Samrat D. Chauhan, Kalol V. The Income Tax Officer, Ward-4, Mehsana

ITA 3548/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8404 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 18-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAJNU PARAMITA
• Assessee Lawyers: JAIMINI SHAH
• Keywords: Difference of opinion; Reason to believe; Change of opinion

Judgement Text

, *,LK *,LK *,LK *,LK- -- -,E ,E,E ,E- -- -LH* LH*LH* LH* IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD LOZJH EGKOHJ IZLKN] U;KF;D LNL; ,OA VEJTHR FLAG] LOZJH EGKOHJ IZLKN] U;KF;D LNL; ,OA VEJTHR FLAG] LOZJH EGKOHJ IZLKN] U;KF;D LNL; ,OA VEJTHR FLAG] LOZJH EGKOHJ IZLKN] U;KF;D LNL; ,OA VEJTHR FLAG] YS [KK LNL; DS LE{KA YS[KK LNL; DS LE{KA YS[KK LNL; DS LE{KA YS[KK LNL; DS LE{KA (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ) ./ I.T.A. NO. 3548/AHD/2015 ( / ASSESSMENT YEAR : 2007-08) SAMRAT D. CHAUHAN, 90/91, JAY BHAWANI ROW HOUSING, B/H RAILWAY STATION, KALOL 382721 / VS. INCOME TAX OFFICER WARD 4 MEHSANA. ./ ./ PAN/GIR NO. : AGUPC 9408 N ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : MS. JAIMINI SHAH / RESPONDENT BY : SHRI PRAJNU PARAMITA, SR.D.R. / DATE OF HEARING 21/09/2017 !'# / DATE OF PRONOUNCEMENT 27/09/2017 $% / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-GANDHINAGAR, AH MEDABAD, DATED 23/10/2015 FOR THE ASSESSMENT YEAR (AY) 2007-08, ON THE FOLLOWING GROUNDS: THE COMM. OF INCOME-TAX(A), GANDHINAGAR (HEREINAFTE R REFERRED TO AS THE CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN PA SSING ORDER ON THE FOLLOWING AMONGST THE OTHER GROUNDS: I. THE CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSMENT IS VALIDLY REOPENED U/S.147 EVEN THOUGH THE NOTICES AND REOPEN ING PROCEEDINGS SUFFER FROM INHERENT TECHNICAL DEFECTS, THE PROCEEDINGS ARE BARRED BY LIMITATION OF TIME, THE A O HAS NOT RECORDED/FURNISHED REASONS FOR REOPENING AND THE AO HAS NOT ITA NO.3548/AHD /2015 SAMRAT D. CHAUHAN VS. ITO ASST.YEAR 2007-08 - 2 - PASSED A SPEAKING ORDER IN VIEW OF DECISION OF HON. SUPREME COURT IN THE CASE OF GKN DRIVE SHAFT. II. THE CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSMENT IS CORRECTLY REOPENED U/S.147 EVEN THOUGH THE INCOME AND TDS WER E RECONCILED BY THE AO WHILE PASSING ORIGINAL ORDER U /S.143 (3) DTD.23-12-2009 AND EVEN THOUGH REOPENING IS ON ACCO UNT OF CHANGE OF OPINION WHICH IS NOT COVERED U/S.147. III. THE CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.2 9,36,085/- AS UNRECONCILED DIFFERENCE BETWEEN INCOME REFLECTED IN THE BOOKS AND THE SAME REFLECTED IN FORM 16A EVEN THOUGH THER E IS NO SUCH DIFFERENCE ON MERITS AND EVEN THOUGH THE SAME IS RE CONCILED BY THE CERTIFICATE ISSUED BY THE PRAYER WHICH IS VERIF IED BY THE AO WHILE PASSING ORIGINAL ASSESSMENT ORDER U/S.143(3) DATED 23-12- 2009. IV. THE CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.2 ,95,000/- BEING CASH DEPOSITED AS INCOME OF THE APPELLANT EVE N THOUGH CASH DEPOSITED CAN BE EXPLAINED WITH ENTRIES AND EV IDENCES BY WAY OF THE WITHDRAWALS FROM APPELLANTS OWN BANK ACC OUNT AND AMOUNTS RECEIVED BY THE APPELLANT IN THE COURSE OF BUSINESS PROCEEDINGS. V. THE CIT(A) HAS ERRED IN CONFIRMING CHARGING OF INTE REST U/S.234B/C/D AND INITIATING PROCEEDINGS U/S.271(1)( C) EVEN THOUGH THE PROVISIONS OF THESE SECTIONS ARE NOT APP LICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- IN THIS CASE, RETURN OF INCOME WAS FILED ON 29/10/ 2007 FOR ASST. YEAR 2007-08 DECLARING TOTAL INCOME AT RS.7,21,250/ -. RETURN OF INCOME WAS PROCESSED U/S.143(1) ON 19/06/2008 AND GRANTED REFUND TO THE ASSESSEE. THE CASE WAS SELECTED FOR SCRUTINY AND NO TICE U/S.143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE. ITA NO.3548/AHD /2015 SAMRAT D. CHAUHAN VS. ITO ASST.YEAR 2007-08 - 3 - 2.2 SUBSEQUENTLY, NOTICE U/S.142(1) WAS ISSUED ON 2 3/09/2009 AND SERVED UPON THE ASSESSEE. THE ASSESSEE HAS PRODUCED THE BOOKS OF ACCOUNTS, CASH BOOKS, BILLS VOUCHERS ETC. DURING TH E ASSESSMENT PROCEEDINGS, THE DETAILS WERE CALLED FOR FROM THE A SSESSEE IN SUPPORT OF THE RETURN OF INCOME FILED WERE VERIFIED. THE ASSES SEE IS ENGAGED IN THE BUSINESS OF LABOUR CONTRACTOR BY PROVIDING LABOUR. THE ASSESSEE HAS SHOWN GROSS LABOUR INCOME OF RS.1,73,50,423/- AND C LAIMED EXPENSES OF RS.1,66,30,869/- AND DECLARED NET PROFIT OF RS.7,19 ,554/-. 2.3 DURING THE ASSESSMENT PROCEEDINGS, ON VERIFICAT ION OF PROFIT AND LOSS ACCOUNT, IT IS NOTICED THAT THE ASSESSEE HAS D EBITED AN AMOUNT OF RS.11,250/- UNDER THE HEAD OFFICE EXPENSES. DURING THE SCRUTINY PROCEEDINGS, THE COMPLETE DETAILS IN RESPECT OF THE EXPENSES CLAIMED UNDER THE HEAD OFFICE EXPENSES WERE CALLED FOR VERI FICATION. THE ASSESSEE HAS NOT PRODUCED THE COMPLETE DETAILS IN RESPECT OF THE EXPENSES CLAIMED. HENCE, AN AMOUNT OF RS.5,000/- IS DISALLOWED OUT OF THE EXPENSES CLAIMED AND THE SAME IS ADDED TO THE TOTAL INCOME O F THE ASSESSEE. 2.4 DURING THE ASSESSMENT PROCEEDINGS, ON VERIFICAT ION OF PROFIT AND LOSS ACCOUNT, IT IS NOTICED THAT THE ASSESSEE HAS D EBITED AN AMOUNT OF RS.78,500/- UNDER THE HEAD STAFF SALARY EXPENSES. D URING THE SCRUTINY PROCEEDINGS, THE COMPLETE DETAILS IN RESPECT OF THE EXPENSES CLAIMED UNDER THE HEAD STAFF SALARY EXPENSES WERE CALLED FO R VERIFICATION. THE ASSESSEE HAS NOT PRODUCED THE COMPLETE DETAILS IN R ESPECT OF THE EXPENSES CLAIMED. ITA NO.3548/AHD /2015 SAMRAT D. CHAUHAN VS. ITO ASST.YEAR 2007-08 - 4 - 2.5 THE ASSESSEE HAS ALSO PAID WAGES OF RS.1,53,07, 047/-. HENCE, AN AMOUNT OF RS.10,000/- IS DISALLOWED OUT OF THE STAF F SALARY EXPENSES CLAIMED AND THE SAME IS ADDED TO THE TOTAL INCOME O F THE ASSESSEE. 2.6 AFTER VERIFICATION OF THE DETAILS FILED, THE TO TAL INCOME ASSESSEE IS COMPUTED AS UNDER: TOTAL INCOME AS PER RETURN OF INCOME RS.7,21,25 0/- ADD: DISALLOWANCE AS DISCUSSED ABOVE (1) DISALLOWANCE OUT OFFICE EXPENSES RS. 5,000/- (2) DISALLOWANCE OUT OF STAFF SALARY RS. 10,000/- RS. 15,000/- TOTAL INCOME RS.7,36,250/- 3. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LEARNED CIT(A) WHO DISMISSED THE APPEAL OF THE ASSESSEE. 4. NOW APPELLANTS APPEAL IS BEFORE US. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. SO FAR GROUND NOS.1 AND 2 ARE CONCERNED. LEARNED CIT(A ) HAS RIGHTLY STATED THAT APPELLANT WAS PROVIDED THE REASONS RECORDED AN D NOTICES ISSUED ON WHICH APPELLANT HAS FURNISHED HIS REBUTTAL AND ALSO RELIED ON VARIOUS DECISIONS INCLUDING THAT OF THE HONBLE APEX COURT WHICH IS DISTINGUISHABLE FROM THE FACTS OF THE CASE OF THE A PPELLANT AS THERE WAS MATERIAL AVAILABLE ON RECORD TO HAVE A VALID REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. THE LEARNED CIT(A) HAS RIGH TLY OBSERVED THAT REOPENING WHICH IS VALID EVEN ON ONE OF THE MANY GR OUND OF REASON TO BELIEVE WOULD BE VALID REOPENING. ITA NO.3548/AHD /2015 SAMRAT D. CHAUHAN VS. ITO ASST.YEAR 2007-08 - 5 - 5.2 SO FAR GROUND NOS.3 AND 4 ARE CONCERNED. ASSESS EES MAIN GRIEVANCE WAS THAT THE RECONCILIATION STATEMENT AND THE CONFIRMATION LETTER OF CLARIS LIFE SCIENCE LTD. WERE NOT ACCEPTE D BY THE AUTHORITIES BELOW. ASSESSEE ALSO FILED VARIOUS DOCUMENTS, WHICH WERE NOT CONSIDERED BY THE AUTHORITIES BELOW. ASSESSEES GRIEVANCE WAS THAT ASSESSEE DEPOSITED CASH IN THE BANK ACCOUNT AGAINST WHICH AP PELLANT CONTENDED BANK STATEMENTS WHICH SHOWED CASH WITHDRAWAL WHICH WAS RE-DEPOSITED IN THE BANK ACCOUNT. SAME WAS NOT CONSIDERED BY THE AUTHORITIES BELOW. 6. IN VIEW OF THE ABOVE OBSERVATION, WE SET ASIDE T HE MATTER AND SEND IT BACK TO THE LEARNED AO TO DECIDE THE MATTER AFRE SH AFTER CONSIDERING THE ALL DOCUMENTS TO BE FILED BY THE ASSESSEE BEFORE TH E AO AND WILL DECIDE THE MATTER AS PER LAW. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSE. THIS ORDER PRONOUNCED IN OPEN COURT ON 27/09/2017 SD/- SD/- VEJTHR FLAG VEJTHR FLAG VEJTHR FLAG VEJTHR FLAG &' $ ( $ ) ()* $ ) ( AMARJIT SINGH ) ( MAHAVIR PR ASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27/09/2017 PRITI YADAV, SR.PS ITA NO.3548/AHD /2015 SAMRAT D. CHAUHAN VS. ITO ASST.YEAR 2007-08 - 6 - !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. , -. / / CONCERNED CIT 4. / () / THE CIT(A)-GANDHINAGAR, AHMEDABAD. 5. 012 **-. , -.# , '&$,$ / DR, ITAT, AHMEDABAD 6. 245 6 / GUARD FILE. % & / BY ORDER, 0 * //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 22/09/2017 (DICTATION-PAD 4 P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26/09/2017 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. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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