The DCIT-Circle-2, Surat V. Shri Ankit C.Maheshwari, Surat

ITA 742/AHD/2013

• Counselvise Citation: 74220514 RSA 2013
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-09-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 13-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JANGID
• Assessee Lawyers: RASESH SHAH
• Keywords: Assessment record
• Section: 147

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , , , . .. . . .. . !'# !'# !'# !'#, , , , $ % $ % $ % $ % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ./ I.T.A.NO.742/AHD/2013 ( ' ( )( ' ( )( ' ( )( ' ( )( / / / / ASSESSMENT YEAR : 2005-06) DY.CIT CIRCLE-2 SURAT 395 001 ' ' ' ' / VS. SHRI ANKIT C.MAHESHWARI PROP.OF KOTHARI IMPEX 202-D INDOWORLD COMMERCIAL COMPLEX SURAT 395 002 * $ ./+, ./ PAN/GIR NO. : AFGPM 0328 G ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) AND CO NO.116/AHD/2013 A.Y. 2005-06 (IN ITA NO.742/AHD/2013) SHRI ANKIT C.MAHESHWARI VS. DY.CIT SURAT SURAT-39 5 001 (CROSS OBJECTOR) .. (RESPO NDENT) REVENUE BY : SHRI J.P. JANGID, SR.D.R. ASSESSEE BY : SHRI RASESH SHAH '0 1 2$ / / / / DATE OF HEARING : 12/09/2013 3!) 1 2$ / DATE OF PRONOUNCEMENT : 16/09/2013 4 / O R D E R PER SHRI A.K.GARODIA ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE, AND THE CR OSS OBJECTION IS FILED BY THE ASSESSEE. THESE ARE DIRECTED AGAINST THE ORDER OF LD.CIT(A)-I SURAT DATED 24.12.2012 FOR ASST.YEAR 2005-06. GROU NDS RAISED BY THE ITA NO.742/AHD/2013 (BY REVENUE) AND CO NO.116/AHD/2013 (BY ASSESSEE) DY. CIT VS. SHRI ANKIT C.MAHESHWARI ASST.YEAR 2005-06 - 2 - REVENUE IN ITS APPEAL AND GROUNDS RAISED BY THE ASS ESSEE IN THE CROSS OBJECTION ARE AS UNDER:- GROUNDS RAISED BY THE REVENUE [1] ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND LAW, THE LD.CIT(A)-I, SURAT HAS ERRED IN ANNULLING THE REASS ESSMENT PROCEEDINGS AND DELETING THE ADDITION OF RS.7,96,00 0/- MADE ON ACCOUNT OF DISALLOWANCE OF PROPORTIONATE INTERES T WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO P ROVE THAT THERE WAS NO NEXUS BETWEEN INTEREST BEARING FUNDS A ND INTEREST FREE LOANS AND ADVANCES GIVEN TO PARTIES A S WELL AS INVESTMENT MADE ON SUCH FUNDS. [2] ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND I N LAW, THE LD.CIT(A)-I, SURAT HAS ERRED IN ANNULLING THE REASS ESSMENT PROCEEDINGS AND DELETING THE ADDITION OF RS.642444/ - U/S.40(A)(IA) OF THE ACT IN SPITE OF THE ASSESSEES FAILURE TO DEDUCT TDS ON RENT PAID IN VIOLATION OF PROVISIONS OF SECTION 1941. [3] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASS ESSING OFFICER. GROUNDS RAISED BY THE ASSESSEE IN CROSS OBJECTION: 1. THE LD.CIT(A) HAS NOT DEALT WITH THE MERITS OF THE GROUND OF ADDITION OF DISALLOWANCE OF PROPORTIONATE INTERE ST OF RS.7,96,000/-. 2. THE LD.CIT(A) HAS NOT DEALT WITH THE MERITS OF THE GROUND OF ADDITION U/S.40(A)(IA) OF THE ACT OF RS.6,42,444/-. 3. IT IS THEREFORE PRAYED THAT IF THE VALIDITY OF R E-ASSESSMENT IS CONFIRMED BY THE HONOURABLE TRIBUNAL IN APPEAL FILE D BY REVENUE, THE CIT(A) MAY PLEASE BE DIRECTED TO DECID E THE ABOVE UNADJUDICATED GROUNDS. ITA NO.742/AHD/2013 (BY REVENUE) AND CO NO.116/AHD/2013 (BY ASSESSEE) DY. CIT VS. SHRI ANKIT C.MAHESHWARI ASST.YEAR 2005-06 - 3 - 2. FIRST, WE TAKE UP THE APPEAL FILED BY THE REVENU E, I.E.ITA NO.742/AHD/2013. 2.1. APROPOS TO GROUND NO.1 OF REVENUES APPEAL, TH E LD.DR OF THE REVENUE SUPPORTED THE ORDER OF THE ASSESSMENT ORDER , WHEREAS THE LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A ). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE ASSESSMENT WAS ANNULLED BY THE LD.CIT(A) ON THIS BA SIS THAT AS PER THE REASONS RECORDED BY THE ASSESSING OFFICER FOR RE-O PENING THE ASSESSMENT U/S.148 OF THE IT ACT, 1961, THIS IS NOT THE ALLEGA TION OF THE AO THAT THERE IS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE MATERIAL FACTS TRULY AND CORRECTLY. HE HAS ALSO NOTED THAT IN THE PRESENT C ASE, THE ORIGINAL ASSESSMENT WAS COMPLETED BY THE AO U/S.143(3) OF TH E ACT AND THE RE- OPENING IS AFTER FOUR YEARS FROM THE END OF THE REL EVANT ASSESSMENT YEAR. AS PER THE ASSESSMENT ORDER, WE ALSO FIND THAT IT IS NOTED BY THE AO IN THE ASSESSMENT ORDER THAT THE ORIGINAL ASSESSMENT W AS COMPLETED U/S.143(3) OF THE ACT ON 26/12/2007 AND HE HAS ALSO NOTED THAT NOTICE U/S.148 OF THE ACT WAS ISSUED TO THE ASSESSEE AND S ERVED UPON HIM ON 23.03.2011. THE ASSESSMENT YEAR INVOLVED IS AY 20 05-06 AND, HENCE, THE RE-OPENING OF THE ASSESSMENT ISAFTER FOUR YEARS AND THEREFORE, THE 1 ST PROVISO TO SECTION 147 OF THE ACT IS APPLICABLE. B Y THIS PROVISO, THE RE- OPENING IS POSSIBLE ONLY IF INCOME HAS ESCAPED ASSE SSMENT BECAUSE OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY TRULY ALL MATERIAL FACTS. THE ASSESSEE HAD SUBMITTED A PAPER-BOOK CONTAINING 79 PAGES BUT SINCE THE SAME WAS SUBMITTED LATE ONLY ON 10.09.2013 AND THE HEARING WAS ITA NO.742/AHD/2013 (BY REVENUE) AND CO NO.116/AHD/2013 (BY ASSESSEE) DY. CIT VS. SHRI ANKIT C.MAHESHWARI ASST.YEAR 2005-06 - 4 - FIXED ON 12/09/2013, WE DO NOT CONSIDER ANY OTHER D OCUMENT IN THE PAPER-BOOK EXCEPT THE REASONS FOR RE-OPENING OF THE ASSESSMENT AVAILABLE ON PAGE NOS.8 & 9 OF THE PAPER-BOOK BECAUSE THE SAM E ARE AVAILABLE IN ASSESSMENT RECORDS ALSO. AS PER THE REASONS RECORD ED BY THE AO FOR RE- OPENING OF THE ASSESSMENT, IT IS SEEN THAT IT IS NO TED BY THE AO IN THE REASONS THAT THE REASONS ARE ON THE BASIS OF PERUSA L OF THE ASSESSMENT RECORDS AND THERE IS NO ALLEGATION THAT THERE WAS N AY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERI AL FACTS NECESSARY FOR THE ASSESSMENT. IN THE PRESENT CASE, IT IS ESTABLISHED THAT THE REQUIREMENT OF FIRST PROVISO TO SECTION 147 ARE NOT BEING COMPLIED WITH AND THEREFORE, THE RE-OPENING AFTER FOUR YEARS IS NOT VALID. THEREFOR E, WE UPHOLD THE FINDING OF THE LD.CIT(A) REGARDING ANNULMENT OF THE ASSESSM ENT. 4. SINCE, THE ASSESSMENT ITSELF IS ANNULLED BY THE LD.CIT(A) AND HIS ORDER ON THIS ASPECT HAS BEEN UPHELD BY US IN ABOVE PARAGRAPH, OTHER GROUNDS RAISED BY REVENUE IN ITS APPEAL AND THE GRO UNDS RAISED BY THE ASSESSEE IN ITS CROSS OBJECTION DO NOT CALL FOR ANY ADJUDICATION. 5. IN THE RESULT, APPEAL OF THE REVENUE AND CROSS O BJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED ON THE DATE MENTIONED ON CAPTION PAGE SD/- SD/- ( ) ( .. !'# ) $ ( MUKUL KR. SHRAWAT ) ( A. K. GARODIA ) JUDICIAL MEMBER A CCOUNTANT MEMBER AHMEDABAD; DATED 16/ 09 /2013 52..', .'../ T.C. NAIR, SR. PS ITA NO.742/AHD/2013 (BY REVENUE) AND CO NO.116/AHD/2013 (BY ASSESSEE) DY. CIT VS. SHRI ANKIT C.MAHESHWARI ASST.YEAR 2005-06 - 5 - 4 1 .6 76) 4 1 .6 76) 4 1 .6 76) 4 1 .6 76)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. 8 / CONCERNED CIT 4. 8() / THE CIT(A)-II, SURAT 5. 6; .' , , / DR, ITAT, AHMEDABAD 6. #( <0 / GUARD FILE. 4 4 4 4' ' ' ' / BY ORDER, /6 . //TRUE COPY// = == =/ // / + + + + ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION 16S.9.13 (DICTATION-PAD 7 PAGES ATTACHED WITH TH E FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16.9.13 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.17.9.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 17.9.13 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER