Shri Bharat Ishwarlal Mehta, Ahmedabad V. The Income Tax Officer, Ward-1(3)(2), Ahmedabad

ITA 38/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5073 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 05-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APOORNA BHARWADAJ
• Assessee Lawyers: S N DIVETIA
• Keywords: Business income
• Section: 143(3); 142(1); 147; 148; 139

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 38/AHD/2017 / ASSESSMENT YEAR: 2008-09 BHARAT ISHWARLAL MEHTA 114, GOYAL PARK NR. LAD SOCIETY ROAD VASTRAPUR, AHMEDABAD 380 015. PAN : AGUPM 2721 N VS THE ITO, WARD-1(3)(2) AMBAWADI AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.N. DIVETIA, AR REVENUE BY : MS.APOORNA BHARWADAJ, SR.DR / DATE OF HEARING : 09/08/2018 /DATE OF PRONOUNCEMENT : 09/08/2018 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A)- 1, AHMEDABAD DATED 27.10.2016 FOR THE ASSESSMENT YEAR 2008-09. 2. IN THE FIRST GROUND OF APPEAL, THE ASSESSEE HAS PLEADED THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING REOPENING OF ASSE SSMENT BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 196 1. 3. BRIEF FACTS OF THE CASE ARE THAT AN ASSESSMENT O RDER WAS PASSED UNDER SECTION 143(3) ON 5.5.2010 DETERMINING TOTAL TAXABL E INCOME OF THE ASSESSEE AT RS.21,11,460/-. THE LD.AO THEREAFTER RE CORDED REASONS AND ITA NO.38/AHD/2017 - 2 - REOPENED THE ASSESSMENT BY ISSUANCE NOTICE UNDER SE CTION 148 OF THE ACT. THE LD.COUNSEL FOR THE ASSESSEE DREW OUR ATTENTIONS TOWARDS REASONS RECORDED BY THE AO, WHICH ARE AVAILABLE AT PAGE NO. 2 5OF THE PAPER BOOK, WHICH READS AS UNDER: OFFICE OF THE INCOME TAX OFFICER, WARD 1(1)(3), ROOM NO. 303, A WING, 3RD FLOOR, PRATYAKSH KAR BHAV AN, NR. GOVT. POLYTECHNIC, B/H AHMEDABAD STOCK EXCHANGE , AMBAVADI, AHMEDABAD. PHONE: [phone] NO: ITO WD. L(L)(3)/AHD/BHARAT I MEHTA/2015-16/ DATE: 23-04-2015. TO, SHRI BHARAT I MEHTA 114, GOYAL PARK, NR. LAD SOCIETY ROAD, VASTRAPUR, I AHMEDABAD SUB: NOTICE U/S.148 OF THE INCOME TAX ACT, 1961 IN YOUR CASE PAN: AGUPM2721N FOR A.Y.2008-09 REG. KINDLY REFER TO THE ABOVE. WITH REFERENCE TO THE ABOVE, SUBMITTING HEREWITH TH E REASONS FOR RE- OPENING OF 'ASSESSMENT FOR THE A.Y.2008-09,:- 'THE ASSESSMENT WAS FINALIZED U/S. 143(3) OF THE AC T ACCEPTING THE RETURN INCOME OF RS. 21,11,460/-. ASSESSEE HAS DERIVED SHORT TERM CAPITAL GAIN ON SALE OF SHARES. ASSESSEE WAS ALSO DERIVING SHARE OF INCOME HAS A WORKING PARTNER FROM M/S. COLLECTIVE TRADELINK PVT. LTD. AND REMUNERATION FRO M M/S. COLLECTIVE TRADE LINK PVT. LTD. THE VERIFICATION REVEALS THAT ASSESSEE HAS FREQUENT LY TRANSACTED IN SALE/PURCHASE OF SHARES WITH A MOTIVE TO EARN PROFIT AND THE TRANSACTIONS WERE IN NATURE OF AN AD VENTURE IN TRADE. THEREFORE, ASSESSEE 'S INCOME SHOULD HAVE BE EN ITA NO.38/AHD/2017 - 3 - ASSESSED AS BUSINESS INCOME INSTEAD THAT OF ASSESSE D AS 'SHORT TERM CAPITAL GAIN'. THEREFORE. I HAVE REASON TO BEL IEVE THAT ASSESSEE 'S INCOME HAS ESCAPED ASSESSMENT WITHIN TH E MEANING OF SUB-CLAUSE (II) TO CLAUSE C OF EXPLANATION 2 TO SECTION 147 OF THE ACT. ISSUED NOTICE U/S.148 OF THE ACT WITH A PRIOR PERMI SSION OF THE PR.CIT, AHMEDABAD- 1, AHMEDABAD, OBTAINED VIDE LETT ER NO. CIT/ABD. I/APPROVAL 148/151/2014-15 DTD.24.03.2015. ' YOURS FAITHFULLY, SD/- (U.G.JOSHI) INCOME-TAX OFFICER WARD-1(1)(3), AHMEDABAD. 4 THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT NO TICE UNDER SECTION 148 HAS BEEN ISSUED AFTER EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR AND IN THE FIRST INSTANCE SCRUTINY ASSESSMENT UNDER SECTION 143(3) WAS MADE. THEREFORE, UNLESS CONDITIONS ENUM ERATED IN PROVISO APPENDED TO SECTION 147 ARE SATISFIED, THE LD.AO CA NNOT REOPEN THE ASSESSMENT. ON THE OTHER HAND, LD.DR RELIED UPON T HE ORDERS OF THE REVENUE AUTHORITIES BELOW. 5. WITH THE ASSISTANCE OF THE LD.REPRESNETATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. INTERDICTION PROVIDED IN FIR ST PROVISO APPENDED TO SECTION 147 OF THE ACT PUT AN EMBARK UPON THE POWER OF ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT. HE CANNOT REOPEN THE ASSESSMENT UNLESS IT IS DEMONSTRATED THAT ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF FA ILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN R ESPONSE TO A NOTICE ISSUED UNDER SECTION 142(1) OR SECTION 148 OR DISCL OSE ALL MATERIAL FACTS FULLY AND TRULY. A PERUSAL OF REASONS EXTRACTED (S UPRA) WOULD INDICATE THAT ITA NO.38/AHD/2017 - 4 - THE AO HAS NOWHERE MADE PRIMA FACIE OPINION THAT ON ACCOUNT OF FAILURE OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULL Y AND TRULY, INCOME HAS ESCAPED THE ASSESSMENT. HE SIMPLY GONE THOUGH THE RECORD ALREADY AVAILABLE TO HIM ON THE BASIS OF WHICH A SCRUTINY A SSESSMENT FRAMED UNDER SECTION 143(3). THEREFORE, ON THE ABOVE REASONING A SSESSMENT CANNOT BE REOPENED. WE ALLOW THE GROUND OF APPEAL AND QUASH THE ASSESSMENT ORDER. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. PRONOUNCED IN THE OPEN COURT ON 9 TH AUGUST, 2018. SD/- (WASEEM AHMED) ACCOUNTANT MEMBER SD/- (RAJPAL YADAV) JUDICIAL MEMBER