Smt. Neena Khullar, Samrala V. CIT II, Ludhiana

ITA 443/CHANDI/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63946 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 18-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Assessee Lawyers: S R CHHABRA
• Keywords: Assessment record
• Section: 143(3); 43(5); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 443/CHD/2012 ASSESSMENT YEAR: 2008-09 SMT. NEENA KHULLAR, VS THE CIT-II SAMRALA LUDHIANA PAN NO. AAYPK0317J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.R.CHHABRA RESPONDENT BY : SMT. JYOTI KUMARI DATE OF HEARING : 30.08.2012 DATE OF PRONOUNCEMENT : 24.09.2012 ORDER PER T.R.SOOD, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-II, LUDHIANA DATED 16.3.2012 RELATING TO ASS ESSMENT YEAR 2008-09. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING EFFECTIVE GROUND:- 1. THAT THE LD. CIT(A)-II, LUDHIANA HAS ERRED IN LAW A ND ON THE FACTS OF THE CASE :- A) BY INVOKING HIS JURISDICTION U/S 263 AND THEREB Y SET ASIDE THE ASSESSMENT ORDER U/S 143(3) DATED 24.12.2 010 AND DIRECTING THE LD. ASSESSING OFFICER TO REASSESS THE INCOME IN THE LIGHT OF DIRECTIONS GIVEN IN THE ORDER PASSE D U/S 263. B) BY NOT CONSIDERING AND ALLOWING THE CLAIM OF THE ASSESSEE TO SET OFF THE NET BUSINESS LOSS OF RS. 11 85340/- SUFFERED IN THE TRADING OF SHARES / DERIVATIVE IN F UTURES OPTIONS U/S 43(5) OF THE INCOME TAX ACT, 1961 AGAIN ST THE OTHER INCOMES. 2 3. AFTER HEARING BOTH THE PARTIES, WE FIND THAT UPON E XAMINATION OF ASSESSMENT RECORDS, THE LD. CIT(A) NOTICED THAT THE ASSESSEE HAD TAKEN UNSECURED LOANS AMOUNTING TO RS. 10,45,000/- FROM THE FOLLOWING PARTIES. NAME & ADDRESS AMOUT (RS. ) DATE SHRI PAL SINGH S/O SHRI SHER SINGH VILL. SARBARPUR, TEHSIL SAMRATA 4,45,000/- 13.08.2007 SHRI BHARPUR SINGH, S/O SHRI KARAM SINGH, VILLAGE KHUGRAILI SIKHAN 5,00,000/- 23.01.2007 SHRI GULAB SINGH, S/O SHRI SARWAN SINGH VILL SIHALA, TEHSIL SAMRALA 1,00,000/- 19.11.2007 4. IT WAS FURTHER NOTICED THAT THOUGH THE ASSESSING OFFICER RECORDED STATEMENTS OF THESE PARTIES BUT THE STATEMENTS HAD BEEN RECORDED IN A CASUAL OR ROUTINE MANNER. NO DOCUMENTARY EVIDENCE HAD BEE N OBTAINED IN SUPPORT OF THE CLAIM OF SOURCES FOR THE ABOVE UNSECURED LOANS GIVEN. ACCORDINGLY, A SHOW CASE NOTICE WAS ISSUED. IN RESPONSE TO NOTICE , IT WAS MAINLY STATED THAT ASSESSING OFFICER WAS AWARE OF THESE LOANS AND, THE REFORE, THE ASSESSEE WAS ASKED ABOUT THE GENUINENESS OF THE LOANS AND THE AS SESSEE HAD FURNISHED EVIDENCE OF THESE PARTIES. THE ASSESSING OFFICER T HEN REQUIRED THE ASSESSEE TO PRODUCE THESE PARTIES AND ASSESSEE PRODUCED THES E CREDITORS BEFORE HIM. THEREAFTER, THE ASSESSING OFFICER RECORDED THEIR ST ATEMENTS AND WAS SATISFIED THAT IS WHY HE ALLOWED THE CLAIM. THEREFORE, IT IS CLEAR THAT ASSESSING OFFICER HAS MADE PROPER INQUIRES IN THIS RESPECT OF THE SAI D CREDITORS AND ACCORDINGLY THE ASSESSMENT ORDER CANNOT BE CALLED ERRONEOUS AND PRE JUDICIAL TO THE 3 INTEREST OF REVENUE. IN THIS REGARD, RELIANCE WAS PLACED ON VARIOUS DECISIONS OF VARIOUS HIGH COURTS AS UNDER:- (I) [2011] 335 ITR 83 (DEL) CIT V ANIL KUMAR S HARMA (II) [2011] 332 ITR 608 (P&H) CIT VS RAJIV AGNIHOT RI (III) [2011] 332 ITR 167 (DEL) CIT VS SUNBEAM AUTO LTD (IV) [2011] 323 ITR 206 (BOM)CIT VS DEVELOPMENT CR EDIT BANK LTD. 5. HOWEVER, LD. COMMISSIONER AFTER EXAMINING THE SU BMISSIONS WAS NOT SATISFIED BECAUSE ACCORDING TO HIM ASSESSING OFFICE R HAD MADE ONLY VERY CASUAL INQUIRIES AND NO DOCUMENTARY EVIDENCE IN RES PECT OF THE SOURCE IN THE HANDS OF THE CREDITORS WAS OBTAINED, THEREFORE, THE ASSESSMENT ORDER WAS ERRONEOUS. THE LD. COMMISSIONER HELD THAT ASSESSME NT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND SET ASIDE THE SAME AND DIRECTED THE ASSESSING OFFICER TO RE-ASSESS THE INCOME OF TH E ASSESSEE. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REI TERATED THE SUBMISSIONS MADE BEFORE THE COMMISSIONER AND ALSO FILED COPIES OF THE AFFIDAVITS AND STATEMENTS RECORDED BEFORE THE ASSESSING OFFICER. H E FURTHER SUBMITTED THAT ENQUIRIES HAVE DEFINITELY BEEN MADE BY THE ASSESSIN G OFFICER. MERELY BECAUSE ENQUIRIES ARE NOT TO THE SATISFACTION OF TH E COMMISSIONER, IT CANNOT BE SAID THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PRE-JUDICIAL TO THE INTEREST OF REVENUE. IN THIS REGARD, HE RELIED ON THE FOLLO WING DECISIONS. (I) [2011] 335 ITR 83 (DEL) CIT V ANIL KUMAR SHAR MA (II) [2011] 332 ITR 608 (P&H) CIT VS RAJIV AGNIHOT RI (III) [2011] 332 ITR 167 (DEL) CIT VS SUNBEAM AUTO LTD (IV) [2011] 323 ITR 206 (BOM)CIT VS DEVELOPMENT CR EDIT BANK LTD. 4 7 ON THE OTHER HAND, LD. DR SUBMITTED THAT MERE FIL ING OF AN AFFIDAVIT WOULD NOT PROVE THE LOANS AND AT BEST IT CAN BE SAI D THAT IDENTITY OF SUCH CREDITORS HAVE BEEN PROVED. IN THIS REGARD, SHE RE LIED UPON THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF BLOWELL AUTO (P) LTD VS ACIT (219 CTR 185). SHE FURTHER SUBMITTED T HAT THOUGH THE ASSESSING OFFICER HAS RECORDED THE STATEMENTS OF TH E CREDITORS BUT THAT AT NO POINT OF TIME HE HAD TRIED TO COLLECT THE DOCUMENTA RY EVIDENCE REGARDING THE SOURCES OF FUND IN THE HANDS OF SUCH CREDITORS AND THEREFORE, COMMISSIONER WAS JUSTIFIED IN PASSING THE REVISIONARY ORDER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. ADMITTEDLY, INITIALLY AFFIDAVITS FROM ALL THREE CREDITORS WERE FILED BEFORE THE ASSESSING OFFICER AND WHEN HE WAS NOT SATISFIED, THE CREDITOR S WERE PRODUCED BEFORE HIM AND THEIR STATEMENTS HAVE BEEN ALSO RECORDED. IN THE SAID STATEMENTS, IT HAS BEEN STATED THAT CREDITORS ARE BASICALLY AGRICU LTURISTS AND ARE ALSO RELATED TO THE HUSBAND OF THE ASSESSEE. IN CASE OF SHRI PA L SINGH, THE LOAN WAS STATED TO HAVE BEEN GIVEN IN CASH OUT OF AGRICULTURAL INCO ME AND IN CASE OF BHARPUR SINGH, THE LOAN WAS STATED TO HAVE BEEN GIVEN THRO UGH TRANSFER OF FUNDS FROM THE BANK ACCOUNT. SHRI BHARPUR SINGH HAD FURTHER A DMITTED THAT LOAN HAS BEEN REFUNDED TO HIM THROUGH CHEQUE. THESE FACTS CLEARL Y SHOW THAT ASSESSING OFFICER HAS MADE REASONABLE INQUIRES. AT BEST, IT CAN BE SAID THAT THESE ENQUIRIES ARE NOT ACCORDING TO THE STANDARD OF LD. COMMISSIONER BUT IT WILL NOT MAKE THE ORDER ERRONEOUS. HON'BLE DELHI HIGH C OURT IN THE CASE OF CIT V ANIL KUMAR SHARMA [2011] 335 ITR 83(DELHI) HAS OBSE RVED AS UNDER:- THERE IS A DISTINCTION BETWEEN LACK OF INQUIRY A ND INADEQUATE INQUIRY. IF THERE WAS ANY INQUIRY, EVE N 5 INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION T O THE COMMISSIONER TO PASS ORDERS UNDER SECTION 263 OF INCOME-TAX ACT, 1961, MERELY BECAUSE HE HAS A DIFFE RENT OPINION IN THE MATTER. 9. THUS, MERELY BECAUSE INQUIRES ARE INADEQUATE, TH E ASSESSMENT ORDER CANNOT BE CALLED ERRONEOUS AND PRE-JUDICIAL TO THE INTEREST OF REVENUE. SIMILARLY, HONBLE PUNJAB & HARYANA HIGH COURT IN T HE CASE OF CIT V RAJIV AGNIHOTRI (2011) 332 ITR 608 HELD THAT REVISIONARY POWERS U/S 263 OF THE ACT CAN BE EXERCISED ONLY WHEN THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE . AS STATED , THE PRESENT ASSESSMENT ORDER CANNOT BE CALLED ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE DECISION RELIED UPON BY THE LD. DR IN THE CASE OF BLOWELL AUTO (P) LTD VS ACIT (SUPRA) IS CLEARLY DISTINGUISHABLE BECAUSE IN THAT CASE, IN THE AFFIDAVITS, NO SPECIFIC SOURCE OF INCOME WAS MENTIO NED WHEREAS IN THE CASE BEFORE US, THE CREDITOR HAD CLEARLY STATED THAT THE Y ARE DERIVING INCOME FROM AGRICULTURAL SOURCES. IN THESE CIRCUMSTANCES, WE A RE OF THE OPINION THAT ASSESSMENT ORDER CANNOT BE CALLED ERRONEOUS AND PRE JUDICIAL TO THE INTEREST OF REVENUE AND THEREFORE, THE SAME COULD NOT HAVE BEEN STATED TO BE REVISIONARY ORDER. ACCORDINGLY, WE QUASH THE ORDER U/S 263 OF THE ACT. 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF SEPTEMBER, 2012 SD/- SD/- (H.L.KARWA) (T.R. SOOD) VICE PRESIDENT ACCOUTNANT MEMBER 6 DATED : 24 TH SEPTEMBER, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR