M/s. J.P. Stone Crushers Pvt. Ltd., Nainital V. ACIT, Uttrakhand

ITA 5686/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65484 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 13-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 19-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNANA SEN
• Assessee Lawyers: ASHWANI TANEJA; RISHAB V KAPOOR
• Section: 143(3); 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.5686/DEL/2011 ASSESSMENT YEAR : 2005-06 J.P. STONE CRUSHERS PVT. LTD., ACIT, RAMPUR HALDWANI ROAD, HALDWANI, NAINITAL, HALDWANI. V. UTTRAKHAND. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AABCJ AABCJ AABCJ AABCJ- -- -5662 5662 5662 5662- -- -M MM M APPELLANT BY : SHRI ASHWANI TANEJA & SHRI RISHAB V. KAPOOR. RESPONDENT BY : SMT. SUNANA SEN, DR. ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD CIT(A) DATED 1,9.2011. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF T HE CASE, LD CIT(A), DEHRADUN HAS ERRED IN LAW AND ON FACTS IN CON FIRMING THE ACTION OF THE LD ASSESSING OFFICER IN MAKING ADDITION O F ` .17,15,717/- ON ACCOUNT OF ESTIMATION OF ALLEGED CAP ITAL EMPLOYED OUT OF THE BOOKS ON THE BASIS OF SURMISES AND ASSUMPTIONS ON THE BASIS OF SELF GENERATED FORMULA WHICH HAS GOT NO MATHEMATICAL SANCTION OR OTHERWISE REPRESENTS A ND ESTABLISHED MODEL OR FORMULA FOR SUCH FINANCIAL ESTIMA TION, WITHOUT PLACING ANY CORROBORATING MATERIAL AND BY R ECORDING ITA NO5686/DEL/201 2 INCORRECT FACTS AND OBSERVATIONS PURELY ON THE BASIS O F THIRD PARTY REPORTS, THE FINDINGS WHICH WERE ALSO STAYED BY THE HI GHER AUTHORITIES. 2. THAT HAVING REGARD TO THE FACT IN CIRCUMSTANCES OF TH E FACTS, THE LD ASSESSING OFFICER FURTHER ERRED IN REJECTING THE PRA YER OF THE APPELLANT COMING TO THE CONCLUSION THAT THE ASSESSEE HAD CHALLENGED THE VERY ACTION OF ASSESSING OFFICER IN RELY ING ON THE FINDING OF DISTRICT AUTHORITIES AND NOT THE BASIS OF EST IMATION OF CAPITAL EMPLOYED, MISTAKENLY WHICH WAS FORMING PART O F WRITTEN SUBMISSIONS AS WELL AS VERBAL DISCUSSIONS. 3. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF H EARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHE R. 2. AT THE OUTSET, THE LD AR STATED THAT THIS IS A COVER ED MATTER. HE FURTHER STATED THAT THE ONLY ISSUE IN THE PRESENT APPEA L IS AGAINST THE ADDITION OF ` .17,15,717/- ON ACCOUNT OF ESTIMATED CAPITAL EMPLOYE D OUT OF BOOKS WHICH WAS CONFIRMED BY LD CIT(A). HE FURTHE R EXPLAINED THAT ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) O N DATED 28.12.2007 WHEREIN ADDITION OF ` .19,79,284/- WAS MADE ON ACCOUNT OF ILLEGAL TRANSPORTATION AND CAPITAL EMPLOYED OUT OF B OOKS ON THE BASIS OF SOME ACTION BY DISTRICT AUTHORITIES WHO HAD FOUND DISCR EPANCIES IN STOCKS DURING A SURVEY. THE SAID ADDITION WAS CHALLENGED BEFORE THE LD CIT(A) WHO VIDE HIS ORDER DATED 14.10.2008 HAD CONFI RMED THE SAID ADDITION INCLUDING THE ADDITION OF ` . 1,00,000/- ON ACCOUNT OF CAPITAL EMPLOYED OUT OF BOOKS. ON FURTHER APPEAL, THE HON'B LE ITAT VIDE ITS ORDER DATED 25.10.2011 RESTORED THE MATTER BACK TO T HE FILE OF THE ASSESSING OFFICER BECAUSE OF THE FACT THAT ASSESSEE HAD CHAL LENGED THE ACTION OF DISTRICT AUTHORITIES AND MATTER HAD NOT RE ACHED ITS FINALITY. IN THE MEANTIME, THE LD CIT VIDE HIS ORDER DATED 19.3.2 010 U/S 263 SET ITA NO5686/DEL/201 3 ASIDE THE ISSUE OF CAPITAL EMPLOYED TO THE FILE OF LD ASSESSING OFFICER AND PASSED FRESH ASSESSMENT ORDER U/S 143(3)/263 OF THE ACT MAKING THE IMPUGNED ADDITION. HE FURTHER STATED THAT ORIGI NAL ADDITION IN ANY CASE HAS ALREADY BEEN SET ASIDE BY THE TRIBUNAL VIDE IT S ORDER DATED 25.10.2011. THEREFORE, THE IMPUGNED ADDITION U/S 143 (3)/263 HAS TO BE REMANDED BACK TO ASSESSING OFFICER FOR FRESH ADJUDICATIO N. HE FURTHER ARGUED THAT IN VIEW THE FACT THAT ASSESSEE HAD CHALLENG ED THE INVESTIGATION/ENQUIRY BY DISTRICT AUTHORITIES ON THE B ASIS OF WHICH ORIGINAL ADDITION WAS MADE AND THE ENTIRE ISSUE INCLU DING ISSUE RAISED U/S 263 CAN BE CONSIDERED TOGETHER. 3. THE LD DR HAD NO SERIOUS OBJECTION EXCEPT TO THE E XTENT THAT DIRECTION MAY BE ISSUED TO ASSESSING OFFICER TO COMPLETE ASSESSMENT PROCEEDINGS AFRESH AND HE SHOULD TAKE INTO ACCOUNT THE ISSUE RAISED BY COMMISSIONER U/S 263 OF THE ACT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THERE WAS AN ACTION OF DISTRICT ENFORCEMENT AUTHORITY ON TH E ASSESSEE AND THE ENFORCEMENT AUTHORITY FOUND THAT THERE WAS SOME I LLEGAL SALE, ILLEGAL TRANSPORTATION. ON THE BASIS OF SUCH FINDING TH E ASSESSING OFFICER COMPLETED ASSESSMENT U/S 143(3) AND MADE ADDITION ON ACC OUNT OF ILLEGAL MINING, ILLEGAL STOCK AND ILLEGAL TRANSPORTAT ION ETC. THE ASSESSEE TOOK THE MATTER TO LD CIT(A) WHO CONFIRMED THE ADDI TION AND FINALLY THE MATTER TRAVELED UP TO THE STAGE OF ITAT WHO REMANDED THE MATTER BACK TO THE OFFICE OF ASSESSING OFFICER FOR FRESH CONSIDERATI ON IN VIEW OF THE CHALLENGE OF THE ACTION OF ENFORCEMENT AUTHORITIES B Y THE ASSESSEE. THE HON'BLE TRIBUNAL HAD OBSERVED THAT FINAL ADDITIO NS CAN BE MADE ONLY WHEN THE MATTER REACHED ITS FINALITY. IN THE ME ANTIME, LD. COMMISSIONER FOUND THAT ORDER U/S 143(3) WAS ERRONEOUS A ND HE ITA NO5686/DEL/201 4 COMPLETED ASSESSMENT U/S 143(3)/263 OF THE ACT AND MADE AN ADDITION OF ` .17,15,717/- ON ACCOUNT OF ESTIMATED CAPITAL EMPLOYE D OUT OF BOOKS FOR CARRYING OUT SALES OUT OF BOOKS. WE FIND THAT THIS ADDITION ALSO AROSE FROM THE ACTION OF ENFORCEMENT AUTHORITIES AS L D CIT(A) FELT THAT FOR ILLEGAL MINING AND ILLEGAL SALE CERTAIN CAPITAL ALSO MUST HAVE BEEN EMPLOYED THEREFORE HE MADE THE ADDITION U/S 143(3)/2 63 FOR CAPITAL EMPLOYED IN BUSINESS FOR OUT OF BOOKS SALE. SINCE ORIGI NAL ASSESSMENT U/S 143(3) HAS ALREADY BEEN SET ASIDE THE ASSESSMENT U/S 14 3(3)/263 SHOULD ALSO BE RECONSIDERED AFTER FINALIZATION OF PROC EEDINGS OF DISTRICT AUTHORITIES. THEREFORE, WE DEEM IT FIT TO REMIT THE MATTER BACK TO THE OFFICE OF ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER THE FINALIZATION OF PROCEEDINGS BY THE ENFORCEMENT AGENCY. NEEDLESS TO SAY , THAT ASSESSEE WILL BE GIVEN PROPER OPPORTUNITY OF BEING HEAR D. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 6. ORDER PRONOUNCED IN THE OPEN COURT ON 21ST DAY OF SEPTEMBER, 2012. SD/- SD/- (U.B.S. BEDI) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 21 .9.2012. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO5686/DEL/201 5 DATE OF HEARING 13.9.2012 DATE OF DICTATION 14.9.2012 DATE OF TYPING 14.9.2012 DATE OF ORDER SIGNED BY 21.9.2012 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET 21.9.2012 & SENT TO THE BENCH CONCERNED.