Lokesh Bansal, Muzaffarnagar V. CIT, Muzaffarnagar

ITA 662/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1217 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2013
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 15-01-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2012
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Assessee Lawyers: PREM PRAKASH
• Keywords: Salary income
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: D NEW DELHI BEFORE SHRI U.B.S.BEDI, JM AND SHRI J.SUDHAKAR REDDY, A.M. ITA NO: 662/DEL/2012 ASSESSMENT YEAR : - 2007-08 SH.LOKESH BANSAL VS. CIT, MUZAFFARNAGAR C/O MP SINGHAL, ADVOCATE 62-B, NEW MANDI MUZAFFARNAGAR PAN: ADDPB 7533 M (APPELLANT) (RESP ONDENT) APPELLANT BY : SH. PREM PRAKASH, ADV. RESPONDENT BY : SH.D.K.MISHRA, SR.D.R O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DT. 17.10.2011 OF LD.CIT, MUZAFFARNAGAR FOR ASSESSMEN T YEAR 2007-08 UNDER SECTION 263 OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IS A DIRECTOR IN M/S MUKUND INDUSTR IES PVT.LTD. HE DERIVES INCOME FROM SALARY. HE ALSO DECLARED NE T PROFIT AS PER PROFIT & LOSS A/C PROFIT FROM SRI SAI TRADING COMPANY, BAN K INTEREST AND INTEREST ACCRUING OF NSC. HE DECLARED SHORT TERM C APITAL GAIN LOSS WHICH IS CLAIMED TO BE CARRIED FORWARD. THE ASSESSING OF FICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 VIDE ORDER DT. 3.6.2009. THE CIT ISSUED A NOTICE INITIATING PR OCEEDINGS UNDER ITA 662/DEL/20 12 PAGE 2 OF 6 ASSESSMENT YEAR 2007-08 SH.LOKESH BANSAL, MUZAFFARNAGAR SECTION 263 OF THE INCOME TAX ACT, 1961 ON 16.8.201 1. AFTER RECEIVING THE REPLY AN ORDER UNDER SECTION 263 DT. 17.10.2011 WAS PASSED AND THE ASSESSMENT ORDER HAS BEEN SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR BEING MADE AFRESH, AFTER MAKING DUE AND INDEP ENDENT ENQUIRIES. HE HELD THAT THE ASSESSING OFFICER HAS NOT EXAMINED TH E STATEMENT OF AFFAIRS FILED BY THE ASSESSEE AND THAT THE ASSESSING OFFICE R FAILED TO WORK OUT THE TRUE AND CORRECT INCOME AND CONSEQUENTLY THE ASSESS MENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GR OUNDS. 1. THAT THE ORDER IS AGAINST LAW AND FACTS ON REC ORD. 2. THAT THE LD.CIT WAS WRONG IN PASSING ORDER UNDER SECTION 263 WITHOUT ANY BASE. 3. THAT THE LD.CIT HAS CONSIDERED MANY FACTS WHICH WERE NOT MENTIONED IN THE NOTICE ISSUED BY HIM AND THUS HE DID NOT PRO VIDE AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. THAT THE LD.CIT WAS WRONG IN SETTING ASIDE THE ASSESSMENT WITHOUT HOLDING THAT THE ORDER IS ERRONEOUS IN SO FAR AS I T IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. MR.PREM PRAKASH THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THOUGH THE ASSESSMENT ORDER IS BRIEF, THE ASSESSING OFFICER HAD ISSUED A DETAILED QUESTIONNAIRE WHICH IS AT PAGE 37 OF THE P APER BOOK FILED BY HIM. HE SPECIFICALLY REFERRED TO QUESTION NO.1, 3, 8, 9, 13 AND 14 AND DREW THE ATTENTION OF THE BENCH TO THE DETAILED REPLIES FILE D BY THE ASSESSEE WHICH ARE AT PAGES 38 AND 39 OF THE ASSESSEES PAPER BOOK . HE SUBMITTED THAT ALL OTHER QUESTIONS PERTAIN TO THE STATEMENT OF AFF AIRS. HE SUBMITTED THAT THE ASSESSEE HAD REPLIED IN DETAIL THAT THE SHARES WORTH RS.48 LAKHS WITH MUKUND INDUSTRIES P.LTD. ARE OLD ASSETS AND THAT TH ERE ARE NO PURCHASES ITA 662/DEL/20 12 PAGE 3 OF 6 ASSESSMENT YEAR 2007-08 SH.LOKESH BANSAL, MUZAFFARNAGAR DURING THE YEAR. HE POINTED OUT TO THE DETAILS FUR NISHED OF SHORT TERM CAPITAL GAINS. HE FURTHER POINTED OUT THAT THE QUE RY ON THE FAMILY DRAWINGS TOWARDS HOUSE HOLD EXPENSES HAS ALSO BEE N ANSWERED BY THE ASSESSEE. HE SUBMITTED THAT THE ASSESSING OFFICER HAS ENQUIRED INTO EACH AND EVERY ASPECT RAISED BY THE CIT, MUZAFFARNA GAR IN THE NOTICE UNDER SECTION 263 DT. 16.8.2011 AND THAT THE ASSESS EE HAS REPLIED TO THE SAME AND ON CONSIDERATION OF THE REPLIES AND ON BEI NG SATISFIED WITH THE SAME THE A.O. HAD PASSED AN ASSESSMENT ORDER. HE CLAIMED THAT THE NOTICE UNDER SECTION 263 AND THE ORDER UNDER SECTIO N 263 ARE NOT ON THE SAME ISSUES. THE ASSESSEE SUBMITS THAT THE CIT WA S WRONG IN COMING TO A CONCLUSION THAT THE ASSESSING OFFICER HAS NOT EXA MINED ALL THE ISSUES CORRECTLY AND HAS FAILED TO WORK OUT THE TRUE AND C ORRECT INCOME. HE SUBMITTED THAT THE ASSESSING OFFICER AFTER DUE ENQU IRY AND GATHERING OF EVIDENCE, HAS TAKEN A POSSIBLE VIEW AND THAT UNDER THOSE CIRCUMSTANCES THE ORDER UNDER SECTION 263 IS BAD IN LAW. HE RELI ED ON A NUMBER OF CASE LAWS WHICH WE WOULD BE DEALING WITH AS PART OF OUR FINDING. 4. THE LD.CIT, DEPARTMENTAL REPRESENTATIVE MR.DK MI SHRA ON THE OTHER HAND OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSMENT ORDER IS A VERY BRIEF ORDER AND MANI FESTLY INDICATES NON APPLICATION OF MIND BY THE ASSESSING OFFICER. HE D ISPUTED THE CONTENTIONS OF THE ASSESSEE THAT THE NOTICE UNDER S ECTION 263 AND THE ORDER UNDER SECTION 263 ARE NOT ON THE SAME ISSUE. HE TOOK THIS BENCH ITA 662/DEL/20 12 PAGE 4 OF 6 ASSESSMENT YEAR 2007-08 SH.LOKESH BANSAL, MUZAFFARNAGAR TO THE REASONS RECORDED FOR SCRUTINY BY THE ASSESSI NG OFFICER AND SUBMITTED THAT THE ASSESSING OFFICER HAS NOT ASKED A SINGLE QUESTION ON THE REASONS RECORDED. HE DISPUTED THE SUBMISSIONS OF THE LD.COUNSEL OF THE ASSESSEE THAT EXCEPT FOR SOME QUESTIONS, ALL TH E OTHER QUESTIONS PERTAIN TO THE TRADING ACCOUNT OF THE ASSESSEE. HE CONTENDED THAT THE BOARD IN ITS CIRCULAR HAD DIRECTED THE ASSESSING OF FICER TO EXAMINE WHETHER INCOME FROM SALE OF SHARES IS BUSINESS INCO ME OR ASSESSABLE UNDER CAPITAL GAINS AND THAT THE ASSESSING OFFICER HAS TOTALLY IGNORED THIS ASPECT. REFERRING TO THE PAPER BOOK HE SUBMIT TED THAT PAGES 8 TO 12 ARE NOT BEFORE THE ASSESSING OFFICER. HE RELIED ON THE FOLLOWING CASE LAWS. FAB INDIA OVERSEAS P.LTD. 10 TAXMAN.COM 70 DELHI SONAL GARMENTS VS. JCIT, 100 ITD 173 MUMBAI CIT VS. ASHISH RAJPAL, 320 ITR 674 DELHI 5. IN REPLY THE LD.COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE ASSESSEE HAS NO CONTROL ON THE WAY THE ASSESSING OF FICER DRAFTS HIS ORDER AND THAT NOT MENTIONING THE QUESTIONS AND ITS REPLI ES DOES NOT INDICATE NON APPLICATION OF MIND. 6. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDER ATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON A PERUSAL OF T HE PAPERS ON RECORD, WE HOLD AS FOLLOWS. 7. THE ASSESSMENT ORDER IS COMPLETED IN FIVE LINES (OPERATIVE PORTION). THE CASE WAS RECEIVED ON TRANSFER AND THERE AFTER N OTICE UNDER SECTION ITA 662/DEL/20 12 PAGE 5 OF 6 ASSESSMENT YEAR 2007-08 SH.LOKESH BANSAL, MUZAFFARNAGAR 143(2) WAS ISSUED ON 12.12.2008. THE EARLIER NOTIC E CALLING FOR DETAILS WAS ISSUED BY THE ITO, WARD 2(2), MUZAFFARNAGAR AND THE ASSESSEE HAS REPLIED TO THOSE QUERIES. AFTER THE FILE WAS TRANS FERRED TO THE ITO, WARD 1(2), MUZAFFARNAGAR THERE DOES NOT SEEM TO BE ANY ENQUIRY. THE REASONS FOR PICKING UP THE CASE FOR SCRUTINY WAS TO EXAMINE WHETHER THE PURCHASE AND SALE OF SHARES SHOULD BE ASSESSED UNDE R THE HEAD CAPITAL GAIN OR UNDER THE HEAD INCOME FROM BUSINESS. TH IS ASPECT HAS NOT BEEN ENQUIRED INTO EITHER BY THE EARLIER ASSESSING OFFICER OR BY THE ASSESSING OFFICER WHO PASSED THE ORDER. DETAILS HA VE BEEN CALLED FOR ON THE ISSUE OF SHORT TERM CAPITAL LOSS BY THE EARLIER ASSESSING OFFICER. THE ASSESSEE FURNISHED THE DETAILS, BUT THERE IS NO IND ICATION OF THE ASSESSING OFFICER HAVING EXAMINED THE ISSUE. THERE IS NO EVI DENCE OF APPLICATION OF MIND BY IYO, WARD 1(2), MUZAFFARNAGAR WHO PASSED TH E ASSESSMENT ORDER. THUS, IN OUR VIEW, THE ASSESSING OFFICER, WARD (2) MUZAFFARNAGAR, AS RIGHTLY HELD BY THE CIT, HAS FAILED TO CONDUCT PROPER ENQUIRES AND HAS FAILED TO APPLY HIS MIND TO THE ISSUES WHICH LEAD T O SELECTING THE CASE FOR SCRUTINY. THUS IN OUR CONSIDERED VIEW THE CIT WA S RIGHT IN HOLDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF THE REVENUE. COMING TO THE CASE LAWS CITED BY BOTH THE PARTIES, WE HAVE CONSIDERED THE SAME. THEY ARE ALL FACT BASED. THE PROPOSITIO NS LAID DOWN IN THESE CASE LAWS SUPPORT THE CONCLUSIONS, DRAWN BY THE CIT , MUZAFFARNAGAR. IN THE RESULT WE UPHOLD THE ORDER OF THE CIT AND DISMI SS THIS APPEAL OF THE ASSESSEE. ITA 662/DEL/20 12 PAGE 6 OF 6 ASSESSMENT YEAR 2007-08 SH.LOKESH BANSAL, MUZAFFARNAGAR 8. IN THE RESULT THE APPEAL BY THE ASSESSEE IS DISM ISSED ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH FEB., 2013. SD/- SD/- (U.B.S.BEDI) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 27 TH FEB., 2013 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR 1. DATE OF DICTATION: 2. DRAFT PLACED BEFORE THE AUTHOR ON: 3. DRAFT PROPOSED AND PLACED BEFORE SECOND MEMBER ON: 4. DRAFT DISCUSSED/APPROVED BY THE SECOND MEMBER ON: 5. APPROVED DRAFT CAME TO SR.P.S. ON: 6. DATE OF PRONOUNCEMENT : 7. FILE SENT TO BENCH CLERK ON : 8. DATE ON WHICH FILE GIVEN TO HEAD CLERK ON: 9. DATE OF DISPATCHING THE ORDER ON :