SHRI SYAM AVTAR GUPTA HUF, BEAWAR V. CIT, Ajmer

ITA 513/JPR/2012

• Counselvise Citation: 51323114 RSA 2012
• Duration Of Justice: 2 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 25-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ROLEE AGARWAL CIT DHK
• Assessee Lawyers: DEEPAK GUPTA
• Keywords: Prejudicial to interest
• Section: 143(3); 133A; 147; 148; 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NOS.514 & 510/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 & 2009-10 SHRI SHYAM AVTAR GUPTA (INDIVIDUAL ) PROP. M/S. SHREE RAM PIPE UDHYOG, FIROZ COMPLEX, AJMER ROAD, BEAWAR CUKE VS. THE CIT AJMER RANGE, AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABDPG 9585 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.513/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI SHYAM AVTAR GUPTA (HUF ) PROP. M/S. YASH ENTERPRISES, BEAWAR CUKE VS. THE CIT AJMER RANGE, AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAJHS 4798 VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VINOD GUPTA & SHRI DEEPAK GUPTA, CA JKTLO DH VKSJ LS@ REVENUE BY : MRS. ROLEE AGARWAL (CIT). LQUOKBZ DH RKJH[K@ DATE OF HEARING : 09/02/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 04/03/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS SET OF APPEALS BY THE RELATED ENTITIES, IN DIVIDUAL FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10 AND HUF FOR TH E ASSESSMENT YEAR ITA NO. 513/JP/2012 SHYAM AVTAR GUPTA VS. CIT, AJMER . 2 2008-09 AGAINST THREE DIFFERENT ORDERS OF THE LD. C IT, AJMER DATED 28-03-2012 AND 26-03-2012 U/S 263 OF THE ACT WHERE IN THE LD. CIT HAS GIVEN DIRECTION FOR DE NOVO ASSESSMENT. 2.1 BRIEF FACTS OF THE CASES ARE THAT ASSESSMENT FO R ASSESSMENT YEAR 2008-09 IN BOTH THE CASES WAS FRAMED U/S 147 / 148 OF THE ACT AND FOR ASSESSMENT YEAR 2009-10 IN THE CASE OF INDIVIDUAL A LSO U/S 143(3) OF THE ACT. THE STATEMENTS WERE MADE CONSEQUENT TO SURVEY CARRIED OUT IN ASSESSEES PREMISES ON 21-01-09 AS ALREADY MENTIONE D THAT KARTA OF HUF AND INDIVIDUAL STATEMENT WAS RECORDED OFFERING ADDI TIONAL INCOME. WHILE FRAMING THE IMPUGNED ASSESSMENTS U/S 143(3) AO CONS IDERED THE SURVEY MATERIAL AND MADE ADDITIONS IN BEHALF OF SURVEY OPE RATIONS. 2.2 THE LD. CIT(A) HOWEVER, WAS OF THE VIEW THAT SU RVEY MATERIAL WAS NOT PROPERLY CONSIDERED BY AO AND ISSUED SHOW CAUSE NOTICE U/S 263 OF THE ACT ALLEGING THAT THE ORDERS PASSED BY THE AO W ERE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2.3 THE ASSESSEE FILED REPLY CONTENDING THAT THE AO HAD FRAMED THE ASSESSMENT ORDER AFTER GOING THROUGH ENTIRE MATERIA LS AVAILABLE ON RECORD, SURVEY FOLDER, STATEMENTS AND THUS MADE ADDITIONS A FTER TAKING CONSIDERED OPINION ON SURVEY REPORT AND MATERIAL IMPOUNDED DUR ING THE SURVEY. SINCE THE AO HAD MADE ALL RELEVANT ENQUIRIES AND BA SED ON HIS JUDGMENT ADOPTED ONE OF THE POSSIBLE VIEW FOR QUANTIFICATION OF ADDITIONS, ITA NO. 513/JP/2012 SHYAM AVTAR GUPTA VS. CIT, AJMER . 3 THEREFORE, THE ASSESSMENTS ORDERS CAN NEITHER BE CA LLED AS ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. AO HAS MADE THE ADDITION OF PEAK AMOUNT EMANATING FROM THE SURVEY PAPERS WHICH IS ONE OF THEY RECOGNIZED METHOD OF FRAMING ASSESSMENT IN SURVEY C ASES. MERELY BECAUSE LD CIT HAS HOLDS A DIFFERENT VIEW ABOUT INT ERPRETATION OF PAPERS OR QUANTIFICATION OF AMOUNTS, THE ASSESSMENT ORDERS CAN NEITHER BE HELD AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE . THEREFORE, NO ACTION U/S 263 OF THE ACT WAS CALLED FOR IN THESE FACTS AN D CIRCUMSTANCES. RELIANCE IS PLACED AS UNDER:- 1. MALABAR INDST. CO V CIT 203 ITR 108 (SC) 2. ITO VS. VIJAY KUMAR KESAR (2010) 2312 CTR 165 (CHATTISGARH) 2. CIT VS. DINGRA METALS WORKS (2010) 236 CTR 621 (DEL.) 3. M NARAYAN & BROS VS. ACIT (2011) 243 CTR 588 (M AD.) 4. SARASWATI OIL TRADERS VS. CIT (2002) 174 CTR 10 8 (SC) 5. CIT VS. ISHWARDS MUTHA(2004) 186 CTR 759 (RAJ.) 6. CIT VS. RAJEET KUMAR SETHIA (2005) 198 CTR 550 (RAJ.) 7. CIT VS. DHANIRAM (2010) 326 ITR 399 (P&H) 8. ANNAMALI REDDIAR VS. CIT (1964) 53 ITR 601 (KER .) 9. M.V. MATHEW VS. ITO (1993) 46 TTJ 353 (COACHIN) LD. CIT HOWEVER SET ASIDE THE ASSESSMENT TO BE FRAM ED DE NOVO. ITA NO. 513/JP/2012 SHYAM AVTAR GUPTA VS. CIT, AJMER . 4 2.4 AGGRIEVED, THE ASSESSEE IS BEFORE US. 2.5 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE EXERCISE OF JURISDICTION IS PATENTLY UNTENABLE AS THE LD. CIT C ANNOT REVIEW THE ORDER OF AO ON DIFFERENT PERCEPTION OF METHOD OF INTERPRETIN G PAPERS; QUANTIFICATION OF ADDITIONS OR WORKING OF PEAK AMOU NTS. BESIDES LD. CIT HIMSELF HAS COMMITTED ERROR IN IGNORING THE ANSWER TO THE QUESTION NO. 20 RECORDED DURING THE SURVEY A PERUSAL OF THE ANSWER AT PAGES 4 AND 5 OF THE LD. CIT ORDER SHOWS THAT LD. CIT HAS FAILED TO CONS IDER THE SENTENCE ATAH ISME LABH KA ANSH BHI SAMMALIT HAI (THE COMP LETE CORRECT QUESTION AND ANSWER IS AVAILABLE AT PBP NO. 33-34). IT SHOWS THAT EVEN LD. CIT HAS NOT EVALUATED THE ISSUE CORRECTLY AND LED TO WRONG INFERENCE. THE MISSING SENTENCE ITSELF CLARIFIED TH E REMAINING PART OF THE SENTENCE ON WHICH LD. CIT SOLELY RELIED AND UNDERLI NED THE SAME. LD CIT USED HIS OWN ASSUMPTION THAT SURRENDER IS ON ACCOUN T OF PROFIT INSTEAD OF READING THE STATEMENT AS IT IS, WHEREIN IT IS CLEAR LY STATED THAT AMOUNT UNDER CONSIDERATION IS SALE I.E. INCLUSIVE OF PROF IT. THUS LD. CIT HAS NOT TAKEN INTO CONSIDERATION STATEMENT IN TOTALITY AND IGNORED THAT PART OF THE STATEMENT WHEREIN IT IS CLEARLY STATED THAT THE SUM UNDER CONSIDERATION IS UNACCOUNTED SALES. AT THE TIME OF SURRENDER, IT WAS SPECIFICALLY STATED THAT THE ASSESSEE IS SURRENDERING UNACCOUNTED SALES (WHI CH INCLUDED PROFIT AS WELL). IN THE STATEMENT, IT IS CLARIFIED THAT SIN CE HE HAS SURRENDERED THE ITA NO. 513/JP/2012 SHYAM AVTAR GUPTA VS. CIT, AJMER . 5 ENTIRE AMOUNT OF UNDISCLOSED SALE, THEREFORE, NO IN FERENCE CAN BE DRAWN TO MEAN THAT THE ENTIRE AMOUNT OF UNDISCLOSED SALE IS PROFIT. THUS IT IS CLEAR THAT THE CONCLUSION HAVE BEEN DRAWN BY LD. CIT SOLELY ON THE BASIS OF INTERPRETATION OF THE STATEMENT OF ASSESSE E RECORDED U/S 133A OF THE I.T. ACT, 1961 AND NOT ON THE BASIS OF ANY NEW MATERIAL OR INFORMATION. STATEMENT HAS BEEN RECORDED UNDER SUB -SECTION (3)(III) TO SECTION 133A OF THE ACT WHICH HAS NO EVIDENTIARY VA LUE. HENCE , IT IS CLEAR FROM THE ABOVE THAT THE INFERENCES DRAWN BY L D. CIT ARE SOLELY BASED ON INTERPRETATION OF STATEMENT. THE AO ACCEPTED THE EXPLANATION OF THE ASSESSEE AFTER EVALUATING THE FACTS, STATEMENT AND MATERIAL AVAILABLE ON RECORD HENCE, THE ORDER PASSED BY THE AO IS NEITHER ERRONEOUS NOR PREJUDICIAL INTEREST OF THE REVENUE. THE LD. AR REL IED ON THE FOLLOWING CASE LAWS. 1. CIT VS. MAX INDIA LTD. (2007) 259 ITR 259 (SC) 2. MALABAR INDUSTRIAL LTD. VS. CIT (2000) 243 ITR 83 (SC) 3. CIT VS. GABRIEL INDIA LTD. (1993) 203 ITR 108 ( BOM.) 4. CIT VS. GANPAT RAM BISHNOI 296 ITR 292 (RAJ.) 5. DIVJI EXPORTS VS. ITO, 48 TW 99 (ITAT JODHPUR) 6. CIT VS. ARVIND JEWELLERS, 259 ITR 502 (GUJ.) ITA NO. 513/JP/2012 SHYAM AVTAR GUPTA VS. CIT, AJMER . 6 2.6 MS ROLEE AGRAWAL, LD. CIT (DR), CONTENDS THA T LD. AO WAS OBLIGED TO FRAME THE ASSESSMENTS AFTER FULL CONSIDE RATION OF IMPOUNDED MATERIAL. IN THE INSTANT CASES HE GLOSSED OVER THES E CRUCIAL ENTRIES DUE TO WHICH THE IMPUGNED ASSESSMENT ORDERS HAVE BECOME ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. LD. CI T IS FULLY JUSTIFIED IN REVISING THESE ORDERS IN EXERCISE OF HIS POWERS CON FERRED BY SEC. 263. WHILE MAKING SURVEY BASED ASSESSMENTS, IT IS THE D UTY OF THE ITO TO VERIFY THE IMPOUNDED DOCUMENTS PROPERLY AND ARRIVE AT PROPER FINDINGS AFTER GIVING COGENT REASONS. IN THE INSTANT CASE, T HE AO FAILED TO CONSIDER THE MATERIALS AVAILABLE ON RECORD IN PROPER MANNER, FAILED TO GIVE REASONED FINDINGS AND COMMITTED OBVIOUS ERRORS WHIC H HAVE LED THE INCOME TO BE ASSESSED AT A LOWER FIGURES. CONSEQUEN TLY, THE TWIN CONDITIONS OF THERE BEING AN ERROR AND THE SAME BEI NG PREJUDICIAL TO THE INTEREST OF THE REVENUE PROFOUNDLY EXIST, WHICH JUS TIFY THE REVISION OF THE ORDER U/S 263 OF THE ACT. 2.7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT HAS NOT BEEN DISPUTED THAT THE SURVEY MATERIAL WAS DULY CONSIDERED BY LD AO WHILE FRAMING THE IMPUGNED ASSESSMENT. SIMILARLY IT HAS NOT BE ALLEGED THAT THEY HAVE BEEN FRAMED WITHOUT INQUIRY. THE ERRORS CONTEMPLATED BY LD. CIT ARE MAI NLY TO THE EFFECT THAT SURVEY PAPERS WERE NOT EXAMINED PROPERLY AND PEAK O UT NOT HAVE BEEN ITA NO. 513/JP/2012 SHYAM AVTAR GUPTA VS. CIT, AJMER . 7 WORKED OUT FOR ADDITION. IN OUR CONSIDERED OPINION THE SHORTCOMINGS AS ALLEGED BY LD. CIT CANNOT BE CONSID ERED AS ERRORS IN TERMS OF SEC. 263 AND PLETHORA OF JUDICIAL PRECEDEN T ON THE ISSUE OF WHAT CONSTITUTES ERRONEOUS ORDER. HONBLE SUPREME COURT S DIRECTIONS IN THE CASES OF MALABAR INDUSTRIES AND MAX INDIA HAS POSTU LATE THAT ANY ORDER CANNOT BE HELD ERRONEOUS MERELY BECAUSE IN THE PERC EPTION OF CIT, AO SHOULD HAVE CONDUCTED INQUIRIES IN DIFFERENT MANNER . IF THE ORDER PASSED BY AO IS BASED ON INQUIRIES WHICH AS A QUASI JUDICI AL AUTHORITY HE DEEMED FIT AND IS ONE OF THE POSSIBLE VIEW, IT CANNOT BE T ERMED AS ERRONEOUS. IN THIS CASE SURVEY PAPERS, STATEMENTS AND RECORD WERE DULY INQUIRED; QUESTION WERE ASKED AND PAPERS HAVE BEEN REASONABLY INTERPRETED AND PEAK OF ADDITIONS HAVE BEEN WORKED OUT IN MANNER W HICH VIEW OF LD. AO WAS PROPER. THE SAME CANNOT BE HELD AS PERVERSE OR OUTLANDISH. LD. COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT RATHER L D. CIT IN HOLDING THE IMPUGNED ASSESSMENT ORDERS AS ERRONEOUSLY; GLOSSED OVER THE RELEVANT PARAS OF THE STATEMENT. RELYING ON HONBLE SUPREME COURT JUDGMENTS IN THE CASE OF MALABAR INDUSTRIES AND MAX INDIA (SUPRA ), WE ARE OF THE VIEW THAT THE IMPUGNED ORDERS ARE NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. CONSEQUENTLY THE ORDERS PASSED BY LD. CIT U/S 263 IN ALL THESE ASSESSEES ARE QUASHED. ITA NO. 513/JP/2012 SHYAM AVTAR GUPTA VS. CIT, AJMER . 8 3.0 IN THE RESULT, ALL THESE APPEALS FILED BY ASSES SEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 /03/2015 . SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 04 TH MARCH, 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI SHYAM AVTAR GUPTA, HUF , AJMER 2. VIHYKFKHZ@ THE APPELLANT SHRI SHYAM AVTAR GUPTA, INDIVIDUAL, AJMER 3. IZR;FKHZ@ THE RESPONDENT- THE CIT , AJMER RANGE, AJMER 4. VK;DJ VK;QDR@ CIT, JAIPUR, AJMER 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.513/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR