Ginger Properties Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-4(2), Ahmedabad

ITA 3379/AHD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9437 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 16-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIBHA BHALLA
• Assessee Lawyers: M K PATEL
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) ITA. NO: 3379/AHD/2014 (ASSESSMENT YEAR: 2010-11) GINGER PROPERTIES PVT. LTD. SANKALP SQUARE, DRIVE IN ROAD, MEMNAGAR, AHMEDABAD-380051 V/S THE INCOME TAX OFICER WARD-4(2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAACC8513B APPELLANT BY : SHRI M.K. PATEL, AR RESPONDENT BY : SMT. VIBHA BHALLA, CIT/ D.R. ( )/ ORDER DATE OF HEARING : 17 -02-201 6 DATE OF PRONOUNCEMENT : 19-02-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE V ALIDITY OF THE ORDER OF THE LD. CIT-II, AHMEDABAD DATED 27.10.2014 PERTAINING T O A.Y. 2010-2011. ITA NO. 3379 /AHD/2014 . A.Y. 2010-11 2 2. THE ASSESSEE HAS CHALLENGED THE JURISDICTION OF THE COMMISSIONER STATING THAT THE COMMISSIONER HAS GROSSLY ERRED IN INVOKING THE POWERS CONFERRED UPON HIM BY VIRTUE OF SECTION 263 OF THE ACT AS THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PRE-JUDICIAL TO THE INTEREST OF THE REVENUE. 3. IN THIS CASE, THE ASSESSMENT ORDER WAS MADE U/S. 14 3(3) OF THE ACT VIDE ORDER DATED 18 TH JULY, 2012, INVOKING THE POWERS CONFERRED UPON HIM U/S. 263 OF THE ACT. THE COMMISSIONER ISSUED AND SERVED NOTICE U/S. 263 OF THE ACT DATED 19 TH SEPTEMBER, 2014. IN HIS SHOW CAUSE NOTICE, THE COM MISSIONER WAS OF THE FIRM BELIEF THAT DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER MECHANICALLY ACCEPTED THE OPENING BALANCE OF RS. 1, 49,45,664/- AND THEN DEBITS OF INTEREST, BROKERAGE, TDS AND COMMISSION TOTALING TO RS. 7,37,493/- AND ACCEPTED THE CAPITAL GAIN OF RS. 3,16,843/-, WITHOUT MAKING ANY INQUIRY TO VERIFY THE ALLOWABILI TY OF THE CLAIM OF ASSESSEE. ACCORDING TO THE COMMISSIONER, THE ASSESS EES CLAIM ON ACCOUNT OF CAPITAL GAINS HAS BEEN ACCEPTED WITHOUT PROPER ENQU IRY RESULTING INTO UNDERASSESSMENT OF CAPITAL GAINS. THE LD. CIT(A) CO NCLUDED IN HIS SHOW CAUSE NOTICE BY OBSERVING THAT THE ORDER DATED 18.0 7.2012 PASSED BY THE ITO WARD-4(3), AHMEDABAD IS ERRONEOUS IN SO FAR AS IT I S PRE-JUDICIAL TO THE INTEREST OF REVENUE. IN SUPPORT OF THE SAME, THE LD . COMMISSIONER DREW SUPPORT FROM THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. 243 ITR 83. 4. THE ASSESSEE IS IN APPEAL AGAINST THE ACTION OF THE LD. CIT. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY SUBMITTED THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, SPECIFIC QUERIES WERE RAISE D BY THE ASSESSING OFFICER TO WHICH SPECIFIC ANSWERS WERE PROVIDED ALO NG WITH NECESSARY ITA NO. 3379 /AHD/2014 . A.Y. 2010-11 3 DOCUMENTARY EVIDENCES. IT IS THE SAY OF THE LD.COUN SEL THAT THE COMMISSIONER HAS GROSSLY ERRED IN HOLDING THAT THE A.O HAS NOT M ADE ANY INQUIRY IN RESPECT OF THE SALE TRANSACTION OF THE PLOT IS CONCERNED. T HE LD. COUNSEL CONTINUED BY STATING THAT THE CAPITAL GAINS HAVE BEEN THOROUGHLY EXAMINED BY THE A.O AND THEREAFTER IT WAS ACCEPTED. THE LD. COUNSEL CONCLUD ED BY SAYING THAT SINCE THE A.O HAS MADE THOROUGH INVESTIGATION THEREFORE, IT C ANNOT BE SAID THAT THE ASSESSMENT ORDER MADE U/S. 143(3) OF THE ACT IS ERR ONEOUS IN SO FAR AS IT IS PRE-JUDICIAL TO THE INTEREST OF REVENUE. 5. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FIN DINGS OF THE COMMISSIONER. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE RIV AL SUBMISSIONS. WE HAVE ALSO GONE THROUGH THE IMPUGNED ASSESSMENT ORDER AND THE ORDER OF THE COMMISSIONER MADE U/S. 263 OF THE ACT. WE HAVE ALSO CONSIDERED THE RELEVANT DOCUMENTARY EVIDENCES BROUGHT ON RECORD BE FORE US. THE FIRST THING WHICH HAS TO BE CONSIDERED IS WHETHER THE LD. COMMI SSIONER HAS RIGHTLY ASSUMED THE POWER U/S. 263 OF THE ACT. THE HONBLE SUPREME COURT IN MALABAR INDUSTRIAL CO. LTD. 243 ITR 83 HAS LAID DOW N THE FOLLOWING RATIO:- 'A BARE READING OF SECTION. 263 OF THE INCOME-TAX A CT, 1961, MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JURISDICTION B Y THE COMMISSIONER SUO MOTU UNDER II, IS THAT THE ORDER OF THE INCOME-TAX OFFIC ER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE CO MMISSIONER HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE AS SESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENTIF THE ORDER OF THE INCOME-TA X OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRO NEOUS HUT IS PREJUDICIAL TO THE REVENUE RECOURSE CANNOT BE HAD TO SECTION 263(1) O F THE ACT. THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL ITA NO. 3379 /AHD/2014 . A.Y. 2010-11 4 BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR A N INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERR ONEOUS' 6. NOW, LET US SEE IN THE LIGHT OF THE ABOVE RATIO, WH ETHER THE ASSESSMENT HAS BEEN MADE ON AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW. 7. NOW, LET US SEE THE QUESTIONNAIRE SERVED BY THE ASS ESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE NOTICE U/S. 1 42(1) OF THE ACT WHICH IS AT PAGE 5 OF THE PAPER BOOK. THE RELEVANT QUERIES A RE AS UNDER:- Q6. FURNISH COPY OF PURCHASE AND SALE DEED OF PLOT NO. 113/2/2. Q7. FURNISH WORKING OF CAPITAL GAIN. Q8. FURNISH BREAKUP OF INVESTMENT OF RS. 1,49,45,66 4/- REFLECTED IN THE BALANCE SHEET. 8. THUS, IT CAN BE SEEN THAT VERY SPECIFIC QUESTIONS W ERE RAISED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. 9. NOW, LET US SEE THE REPLY OF THE ASSESSEE WHICH IS AT PAGE NO. 7 OF THE PAPER BOOK AND THE RELEVANT PART READ AS UNDER:- 6. COPY OF PURCHASE AND SALE DEED OF PLOT NO. 113/2 /2 IS ENCLOSED HERE WITH. 7. WORKING OF CAPITAL GAIN IS AS PER RETURN OF INCO ME. 8. AS REGARD INVESTMENT OF RS. 14945664/- IT IS STA TED THAT IT IS A AMOUNT OF LAST YEAR INVESTMENT THERE WAS NO NEW INVESTMENT MADE DURING THE YEAR AND NO AMOUNT SHOWN AS A INVESTMENT AS ON 31.03.2010 BALANCE SHEET. 10. THUS, IT CAN BE SEEN THAT SPECIFIC QUERIES WERE REP LIED SPECIFICALLY. ITA NO. 3379 /AHD/2014 . A.Y. 2010-11 5 11. AGAIN ON 09.07.2012, THE ASSESSEE FURNISHED BREAKUP OF INVESTMENT AND COPY OF FRESH COMPUTATION. WE ALSO FIND THAT THE COPIES OF BREAKUP OF RS. 1,49,45,664/- FURNISHED DURING THE COURSE OF THE AS SESSMENT PROCEEDINGS ARE EXHIBITED AT PAGE NOS. 70 & 71 OF THE PAPER BOOK. T HE DETAILS OF PAYMENT OF BROKERAGE COMMISSION AND INTEREST ARE EXHIBITED AT PAGE NOS. 72 & 73 OF THE PAPER BOOK. THE COMPUTATION OF SHORT TERM CAPITAL G AIN IS EXHIBITED AT PAGE NO. 75 OF THE PAPER BOOK AND ALL THESE DOCUMENTS WE RE FILED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS WHICH HAVE BEE N EXAMINED BY THE A.O BEFORE COMPLETING THE ASSESSMENT. 12. A PERUSAL OF THE AFORE-STATED DOCUMENTARY EVIDENCES QUA THE OBSERVATIONS OF THE COMMISSIONER SHOW THAT THERE IS NO FAILURE ON T HE PART OF THE A.O TO EXAMINE THE IMPUGNED TRANSACTIONS AND, THEREFORE, I N OUR CONSIDERED OPINION, THERE IS NO ERROR IN THE ASSESSMENT ORDER WHICH CAN BE SAID TO BE PRE-JUDICIAL TO THE INTEREST OF REVENUE. 13. THE AO HAS TAKEN A VIEW WHICH MAY BE DIFFERENT FROM THE VIEW OF THE LD. COMMISSIONER AND ASSUMING THAT THE VIEW TAKEN BY TH E AO IS A LOSS TO THE REVENUE BUT THE HON'BLE SUPREME COURT IN MALABAR IN DUSTRIAL CO. LTD. (SUPRA) HAS HELD THAT ' EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE AO CANNOT BE TREATED AS PREJUDICIAL TO THE INTE REST OF THE REVENUE,' FOR E.G. WHEN AN INCOME TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE LD. COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED A S AN ORDER WHICH IS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE UNLESS THE VIEW TAKEN BY THE INCOME TAX OFFICER IS UNSUSTAINABLE IN LAW. ITA NO. 3379 /AHD/2014 . A.Y. 2010-11 6 14. THE BOMBAY HIGH COURT IN CIT VS GABRIAL INDIA LTD., (1993) 203 ITR 108 HAS HELD THAT 'THE DECISION OF THE INCOME TAX OFFICER COULD NOT B E HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER, HE DID NOT M AKE AN ELABORATE DISCUSSION IN THAT REGARD'. CONSIDERING THE FACTS IN TOTALITY IN THE LIGHT OF T HE JUDICIAL DECISIONS DISCUSSED HEREINABOVE, IN OUR UN DERSTANDING OF LAW, THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICI AL TO THE INTEREST OF THE REVENUE. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDE R PASSED BY THE LD. COMMISSIONER U/S. 263 AND RESTORE THAT OF THE ASSES SING OFFICER PASSED U/S. 143(3) OF THE ACT. A SIMILAR VIEW HAS ALSO BEEN TAK EN BY THE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF NIRMA CHEMICAL S WORKS P. LTD. 309 ITR 67. 15. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 19 - 02 - 2016. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AH MEDABAD