Smt. Sudarshan Sharma, Agra V. CIT, Agra

ITA 627/AGR/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6774 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-05-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 14-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEEMA RAJ
• Assessee Lawyers: ROOP KISHORE AGARWAL
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NO.627/AGR/2008 ASST. YEAR: 2002-03 SMT. SUDHARSHAN SHARMA, VS. INCOME-TAX ORFICER-2 (4), 56, ALKAPURI PRATAP NAGAR, AGRA. AGRA. (PAN : AAJPS 7016 Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROOP KISHORE AGARWAL, ADVOCATE RESPONDENT BY : SMT. SEEMA RAJ, CIT D.R. ORDER PER P.K. BANSAL, A.M.: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) DATED 12.08.2008 PASSED UNDER SECTION 263 OF THE INCOME-T AX ACT, 1961 (THE ACT HEREINAFTER) HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE A.O. FOR TH E A.Y. 2002-03 DATED 26.12.2007 IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. HE ACCORDINGLY SET ASIDE THE ASSESSMENT ORDER TO MAKE IT DENOVO. WHILE GIVING T HIS FINDING, THE CIT(A) TOOK THE VIEW THAT IN THE BANK ACCOUNT OF THE ASSESSEE, TWO CHEQUES OF RS.79,812/- AND RS.85,968/- WERE CREDITED ON 24.09.2001 AND 26.09.2001 RESPECTIVELY. BOTH THE E NTRIES RELATE TO A.Y. 2002-03 BUT IN THE RETURN THE ASSESSEE HAS TAKEN ONE ENTRY OF RS. 85,9 68/- WHILE IN THE A.Y. 2001-02 AND THE OTHER ENTRY OF RS. 79,812/- HAS BEEN ACCOUNTED FOR IN THE A.Y.2002-03. HE WAS OF THE VIEW THAT THE A.O. HAS NOT CONSIDERED THE FACT THAT BOTH THE INCO ME WERE ARISING BY WAY OF THESE CHEQUES DURING THE YEAR 2002-03. 2 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. WE NOTED THAT THE A.O. HAS DULY CONSIDERED BOTH THE CHEQUES OF RS .85,968/- AND RS.79,812/- RECEIVED BY THE ASSESSEE DURING THE YEAR AND HAS ASKED FOR THE EXPL ANATION FROM THE ASSESSEE AFTER MAKING DUE ENQUIRY. HE HAS GIVEN A FINDING IN THE ASSESSMENT ORDER TO THE FOLLOWING EFFECT:- FROM PERUSAL OF DETAILS FILED, IT IS NOTICED THAT THE ASSESSEE HAS SHOWN THE INCOME OF RS.79912/- AS INCOME FROM SPECULATION PRO FIT IN INDIVIDUAL HAND FOR WHICH RETURN HAS BEEN FILED ON 08.08.2002 IN WARD 2 (4) AGRA. AS REGARDS ENTRY OF RS.85968/-, IT HAS BEEN SUBMITTED THAT THE SPECULAT ION PROFIT OF RS.81968/- WAS EARNED DURING F. Y. 2000-01 FOR WHICH RETURN OF INC OME WAS FILED ON 4.02.2002 (A.Y. 2001-02) AT SL. NO.607498 IN WARD 2(4), AGRA. RS.4000/- WAS RECEIVED BACK AS MARGIN MONEY DEPOSITED EARLIER. THE ASSESSEE HA S SUBMITTED THAT THE PROFIT WAS EARNED AND SHOWN IN THE INDIVIDUAL HAND. ACCORDINGLY TOTAL INCOME IS ASSESSED AT RS.79812/- AS SHOWN IN THE ORIGINAL RETURN FILED FOR A.Y. 2002-03. 3. UNDER SECTION 263 OF THE ACT, THE CIT(A) CAN EXE RCISE THE REVERSIONARY JURISDICTION IF BOTH THE CONDITIONS THAT THE ORDER PASSED BY THE A. O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IF NONE OF THE CONDITIONS EXIST, H E CANNOT EXERCISE JURISDICTION UNDER SECTION 263. EVEN IF THE A.O. HAS NOT ENQUIRED OR HAD NOT MADE DUE ENQUIRY, THE ASSESSMENT CAN BE REGARDED TO BE ERRONEOUS. IN THIS CASE, WE NOTED F ROM THE PERUSAL OF THE ASSESSMENT ORDER THAT THE A.O. HAS MADE THE DUE ENQUIRY, ISSUED THE NOTICES T O THE ASSESSEE IN RESPECT OF BOTH THE ENTRIES AND AFTER CONSIDERING THE REPLY OF THE ASSESSEE HE HAS TAKEN THE VIEW THAT THE ENTRY OF RS.85,968/- RELATES TO THE A.Y. 2001-02. IT IS A SETTLED LAW I N VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL COMPANY LIMITED V S. CIT, 243 ITR 83 (SC) THAT IF A.O. HAS TAKEN ONE OF THE POSSIBLE VIEW AND UNTIL AND UNLESS THAT VIEW IS UNSUSTAINABLE IN LAW, THE ORDER PASSED BY THE A.O. ACCEPTING THE SAME VIEW CANNOT B E REGARDED TO BE ERRONEOUS. THE RELEVANT FINDING OF THE HONBLE SUPREME COURT IS GIVEN AS UN DER :- 3 A BARE READING OF PROVISIONS OF SECTION 263 MAKES IT CLEAR THAT THE PREREQUISITE TO EXERCISE OF JURISDICTION BY THE CIT SUO MOTO UNDER IT, IS THAT THE ORDER OF THE ITO IS ERRONEOUS IN SO FAR AS IT IS PR EJUDICIAL TO THE INTEREST OF THE REVENUE. THE CIT HAS TO BE SATISFIED OF TWIN CONDI TIONS, NAMELY, (I) THE ORDER OF THE A.O. SOUGHT TO BE REVISED IS ERRONEOUS; AND (II ) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IT IS ONLY WHEN AN ORDER IS ERRONE OUS THAT THE SECTION WILL BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOU S. IF DUE TO AN ERRONEOUS ORDER OF THE ITO, THE REVENUE IS LOSING TAX LAWFULL Y PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO THE INTEREST OF THE REV ENUE. THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE REVENUE HAS TO BE READ IN CON JUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE A.O. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF A.O. CANNOT BE TREATED AS PREJUDICIAL TO THE INTERE STS OF THE REVENUE. WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW W ITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER P REJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNS USTAINABLE IN LAW. 4. IN VIEW OF OUR AFORESAID DISCUSSION ON THE LIGHT OF THE DECISION OF HONBLE SUPREME COURT AS STATED ABOVE, WE QUASH THE ORDER PASSED UNDER SE CTION 263 OF THE ACT. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 25.06.2010). SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 25 TH JUNE, 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY