Shri Harish Kumar Gupta, Rajgarh V. Income Tax officer, Rajgarh

ITA 673/Ind/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9468 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 18-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S AMBEDKAR
• Assessee Lawyers: G B AGRAWAL
• Keywords: Reopening of assessment; Principle of natural justice; Opportunity of cross examination; Reassessment proceedings
• Section: 234B; 148

Judgement Text

[ITA NO.673/IND/2017] [HARISH KUMAR GUPTA, RAJGARH] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.673/IND/2017 ASSESSMENT YEAR: 2011-12 HARISH KUMAR GUPTA RAJGARH / VS. ITO, RAJGARH ( AP PELLANT ) ( REVENUE ) P.A. NO. AGQPG3130K APPELLANT BY SHRI G.B. AGRAWAL, A.R. RESPONDENT BY SHRI R.S. AMBEDKAR, SR. D.R. DATE OF HEARING: 14.11.2018 DATE OF PRONOUNCEMENT: 18.12.2018 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER O F THE CIT(A), UJJAIN DATED 3.7.2017 PERTAINING TO THE ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: [ITA NO.673/IND/2017] [HARISH KUMAR GUPTA, RAJGARH] 2 1. AS REGARDS REASSESSMENT PROCEEDINGS :- I. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, DETAILS AND DOCUMENTS ON RECORD THE CONFIRMATION OF REASSESSMEN T PROCEEDINGS IS ARBITRARY, UNJUST AND BAD BOTH ON FACTS AND IN L AW. II. WITHOUT PREJUDICE TO THE ABOVE, THE A.O. ON THE BAS IS OF INFORMATION WITHOUT ANY INDEPENDENT ENQUIRY HIMSELF STARTED REA SSESSMENT PROCEEDINGS AND THEREFORE REASSESSMENT PROCEEDINGS AND THEREFORE REASSESSMENT PROCEEDINGS ARE ARBITRARY, UNJUST AND BAD IN LAW. 2. AS REGARDS CONFIRMATION OF ADDITION OF RS.11,00,000 /- I. WITHOUT PREJUDICE TO THE ABOVE, THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.11,00,000/- WITHOUT PROPERLY APPRECI ATING THE FACTS AND CIRCUMSTANCES OF THE CASE, DETAILS AND DOCUMENT S ON RECORD, EVIDENCES PRODUCED AND CASE LAWS CITED DURING THE C OURSE OF APPEAL PROCEEDINGS, WHICH IS ARBITRARY UNJUST AND BAD IN L AW. II. WITHOUT PREJUDICE TO THE ABOVE, THE CONFIRMATION OF AFORESAID ADDITION ON THE BASIS OF THIRD PARTY EVIDENCE IS AR BITRARY, UNJUST AND BAD IN LAW. 3. AS REGARDS INTEREST CHARGED U/S 234A AND 234B INTEREST CHARGED U/S 234A AND 234B IS ARBITRARY AND ERRONEOUS. 2. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT THE CASE OF THE ASSESSEE REOPENED BY ISSUING NOTICE U/S 1 48 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE A CT). IN RESPONSE THERETO, THE ASSESSEE REQUESTED THAT THE INCOME DECLARED IN THE ORIGINAL RETURN MAY BE CONSIDE RED. THE BASIS OF REOPENING WAS THAT THE ASSESSEE HAD MADE CASH PAYMENTS OF RS.11 LAKHS ON 25.12.2010 FOR PURCH ASE OF IMMOVABLE PROPERTY WORTH RS.36,50,000/-. AFTER [ITA NO.673/IND/2017] [HARISH KUMAR GUPTA, RAJGARH] 3 CONSIDERING THE EXPLANATION OF THE ASSESSEE, THE A.O. TREATED THE SUM OF RS.11 LAKHS AS UNEXPLAINED AND ADDED INTO HIS INCOME. AGAINST THIS, THE ASSESSEE PREFERRE D AN APPEAL BEFORE LD. CIT(A), WHO DISMISSED THE APPEAL. NO W THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 3. GROUND NO.1 (I) & (II) ARE AGAINST THE LEGALITY OF T HE REOPENING OF ASSESSMENT. IT IS SUBMITTED THAT REASON S RECORDED BY THE A.O. IS BASED UPON THE INFORMATION BY INVESTIGATION WING AND NO SEPARATE ENQUIRY IS MADE BY TH E A.O. IT WAS SUBMITTED THAT MERE SUSPICION CANNOT BE T HE BASIS OF REOPENING. FURTHER, HE SUBMITTED THAT THERE IS NO MATERIAL FOR THE BELIEF REGARDING ESCAPEMENT OF INCOME. IT IS SUBMITTED THAT ASSESSING OFFICER OUGHT TO HAVE CARRI ED OUT ENQUIRY BEFORE REOPENING THE ASSESSMENT. IT IS CONTENDED THAT NO INDEPENDENT ENQUIRY WAS CARRIED OUT B Y THE ASSESSING OFFICER. IT IS FURTHER CONTENDED THAT THIS ACT [ITA NO.673/IND/2017] [HARISH KUMAR GUPTA, RAJGARH] 4 OF THE A.O. IS CONTRARY TO THE JUDICIAL PRONOUNCEMENT S. LD. COUNSEL HAS RELIED UPON THE FOLLOWING CASE LAWS: 1. CIT VS. KAMDHENU STEEL & ALLOYS (2012) 248 CTR 33 (DELHI)(HIGH COURT) 2. CIT VS. MULTIPLEX TRADING & INDUSTRIAL CO. LTD. (2015) 128 DTR 217 (DELHI)(HC) 3. PR. CIT VS. G. PHARMA INDIA LTD. (2017) 384 ITR 147 (DELHI) (HC) 4. CIT VS. INSECTICIDES (INDIA) LTD. (2013) 357 ITR 300 (DEL.)(HC) 5. CIT VS. MEENAKSHI OVERSEAS PVT. LTD. (2017) 395 ITR 677 (DEL) (HC) 6. CIT VS. FAIR INVEST LTD. (2013) 357 ITR 146 (DEL.)(HC) 7. SARTHAK SECURITIES CO. (P) LTD. VS. ITO (2010) 329 ITR 110. 4. IT IS FURTHER CONTENDED THAT THE ASSESSEE WAS NOT PROVIDED OPPORTUNITY TO CROSS EXAMINE SHRI DEEPAK GUP TA AND DIRECTORS OF M/S. AMRIT COLONIZERS PVT. LTD. NO N- PROVIDING OF THE CROSS EXAMINATION HAS VITIATED THE PROCEEDINGS. [ITA NO.673/IND/2017] [HARISH KUMAR GUPTA, RAJGARH] 5 5. ON THE CONTRARY, LD. D.R. OPPOSED THE SUBMISSIONS AND SUBMITTED THAT THE INFORMATION CAN BE GATHERED ON T HE BASIS THAT THE ASSESSING OFFICER CAN REOPEN THE ASSESSME NT EVEN INCOME IS ESCAPED. HE SUBMITTED THAT ADMITTEDLY ON THE BASIS OF SURVEY ON THE THIRD PARTY IT WAS FOUND TH AT THE ASSESSEE HAS MADE CASH PAYMENT TO THE CONCERNED PARTY. UNDER THESE FACTS, THE A.O. WAS JUSTIFIED IN REOPENI NG THE ASSESSMENT. HE SUBMITTED THAT LAW DOES NOT ENVISAGE TH AT A.O. SHOULD DETERMINE THE VERACITY OF THE INFORMATION BEFORE ISSUING NOTICE FOR REOPENING OF THE ASSESSMEN T. HE SUBMITTED THAT ON THE BASIS OF INFORMATION SO RECEIVED , THE ASSESSING OFFICER HAS TO FORM A BELIEF ABOUT ESCAPEMENT OF INCOME. THE DECISION AS RELIED BY THE LD. COUNSEL F OR THE ASSESSEE WOULD NOT APPLY ON THE FACTS OF THE PRESENT C ASE AS THE INFORMATION WAS SUFFICIENT IN VIEW OF THE A.O. TO REOPEN THE ASSESSMENT. [ITA NO.673/IND/2017] [HARISH KUMAR GUPTA, RAJGARH] 6 6. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. THE SUBMISSIONS OF THE ASSESS EE ARE TOO FOLD. FIRSTLY, THE REOPENING IS BAD IN LAW AS TH E A.O. HAS NOT MADE ANY QUERY ON THE INFORMATION SO RECEIVED. HE HAS MERELY ACTED UPON THE INFORMATION WITHOUT VERIFYIN G THE VERACITY OF THE SAME. SECONDLY, EVEN IF IT IS PR ESUMED THAT THE NOTICE U/S 148 OF THE ACT WAS RIGHTLY ISSUED BUT DURING THE COURSE OF ASSESSMENT ON THE BASIS OF THE INFORMATION RECEIVED FROM THE THIRD PARTIES WITHOUT G IVING OPPORTUNITY OF CROSS EXAMINATION, SUCH PROCEEDINGS AR E CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE. IT IS ALSO CONTENDED THAT NON PROVIDING OF THE OPPORTUNITY OF C ROSS EXAMINATION HAS CAUSED SERIOUS PREJUDICE TO THE ASSESSEE . MOREOVER, IT IS STATED THAT THERE IS NO WHISPER OF ANY PAYMENT PAID OTHER THAN THE PAYMENT DESCRIBED IN THE REGISTERED SALE DEED. I HAVE GIVEN MY THOUGHTFUL [ITA NO.673/IND/2017] [HARISH KUMAR GUPTA, RAJGARH] 7 CONSIDERATION TO THE FACTS OF THE PRESENT CASE AND THE MATERIAL PLACED BEFORE ME. SO FAR THE CONTENTION OF TH E ASSESSEE THAT A.O. OUGHT TO HAVE VERIFIED THE VERACITY OF INFORMATION RECEIVED WHICH SUGGESTED ESCAPEMENT OF INCOME IN MY VIEW IS DEVOID OF ANY MERIT. THE A.O. HAS TO FORM A BELIEF THAT CERTAIN INCOME HAS ESCAPED ASSESSMENT AND HE DOES NOT REQUIRE TO VERIFY WHETHER THE INFORMAT ION IS CORRECT OR FALSE. SUCH EXERCISE WOULD BE CARRIED OUT ONLY AFTER ISSUING NOTICE U/S 148 OF THE ACT. HENCE, THI S CONTENTION OF THE ASSESSEE IS REJECTED. ANOTHER CON TENTION OF THE ASSESSEE IS THAT HE WAS NOT PROVIDED OPPORTUNIT Y OF CROSS EXAMINING SHRI DEEPAK GUPTA AND THE DIRECTORS OF M/S. AMRIT COLONIZERS PVT. LTD. I FIND MERIT INTO THESE SUBMISSIONS OF THE ASSESSEE AS THE REVENUE HAS BASED IT S FINDING ON THE BASIS OF CERTAIN DOCUMENTS BELONGING T O THIRD PARTY WHERE CERTAIN ENTRY IS RECORDED BY THAT TH IRD PARTY RELATING TO THE ASSESSEE. THE A.O. BEFORE MAKING [ITA NO.673/IND/2017] [HARISH KUMAR GUPTA, RAJGARH] 8 ASSESSMENT SHOULD HAVE GRANTED OPPORTUNITY OF CROSS EXAMINING SUCH PERSON. I THEREFORE HEREBY SET ASIDE THE ASSESSMENT ORDER AND RESTORE THE ISSUE OF ASSESSMENT T O THE FILE OF THE A.O. TO MAKE A DE-NOVO ASSESSMENT AFTER PROVIDING OPPORTUNITY OF CROSS EXAMINATION TO THE ASSE SSEE. I HAVE NOT EXPRESSED MY VIEW ON THE MERIT OF THE CASE . THE A.O. WOULD DECIDE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND THE CROSS EXAMINATION MADE BY THE ASSESSEE. GROUNDS RAISED IN THIS APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18 .12.2018. SD/- (KUL BHARAT) JUDICIALMEMBER INDORE; DATED : 18/12/2018 VG/SPS [ITA NO.673/IND/2017] [HARISH KUMAR GUPTA, RAJGARH] 9 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE