THE ITO WARD - 2(3), Vijayawada V. Pehlumal Ram Ramnani, Vijayawada

ITA 483/VIZ/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6726 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 11-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Unexplained investment; Tangible material; Difference of opinion; Assessment record; Reason to believe; Change of opinion
• Section: 143(3); 142(1); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 483 /VIZ/ 201 4 ( / ASSESSMENT YEAR: 20 08 - 09 ) INCOME TAX OFFICER WARD - 2(3) CENTRAL REVENUES BUILDING M.G.ROAD VIJAYAWADA - 520 002 SHRI PEHLUMAL RAM RAMNANI PROP.PARIS PLASTICS D.NO.54 - 2/1 - 1 - 13A, PHASE - III PLOT NO.6, KOTI REDDY STREET JAWAHAR AUTO NAGAR VIJAYAWADA [PAN :A GYPP4742L ] ( / APPELLANT) ( / RESPONDENT) CROSS OBJECTION NO.02/VIZAG/2015 ARISING OUT OF ITA NO.483/VIZAG/2014 SHRI PEHLUMAL RAM RAMNANI PROP.PARIS PLASTICS D.NO.54 - 2/1 - 1 - 13A, PHASE - III PLOT NO.6, KOTI REDDY STREET JAWAHAR AUTO NAGAR VIJAYAWADA [PAN :A GYPP4742L ] INCOME TAX OFFICER WARD - 2(3) CENTRAL REVENUES BUILDING M.G.ROAD VIJAYAWADA - 520 002 ( / APPELLANT) ( / RESPONDENT) / A SSESSEE BY : SHRI M.N.MURTHY NAIK, DR / R EVENUE BY : SHRI G.V.N.HARI, AR / DATE OF H EARING : 23 .0 8 .2017 / DATE OF P RONOUNCEMENT : 30 . 08. 2017 2 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) , VI JAYAWADA VIDE ITA NO. 591 / CIT(A) / VJA /201 4 - 1 5 DATED 2 9 . 05 .201 4 FOR THE A.Y. 20 08 - 09 . 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO T HREE ISSUES INVOLVED IN THIS APPEAL. GROUND NO. 1 AND 9 ARE GENERAL IN NATURE. GROUND NO. 2 TO 4 ARE RELATED TO THE DATE OF ISSUE OF NOTICE U/S 148. GROUND NO. 5 AND 6 ARE RELATED TO THE CHANGE OF OPINION FOR ISSUE OF NOTICE U/S 148 AND G ROUND NO. 7 AND 8 ARE RELATED TO THE MERITS OF THE CASE. 3. GROUND NO . 2 TO 4 ARE RELATED TO THE DISPUTE WITH REG ARD TO THE DATE OF ISSUE OF NOTICE U/S 148. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,82,620/ - AND THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 24.12.2010. SUBSEQUENTLY THE ASSESSING OFFICER ISSUED THE NOTICE U/S 148 ON 3 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI 31.03.2 013 WHICH IS ONE OF THE DISPUTES IN THIS APPEAL. THE ASSESSING OFFICER ISSUED THE NOTICE U/S 31.03.2013 AND THE SAME WAS SERVED ON THE ASSESSEE ON 04.04.2013. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE WENT ON APPEAL BEFORE THE LD.CIT(A ) AND CHALLENGED THE DATE OF ISSUE OF NOTICE U/S 148 WHICH IS 31.03.2013 BUT DELIVERED TO THE POST OFFICE ON 03.04.2013. THE CONTENTION OF THE LD.AR IS 31.03.2013 BEING THE HOLIDAY, THE NOTICE U/S 148 WAS DELIVERED T O POST OFFICE ON 03.04.2013,HENCE THE DATE OF ISSUE OF NOTICE HAS TO BE RECKONED AS 03.04.2013 BUT NOT 31 . 03 . 2013. IF THE SAME IS RECKONED AS 03 . 04 . 2013 THE NOTICE U/S 148 WAS ISSUED BEYOND THE LIMIT OF 4 YEARS AND THE APPROVAL OF THE CIT IS REQUIRED , AS PROVIDED U/S 151 OF I.T.ACT. IN THE ASSESSEES CASE, APPROVA L WAS ACCORDED BY THE ADDL .COMMISSIONER OF INCOME TAX , HENCE IN THE ABSENCE OF THE APPROVAL FROM THE COMMISSIONER OF INCOME TAX, THE NOTICE ISSUED U/S 148 IS WITHOUT JURISDICTION, INVALID AND REQUIRED TO BE QUASHED. THE LD.CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE AND HELD THAT THE NOTICE WAS DELIVERED TO POST OFFICE ON 03.04.2013 AND THE SAME DATE HAS TO BE TAKEN AS THE DATE FOR 4 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI ISSUANCE OF NOTICE AND ACCORDINGLY IT WAS ISSUED BEYOND 4 YEAR S FROM THE END OF THE RELEVANT ASSESSMENT YEAR . THE LD.CIT(A) HELD THAT IN THE ABSENCE OF APPROVAL FROM THE CIT THE ISSUE OF NOTICE U/S 148 BEYOND THE 4 YEARS TIME LIMIT IS INVALID AND ACCORDINGLY STRUCK DOWN THE ASSESSMENT ORDER. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), REVENUE IS IN APPEAL BEFORE US. 4. APPEARING FOR THE REVENUE, LD.DR ARGUED THAT THE NOTICE WAS ISSUED U/S 148 ON 31.03 .2013. THERE IS A N OFF ICE PROCEDURE FOR SERVICE OF THE NOTICE IN THE DEPARTMENT. AS PER THE PROCEDURE AFTER SIGNING THE NOTICE, T HE ASSESSING OFFICER W ILL SEND THE NOTICE TO THE ASSESSMENT SECTION AND THE ASSESSMENT SECTION AFTER MAKING THE ENTRIES IN THE CONCERNED REGISTERS WOULD DELIVER THE NOTICE TO THE DE SPATCH SECTION AND THE D E SPATCH SECTION DELIVERS THE ENTIRE DAK TO THE POST OFFICE. THE RANGE IS HEADED BY THE ADDL / JOINT COMMISSIONER OF INCOME TAX AND 4 TO 5 ASSESSING OFFICER S WOULD BE WORKING UNDER THE RANGE. THE D E SPATCH SECTION IS UNDER THE CONTROL OF THE RANGE OFFICE B UT NOT UNDER THE CONTROL OF THE ASSESSING OFFICER. THEREFORE T HE LD.DR 5 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI CONTENDED THAT SIGNING OF THE NOTICE AND DELIVERING TO THE DAK SECTION S HOULD BE TAKEN AS DATE FOR ISSUANCE OF NOTICE U/S 148. IN SUPPORT OF H IS ARGUMENT, THE LD.DR SUBMITTED THE X ERO X COPY OF DAK REGISTER OF 31.03.2013 AS ANNEXURE A. A CCORDING TO THE LD.DR, THE DATE OF ISSUANCE OF NOTICE TO BE RECKONED AS 31.03.2013 THE DATE OF DELIVERY TO DAK SECTION , BUT NOT 03.04.2013 IN THAT CASE, THE NOTICE WAS ISSUED WITHIN 4 YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR AND THE NOTICE WAS ISSUED AFTER TAKING APPROVAL FROM THE ADDL.COMMISSIONER OF INCOME TAX AND THE SAME IS VALID AND REQUIRED TO BE UPHELD. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. TH E LD. D R HAS PRODUCED THE ASSESSMENT RECORDS AND WE HAVE VERIFIED THE ASSESSMENT RECORDS. AS PER THE ASSESSMENT RECORDS, THE NOTICE WAS ISSUED ON 31.0 3.2013 AND DELIVERED TO THE DESPATCH SECTION WHICH WAS DULY RECORDED IN THE ASSESSMENT RECORD. THE D E SPAT CH SECTION WORKS UNDER THE CONTROL AND THE SUPERVISION OF ADDL. CIT / JOINT CIT WHO IS SUPERVISING OFFICER BUT NOT UNDER THE CONTROL OF THE 6 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI AO. SIMILARLY, THE DESPATCH SECTION HAS RECEIVED THE NOT ICE U/S 148 ON 31.03.2013 WITH SERIAL N O.2166 ENTERED IN THE TAPAL REGISTER ON 31.03.2013. THOUGH 31.03.2013 WAS HOLIDAY, THE LD.DR SUBMITTED THAT THE CBDT DIRECTED THE I NCOME T AX OFFICES TO KEEP OPEN THE OFFICES ON 31.03.2013 FOR THE SAKE OF THE CONVENIENCE OF THE TAX PAYERS BEING IT WAS THE LAST DAY FOR FILING THE RETURNS . THEREFORE, THERE IS NO DISPUTE THAT 31.03.2013 WAS WORKING DAY AND I NCOME T AX OFFICES HA D WORKED ON 31.03.2013 AS PER THE DIRECTIONS OF THE BOARD. ON 31.03.2013, APART FROM THE ASSESSEE , NOTICES AND LETTERS OF COMMUNICATION WERE RECEIVED BY THE TAPAL CLERK FOR SERVICE TO O THE R TAX PAYERS. THEREFORE, WHEN THERE ARE DIFFERENT LAYERS WORKING UNDER THE DIFFERENT OFFICERS AND TAPAL SECTION BEING UNDER THE CONTROL OF RANGE HEAD, WE ARE OF THE CONSIDERED OPINION THAT THE DATE OF DELIVERY OF NOTICE TO THE DESPATCH SECTION SHOULD BE CONSIDERED AS THE DATE OF ISSUE OF NOTICE U/S 148, THE DATE OF DELIVERY OF NOTICE TO DESPATCH SECTION WAS 31.03.2013. THE LD.AR RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF KANUBHAI M.PATEL (HUF) V S. HIREN BHATT OR HIS SUCCESSORS TO 7 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI OFFICE & ORS. REPORTED (2010) [43 DTR 0329]. IN THE CASE LAW RELIED UPON BY THE ASSESSEE, THE PROCEDURE INVOLVED FOR DELIVERING THE NOTICE TO THE DESPATCH SECTION IN THE DEPARTMENT WAS NOT BROUGHT TO THE NOTICE OF HONB LE GUJARAT HIGH COURT . I N THE CITED CASE LAW THE NOTICES HAVE BEEN SIGNED ON 31 ST MARCH 2010 AND THE SAME WERE SENT TO THE POST OFFICE ON 7 TH APRIL 2010 AFTER 7 DAYS. WHEREAS IN THE ASSESSEES CASE, THE NOTICE WAS DELIVERED TO THE D E SPATCH SECTION OF THE DEPARTMENT ON 31.03.2013 ITSELF AND IT WAS DE LIVERED TO THE POST OFFICE ON 03.04 .2013. IN VIEW OF NON DISCUSSION OF INTERNAL PROCEDURE IN THE CITED CASE, THE SAME IS DISTINGUISHABLE AND NOT APPLICABLE IN THE ASSESSEES CASE. SINCE T HE ORDER SHEET OF THE ASSESSMENT RECORD, THE DESPATCH REGISTER CLEARLY SHOWS THAT THE DATE OF ISSUE OF NOTICE WAS 31.03.2013, WE HOLD THAT THE NOTICE U/S 148 WAS ISSUED ON 31.03.2013. SINCE THE ASSESSMENT IS REOPENED WITHIN 4 YEARS FROM THE END OF THE REL EVANT ASSESSMENT YEAR, THE ASSESSING OFFICER HAS RIGHTLY RE OPENED THE ASSESSMENT WITH THE APPROVAL OF THE ADDL. COMMISSIONER OF INCOME TAX. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT ON THIS ISSUE AND ALLOW THE 8 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI APPEAL OF THE REVENUE. REVENUES APP EAL ON THIS ISSUE IS ALLOWED. 6. THE SECOND ISSUE IN GROUND N OS. 5 AND 6 ARE RELATED TO THE CHANGE OF OPINION. THE ASSESSING OFFICER ISSUED NOTICE U/S 148 AFTER RECORDING THE REASONS AS UNDER : 2. THE REASONS FOR REOPENING THE ASSESSMENT IS THAT THERE IN RESPECT OF FOLLOWING I TEMS, NO PURCHASES WERE SHOWN BY THE ASSESSEE, BUT THE CLOSING STOCK WAS INCREASED COMPARED TO THE OPENING STOCK: - S.NO. DESCRIPTION OF ITEM NO. OF PIECES RATE PER PIECE TOTAL RS. 1. DOP OILS 1000 42 42,000 2. CPW OILS 850 26 22,100 3. FOAMING POWDER 100 45 4,500 4. STABLIZER 45 35 1,575 5. TITANIUM 100 90 9,000 6. SOAP STONE POWDER 500 10 5,000 7. PVC COLOUR POWDER 100 750 75,000 8. PVC COLOUR ALL MIX 400 35 14,000 9. PVC COMPOUND 250 40 10,000 10. PVC WHITE GRANULES 130 9 1,170 11. PVC BLACK GRANULES 500 7 3,500 12. PVC FOAM DHANA 85 29 2,465 13. PVC PEARL GRANULES 250 30 7,500 14. CARBON 100 22 2,200 15. LOCAL COLOUR MASTER 100 35 3,500 16. DELHI COLOUR IT 55 16 800 TOTAL 2,04,310 AS MENTIONED IN ABOVE TABLE, THE VALUE OF DIFFERENCE RAW - MATERIAL AS SHOWN IN CLOSING STOCK AND OPENING STOCK IS AT RS.2,04,310/ - AND THEREFORE, THE UNACCOUNTED PU RCHASES WOULD BE MUCH MORE 9 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI THAN THE OF THE ABOVE VALUE. (B) \ IN THE SCHEDULE FOR PURCHASES, THE ASSESSEE HAS SHOW N H A WAI STRAPS AT RS.23,400/ - . AS PER THE TRADING ACCOUNT, THERE WERE SALES AT RS78,72,318/ - AND AFTER REDUCING THE GROSS PROFIT AT 20 % AMOUNTING TO RS.15,74,458/ - , THE N E T AMOUNT COMES TO RS . 62 , 97,860/ - WHICH IS THE COST OF FINISHED GOODS IN THE HANDS OF THE ASSESSEE . AS PER THE ASSESSEE THE COST OF FINISHED GOODS IS RS. 45/ - PER PAIR, HENCE THE TOTAL PAIRS SOLD WORKED OUT TO RS.1,39,950/ - . HOWEVER THE ASSESSEE HAS SHOWN AN AMOUNT OF RS.25,82,350/ - TOWARDS THE PURCHASE OF H AWA I SHEETS AT THE COST OF RS . 95/ - PER PIECE. THE TOTAL SHEETS COME TO RS.27 , 181/ - . THE MANUFACTURER WILL MAKE MINIMUM 10 PAIRS PER ONE SHEET AND AS PER THE PURCHASED HAWAI SHEETS, THE TOTAL PAIRS OR H AWAI CHEPPA L S WOULD HAVE MADE IS 2,69,300 (2,71,810 - 2,510 NOT USED) BUT AS PER THE ABOV E CALCULATION THE ASSESSEE HAS SHOWN ONLY PAIRS SOLD A T RS. 1,39,950 AND A F TER REDUCING THIS THERE WERE 1,29,350 PAIRS WHICH ARE NOT ACCOUNTED FOR BY THE ASSESSEE. THE UNACCOUNTED INVESTMENT IN THE PURCHASE OF HAWA I STRAPS WILL BE WORKED OUT AS UNDER : HA WAL STRAPS 23,400 SALES RS. 78,72,318 20% RS .15,74,452 RS.62,97,860 COST OF PAIR - 45 RS.62,97,860 = 1,39,950 45 COST OF HAWAI STRAPS PER TWO = RS.5/ - 2,69,300 X 5 = RS.13,46,500/ - AFTER REDUCING THE AMOUNT OF RS.23;400/ FROM THE ABOVE, THE UNACCOUNTED INVESTMENT IS AT RS.1323100/ - . (C) IN THE SCHEDULE FOR PURCHASES, THE ASSESSEE HAS SHOWN THE HAWAI SHEETS AT RS25,82,350/ - . AS PER THE OPENING BALANCE THE STOCK OF HAWAL SHEETS IS AT 1,481 AND THE CLOSING BALANCE OF THE SAME IS AT 3991. THE COST OF HAWAI SHEETS WAS SHOWN AT RS . 95/ - PER SHEET IN BOTH THE OPENING AND CLOSING BALANCES. THEREFORE, AS PER T HE VALUE OF PURCHASES SHO WN THE TOTAL NUMBER OF HAWAI SHEETS PURCHASED WORKS OUT AS UNDE R : HAWAI SHEETS = 2 5,82,350 = 27,181 95 10 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI THE TOTAL NUMBER OF PAIRS MANUFACTURED BY CONSIDERING 10 PAIRS PER SHEET IS (27181 X 10) = 2,71,810 LESS: NOT AVAILED = 2,510 ----------- 2,69,300 LESS: AS PER SALES = 1,39,950 ----------- 1,29,350 1,29350 X COST OF PAIR RS.45 = RS 58,20,750 ADD 20% RS.11,64,150 THE UNACCOUNTED SALES RS . 69 , 84,900 LESS: UNACCOUNTED INVESTMENT RS.23,23,100 ------------------ RS.46,61,800 ------------------ THUS, THERE WERE UNACCOUNTED SALES TO THE TUNE OF RS . 46 , 61,800/ - . IN VIEW OF THE ABOVE, THE A O HAS REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF SEC. 147 OF THE I.T.ACT FOR THE ASST. YEAR 2008 - 09. 6.1. THE ASSESSEE CHALLENGED THE REASONS RECORDED BEFORE THE LD.CIT(A) STATING THAT THE ASSESSING OF FICER HAS ISSUED THE NOTICE MERELY BECAUSE OF CHANGE OF OPINION AND THERE IS NO TANGIBLE MATERIAL FOR REOPENING THE ASSESSMENT. LD.CIT(A) HELD THE ISSUE IN FAVOUR OF THE ASSESSEE STATING THAT THE ASSESSING OFFICER HAS COMPLETED THE ORIGINAL ASSESSMENT MAD E U/S 143(3) BY CALLING ALL THE DETAILS AND THE BOOKS OF ACCOUNTS AND THE ASSESSING OFFICER HAS NO FRESH INFORMATION TO REOPEN THE ASSESSMENT A ND THE REOPENING OF ASSESSMENT IS MERE CHANGE OF OP INION. LD.CIT(A) 11 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI ALSO RELIED ON THE DECISION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF ASIAN PAINS LTD. VS. DY.COMMISSIONER OF INCOME TAX & ANR [308 ITR 185] AND THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. KELVINATOR INDIA LTD. [320 IT R 561]. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 7. APPEARING FOR THE REVENUE, THE LD.DR ARGUED THAT THE ASSESSING OFFICER RE OPENED THE ASSESSMENT DULY RECORDING THE REASONS AND AS PER THE REASONS RECORDED, THE ASSESSI NG OFFICER DID NOT EXAMINE THE ISSUES RELATING TO THE OPENING STOCK AND CLOSING STOCK AND PURCHASES WITH RESPECT TO THE ITEMS RECORDED IN THE REASON I.E. DOP OILS , CPW OILS , FOAMING POWDER ETC.. AND THE CONSUMPTION MATER I AL AND THE PRODUCTION WITH REGARD T O HAWAI STRAPS WHICH RESULTED IN UNACCOUNTED PURCHASES AND SALES AS PER THE REASONS RECORDED . THE ASSESSING OFFICER ALSO HAS NOT EXAMINED THE ISSUES WITH REGARD TO HAWAI SHEETS AND FORMED AN OPINION IN THE ORIGINAL ASSESSMENT ORDER. THEREFORE, MERE PROD UCTION OF DETAILS AND THE BOOKS OF ACCOUNTS WOULD NOT BE 12 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI CONSTRUED AS EXAMINATION OF THE DETAILS AND FORM ING AN OPINION BY THE ASSESSING OFFICER. THE ASSESSING OFFICER SHOULD EXAMINE THE DETAILS AND FORM AN OPINION THEN ONLY IT WOULD BE TERMED AS CHANGE OF OPINION. HENCE, THE LD. DR WAS OF THE OPINION THAT THERE IS NO CHANGE OF OPINION IN THIS CASE, HENCE, THE ASSESSING OFFICER RIGHTLY REOPENED THE ASSESSMENT. 8. ON THE OTHER HAND LD.AR ARGUED THAT THERE IS NO FRESH MATERIAL AVAILABLE TO THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT, LEAVE ALONE THE TANGIBLE MATERIAL. IN THIS CASE, THE ASSESSMENT WAS COMPLET ED U/S 143(3) AND ON THE BASIS OF THE INFORMATION FILED BY THE ASSESSEE, THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT AND ISSUED THE NOTICE U/S 148 WHICH IS EVIDENT FROM THE AS SESSMENT ORDER. REFERRING TO PAPER BOOK, THE LD.AR SUBMITTED THAT THE ASSE SSING OFFICER CALLED FOR THE DETAILS VIDE NOTICE U/S 142(1) ON 2 0 . 01 .2010 AND 12.7.2010. THE DETAILS SUCH AS BOOKS OF ACCOUNTS, NATURE OF BUSINESS AND PROCESS OF MANUFACTURING ACTIVITY , RAW MATERIALS USED AND OTHER ALLIED PRODUCTS GENERATED, QUALITATIVE AND QUANTITATIVE ANALYSIS 13 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI OF THE OPENING STOCK, PURCHASES AND SALES, QUALITATIVE INVENTORY OF CLOSING STOCK WAS CALLED FOR BY THE ASSESSEE WHICH ARE DIRECTLY ON THE ISSUE AND THE SAID DETAILS WERE FURNISHED BY THE ASSESSEE . AFTER FURNISHING THE ENTIRE DET AILS AND AFTER VERIFICATION OF THE DETAILS AND THE BOOKS OF ACCOUNTS, THE ASSESSING OFFICER HA S COMPLETED THE ASSESSMENT U/S 143(3) AFTER HAVING SATISFIED WITH THE CORRECTNESS OF INFORMATION . THEREFORE, THE ARGUMENT OF THE REVENUE THAT ASSESSING OFFICER H AS NOT VERIFIED THE DETAILS AND HAS FORMED AN OPINION IS IN CORRECT AND INCOMPREHENSIBLE . THE ASSESSING OFFICER HAS VERIFIED THE ENTIRE DETAILS, HENCE, REOPENING WAS DONE BY MERE CHANGE OF OPINION AND THERE IS NO TANGIBLE MATERIAL TO REOPEN THE ASSESSMENT. ACCORDING TO THE LD.AR, REOPENING OF ASSESSMENT IS BAD IN LAW. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. IN THIS CASE AS EVIDENT FROM THE ASSESSMENT ORDER, THE ASSESSMENT WAS REOPENED FROM THE INFORMATION ALREADY AVAILABLE IN THE ASSESSMENT RECORDS , WITH A SUSPICION OF UNACCOUNTED PURCHASES AND UNACCOUNTED SALES 14 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI MERELY ANALYZING THE MATERIAL ALREADY AVAILABLE O N RECORD. W ITH REGARD TO THE PURCHASES OF DOP OILS , PURCHASE OF HAWAI STRAPS AND UNACCOUNTED SALES THE IN FORMATION RELATING TO PURCHASES AND SALES, QUANTITATIVE DETAILS OF PURCHASES ETC. WAS CALLED FOR BY THE AO WHILE COMPLETING THE ASSESSMENT. WHEN AO CALLED FOR THE SPECIFIC INFORMATION , THE ARGUMENT OF THE LD.DR THAT IT WAS NOT VERIFIED BY THE AO IS UNTENA BLE. WE ARE OF THE VIEW THAT INFORMATION WOULD BE CALLED FOR VERIFICATION AND FOR NOT INCREASING THE VOLUME OF FILE. THE ASSESSING OFFICER ANALYSED THE PURCHASES OF HAWAI STRAPS AND REWO R KED THE POSSIBLE MANUFACTURE OF PAIRS WITH HIS GUESS WORK AND RE CO MPUTED THE UNACCOUNTED INVESTMENT. SIMILARLY, THE ASSESSING OFFICER HAS ANALYSED THE HAWAI SHEETS AND ESTIMATED THE TOTAL NUMBER OF PAIRS THAT CAN BE MANUFACTURED AND ESTIMATED UNACCOUNTED SALES. THE ENTIRE ANALYSIS WAS MADE WITH THE AVAILABLE INFORMATION ON RECORD AND T HERE IS NO DIRECT INFORMATION WITH REGARD TO ESCAPEMENT OF INCOME EITHER IN PURCHASES OR IN SALES. THE ENTIRE INFORMATION WITH REGARD TO THE OPENING STOCK AND CLOSING STOCK QUALITATIVE AND QUANTITATIVE PURCHASES WAS ALREADY 15 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI AVAILABLE TO TH E ASSESSING OFFICER AT THE TIME OF FRAMING THE ORIGINAL ASSESSMENT FRAMED U/S 143(3) DATED 24.12.2010. 9.1. ON VERIFICATION OF THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 24.10.2010 , THERE IS NO WHISPER WITH REGARD TO NON SUBMISSION OF ANY OF THE DETAILS CALLED FOR BY THE ASSESSING OFFICER. THEREFORE, THERE IS NO FAILURE ON THE PART OF THE ASSESSEE W.R.T. SUBMISSION OF THE DETAILS A ND HAVING SUBMITTED THE DETAILS BY THE ASSESSEE, IT IS PRESUMED THAT THE ASSESSING OFFI CER HAS VERIFIED THE SAME AND COMPLETED THE ASSESSMENT. THERE IS NO OTHER FRESH MATERIAL AVAILABLE TO THE ASSESSING OFFICER. SINCE THE ASSESSEE HAS FURNISHED THE DETAILS, AND THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT , O N THE BASIS OF SAME INFORMATION WHICH WAS ALREADY EXAMINE D BY HIM AND COMPLETED THE ASSESSMENT U/S 143(3), REEXAMINATION OF THE SAME MATERIAL WOULD AMOUNT TO REVISION OF THE SAME ISSUE AND CHANGE OF OPINION. IT IS SETTLED ISSUE THAT T O REOPEN THE COMPLETED ASSESSMENT, TANGIBLE MATERIAL IS REQUIRED. IF NO NEW I NFORMATION IS AVAILABLE TO THE ASSESSING OFFICER , ASSESSMENTS 16 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI ALREADY COMPLETED CANNOT BE REOPENED MERELY BECAUSE OF SUSPICION OR SURMISES. THIS VIEW I S SUPPORTED BY THE DECISIONS RELIED UPON BY THE LD.CIT(A) CITED SUPRA. THEREFORE, WE AGREE WITH THE LD. CIT(A) THAT THE ASSESSMENT IS REOPENED ON MERE CHANGE OF OPINION BUT NOT ON ANY FRESH INFORMATION AND THERE IS NO TANGIBLE MATERIAL AVAILABLE TO THE DEPARTMENT. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD.CIT(A) AND DISMISS THE APPEAL OF THE REVENUE ON THI S GROUND. 10. GROUND NOS. 7 AND 8 ARE RELATED TO THE MERITS OF THE ADDITION . SINCE, WE HAVE STRUCK DOWN THE ASSESSMENT HOLDING THAT IT IS REOPENED ON CHANGE OF OPINION, WE CONSIDER IT IS NOT NECESSARY TO ADJUDICATE THE ISSUE ON MERITS . CROSS OBJECTION NO.02/VIZAG/2015 11. CROSS OBJECTION IS SUPPORTIVE OF THE LD.CIT(A) ORDER. SINCE, WE HAVE DISMISSED THE APPEAL OF THE REVENUE ON CHANGE OF OPINION, WE CONSIDER IT IS NOT NECESSARY TO SEPARATELY 17 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI ADJUDICATE THE CROSS OBJECTION. HENCE, GROUND NO.1(A) IS DISMISSED. 1(B) IS DECIDED IN THE DEPARTMENTAL APPEAL. GROUND NO. 2 AND 3 DOES NOT REQUIRE ANY SEPARATE ADJUDICATION. 12. IN THE RESULT THE APPEAL OF THE REVENUE IS PARTLY ALLOWED AND THE CROSS OB JECTIONS ARE DISMISSED. T HE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 30 TH AUG 20 17 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 30 . 0 8 .2017 L. RAMA, SPS 18 ITA NO. 483 /VIZ/201 4 & CO NO.02/VIZ/2015 PEHLUMUL RAM RAMNANI / COPY OF THE ORDER FORWARDED TO : - 1. / THE APPELLANT INCOME TAX OFFICER, WARD - 2(3), CENTRAL REVENUES BUILDING, M.G.ROAD, VIJAYAWADA - 520 002 9 2 . / THE RESPONDENT SHRI PEHLUMAL RAM RAMNANI, PROP.PARIS PLASTICS, D.NO.54 - 2/1 - 1 - 13A, PHASE - III, PLOT NO.6, KOTI REDDY STREET , JAWAHAR AUTO NAGAR, VIJAYAWADA 3 . / THE CIT, VIJAYAWADA 4 . ( ) / THE CIT (A) , VIJAYAWADA 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM