Dr. Hargun J.Sangtani, Nagpur V. ACIT, Cir, 4, Nagpur

ITA 245/NAG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3919 (ITAT-NAGPUR)
• Duration Of Justice: 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY MARATHE
• Assessee Lawyers: HARISH BHONEJA
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO.245/NAG/2012 ASSESSMENT YEAR: 2009-2010 DR. HARGUN J SANGTANI, C/O. M/S. J.S. UBEROI & CO., CHARTERED ACCOUNTANTS, 2, SAT-PRATAP, BEZON BAGH, KAMPTEE ROAD, NAGPUR 400 004. PAN:AHFPS 7402 J VS ACIT, CIRCLE-4, ROOM NO.301, 3 RD FLOOR, SARAF CHAMBERS, NAGPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARISH BHONEJA RESPONDENT BY : SHRI ABHAY MARATHE, JCIT DATE OF HEARING:6.3.2013 DATE OF ORDER: 05.4.2013 O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 27.6.2012 IS A GAINST THE ORDER OF CIT-II, NAGPUR DATED 3.5.2012 FOR THE ASSESSMENT YEAR 2009- 2010. 2. IN THIS APPEAL, ASSESSEE RAISED THE ONLY FOLLOWIN G EFFECTIVE GROUND WHICH READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE REV ISION OF THE ORDER U/S 263 IS BAD IN LAW. 3. AT THE OUTSET, SHRI HARISH BHONEJA, LD COUNSEL FOR THE ASSESSEE ME NTIONED THAT THE REGULAR ASSESSMENT WAS MADE UNDER SECTION 143(3) OF THE ACT ON 28.12.2011 AND BROUGHT OUR ATTENTION THE BRIEF CONTENTS OF THE SAID ASSESS MENT ORDER AND THE RELEVANT PART READS AS UNDER: HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDING S IT IS SEEN THAT THE ASSESSEE HAS OFFERED EXPLANATION BEFORE THE AO THAT OPENING STOCK TAKEN IN TRADING ACCOUNT PREPARED DURING THE COURSE OF SURVE Y WAS INCORRECT AND ALSO THAT SOME PURCHASES OF AUGUST & SEPTEMBER OF 2008 W ERE NOT BOOKED. 4. THIS WAS THE CASE WHERE THERE WAS A SURVEY ACTIO N U/S 133(3) OF THE ACT ON 10.9.2008 AND CIT ASSUMED JURISDICTION U/S 263(1) O F THE ACT AND PASSED THE 2 PRESENT IMPUGNED ORDER DATED 3.5.2012. AS PER THE SAID ORDER OF THE CIT, THE AO HAS NOT CONDUCTED NECESSARY ENQUIRIES AND HE SIMPLY ACCEPTED THE CONTENTION OF THE ASSESSEE WITHOUT CONSIDERING THE FOLLOWING ITEMS. 1. THE STAND TAKEN BY THE ASSESSEE REGARDING ERRONE OUS OPENING STOCK & PURCHASES NOT BOOKED CANNOT BE ACCEPTED AFTER THE L APSE OF CONSIDERABLE PERIOD OF 3 YEARS FROM THE DATE OF SURVEY IE 10.9.2 008, MORE PARTICULARLY WHEN THE ASSESSEE HIMSELF HAS SIGNED THE TRADING ACCOUNT DURING THE COURSE OF SURVEY & GIVEN TO THE SURVEY PARTY. 2. AO HAS ASKED IN Q.NO.5 OF THE STATEMENT RECORDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO SUBSTANTIATE THE CLAIM WITH EVIDENCE. HOWEVER, ON NEXT DAY THE ASSESSEE HAS PRODUCED ONLY 4 BILLS OF RS. 2,28,000/- (RS. 27,000/-. RS. 67,000 + RS. 67,000/- + RS. 67,000/-) AS AGAINST DIFFERENCE OF RS. 2,65,475/- IN IMPLANTS. THE AO HAS SIMPLY ACCE PTED THE BILLS WITHOUT ENQUIRING ACTUAL DATE OF DELIVERY OF GOODS AND WHET HER THOSE WERE INCLUDED IN THE INVENTORY DURING THE COURSE OF SURVEY CREATING THE DIFFERENCE IN THE STOCK AS CLAIMED BY THE ASSESSEE. THUS, THE AO HAS ACCEP TED THE CONTENTION OF ASSESSEE WHICH IS NOT SUBSTANTIATED BY ANY EVIDENCE . 3. AS PER COMPUTERIZED PRINT OF TRIALD BALANCE TAKE N FROM 01.04.2008 TO 10.9.2008 DURING THE COURSE OF SURVEY THE OPENING S TOCK AS ON 1.4.2008 OF THE ASSESSEE WAS RS. 27,60,780/- AS AGAINST RS. 32, 70,708/- CLAIMED BY HIM AT ASSESSMENT STAGE. 4. EVEN AS PER SAY OF THE ASSESSEE IN REPLY TO Q.NO .4 OF THE STATEMENT RECORDED DURING THE COURSE OF SCRUTINY, THERE IS A DIFFERENCE OF RS. 1,93,362/- FOR WHICH NO COGNIZANCE WAS TAKEN BY THE AO IN THE ASSESSMENT ORDER. 5. ABOVE MENTIONED ISSUES RELATE TO THE FINDINGS OF THE SURVEY TEAM NOTED DURING THE SURVEY OPERATION. IN REPLY TO THE SHOW CAUSE NOTICE, ASSESSEE SUBMITTED THAT THE STATEMENT IN QUESTION WAS MADE USE OF BY T HE AUTHORITY DURING THE ASSESSMENT PROCEEDINGS AND RECONCILIATION WAS ALSO FILED AND THE DETAILS WERE FURNISHED WHICH CAN BE SEEN IN PARA 4 OF THE REVENU E ORDER. THE CIT DID NOT ACCEPT THE WRITTEN SUBMISSIONS OF THE ASSESSEE AND HOLD AS UNDER: 5. MATTER WAS DISCUSSED WITH SHRI J.S. UBERAI, CA, COUNSEL OF THE ASSESSEE ON 2.5.2012. THE SUBMISSION OF THE ASSESS EE IS NOT ACCEPTABLE. RECORD DOES NOT SHOW ANY VERIFICATION DONE BY THE A O REGARDING PURCHASE BILL PRODUCE3D BY THE ASSESSEE DURING THE ASSESSMENT PRO CEEDING NOR DID HE ENQUIRE PROPERLY THE REASON OF VARIATION IN OPENING STOCK AS PER TENTATIVE TRADING ACCOUNT GIVEN DURING THE COURSE OF SURVEY A ND AS PER AUDITED REPORT. FURTHER, THE ASSESSEES SUBMISSION IS SILENT ON POI NT NO.(IV) OF NOTICE U/S 263 OF IT ACT, 1961. THE ENTIRE ASSESSMENT IS THEREFOR E, SET-ASIDE TO BE MADE AFRESH DENOVO ON THE LINES AS ABOVE. 3 5.1. AGGRIEVED WITH THE ABOVE, THE ASSESSEE IS IN A PPEAL BEFORE THE TRIBUNAL WITH THE GROUND AS MENTIONED ABOVE. 6. DURING THE E-COURT PROCEEDINGS BEFORE US, SHRI HARISH BHONEJA, LD COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THAT THE STATEME NT AND THE RECONCILIATIONS WERE UNDISPUTEDLY FURNISHED BEFORE THE AO DURING THE REG ULAR ASSESSMENT PROCEEDINGS AND THE SAME ARE IN FACT QUOTED BY THE CIT IN PARA 2, WHERE IT WAS MENTIONED THAT HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT IS SEEN THA T THE ASSESSEE HAS OFFERED EXPLANATION BEFORE THE AO THAT OPENING STOCK TAKEN IN TRADING A CCOUNT PREPARED DURING THE COURSE OF SURVEY WAS INCORRECT AND ALSO THAT SOME PURCHASES O F AUGUST & SEPTEMBER OF 2008 WERE NOT BOOKED. FURTHER, LD COUNSEL MENTIONED THAT CONSIDERING THE CIT WAS UNDER WRONG OPINION THAT THE ISSUES WERE NOT CONSIDERED, BECAUS E THE ASSESSMENT ORDER DOES NOT SPEAK OF ALL THE DETAILS ABOUT HOW THE RECONCILIATION WAS MADE AND WHY THE AO ACCEPTED THE SAID RECONCILIATION. 7. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF THE CIT. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AUTHORITIES. WE HAVE GONE THROUGH THE REVIEW ORDER OF THE CIT AND FIND THAT THE ASSESSEE HAS FURNISHED THE REQUISITE RECONCILIATION S AND THE AO CONSIDERED THE STATEMENT RECORDED DURING THE SURVEY OPERATION WHIC H IS AN UNDISPUTED FACT AS IS EVIDENT FROM PARA 4 OF THE IMPUGNED ORDER. WE HAVE ALSO NOTICED THAT THE CIT HAS NOT GIVEN ANY REASON AS TO WHY THE SUBMISSIONS OF T HE ASSESSEE WERE NOT ACCEPTABLE. IN OUR OPINION, THE AO HAS APPLIED HIS MIND TO THE ISSUES RAISED BY THE CIT, AS EXTRACTED ABOVE, THEREFORE, AO HAS FORMED A N OPINION ON THE SAID ISSUE. IN SUCH CIRCUMSTANCES, CIT HAS WRONGLY ASSUMED JURISDI CTION U/S 263 OF THE ACT. IT IS NOT A CASE WHERE THERE IS NO ANY ERRONEOUS ASSUMPTI ON OF FACT OR LAW OR THERE WERE NO ENQUIRIES CONDUCTED BY THE CIT WHICH WERE BELOW THE REASONABLE ENQUIRIES IN ANY ASSESSMENT OF INCOME. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE ORDER OF THE CIT IS ERRONEOUS AND ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED . 4 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF APRIL, 2013. SD/- SD/- (R.K. GUPTA) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 05.4.2013 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR NAGPUR, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI