Shri Devendra Bharatbhai Dhabi, Ahmedabad V. The CIT- 1, Ahmedabad

ITA 3320/AHD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85574 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 11-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Assessee Lawyers: S K SADHWANI
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBE R AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.3320/AHD/2014 ( / ASSESSMENT YEAR : 2010-11) SHRI DEVENDRA BHARATBHAI DHABI 923/4, MAHADEV VALO KHANCHO, PANCHBHAI POLE GHEEKANTA AHMEDABAD / VS. THE CIT-1 AMBAWADI, AHMEDABAD ./ ./ PAN/GIR NO. : AHWPD 2819 H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S.K. SADHWANI, AR / RESPONDENT BY : SHRI O.P. VAISHNAV, CIT-DR / DATE OF HEARING 27/01/2015 !'# / DATE OF PRONOUNCEMENT 29/ 01/2015 / O R D E R PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER PASSED U/S.263 OF THE I.T.ACT, 1961 BY THE LD.CIT-I , AHMEDABAD DATED 17/10/2014 FOR THE ASST.YEAR 2010-11. THE ASSESSE E HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. (A) THE LEARNED CIT-1, AHMEDABAD HAS ERRED IN LAW AND FACT BY CANCELLING THE ASSESSMENT ORDER PASSED BY ITO U/ S.143(3) ITA NO.3320/AHD /2014 DEVENDRA BHARATBHAI DHABI VS. CIT ASST.YEAR 2010-11 - 2 - DTD. 20.12.2012 AND DIRECTING TO MAKE THE FRESH ASS ESSMENT BY PASSING ORDER U/S.263 DTD. 17.10.2014. (B) THE ISSUE INVOLVED IN SECTION 263 IS COMMON INT EGRATED AND ALREADY DECIDED BY HON.CIT(A)-VI ON DT. 08.10.2014. TO THAT EXTENT THE ORDER OF CIT(A) WAS MERGED WITH THE ASSE SSMENT ORDER PASSED U/S.143(3) BY ITO. (C) THEREFORE THE ORDER PASSED U/S.263 BY LD.CIT-1 SUBSEQUENT TO PASSING OF ORDER BY CIT(A) IS UNJUSTIFIED, BAD IN L AW AND REQUIRES TO BE QUASHED. 2. THE APPELLANT CRAVES A LEAVE TO ADD, ALTER AND/OR M ODIFY THE GROUNDS OF APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF READYMADE GARMENTS OF PURCHASE AND SALE OF CLOTH IN THE NAME OF HARIKRUPA GARMENT. AS PER THE TRADING ACCO UNT OF HARIKRUPA GARMENT, THE ASSESSEE SHOWED SALES OF RS.6,32,281/- AND GROSS PROFIT OF RS.90,148/- WHICH COMES @ 14.26% AND NET PROFIT OF RS.17,920/-. IN ADDITION THERETO, THE ASSESSEE MADE SOME PURCHASES THROUGH CREDIT CARDS OF CITI BANK, HDFC BANK LTD., KOTAK MAHINDRA BANK L TD., ICICI BANK LTD. AND THE ROYAL BANK OF SCOTLAND AMOUNTING TO RS .29,39,601/-. THE ASSESSEE SUBMITTED THAT THESE PURCHASES ARE OVER AN D ABOVE THE PURCHASES DISCLOSED IN THE CASE OF HARIKRUPA GARMENT AND OFFE RED AN INCOME OF 5% ON THE SAID PURCHASES U/S.44AF OF THE ACT. THE ASS ESSEE FILED AN APPEAL BEFORE CIT(A) AGAINST THE AFORESAID ADDITION. WE F IND THAT THE CIT INITIATED PROCEEDINGS U/S.263 OF THE ACT VIDE NOTIC E DATED 19/08/2014 ON TRADING PURCHASES MADE THROUGH CREDIT CARDS AS UNAC COUNTED PURCHASES OF CLOTH AND STATED THAT ORDER OF AO WAS PASSED U/S .143(3) IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE UNDER TH E PROVISIONS OF SECTION ITA NO.3320/AHD /2014 DEVENDRA BHARATBHAI DHABI VS. CIT ASST.YEAR 2010-11 - 3 - 263 OF THE ACT. THE SAME WAS OBJECTED BY THE LD.AR ON BEHALF OF THE ASSESSEE. MEANWHILE, THE CIT(A) VIDE ORDER DATED 0 8/10/2014 DELETED THE ADDITION OF 4,19,187/- AND HELD THAT THERE WAS NO REASON FOR AO TO REJECT THE INCOME OFFERED U/S.44AF OF THE ACT. THE ASSESSEE ALSO INFORMED CIT THAT THE ISSUE INVOLVED IN PROPOSED AC TION U/S.263 BEING INTEGRATED COMMON ISSUE COULD NOT BE SEGREGATED BE FORE TWO DIFFERENT AUTHORITIES AND THERE CANNOT BE TWO PARALLEL PROCEE DINGS VIDE HIS LETTER DATED 09/10/2012. IN SPITE OF THAT, THE CIT PASS ED ORDER U/S.263 OF THE ACT ON 17/10/2014. IT MEANS THAT CITS ORDER DATED 17/10/2014 PASSED U/S.263 OF THE ACT SETTING ASIDE THE ASSESSMENT ORD ER, I.E. AFTER THE ORDER OF CIT(A) DATED 08/10/2014. THE ORDER OF AO HAD AL READY MERGED WITH THE ORDER OF THE CIT(A) WHICH IS EVIDENT FROM HIS O RDER DATED 08/10/2014. IT ACCORDING TO US THE CIT UNDER PROCE EDINGS OF SECTION 263 OF THE ACT IN ITS ORDER DATED 17/10/2014 CANNOT CAN CEL THE ASSESSMENT ORDER WHICH HAS ALREADY MERGED WITH THE ORDER OF TH E CIT(A) BY VIRTUE OF HIS ORDER DATED 08/10/2014. IN VIEW OF THIS, THE S AME IS QUASHED. AS A RESULT, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 3 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 29-1-2015, THE .. OF JANUARY, 2015 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 29/ 01 /2015 &.., .(../ T.C. NAIR, SR. PS ITA NO.3320/AHD /2014 DEVENDRA BHARATBHAI DHABI VS. CIT ASST.YEAR 2010-11 - 4 - !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT-I, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 27.1.15 (DICTATION-PAD 8- P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27.1.15 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.29.1.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 29.1.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER