ACIT, UDAIPUR V. M/s. Bhaval Synthetics (India) Ltd., UDAIPUR

ITA 249/JODH/2007

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54418 (ITAT-JODHPUR)
• Duration Of Justice: 4 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-12-2011
• Assessment Year: 1997-1998
• Appeal Filed On: 30-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K CHOBEY
• Section: 263

Judgement Text

1 ITA 249-07 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 249/JODH/2007 ASSTT. YEAR : 1997-98. THE ACIT, CIRCLE-2, VS. M/S. BHAVAL SYNTHETICS ( INDIA) LTD., UDAIPUR. VILLAGE BIKA KHERA, TEHSIL : MAVLI, DISTT. UDAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.K. CHOBEY RESPONDENT BY : SHRI MAHENDRA GARGIEY A DATE OF HEARING : 08.12.2011. DATE OF PRONOUNCEMENT : 15.12.2011. ORDER DATED : 15/12/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 1997-98. 2. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE S TATED THAT THE APPEAL OF THE DEPARTMENT IS INFRUCTUOUS IN NATURE. IT WAS EXPLAIN ED THAT IN FACT PROCEEDINGS UNDER SECTION 263 WERE INITIATED AND THE LD. CIT DIRECTED THE ASSESSING OFFICER TO CONSIDER THE VARIOUS DEPOSITS AND SHARE APPLICATION MONEY AFRESH AS PROPER ENQUIRY WAS NOT MADE EARLIER. 2.1. IT WAS SUBMITTED THAT ON APPEAL BEFORE THE TRI BUNAL, THE TRIBUNAL HAS PARTLY CONFIRMED THE INITIATION PROCEEDINGS UNDER SECTION 263. THE TRIBUNAL HAS HELD THAT LD. 2 CIT WAS JUSTIFIED IN SETTING ASIDE THE ORDER IN RES PECT TO VARIOUS DEPOSITS. HOWEVER, IN RESPECT TO SHARE APPLICATION MONEY, THE TRIBUNAL HA S HELD THAT THERE WAS NO REASON OR JUSTIFICATION IN INITIATING PROCEEDINGS UNDER SECTI ON 263 ON ACCOUNT OF SHARE APPLICATION MONEY AND ACCORDINGLY THE ORDER OF LD. CIT WAS MODI FIED. HOWEVER, THE ASSESSING OFFICER HAS MADE THE ADDITION IN RESPECT TO DEPOSIT S AS WELL AS SHARE APPLICATION MONEY BY SEPARATE PROCEEDINGS. THE APPEAL AGAINST DEPOSITS I S PENDING EITHER BEFORE LD. CIT (A) OR BEFORE TRIBUNAL. HOWEVER, IN RESPECT TO SHARE APPLI CATION MONEY, THE ISSUE HAS BEEN DECIDED BY LD. CIT (A) IN FAVOUR OF THE ASSESSEE IN VIEW OF THE DECISION OF TRIBUNAL THAT THE ORDER UNDER SECTION 263 WAS NOT CORRECT IN RESP ECT TO SHARE APPLICATION MONEY. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, IT WAS SUBMITTED THAT THE APPEAL OF THE DEPARTMENT IS INFRUCTUOUS IN NATURE. 3. THE LD. CIT D/R HAS FAIRLY ACCEPTED THE CONTENTI ON OF THE LD. A/R. 4. AFTER CONSIDERING THE ORDERS OF THE ASSESSING OF FICER AND LD. CIT (A) AND THE SUBMISSIONS OF THE LD. A/R AND FAIRNESS SHOWN BY LD . D/R, WE FIND THAT APPEAL OF THE DEPARTMENT IS INFRUCTUOUS IN NATURE BECAUSE THE BAS IS ON WHICH THE ADDITION HAS BEEN MADE DOES NOT SURVIVE. THE TRIBUNAL HAS QUASHED TH E ORDER UNDER SECTION 263 IN PART BY HOLDING THAT LD. CIT (A) WAS NOT JUSTIFIED IN DIREC TING THE ASSESSING OFFICER TO CONSIDER THE ISSUE OF SHARE APPLICATION MONEY AFRESH. THERE FORE, ONCE THE ORDER UNDER SECTION 263 HAS BEEN QUASHED IN RESPECT TO SHARE APPLICATION MO NEY, THEN ASSESSING OFFICERS ACTION FOR REASSESSING THE SAME AMOUNT CANNOT BE UPHELD AN D LD. CIT (A) WAS JUSTIFIED IN ALLOWING THE ISSUE IN FAVOUR OF THE ASSESSEE EVEN O N MERIT. SINCE THE TRIBUNAL HAS QUASHED THE ORDER UNDER SECTION 263 IN RESPECT OF S HARE APPLICATION MONEY AT RS. 3 58,40,000/-. THEREFORE, WE HOLD THAT APPEAL OF THE DEPARTMENT IS INFRUCTUOUS IN NATURE AND ACCORDINGLY THE SAME IS DISMISSED. 5. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. 6. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15. 12.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR, COPY FORWARDED TO :- THE ACIT, CIRCLE-2, UDAIPUR. M/S. BHAVAL SYNTHETICS (INDIA) LTD., UDAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 249/JODH/2007)) BY ORDER, AR ITAT JODHPUR.