PANNA LAL HUKUM CHAND, Jaipur V. CIT, Kota

ITA 326/JPR/2013

• Counselvise Citation: 32623114 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 26-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROLEE AGARWAL
• Assessee Lawyers: G M MEHTACA
• Keywords: Revision of order
• Section: 143(3); 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 326/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 PANNA LAL HUKUM CHAND, NEW MANDI, HINDON CITY, DISTT- KAROULI. CUKE VS. THE C.I.T. KOTA, (RAJASTHAN) LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AABFP 7817 R VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI G.M. MEHTA,(CA) JKTLO DH VKSJ LS @ REVENUE BY : SMT. ROLEE AGARWAL, (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 10/12/2014 ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 09/02/2015 VKNS'K @ ORDER PER: R.P. TOLANI, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28/02/2013 BY THE LEARNED CIT, KOTA FOR A.Y. 2008-0 9. RESPECTIVE GROUNDS OF APPEAL ARE AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRE D IN LAW AND ON FACTS IN TREATING THE ORDER DATED 02/01/2010 U/S ITA 326/JP/2013_ PANNALAL HUKUMCHAND VS. CIT 2 143(3) OF IT ACT, PASSED BY LEARNED A.O. AS ERRONEO US AND PREJUDICIAL TO THE INTEREST OF REVENUE BY IGNORING THE FACT THAT ALL THE FOLLOWING EXPENSES/DEDUCTIONS FOR WHICH ACTION U/S 263 WAS TAKEN, WERE ALLOWED IN ORDER U/S 143(3) OF IT ACT AFTER SPECIFIC QUERIES, REPLY SUBMITTED BY THE ASSESSEE AND DEEP INVESTIGATION BY LEARNED A.O.: (A) ADDITION OR DISALLOWANCE OF INTEREST OF RS. 1,12,603 /- :- (THE ISSUE SETTLED WITH DIRECTIONS ISSUED BY LEARNE D CIT(A) IN ORDER DATED 12/02/2013 (APPEAL NO. 162/2010-2011) IN CASE OF ASSESSEE). (B) SET OFF OF FLOSS OF RS. 1,19,145/ -:- SET OFF ALLOWED BY THE LEARNED A.O. AFTER VERIFICATION FROM THE PAST RECORDS, INCLUDING SUBMISSION OF ALL THE INCOME TA RETURNS FROM A.Y. 2000-01 WITHIN TIME ALLOWED U/S 139(1) OF IT ACT. (C) CLAIM OF LOSS ON ACCOUNT OF THEFT OF RS. 2,50,000/- :- AMOUNT WAS ALLOWED AFTER VERIFYING THE AVAILABLE CASH BALANCE ON THE DAY OF THEFT, FIR LODGED WITHIN THE POLICE. COPY OF FR WAS ALSO SUBMITTED TO LEARNED CIT DURING COURSE OF PROCEEDINGS U/S 263 OF IT ACT. (D) TRADE DEBTORS OF RS. 19,76,226/-:- OUTSTANDING IN REGULAR COURSE OF TRADING ACTIVITIES. (E) CASH CREDITOR IN NAMES OF FARMERS:- THESE WERE TRADING CREDITORS ON ACCOUNT OF SUPPLY OF GOODS, FO R WHICH THERE WAS NO REQUIREMENT TO CONSIDER THE GENUINENESS AND CREDITWORTHINESS. ITA 326/JP/2013_ PANNALAL HUKUMCHAND VS. CIT 3 2 LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE IMPUGNED ASSESSMENT ORDER FRAMED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), WHICH IN DETAIL, CONSIDERS EACH ITE M OF DISALLOWANCES. THUS, THE ASSESSMENT ORDER WHICH CATEGORICALLY MENTIO NS ABOUT VERIFICATION OF ASSESSEES BOOKS OF ACCOUNT, RECORD AND HAS BEEN PASSED AFTER DUE APPLICATION OF MIND. BESIDES THE ISSUE OF INTEREST WAS APPEALED AGAINST BY THE ASSESSEE AND THERE BEING AN APPEAL ON THE ISSUE LD. CIT SHOULD NOT HAVE INVOKED POWERS U/S 263. IT IS FURTHER CONTENDED THAT LD. CIT HAS RAISED THOSE ISSUES WHICH HAVE BEEN DULY CONSIDERED BY THE LD. ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT. DETAILED SUBMISSIONS ARE MADE IN THIS B EHALF BEFORE US, THE CONCISE REPLIES TOWARDS OBJECTIONS OF THE LEARNED CI T ARE MENTIONED AS UNDER:- S. NO. ISSUES TREATED AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. REASONS AGAINST SUCH FINDING OF LEARNED COMMISSIONER OF IT A. A.O. SHOULD HAVE DISALLOWED INTEREST OF RS. 1,12,603/- WHEREAS HE HAD MADE ADDITIONS OF THE SAID AMOUNT. THE ISSUE HAS ALREADY BEEN DECIDED/SETTLED BY LEARNED CIT(A) VIDE ORDER DATED 12/02/2013 AS AGAINST ORDER U/S 263 DATED 28/01/2013 (PB PAGE 4 TO 10) B. A.O. HAD NOT EXAMINED THE ALLOWABILITY OF B/F. LOSSES- WHETHER TIMELY RETURNS SUBMITTED AND LOSSES ACCEPTED ALL THE RETURN SUBMITTED WITHIN TIME ALLOWED U/S 139(1) OF IT ACT AS PER COPY OF ACK. OF RETURNS (PB PAGE 11 TO 35) AFTER GETTING THE ITA 326/JP/2013_ PANNALAL HUKUMCHAND VS. CIT 4 BY DEPARTMENT ACCOUNTS AUDITED U/S 44AB OF IT ACT. RETURNS UP TO A.Y. 2007-08 WERE ACCEPTED U/S 143(1) OF IT ACT. C. LOSS FOR CASH THEFT AMOUNTING TO RS. 2,50,000/- WAS ALLOWED WITHOUT ANY CONFIRMATIONS FROM POLICE DEPARTMENT. CASH LYING IRON BOX (CHEST) AMOUNTING TO RS. 2,50,000/- WAS STOLEN. THE THEFT AMOUNT IS DULY ENTERED IN CASH BOOK (PB PAGE 36 & 37) FOR WHICH FIR WAS LODGED WITH THE POLICE (PB PAGE 38 TO 40) SINCE NO RECOVERY WAS MADE EVEN UP TO THE DATE OF HEARING BEFORE LEARNED CIT U/S 263 COPY OF FR (PB PAGE 41)WAS ALSO SUBMITTED TO LEARNED CIT. D. AS PER LIST OF S. CREDITORS AND DEBTORS, RS. 19,76,221/- WAS ADVANCED AS INTEREST FREE AMOUNT WHEREAS THE ASSESSEE IS PAYING HUGE INTEREST. THEREFORE, SUBSTANTIAL AMOUNT OUT OF INTEREST PAYMENTS SHOULD HAVE BEEN DISALLOWED BY A.O. ALL THE S. CREDITORS AND S. DEBTORS ARE FOR TRADING ACTIVITIES. MAJORITY OF THEM ARE AGRICULTURISTS. AS AGAINST (INTEREST FREE) TRADE CREDITORS OF RS. 18,43,325/- (PB PAGE 42 & 43) THE AMOUNT DUE FROM TRADE DEBTORS IS RS. 19,76,226/- (PB PAGE 44 TO 46) AS PER THE MARKET PRACTICE, IN ORDER TO ENSURE MAJOR QUANTITY SALE OF AGRICULTURAL PRODUCT TO THE ASSESSEE FIRM, IT HAS TO ADVANCE MONEY TO AGRICULTURISTS OR OTHER SELLERS. E. GENUINENESS OF CREDITS IN NAMES OF FARMERS. BOOKS OF ACCOUNTS WERE THOROUGHLY EXAMINED BY LEARNED A.O. HE HAD ALSO TEST CHECKED BY OBTAINING CONFIRMATIONS FROM THE TRADE CREDITORS/DEBTORS FOR THEIR DEALINGS WITH THE ASSESSEE FIRM AND FOUND THESE TO BE GENUINE. ON THE OTHER HAND, LEARNED CIT HAD NOT CHALLENGED THE GENUINENESS OF THE PURCHASE MADE BY THE ASSESSEE INCLUDING ITA 326/JP/2013_ PANNALAL HUKUMCHAND VS. CIT 5 FROM THE FARMERS. NO LOAN WAS TAKEN FROM FARMERS THEREFORE THEIR CREDITWORTHINESS AND GENUINENESS CANNOT BE THE RELEVANT ISSUES FOR INITIATING PROCEEDINGS U/S 263. IT IS FURTHER CONTENDED THAT THE FIRST APPEAL IN TH IS CASE WAS INSTITUTED ON 06/12/2010 CHALLENGING THE DISALLOWANCE OF INTERE ST. WHEN THE SUBJECT MATTER OF THE ASSESSMENT IS PENDING IN THE FIRST APPEAL, IT WAS NOT PROPER ON THE PART OF THE LEARNED CIT TO ISSUE 263 NOTICE ON 10/1/2013. THE ISSUE OF INTEREST WAS VERY MUCH BEFORE THE LEARNED CIT(A) AND HAS BEEN DECIDED BY HIM VIDE ORDER DATED 12/2/2013. 3. IT IS PLEADED THAT WHEN THE ASSESSMENT PROCEEDING S ARE COMPLETED IN A PROPER MANNER, THE SAME CANNOT BE HE LD TO BE ERRONEOUS MERELY BECAUSE LEARNED CIT HOLDS DIFFEREN T VIEW ABOUT THE MANNER OF INQUIRY. BESIDES THE ISSUE, WHICH IS ALREA DY SUBJECT MATTER OF APPEAL CANNOT BE SUBJECT TO 263 ACTION. 4. IT IS FURTHER PLEADED THAT THE LEARNED CIT HAS P OWER OF ASSESSMENT AND IF ANY MISTAKE IS FOUND BY HIM IN TH E ASSESSMENT, SAME CAN BE ENHANCED BY HIM. THE FACT THAT NO ENHANCEMENT OF INCOME IS MADE BY THE LEARNED CIT SIGNIFIES THAT THERE WAS NEI THER ANY ERROR IN THE ASSESSMENT ORDER NOR IT WAS PREJUDICIAL TO THE R EVENUE. THE ACTION ITA 326/JP/2013_ PANNALAL HUKUMCHAND VS. CIT 6 OF THE LEARNED CIT AMOUNTS TO REVIEW OF THE ASSESSME NT PROCEEDINGS, WHICH IS NOT PERMISSIBLE U/S 263 OF THE ACT, THEREFO RE, THE PROCEEDINGS MAY BE QUASHED. 5. THE LEARNED SR.DR SUPPORTED THE ORDER OF THE LEAR NED CIT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. FROM THE RECORD, IT CLEARLY EMERGES THAT THE ISSUE OF INTEREST WAS ALREADY SUBJE CT MATTER OF FIRST APPEAL ON WHICH CIT DOES NOT HAVE POWER OF REVISION U /S 263. APROPOS OTHER ISSUES, WE FIND THAT THE ASSESSMENT PROCEEDING S HAVE BEEN COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSMENT HAS BEEN FRAMED AFTER MAKING NECESSARY INQUIRIES. IT IS TRITE LAW TH AT THE DIFFERENT OFFICERS HAVE DIFFERENT PERCEPTION ABOUT THE MANNER OF INQUI RY. HOLDING A DIFFERENT PERCEPTION, DOES NOT MEAN THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE. IF THE ASSESSING OFFICER HAS ADOPTED ONE O F THE PLAUSIBLE AND REASONABLE VIEWS, THE ORDER CANNOT BE TERMED AS ERRO NEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE MERELY B ECAUSE SOME MORE INQUIRY OR DEFERENT VIEW COULD BE ADOPTED AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS . CIT 243 ITR 83. IN CONSIDERATION OF ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS ITA 326/JP/2013_ PANNALAL HUKUMCHAND VS. CIT 7 THE CASE LAWS MENTIONED ABOVE, WE HOLD THE EXERCISE O F JURISDICTION U/S 263 OF THE ACT IS NOT PROPER, THE SAME IS QUASHED. 7. IN THE RESULT, THE ASSESSEE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/02/2015. SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 09 TH FEBRUARY, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI PANNA LAL HUKUM CHAND, HINDON CITY, DISTRICT- KAROULI. 2. IZR;FKHZ @ THE RESPONDENT- THE CIT, KOTA. 3. VK;DJ VK;QDR @ CIT, JAIPUR 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 5. XKMZ QKBZY @ GUARD FILE (ITA NO. 326/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR