SHRI ANIL JAIN (BAFNA), Indore V. THE CIT-II, Indore

ITA 384/IND/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4318 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 15-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJIV VARSHNEY
• Keywords: Prejudicial to interest
• Section: 142(1); 263; 12

Judgement Text

ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 384/IND/2014 A.Y.2009-10 ANIL JAIN (BAFNA) INDORE ::: APPELLANT VS COMMISSIONER OF INCOME TAX-II INDORE ::: RESPONDENT ASSESSEE BY SHRI ANIL KAMAL GARG REVENUE BY SHRI RAJIV VARSHNEY DATE OF HEARING 17.5.2016 DATE OF PRONOUNCEMENT 1 6 . 8 . 2016 O R D E R PER SHRI D.T. GARASIA, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT-II, INDORE, DATED 20.3. 2014 ON THE GROUND THAT THE CIT WAS NOT JUSTIFIED IN INVOKIN G THE PROVISIONS OF SECTION 263 OF THE ACT. ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 2 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE DERIVES INCOME FROM M/S BAFNA HOSPITAL & ORTHOPAEDIC RESEARCH CENTRE (P) LTD., INDORE, AND INCOME FROM MED ICAL PRACTICE. THE ASSESSEE ALSO DERIVES INCOME FROM OTHER SOURCES I.E. BANK INTEREST AND INTEREST ON PPF, ETC. THE ASSESSEE FILED RETURN OF INCOME ON 5.1.2010 DECLARING INCOME ATRS.6,74,960/-. THE CASE WAS SELECTED FOR SCRU TINY THROUGH CASS. NOTICE U/S 143(2) WAS ISSUED WHICH WAS SERVED. AGAIN NOTICES U/S 143(2) AND 142(1) OF THE AC T ALONG WITH QUESTIONNAIRE WERE ISSUED IN RESPONSE TO WH ICH THE ASSESSEE ATTENDED BEFORE THE ASSESSING OFFICER. AIR INFORMATION REVEALED THAT THE ASSESSEE DEPOSITED RS.48,75,000/- CASH IN HIS BANK ACCOUNT WITH STATE BANK OF INDORE, CLOTH MARKET BRANCH, INDORE. THE ASSESSIN G OFFICER ASKED THE ASSESSEE TO SHOW THE SOURCE OF CASH DEPOSITS IN RESPONSE TO WHICH IT WAS SUBMITTED THAT T HE ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNTS. THE ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 3 ASSESSEE WITHDREW RS. 1,20,000/- ONLY DURING THE YEAR UNDER CONSIDERATION FOR HOUSEHOLD EXPENSES FROM HIS CAPITAL ACCOUNT. THE ASSESSING OFFICER FOUND THE WITHDRAWALS TO BE VERY LOW AND ASKED FOR REASONS THEREF OR IN RESPONSE TO WHICH THE ASSESSEE EXPLAINED THAT THE F AMILY COMPRISES OF HIMSELF AND HIS WIFE AND TWO CHILDREN ON LY. THE ASSESSEE DID NOT FILE DETAILS OF HOUSEHOLD EXPENS ES. THE ASSESSING OFFICER, THEREFORE, CONSIDERING THE STATUS OF THE ASSESSEE AND KEEPING IN VIEW THAT THE ASSESSEE IS MAINTAINING CAR, THE WITHDRAWALS APPEAR TO BE ON LOWER SIDE. HE, THEREFORE, ESTIMATED THE HOUSEHOLD EXPENSE S AT RS. 13000/- P.M. WHICH WORKS OUT TO RS. 1,56,000/-. HENCE, AN AMOUNT OF RS.36,000/- TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF LOW WITHDRAWALS. 3. ON EXAMINATION OF CASE RECORD, IT WAS OBSERVED BY TH E LEARNED COMMISSIONER OF INCOME TAX THAT THE ASSESSMENT ORDER FRAMED BY THE ASSESSING OFFICER WAS ERRONEOUS ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 4 INASMUCH AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AS NO ENQUIRY/INVESTIGATION WAS MADE IN THE HIGH PAYMENT OF INTEREST ON UNSECURED LOAN, SOURCES OF CASH DEPOSITS IN BANK ACCOUNT, OTHER DEPOSITS IN BANK ACCOUNT, ETC. THE LEARNED COMMISSIONER OF INCOME TAX, THEREFORE, ISSUE D A NOTICE U/S 263 OF THE ACT TO SHOW REASONS AS TO WHY T HE ASSESSMENT ORDER IS NOT TO BE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN RESPO NSE, THE ASSESSEE ATTENDED. THEREAFTER, THE LEARNED COMMISSIONE R OF INCOME TAX ISSUE SHOW CAUSE NOTICE ON THE FOLLOWI NG POINTS :- (A) THE ASSESSEE MADE PAYMENT OF INTEREST AT RS.7,91,405/- ON UNSECURED LOAN AND DECLARED INTERE ST AT RS.7,91,405/-. THUS, THE PAYMENT AND INTEREST RECEIVED IS OF SAME AMOUNT. IT LOOKS SUSPICIOUS. NO ENQUIRY IN THIS REGARD WAS MADE BY THE ASSESSING OFFICER. IT IS ALSO NOTEWORTHY THAT THE ASSESSEE I S A ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 5 DOCTOR BY PROFESSION AND THE HUGE TRANSACTIONS IN T HE BANK ACCOUNT ARE NOT USUAL IN THIS LINE OF PROFESSI ON. NO ENQUIRY HAS BEEN CONDUCTED BY THE ASSESSING OFFICER IN THIS RESPECT. (B) IN THIS CASE, THERE IS AIR INFORMATION THAT THE ASSESSEE HAD MADE CASH DEPOSITS IN HIS BANK ACCOUNT AT RS.48,75,000/- WITH STATE BANK OF INDIA, CLOTH MARK ET, INDORE BRANCH. THOUGH BANK STATEMENTS AND COPY OF CASH BOOK ARE PLACED ON RECORD. HOWEVER, IT IS FOU ND THAT NO VERIFICATION IN RESPECT OF SOURCES OF THE D EPOSITS HAD BEEN MADE DURING ASSESSMENT. (C) BESIDES CASH DEPOSITS, THERE WERE OTHER DEPOSIT S THROUGH CHEQUES. HOWEVER, NO DETAILS WERE OBTAINED BY THE A.O. WITH REGARD TO THESE DEPOSITS AND NO INQUI RY ABOUT THE SOURCES WAS MADE IN THIS RESPECT. ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 6 (D) IN THE REPLY DATED 11 TH NOV., 2011 IT WAS SUBMITTED THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT TO SELL HIS AGRICULTURAL LAND FOR RS.13,00,000/- WITH SHRI PREM SINGH PANWAR. IT IS FURTHER CLAIMED THAT RS.11,00,0 00/- RECEIVED IN CASH AS ADVANCE IN THE YEAR UNDER CONSIDERATION. IN SUPORT OF THE CLAIM, ONE AGREEMEN T WITHOUT ANY STAMP PAPER OR NOTORIZED HAD BEEN SUBMITTED IN SUPPORT OF VERIFICATION. IT IS FOUND T HAT NO VERIFICATION OF SAID PURCHASER, SHRI PREM SINGH PAN WAR WAS MADE BY THE A.O. A.O. ALSO NOT VERIFIED THE AUTHENTICITY OF THE SALE AGREEMENT. IT IS ALSO CLAI MED THAT THE LAND SOLD IS IN THE NAME OF HUF BUT AS PER THE KHASARA COPY, THE LAND IS IN THE NAME OF SHRI ANIL JAIN, INDIVIDUAL. IN REPLY TO THE ABOVE QUERIES, THE ASSESSEE COULD NOT SUBSTANTIATE HIS CLAIM WITH DOCUMENTARY EVIDENCE EXCEPT REPEATEDLY STATING THAT THE ASSESSMENT ORDER WAS NOT ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 7 PREJUDICIAL TO THE INTEREST OF REVENUE. THE LEARNED COMMISSIONER OF INCOME TAX, THEREFORE, SET ASIDE THE ASSESSMENT ORDER WITH THE DIRECTION THAT A DETAILED ENT RY- WISE EXAMINATION OF BANK ACCOUNTS OF THE ASSESSEE IS IMPERATIVE TO ASCERTAIN COMPLETE FACTS AND BACKGROUND OF THE CASH DEPOSIT OF RS.48,75,000/- IN THE ACCOUNT OF THE ASSESSEE WITH STATE BANK OF INDIA, CLOTH MARKET, INDORE. THE LEARNED COMMISSIONER OF INCOME TAX IN THE INTER EST OF JUSTICE TO BOTH THE SIDES, SET ASIDE THE ASSESSMENT ORDER ON ALL THE ISSUES DISCUSSED IN PARA 3 OF THIS ORDER. AGAI NST THIS DIRECTION, THE ASSESSEE IS NOW IN APPEAL BEFORE T HE TRIBUNAL. 4. BEFORE ME, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TA X WAS NOT JUSTIFIED IN HOLDING THAT THE ORDER OF THE AS SESSING OFFICER WAS ERRONEOUS INASMUCH AS IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ASSESSING OFFICER BEF ORE ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 8 PASSING THE ASSESSMENT ORDER HAS MADE DETAILED INQUIRY INTO EACH AND EVERY ASPECT OF THE MATTER. IT WAS ALSO PLEADED THAT THE ASSESSEE HAS ALSO PRODUCED ALL THE RELEVANT PAPERS BEFORE THE LEARNED CIT BUT HE DID NOT CONSIDER THE SAME. AS SUCH, THE ORDER OF THE LEARNE D CIT DESERVES TO BE SET ASIDE AND THAT OF THE ASSESSING OFF ICER RESTORED. 5. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORDER OF THE LEARNED CIT AND SUBMITTED THAT THE ORDER PASSED BY THE LEARNED CIT IS REASONED ONE AS NO ENQUIRY/INVESTIGATION WAS MADE BY THE ASSESSING OFFICE R IN REGARD TO HIGH PAYMENT OF INTEREST ON UNSECURED LOAN, SOURCES OF CASH DEPOSITS IN THE BANK ACCOUNT, ETC. IN SUPPORT OF HIS SUBMISSIONS, THE LEARNED DR RELIED UP ON THE ORDERS OF THE HON'BLE COURT OF MADHYA PRADESH IN THE FOLLOWING CASES :- ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 9 (I) CIT VS. DEEPAK KUMAR GARG; 299 ITR 435 (MP) (II) CIT VS. MAHAVAR TRADERS; 220 ITR 167 (MP) 4. WE HAVE HEARD BOTH THE PARTIES. FOR THE SAKE OF BREVITY, THE RELEVANT PORTION OF THE ASSESSMENT ORDER WHEREIN THE ASSESSING OFFICER HAS DISCUSSED THE ISSU E IS UNDER :- AIR INFORMATION REVEALED THAT ASSESSEE DEPOSITED RS.4875000/- IN HIS BANK ACCOUNT WITH STATE BANK OF INDORE, CLOTH MARKET BR., INDORE. ASSESSEE WAS ASKE D TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT. COUNSEL OF THE ASSESSEE EXPLAINED THAT ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNTS A ND DAY TO DAY CASHBOOK. ASSESSEE HAS FILED THE COPY OF CASHBOOK AND COPY OF BANK ACCOUNT. THE AMOUNTS OF CASH DEPOSITS ARE VERIFIABLE. THUS AIR INFORMATION STANDS VERIFIED. ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 10 FROM THE ASSESSMENT ORDER WE FIND THAT THE ASSESSING OFFICER HAS NOT MADE ANY INQUIRY REGARDING PAYMENT OF INTEREST OF RS.7,91,405/- ON UNSECURED LOAN AND DECLAR ED INTEREST RECEIVED OF RS.7,91,405/-. THUS, THE PAYME NT AND THE INTEREST IS THE SAME AMOUNT. IT LOOKS SUSPICIOUS THAT NO INQUIRY IN THIS REGARD WAS MADE BY THE ASSESSING OFFICER. THERE WAS A HUGE TRANSACTION IN THE BANK ACCOUN T. THEREFORE, ONE HAS TO MAKE THE ENQUIRY. MOREOVER, THE ASSESSING OFFICER HAS NOT VERIFIED THE AGREEMENT TO S ELL WITH ONE PREM SINGH PANWAR. FROM THE ASSESSING OFFICER IT CAN BE SEEN THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS NOT MADE ANY INQUIRY IN RESPECT OF THESE TWO ADDITIO NS. THEREFORE, WE ARE OF THE VIEW THAT WHEN THE ASSESSING OFFICER HAS NOT MADE ANY INQUIRY, THE ASSESSMENT ORDER I S CLEARLY ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF T HE REVENUE. MOREOVER, THE ASSESSEE COULD NOT SUBMIT BEF ORE US AS TO HOW THE ASSESSING OFFICER HAS APPLIED HIS MIND ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 11 DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, IN OUR VIEW, THE WHOLE MATTER REQUIRES VERIFICATION. MOREOVER, THE ASSESSING OFFICER HAS ALSO MADE INQUIRY IN RESPECT OF AIR INFORMATION REGARDING DEPOSIT IN THE STATE BANK OF INDO RE OF RS.48,75,000/-. THEREFORE, WE ARE OF THE VIEW THAT THE CIT WAS FULLY JUSTIFIED IN INVOKING THE PROVISIONS O F SECTION 263 OF THE ACT. IN HOLDING SO, WE GET SUPPORT FROM THE FOLLOWING JUDGMENTS OF THE HON'BLE JURISDICTIONAL HI GH COURT OF MADHYA PRADESH :- CIT VS. DEEPAK KUMAR GARG; (2008) 299 ITR 435 (MP ) WHERE FROM ORDER OF ASSESSING OFFICER IT WAS CLEAR THAT FOR WANT OF TIME, ASSESSING OFFICER HAD DONE ONLY A SEMBLANCE OF ENQUIRY AND THAT TOO IN VERY SLIPSHOD MANNER AND ASSESSING OFFICER HAD ACCEPTED VERSION O F ASSESSEE WITHOUT PROPER ENQUIRY, AS A RESULT OF WHI CH SUBSTANTIAL AMOUNT OF TAXABLE INCOME WAS NOT BROUGH T TO TAX, COMMISSIONER RIGHTLY HELD ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO INTEREST OF REVENUE. THE ASSESSEE WAS IN THE BUSINESS OF PURCHASE OF AGRICULTURAL LAND AND SALE OF DEVELOPED RESIDENTIAL PLOT. THE ASSESSEE FILED THE RETURN SHOWING RS. 9,982 AS THE TOTAL INCOME. AFTER SCRUTINY, NOTICE UNDER SECTION 143(2) ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 12 READ WITH SECTION 142(1) WAS ISSUED TO THE ASSESSEE . IN RESPONSE, THE AUTHORISED REPRESENTATIVE APPEARED ALONG WITH DOCUMENTS. THE ASSESSING OFFICER FRAMED THE ASSESSMENT ORDER ON 28.3.2002 HOLDING A SUM OF RS.5,90,290 AS TAXABLE INCOME IN THE HANDS OF THE ASSESSEE. THE COMMISSIONER, HOWEVER, SET ASIDE THE ASSESSMENT ORDER. HELD THAT FROM THE ORDER OF THE ASSESSING OFFICER I T WAS CLEAR THAT FOR WANT OF TIME, THE ASSESSING OFFICER HAD DONE ONLY A SEMBLANCE OF ENQUIRY AND THAT TOO IN VERY SLIPSHOD MANNER, AS WAS CLEAR FROM THE POST SCRIPT IN THE ORDER AND THE ASSESSING OFFI CER HAD ACCEPTED THE VERSION OF THE ASSESSEE WITHOUT PROPER ENQUIRY AS A RESULT OF WHICH SUBSTANTIAL AMOUNT OF TAXABLE INCOME WAS NOT BROUGHT TO TAX. IN SUCH A CASE ASSESSMENT ORDER WOULD BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE LAW ENJOINS UPON THE ASSESSING OFFICER TO MAKE ASSESSMENT ORDER BRINGING ALL TAXABLE INCOME TO TAX. THE ENQUIRY HELD IN A PERFUNCTORY MANNER COULD NOT BE SAID TO BE A PROPER ENQUIRY BEFORE PASSING THE ASSESSMENT ORDER. THAT COULD NOT BE A GROUND TO SHUT OUT THE JURISDICTION OF THE COMMISSIONER. THUS, THE ORDER OF THE COMMISSIONER UNDER SECTION 263 WAS TO BE UPHELD. CIT VS. MAHAVAR TRADERS; (1996) 220 ITR 167 (MP) THE COMMISSIONER FOUND THAT THE ASSESSMENT WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE INASMUCH AS ASSESSEES CLAIM UNDER SECTIONS 80HH AND 80J HAD WRONGLY BEEN ALLOWED. HE INVOKED THE PROVISIONS OF SECTION 263 AND AFTER HEARING THE ASSESSEE SET ASIDE THE ORDER OF ASSESSMENT WITH ANIL JAIN (BAFNA) ITA NO. 384/IND/2014 13 DIRECTIONS TO THE ITO TO FRAME A FRESH ASSESSMENT. ON APPEAL, THE TRIBUNAL HELD THAT THE COMMISSIONER HAD WRONGLY INVOKED JURISDICTION UNDER SECTION 263 AS THE ORDER PASSED BY THE ITO WAS CORRECT. IN VIEW OF THE ABOVE DISCUSSIONS, WE FIND NO MERIT I N THE APPEAL OF THE ASSESSEE AND AS SUCH DISMISS THE SAME. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. PRONOUNCED IN OPEN COURT ON 16 AUG., 2016 SD/- SD/- (B.C. MEENA) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 16 AUG., 2016