The ACIT, Sagar V. M/s. Ashok Traders, Sagar

ITA 7/JAB/2008

• Counselvise Citation: 722714 RSA 2008
• Duration Of Justice: 3 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-04-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 10-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESHAVE SAXENA
• Assessee Lawyers: GIRISH AGARWAL; H P VERMA SHRI ASHISH GOYAL
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAGFA6982M I.T.A.NO. 07/JAB/2008 A.Y. : 2003-04 ACIT, M/S. ASHOK TRADERS, CIRCLE SAGAR VS KATRA BAZAR, SAGAR APPELLANT RESPONDENT APPELLANT BY : SHRI KESHAVE SAXENA, CIT DR RESPONDENT BY : SHRI H.P.VERMA, SHRI ASHISH GOYAL AND SHRI GIRISH AGARWAL, O R D E R PER JOGINDER SINGH, J.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), JABALPUR, DATED 31 ST OCTOBER, 2007 FOR THE ASSESSMENT YEAR 2003-04. 2. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY THE ORD ER OF CIT(A) FOR DELETING THE TRADING ADDITION MADE BY TH E ASSESSING OFFICER. -: 2: - 2 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. F ROM THE RECORD, WE FOUND THAT THE AO HAS MADE TRADING ADDIT ION BY ESTIMATING SALES AT HIGHER FIGURE AND ALSO APPLYING GROSS PROFIT RATE OF 2 % ON SUCH SALES. THE LD. CIT(A) HAS DELET ED THE ADDITION BY OBSERVING THAT THE AO HAS NOT REFERRED TO ANY OF THE TRANSACTION WHICH HAS NOT BEEN INCORPORATED IN THE BOOKS OF ACCOUNT, THEREFORE, THE AO WAS NOT JUSTIFIED IN ESTIMATING SALES BY TAKING INTO CONSIDERATION SUCH TRANSACTION S. THE LD. CIT(A) HAS CATEGORICALLY OBSERVED THAT THE AO HAD B EEN MADE SPECIFIC QUERY IN THIS REGARD, BUT HE DID NOT MAKE ANY SUBMISSIONS. THE LD. CIT(A) FOUND THAT THE ASSESSEE HAS DISCLOSED SALES AT RS. 89.37 CRORES, WHICH HAS BEEN ESTIMATED BY THE ASSESSING OFFICER AT RS. 89.50 CRORES. AS PE R LD. CIT(A), SUCH AN ESTIMATE RATHER SHOWS THAT THE SALES DECLAR ED BY THE ASSESSEE WAS A RELIABLE FIGURE. IT WAS CATEGORICALL Y OBSERVED THAT THE AO HAS NOT BEEN ABLE TO POINT OUT ANY TRAN SACTION, WHICH HE FOUND TO BE NOT LYING RECORDED IN THE BOOK S OF ACCOUNT. THUS, THE ESTIMATION OF SALES BY THE ASSES SING OFFICER WAS HELD TO BE WITHOUT ANY BASIS. SIMILARLY, THE LD . CIT(A) -: 3: - 3 FOUND THAT NO BASIS HAS BEEN GIVEN BY THE ASSESSING OFFICER FOR APPLYING A PROFIT RATE OF 2 % AS NO REASON MUCH LES S A COGENT REASON HAS BEEN ASSIGNED BY THE ASSESSING OFFICER F OR APPLYING PROFIT RATE OF 2 %, WE DO NOT FIND ANY INFIRMITY I N THE ORDER OF THE CIT(A) FOR DELETING THE ADDITION BY ACCEPTING T HE PROFIT RATE DECLARED BY THE ASSESSEE. 4. IN THE RESULT, NO INTERFERENCE IS REQUIRED IN THIS PART OF THE ORDER OF THE CIT(A), WHEREIN ADDITION HAS BEEN DELETED ON MERITS. 5. DURING THE COURSE OF HEARING BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE BY TAKING RECOURSE OF RUL E 27 HAD PLEADED THAT NOTICE U/S 153A WAS ISSUED BY THE ASSE SSING OFFICER SAGAR ON 15.2.2005, WHEN HE HAD NO JURISDIC TION OVER THE CASE AND THIS WAS IN THE VERY KNOWLEDGE OF THE AO THAT THE ASSESSEE HAD ALREADY FILED RETURN AT KOLKATA ON 28. 11.2003, MUCH PRIOR TO THE DATE OF SEARCH, AT AN INCOME OF R S. 1,0- 3,08,259/-. HE FURTHER INVITED OUR ATTENTION TO THE ORDER DATED 27.2.2004, WHEREIN RETURNED INCOME WAS PROCESSED U/ S 143(1) BY ACIT, KOLKATA. THE LD. AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT THE RETURN WITH AO SAGAR WAS FILED A FTER THE -: 4: - 4 ISSUE OF NOTICE BY HIM, AT THE VERY SAME INCOME AT WHICH RETURN HAD ALREADY BEEN FILED WITH ACIT, CIRCLE 10, KOLKATA. AS PER THE LD. AUTHORIZED REPRESENTATIVE, NOTICE U/S 1 43A ISSUED ON 15.2.2005 AND THE RETURN FILED ON 5.1.2006, WERE AB INITIO VOID AND BAD IN LAW. HE VEHEMENTLY ARGUED THAT ANY NOTICE WITHOUT JURISDICTION IS UNLAWFUL AND NO COGNIZANCE OF IT CAN BE TAKEN AND ANY PROCEEDING FOLLOWING SUCH NOTICE IS B AD IN LAW. AS PER LD. AUTHORIZED REPRESENTATIVE, THE ORDER PAS SED U/S 153A READ WITH SECTION 143(3) IS ALSO UNJUSTIFIED A ND UNLAWFUL. 6. ON THE OTHER HAND, IT WAS CONTENDED BY THE LD. CIT DR THAT CIT(A) HAS ALREADY DECIDED THIS ISSUE AND H ELD THAT BECAUSE FOR THIS YEAR THE CASE HAD ALREADY BEEN TAK EN UNDER SCRUTINY BY THE ASSESSING OFFICER OF SAGAR BY ISSUI NG NOTICE U/S 143(2) WITHIN THE TIME AVAILABLE I.E. WITHIN 12 MONTHS FROM THE DATE OF FILING OF THE RETURN. IT WAS THUS A CONTINUATION OF THE PROCEEDINGS, WHICH HAD VALIDLY BEEN INITIATE D. THE ORDER SO PASSED, THUS, CANNOT BE HELD TO BE ILLEGAL. 7. IN REPLY TO THE LD. CIT DRS CONTENTION, IT WAS CONTENDED BY THE LD. AUTHORIZED REPRESENTATIVE THAT THE LD. -: 5: - 5 CIT(A) IS NOT JUSTIFIED TO HOLD THAT THE PROCEEDING S AT KOLKATA CONTINUED AT SAGAR. ONCE A SEARCH IS CONDUCTED, THE RE IS SPECIAL PROCEDURE TO MAKE ASSESSMENT. THE HEAD NOTE OF SECTION 153A READS AS UNDER :- ASSESSMENT IN CASE OF SEARCH OR REQUISITION. AND SUB-SECTION (1) IS NON OBSTANTE CLAUSE. AND SECOND PROVISO CLEARLY SAYS THAT THE NORMAL PROCEEDINGS SHALL ABATE. THEREFORE, THE FINDING OF LD. CIT(A) THAT PROCEEDINGS AT KOLKATA CONTINUED AT SAG AR IS ALSO NOT GOOD. THE PROCEEDINGS COULD NOT BE CONTINU ED AT SAGAR. ACCORDINGLY, HE PRAYED THAT THE ASSESSMENT SO FRAMED MAY KINDLY BE ANNULLED. 8. AS WE HAVE ALREADY DECIDED THE ISSUE ON MERIT, WIT H REFERENCE TO THE FINDINGS GIVEN BY THE LD. CIT(A), WHEREIN HE HAS DELETED THE ESTIMATED ADDITION MADE BY THE ASSE SSING OFFICER, WE DO NOT FIND ANY REASON TO GO IN THE TEC HNICAL ISSUE RAISED BY THE LD. AUTHORIZED REPRESENTATIVE WITH RE FERENCE TO -: 6: - 6 THE VALIDITY OF JURISDICTION ASSUMED BY THE ASSESSI NG OFFICER, SAGAR. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 31 ST MAY, 2011. SD/- SD/- ( R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31 ST MAY, 2011. CPU* 315