Shashikala Gupta, Sec'bad, Hyderabad V. ITO, Ward-10(1), Hyderabad, Hyderabad

ITA 795/HYD/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4414 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 27-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G APARNA RAO
• Assessee Lawyers: LAXMINIWAS SHAR MA
• Keywords: Source of fund; Assessment record
• Section: 143(3); 142(1); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 795/HYD/2016 ASSESSMENT YEAR: 2009-10 SMT. SHASHIKALA GUPTA, SECUNDERABAD. PAN AASPG 1838 V VS. INCOME-TAX OFFICER, WARD 10(1), HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI LAXMI NIWAS SHARMA REVENUE BY : SMT. G. APARNA RAO DATE OF HEARING 18-11-2016 DATE OF PRONOUNCEMENT 30-11-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX - 6, HYDERAB AD, DATED 29/03/2016 FOR AY 2009-10. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL DECLARED TOTAL INCOME OF RS.3,73,997/- F OR THE ASSESSMENT YEAR 2009-10. HER SOURCES OF INCOME ARE MAINLY FROM THE RENT FROM SHOP AT SURYA TOWERS. THE CASE WAS TAKEN UP FOR SCR UTINY AND THE ASSESSMENT ORDER WAS PASSED U/S 143(3) BY MAKING AN ADDITION OF RS.78,05,000/- TO THE RETURNED INCOME ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS. 2.1 THE ASSESSEE FILED APPEAL BEFORE THE C1T(A), GA VE RELIEF EVEN WHILE HOLDING THAT THE ASSESSEE'S EXPLANATION THOUG H BEYOND ACCEPTABLE PROBABILITY, THE ASSESSING OFFICER HAD F AILED TO DISPROVE 2 ITA NO. 795/H/16 SHASHIKALA GUPTA THE CONTENTIONS/SUBMISSIONS OF THE ASSESSEE. AGAINS T SUCH RELIEF GIVEN BY THE CIT(A) THE DEPARTMENT PREFERRED FURTHE R APPEAL TO THE ITAT. THE ITAT SET ASIDE THE CASE FOR EXAMINATION B Y THE ASSESSING OFFICER HOLDING THAT NEITHER THE ASSESSING OFFICER NOR THE CIT(A) HAD LOOKED INTO THE ISSUE IN DEPTH. THE CASE WAS REMITT ED BACK TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION AFTER MAK ING NECESSARY ENQUIRIES. 2.2. IN ACCORDANCE WITH SUCH DIRECTIONS OF THE ITAT , THE ASSESSING OFFICER HAS REASSESSED ACCEPTING THE INCOME RETURNE D BY THE ASSESSEE. 3. ON PERUSAL OF ASSESSMENT RECORD, THE CIT OBSERVE D THAT NO THIRD PARTY ENQUIRIES WERE MADE TO ESTABLISH THE VE RACITY OF THE ASSESSEE'S CLAIMS. SINCE THE ASSESSING OFFICER NEIT HER CONDUCTED ANY ENQUIRIES UNDER THE ACT AS DIRECTED BY THE ITAT NOR APPLIED HIS MIND PROPERLY IN COMPLETION OF THE ASSESSMENT U/S 143(3) R.W.S. 254, THE ORDER PASSED IS CONSIDERED TO BE ERRONEOUS AND PREJ UDICIAL TO THE INTERESTS OF THE REVENUE. THEREFORE, NOTICE UNDER S ECTION 263 WAS ISSUED ASKING THE ASSESSEE TO SHOW CAUSE AS TO WHY THE ASSESSMENT WHICH WAS COMPLETED WITHOUT MAKING PROPER ENQUIRIES SHOULD NOT BE SET ASIDE. THE ASSESSEE'S AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAD ESTABLISHED THE IDENTITY OF THE CR EDITOR AND THE GENUINENESS AND CREDIT WORTHINESS OF THE PERSON. RE LIANCE WAS PLACED ON THE DECISION OF THE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. JAIN CONSTRUCTION COMPANY, WHERE THE COURT HEL D THAT WHEN ENQUIRY WAS IN FACT CONDUCTED BY THE AO, EVEN IF NO T FORMING PART OF THE ASSESSMENT ORDER, THE INVOCATION OF JURISDICTIO N BY THE CIT WAS NOT SUSTAINABLE. THE COURT HELD THAT THE PROVISIONS OF SECTION 263 CANNOT BE INVOKED FOR MAKING SHORT ENQUIRIES OR GET TING INTO THE PROCESS OF ASSESSMENT AGAIN AND AGAIN. 3 ITA NO. 795/H/16 SHASHIKALA GUPTA 3.1 THE CIT OBSERVED THAT ACCORDING TO THE SUBMISSI ONS MADE BY THE ASSESSEE, SHE RECEIVED AMOUNTS FROM HER HUSBAND , SHRI VIJAY KUMAR GUPTA. A TOTAL OF RS.38,00,000/- WAS RECEIVED BY WAY OF ACCOUNT PAYEE CHEQUES ON DIFFERENT DATES AND IMMEDI ATELY ON RECEIPT, THE AMOUNT WAS WITHDRAWN IN CASH. CASH DEPOSITS OF ALMOST THE SAME AMOUNT WERE SEEN TO BE MADE WITHIN A SHORT WHILE, F OLLOWED IMMEDIATELY USUALLY ON THE SAME DATE OR THE NEXT DA Y BY ADVANCES TO HER HUSBAND, SHRI VIJAY KUMAR GUPTA. THE ASSESSEE H AS EXPLAINED DEPOSITS TO THE EXTENT OF RS.38,00,000/-, AS AMOUNT S RECEIVED FROM HER HUSBAND THROUGH ACCOUNT PAYEE CHEQUES. THE BALA NCE OF DEPOSITS MADE IN CASH, ARE STATED TO BE OUT OF WITH DRAWALS OF THE AMOUNTS RECEIVED FROM HER HUSBAND. 3.2 THE CIT OBSERVED THAT IT IS REALLY STRANGE THA T THE ASSESSEE RECEIVES MONEY FROM HER HUSBAND FOR NO OSTENSIBLE R EASONS THE EXPLANATION REGARDING PURCHASE OF JEWELLERY SEEMS C LEARLY AN AFTERTHOUGHT AND THE REGULARITY WITH WHICH SUCH TRA NSACTIONS ARE REPEATED ALSO CAST GREAT DOUBT ON THAT CLAIM. AFTER THIS AMOUNT STATED TO BE RECEIVED FROM HER HUSBAND IS WITHDRAWN, THERE IS A CASH DEPOSIT OF THE SAME AMOUNT IMMEDIATELY FOLLOWED BY AN ADVAN CE STATED TO BE MADE TO HER HUSBAND. THIS TIME LAG BETWEEN THE RECE IPT OF MONEY FROM HER HUSBAND AND ADVANCING OF MONEY TO HER HUSB AND IS SEEN TO BE 27 TO 31 DAYS IN MOST CASES. HOWEVER, INTERESTIN GLY, WITH RESPECT TO ONE TRANSACTION, AN AMOUNT OF RS. 9,50,000/- IS STATED TO BE RECEIVED FROM HER HUSBAND ON 19/03/2009. THE SAME A MOUNT IS WITHDRAWN BY 'SELF ON THAT VERY DATE. IT IS RE-DEP OSITED IN CASH ON THE NEXT DATE, I.E., 20/03/2009, AND ADVANCE OF RS.9,50 ,000/- IS GIVEN TO SHRI VIJAY KUMAR GUPTA ON THE SAME DATE, I.E., 20/0 3/2009. IT IS INCREDIBLE THAT SHRI VIJAY KUMAR GUPTA ADVANCES RS . 9,50,000/- FOR NO APPARENT REASON TO THE ASSESSEE AND THE VERY NEX T DATE, AFTER THE ASSESSEE HAS WITHDRAWN AND RE-DEPOSITED THE AMOUNT IN CASH, IT IS AGAIN TAKEN BACK BY HER HUSBAND. 4 ITA NO. 795/H/16 SHASHIKALA GUPTA 3.3. THE CIT OBSERVED THAT THE ASSESSING OFFICER H AS NOT GONE INTO ANY DETAILS OF THE DEPOSITS MADE AND WITHDRAWALS FR OM THE BANK. IN SPITE OF THE ITAT SPECIFICALLY HOLDING THAT THE ISS UE WAS NOT LOOKED INTO AT DEPTH END THE CASE BEING REMITTED TO THE AS SESSING OFFICER FOR VERIFICATION, ALL THAT THE ASSESSING OFFICER HAS DO NE IS TO AGAIN CALL FOR INFORMATION FROM THE ASSESSEE AND THIS TIME ACCEPT THE ASSESSEE'S CONTENTIONS. THE ASSESSMENT WHICH WAS COMPLETED WIT HOUT MAKING ENQUIRIES IS ERRONEOUS AND PREJUDICIAL TO THE INTER ESTS OF REVENUE. THE CIT FOLLOWING THE HONBLE DELHI HIGH COURTS D ECISION IN THE CASE OF GEE VEE ENTERPRISES VS. ADDL CIT 99 ITR 375 (DEL) AND THE HONBLE SUPREME COURTS DECISION IN THE CASE OF MAL ABAR INDUSTRIAL CO. LTD. VS. CIT HELD AS FOLLOWS: 7. THE ASSESSMENT IS SET ASIDE. THE ASSESSING OFFIC ER IS DIRECTED TO MAKE ENQUIRIES WITH THE BANK, CALLING F OR AND EXAMINING DETAILS OF THE PERSONS WHO WITHDREW AMOUN TS FROM THE ASSESSEE'S ACCOUNT AND THE PERSON WHO MADE THE CASH DEPOSITS. THE RELATIONSHIP OF THIS PERSON TO THE ASSESSEE IS TO BE VERIFIED AND ESTABLISHED. THE ASSESSING OFFICER IS ALSO DIRE CTED TO LOOK INTO THE GENUINENESS OF THE ASSESSEE'S CLAIM THAT T HE AMOUNTS RECEIVED WERE FROM HER HUSBAND AND ESTABLISH THE GE NUINENESS OF THESE TRANSACTIONS. THE ASSESSMENT IS TO BE COMP LETED AFTER MAKING THESE ENQUIRIES AND IS SET ASIDE TO BE REDON E. 4. AGGRIEVED BY THE ORDER OF THE CIT, THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED PRINCIPLE COMMISSIONER OF INCOME TA X (PCIT) ERRED IN FACTS AND LAW WHILE PASSING ORDER UNDER SE CTION 263 OF THE INCOME TAX ACT, 1961. 2. THE LEARNED PCIT ERRED IN INVOKING JURISDICTION AL POWERS UNDER SECTION 263 WITHOUT SATISFYING THE TWIN CONDI TIONS WHICH MUST BE SATISFIED TO EXERCISE REVISION UNDER THE SE CTION NAMELY; (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS AND (II) IT IS PREJUDICIAL TO THE INTERES TS OF THE REVENUE. ASSESSING OFFICER HAS EXAMINED THE ISSUE TWICE HENC E PR.CIT CANNOT REVISE THE ASSESSMENT. 5 ITA NO. 795/H/16 SHASHIKALA GUPTA 5. BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE AO AFTER VERIFICATION OF ALL THE ISSUES AS DIRECTED BY THE HON'BLE ITAT, COMPLETED THE ASSESSMENT PROCEEDING BY ACCEPTING TH E INCOME RETURNED BY THE ASSESSEE AND PASSED ORDER U/S 143(3 ) R.W.S. 254 DATED 30-12-2013. HE SUBMITTED THAT PR.CIT ISSUED S HOW CAUSE NOTICE U/S 263 STATING THAT ASSESSING OFFICER NEITHER COND UCTED ANY ENQUIRIES UNDER THE ACT AS DIRECTED BY THE ITAT NOR APPLIED H IS MIND PROPERLY IN COMPLETION OF THE ASSESSMENT U/ S 143(3) R.W.S.254, IS NOT CORRECT, AS THE ASSESSING OFFICER HAS MADE A DETAILED EXAMINATI ON OF INFORMATION AND EXPLANATION SUBMITTED BY THE ASSESSEE AS FOLLOW S: DATE OF HEARING SUBJECT ENCLOSURES 19/07/2013 REPLY TO NOTICE U/S 142(1) ENCLOSURES: 1. COPY OF RETURN OF INCOME. 2. DETAILS OF MOVEABLE & IMMOVABLE PROPERTIES 3. COPY OF BANK ACCOUNT STATEMENT 4. ITAT ORDER SHASHIKALA GUPTA ITA NO. 1152/H/12. 07/08/2013 12/08/2013 SUBMISSIONS OF DETAILS ENCLOSURES: 1. RENTAL AGREEMENT BETWEEN SHASHIKALA GUPTA AND VIJAY TEXTILES LTD. 2. EXPLANATION FOR RECONCILING DEPOSITS AND WITHDRAWAL. 04/12/2013 SUBMISSION OF FURTHER EXPLANATION AND INFORMATION DETAILS OF VARIOUS DEPOSITS AND WITHDRAWALS AS REQUIRED BY AO 10/12/13 FURNISHING INFORMATION AND EXPLANATIONS DETAILS OF VARIOUS DEPOSITS AND WITHDRAWALS AS REQUIRED BY AO 28/12/2013 30/12/2013 FURNISHING INFORMATION AND EXPLANATIONS DETAILS OF VARIOUS DEPOSITS AND WITHDRAWALS AS REQUIRED BY AO 6 ITA NO. 795/H/16 SHASHIKALA GUPTA 5.1 REFERRING TO THE PROVISIONS OF SECTION 263, TH E AR SUBMITTED THAT SUCH POWERS ARE NOT ALLOWED TO BE INVOKED MER ELY BECAUSE THE REVISIONAL AUTHORITY IS OF DIFFERENT OPINION ON THE GIVEN SET OF FACTS OR ON THE GROUND THAT ASSESSING AUTHORITY DID NOT HOLD A SUFFICIENT ENQUIRY DURING THE COURSE OF ASSESSMENT PROCEEDINGS UNLESS THE AFORESAID TWIN CONDITIONS FOR INVOKING THE SAID JUR ISDICTION UNDER SECTION 263 ARE SATISFIED. RELIANCE IS PLACED ON TH E FOLLOWING CASE LAWS: 1. COMMISSIONER OF INCOME TAX-II, JODHPUR VS. MIS J AIN CONSTRUCTION CO. (ITA NO.60/2012) 257 ITR 336 ORDER DATED 24TH NOVEMBER 2012, RAJASTHAN HIGH COURT. 2. CIT VS GABRIEL INDIA LIMITED (1993) 203 ITR 108 BOMBAY HIGH COURT. 3. CIT VS ARVIND JEWELLERS (2003) 259 ITR 502 GUJAR AT HIGH COURT. 4. CIT VS MIS GANPAT RAM BISHNOI APPEAL NO. 43/1999 REPORTED IN 296 ITR 292 RAJASTHAN HIGH COURT. 5. SMT NIRMALA DEVI CHORDIA CUKE VS CIT ITA NO. 150 /JP/2015 DATED 29TH MAY 2015 - ITAT JAIPUR. 6. MALABAR INDUSTRIAL CO. LIMITED VS CIT, 243 ITR 8 3 (SUPREME COURT) 7. CIT VS MAX INDIA LIMITED 295 ITR 282 (SUPREME CO URT) 8. JEEWANRAM CHOUDHARY VS CIT 153 TTJ 195 RAJASTHAN HIGH COURT. 9. CIT VS SUN BEAM AUTO LIMITED (2011) 332 ITR 167 DELHI HIGH COURT. 10. DIPTI BHARGAVA VS CIT ITA NO. 446/JP/2013 DATED 30TH SEPTEMBER 2015 (ITAT JAIPUR). 6. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF CIT AND CONFIRMED THE VARIOUS DETAILS FILED BEFORE THE AO A RE PART OF THE ASSESSMENT RECORDS. 7 ITA NO. 795/H/16 SHASHIKALA GUPTA 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD AS WELL AS THE DECISIONS CITED BY THE LD. AR. THE AO HAS COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 254 AFTE R OBTAINING THE RELEVANT INFORMATION AS PER THE DIRECTIONS OF THE I TAT BUT CHOSE NOT TO DISCUSS IN THE ASSESSMENT ORDER. CONSIDERING THE IN FORMATION FILED BEFORE AO, IT CAN BE PERCEIVED THAT AO HAD ALREADY APPLIED HIS MIND BEFORE COMPLETING THE ASSESSMENT. NOW, THE LD. CIT CANNOT REVISIT THE ASSESSMENT ORDER ON THE SAME POINT. IN OUR CONSIDER ED VIEW, AO HAD ALREADY REVIEWED/EXAMINED THE INFORMATION AND APPLI ED HIS MIND. HENCE, THE INVOCATION OF JURISDICTION BY CIT U/S 26 3 IS NOT PROPER AND NOT PROPER TO INVOKE PROCEEDINGS U/S 263 TO MAKE FU RTHER ENQUIRIES ON THE SAME ISSUE. HENCE, THE ORDER U/S 263 IS QUASHED . 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 30 TH NOVEMBER, 2016 KV COPY TO:- 1) SMT. SHASHIKALA GUPTA, 104, SURYA TOWERS, SP ROA D, SECBAD. 2) ITO, WARD 10(1), HYD. 3) PR. CIT - 6, HYDERABAD 4 ADDL. CIT, RANGE 10, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE 8 ITA NO. 795/H/16 SHASHIKALA GUPTA S.NO. DESCRIPTION DATE INTLS DS1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./ P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER