Sh. Surinder Kumar, Amritsar. V. The Commissioner of Income-tax-I, Amritsar.

ITA 332/ASR/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73243 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3); 133A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.332(ASR)/2013 ASSESSMENT YEAR:2008-09 PAN :AFFPK9640G SHRI SURINDER KUMAR PROP. VS. COMMISSIONER OF INCOM E TAX-1, M/S. S.K. JEWELLERS, AMRITSAR. 70/4, GURU BAZAR, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:NONE RESPONDENT BY:SH. MAHAVIR SINGH, DR DATE OF HEARING: 20/01/2014 DATE OF PRONOUNCEMENT:14/02/2014 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE COMM ISSIONER OF INCOME TAX-1, AMRITSAR, DATED 30.03.2013 FOR THE ASSESSME NT YEAR 2008-09 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961.THE A SSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER PASSED BY THE CIT IN SETTING ASIDE TH E ASSESSMENT WITH THE DIRECTION TO THE AO TO COMPLETE THE ASSESS MENT DENOVO IS NOT LEGALLY JUSTIFIED. ITA NO.332(ASR)/2013 2 2. THE ORDER OF THE AO CANNOT BE SAID TO BE ERRONEOUS. 3. REGARDING ENTRY 3120650/-, IT IS ONLY A TRANSFER EN TRY. THERE IS NO INVESTMENT RELEVANT TO THE FY 2007-08 SO THERE W AS NO NEED OF ANY ENTRY BY THE AO REGARDING ITS SOURCE. 4. THE ASSESSEE HAD SHOWN THE CLOSING STOCK OF GOLD JE WELLERY OF 14888.700 GM AT RS.12593534/- APPLYING THE RATE OF RS.845.84 PER GRAM. THE METHOD OF VALUATION OF CLOSING STOCK WAS WEIGHTED AVERAGE COST PRICE METHOD WHICH THE ASSESS EE HAS BEEN REGULARLY FOLLOWING IN THE EARLIER YEARS. AUDI T REPORT WAS ALSO FILED. THE LD. AO COMMITTED TO ERRORS IN ACCE PTING THE CLAIM OF THE ASSESSEE. 5. THE ORDER OF AO IS NEITHER ERRONEOUS NOR PREJUDICIA L TO THE INTEREST OF THE REVENUE. 2. NONE ATTENDED ON BEHALF OF ASSESSEE INSPITE OF V ALID SERVICE OF NOTICE. THEREFORE, WE PROCEED TO DECIDE THE APPEAL EX-PARTE AFTER HEARING THE LD. DR AND MATERIAL AVAILABLE ON RECORD. 3. THE LD. DR RELIED UPON THE ORDER OF THE CIT-1, A MRITSAR. 4. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIA L AVAILABLE ON RECORD. AS REGARDS VALUATION OF CLOSING STOCK AND T HAT OF THE CREDIT ENTRIES THE LD. CIT, AMRITSAR HAS STATED THAT NO INQUIRY HAS BE EN MADE BY THE AO WHILE PASSING THE ORDER UNDER SECTION 143(3) OF THE ACT, WHICH IS DATED 28.10.2010. WE HAVE PERUSED THE SAID ASSESSMENT ORD ER PASSED U/S 143(3) OF THE ACT AND THE ORDER OF THE LD. CIT-1, AMRITSAR DA TED 30.03.2013 AND SHOW CAUSE NOTICE DATED 18.03.2013 REPRODUCED IN PARA-3 OF LD. CITS ORDER. ON ITA NO.332(ASR)/2013 3 PERUSAL OF THE SAME, WE CONCUR WITH THE VIEWS OF TH E LD. CIT THAT THE ORDER U/S 143(3) FOR THE A.Y. 2008-09 WAS PASSED ON 28.10 .2010 BUT NO ENQUIRY OR VERIFICATION HAS BEEN MADE BY THE AO BEFORE ACCEPTI NG THE VALUATION OF CLOSING STOCK OF JEWELLERY. DURING SURVEY U/S 133A ASSESSEE SURRENDERED ADDITIONAL INCOME BY VALUING THE CLOSING STOCK @ 10 26 PER GRAM AS ON 19.12.2007. THE PREVALENT RATE AS ON 31.03.2008 WAS RS.1212 PER GRAM, THE CLOSING STOCK HAS BEEN WORKED OUT BY APPLYING A RAT E OF RS.845/- PER GRAM. THUS, THE RATE APPLIED FOR VALUATION OF CLOSING STO CK IS NOT ONLY ERRONEOUS BUT PREJUDICIAL TO THE INTEREST OF REVENUE. ASSESSING O FFICER SHOULD HAVE APPLIED HIS MIND TO THE CASE IN ALL PERSPECTIVE. IF AO ACCE PTS THE CLAIM OF THE ASSESSEE ON THE BASIS OF VALUATION SHOWN BY THE AS SESSEE IN AUDIT REPORT WITHOUT MAKING ENQUIRIES AND ENTRY MADE IN THE BOOK S OF THE ASSESSEE WITHOUT ANY SUPPORTING MATERIAL, THE OBVIOUS CONCL USION IS THAT THE ORDER PASSED BY THE AO IS ERRONEOUS IRRESISTIBLE. THE A.O . IS NOT ONLY ADJUDICATOR BUT ALSO AN INVESTIGATOR. HE IS NOT EXPECTED TO PAS SIVE IN THE FACE OF A RETURN WHICH IS APPARENTLY IN ORDER BUT CALLS FOR FURTHER ENQUIRY. THUS, ANY ORDER PASSED WITHOUT MAKING REQUISITE ENQUIRY MAKES THE O RDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE WIT HIN THE MEANING OF SECTION 263 OF THE ACT. THIS VIEW HAS BEEN UPHELD BY VARIOU S JUDICIAL PRONOUNCEMENTS. RELIANCE IS PLACED IN THIS REGARD O N THE DECISION OF THE ITA NO.332(ASR)/2013 4 HONBLE SUPREME COURT IN THE CASE MALABAR INDUSTRIA L CO. LTD VS CIT 187 412 (ALL) , THALIBAI F JAIN & ORS VS. ITO 101 ITR P AGE 1 (KARNATAKA), DUGGAL & CO. VS. CIT 220 ITR 456 (DEL). IT HAS ALSO BEEN HELD BY THE APEX COURT IN THE CASE OF TARA DEVI AGGARWAL VS. C IT 88 ITR 323 (SC) THAT WHERE A STEREOTYPE ORDER IS PASSED, BY WHICH SIMPLY ACCEPTS WHAT THE ASSESSEE HAS SAID IN THE RETURN AND FAILS TO MAKE E NQUIRIES WHICH ARE CALLED FOR IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIO NER IS JUSTIFIED IN HOLDING THAT THE ORDER IS ERRONEOUS AND PREJUDICI AL TO THE INTEREST OF REVENUE. 4.1. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER O F THE LD. CIT WHO HAS RIGHTLY SET ASIDE THE SAID ISSUE TO THE FILE OF THE AO TO REFRAME THE ASSESSMENT DENOVO SINCE THE SAME IS PREJUDICIAL AND ERRONEOUS TO THE INTEREST OF THE REVENUE UNDER SECTION 263 OF THE ACT. 4.2. WE ALSO CONCUR WITH THE VIEWS OF THE LD. CIT T HAT THE AO DID NOT RAISE ANY QUERY AS TO THE NATURE AND SOURCE OF CRED IT ENTRY OF RS.3120650/-. NO DETAILS HAVE BEEN CALLED FOR WITH REGARD TO SUCH INVESTMENT WHICH SHOWS THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AND PR EJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY, WE FIND NO INFIRMITY IN T HE ORDER OF THE LD. CIT AND THE SAME IS UPHELD. THUS, ALL THE GROUNDS OF TH E ASSESSEE ARE DISMISSED. ITA NO.332(ASR)/2013 5 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.332(ASR)/2013 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14TH FEBRUARY, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14TH FEBRUARY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.SURINDER KUMAR, AMRITSAR. 2. THE CIT-1, ASR. 3. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR