M/s M.P.Rajya Van Vikas Nigam Ltd., Bhopal V. The Pr. CIT-I , Bhopal

ITA 518/Ind/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4430 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-10-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 26-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: ANIL KHAA
• Keywords: Assessment record; Tax effect; Set aside
• Section: 143(3); 143(2); 6; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.518/IND/2019 ASSESSMENT YEAR 2014-15 M/S M.P. RAJYA VAN VIKAS NIGAM LTD, 5 TH FLOOR, PANCHANAM BUILDING, T.T. NAGAR, BHOPAL PAN : AACCM1081C : APPELLANT V/S PR. CIT-1, BHOPAL : RESPONDENT REVENUE BY S MT. ASHIMA GUPTA , CIT ASSESSEE BY SHRI ANIL KHABYA , CA DATE OF HEARING 1 9. 1 0 .2020 DATE OF PRONOUNCEMENT 23 . 1 0 . 2020 O R D E R PER MANISH BORAD, A.M: THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCES O F THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 2014-15 IS DIRECTED A GAINST THE ORDER OF LD. PR. COMMISSIONER OF INCOME TAX (APPEALS)-1 ( IN SHORT LD.CIT(A)], BHOPAL DATED 26.03.2019 FRAMED U/S 26 3 OF THE ACT. 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - M.P. RAJYA VAN VIKAS NIGAM LTD ITA NO.518/IND/2019 2 1. THAT THE LD. PR. CIT(A) ERRED IN INVOKING PROVIS IONS OF SECTION 263 AND SETTING ASIDE ORDER OF ASSESSMENT DATED 31.10.2016 TO BE FRAMED DENOVO. 2. THAT THE LD. CIT(A) ERRED IN HOLDING THAT THE OR DER OF ASSESSMENT PASSED BY THE A.O WAS ERRONEOUS AND PREJUDICIAL TO INTERST OF REVENUE AS CLAIM OF AGRICULTURE INCOME WAS ACCEPTED BY A.O IN ORIGINAL ASSESSMENT PROCEEDING WITHOUT ANY VERIFICATION WHICH ALLEGATION IS FACTUA LLY INCORRECT. 3. BRIEF FACTS RELATING TO THIS ISSUE IS THAT THE A SSESSEE IS A MADHYA PRADESH GOVERNMENT UNDERTAKING ENGAGED IN TH E BUSINESS OF FORESTRY AND AGRICULTURE. THE ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME ON 29.09.2014 SHOWING INCOME AT RS.17,77,18, 930/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTIC E U/S 143(2) DATED 31.08.2015 WAS DULY SERVED. ASSESSMENT U/S 14 3(3) OF THE ACT WAS COMPLETED ON 31.10.2016 ASSESSING INCOME AT RS. 68,18,49,104/- AFTER MAKING ADDITION ON ACCOUNT OF LEASE RENT AT RS.47,28,83,250/- AND DISALLOWANCE OF CORPORATE EXP ENSES AT RS.3,12,46,924/-. ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND SUCCEEDED. SUBSEQUENTLY REVENUE PREFERRED APPEAL BE FORE THE TRIBUNAL BUT FAILED TO SUCCEED. 4. LD. PR. CIT-1 EXERCISING HIS POWER U/S 263 OF TH E ACT EXAMINED THE ORDER OF LD. A.O U/S 143(3) OF THE AC T AS TO WHETHER IT M.P. RAJYA VAN VIKAS NIGAM LTD ITA NO.518/IND/2019 3 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REV ENUE AND EXAMINED THE ASSESSMENT RECORDS OBSERVING AS FOLLOWS:- 2. ON GOING THROUGH THE CASE RECORDS, IT IS NOTICED THAT THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2014 HAD SHOWN OTHER INCOME WHICH WAS SALE OF ROOT SHOOT/SEEDS OF RS.521.36 LAK H AND OTHER INCOME WHICH WAS CROP-1 OF RS.256.42 LAKH, TOTAL AS AGRICU LTURE INCOME OF RS.777.78 LAKH (521.36+256.42), BUT AT THE TIME OF COMPUTATION OF INCOME ASEESSEE COMPANY HAD TAKEN THE AGRICULTURE INCOME O F RS.62,60,40,263/- WHICH WAS NOT IN ORDER AS PER CONDITIONS LAID DOWN IN RESPECT OF SECTION 2(1A) OF THE INCOME TAX ACT,1961. THUS THE DIFFEREN CE AMOUNT OF RS.54,82,62,263/- (6260540263-77778000) WAS REQUIRED TO BE ADDED BACK TO THE ASSESSEE'S COMPANY INCOME. THE OMISSION RESULTED IN UNDER ASSESSMENT OF INCOME TO THE EXTENT OF RS. 54,82,62,263/- LEADING TO TAX EFFECT OF RS. 18,63,54,343/- (33.99% OF RS. 54,82,62,263/-). SO PRIMA FACIE ADMISSIBILITY OF AGRICULTURE INCOME IN THE CASE IS NOT PROVED. IN ABSENCE OF MATERIAL EVIDENCE THE INCOME CLAIMED AS AGRICULTURE INCOME SHOULD HAVE BEEN TREATED AS INCOME FROM OTHER SOURCES. 5. ON THE BASIS OF THE ABOVE OBSERVATION LD. PCIT I SSUED A SHOW CAUSE NOTICE U/S 263 OF THE ACT DATED 12.03.2019. IN COMPLIANCE THERE TO ASSESSEE MADE NECESSARY SUBMISSIONS AND AF TER GOING THROUGH THE SAME LD. PR.CIT CAME TO THE CONCLUSION THAT THE LD. A.O HAS NOT EXAMINED THE MATERIAL FACTS OF THE CASE WITH REGARD TO THE ISSUE RAISED IN THE SHOW CAUSE NOTICE. LD. PR. CIT HAS ACCORDINGLY SET ASIDE THE ORDER OF LD. A.O U/S 143( 3) OF THE ACT AND M.P. RAJYA VAN VIKAS NIGAM LTD ITA NO.518/IND/2019 4 DIRECTING IT TO BE FRAMED DENOVO AFTER EXAMINING THE ISSUE REFERRED IN THE SHOW CAUSE NOTICE. 6. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L ASSAILING THE ORDER OF LD. PR. CIT U/S 263 OF THE ACT. 7. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE IMPUGNED ORDER U/S 263 OF THE ACT NEEDS TO BE MODIF IED TO THE EXTENT OF DIRECTING THE LD. A.O TO EXAMINE ONLY THE ISSUE REFERRED IN THE SHOW CAUSE NOTICE BY LD. PR.CIT RATHER THAN TO FRAME DENOVO ASSESSMENT. IN SUPPORT OF THIS CONTENTION LD. COUN SEL FOR THE ASSESSEE REFERRED TO THE DECISION OF THE HON'BLE TR IBUNAL, INDORE BENCH VIDE ITA NO.453/IND/2017 DATED 21.8.2018 IN A SSESSEES OWN CASE FOR ASSESSMENT YEAR 2014-15 IN WHICH THE REVEN UE HAS CHALLENGED THE ORDER OF LD. CIT(A) DELETING THE ADD ITION MADE BY LD. A.O IN THE ASSESSMENT ORDER U/S 143(3) OF THE ACT D ATED 31.10.2016. IT WAS SUBMITTED THAT THE HON'BLE TRIBUNAL HAS ALRE ADY CONFIRMED THE FINDING OF LD. CIT(A) DELETING THE ADDITIONS MA DE IN THE REGULAR ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT AND TH US FRAMING OF DENOVO ASSESSMENT ORDER WILL NOT BE JUSTIFIED. 8. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY ARGUED SUPPORING THE ORDER OF LD. PR. CIT. M.P. RAJYA VAN VIKAS NIGAM LTD ITA NO.518/IND/2019 5 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFOREUS. THE ASSESSEE HAS CHALLENGED THE F INDING OF LD. PR.CIT TO THE EXTENT OF MAKING MODIFICATION IN HIS FINDING WHEREIN DIRECTIONS HAVE BEEN GIVEN FOR FRAMING DENOVO ASSESSMENT ORDER. BEFORE US LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTE D THAT AS FAR AS THE ISSUE RAISED IN THE SHOW CAUSE NOTICE ISSUED BY LD. PR.CIT RELATING TO ADMISSIBILITY OF AGRICULTURE INCOME I.E . ASSESSMENT OF INCOME TO THE EXTENT OF RS.54.82 CRORES, THEY ARE A DMITTING THE FACT THAT THIS ISSUE WAS NOT EXAMINED BY LD. A.O AND LD. CIT(A) HAS RIGHTLY DIRECTED TO EXAMINE THIS ISSUE TO THE LD. A .O. HOWEVER DIRECTION OF LD. PR. CIT TO THE LD. A.O FOR FRAMING DENOVO ASSESSMENT WILL NOT BE JUSTIFIED SINCE THE ADDITIONS MADE IN T HE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT HAS TRAVELLED UP TO THE TRIBUNAL, INDORE BENCH AND THE ADDITIONS SO MADE ON ACCOUNT O F LEASE RENT AND DISALLOWANCE OF CORPORATE EXPENSES HAVE BEEN DE LETED BY THE TRIBUNAL. 10. ON GOING THROUGH THE ORDER OF TRIBUNAL, INDORE BENCH DATED 21.8.2018 VIDE ITA NO.453/IND/2017 IN ASSESSEES OW N CASE, WE FIND SUFFICIENT MERIT IN THE CONTENTION MADE BY THE LD. COUNSEL FOR THE ASSESSEE AND ARE OF THE CONSIDERED VIEW THAT IM PUGNED ORDER M.P. RAJYA VAN VIKAS NIGAM LTD ITA NO.518/IND/2019 6 U/S 263 OF THE ACT DATED 26.3.2019 NEEDS TO BE MODI FIED AND THE DIRECTION OF LD. PR.CIT TO THE LD. A.O SHOULD BE RE STRICTED ONLY TO THE EXTENT OF EXAMINING THE ISSUE OF ADMISSIBILITY OF AGRICULTURE INCOME AT RS. 54.82 CRORES AND NOT TO OTHER ISSUES ALREADY DEALT BY THE LD. A.O AND HAVE ALSO BEEN EXAMINED BY THE I.T.A.T., IN DORE BENCH. THUS WE PARTLY ALLOW ASSESSEES APPEAL DIRECTING TH E PR. CIT TO REMOVE THE WORD DENOVO ASSESSMENT AND REPLACE IT WITH THE DIRECTION TO LD. A.O ONLY TO THE EXTENT OF EXAMININ G THE ISSUE RAISED IN THE SHOW CAUSE NOTICE DATED 12.3.2019 I.E. THE I SSUE OF ADMISSIBILITY OF AGRICULTURE INCOME. 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 23.10.2020. SD/- SD/- ( KUL BHARAT) (MANI SH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 23 OCTOBER, 2020 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE