Shri Nishant.P.Soni, Indore V. The CIT, Indore

ITA 313/IND/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9567 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 18-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K ANAND
• Assessee Lawyers: P D NAGAR
• Keywords: Revision of order; Source of fund
• Section: 143(3); 148; 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.313/IND/2010 A.Y.2004-05 NISHANT P. SONI BURHANPUR PAN BAPPS6529G APPELLANT VS COMMISSIONER OF INCOME TAX-II INDORE RESPONDENT APPELLANT BY : SHRI P.D. NAGAR RESPONDENT BY : SHRI S.K. ANAND O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT DATED 19.3.2010 ON THE GROUND THAT THE ASSESSM ENT ORDER FRAMED U/S 143(3)/148 IS NEITHER ERRONEOUS NOR PREJUDICIA L TO THE INTEREST OF REVENUE, THEREFORE, THE DIRECTION TO THE ASSESSING OFFICER IN ORDER U/S 263 OF THE ACT IS NOT JUSTIFIED. 2. DURING HEARING, WE HAVE HEARD THE LEARNED REPRES ENTATIVES OF BOTH THE PARTIES AND CONSIDERED THE ARGUMENTS ADVANCED B Y THEM. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT A DE TAILED EXPLANATION 2 WAS SUBMITTED BEFORE THE INCOME TAX OFFICER, DURING ASSESSMENT PROCEEDINGS, FOR THE ASSESSMENT YEARS 2003-04 TO 20 05-06 AND HE ACCORDINGLY FRAMED THE ASSESSMENT U/S 143(3) OF THE ACT. THE BASE YEAR WAS CLAIMED TO BE ASSESSMENT YEAR 2003-04 AND THE SAME FUNDS WERE CLAIMED TO BE ROTATED IN SUBSEQUENT YEARS FOR BUSINESS WHICH WERE DULY VERIFIED DURING ASSESSMENT PROCEEDINGS. IT WAS FURTHER ASSERTED THAT THE ASSESSMENT WAS FRAMED AFTER DUE VERIFICATION OF BANK ACCOUNTS, RELEVANT RECORDERS AND THEN THE EXPLANATION OF THE ASSESSEE WAS ACCEPTED, THEREFORE, THE PROCEEDINGS INITIATED U/S 263 OF THE ACT BY THE LEARNED CIT ARE WITHOUT ANY BASIS. ON THE OTHER HAND, SHRI S.K. ANAND, LEARNED CIT D R STRONGLY DEFENDED THE IMPUGNED ORDER BY INVITING OUR ATTENTI ON TO UNCONTROVERTED FINDING CONTAINED IN CONCLUDING PARA OF THE IMPUGNE D ORDER. IT WAS FURTHER ASSERTED THAT THE ASSESSMENT ORDER IS ERRON EOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THERE IS NO ROTA TION OF CASH AS HAS BEEN CLAIMED BY THE LD. COUNSEL FOR THE ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. BRIEF FACTS ARE THAT THE ASSESSEE, AN INDIVIDUAL, IS IN THE BUSINES S OF COTTON. THE ASSESSMENT WAS FRAMED U/S 143(3) READ WITH SECTION 147/148 OF THE ACT ON 28.12.2007. THE ASSESSEE DEPOSITED RS.65,000/- AND RS.15 LACS ON 23.5.2003 AND 31.3.2004, RESPECTIVELY, IN HIS BANK ACCOUNT BUT DID NOT 3 FILE ANY RETURN OF INCOME. NOTICE U/S 148 OF THE A CT WAS ISSUED TO THE ASSESSEE. PURSUANT TO THAT THE ASSESSEE DECLARED B USINESS INCOME OF RS.90,000/-. DURING ASSESSMENT PROCEEDINGS THE CLA IM OF THE ASSESSEE IS THAT THE IMPUGNED AMOUNTS WERE ONLY ROTATION OF FUNDS AND THE SAME WERE INTRODUCED IN THE ASSESSMENT YEAR 2003-04 AND WERE ACCEPTED BY THE ASSESSING OFFICER. ON VERIFICATION OF RECORD I T WAS FOUND BY THE DEPARTMENT THAT DURING THE YEAR UNDER CONSIDERATION I.E. 2004-05 THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNTS, TH EREFORE, IT WAS NOT POSSIBLE FOR THE REVENUE THAT THE IMPUGNED AMOUNTS WERE ONLY A ROTATION OF FUNDS. AS PER THE REVENUE, THERE WAS NO PROOF OF AVAILABILITY OF CASH THAT THE SUBSTANTIAL CLAIMED AMOUNT OF CASH WAS AVA ILABLE WITH THE ASSESSEE, CONSEQUENTLY, THE ASSESSING OFFICER BLIND LY ACCEPTED THE VERSION OF THE ASSESSEE THAT TOO WITHOUT VERIFYING THE FACTS. IT IS FURTHER SEEN THAT THE LEARNED CIT IN THE IMPUGNED ORDER HAS SET ASIDE THE ASSESSMENT ORDER WITH THE DIRECTION TO THE ASSESSIN G OFFICER TO RECONSIDER THE CLAIM OF THE ASSESSEE OF THE IMPUGNE D AMOUNTS ON THE RESPECTIVE DATES ON WHICH THE FUNDS WERE CLAIMED TO BE ROTATED/INTRODUCED FOR BUSINESS IN THE ASSESSMENT Y EAR 2003-04 AND AFTER PROPER VERIFICATION AND DUE OPPORTUNITY, THE SAME MAY BE DECIDED. IT IS NOT THE CASE THAT THE LEARNED CIT FINALLY REA CHED A PARTICULAR CONCLUSION RATHER STICK TO THE FAIR APPROACH IN DIR ECTING TO VERIFY THE CLAIM OF THE ASSESSEE, THEREFORE, NO PREJUDICE IS CAUSED TO THE ASSESSEE. 4 4. WHILE INVOKING THE JURISDICTION U/S 263 OF THE A CT, THE LEARNED CIT SHOULD BE SATISFIED THAT THE ORDER PASSED BY THE AS SESSING OFFICER IS GROSSLY ERRONEOUS AND AT THE SAME TIME PREJUDICIAL TO THE INTEREST OF REVENUE. BOTH THE CONDITIONS SHOULD BE IN EXISTENC E TOGETHER. THIS VIEW IS SUPPORTED BY THE DECISION OF THE HONBLE HIGH CO URT OF MP IN H.H. MAHARAJA RAJA PAWAR, DEWAS V. CIT; 138 ITR 518, THE REFORE, IN THE ABSENCE OF ANY SOURCE OF IMPUGNED AMOUNTS DURING 20 04-05 STATED TO BE DEPOSITED IN BANK ACCOUNTS, THE ASSESSING OFFICE R WAS NOT JUSTIFIED IN ACCEPTING THE SOURCE OF FUNDS DURING THE ASSESSMENT YEAR 2003-04, THEREFORE, WE FIND NO INFIRMITY IN SETTING ASIDE TH E ASSESSMENT ORDER WITH THE DIRECTION TO THE ASSESSING OFFICER TO VERIFY TH E CLAIM OF THE ASSESSEE FOR DEPOSIT AND THAT TOO AFTER PROVIDING PROPER OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. WE, THEREFORE, UPHOLD THE ORDER O F THE LEARNED CIT. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 2 ND MARCH, 2011. (R.C.SHARMA) (JOGI NDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 ND MARCH, 2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE DN/- 5