ITO, Jamshedpur V. M/s S.P Associates, Jamshedpur

ITA 80/RAN/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9619 (ITAT-RANCHI)
• Duration Of Justice: 3 year(s) 25 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 10-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL
• Assessee Lawyers: S K PODDAR
• Keywords: Set aside
• Section: 142(1)

Judgement Text

1 ITA NO. 80 /RAN/ 201 6 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S.SAINI , ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 80 /RAN/201 6 A .Y. : 20 05 - 20 06 ITO, WARD - 3(1), 47,C.H.AREA, JAMSHDPUR V S M/S S.P. ASSOCIATES, 39,MILLS & GODOWN AREA BURMA MINES, SAKSCHI, JAMSHEDPUR - 831006 P AN NO. : AAYFS 5544 F (APPELLANT ) . RESPONDENT REVENUE BY :SHRI P.K.MONDAL, JCIT ASSESSEE BY : SHRI S.K.PODDAR & DEVESH PODDAR , ADV. DATE OF HEARING : 2 3 . 05 .201 8 DATE OF PRONOUNCEMENT : 25.05 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT ( A ) , JAMSHEDPUR , DATED 18.12.2015 , FOR THE ASSESSMENT YEAR 2005 - 06 , WHEREIN THE REVENUE HAS RAI SED THE FOLLOWING GROUNDS OF APPEAL : - (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), JAMSHEDPMUR, IS NOT JUSTIFIED IN APPRECIATING THE JUDGMENT OF HONBLE HIGH COURT OF JHARKHAND, DIRECTING THE ASSESSING OFFICER TO EXAMINE THE FUL L FACTS OF THE CASE WHILE MAKING FRESH ASSESSMENT. THE HONBLE HIGH COURT OF JHARKHAND HAD NOT RESTRICTED THE ASSESSING OFFICER WHILE MAKING ASSESSMENT AFRESH. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 31.10.2005 DECL ARING TOTAL INCOME AT RS.1,99,642/ - .THE CASE WAS SELECTED FOR SCRUTINY AS PER BOARDS GUIDELINES. SUBSEQUENTLY NOTICES 2 ITA NO. 80 /RAN/ 201 6 U/S.143(2) & 142(1) OF THE ACT WERE ISSUED TO THE ASSESSEE. THE RETURN WAS ACCOMPANIED BY TAX AUDIT REPORT IN FORM 3CB AND 3CD ALONG WITH AUDITED PROFIT AND LOSS ACCOUNT AND BALANCE SHEET. THEREAFTER THE AO COMPLETED THE ASSESSMENT MAKING CERTAIN ADDITIONS, AGAINST WHICH THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND THE CIT(A) DELETED SOME OF THE ADDITIONS. AGAINST THE DELETION OF ADDITIO NS BY THE CIT(A), THE REVENUE PREFERRED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL SUSTAINED THE ENTIRE ADDITIONS MADE BY THE AO. THEREAFTER THE ASSESSEE APPEALED BEFORE THE HONBLE HIGH COURT AND THE HONBLE HIGH COURT SET ASIDE THE ORDER PASSED BY THE I TAT AND MATTER WAS REMANDED TO THE FILE OF AO FOR FRESH ADJUDICATION. IN THE FRESH ASSESSMENT THE AO MADE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME, COMMISSION, CAPITAL INTRODUCED BY THE PARTNERS U/S.68 &69 OF THE ACT AND ASSESSEE THE TOTAL INCOME AT RS.1, 31,49,490/ - AND PASSED ORDER U/S. 143(3)/250/260/143(3) OF THE ACT, DATED 28.03.2014. 3 . AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS LD. AR OF THE ASSESSEE ARGUED THE GROUNDS AND REITERA TED THE SUBMISSIONS AND LD.CIT(A) HAVING CONSIDERED THE FINDINGS AND THE SUBMISSIONS OF THE ASSESSEE DEALT ON THE DISPUTED ISSUE AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 5 . BEFORE US, LD.DR SUPPORTED THE ORDER OF CIT(A) AND THE DIRECTIONS OF HONBLE HIGH COURT. 3 ITA NO. 80 /RAN/ 201 6 6. CONTRA, LD. AR OF THE ASSESSEE RELIED ON THE ORDER OF HIGH COURT AND THE DIRECTIONS AND ALSO FILED AN UNDERTAKING IN RESPECT OF WITHDRAWAL OF PARTNER S APPEAL S B EFORE THE CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE DISPUTED ISSUE RAISED BY THE DEPARTMENT THAT THE CIT(A) SHOULD NOT HAVE DELETED THE ADDITION AND ALSO THE DIRECTIONS OF HONBLE JHARKHAND HIGH COURT HAS NOT BEEN CONSIDERED. ON THE QUERY FROM THE BENCH AS TO WHAT IS THE POSITION OF THE PARTNERS AGAINST WHOM THIS ADDITION HAS BEEN MADE, LD.AR SUBMITTED THAT THE APPEALS ARE PENDING BEFORE THE CIT(A) AND WE ARE OF THE OPINION THAT THE DOUBLE ADDITION IN RESPECT OF C APITAL CANNOT BE TAXED IN THE HANDS OF THE FIRM AND ALSO WITH THE PARTNERS. WE ALSO CONSIDERED THE DIRECTIONS OF HONBLE HIGH COURT DATED 27 TH JULY, 2012 IN TAX APPEAL NO.36 OF 2010, WHICH READS AS UNDER : - HEARD LEARNED COUNSEL FOR THE PARTIES. THE FO LLOWING QUESTIONS OF JAW ARE INVOLVED IN THIS APPEAL: 1 . 'WHETHER THE REVENUE COULD HAVE TAX THE SAME AMOUNT IN THE HANDS OF THE FIRM AS WELL AS IN THE HANDS OF THE PARTNERS. 2 . WHETHER THE TRIBUNAL HAS COMMITTED ERROR OF LAW IN ALLOWING THE APPEAL OF THE REVE NUE WITH RESPECT TO DELETION OR ADDITION OF RS.23,74,842/ - WHICH WAS ADDED IN THE INCOME OF THE ASSESSES IN V IEW OF THE REPORT SUBMITTED BY THE ASSESSING OFFICER UPON REQUISITIONING BY THE INCOME TAX APPELLATE. TRIBUNAL WHEN ACCORDING TO THE REVENUE, THE A SSESSING OFFICER DID NOT COMPLY W ITH THE DIRECTION OF THE C.I.T. (APPEALS) AND DID NOT SUBMIT THE REPORT OF THE ENQUIRY IN TERMS OF THE LETTER DATED 02.04.2009. SO FAR AS FIRST ISSUE IS CONCERNED, LEARNED COUNSEL FOR THE APPELLANT SUBMITTED THAT THE SAME INCOME HAS NOW BEEN ASSESSED IN THE HANDS OF THE PARTNERS OF THE FIRM WHO ARE SHRI JAWAHAR LAI VIG, SHRI HARISH KUMAR VIG AND SHRI OM PRAKASH JAGGI AND AT THE SAME TIME BY THE IMPUGNED ORDER, THE SAME AMOUNT WHICH HAS BEEN ASSESSED 4 ITA NO. 80 /RAN/ 201 6 IN THE HANDS OF THE ASSE SSES FIRM. LEARNED COUNSELLOR THE APPELLANT HAS PLACED ON RECORD THE COPIES OF THE ORDERS PASSED IN THE ASSESSMENT CASES OF THE PARTNERS. IN VIEW OF THE ABOVE REASONS THE LEGAL QUESTION ARISES THAT, WHETHER THE AMOUNT CAN BE TAXED IN TWO DIFFERENT HANDS, THEREFORE, THE APPEALS SUCCEED ON THIS POINT AND THE MATTER IS REQUIRED TO BE REMANDE D TO THE ASSESSING OFFICER FOR FINDING OUT ABOUT THE FACT OF THE ASSESSMENT OF PARTNERS AS THE APPELLANT HAS PLACED ON THE RECORD ONLY ASSESSMENT ORDER MADE BY THE ASSESSI NG OFFICER AND WHETHER THAT ORDER ATTAINED THE FINALITY OR NOT IS NOT KNOWN, THEREFORE, THE ISSUE NO. 1 IS DECIDED ACCORDINGLY AND THE ORDER IN RELATION TO THE ALLOWING THE APPEAL OF THE REVENUE FOR TAXING THE AMOUNT IN QUESTION IN THE HANDS OF THE FIRM IS SET ASIDE AND THE MATTER IS REMANDED TO THE ASSESSING OFFICER. LD. AR GAVE AN UNDERTAKING THAT HE WILL WITHDRAW THE APPEALS FILED BEFORE THE CIT(A) AND ALSO FILE PROOF BEFORE THE TRIBUNAL. ACCORDINGLY, CONSIDERING ALL THE ASPECTS AND THE UNDERTAKING MADE BY THE LD. AR OF THE ASSESSEE AT BAR, WE ARE OF THE OPINION THAT THE CIT(A) HAS PASSED A REASONED ORDER CONSIDERING THE SUBMISSIONS AND JUDICIAL DECISIONS. THUS, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE GROUND OF APPEAL OF THE REVENUE . 8 . I N THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 / 05 /201 8 SD/ - SD/ - ( N.S.SAINI ) ( PAVAN KUMAR GADALE ) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED 25 / 05 /201 8 PRAKASH KUMAR MISHRA , SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COPY// SR.PS, ITAT, RANCHI 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.