Smt. Reshma, Karnal V. CIT, Karnal

ITA 241/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6672 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 19-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Agreed addition
• Section: 44AD; 143(3); 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 I TA NO .241/DEL/2016 (ASSESSMENT YEAR: 2011 - 12 ) RESHMA, W/O. SH. RAVINDER SINGH, NEAR DOON VALLEY COLLEGE, JUNDIA GATE, RISHI NAGAR, KARNAL PAN:ARQPR3918R VS. CIT, KARNAL (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. GAUTAM JAIN, ADV REVENUE BY: SH. SS RANA, CIT DR DATE OF HEARING 16/01/2017 DATE OF PRONOUNCEMENT 27 /02/2017 O R D E R PER PRASHANT MAHARISHI , A . M . 1. THE ASSESSEE AGAINST THE ORDER OF LD CIT FILES THIS APPEAL , KARNAL DATED 11.12.2015 FOR AY 2011 - 12 U/S 263 OF THE INCOME TAX ACT, 1961 WHEREIN THE ORDER PASSED BY THE LD ASSESSING OFFICER U/S 143(3) OF THE ACT DATED 07.11.2013. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1 THAT ORDER DATED 11.12.2015 U/S 263 OF THE ACT BY LEARNED PR. COMMISSIONER OF INCOME TAX, KARNAL HAS BEEN MADE WITHOUT SATISFYING THE STATUTORY PRECONDITIONS CONTAINED IN THE ACT AND IS THEREFORE WITHOU T JURISDICTION AND THUS, DESERVES TO BE QUASHED AS SUCH. 1.1 THAT LEARNED PR. COMMISSIONER OF INCOME TAX HAS ERRED BOTH IN LAW AND ON FACTS IN HOLDING THAT SOURCE OF CASH DEPOSITS OF RS. 42,67,500/ - HAVE NOT BEEN PROPERLY EXPLAINED BY THE ASSESSEE, AS THE ASSESSING OFFICER HAS NOT MADE THE REQUISITE ENQUIRIES/VERIFICATIONS ABOUT THE SOURCE OF THESE CASH DEPOSITS OF RS. 11,89,5007 - . THIS FINDING IS FACTUALLY INCORRECT AND LEGALLY MISCONCEIVED, CONTRARY TO RECORD AND UNTENABLE. 1.2 THAT THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS FAILED TO APPRECIATE THAT ONCE THE LEARNED ASSESSING OFFICER ON EXAMINATION OF THE FACTS ON RECORD AND AFTER MAKING ALL POSSIBLE ENQUIRIES HAD ACCEPTED CLAIM OF THE APPELLANT THEN SUCH AN ORDER OF ASSESSMENT COULD NOT BE REGARDED AS ERRONEOUS IN AS MUCH AS PREJUDICIAL TO THE INTEREST OF REVENUE MERELY BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX HAD A DIFFERENT OPINION AND THAT TOO, WITHOUT HAVING ESTABLISHED IN ANY MANNER THAT, VIEW ADOPTED BY THE LEARNED ASSESSING OFFI CER WAS AN IMPOSSIBLE VIEW. 1.3 THAT VARIOUS FINDINGS AND OBSERVATIONS MADE BY THE LEARNED PR. COMMISSIONER OF INCOME TAX IN ORDER ARE VAGUE, VERBOSE, CONTRADICTORY BASED ON FUNDAMENTAL MISCONCEPTION OF FACTS AND LAW, ARBITRARY AND UNJUSTIFIED AND THEREFO RE UNTENABLE. 1.4 THAT FARTHER THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS ALSO FAILED TO APPRECIATE THAT, U/S 263 OF THE ACT, AN ORDER OF ASSESSMENT CANNOT BE SET - ASIDE TO SIMPLY TO MAKE FURTHER ENQUIRIES AND THEREAFTER PASS FRESH ORDER OF ASSESSME NT AND AS SUCH, IMPUGNED ORDER IS CONTRARY TO LAW AND HENCE, UNSUSTAINABLE. 2. HOWEVER, THE ONLY ISSUE IS THAT THE ORDER PASSED BY THE LD CIT(A) IS WITHOUT JURISDICTION AS THERE IS NO ERROR IN THE ASSESSMENT ORDER AND IT IS NOT PREJUDICIAL TO THE INTEREST O F REVENUE. THE FACT OF THE CASE IS THAT THE ASSESSEE HAS DEPOSITED CASH OF RS. 4267500/ - IN THE SAVING BANK ACCOUNT MAINTAINED WITH ORIENTAL BANK OF COMMERCE, KARNAL. THEREFORE, THE RETURN OF INCOME FILED BY THE ASSESSEE ON 30.01.2012 DECLARING TOTAL INCOME OF RS. 187480/ - WAS SELECTED FOR SCRUTINY. THE LD ASSESSING OFFI CER THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF MILK NEAR DOON VALEY COLLEGE, KARNAL AND HAS FILED RETURN SHOWING INCOME U/S 44AD OF THE INCOME TAX ACT NOTED IT . SUBSEQUENTLY, ASSESSMENT U/S 143(3) OF THE ACT WAS PASSED ON 07.11.2013 BY MAKI NG AN AGREED ADDITION OF RS. 2 LAKHS TO THE RETURNED INCOME AND ASSESSED AT RS. 387480/ - . SUBSEQUENTLY, ON EXAMINATION OF THE RECORDS THE LD CIT ISSUED SHOW CAUSE NOTICE ON 01.09.2015 WHEREIN ACCORDING TO HIM THE ORDER PASSED BY THE LD ASSESSING OFFICER IS ERRONEOUS AS THE ENQUIRY WITH RESPECT TO CASH DEPOSIT TO THE EXTENT OF RS. 1189500/ - WAS NOT MADE AT ALL. THEREFORE, HE PASSED U/S 263 OF THE ACT ON 11.12.2015 HOLDING THAT THE ORDER PASSED BY THE LD ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE I NTEREST OF REVENUE FOR THE REASONS MENTIONED IN PARA NO. 6 OF THIS ORDER. 3. THE LD AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS EXAMINED THE ISSUE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND FOR THIS HE REFERRED TO QUERY LETTER DATED 02.0 7.2013 AND REPLY OF THE ASSESSEE DATED 29.07.2013. HE FURTHER REFERRED TO SUBMISSION OF VARIOUS BANK ACCOUNTS BEFORE THE ASSESSING OFFICER. HE FURTHER REFERRED THAT A SUM OF RS . 545878/ - IS ON ACCOUNT OF MATURITY OF FIXED DEPOSIT AND RS. 9 LAKHS AND RS. 11 23227/ - WERE RECEIVED ON SALE OF LAND AND COMPENSATION. HE FURTHER SUBMITTED THAT ALL REMAINING DEPOSITS HAVE BEEN DONE FORM MIL TRADING BUSINESS RUN BY THE ASSESSEE. THEREFORE, ACCORDING TO HIM THE LD ASSESSING OFFICER HAS CORRECTLY EXAMINED THE CASH DEPO SITED BY THE ASSESSEE. THEREFORE , ACCORDING TO HIM THE ORDER IS CORRECT AND IT CAN ALSO NOT BE SAID TO BE PREJUDICIAL TO THE INTEREST OF REVENUE. HE THEREFORE SUBMITTED THAT LD CIT HAS ERRED IN ASSUMING THE JURISDICTION. HE ALSO PLACE WRITTEN SYNOPSIS BEFO RE US FOR OUR CONSIDERATION. THE LD DR SUBMITTED THAT LD ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS THE LD ASSESSING OFFICER DID NOT EXAMINE THE FACT OF CASH DEPOSIT OF RS. 48.67 LAKHS COMPLETELY AND HE HAS LEFT ENQUIRY WITH R ESPECT TO SUM OF RS. 11.89 LAKHS. THEREFORE, LD CIT FOUND THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS . THE FACT IS NOT DISPUTED THAT IN HER RETURN OF INCOME THE ASSESSEE HAS SHOWN INCOME MAINLY FROM SEWING, KNITTING AND TRADING AND DURING THE COURSE OF ASSESSMENT PROCEEDING SHE SUBMITTED THAT IT IS ENGAGED IN BUSINESS OF TRADING OF MILK AND HER TURNOVER FROM TRADING OF MILK WAS RS. 1978000/ - . THEREBY SHE OFFERED AN INCOME OF RS. 162400/ - FROM THAT BUSINESS. FURTHER DURING THE COURSE OF ASSESSMENT PROCEEDING VIDE LETTER DATED 28.10.2013 IT WAS SUBMITTED THAT SHE SOLD MILK OF RS. 3613500/ - AND PURCHASED MILK OF RS. 2738927/ - . FURTHER, A SUM OF RS. 4267500/ - WAS FOUND TO BE DEPO S I TED IN CASH IN HER BANK ACCOUNT WITH ORIENTAL BANK OF COMMERCE, KARNAL. VIDE LETTER DATED 14.10.2015 SHE SUBMITTED THAT HER TURNOVER WAS RS. 19.78 LAKHS WHEREAS REST OF THE CASH DEPOSITED IS OUT OF WITHDRAWAL. THEREFORE, THE ASSESSEE IS CONSISTENTLY CHANGING HER STAND. THE LD CIT FURTHER HELD THAT THOUGH THE SALES OF MILK PER MONTH IS RANGING FROM RS. 1.5 LAKHS TO RS. 1.63 LAKHS WHEREA S PURCHASES ARE BETWEEN RS. 55000/ - TO RS. 1.63 LAKHS. THIS ERRATIC UNMATCHED TRANSACTION IN A PERISHABLE COMMODITY WAS REJECTED IN VIEW OF NON - AVAILABILITY OF STORAGE CAPACITY AND SEASONAL BUSINESS. THE LD ASSESSING OFFICER HAS OBTAINED THE COPY OF THE BA NK ACCOUNT HOWEVER, HAS NOT FULLY RECONCILED TO THE AMOUNT OF CASH DEPOSIT INTO THE BANK AND SOURCES OF SUCH DEPOSITS. IN FACT THE LD ASSESSING OFFICER HAS NOT CARRIED OUT ANY ENQUIRY, WHICH CAN BE SAID TO HAVE BEEN CONDUCTED TO THE DUE APPLICATION OF MIND AT ALL. HE HAS MERELY CLOSED HIS EYES BY MAKING AN AD HOC ADDITION OF RS. 2 LAKHS AND NOT AT ALL APPLYING HIS MIND TO THE FACT THAT THERE IS MISMATCH BETWEEN THE TURNOVER SHOWN BY THE ASSESSEE AS WELL AS AMOUNT OF CASH DEPOSITED BY THE ASSESSEE. IN THE PR ESENT CASE, THE LD ASSESSING OFFICER HAS NOT MADE ENQUIRY TO THE LEVEL OF SATISFACTION WHICH WOULD OBVIOUSLY MEAN THAT HE HAS CONDUCTED THE INQUIRY IN A MANNER WHEREBY HE PLACES ON RECORD THE MATERIAL ENOUGH TO REACH THE SATISFACTION, WHICH A RATIONAL PERS ON, BEING INFORMED OF THE NUANCES OF TAX LAWS WOULD REACH AFTER DUE APPRECIATION OF SUCH MATERIAL. IF THIS COMPONENT IS MISSING, IT WILL ALWAYS BE A CASE OF LACK OF INQUIRY AND NOT INADEQUATE INQUIRY. IN VIEW OF THIS WE ARE OF OPINION THAT LD CIT IS CORR ECT IN ASSUMING JURISDICTION U/S 263 OF THE ACT HOLDING THAT IMPUGNED ASSESSMENT ORDER PASSED U/S 143(3) BY THE LD ASSESSING OFFICER IS PASSED WITHOUT MAKING ANY ENQUIRY. 5. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OP EN COURT ON 27 /02/2017 . - SD/ - - SD/ - ( H.S.SIDHU) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 /02 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI