Rakesh Swadia, Ahmedabad V. Income Tax Officer,Ward-5(2)(4), Ahmedabad

ITA 3419/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1840 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-03-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 08-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Keywords: Unexplained investment; Rectification of order
• Section: 143(3); 148; 154

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA.NO.3419/AHD/2015 / ASSTT. YEAR: 2003-04 RAKESH SWADIA 23, ASHWAMEGH PART-II SATELLITE AHMEDABAD. PAN : ACVPS 6065 J VS ITO, WARD - 5(2)(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI TEJ SHAH, AR REVENUE BY : SHRI NARENDRA SINGH, SR.DR / DATE OF HEARING : 17/03/2016 / DATE OF PRONOUNCEMENT: 05/04/2016 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF THE LD.CIT(A) DATED 8.10.2015 PASSED FOR THE ASSTT.YEAR 2003-04. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN UPHOLDING THE RECTIFICATION ORDER PASSED BY THE AO ON 11.9.2014. ITA NO.3419/AHD/2015 2 3. BRIEF FACTS OF THE CASE ARE THAT THE AO HAD RECE IVED INFORMATION FROM DCIT, AHMEDABAD TO THE EFFECT THAT THE LAND BE ARING SURVEY NO.731 SITUATED AT VILLAGE MAKARBA, TALUKA & DISTRI CT AHMEDABAD WAS SOLD BY THE ASSESSEE FOR A CONSIDERATION OF RS.7,15 ,000/- TO ONE SHRI JASRAJ M. JAIN. IT ALSO CAME TO THE NOTICE OF THE DEPARTMENT DURING THE SEARCH OPERATION CARRIED OUT IN THE CASE OF ORNET GROUP THAT THIS LAND WAS MORTGAGED BY THE ASSESSEE TO AHMEDABAD MERCANTI LE CO-OPERATIVE BANK LTD. FOR A CONSIDERATION OF RS.65 LAKHS. BEFOR E THE SALE OF LAND BY THE ASSESSEE, THE CHARGE WAS RELEASED BY THE BANK O N PAYMENT OF RS.65 LAKHS. ARMED WITH THIS INFORMATION, THE AO HAD ISS UED NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT DATED 31.3.2010, BECAUSE, THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME FOR THI S ASSESSMENT YEAR. ULTIMATELY, THE AO HAS PASSED AN ASSESSMENT ORDER U NDER SECTION 143(3) R.W.S. 147 ON 24.12.2010. THE LD.AO HAS DETERMINED THE TOTAL TAXABLE INCOME OF THE ASSESSEE AT RS.69,76,391/-. THIS ORD ER WAS CHALLENGED BEFORE THE CIT(A), AND ULTIMATELY DISPUTE TRAVELLED TO THE TRIBUNAL, AND THE TRIBUNAL VIDE ORDER IN ITA NO.496/AHD/2012 SET ASIDE THE ISSUE TO THE FILE OF THE AO. THE RELEVANT FINDING RECORDED IN PARA-8 OF THE ORDER READS AS UNDER: 8. IT IS THUS SUBMITTED THAT ON BEHALF OF ASSESSEE , C.A. HAD APPEARED BEFORE THE LOWER AUTHORITIES AND HAD SUBMI TTED THE DETAILS CALLED FOR THOUGH THERE WAS NO PROOF OF THE FILING OF THE SUBMISSIONS AND THE AO HAD REFUSED TO TAKE THE SAME ON RECORD. THE CONTENTS OF THE AFFIDAVIT HAVE NOT BEEN CONTROV ERTED BY REVENUE BY BRINGING ANY MATERIAL ON RECORD. IN VIE W OF THE AVERMENTS MADE BY ASSESSEE IN THE AFFIDAVIT, WE ARE OF THE VIEW THAT TO MEET THE ENDS OF ISSUE AND FAIR-PLAY ONE MO RE OPPORTUNITY BE GRANTED TO THE ASSESSEE TO FURNISH ALL THE DOCUM ENTS CALLED FOR BY THE AO FOR DECIDING THE ISSUE. WE THUS REMIT TH E MATTER TO THE ITA NO.3419/AHD/2015 3 FILE OF THE AO FOR DECIDING THE ISSUE DE-NOVO. THE ASSESSEE IS ALSO DIRECTED TO COOPERATE BY FILING THE REQUIRED DETAIL S AND WITHOUT SEEKING UNNECESSARY ADJOURNMENT. THUS, THE MATTER IS REMANDED BACK TO THE FILE OF AO TO DECIDE THE ISSUE AFRESH A ND AFTER GRANTING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSE. 4. THE AO HAS PASSED THE FOLLOWING ORDER: ORDER GIVING EFFECT TO ITAT'S ORDER IN VIEW OF, THE HON'BLE ITAT'S ORDER NO, ITA NO. 49 6/AHD/2012 DATED 22/03/2013, THE APPEAL FILED BY THE ASSESSEE AGAINS T THE ORDER PASSED BY THE LD. CIT(A) DATED 11.01.2011 HAS BEEN SET-ASIDE AND MATTER IS REMANDED BACK TO THE FILE OF A O. TO DECI DE THE ISSUE AFRESH AND AFTER GRANTING REASONABLE OPPORTUNITY OF HEARIN G TO THE ASSESSEE THUS, THE REVISED TOTAL ASSESSED INCOME COMES AT RS .21,091/- (10000 STANDARD DEDUCTION. + 1091 INCOME FROM OTHER SOURCE ) SD/- DATE- 28.03.2013 (R. N. MEENA) INCOME TAX OFFICER, WARD-10(4) AHMEDABAD. 5. THEREAFTER, THE LD.AO HAS PASSED AN ORDER UNDER SECTION 154 OF THE ACT. THIS READS AS UNDER: ORDER U/S 154 OF THE IT ACT. 1961 IN THE ASSESSEE CASE HON'BLE ITAT, AHMEDABAD DECIDE D THE APPEAL FILED BY THE ASSESSEE VIDE HIS ORDER DTD.22.03.2013 AND SET-ASIDE MATTER REMIT BACK TO THE AO PERTAIN TO ADDITION MAD E BY THE AO OF RS.64,99,599/- ON ACCOUNT OF UNACCOUNTED INVESTMENT . ACCORDINGLY, APPEAL EFFECT TO ITAT ORDER GIVEN ON 28.03.2013 IN WHICH TOTAL ASSESSED INCOME WRONGLY RE-COMPUTE AT RS.21,091/-. THE SAME MISTAKE FOUND APPARENT FROM THE RECORD AND FALL IN PREVIEW OF THE RECTIFICATION OF MISTAKE U/S. 154 OF THE IT. ACT. THEREFORE, THE SAME MISTAKE RECTIFY U/S. 154 OF THE I.T. ACT AND TOTAL INCOME RECOMPUTED AS UNDER :- LAST ASSESSED INCOME AS PER ORDER GIVING EFFECT TO CIT(APPEALS) ORDER DTD.12.3.2013 RS.69,64,391/- LESS: SET ASIDE MATTER PERTAIN TO ADDITION RS.64,99 ,599/- ITA NO.3419/AHD/2015 4 MADE BY THE AO ON ACCOUNT OF UNACCOUNTED INVESTMENT TOTAL REVISED INCOME RS.4,64,792/- THE TOTAL INCOME ASSESSED U/S.154 OF THE I.T. ACT. DEMAND NOTICE & CHALLAN ARE ISSUED ACCORDINGLY. 6. AGAINST THIS ORDER, THE ASSESSEE WENT TO THE CIT (A) WHO UPHELD THIS ORDER. 7. THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT T HE AO HAS FAILED TO POINT OUT ANY APPARENT ERROR IN THE ORDER DATED 28. 3.2013. IT IS NOT UNDERSTANDABLE ON WHAT BASIS HE REVISED THE INCOME TO A FIGURE OF RS.4,64,792/-. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES BELOW. 8. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. THE POWER OF RECTIFICATION UNDE R SECTION 154 OF THE INCOME TAX ACT CAN BE EXERCISED ONLY WHEN THE MISTA KE, WHICH IS SOUGHT TO BE RECTIFIED, IS AN OBVIOUS AND PATENT MI STAKE, WHICH IS APPARENT FROM THE RECORD AND NOT A MISTAKE, WHICH I S REQUIRED TO BE ESTABLISHED BY ARGUMENTS AND LONG DRAWN PROCESS OF REASONING ON POINTS, ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. 9. A PERUSAL OF THE ORDER DATED 11.9.2014, IT REVEA LS THAT THE AO HAS OBSERVED THAT INCOME OF THE ASSESSEE WAS WRONGLY RE COMPUTED AT RS.21,091/-. IN HIS UNDERSTANDING IT WAS AN APPARE NT ERROR. BUT WHAT IS THE BASIS TO ARRIVE AT THIS BELIEF IS NOT DISCERNIB LE FROM THE IMPUGNED ORDER. WHEN THE ITAT HAS SET ASIDE THE ISSUE FOR F RESH ADJUDICATION, THE AO WAS SUPPOSED TO PASS AN ASSESSMENT ORDER. THE O RDER DATED 28.3.2013 CAN BE EQUATED TO AN ORDER BY VIRTUE OF T HAT TAXES COULD BE ITA NO.3419/AHD/2015 5 RECOVERED FROM THE ASSESSEE ON DETERMINATION OF TAX ABLE INCOME AT RS.21,0921/-. HOW THE AO HAS ARRIVED AT A REVISED I NCOME OF RS.4,64,792/- BY RECORDING THAT AN APPARENT MISTAKE HAD OCCURRED IN THE ORDER DATED 28.3.2013 IS NOT DISCERNIBLE. WE COULD APPRECIATE THE CASE OF THE AO, HAD HE FRAMED AN ASSESSMENT ORDER AND DE TERMINED THE TAXABLE INCOME AT RS.4,64,792/-, BUT AT THE END OF THE ORDER, IN THE COMPUTATION, HE COMMITTED A MISTAKE BY TAKING INCOM E AT RS.21,091/-. BUT THAT IS NOT THE CASE. WE HAVE EXTRACTED COMPLE TE ORDERS PASSED BY THE AO IN PURSUANCE OF ITATS ORDER. WE HAVE EXTRA CTED THE FINDING OF THE TRIBUNAL WHILE SETTING ASIDE THE ORIGINAL ASSES SMENT ORDER. THEREFORE, THERE CANNOT BE ANY RECTIFICATION ORDER UNDER SECTION 154 PASSED ON 11.9.2014. THE APPEAL OF THE ASSESSEE IS ALLOWED AND IMPUGNED ORDER IS QUASHED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 5 TH APRIL, 2016 AT AHMEDABAD. SD/- SD/- ( N.K. BILLAIYA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER