Omsairam Steel & Alloys Pvt.Ltd, Jalna V. Pr. Commissioner of Income-tax-1, Aurangabad

ITA 279/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6741 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-01-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 02-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NANDITA KANCHAN
• Assessee Lawyers: SANJEEVKUMAR KABRA
• Keywords: Difference of opinion
• Section: 143(3); 6; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO. 279/PUN/2018 / ASSESSMENT YEAR : 2013-14 OMSAIRAM STEEL & ALLOYS PVT. LTD. C/O. BANSILAL KABRA ADVOCATE, 1 ST FLOOR AMBIKA MARKET, JALNA-431 203. PAN : AAACO6232H .... / APPELLANT / V/S. THE PR. COMMISSIONER OF INCOME TAX-1, AURANGABAD. / RESPONDENT ASSESSEE BY : SHRI SANJEEV KUMAR KABRA REVENUE BY : SMT. NANDITA KANCHAN / DATE OF HEARING : 09.01.2019 / DATE OF PRONOUNCEMENT : 21 .01.2019 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF PR. COMMISSIONER OF INCOME TAX-1, AURANGABAD DATED 08.12.2017 FOR THE ASSESSMENT YEAR 2013-14 PASSED U/S.263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE THE ACT) AS PER FOLLOWING GROUNDS OF AP PEAL: 1. LEGALITY OF CORRIGENDUM ORDER PASSED U/S. 263 OF THE ACT . THE LEARNED PRINCIPAL CIT IS ERRED IN PASSING CORRI GENDUM ORDER WITHOUT PASSING AN ORDER U/S. 263 FOR THE YEAR UNDER CONSIDERATION. 2 ITA NO. 279/PUN/2018 A.Y.2013-14 A CORRIGENDUM IS AKIN TO ERRATA AND THE CORRIGENDUM ORDER DID NOT MERELY RECTIFY ANY MISTAKE IN THE EARLIER ORDER, BUT SIMPL Y ECLIPSED THE SAME, AND THEREFORE, THE SAME AMOUNTS TO REVIEW BY THE PR .CIT. THE CORRIGENDUM ORDER PASSED U/S. 263 IS BAD IN LAW, WHICH MAY KINDLY BE TREATED VOID. 2. THE ASSESSMENT ORDER PASSED U/S. 143(3) BY THE LEARNED ACIT IS NOT AN ERRONEOUS ORDER IN ANY WAY. THE ACTION OF LEARNE D PR.CIT U/S. 263 IS WHOLLY UNREASONABLE AND BAD IN LAW, WHICH MAY KINDL Y BE QUASHED. 3. THE APPELLANT MAY KINDLY BE ALLOWED TO ADD AND A MEND THE GROUND OF APPEAL. 2. THE BRIEF FACTS IN THIS CASE ARE THAT THE CASE WAS SE LECTED FOR SCRUTINY UNDER CASS TO EXAMINE THE REASON FOR: I) DIFFERENCE IN OPENING STOCK IN CURRENT YEAR WITH THE CLOSI NG STOCK OF THE PREVIOUS YEAR. II) LARGE VALUE OF SQUARED UP LOANS DURING THE YEAR (FORM 3CD) & III) UNSECURED LOANS-WHERE NO RETURNS OF INCOME (FORM 3CD) H AVE BEEN FILED. THE ASSESSING OFFICER PASSED THE ORDER U/S.143 OF THE ACT ON 23.03.2016 ASSESSING TOTAL INCOME OF RS.37,21,862/- AS AGAINST THE RET URNED INCOME OF RS.3,94,718/-. 3. THE REVISIONARY JURISDICTION U/S.263 OF THE ACT BY THE PR. COMMISSIONER OF INCOME TAX WAS UNDERTAKEN BECAUSE OF FOLLOWING ISSUES: I) THAT THE ASSESSMENT WAS COMPLETED WITHOUT VERIFICATION O F IDENTITY AND CREDITWORTHINESS AND GENUINENESS OF THE PERSONS FROM WHOM THE ASSESSEE-COMPANY BORROWED UNSECURED LOANS. II) IT IS THE GROUND OF PR. COMMISSIONER OF INCOME TAX THAT ALTHOUGH CERTAIN DETAILS HAVE BEEN CALLED FOR BY THE ASSESSING OFFICER AND THE ASSESSEE FILED CERTAIN DETAILS BUT NOWHERE IN THE FILE/RECORD , IT IS SEEN THAT REQUISITE ENQUIRIES HAVE BEEN CONDUCTED BY THE AS SESSING OFFICER WHICH MAKES THE ASSESSMENT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3 ITA NO. 279/PUN/2018 A.Y.2013-14 III) APART FROM THIS ISSUE, THE SECTION 263 OF THE ACT WAS ALS O INVOKED AS TO WHETHER LIABILITY OF DISALLOWANCE U/S.43(B) OF THE ACT FOR PA YMENT OF MVAT AFTER THE EXPIRY OF DUE DATE OF RETURN OF INCOME IV) THAT AS TO WHETHER THE ASSESSEE HAS PAID STATUTORY DUES FOR PF & ESIC IN CONTRAVENTION OF SECTION 36(I)(VA) R.W.S. 2(24)(X). HOWEVER, AS PLEADED IN THE GROUNDS BEFORE US, ONLY THE ORDER PASSED U/S.263 OF THE ACT IS CHALLENGED, PRIMARILY, WHETHER THE IDE NTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOANS CREDITORS W ERE IDENTIFIED BY THE ASSESSING OFFICER OR NOT. 4. THE LD. AR FOR THE ASSESSEE AT THE TIME OF HEARING VE HEMENTLY ARGUED THAT THIS ISSUE OF LOAN CREDITORS AND THEIR IDENTITY, CREDITW ORTHINESS AND GENUINENESS OF THE TRANSACTION HAS BEEN ENQUIRED BY THE ASSESSING OFFICER IN DETAIL. THAT IN PAGE 2 TO 3 OF THE PAPER BOOK FILED, THERE IS DETAILED QUESTIONNAIRE WHICH WAS ISSUED BY THE ASSESSING OFFICER AND THEREIN SR.NO.11 OF QUESTIONNAIRE, THE ASSESSEE COMPANY WAS ASKED FOR DET AILS OF UNSECURED LOANS/DEPOSITS/ADVANCES ACCEPTED AND/OR REPAID, ALONG WIT H ACCOUNT EXTRACTS, NOTE ON PURPOSE, THIRD PARTY CONFIRMATION AND D OCUMENTARY EVIDENCES FOR IDENTITY AND CREDITWORTHINESS OF LOANS CREDITO RS AND GENUINENESS OF TRANSACTIONS TO WHICH THE ASSESSEE HAS P ROVIDED DETAILED ANSWER WHICH IS INCLUDED IN PAGE 7 OF THE PAPER BOOK ALONG WITH ANNEXURE G. THAT ALL DETAILS REQUIRED BY THE ASSESSING OFFICER HAD BEEN FURNISHED BY THE ASSESSEE. THE LD. AR FURTHER STATED THAT THERE ARE TOT AL 101 LOAN CREDITORS AND ALL OF THEM HAVE GIVEN THEIR CONFIRMATIONS. THE BENCH PU T A QUESTION TO THE LD. AR TO FURNISH COPIES OF ALL CONFIRMATIONS. HOWEVER, TH E FACT THAT CONFIRMATIONS OF PARTIES WERE RECEIVED BY THE ASSESSING OFFI CER, HAS NOT BEEN DISPUTED BY THE LD. DR. THAT AFTER OBTAINING CONFIRMATIONS , THE ASSESSING OFFICER FURTHER ISSUED NOTICES U/S.133(6) OF THE ACT AND OUT OF 101 LOAN CREDITORS, ONLY 19 NOTICES U/S.133(6) OF THE ACT WERE RETU RNED UN-SERVED DUE 4 ITA NO. 279/PUN/2018 A.Y.2013-14 TO CHANGE OF ADDRESS AND THEREAFTER, THE ASSESSEE HAD PROVIDED FRESH ADDRESS FOR 4 PARTIES OUT OF THOSE 19. THE LD. AR SUBMITTED THAT OUT OF BALANC E I.E. 19- 4=15, ONE PARTY IS NOT AT ALL RELATED AND HOW HIS NAME AP PEARED IN THE LOAN CREDITORS LIST IS ALSO NOT KNOWN TO THE ASSESSEE. THUS, NU MBER OF PARTIES REMAINS 14 IN WHICH THE NOTICE U/S.133(6) OF THE ACT COULD NOT BE SERVED DUE TO CHANGE OF ADDRESS. THE LD. AR VEHEMENTLY ARGUED THA T IT IS AGREED BY THE PR. CIT-1, THAT THIS ISSUE WAS ENQUIRED BY THE ASSESSING OFFICER BUT IT WAS NOT DONE UPTO THE INTELLECTUAL SATISFACTION LEVEL OF THE PR. COMMIS SIONER OF INCOME TAX-1 WHICH IS JUST DIFFERENCE OF OPINION AND VIEW AND FOR WH ICH THE ORDER PASSED U/S.263 OF THE ACT IS NOT MAINTAINABLE. 4.1 THE LD. AR PLACED RELIANCE ON THE DECISION OF HON'BLE B OMBAY HIGH COURT IN THE CASE OF THE COMMISSIONER OF INCOME TAX-8 VS . M/S. FINE JEWELLARY (INDIA) LTD., ITA NO.296 OF 2013 AND THE APPEAL FILED BY THE REVENUE WAS DISMISSED BY THE HON'BLE HIGH COURT BY UPHOLDING THE FINDINGS OF THE TRIBUNAL WHICH WAS PASSED AFTER RELYING ON THE JUDGMENT OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. MAX INDIA LTD. REPOR TED AT 295 ITR 282 WHEREIN IT HAS BEEN HELD THAT IT IS SETTLED PRINCIPLE OF LA W THAT IF AFTER EXAMINING THE DETAILS, THE ASSESSING OFFICER HAS TAKEN A VIE W WHICH IS A POSSIBLE VIEW THEN IT CANNOT BE TREATED THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 5. ON THE OTHER HAND, LD. DR HAS PLACED RELIANCE ON THE ORDER PASSED U/S.263 OF THE ACT BY THE LD. PR. COMMISSIONER OF INCOME T AX AND ALSO HAS PLACED RELIANCE ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHORELINE HOTEL PRIVATE LIMITED VS. COMMISSIONER OF INCOME TAX, REPORTED AS (2018) 305 CTR 491 (BOM.). 5 ITA NO. 279/PUN/2018 A.Y.2013-14 6. WE HAVE PERUSED THE CASE RECORDS AND CONSIDERED T HE JUDICIAL PRONOUNCEMENTS PLACED BEFORE US. THAT THIS ISSUE IS PREDO MINANTLY THE MATTER RELATING TO FACTS, WHERE ON THE FACTS OF VERIFICATION OF LOAN CREDITORS, THE ASSESSING OFFICER HAD CONDUCTED SUFFICIENT ENQUIRY. THE FACT O N RECORD CLEARLY ESTABLISHES THAT DETAILED ANSWER AS ASKED BY THE ASSESS ING OFFICER TO THE ASSESSEE REGARDING LOAN CREDITORS THROUGH QUESTIONNAIRE , WAS DULY FURNISHED BY THE ASSESSEE. THE ASSESSING OFFICER, THEREAFTER, HAD IS SUED NOTICES U/S.133(6) OF THE ACT TO ALL THE PARTIES. THE PR. COMMISSIONE R OF INCOME TAX, IN HIS ORDER HAS ALSO AGREED THAT ENQUIRY WAS DONE BY THE ASSESSING OFFICER BUT NOT REQUISITE ENQUIRES CONDUCTED AS ACCORDING TO HIM. THE PO SITION OF LAW ABSOLUTELY CLEAR AS HELD BY THE HON'BLE APEX COURT IN TH E CASE OF CIT VS. MAX INDIA LTD. (SUPRA.) THAT WHEN THE ASSESSING OFFICER HAS TAKE N A VIEW WHICH IS A POSSIBLE VIEW THEN IT CANNOT BE TREATED THAT THE ORDE R PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. ON THE OTHER HAND, CASE LAWS RELIED ON BY THE LD. DR IS SUBSTANTIALLY DIFFERENT ON FACTS FROM CASE OF THE ASSESSEE. 7. IN VIEW OF THE MATTER, WE DIRECT THAT THE ORDER PASS ED BY THE PR. COMMISSIONER OF INCOME TAX U/S.263 OF THE ACT IS ARBITRAR Y AND BAD IN LAW, THEREFORE, SHOULD BE QUASHED. WE ORDER ACCORDINGLY. 8. IN THE COMBINED RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON 21 ST DAY OF JANUARY, 2019. SD/- SD/- D. KARUNAKARA RAO PARTHA SARAT HI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 21 ST JANUARY, 2019. SB 6 ITA NO. 279/PUN/2018 A.Y.2013-14 !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE PR. CIT-1, AURANGABAD. 4 . !'# $$%& , ' %& , ()* , / DR, ITAT, B BENCH, PUNE. 5. #+, -. / GUARD FILE. // TRUE COPY // '/ / BY ORDER, $0 %* / PRIVATE SECRETARY ' %& , / ITAT, PUNE. 7 ITA NO. 279/PUN/2018 A.Y.2013-14 DATE 1 DRAFT DICTATED ON 09 .01.2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 11 .01 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER