Ramesh Chand, Haryana V. ITO, Narnaul

ITA 3511/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3255 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-04-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 14-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBANI CHAUDHURI
• Assessee Lawyers: NAVEEN GUPTA
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ITAS NO.3511/DEL/2016 ASSESSMENT YEAR 2002-03 RAMESH CHAND, PROP. RAMESH CHAND PREM CHAND, NEW MANDI, NARNAUJL, DIST- MAHENDERGARH, HARYANA. PAN: AAVPC 6510A VS. ITO, WARD-1, NARNAUL. (APPELLANT) (RESPONDENT) REVENUE BY : MS. BEDOBANI CHAUDHURI, SR.D.R. ASSESSEE(S) BY : SHRI NAVEEN GUPTA, ADV. / DATE OF HEARING : 25/04/2017 / DATE OF PRONOUNCEMENT: 28/04/2017 ORDER THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER O F LEARNED CIT(A)-2, GURGAON, VIDE ORDER DATED 22.03.2015 FOR THE ASSESSMENT YEAR 2002-03. THE ASSESSEE HAS RAISED THE GROUNDS O F APPEAL AS UNDER: 1. THAT THE ORDER OF LD. CIT (APPEALS) IS AGAINST LAW AND F A CTS. 2. THAT THE LD . CIT (APPEA L S) ERRED IN DISMISSING THE GROUND OF THE A PPELLANT CHALLENGING THE ISSUANCE OF NOTICE U / S 148 OF THE ACT AND IN MAKING THE R E - A S S E SS MENT W HICH IS W ITHOUT JURI S DICTION AND IN V ALID . . 3 . THAT THE LD . CIT (APP E ALS ) E RRED IN C ONFIRMING THE A DDITION OF R S . 6 25000 / - M A D E B Y THE LD. AO ON A CCOUNT OF DI F FER E NCE IN TH E COP Y OF ACC OUNT O F M/S. GOEL TRA D E R S, NA R NAUL . 4 . THAT THE LD. CIT ( APPE A LS ) E RRED IN CONFIRMIN G THE A DDITION OF R S . 1 3 102 6 / - M A DE B Y TH E LD . AO ON ACCOUNT OF F O UR ALL E G E D BENAMI FI R M S B A N K A C COUNT . TH E A PP E LLANT H AS NO CONCERN WITH THES E FIRM S OR THEIR BANK ACCOUNTS. MOREO V ER THE ADDITION M A DE WERE WITHOUT CON F RONTING THE MATERIAL TO THE APPE L LANT . 2. GROUND NOS.1 AND 5 ARE GENERAL IN NATURE THEREFO RE DO NOT REQUIRE ITA NO.3511/DEL/2016 2 ANY ADJUDICATION. 3. AS REGARDS GROUND NO.2 IS LEGAL IN NATURE, IS DE CIDED FIRST AS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE, MR. NAV EEN GUPTA, ADVOCATE. LEARNED AR, MR. NAVEEN GUPTA, AT THE OUTS ET, POINTED OUT AT PAPER BOOK 5 THE REASONS RECORDED WHICH IS FOR THE SAKE OF CONVENIENCE IS REPRODUCED HEREINBELOW: REASON FOR ISSUE OF NOTICE U/S. 148 OF THE IT ACT, 1961 . DUR ING T H E COU R SE O F CO MPLETION O F A S SES S ME NT P ROC EEDING S F O R TH E AY . 2003-04 I N THE C ASE O F THE ASSESSEE , IT WAS N O TIC E D THA T THE ASSESSE E SH . R AME SH CH A ND P RO P . M/S RAMESH CHAND PREM CHAND NARN AU L HAS SHOWN A LIABILIT Y O F RS6 , 25 , 0 0 0 / - IN THE NAME OF M/S. GO E L TRADERS NEW M U NDI NARNAUL AS ON 3103 . 2002. NUT AS P E R COP Y OF ACCOUNT OBTAINED FROM SH . RAMESH CHAND PROP . M R S RAM E SH CHAND PREM CHAND IN HIS BOOKS OF ACCOUNT IN THE CASE OF M I S GO E L T RADER S NARNAUL NO OPENING BA LANCE OF RS6 , 25 , 000 / - WA S SHOWN BY THE ASSESSEE SH. RAMESH CHAND PROP . M / S RAMESH CHAND PREM CHAND NAMAUL . THUS AN A DD I TION O F R S .6, 25 , 00 0 / - WA S MADE I N THE AY . 2003-04 IN T H E C A S E OF M/S. RAMESH CHA N D PREM CHAND HOLDING T HAT THE LIABILITY WA S DISCHARGE D OU T O F BOOKS . IN APPEAL THE L D . CIT(A ) H A S OB S ER V ED THAT WHEN THE LIABIL I TY OF R S.6 , 25 ,000 / -WAS NOT FORWARDED AS ON 01 . 04 . 2002 THE ADDITION COULD BE BEST HAVE BEEN CONSIDERE D IN THE F. Y.2 0 0 1 - 02 RE LEVANT TO AY . 2002-03. THUS I AM OF THE OPINION THAT THE INCOME F OR THE A.Y.20 02 -03 HAS E S CAPED ASSESSMENT TO THE TUNE OF RS . 6,25 , 000/- 2. DUR I NG TH E COU R SE OF COMPLETION OF ASSESSMENT PR O CEEDINGS FOR THE A.Y . 200 1 -0 2 AND A .Y . 20 0 3-04 , THE F O LL O WING FIRMS WERE TREATED AS BENAMI FIRMS OF ASSE S SEE AND THE PEAK AM O UNT ALONG W ITH PROFIT EARNED ON SALE S M A DE THROUGH THE SE FIRM S WERE ADDED IN THE INCO ME OF THE ASS ES S EE SH. R A M ES H C H AN D PROP. M/S. R AMES H C HA N D PREM C HAND NARNAUL DURIN G THE AY . 2 001 - 02 A ND 20 0 3 - 04 A N D THIS A C TIO N OF T H E AO . H AS B EEN C ON FIRMED BY THE LD . CIT ( A ) R O H TAK I N H IS A PP E L LA T E O R DERS FOR THE AY . 200 1- 0 2 AND 20 0 3 - 04 . I) M/S. SATYA NARAIN DINESH KUMAR NARNAUL. A.Y.2001-02 II) M/S. SANTOSH KUMAR VIJAY KUMAR NARNAUL A.Y. 2001-02 III) M/S. BUDH MAL & SONS A.Y.2003-04 IV) M/S. CHITTAR MAL BUDH RAM A.Y.2003-04 FROM THE HANK ACCO UNT S OF THE S E FIRMS , I T HA S BE EN FOUN D THAT T H ERE ARE HUGE DE POSITS IN TH E BANK ACCO UNTS OF THESE FI R M S DU RI N G TH E P E RIO D 01 .0 4 . 2001 TO 31.03.20 0 2 . THE S E DE POS I T S RE P R ESENT S THE SALES OF MU S TERED S EED S M A DE THROUGH THESE BENAMI FIRMS BY THE ASSESSEE SH. RAMESH CHAND. THE DEPOSITS MADE IN THE BANK ACCOUNT OF THESE CONCERNS DURING THE PERIOD 01.04.2001 TO 31.03.2002 ARE AS U NDER: M/S. SATYA NARAIN DINESH KUMAR OBC NNI A/C. NO.13 53 RS.160211/- SANTOSH KUMAR VIJAY KUMAR SBOP NNL A/C. NO.50269 RS.7306634/- BUDH MAL & SONS SBOP NNI A/C NO.60392 RS.119890 857/- M/S. CHITTAR MAL BUDH RAM OBC, REWARI A/C. NO.276 4 RS.18226878/- TOTAL RS.145584580/- ITA NO.3511/DEL/2016 3 THE A M O UN T O F R S . 1 45 58 4580 / - IS SALE OF MUSTERED SEEDS MADE BY THE ASSESSEE THRO UG H T H E S E B E N AMI FIRMS WH ICH HA S NOT BEEN SH O WN B Y T HE AS SESSEE IN HIS BOOKS O F AC C O U NT S. T HE A SSE S SE E HAS D E C L A RED G.P . O N MUST E RED S E E D S A T 0 . 0 9 / I N THE A . Y . 2 00 )2-0 3 AN D B Y APPLYING THE G . P . AT 0 . 0 9% ON SALES OF RS . 1 4, 55,84 , 580/- , THE PR OFIT WO R KS O UT TO RS.1,31,026/- WHIC H HA S ESCAP E D A S SESSM E NT . ' ' ' TH EREF O R E I HA VE REASONS TO BELIEVE THA T INC O ME T O TH E TUNE OF R S . 7 5612 6 /- R S. ( 625000 + RS . 131026) HAS ESCAPED ASSESSMENT . ISSUE NOTICE U/S.148 FOR TH E A . Y . 2002 -03 T O RE A SSESS THE INCOME OF THE ASSES S EE. 4. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSESSE E THAT ASSESSING OFFICER HAS REOPENED THE ASSESSMENT ON THE BASIS OF INQUIRIES. HE RELIED UPON THE DECISIONS OF VARIOUS COURTS OF LAW IN THIS REGARD. 5. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF BOTH THE AUTHORITIES BELOW. 6. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE FACTS OF THE CASE. FROM THE REASONS RECORDED AT PAGES 5 AND 6, I T IS EVIDENT THAT ASSESSING OFFICER HAS POINTED OUT WHILE RECORDING T HE REASONS THAT THERE WAS A DIFFERENCE IN THE OPENING BALANCE AMOUNTING T O RS.6,25,000/- WHILE MAKING THE ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04. IT WAS PRESUMED BY THE ASSESSING OFFICER THAT THE ASSESSEE IS HAVING ESCAPED INCOME IN IMMEDIATE PRECEDING YEAR, I.E., THE IMPUG NED YEAR AND ACCORDINGLY PROCEEDED TO REOPEN THE ASSESSMENT U/S. 147 OF THE ACT. THIS ACT OF THE ASSESSING OFFICER IS ON THE BASIS O F SUSPICION AND WITHOUT ANY MATERIAL ON RECORD, THEREFORE, SUCH OPE NING IS BAD IN LAW AND IS LIABLE TO BE QUASHED. 7. AS REGARDS THE SECOND LIMB OF THE REASONS RECORD ED, THE ASSESSING OFFICER HAS MENTIONED FOUR FIRMS WHICH WE RE TREATED BENAMI FIRMS WHILE MAKING THE ASSESSMENT FOR THE ASSESSMEN T YEARS 2001-02 ITA NO.3511/DEL/2016 4 AND 2003-04 WHERE PEAK AMOUNT WAS ADDED TO THE INCO ME OF THE ASSESSEE IN THOSE YEARS AND ACCORDINGLY ASSESSING O FFICER PRESUMED THAT THE BANK ACCOUNTS OF THE FIRM IS HAVING DEPOSI TS IN THE FORM OF SALE OF MUSTARD SEEDS THROUGH THESE BENAMI FIRM AS IN TH E ASSESSMENT YEARS 2001-02 AND 2003-04 AND ACCORDINGLY ESTIMATED THE D EPOSITS AND WORKED OUT THE ESCAPED INCOME AT RS.1,31,026/-. THI S ACT OF THE ASSESSING OFFICER IS AGAIN BASED ON THE SUSPICION A ND WITHOUT ANY MATERIAL ON RECORD, THEREFORE, SUCH REOPENING IS BA D IN LAW AND IS LIABLE TO BE QUASHED. MOREOVER, THESE FOUR FIRMS HAVE BEEN HELD NOT BE BENAMI FIRM BY ITAT IN THEIR ORDER IN ITA NO.3617/D EL/2013 DATED 30 TH AUGUST, 2016 BY ITAT BENCH F NEW DELHI. IN THE C IRCUMSTANCES AND FACTS OF THE CASE, THE ASSESSING OFFICER DOES N OT ACQUIRE JURISDICTION TO ASSESS/RE-ASSESS U/S.147 OF THE ACT AND ACCORDINGLY THE ASSESSMENT/RE-ASSESSEMENT SO MADE IS DIRECTED TO BE QUASHED. 8. SINCE THE ASSESSEE SUCCEEDS IN THE LEGAL GROUND, THEREFORE, THE GROUNDS ON MERIT BECOME ACADEMIC IN NATURE, AND THE REFORE, DO NOT REQUIRE ANY ADJUDICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY 28 TH APRIL, 2017 SD/- (B.P. JAIN) ACCOUNTANT MEMBER DATED: 28/04/2017