M/s. Shri Virat Overseas Pvt.Ltd., Banda. V. Asstt. Commissioner of Income Tax-IV, Kanpur

ITA 449/LKW/2012

• Counselvise Citation: 44923714 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-10-2013
• Assessment Year: misc
• Appeal Filed On: 06-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Keywords: Unexplained investment; Principle of natural justice
• Section: 153A; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKN BENCH A : LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A. K. GARODIA , ACCOUNTANT MEMBER I.T.A. NO. 449 /LKW/201 2 ASSESSMENT YEAR :2000 - 2001 M/S SRI VIRAT OVERSEAS PVT. LTD., VS. A.C.I.T. - IV, RAMLEELA GROUND, KANPUR. BANDA. PAN:AAECS6234K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH GARG, ADVOCATE RESPONDENT BY : SHRI ALOK MITRA, D.R. DATE OF HEARING : 24 / 10 /2013 DATE OF PRONOUNCEMENT : 18/12/2013 ORD ER PER SUNIL KUMAR YADAV: TH IS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) , INTER ALIA, ON VARIOUS GROUNDS, WHICH ARE AS UNDER: 1. BECACUSE THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT GIVING ADEQUATE AND REASONABLE OPPORTUNITY TO THE ASSESSEE APPELLANT FOR MAKING NECESSARY SUBMISSIONS AND TO FILE EXPLANATIONS PURSUANT TO THE APPEAL FILED . THE ORDER PASSED BY THE NATURAL JUSTICE, BAD IN LAW AND HENCE BE QUASHED. 2 2. BECAUSE THE LD. CIT(A) HAS ERRED ON FACTS AND IN LA W AND WAS TOTALLY UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS.5,40,864 / - AS INCOME FROM BUSINESS. 3. BECAUSE THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW AND WAS TOTALLY UNJUSTIFIED I N UPHOLDING THE ADDITION OF RS. 14,50,000 / - AS UNEXPLAINED INVESTMENT IN BUSINESS U/S 69 AS INCOME FROM OTHER SOURCES. 4. BECAUSE THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW AND WAS TOTALLY UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS.1,10,000 / - BEING SHARE APPLICATIONS MONEY RECEIVED, AS UNEXPLAINED U / S 68 AS INCOME FROM OTHER SOURCES. 5. BECAUSE ON A PROPER CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ENTIRE ADDITION OF RS.5,40,864/ - RS.14,50,000 / - AND RS. 1,10,000 / - MADE ON CONJAECTURES AND SURMISES AND UPHELD BY CIT (A) WITHOUT APPRECIATION OF THE FACTS , BEING TOTALLY UNWARRANTED BE DA L ETED . 2. DURING THE COURSE OF HEARING OF THE APPEAL, THE LEARNED COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACTS THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2000 - 2001 DECLARIN G A LOSS OF RS.28,670/ - ON 29/11/2000. THE PREVENTIVE UNIT OF CENTRAL EXCISE COMMISSIONRATE, ALLAHABAD HAS CARRIED OUT SEARCH AT BUSINESS PREMISES OF THE ASSESSEE ON 08/06/2002. AFTER RECEIVING INFORMATION THAT THE CENTRAL EXCISE AUTHORITIES HAVE SEIZED /INVENTORISED CASH, FDRS/NSCS/CPUS AND OTHER BOOKS OF ACCOUNT AND INCRIMINATING DOCUMENTS FOUND FROM THE ASSESSEE, WHICH MAY CONTAIN ENTRIES/ASSETS EITHER WHOLLY OR PARTLY NOT DISCLOSED FOR THE PURPOSES OF INCOME TAX, A WARRANT OF AUTHORIZATION U/S 132A(1) OF THE ACT WAS ISSUED BY THE DIRECTOR GENERAL OF INCOME TAX (INV.), LUCKNOW ON 07/08/2003 IN THE CASE OF THE ASSESSEE I.E. M/S SRI 3 VIRAT OVERSEAS PVT. LTD. ON THE BASIS OF MATERIAL COLLECTED FROM CENTRAL EXCISE DEPARTMENT, NOTICE U/S 153A READ WITH SECTI ON 142 DATED 24/02/2006 WAS ISSUED AND ASSESSEE HAS BEEN REQUESTED TO FILE THE RETURN ON 13/03/2006. THE ASSESSEE COMPANY FILED ITS RETURN ON 13/03/2006 AT NIL INCOME. THEREAFTER, THE ASSESSMENT WAS COMPLETED ON 31/03/2006. THE LEARNED COUNSEL FOR THE AS SESSEE HAS FURTHER CONTENDED THAT THE ASSESSMENT HAS BEEN FRAMED WITHIN 15 DAYS FROM THE FILING OF THE RETURN OF INCOME AND THE ADDITIONS WERE MADE ON THE BASIS OF SHOW CAUSE NOTICE ISSUED BY THE CENTRAL EXCISE DEPARTMENT WITHOUT MAKING ANY INDEPENDENT ENQ UIRY. LATER ON, THE DISPUTE WAS RESOLVED BEFORE THE SETTLEMENT COMMISSION. THE ORDER PASSED BY CUSTOMS AND CENTRAL EXCISE SETTLEMENT COMMISSION WAS NOT TAKEN INTO ACCOUNT BY THE ASSESSING OFFICER AS WELL AS THE CIT(A) WHILE ADJUDICATING THE ISSUE IN DISP UTE. THE REASONS FOR NON CONSIDERATION OF THE ORDER OF THE CUSTOMS AND CENTRAL EXCISE SETTLEMENT COMMISSION BY THE ASSESSING OFFICER WAS STATED THAT THE ASSESSMENT ORDER WAS PASSED ON 31/03/2006 BEFORE EVEN THE REFERENCE TO THE SETTLEMENT COMMISSION. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT IN THE LIGHT OF THESE FACTS, IT HAS BEEN ESTABLISHED THAT THE LOWER AUTHORITIES HAVE NOT APPLIED THEIR MIND INDEPENDENTLY WHILE MAKING THE ADDITIONS. THEREFORE, THE ORDER OF CIT(A) IS TO BE SET ASID E AND THE MATTER MAY BE RESTORED TO THE ASSESSING OFFICER FOR READJUDICATION OF THE IMPUGNED ISSUES IN THE LIGHT OF THE ORDER OF CUSTOMS AND CENTRAL EXCISE SETTLEMENT COMMISSION AND OTHER EVIDENCE. 3. THE LEARNED D.R., ON THE OTHER HAND, FORMERLY OPPOSED THE REQUEST OF THE ASSESSEE AND HAS PLACED RELIANCE UPON THE ORDERS OF THE LOWER AUTHORITIES. 4 4. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. WE FIND THAT THE ASSESSING OFFICE R HAS ISSUED NOTICE U/S 153A AFTER OBTAINING THE SEIZED ASSETS /MATERIALS FROM THE CUSTODY OF CENTRAL EXCISE DEPARTMENT ON 13/03/2006, ACCORDING TO THE ASSESSEE OF WHICH REPLY WAS FILED ON 24/03/2006 AND THE ASSESSMENT WAS FRAMED ON 31/03/2006. THEREFORE, IT IS FAIRLY EVIDENCED FROM THE RECORD THAT THE ASSESSMENT WAS FRAMED ALMOST WITHIN 17 DAYS OR SO FROM THE FILING OF RETURN OF INCOME AND ADDITIONS WERE MADE ON THE BASIS OF THE SHOW CAUSE NOTICE ISSUED BY CENTRAL EXCISE DEPARTMENT WITHOUT MAKING ANY INDEP ENDENT ENQUIRY. IT IS ALSO EVIDENT FROM THE RECORD THAT THE SEIZED MATERIAL WAS RECEIVED BY THE ASSESSING OFFICER IN THE MONTH OF MARCH, 2006. THEREFORE, THE ASSESSMENT WAS COMPLETED WITHIN 30 DAYS FROM THE RECEIPT OF THE SEIZED RECORDS FROM THE CENTRAL EXCISE DEPARTMENT. WHEN THE MATTER WENT TO THE CIT(A), THE CIT(A) HAS PASSED AN EX - PARTE ORDER CONFIRMING THE ADDITIONS MADE BY THE ASSESSING OFFICER. THE REASONS FOR CONFIRMING THE ADDITIONS ARE VIRTUALLY GIVEN IN THREE LINES, WHICH CLEARLY SHOWS THAT T HERE WAS NO APPLICATION OF MIND BY THE CIT(A) TO THE ISSUE IN DISPUTE WHILE CONFIRMING THE ADDITION. 4.1 W E HOWEVER HAVE EXAMINED THE ORDERS OF THE LOWER AUTHORITIES AND F R OM A CAREFUL PERUSAL , WE FIND THAT NONE OF THE AUTHORITIES HAVE APPLIED THEIR MIND TO THE EVIDENCE COLLECTED FROM THE CENTRAL EXCISE DEPARTMENT. THEY HAVE MADE ADDITIONS HURRIEDLY WITHOUT MAKING ANY PROPER VERIFICATION. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSE SSMENT WAS FRAMED HALF HEARTEDLY BY THE ASSESSING OFFICER WITHOUT APPLICATION OF HIS MIND AND SIMILAR IS THE POSITION WITH CIT(A). WE, THEREFORE, SET ASIDE 5 THE ORDERS OF THE LOWER AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO FRAME THE ASSESSMENT DE NOV O ON THE BASIS OF SEIZED MATERIAL AFTER MAKING PROPERE ENQUIRY AND VERIFICATION. WE ALSO DIRECT THE ASSESSEE TO EXTEND ALL SORT OF COOPERATION TO THE LOWER AUTHORITIES SO THAT ISSUES CAN BE ADJUDICATED PROPERLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESS EE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 18/12/2013 ) SD/. SD/. (A. K. GARODIA) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18/12/2013 *CL SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR