M/s Shaleen Stone Plast, Indore V. The ITO 5(3), Indore

ITA 250/IND/2013

• Counselvise Citation: 25022714 RSA 2013
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 29-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Condonation of delay; Reason to believe
• Section: 143(3); 147; 148

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 250/IND/2013 A.Y. 2006-07 M/S. SHALEEN STONE PLAST 48, SAJAN NAGAR INDORE ... APPELLANT PAN AADFS 7694 H VS THE ITO WARD 5 (3) INDORE ... RESPONDENT ASSESSEE BY SHRI ANIL KAMAL GARG, CA DEPARTMENT BY SHRI R.A.VERMA, SR. DR DATE OF HEARING 12-11-2013 DATE OF PRONOUNCEMENT 14 -11-2013 2 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 21-12-2012 OF THE LD. FIRST APPELLATE AUTHORITY, IN DORE. THE ASSESSEE HAS ALSO MOVED APPLICATION FOR CONDONATION DELAY OF 36 DAYS ON THE GROUND THAT THE ASSESSEE FIRM, BEFORE DISSOLUTION, WAS A PARTNERSHIP FIRM CONSISTING OF TWO PARTNERS I .E SHRI DINESH KHANDELWAL AND SHRI AJAY KHANDELWAL. DUE TO SAD DEM ISE OF ONE OF THE PARTNERS, THE ASSESSEE FIRM WAS DISSOLVED. MEANWHILE MOTHER OF THE ARGUING COUNSEL ALSO DIED ON 27-02-20 13 RESULTING INTO DELAY IN FILING THE APPEAL. IT WAS PLEADED THA T IN THE INTEREST OF JUSTICE, THE DELAY IN FILING THE APPEAL MAY BE COND ONED. THE LD. SR DR HAD NO OBJECTION. IN VIEW OF THE FACTS NARRAT ED ABOVE AND ALSO IN THE INTEREST OF JUSTICE, THE APPLICATION FO R CONDONATION OF DELAY IS ALLOWED AND PROCEED TO DISPOSE OFF THE APP EAL ON THE BASIS OF MATERIALS AVAILABLE ON RECORD. 3 2. IN GROUND NOS. 1 AND 2, THE ASSESSEE HAS CHALLEN GED UPHOLDING THE ISSUANCE OF NOTICE U/S 148 OF THE AC T AND FRAMING REASSESSMENT U/S 147 OF THE ACT. THE LEARNED COUNS EL FOR THE ASSESSEE CONTENDED THAT THE APPELLATE ORDER WAS PAS SED BY THE LD. CIT(A) SUBSTANTIALLY CONFIRMING THE ASSESSMENT ORDER WHICH IS UNWARRANTED AND UNJUSTIFIED. ON THE OTHER HAND, THE LD. SR DR STRONGLY DEFENDED THE PROCEEDINGS BY CONTENDING THA T THE BASIS OF ISSUANCE OF NOTICE WAS THAT IN THE CASE OF PARTN ER, THERE WAS DIFFERENCE IN CAPITAL ACCOUNT AND THUS THERE WAS ES CAPEMENT OF INCOME. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF AR E THAT INITIALLY, THE FIRM WAS CONSTITUTED BY TWO PARTNERS SHRI DINESH KH ANDELWAL AND SHRI AJAY KHANDELWAL. DUE TO DEMISE OF ONE OF THE P ARTNERS, THE ASSESSEE FIRM GOT DISSOLVED. THE ASSESSEE DECLARED NIL INCOME IN ITS RETURN FILED ON 2-01-2007 WHICH WAS PROCESSE D U/S 143(1) OF THE ACT ON 16-05-2007. THE ASSESSEE ALSO FILED PROFIT AND LOSS 4 ACCOUNT, BALANCE SHEET ALONGWITH THE RETURN. AS PER THE PARTNERS CAPITAL ACCOUNT FOR THE YEAR ENDING 31-03-2006, IN RESPECT OF SHRI DINESH KHANDELWAL, THE CLOSING BALANCE WAS SHOWN AT RS. 6,82,015/-. IT WAS NOTICED THAT SHRI DINESH KHA NDELWAL SHOWED CLOSING BALANCE WITH THE ASSESSEE FIRM AT RS. 38,82,015/-, AS ON 31-03-2006 IN THE RETURN. TH IS FACT CAME TO THE NOTICE OF THE ASSESSING OFFICER DURING ASSESSME NT PROCEEDINGS IN THE CASE OF SHRI DINESH KHANDELWAL F OR THE ASSESSMENT YEAR 2008-09. IT WAS FURTHER NOTICED THA T THE CREDITORS WERE DECREASED BY RS. 25,94,201/- WHEREAS DEBTORS I NCREASED BY RS. 6,05,799/-. IN VIEW OF THIS FACTUAL MATRIX, THE ASSESSING OFFICER APPREHENDED ESCAPEMENT OF INCOME AS THE AS SESSEE DID NOT DISCLOSE ACTUAL PROFIT FOR ASSESSMENT YEAR 200 6-07. THE ASSESSING OFFICER, THEREFORE, WAS HAVING REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WIT HIN THE MEANING OF SECTION 147 OF THE INCOME-TAX ACT. THERE FORE, HE ISSUED NOTICE U/S 148 OF THE ACT. IN VIEW OF THIS FACT, WITHOUT GOING 5 INTO MUCH DELIBERATION, WE FIND NO ILLEGALITY IN TH E PRESUMPTION OF THE ASSESSING OFFICER THAT INCOME HAS ESCAPED ASSES SMENT. EVEN OTHERWISE, AFTER INSERTION OF EXPLANATION 3 TO SECTION 147 BY THE FINANCE (NO.2) ACT, 2009 W.E.F. 01-04-1989, THE ASSESSING OFFICER HAD WIDE POWERS IN SUCH CASES, THOUGH NOT U NBRIDLED. POWERS UNDER AMENDED PROVISIONS ARE WIDE ENOUGH EVE N TO COVER CASES WHERE THE ASSESSEE HAD FULLY DISCLOSED MATERIAL FACTS AS WAS HELD BY HON'BLE DELHI HIGH COURT IN BA WA ABHAY SINGH VS DCIT, 117 TAXMAN 12 AND RAKESH AGARWAL VS ACIT, 87 TAXMAN 306 (DEL.). IN VIEW OF THE FACTS AVAILABLE O N RECORD AND VARIOUS DECISIONS, WE FIND NO INFIRMITY IN THE CONC LUSION DRAWN BY THE LD. CIT(A) SO FAR AS AFFIRMING THE ISSUANCE OF NOTICE U/S 148 AND REASSESSMENT / ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT IS CONCERNED. 3. NOW WE PROCEED TO DISPOSE OFF THE APPEAL ON MERI T UPHOLDING ADDITION OF RS. 32.00 LACS ON ACCOUNT OF ALLEGED DIFFERENCE BETWEEN CLOSING BALANCE SHOWN BY THE A SSESSEE AND 6 THAT SHOWN BY ONE OF THE PARTNERS OF THE ASSESSEE FIRM. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ADDITION HAS BEEN MADE IN INDIVIDUAL HAND IN THE CASE OF THE PAR TNER AND ALSO OF THE ASSESSEE FIRM. OUR ATTENTION WAS INVITED TO PAGE 32 OF THE PAPER BOOK. IT WAS ALSO CONTENDED THAT THE ASSESSE E FIRM IS REGULARLY MAINTAINING BOOKS OF ACCOUNTS IN ITS ORDI NARY COURSE OF BUSINESS WHICH WERE DULY PRODUCED BEFORE THE ASSESS ING OFFICER AND NO DEFECT OR DISCREPANCY WAS POINTED OUT IN THE BOOKS OF THE ASSESSEE FIRM. IT WAS ALSO PLEADED THAT IN THE ASSE SSMENT ORDER, THE ASSESSING OFFICER HAS NOT ASSIGNED ANY REASON A S TO WHY THE BALANCES OF SUNDRY CREDITORS / SUNDRY DEBTORS AND P ARTNERS CANNOT BE DISBELIEVED AND THUS THE ASSESSING OFFICER GROSS LY FAILED IN APPRECIATING THE MATERIAL FACTS IN NOT ACCEPTING BA LANCE SHEET. ON THE OTHER HAND, THE LD. SR. DR DEFENDED THE ADDITIO N BY SUPPORTING THE CONCLUSION DRAWN IN THE IMPUGNED ORD ER. 3.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO PERUSED THE INDIVIDUAL 7 ASSESSMENT ORDER OF SHRI DINESH KHANDELWAL (PAGE 32 ) PROP. OF ASSESSEE FIRM. AT PAGE 4, DISALLOWANCE ON ACCOUNT O F UNEXPLAINED INCOME HAS BEEN DISCUSSED AND THE AMOUN T OF RS. 32,49,171/- HAS BEEN ADDED IN THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSING OFFICER HAS OPINED THAT THE CAPITAL WAS INCREASED BY RS. 32.00 LACS BY MANIPULATION IN THE ACCOUNTS, DECREASING THE CREDITORS BY RS. 25,94,201/- AND INC REASING THE DEBTORS BY RS. RS. 6,05,799/-. THE BALANCE SHEET OF THE ASSESSEE FOR F.Y. 2006-07 HAS ALSO BEEN EXAMINED. I N VIEW OF THESE UNCONTROVERTED FACTS, SINCE ADDITION HAS BEEN MADE IN INDIVIDUAL HAND THAT TOO WHILE FRAMING THE ASSESSME NT U/S 143(3) OF THE ACT AFTER EXAMINING THE FACTS, THEREFORE, N O DOUBLE ADDITION IS PERMITTED. CONSEQUENTLY, ON MERIT, THIS GROUND O F THE ASSESSEE IS ALLOWED. THE ASSESSING OFFICER IS DIRECTED TO DE LETE THE ADDITION SO MADE IN THE HANDS OF THE ASSESSEE FIRM. 8 FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES A T THE CONCLUSION OF THE HEARING ON 12 TH NOV. 2013. SD/- SD/- (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED - 14 TH NOV. 2013 COPY TO APPELLANT/RESPONDENT/CIT/CIT(A)/DR RNM/-