Sh. Vikram Jain, Amritsar. V. The Dy. Commissioner of Income Tax, Amritsar.

ITA 334/ASR/2016

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7528 (ITAT-AMRITSAR)
• Duration Of Justice: 6 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 07-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 334/ASR/2016 Assessment Year: 2006-07 M/s Vikram Jain S/o Sh. Vinod Jain, Prop. AAR Vee Textiles, Now at 528, White Avenue, Amritsar [PAN: AALPJ 4238Q] Vs. DCIT, Circle-I Amritsar (Appellant) (Respondent) Appellant by : Sh. R. K. Magow, CA Respondent by: Sh. S. M. Surendranath, Sr. DR Date of Hearing: 07.07.2022 Date of Pronouncement: 14.07.2022 ORDER Per Anikesh Banerjee, JM: The instant appeal is directed against the order of Ld. Commissioner of Income Tax (Appeal)-1, Amritsar, {in brevity CIT(A)} bearing appeal no. 123/2014-15 dated of order 13.03.2016, order passed u/s. 250(6) of the Income Tax Act, 1961 (in brevity of the Act) for the Assessment year 2006-07. The impugned order was originated from the order of Dy. Commissioner of Income Tax, Circle-I Amritsar (in brevity A.O) order passed u/s.14 of the Act order dated 23.03.2014. ITA No. 334/ASR/2016 Vikram Jain v. DCIT 2. Tersely we advert the fact of the case. The assessment was initiated u/s. 148 of the Act as information received from the department of Commissioner of customs Preventive, New Delhi, for cheating of Govt., exchequer by misusing duty entitlement pass book scheme/draw back and focus product scheme. The assessment was completed after rejecting books of account, the ld. AO added back the net profit @ 2.7% on assessee turnover amount to Rs.8,25,34,222/- which is calculated Rs.22,69,690/-. Considering the principal of natural justice Rs.3,00,000/- is allowed against the expenditure claimed by the assesse. The net amount after this deduction comes to Rs.19,96,690/-, which is added back with the total income of the assessee. Aggrieved assesse filed an appeal before the ld. CIT(A). The ld. CIT(A) sustained the addition. Aggrieved, assessee filed an appeal before us. 3. The ld. Counsel of the assessee argued the matter filed a Paper Book which is containing pages from 1 to 15. The ld. Counsel pleaded that during the hearing the ld. AO supplied the recorded reasons of Mr. Rakesh Arora. Later on the recorded reasons of the assessee was supplied. Copy of related reasons is annexed herewith: “There is information on record that supplied to Income tax department by the Commissioner of customs, preventive, New Delhi, as per which Aar Vee Textile was one other eight firms which have cheated the government exchequer by misusing Duty Entitlement Pass Book Scheme/ Drawback and focus product scheme. Considering all these facts I have reason to believe that income of assessee has escaped assessment for the A.Y. 2007-08 within the meaning of section 147 read with section 148 of the Income Tax Act, 1961 and also any other income chargeable ITA No. 334/ASR/2016 Vikram Jain v. DCIT to tax in respect of which the assessee is assessable, which has escaped assessment and which comes to this notice subsequently in the course of proceedings under this act for the assessment year under consideration.” 4. The ld. Counsel of the assessee further argued as no export sale, so there is no question of embezzlement of duty Draw Back. The Revenue has re-opened and assessed from A.Y. 2006-07 to 2012-13. None of the order, the export sale was found or cheating export duty was made. In this respect, the ld. Counsel filed a synopsis and list is attached with this synopsis. Also reopening was made 2007-08 but the ld. AO drop the proceedings as there was no export sale vide order dated 16.03.2011 passed u/s.143(3)/147 by the ld. Income-tax Officer, Ward 1(2), Amritsar. He also argued for Denovo as the matter was in ITAT NO. 335/ASR/2016, the Bench has not found any export sale or any cheating the duty Draw Back and accordingly the order passed. 4.1 The ld. Counsel draw our attention in letter of the Dy. Commissioner which is self-explanatory, the copy of the letter is annexed herewith: “OFFICE OF THE COMMISSIONER OF CUSTOMS (PREVENTIVE) NEW CUSTOM HOUSE, NEW DELHI-110037. C.NO.VIII(SB)9/INV//2010/Pt.VI 3504 Dated: 12.03.2014 Mr. Manoj Kumar, Deputy Commissioner of Incoem Tax, Circle-I, AayakarBhawan, Amritsar-143001. ITA No. 334/ASR/2016 Vikram Jain v. DCIT Sir, Subject: Investigation into export of Handloom floor covering/carpets by certain Amritsar based Firms-Obtaining of present address of the assesse. Reg: Please refer to your office letter C.No.DCIT/CIR-1/ASR/2013-14 even no. 3000, 3002, 3003 and 3004 dated 16/*17.02.2014 on the above mentioned subject. 2. In this regard, it is intimated that amount of export incentive received by the M/s. Rasim Enterprises and Sh. Vikram Jain, Prop. M/s. Aar Vee Textiles for the assessment year 2006-07 and 2011-12 is not available in this officer as per available records. This is for your information please. 4.2 The ld. Counsel further mentioned that recorded reasons and in addition, there is no similarity in between them. The ld. AO did not find any export sale or any Duty Draw Back in this particular assessment year. So the entire assessment order is against the law. 5. The ld. DR relied on the order of the Revenue Authorities. He pointed out our attention in order of ld. CIT(A) in page no. 11 relevant para is extracted as follows: Ground No. 3 - The assessee is one of the main person who was closely associated with Sh. Rajender Kumar Arora and his associates firms (as per page 283 of the customs show case notice) for defrauding the Govt. exchequer by showing highly invoiced prices per import and export sales for taking undue advantage of duty drawback and Focus product scheme which was totally against the spirit of Govt. laws formulated in this regard. The AO has rightly calculated the commission @ 2.75% on total turnover. As far as the cash sales are concerned, these transactions are part of nexus and AO has rightly calculated income on total turnover of Rs8,25,34,222/-. ITA No. 334/ASR/2016 Vikram Jain v. DCIT 6. We heard the rival submissions and relied on the documents available in the record. The assessment was done u/s. 144 and reasons was recorded and the basis of information from the department of customs. During the proceedings u/s. 148, the ld. AO did not verified the sanctity of transaction related to assessee. Even the document showing with the proper record was not with the Revenue Authorities. The reasons record and nature of additions are totally different. In the order ld. AO himself not confirmed able to determine his own recorded reasons. Accordingly the addition made to Rs. 19,96,990 to be deleted. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 14.07.2022 Sd/- Sd/- (Dr. M. L. Meena) (Anikesh Banerjee) Accountant Member Judicial Member *GP/Sr. PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(A), (4) The CIT concerned (5) The Sr. DR, I.T.A.T (6) The Guard File True Copy By Order