ACIT, UDAIPUR V. M/s. Fragrance Cosmetics Pvt. Ltd., UDAIPUR

ITA 317/JODH/2010

• Counselvise Citation: 31723314 RSA 2010
• Duration Of Justice: 3 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-12-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 06-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO.317/JU/2010 BLOCK PERIOD: 2001-02 ASST. COMMISSIONER OF INCOME TAX, VS. M/S FRAGRANCE COSMETICS PVT. LTD., CIRCLE-1, UDAIPUR. C/O. MEWAR SHEET GRAPH, SARDARPURA, UDAIPUR (PAN: AAACF 4214 F). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.A. JOSHI, D.R. RESPONDENT BY : NONE DATE OF HEARING : 04.12.2013 DATE OF PRONOUNCEMENT : 10.12.2013 ORDER PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE FOR A.Y. 2001-02 IS DIR ECTED AGAINST THE ORDER OF LD. CIT(A), UDAIPUR, DATED 16.02.2010. 2. THE SOLE ISSUE RAISED IN THIS APPEAL READS AS UN DER:- ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN QUASHING THE ASSESSMENT PROCEED INGS INITIATED U/S 147 OF THE I.T. ACT, 1961. 2 ITA NO.317/JU/2010 A.Y. 2001-02 3. NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE T IME OF HEARING OF THE APPEAL. THEREFORE, APPEAL WAS HEARD EX-PARTE. 4. THE FACTS APROPOS THE SOLE GROUND RAISED ARE THA T THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF COSMETI CS ITEMS. FOR A.Y. 2001-02, THE COMPANY FILED ITS RETURN OF INCOME ON 18.10.200 1 DECLARING A LOSS OF RS.3,14,507/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT FOR SHORT) AT A LOSS OF RS .1,77,107/-. THEREAFTER, THE CASE WAS REOPENED UNDER SECTION 147 OF THE ACT BY ISSUAN CE OF NOTICE UNDER SECTION 148 OF THE ACT DATED 02.03.2006. THE ASSESSEE REQUESTE D VIDE LETTER DATED 08.03.2006 THAT THE ORIGINAL RETURN FILED ON 18.10.2001 MAY BE TREATED AS RETURN FILED IN COMPLIANCE TO THIS NOTICE. THE ASSESSEE REQUESTED THAT CERTIFIED TRUE COPY OF THE REASONS BE SUPPLIED TO IT WHICH WAS ALSO SUPPLIED. THE ASSESSEE RAISED OBJECTION AGAINST REOPENING INITIATED UNDER SECTION 147/148 O F THE ACT AND THESE OBJECTIONS WERE REJECTED VIDE REASONED ORDER AND THE REASSESSM ENT WAS COMPLETED VIDE ORDER DATED 18.12.2006 AT A TOTAL INCOME OF RS.19,43,204/ -. AGGRIEVED, THE ASSESSEE WENT BEFORE THE LD. CIT(A) IN WHICH THE VERY INITIA TION OF REASSESSMENT PROCEEDINGS WERE CHALLENGED. AFTER CONSIDERING THE RIVAL SUBMISSIONS THE LD. CIT(A) HAS FOUND THAT THE NOTICE ISSUED FOR REOPENI NG WAS INVALID. THEREFORE, HE HAS QUASHED THE REASSESSMENT PROCEEDINGS AND HAS AL LOWED THE APPEAL OF THE 3 ITA NO.317/JU/2010 A.Y. 2001-02 ASSESSEE. NOW, THE REVENUE IS AGGRIEVED AND HENCE RAISED THE AFOREMENTIONED GROUND BEFORE US. 5. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIV E, WE FOUND THAT THE CASE WAS REOPENED ON THE BASIS OF AN INFORMATION GATHERE D BY THE INVESTIGATION WING OF THE DEPARTMENT FROM THE SEARCH/SEIZURE PROCEEDINGS UNDER SECTION 132(1) OF THE ACT ON 11.03.2005 IN THE CASE OF SHRI GJENDRA PORWA L GROUP. IN FACT FROM THE ORIGINAL ASSESSMENT ORDER DATED 16.03.2004, A COPY OF WHICH WAS PLACED ON RECORD, IT WAS FOUND THAT THE VERY SAME ISSUE REGARDING LOA N TRANSACTION FROM M/S JALKANA TECHNICAL & FINANCIAL SERVICES PVT. LTD. WERE CONSI DERED AND ALLOWED IN THE ORIGINAL ASSESSMENT ORDER PASSED UNDER SECTION 143( 3) OF THE ACT. THE ASSESSEE HAS DISCLOSED IN THE ORIGINAL ASSESSMENT PROCEEDINGS, C ONFIRMATION LETTERS, PROOF OF PAYMENT THROUGH BANKING CHANNEL, AUDITED BOOKS OF A CCOUNT ETC. BEFORE THE A.O. AND AFTER CONSIDERING THE SAME HE HAD TAKEN THE VIE W THAT SHARE TRANSACTIONS WERE GENUINE. ON THE SAME FACTS EXCEPT FOR THE DOUBT CR EATED ON THE BASIS OF THE INFORMATION GATHERED DURING THE SEARCH IN GAJENDRA PORWAL GROUP, NO OTHER MATERIAL EVIDENCE HAS COME FORTH TO TREAT THESE TRA NSACTIONS AS BOGUS AND ONLY ACCOMMODATION ENTRY. THE STATEMENT OF GAJENDRA POR WAL WAS RECORDED BEHIND THE BACK OF THE ASSESSEE AND HE WAS NEVER CROSS-EXAMINE D OR ALLOWED TO BE CROSS- EXAMINED BY THE ASSESSEE. THE SAME VERSION OF GAJE NDRA PORWAL ALSO CONFIRMED 4 ITA NO.317/JU/2010 A.Y. 2001-02 THROUGH CONFIRMATION LETTER DURING THE ORIGINAL ASS ESSMENT PROCEEDINGS JUSTIFYING THE GENUINENESS OF THE TRANSACTION. THIS WOULD COU NTER PRODUCTIVE PRESENT INFERENCE BY THE A.O. THAT THE REASSESSMENT PROCEED INGS WOULD AMOUNT TO CHANGE OF OPINION ONLY. NO REASSESSMENT AS PER THE SETTLE D LAW CAN BE DONE ONLY ON THE BASIS OF CHANGE OF OPINION. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE FINDING OF THE LD. CIT(A) AND, THEREFORE, WE CONFIR M THE QUASHING OF THE REASSESSMENT PROCEEDINGS AND DISMISS THE APPEAL OF THE REVENUE. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. (ORDER PRONOUNCED IN THE OPEN COURT ON 10.12.2013) SD/- SD/- (N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH DECEMBER, 2013 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, JODHPUR BENCH, JODHPUR 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, JODHPUR