Asim Pal, Asansol V. ITO-Ward,2(3), Asansol, Asansol

ITA 819/KOL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5625 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 21-05-2012
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: U DASGUPTA
• Keywords: Assessment record
• Section: 143(3); 133(6); 145; 263

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 819/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2007-08 ASIM PAL VS. INCOME-TAX OFFICER, WD-2(3), ASA NSOL (PAN: AHQPP4898N) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 06.03.2014 DATE OF PRONOUNCEMENT: 18.03.2014 FOR THE APPELLANT: SHRI U. DASGUPTA, ADVOCATE FOR THE RESPONDENT: SHRI VARINDER MEHTA, CIT(DR) $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF REVISION ORDER OF CIT(A), ASANSOL IN M. NO. CIT/ASL/263/2011-12/10059-62 DATED 23.03.2012. ASS ESSMENT WAS FRAMED BY ITO, WARD- 2(3), ASANSOL U/S. 143(3) OF THE INCOME-TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007-08 VIDE HIS ORDER DATED 14.09. 2009. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE REVISION ORDER PASSED BY CIT U/S. 263 OF THE ACT FOR THE REASON THAT THE ASSESSEES P URCHASES ARE NOT VERIFIED. THE ASSESSEE HAS RAISED FOLLOWING GROUND NOS. 2, 3 AND 4: 2. FOR THAT ON THE FACTS OF THE CASE THE ASSUMPTIO N OF JURISIDCTION U/S. 263 OF THE ACT,1961, BY THE LD. CIT, IS NOT LEGALLY JUSTIFIED, BECAUSE THE ASSESSMENT ORDER HAS BEEN PASSED BY THE AO, AFTER NECESSARY ENQUIRY U/S. 133( 6), AND AS SUCH THE ORDER IS NOT PREJUDICIAL TO THE INTEREST OF REVENUE. 3. FOR THAT ON THE FACTS OF THE CASE THE ASSUMTION OF JURISDICTION U/S. 263 OF THE ACT 1961, BY THE LD. CIT, IS NOT LEGALLY JUSTIFIED, BECAUSE T HE AO HAS ESTIMATED THE PROFITS AT A CERTAIN PERCENTAGE ON GROSS RECEIPTS, (AFTER REJECT ION OF BOOKS OF ACCOUNT), AND AS SUCH THE ORDER IS NOT ERRONEOUS. 4. FOR THAT IN PROCEEDINGS U/S. 263 THE ORDER HAS BEEN PASSED BY THE LD. CIT, ASANSOL ON 23/03/2012, ON THE BASIS OF HEARING CONCLUDED BY TH E ITO, TECHNICAL, WHICH IS LEGALLY ERRONEOUS. 2 ITA NO.819/K/2012 ASIM PAL , AY:2007-08 3. BRIEFLY STATED FACTS ARE THAT THE ORIGINAL ASSES SMENT WAS COMPLETED BY THE AO U/S. 143(3) OF THE ACT VIDE HIS ORDER DATED 14.09.2009 W HEREIN HE NOTED CERTAIN DISCREPANCIES IN THE PURCHASES AND FINALLY REJECTED THE BOOK RESULTS U/S . 145 OF THE ACT BY OBSERVING AS UNDER: DURING THE COURSE OF HEARING THE A/R OF THE ASSESS EE WAS ASKED TO PRODUCE THE SALES REGISTER. IN RESPONSE TO THIS HE PRODUCED MONTHLY DETAILS OF SALES ON A COMPUTERIZED SHEET, WHEREAS THE ASSESSEE USED TO MAINTAIN HIS BOOKS OF ACCOUNTS IN MANUAL REGISTER FORM. WHEN HE WAS ASKED AGAIN AND AGAIN TO PRODUCE THE SA LES REGISTER, HE PRODUCED SOME SELF MADE SAMPLE VOUCHERS TO JUSTIFY HIS SALES. SINCE, HE FAILED TO SUBSTANTIATE HIS SALES, THE CORRECTNESS OF THE BOOKS CANNOT BE RELIED UPON. HE NCE, THE PROFIT ARRIVED UPON IS ALSO NOT ACCEPTABLE. HENCE, IN THE FACT AND CIRCUMSTANCES O F THE CASE THE BOOKS OF ACCOUNTS PRODUCED AS REJECTED AND PROFIT IS BEING ESTIMATED ON COMPARATIVE BASIS AS FOLLOWS. THE AO AFTER REJECTING BOOKS OF ACCOUNTS BY TAKING COMPARATIVE INSTANCES ESTIMATED THE GROSS PROFIT RATE AT 3.5%, WHICH IS MORE AT THE RATE OF 1 .33% THAN THE DECLARED GROSS PROFIT. SUBSEQUENTLY, CIT, ASANSOL ISSUED NOTICE U/S. 263 O F THE ACT DATED 08/10/2010 STATING THAT THE AO HAS NOT VERIFIED PURCHASES OF OCL (INDIA) LTD., SUNDRY CREDITORS PARTICULARLY ULTRATECH CEMENT AND DEPOSITS IN THE BANK ACCOUNT AND PASSED REVISION ORDER VIDE DATED 23.03.2012 DIRECTING THE AO TO CONDUCT ENQUIRY ON THE AFOREMEN TIONED ISSUE BY OBSERVING IN PARA 3 AND 4 AS UNDER: 3. I HAVE CAREFULLY GONE THROUGH THE SUBMISSION MA DE BY THE ASSESSEE AND ALSO THE ASSESSMENT RECORDS OF THE ASSESSEE FOR THE A.YR.: 2 007-08 - ON PERUSAL OF THE ASSESSMENT RECORDS IT IS FOUND THAT THE AO. HAS NOT MADE SUFFI CIENT ENQUIRY. IT HAS BEEN HOLD BY THE HONBLE ITAT, MUMBAI BENCH IN THE CASE OF COLOURCRA FT VS. ITO 303 ITR (AT) 7 (MUMBAI) (2008), THAT THAT LACK OF ENQUIRY WOULD EN DER THE ORDER OF ASSESSMENT ERRONEOUS AND PREJUDICAL TO THE INTERESTS OF THE RE VENUE. LACK OF ENQUIRY WOULD INCLUDE NOT ONLY A SITUATION WHERE NO ENQUIRY WAS MADE BUT ALSO A SITUATION WHERE AS PROPER ENQUIRY WAS MADE CONSIDERING THE FACT OF THE CASE. ON THE BASIS OF THE MATERIAL AVAILAHLE ON RECORD AND THE SUBMISSION MADE BY THE ASSESSEE I T CAN BE RIGHTLY CONCLUDED THAT THE A.O. DID NOT ENQUIRE INTO THE ISSUE AT ALL. 4. SINCE THE A.O AT THE TIME OF ASSESSMENT DID NOT EXAMINE THE CASE PROPERLY, THEREFORE, THE ORDER OF THE A.O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. HENCE, THE CASE NEEDS FURTHER INVESTIGATION AND SCRUTINY IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES MENTIONED ABOVE. I, THEREFORE, SET ASIDE THE CASE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT ENQUIRY SHOULD HE CONDUCTED AS P ER THE AFOREMENTIONED ISSUES AFTER ALLOWING SUFFICIENT OPPORTUNITIES OF BEING HEARD AN D THE ISSUES BE DECIDED AS PER LAW., AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. FIRST OF ALL, IT IS SEEN THAT AO HAS REJECTED THE B OOK RESULTS AND ALSO VERIFIED THE PURCHASES AFTER ISSUING NOTICE U/S. 133(6) OF THE ACT AS NOTED IN T HE ASSESSMENT ORDER. THE AO HAS APPLIED COMPARATIVE GROSS PROFIT RATE AT THE RATE OF 3.5% A FTER NOTICING THE COMPARABLES. THE ASSESSEE IS A DEALER IN CEMENT AND OTHER CONSTRUCTION MATERIAL AND ALSO SUPPLIES DIRECTLY AT SITE. THE 3 ITA NO.819/K/2012 ASIM PAL , AY:2007-08 ASSESSEES PURCHASES ARE ARE VERIFIED BY THE AO AF TER ISSUING NOTICES U/S. 133(6) OF THE ACT. NOW, THE CIT WANTS TO REVISE THE ASSESSMENT JUST FO R THE REASON THAT AO HAS NOT MADE SUFFICIENT ENQUIRIES QUA THE PURCHASES. THE AO, ACCORDING TO US, HAS GONE INTO DETAILS OF BOOKS OF ACCOUNT, WHICH WERE PRODUCED BEFORE HIM AND ALSO EX AMINED AND FOUND DISCREPANCIES ON THE BASIS OF WHICH HE REJECTED THE BOOK RESULTS. THE A O HAS ALSO APPLIED PROFIT RATE OF COMPETITIVENESS AFTER COMPARING FROM OTHER CONCERNS DEALING IN THE SAME PRODUCT. WE FIND NO INFIRMITY IN THE ASSESSMENT ORDER AND THE CIT HAS M ERELY DIRECTED TO EXAMINE THE CASE RECORD PROPERLY WHICH HAS NO BASIS FOR REVISION U/S. 263 O F THE ACT. ACCORDINGLY, WE QUASH THE REVISION ORDER PASSED U/S. 263 OF THE ACT AND APPEA L OF ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 18.03.2 014. SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18TH MARCH, 2014 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT- SHRI ASIM PAL, C/O TAPAS MAZUMDER & ASS OCIATES, CHARTERED ACCOUNTANTS, ROOM NO. S/A-5, 2 ND FLOOR, A BLOCK 74 (192), G.T. ROAD, P.C. CHATTERJEE MARKET, RAMBANDHUTALAW, ASANS OL 713303, W.B. 2 ./,- / RESPONDENT ITO, WARD- 2(2), ASANSOL. 3 . 0' ( )/ THE CIT(A), 4. 5. 0' / CIT ASANSOL <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .