M/s. Balaji Infrastructures & Projects, Kolkata V. CIT, Kol - XVII, Kolkata, Kolkata

ITA 456/KOL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70456 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 26-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S JHAJHARIA
• Keywords: Gift; Depreciation; Third party statement; Assessment record
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI SHAMIM YAHYA, A.M. & SHRI GEORGE MATHA N, J.M. ] I.T.A. NO.456/KOL/2012 ASSESSMENT YEAR : 2007-08 M/S. BALAJI INFRASTRUCTURES & PROJECTS .. ( APPELLANT ) (PAN:AAH FB 2767L) -VS- CIT-XVII, KOLKATA .. ( RESPONDENT ) DATE OF CONCLUDING THE HEARING : 16.12.2013 DATE OF PRONOUNCING THE ORDER : 20.12.2013 APPEARANCES : FOR THE APPELLANTS :SHRI S.JHA JHARIA : FOR THE RESPONDENT :SHRI VARINDER MEHTA , CIT, SR.DR O R D E R PER SHRI SHAMIM YAHYA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT PASSED UNDER SECTION 263 OF THE I.T. ACT FOR ASSESSMENT YEAR 200 7-08 VIDE ORDER DATED 28.12.2011. 2. IN THIS CASE, THE LD. CIT NOTED THAT ON GOING TH ROUGH THE ASSESSMENT ORDER AND DOCUMENTS FILED IN COURSE OF ASSESSMENT PROCEEDINGS , FOLLOWING DEFECTS WERE NOTICED RENDERING THE SAID ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. I) THE DETAILS OF ADDITION MADE TO THE ASSETS AT RS .15,10,498/- WERE NOT FURNISHED AND THEREFORE, IT WAS NOT VERIFIABLE WHET HER THE DEPRECIATION CLAIMED AT RS.1,83,712/- WAS PROPER OR NOT. II) IN RESPECT OF SUNDRY CREDITORS AT RS.37,32,386/ -, CONTRA CONFIRMATION A/CS. WERE NOT CALLED FOR AND PLACED ON RECORD. III) THE SOURCE OF INTRODUCTION OF MONEY IN THE PAR TNERS CAPITAL A/C. WERE NOT EXAMINED. 2 A) SHRI NABARUN BISWAS RS.3,50,000/- B) SHRI SOUMYARUP SENGUPTA RS.2,00,000/- C) SMT. NABANITA SENGUPTA - RS.1,00,000/- D) SMT. SWATI BISWAS RS.L,00,000/- IV) WHETHER ANY INTEREST INCOME WAS EARNED FROM TWO FIXED DEPOSITS EACH OF RS.5,00,000/- MADE WITH UNION BANK OF INDIA AND VIJAY BANK WERE NOT VERIFIED. V) THE DETAILS OF WORK IN PROGRESS INCLUDING CLOSING B ALANCE OF MATERIAL AT SITE WERE NOT FURNISHED AND VERIFIED. VI) THE FULL AND COMPLETE DETAILS OF DONATION OF RS .1,00,000/- AND PUJA EXPENSES OF RS.26,576/- WERE NOT FURNISHED AND VERIFIED. VII) THE FULL AND COMPLETE DETAILS OF THE FOLLOWING EXPE NSES WERE NOT CALLED FOR AND EXAMINED A) CARRYING CHARGES RS.L,22,426/- B) FUEL AND MAINTENANCE OF MACHINERY RS.L,47,255/- A) MACHINERY HIRE CHARGES RS. 69,450/- VIII) THE DETAILS OF GIFT OF RS.12,85,000/- RECEIVE D BY SMT. SWATI BISWAS WERE NOT EXAMINED AND COPY OF DEED OF ACQUIS ITION OF PROPERTY AT RS.12,32,200/- WAS NOT PLACED ON RECORD . IX) THE GOODS IN THE FORM OF STEEL OF RS.56,00,000/ - AND CEMENT OF RS.17,60,000/- PURCHASED VIDE BILL NO.L1 ON 29-3-20 07 WERE ACTUALLY CONSUMED AND USED DURING THE YEAR IS NOT K NOWN AND WHETHER THE SAME IS EITHER REFLECTED IN WORK IN PRO GRESS OR CLOSING STOCK WAS NOT KNOWN. X) THE DETAILS OF GIFT OF RS.5,00,000/ - RECEIVED B Y SHRI NABARUN BISWAS AND DEBIT OF GIFT OF RS.L,65,000/- HAVE NOT BEEN EXAMINED. THE COPY OF DEED FOR ACQUISITION OF LAND FOR RS.20, 26,619/- WAS NOT PLACED ON RECORD AND HOW THERE WAS NO WEALTH TA X LIABILITY FOR THE YEAR UNDER CONSIDERATION WAS NOT KNOWN. XI) THE ENTRIES RELATING TRANSACTIONS WITH M/S SPAR ELECTRICALS WERE NOT PROPERLY RECONCILED. 3 3. THEREFORE A SHOW CAUSE LETTER INITIATING PROCEEDING S U/S.263 OF THE I.T. ACT, 1961 WAS SERVED ON THE ASSESSEE . THE ASSESSEE RESPONDED AS UNDER: EXPLANATION OF POINT NO 2(I) IN ADDITION OF FIXED ASSETS DURING THE YEAR 2006-07 WAS MADE AMOUNTING TO RS.15,10,493/- A ND DEPRECIATION CLAIMED OF RS.183712/- WHICH WAS MATCH ED PROPERLY. PURCHASE BILL VOUCHER AND LEDGER COPY ARE ATTACHED HEREWITH. IN VIEW OF THE FACTS SUCH QUERY MAY BE CO NSIDERED.- ANNEXURE- 1 EXPLANATION OF POINT NO 2(II) : T HE LIST OF SUNDRY CREDITORS HAD BEEN SUBMITTED BEFORE THE DCIT-51/KOL AT THE TIME O F HEARING DT. ON 25.08.2009. IN VIEW OF CIRCUMSTANCES SUCH POINT MAY BE KINDLY CONSIDERED.-- ANNEXURE-2. EXPLANATION OF POINT NO. THE SOURCE OF INTRODUCTION OF MONEY DURING THE YEAR 2006-07 WAS MADE BY THE PARTNERS FR OM OWN SAVINGS, (A)SHRI NABARUN BISWAS RS.3,50,000/- INTRODUCES TH E MONEY THROUGH BANK. (B)SHRI SOUMYARUP SENGUPTA RS.2,00,000/- INTRODUCES THE MONEY THROUGH BANK. (C) SMT. NABANITA SENGUPTA RS.1,00,00 0/ - INTRODUCES THE MONEY BY CASH (D) SMT. SWATI BISWAS RS.1,00,000/ - INTRODUCES THE MONEY BY CASH. IN THIS CIRCUMSTANCES SUCH SUBMISSION MAY BE GRANTE D- ANNEXURE-3. EXPLANATION OF POINT NO 2(IV): THE TWO FIXED DEPOSITS EACH OF AMOUNT OF RS. 500000/ - WERE MADE AS TERM DEPOSIT. SO, WE COULD NOT EARN ANY INTEREST INCOME FOR THE PERIOD. IN THI S VIEW OF SUCH FACTS POINT MAY BE KINDLY ACCEPTED-- ANNEXURE-4. EXPLANATION OF POINT NO. 2(V): THE DETAIL OF CLOSING STOCK HAD BEEN SUBMITTED BEFORE THE DCIT-51, KOL AT THE TIME OF HEARING. IN THE VIEW OF THE FACTS SUCH POINT MAY BE KINDLY C ONSIDERED. 4 ANNEXURE-5. EXPLANATION OF POINT NO 2(VI): THE DONATION WAS MADE TO SRI VENKATESWARA PRANADANA TRUST AT T.T.D ADMINISTRATIO N BUILDING, K.P ROAD, TIRUPATI-517501 VIDE CHEQUE, AND PUJA EXP ENSE WAS MADE IN THE ACCOUNT OF BISWAKARMA PUJA AND OTHERS. IN THE FACTS SUCH POINTS MAY BE KINDLY ALLOWED-- ANNEXURE-6. EXPLANATION OF POINT NO.2(YII): THAT EXPENSES WERE MADE THROUGH VOUCHER AND BILLS PROPERLY - ANNEXURE-7. EXPLANATION OF POINT NO.2(VIII): THE DETAIL OF GIFT HAD BEEN RECEIVED BY SWATI BISWAS AND ACQUISITION OF PROPERT Y DEED (XEROX COPY) IS ATTACHED WITH - ANNEXURE-8. EXPLANATION OF POINT NO.2(IX): THAT THE QUERY OF GOODS IN THE FORM OF STEEL AND CEMENT WERE ACTUALLY SUPPLIED BY THE PARTY, VIDE RA BILL NO.01 WHICH WAS MADE BY THE ASSESSEE, SUBMI TTED BEFORE THE LD.DCIT-51/KOL. AT THE TIME HEARING. NOW IT IS ANNEXED HEREWITH- ANNEXURE-9. EXPLANATION OF POINT NO.2(X): THAT THE DETAIL OF DEBIT AND CREDIT OF GIFT HAD BEEN MADE AND ACQUISITION OF LAND AND X EROX COPY OF LAND AND PROPERTY ATTACHED IN EXPLANATION OF POINT NO.2(VIII). THAT THE ASSESSEE WAS NOT LIABLE TO INCUR ANY WEALTH TAX - ANNEXURE-10. EXPLANATION OF POINT NO.2(XI): THAT THE DETAIL OF LEDGER COPY IS ATTACHED HEREWITH FOR RECONCILIATION---ANNEXURE-11. 3. CONSIDERING THE ABOVE SUBMISSIONS OF THE ASSESSE E, THE ASSESSMENT ORDER AND THE DOCUMENTS FOUND IN THE ASSESSMENT RECORDS, THE LD. CIT WAS IN THE OPINION THAT FURTHER VERIFICATION WAS REQUIRED ON THE ISSUE MENTIONED AB OVE. HENCE, THE LD. CIT DIRECTED THE AO TO DO THE ASSESSMENT AFRESH, AS PER LAW, AFTER C ARRYING OUT NECESSARY VERIFICATION IN RESPECT OF THE ISSUES MENTIONED ABOVE. 4. AGAINST THE ABOVE ORDER OF THE LD. CIT, THE ASSE SSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. THE LD. COUNSEL OF 5 THE ASSESSEE CONTENDED THAT THE ASSESSEE HAS SUBMIT TED ALL THE NECESSARY DETAILS. HE SUBMITTED THAT MAJORITY OF DETAILS REFERRED BY THE CIT WERE CALLED BY THE AO. HE FURTHER SUBMITTED THAT REGARDING ALL THE ISSUES RAI SED IN THE NOTICE UNDER SECTION 263, THE ASSESSEE HAS GIVEN NECESSARY DETAILS AND HAS AL SO POINTED OUT THAT THE SAME WERE ALSO SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. H E CLAIMED THAT CONSIDERING THE ABOVE SUBMISSIONS, THE LD. CIT HAS NOT GIVEN ANY FI NDINGS WHATSOEVER. WITHOUT FINDING ANY SHORT-COMINGS IN THE SUBMISSIONS, HE HAS SET AS IDE THE MATTER TO THE FILE OF THE AO TO DO THE ASSESSMENT AFRESH. THE LD. COUNSEL CONTEN DED THAT THIS AMOUNTS TO DIRECTION BY THE LD. CIT TO DO A ROVING AND FISHING ENQUIRY. HE SUBMITTED THAT THIS IS NOT AT ALL SUSTAINABLE. IN THIS REGARD, HE REFERRED TO THE DEC ISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS- JYOTI FO UNDATION 357 ITR 388. 6. FURTHER, THE LD. COUNSEL OF THE ASSESSEE SUBMITT ED THAT PURSUANT TO THE AFORESAID ORDER UNDER SECTION 263, THE AO HAS REFRAMED THE AS SESSMENT. HE CLAIMED THAT OUT OF THE 11 ISSUES REMITTED TO THE FILE OF THE AO, THE A O HAS BEEN ABLE TO SUSTAIN ADDITION ONLY ON TWO ISSUES AND THAT ALSO ON AN ESTIMATE BAS IS. IN THIS BACKGROUND, THE LD. COUNSEL SUBMITTED THAT THE ORDER UNDER SECTION 263 IS LIABLE TO BE QUASHED. 7. THE LD. D.R., ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE LD. CIT. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT IN THE SHOW-CAUSE NOTICE, THE LD. CIT HAS REFE RRED TO 11 ITEMS AND OPINED THAT THESE DEFECTS RENDERED THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. WE FIND THAT THE ITEMS MENTIONED IN THE SH OW-CAUSE ARE NOT WITH RESPECT TO ANY SPECIFIC DEFECT FOUND. THEY ARE IN RELATION TO DETAILS OF THE SOME OF THE ITEMS AND THE EXPLANATION GIVEN BY THE ASSESSEE. WE FIND THAT IN THE REPLY TO THE SAID SHOW-CAUSE NOTICE, THE ASSESSEE HAS DULY SUBMITTED THAT MAJORI TY OF THE DETAILS WERE FURNISHED BEFORE THE AO. THESE DETAILS WERE ALSO FURNISHED AL ONG WITH THE REQUISITE EXPLANATION BEFORE THE LD. CIT. THE LD. CIT HAS NOT FOUND ANY O MISSION OR MISTAKE WHATSOEVER IN 6 THESE SUBMISSIONS. WE ALSO NOTE THAT IN THE SET ASI DE PROCEEDINGS, THE AO HAS BEEN ABLE TO MAKE ADDITION ONLY IN RESPECT OF TWO OF THE ITEM S AND THAT ALSO ON ESTIMATE BASIS. IN THIS VIEW OF THE MATTER, WE FIND OURSELVES IN AGREE MENT WITH THE LD. COUNSEL OF THE ASSESSEE THAT THE LD. CIT IS TRYING TO DIRECT FOR F ISHING AND ROVING ENQUIRY, WHICH IS NOT SUSTAINABLE. 9. IN THIS REGARD, WE DRAW SUPPORT FROM THE DECISIO N OF THE HONBLE DELHI HIGH COURT IN THE CASE OF JYOTI FOUNDATION ( SUPRA ). IN THIS CASE, THE HONBLE HIGH COURT HAS HELD AS UNDER: HELD, DISMISSING THE APPEAL, THAT INQUIRIES WERE CE RTAINLY CONDUCTED BY THE ASSESSING OFFICER. IT WAS NOT A CASE OF NO INQU IRY. THE ORDER UNDER SECTION 263 ITSELF RECORDED THAT THE DIRECTOR FELT THAT THE INQUIRIES WERE NOT SUFFICIENT AND FURTHER INQUIRIES OR DETAILS SHO ULD HAVE BEEN CALLED FOR. THE INQUIRY SHOULD HAVE BEEN CONDUCTED BY THE DIREC TOR HIMSELF TO RECORD THE FINDING THAT THE ASSESSMENT ORDER WAS ERRONEOUS . HE SHOULD NOT HAVE SET ASIDE THE ORDER AND DIRECTED THE ASSESSING OFFI CER TO CONDUCT THE INQUIRY. 10. IN THE BACKGROUND OF THE AFORESAID DISCUSSION A ND PRECEDENTS, IN OUR CONSIDERED OPINION, ORDER PASSED UNDER SECTION 263 IS NOT SUST AINABLE. ACCORDINGLY, WE QUASH THE ORDER OF LD. CIT UNDER SECTION 263 OF THE I.T.ACT. 11. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSE E STANDS ALLOWED. THIS ORDER IS PRONOUNCED IN THE COURT ON 20 TH DECEMBER, 2013. SD/- SD/- (GEORGE MATHAN) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH DECEMBER, 2013 7 COPY OF THE ORDER FORWARDED TO: 1. M/S. BALAJI INFRASTRUCTURES & PROJECTS, C/O- SALARP URIA JAJODIA & CO. 7, CR AVENUE, KOLKATA- 700 072 2 CIT-XVII, KOLKATA 3. THE CIT(A), 4. CIT, 5. DR, TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.)