THE APPEALS ARE BEING DISPOSED -OFF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE & BREVITY. FIRST WE TAKE UP APPEAL FOR AY 2013-14 WHEREIN THE EFFECTIVE GROUNDS TAKEN BY THE ASSESSEE READ AS UNDER :- 1. THAT THE LD. PR. CIT BIKANER HAS ERRED IN LAW A ND IN FACT IN PASSING ORDER UNDER SECTION 263 OF THE INCOME TAX ACT AND T REATING THE ASSESSMENT ORDER AS PREJUDICIAL TO THE INTEREST OF REVENUE. 2. THAT THE LD. PR. CIT BIKANER HAS ERRED IN LAW A ND IN FACT IN TAKING ACTION UNDER SECTION 263 EVEN AFTER FIRST AND SECON D APPEAL AGAINST THE ASSESSMENT ORDER HAS ALREADY BEEN DECIDED. 3. THAT THE LD. PR. CIT BIKANER HAS ERRED IN LAW A ND IN FACT IN NOT FOLLOWING THE PRINCIPLE OF DOCTRINE OF MERGER, FURTHER PR. CI T BIKANER HAS ERRED IN TAKING THE ACTION UNDER SECTION 263 ON THE ISSUES WHICH AR E ALREADY DECIDED BY THE H'BLE CIT(APPEALS) AND H'BLE ITAT. 4. THAT THE LD. PR. CIT BIKANER HAS ERRED IN LAW A ND IN FACT IN TAKING TWO ACTIONS AT A TIME - ONE IS PASSING ORDER UNDER SECT ION 263 AND ANOTHER IS FILING APPEAL BEFORE THE H'BLE RAJASTHAN HIGH COURT AGAINS T THE ORDER OF THE H'BLE ITAT JODHPUR. 2. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING SUBMISSIONS M ADE DURING ASSESSMENT PROCEEDINGS AS WELL AS DURING REVISIONAL PROCEEDINGS. THE JUDICIAL PRECEDENTS AS CITED DURING THE COURSE OF HEARING HAVE DULY BEEN DELIBERATED UPON. OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPH S. 3.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING ASSOCIATION OF PERSON WAS ASSESSED U/S. 143(3) ON 30/03/2016 WHERE IN IT WAS SADDLED WITH CERTAIN ADDITIONS ON ACCOUNT OF UNACCE PTABLE EXPENDITURE, BOGUS CAPITAL AS WELL AS CASH PURCHASE S. THE 3 ITA NO.233 & 234/JODH/2018 M/S MADAN LAL AND PARTY ASSESSMENT YEARS: 2013-14 & 2014-15 ASSESSMENT ORDER TAKES NOTE OF THE FACT THAT SINCE ENTIRE CASH PURCHASES OF RS.13.63 CRORES WAS BEING DISALLOWED U /S 40A(3), SEPARATE ADDITION THEREOF U/S 40A(2)(B) WOULD NOT B E REQUIRED. FINALLY, THE INCOME WAS DETERMINED AT RS.28.77 CROR ES. UPON FURTHER APPEAL, LD. CIT(A), VIDE ORDER DATED 28/04/ 2017, DELETED THE ADDITIONS OF BOGUS CAPITAL AND CASH PURCHASES. CONS EQUENTLY, THE REVENUE CONTESTED THE APPELLATE ORDER BEFORE THIS T RIBUNAL VIDE ITA NOS.302 & 303/JODH/2017 ORDER DATED 13/09/2017 WHIC H IS COMMON ORDER FOR AYS 2013-14 & 2014-15. A COPY OF T HE SAME IS ON RECORD. IN THE SAID ORDER, THE TRIBUNAL CONFIRME D THE DELETION OF BOTH THE ADDITIONS. IN PARA-25 OF THE ORDER, A FIND ING HAS BEEN RENDERED BY THE BENCH THAT THE ASSESSEE HAS SATISFA CTORILY DEMONSTRATED BY WAY OF DOCUMENTARY EVIDENCES THAT N O UNDUE BENEFIT WAS PASSED ON TO THE RELATED PARTIES U/S 40 A(2)(B) AS ALLEGED BY LD. AO IN THE ASSESSMENT ORDER. 3.2 IN THE MEANWHILE, LD. PR.CIT, INVOKING THE PROV ISION OF SEC.263 AGAINST ASSESSMENT ORDER DATED 30/03/2016, SHOW-CAUSED THE ASSESSEE THAT THE DIRECTIONS ISSUED BY LD. JOIN T COMMISSIONER U/S 144A VIDE LETTER DATED 29/03/2016 WERE NOT COMP LIED WITH BY LD. AO. HENCE, THE ORDER WAS ERRONEOUS AS WELL AS PREJU DICIAL TO THE INTEREST OF THE REVENUE. IN THE SAID LETTER DATED 3 0/03/2016, LD. AO WAS DIRECTED TO VERIFY VARIOUS ISSUES AS LISTED FRO M SERIAL NOS.1 TO 8. 3.3 THE ASSESSEE DEFENDED THE ASSESSMENT ORDER, INT ER-ALIA, BY SUBMITTING THAT ASSESSEES INCOME WAS ALREADY DETER MINED AT MUCH HIGHER FIGURE AS PROPOSED / APPROVED BY LD. JOINT C OMMISSIONER AND THEREFORE, THE ORDER COULD NOT BE DEEMED TO BE PREJUDICIAL TO 4 ITA NO.233 & 234/JODH/2018 M/S MADAN LAL AND PARTY ASSESSMENT YEARS: 2013-14 & 2014-15 THE INTEREST OF THE REVENUE. THE ASSESSEE ALSO PLEA DED THAT DOCTRINE OF MERGER WAS APPLICABLE TO THE ORDER SINC E THE ASSESSMENT ORDER HAD ALREADY BEEN MERGED WITH THE O RDER OF THIS TRIBUNAL PASSED ON 13/09/2017 AND THEREFORE, INVOCA TION OF REVISIONAL JURISDICTION U/S 263 WOULD NOT BE VALID ONE. 3.4 HOWEVER, REJECTING THE SAME, LD. PR.CIT OPINED THAT THE PROPOSED DISALLOWANCE OF RS.856.70 LACS U/S 40A(2)( B) WAS REDUCED TO RS.268.50 LACS IN THE FINAL ASSESSMENT O RDER WHICH MAKE THE ORDER ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT WAS ALSO OPINED BY LD. PR.CIT THAT THE REVENUE WAS IN FURTHER APPEAL BEFORE HONBLE HIGH COURT AGAINST TH E ORDER OF TRIBUNAL AND THEREFORE, IF THE DEPARTMENT SUCCEEDS ON ADDITIONS U/S 40A(2)(B), IT WOULD NOT BE POSSIBLE TO SUBSTITUTE T HE DISALLOWANCE OF RS.268.50 LACS WITH RS.856.70 LACS. ACCORDINGLY, LD . AO WAS DIRECTED TO AMEND THE ASSESSMENT ORDER. AT THE SAME TIME, KEEPING IN VIEW THE ORDER OF TRIBUNAL, LD. AO WAS DIRECTED TO KEEP THE TOTAL INCOME AT THE SAME FIGURES AS ASSESSED IN ORDER DAT ED 30/03/2016. AGGRIEVED AS AFORESAID, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US ASSAILING INVOCATION OF REVISIONAL JURISDICTION U/S 263. 4. UPON CAREFUL CONSIDERATION OF FACTUAL MATRIX AS ENUMERATED IN THE PRECEDING PARAGRAPHS, IT IS QUITE EVIDENT THAT ENTIRE CASH PURCHASES WERE DISALLOWED BY LD. AO AND THEREFORE, NO SEPARATE ADDITION WAS MADE U/S 40A(2)(B). THE COORDINATE BEN CH OF TRIBUNAL CONFIRMED THE DELETION OF ADDITIONS SO MADE AND ALS O NOTED THAT THE ASSESSEE HAD SATISFACTORILY DEMONSTRATED BY WAY OF DOCUMENTARY EVIDENCES THAT NO UNDUE BENEFIT WAS PASSED ON TO TH E RELATED 5 ITA NO.233 & 234/JODH/2018 M/S MADAN LAL AND PARTY ASSESSMENT YEARS: 2013-14 & 2014-15 PARTIES U/S 40A(2)(B) AS ALLEGED BY LD. AO IN THE A SSESSMENT ORDER. THIS BEING THE CASE, DOCTRINE OF MERGER WOULD CLEAR LY APPLY TO THE FACTS OF THE CASE. THE WHOLE MATTER OF DISALLOWANCE U/S 40A(3) AS WELL AS 40A(2)(B) WAS SUBJECT MATTER OF ADJUDICATIO N BEFORE TRIBUNAL AND THE SAME WAS CLEARLY BINDING ON THE REVENUE AUT HORITIES. THIS BEING THE CASE, THE JURISDICTION U/S 263 COULD NOT BE EXERCISED ON THE PRINCIPLE OF DOCTRINE OF MERGER. IN THE CIRCUMS TANCES, THE REVISIONAL JURISDICTION U/S 263 COULD NOT BE INVOKE D MERELY TO RECTIFY THE FIGURES IN THE ASSESSMENT ORDER. 5. THEREFORE, ON THE FACTS ARE CIRCUMSTANCES OF THE CASE, WE DO NOT CONCUR WITH THE STAND OF LD. PR.CIT IN INVOKING JURISDICTION U/S 263. BY QUASHING REVISIONAL ORDER DATED 07/03/2018, WE ALLOW THE APPEAL. 6. THE FACTS ARE IDENTICAL IN AY 2014-15 WHEREIN TH E ASSESSEE WAS ASSESSED ON SIMILAR LINES. THE LD. PR.CIT, INVO KED JURISDICTION U/S 263 ON SIMILAR LOGIC AND REASONING AND ISSUED S IMILAR DIRECTIONS. WE FIND THAT THE TRIBUNAL ORDER IS COMMON ORDER FOR AYS 2013-14 & 2014-15 AND THE FACTS AS WELL AS ISSUES ARE IDENTIC AL AS THEY ARE IN AY 2013-14. THEREFORE, OUR FINDINGS AS WELL AS ADJU DICATION AS FOR AY 2013-14 SHALL MUTATIS-MUTANDIS, APPLY TO THIS YEAR ALSO. BY QUASHING THE REVISIONAL ORDER DATED 07/03/2018, WE ALLOW THE APPEAL. 6 ITA NO.233 & 234/JODH/2018 M/S MADAN LAL AND PARTY ASSESSMENT YEARS: 2013-14 & 2014-15 7. IN NUTSHELL, BOTH THE APPEALS STAND ALLOWED. ORDER PRONOUNCED U/R 34(4) OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. SD/- SD/- (SANDEEP GOSAIN) (MA NOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21/12/2020 SR.PS:-JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$' / THE RESPONDENT 3. % ( ) / THE CIT(A) 4. % / CIT CONCERNED 5. &'#( ) , ) , ) / DR, ITAT, JODHPUR 6. '+,-! / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, JODHPUR.