RADHEY SHYAM AGARWAL, Jaipur V. ITO, Kishangarh

ITA 496/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5412 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 02-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJ MEHRA J DHK
• Keywords: Gift; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 68; 148; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 496/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2004-05 SHRI RADHEY SHYAM AGARWAL PROP.: M/S. JUPITER TEXTILE, AZAD NAGAR, MADANGANJ, KISHANGARH AJMER CUKE VS. THE ITO KISHANGARH LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACFPA 9282 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY :SHRI MANISH AGARWAL FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJ MEHRA, JCIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/02/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 11 /04/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), AJMER; DATED 29-04-2014 FOR THE ASSESSMENT YEAR 2004-05 WHEREIN THE ASSESSEE IS AGGRIEVED THAT THE LD. CIT( A) HAS ERRED IN:- (I) UPHOLDING THE INITIATION OF PROCEEDINGS U/S 147 WHI CH ARE BASED PURELY ON CHANGE OF OPINION (II) CONFIRMING THE GIFTS OF RS. 1.50 LACS U/S 68 OF THE ACT RECEIVED FROM FATHER-IN-LAW. (III) SUSTAINING THE ADDITION OF RS. 15,749/- MADE OUT OF INTEREST. ITA NO.496/JP/2014 SHRI RADHEY SHYAM AGARWAL VS. ITO, KISHANGARH . 2 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE'S ORIGINAL ASSESSMENT WAS REOPENED U/S 148 OF THE ACT AND VIDE ORDER DATE D 29-12-2008 THE ASSESSMENT WAS FRAMED U/S 144 R.W.S. 147 AT AN INCO ME OF RS. 2,95,820/-. THE APPEAL TRAVELED UPTO ITAT; VIDE ORDER DATED 30- 04-2010 IN ITA NO. 591/JP/2009 WHERE ITAT WAS PLEASED TO QUASH THE ASS ESSMENT BY FOLLOWING OBSERVATIONS. 10. IN THE LIGHT OF ABOVE DISCUSSION AND BY RESPE CTFULLY FOLLOWING THE DECISIONS STATED HEREINABOVE, WE HOLD THAT THERE WAS NO MATERIAL WITH THE AO FOR HAVING REASON S TO BELIEVE THAT THE INCOME AS CHARGEABLE TO TAX HAS ES CAPED ASSESSMENT, THUS WE ARE UNABLE TO HOLD THA THE JURI SDICTION ASSUMED U/S 147/148 WAS LEGAL AND VALID, THEREFORE, THE GROUND OF APPEAL NO. 1 OF THE ASSESSEE IS ALLOWED. GROUND NO. 2 & 3 11. SINCE WE HAVE HELD THE REOPENING OF THE ASSESSMENT AS NOT LEGAL AND HAS THUS QUASHED THE AC TION U/S 147/148 ACCEPTING THE CONTENTION OF THE ASSESSEE AP PELLANT, THE ADJUDICATION ON THESE GROUNDS IS NOT NECESSARY HENCE, THESE GROUNDS HAVE BECOME INFRUCTUOUS AND CALLING F OR NO ADJUDICATION. THE COPY OF THE ORDER IS PLACED ON RECORD. THEREAFT ER, THE AO INITIATED SECOND ROUND OF 148 PROCEEDINGS BY ISSUING NOTICE U /S 148 OF THE ACT 28- 03-2011 BY RECORDING SLIGHTLY MODIFIED VERSIONS OF THE REASONS. NO FRESH OR DISTINCT REASONS WERE RECORDED AND THE IMPUGNED ASSESSMENT AT WAS FRAMED BY WAY OF SECOND ORDER PASSED U/S 143(3) R.W .S. 147 OF THE ACT. ITA NO.496/JP/2014 SHRI RADHEY SHYAM AGARWAL VS. ITO, KISHANGARH . 3 2.3 THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY CON TENDS THAT THE ACTION OF LD. AO HAS LEAD TO MULTIPLICATION OF PROC EEDINGS CAUSING HARASSMENT OF ASSESSEE BY SUBJECTING HIM TO NEVER E NDING LITIGATION WITHOUT ANY REASON. IT IS SUBMITTED THAT SUCH PRACT ICES DONT MAKE GOOD PRECEDENT AND OPEN GATES FOR NEVER ENDING LOOPS OF LITIGATION. IT IS FURTHER SUBMITTED THAT THE BASIS FOR SECOND ROUND OF REOPEN ING THE ASSESSMENT IS THE SAME INFORMATION WHICH WAS ALREADY AVAILABLE ON RECORD DURING THE FIRST ROUND WHICH STANDS ALREADY ADJUDICATED BY ITA T IN ASSESSEES FAVOR. SINCE NO FRESH INFORMATION HAS FOUND BY AO SO AS TO FORM A NEW REASONED BELIEF OR SATISFACTION WHICH JUSTIFIES SECOND REASS ESSMENT PROCEEDINGS THE SAME IS BAD IN LAW. FIRST ROUND OF REASSESSMENT PRO CEEDINGS SUFFERED FROM MATERIAL DEFECT AND FOR THAT REASON ONLY, THE ENTIR E REASSESSMENT PROCEEDINGS WERE QUASHED BY ITAT, IN VIEW THEREOF I NITIATION OF REASSESSMENT PROCEEDINGS ONCE AGAIN ON NEARLY SAME REASONS IS UNTENABLE. THE DEFECTS IN REASONS OF FIRST REOPENIN G WERE NOT OF CURABLE NATURE SO AS TO BE RECTIFIED BY CHANGING FEW WORDS. HAD THAT BEEN THE INTENTION OF THE HON'BLE ITAT, IT COULD HAVE SET A SIDE THE ORDER OF THE AO AND THE MATTER WOULD HAVE BEEN REMANDED BACK TO THE FILE OF AO FOR FRESH EXAMINATION AND FRESH COMMENCEMENT OF REASSESSMENT PROCEEDINGS. HOWEVER, IN THE ABSENCE OF ANY SUCH DIRECTIONS THE AO CANNOT BY INDIRECT ITA NO.496/JP/2014 SHRI RADHEY SHYAM AGARWAL VS. ITO, KISHANGARH . 4 MANEUVERING ASSUME JURISDICTION IN THE GUISE OF SEC OND INITIATION OF THE REASSESSMENT PROCEEDINGS. 2.4 THE LD. AR OF THE ASSESSEE ON MERITS CONTENDED THAT BOTH THE LOWER AUTHORITIES I.E. THE AO AS WELL AS THE LD. CIT(A) H AS IGNORED THE FACT THAT THE FUNDS WERE TRANSFERRED FROM THE REGULAR BANK AC COUNT OF THE DONOR AND TRANSACTION IS FURTHER SUPPORTED BY GIFT DEED DULY EXECUTED AND ACCEPTED BY BOTH THE PARTIES. AS REGARDS THE AVAILABILITY OF FUNDS IN THE HANDS OF THE DONOR, IT IS SUBMITTED THAT DURING THE COURSE OF AS SESSMENT PROCEEDINGS THE ASSESSEE HAS SUBMITTED THE COPY OF BANK ACCOUNT OF THE DONOR ALONG WITH THE RETURN OF INCOME, BALANCE SHEET AND CAPITA L ACCOUNT OF THE DONOR WHEREIN THE GIFT MADE TO THE ASSESSEE WAS DULY REFL ECTED THUS THE IDENTITY AND CREDITWORTHINESS OF THE DONOR HAS BEEN PROVED. THE ASSESSEE COULD NOT BE ASKED FOR THE SOURCE IN THE HANDS OF THE DON OR AS ADMITTEDLY ASSESSEE HAS NO CONTROL OVER THE BANK ACCOUNT OF TH E DONOR. FURTHER THE GIFTS HAVE BEEN GENUINELY MADE UNDER THE NATURAL LO VE AND AFFECTION WHICH IS A FACT NOTED IN THE GIFT DEED AND ALSO REF LECTED FROM THE RELATIONSHIP EXISTED BETWEEN THE DONOR AND DONEE OF FATHER AND SON-IN- LAW. IT IS FURTHER SUBMITTED BY THE LD. AR OF THE A SSESSEE THAT AO HAS MADE THE ALLEGATIONS ON THE SO CALLED ADMISSION OF ONE SHRI KRIPA SHANKAR SHARMA WHO IN THIS CASE HAS NO LOCUS STANDI AS HE IS NEITHER THE ITA NO.496/JP/2014 SHRI RADHEY SHYAM AGARWAL VS. ITO, KISHANGARH . 5 DONOR NOR THE RELATIVE OF THE DONOR. THE LD. AR OF THE ASSESSEE RELIED ON FOLLOWING CASE LAWS:- (I) MANJU DEVI NAWALVS ACIT, 34 TW 353 (JAIPUR ) (II) LAXMI NARAIN SHARMA VS. ITO, 33 TW 31 (JAIPUR ) (III) SURAJ BHAN BAJAJ VS. ITO 102 TTJ 665 (DEL.) (IV) NEK KUMAR VS. ACIT , 274 ITR 575 (RAJ.) (V) ARAVALI TRADING CO. VS. ITO, 187 TAXMAN 338 (RAJ.) 2.5 THE LD. DR SUPPORTED THE ORDER OF THE LD. CIT(A ). 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN MY CONSIDERED VIEW, SECTION 147/148 OF THE ACT DO NOT CONTEMPLATE THAT AO WILL GO ON MAKING INITIA TION OF PROCEEDINGS. THE FACT IS THAT THE FIRST ROUND OF PROCEEDINGS OF REASSESSMENT PROCEEDINGS WAS QUASHED BY THE ITAT JAIPUR BENCH WHICH INDICATE S THAT THERE WAS NO SUBSTANCE IN THE REASONS RECORDED BY THE AO. MERELY BY MODIFYING SAME WORDS, IT CANNOT BE HELD THAT SOME NEW REASONS/ INF ORMATION CAME IN POSSESSION WHICH OCCUR TO AO REINITIATED SECOND ROU ND OF REASSESSMENT PROCEEDINGS. THUS THIS ACTION BECOMES A PURELY WORK OF CHANGE OF OPINION WHICH IS NOT PERMISSIBLE AS HELD BY HON'BLE APEX COURT IN THE CASE OF KELVINATOR OF INDIA LTD. 2010-TIOL-06-SCIT -LB (SC). IN VIEW THEREOF AND RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE APEX COURT IN ITA NO.496/JP/2014 SHRI RADHEY SHYAM AGARWAL VS. ITO, KISHANGARH . 6 THE CASE OF KELVINTOR (SUPRA), THE REASSESSMENT PRO CEEDINGS ARE QUASHED. SINCE THE REASSESSMENT PROCEEDINGS ARE QUASHED. CON SEQUENTLY, THERE IS NO NECESSITY TO GO INTO THE MERITS OF THE ADDITION. HENCE, THE APPEAL OF THE ASSESSEE IS ALLOWED. 3.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 11 /04/201 6. SD VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11/04/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO:- 1. VIHYKFKHZ@ THE APPELLANT- SHRI RADHEY SHYAM AGARWAL, KISHANGAR H 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, KISHANGARH 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 496/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR