Shri Nirmal Kumar Patodi, Indore V. The CIT- II, Indore

ITA 32/IND/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7147 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 03-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KESHAVE SAXENA
• Section: 143(3)

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. 32/IND/2011 A.Y.2006-07 NIRMAL KUMAR PATODI INDORE PAN ABNPJ-7307F : APPELLANT VS COMMISSIONER OF INCOME TAX-I INDORE : RESPONDENT APPELLANT BY : SHRI AJAY TULSIYAN ALONG WITH SHRI MANISH VAIDYA RESPONDENT BY : SHRI KESHAVE SAXENA, CIT DR DATE OF HEARING :20.12.2011 DATE OF PRONOUNCEMENT : 20.12.2011 O R D E R PER JOGINDER SINGH BY WAY OF THIS APPEAL, THE ASSESSEE SEEKS TO CHALLE NGE THE ORDER OF THE LEARNED CIT-I, INDORE, DATED 24.2011 O N THE GROUND THAT THE LEARNED CIT WAS NOT JUSTIFIED IN HO LDING THAT THE ORDER PASSED BY THE AO U/S 143(3) OF THE ACT WA S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE AND 2 ALSO ERRED IN SETTING ASIDE THE ASSESSMENT ORDER TO MAKE THE SAME DE-NOVO. 2. DURING HEARING, WE HAVE HEARD SHRI AJAY TULSIYAN , LEARNED COUNSEL FOR THE ASSESSEE ALONG WITH SHRI MA NISH VAIDYA AND SHRI KESHAVE SAXENA, LEARNED CIT DR. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE RETURN OF INCOME FILED BY THE ASSESSEE WAS ACCOMPANIED WITH THE COMP UTATION OF INCOME, BALANCE SHEET, PROFIT AND LOSS ACCOUNT, CAPITAL ACCOUNT, STATEMENT OF CAPITAL GAINS AND ALL THE NOT ICES ISSUED TO THE ASSESSEE WERE DULY ATTENDED. THE ASSESSEE C LAIMED TO HAVE FILED WRITTEN SUBMISSIONS WHICH WERE DULY EXAM INED BY THE AO ACCEPTING THE RETURNED INCOME. A SHORT TERM CAPITAL GAIN OF RS.9,84,518/- IN RESPECT OF MUTUAL FUND INV ESTMENT AND ALSO INVESTMENT IN SHARES WAS DULY EXAMINED BY THE AO. IT WAS SUBMITTED THAT NOTICE U/S 263(1) OF THE ACT WAS ISSUED TO THE ASSESSEE PROPOSING TO SET ASIDE THE ORIGINAL ASSESSMENT FRAMED U/S 143(3)ON THE PREMISES THAT REQUISITE INQ UIRY WAS NOT MADE BY THE AO BEFORE ACCEPTING THE SHORT TERM CAPITAL GAINS. THE CRUX OF ARGUMENTS IS THAT REQUISITE INQ UIRIES WERE MADE BY THE AO, QUESTIONNAIRES WERE ISSUED WHICH WE RE DULY 3 REPLIED. ON THE OTHER HAND, THE LEARNED CIT DR, SHR I KESHAVE SAXENA, STRONGLY DEFENDED THE IMPUGNED ORDER BY SUB MITTING THAT THE ORDER IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE ON MANY COUNTS TO WHICH OU R ATTENTION WAS INVITED TO THE ASSESSMENT ORDER ALONG WITH THE FACTUAL MATRIX MENTIONED IN THE IMPUGNED ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. WITHOUT GOING INT O MUCH DELIBERATION WE FIND THAT THE ASSESSMENT ORDER HAS BEEN FRAMED BY THE LEARNED AO IN A SLIP SHORT MANNER. AD MITTEDLY, THERE IS A MENTION THAT THE ASSESSEE ATTENDED THE P ROCEEDINGS FROM TIME TO TIME, WRITTEN SUBMISSIONS FILED BY THE ASSESSEE WERE DULY PERUSED AND THE BOOKS OF ACCOUNTS WERE DU LY EXAMINED ON TEST CHECK BASIS. WE ARE OF THE VIEW T HAT KEEPING IN VIEW THE CLAIM OF THE ASSESSEE, A DETAILED REASO NED ORDER SHOULD HAVE BEEN PASSED BY THE AO BECAUSE FIRSTLY T HERE IS NO DISCUSSION ON SHORT TERM CAPITAL GAIN AND ITS ALLOW ABILITY AND SECONDLY, THERE IS NO MENTION IN THE ASSESSMENT ORD ER REGARDING DETAILS OF PURCHASE, NUMBER OF SHARES, PU RCHASE RATE, PURCHASE VALUE, DATE OF SALE, NUMBER OF SHARE SOLD, 4 PURCHASED AND SALE VALUE/RATES, SUPPORTING BILLS WH ETHER THE SALE WAS MADE THROUGH D-MAT ACCOUNT, ETC. THERE IS ALSO NO MENTION WHETHER THE TRANSACTION WAS REFLECTED AS IN VESTMENT IN REGULAR BOOKS OF ACCOUNTS AND ALSO THE NUMBER OF TRANSACTIONS. IN THE ABSENCE OF SUCH FINDING, THERE IS EVERY POSSIBILITY THAT INTEREST OF REVENUE IS JEOPARDISZE D, THEREFORE, THE ORDER IS ERRONEOUS AS WELL AS PREJUDICIAL TO TH E INTEREST OF THE REVENUE. OUR VIEW IS SUPPORTED BY THE LANDMARK DECISION FROM THE HON'BLE APEX COURT IN MALABAR INDUSTRIAL COMPANY LIMITED V. CIT; 243 ITR 83 AND THE DECISION FROM TH E HON'BLE JURISDICTIONAL HIGH COURT IN CIT V. DEEPAK KUMAR BH ARGAVA; 9 ITJ 544. IT SEEMS THAT DUE TO WORK PRESSURE, THE AO DID NOT CONDUCT PROPER INQUIRY AND SIMPLY ACCEPTED THE CLAI M OF THE ASSESSEE. THE STAND OF THE LEARNED CIT IS AFFIRMED, ESPECIALLY WHEN WE HAVE FOUND THAT THE ASSESSMENT ORDER IS NON - SPEAKING ONE AND HAS BEEN FRAMED WITHOUT CONSIDERIN G THE FACTS SUCH AS FREQUENT TRANSACTIONS MADE WITHIN A S HORT SPAN OF TIME AND THE HOLDING IS ALSO IN A BIG QUANTITY. WITHOUT ENUMERATING FURTHER WE FIND THAT THE LEARNED CIT HA S PASSED A REASONED ORDER WHEREAS THE ASSESSMENT ORDER NON-SPE AKING 5 ONE RESULTING INTO ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IN VIEW OF THESE FACTS, W E FIND NO INFIRMITY IN THE STAND OF THE LEARNED CIT. IT IS A FFIRMED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DECEMBER, 2011 IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :_20 TH DECEMBER, 2011. DN