Partha Sarathi Ghosh, Kolkata V. ACIT, Cir-52, Kolkata, Kolkata

ITA 903/KOL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70483 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2013
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 12-06-2012
• Court: TRIBUNAL
• Department Lawyers: DR SWETABH SUMAN
• Assessee Lawyers: T K CHAKRABORTY; S CHOUDHURY
• Section: 143(3); 263

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 903 /KOL/201 2 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 200 7 -0 8 PARTHA SARATHI GHOSH VS. ASSISTANT COMMISSIONE R OF INCOME-TAX, (PAN: ADVPG6305N) CIRCLE-52, KOLKATA (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 10.12.2013 DATE OF PRONOUNCEMENT: 19.12.2013 FOR THE APPELLANT: S/SHRI S. CHOUDHURY & T. K. CHAK RABORTY FOR THE RESPONDENT: DR. SWETABH SUMAN, CIT $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF REVISION ORDER PASSED U/S. 263 OF THE INCOME- TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) BY CIT-XVIII, KOLKATA IN MEMO NO. CIT- XVIII,KOL/11-12/263/2180-2182 DATED 21.12.2012. AS SESSMENT WAS FRAMED BY ACIT, CIRCLE- 52, KOLKATA U/S. 143(3) OF THE ACT FOR ASSESSMENT Y EAR 2007-08 VIDE HIS ORDER DATED 31.12.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE REVISION ORDER PASSED U/S. 263 OF THE ACT BY THE CIT-XVIII, KOLKATA. FOR THIS, ASSES SEE HAS RAISED FOLLOWING FOUR EFFECTIVE GROUNDS: 1. FOR THAT THE LD. CIT, KOLKATA-XVIII ERRED BOTH IN LAW AND IN FACT BY CANCELLING THE EARLIER ASSESSMENT ORDER PASSED BY THE LD. ASSESSIN G OFFICER. 2.FOR THAT THE ORDER U/S. 263 PASSED BY THE LD. CIT , KOLKATA-XVIII IS BAD IN LAW AS THE ASSESSMENT ORDER AS SUBSEQUENTLY MERGED WITH THE CI T(A)S ORDER VIDE ORDER PASSED BY THE CIT(A)-XXXIII, KOLKATA. 3. FOR THAT THE LD. CIT, KOLKATA-XVIII ERRED BOTH I N LAW AND IN FACT BY PASSING AN ORDER U/S. 263 WITHOUT GIVING PROPER OPPORTUNITY TO THE A PPELLANT. 4. FOR THAT THE ORIGINAL ORDER AS PASSED BY THE LD. ASSESSING OFFICER HAD ALL MATERIAL FACTS AVAILABLE WITH HIM AND THEREFORE, IT WAS NEIT HER PREJUDICIAL TO THE INTEREST OF REVENUE NOR THE ORDER WAS ERRONEOUS. HENCE, THE PR OVISION OF SECTION 263 IS NOT APPLICABLE IN THIS CASE. 2 ITA NO. 903/K/2012 SHRI PARTHA SARATHI GHOSH, AY:2007-08 3. BRIEFLY STATED FACTS ARE THAT THE ORIGINAL ASSES SMENT WAS FRAMED U/S. 143(3) OF THE ACT FOR THE RELEVANT ASSESSMENT YEAR 2007-08 RELEVANT T O PREVIOUS YEAR 2006-07 VIDE ORDER DATED 31.12.2009. SUBSEQUENTLY, THE AO MOVED A PROPOSAL FOR REVISION OF ASSESSMENT U/S. 263 OF THE ACT TO THE CIT AND IN THE PROPOSAL HE OBSERVED AS U NDER: 1. FROM THE BALANCE SHEET AS ON 31.03.2007 IT WAS FOUND THAT THE ASSESSEES LIABILITY TOWARDS PSG INFRASTRUCTURE PVT. LTD. STOOD AT RS.25 ,00,000/-. IT APPEARED THAT ASSESSMENT PROCEEDINGS WAS COMPLETED WITHOUT VERIFICATION OF T HE LOAN TRANSACTION WITH PSG INFRASTRUCTURE PVT. LTD. FURTHER THE ASSESSEE IS A DIRECTOR OF THE SAID COMPANY HOLDING MORE THAN 10% OF SHARE OF THE SAID COMPANY. THEREF ORE, THE TRANSACTION WITH THE COMPANY ATTRACTS THE PROVISION OF SEC. 2(22)(E). 2. THE ASSESSEE ENTERED INTO A LOAN TRANSACTION WIT H DAMODAR DEVELOPERS PVT. LTD. THIS LOAN TRANSACTION WAS NOT VERIFIED AT THE TIME OF AS SESSMENT PROCEEDINGS. BESIDES, THE FACT THAT THE ASSESSEE IS THE DIRECTOR OF THE SAID COMPA NY WAS ALSO NOT TAKEN INTO ACCOUNT AT THE TIME OF THE PROCEEDING. 4. THE CIT, KOLKATA-XVIII INITIATED PROCEEDINGS U/S . 263 OF THE ACT AND HEARING NOTICE WAS SERVED ON THE ASSESSEE. THE ASSESSEE MOVED A P ETITION SEEKING ADJOURNMENT AT THE FIRST INSTANCE ON 19.03.2012. ACCORDING TO CIT, THE PROC EEDINGS U/S. 263 OF THE ACT WERE GETTING BARRED ON 31.12.2012. HENCE, HE PASSED THIS REVISIO N ORDER. IN THE REVISION ORDER HE OBSERVED AS UNDER: THE ASSESSEE DID NOT TAKE ANY FURTHER INITIATIVE T O SUBSTANTIATE HIS CLAIMS IN COURSE OF PROCEEDINGS U/S. 263. ON VERIFICATION FROM ASSESSM ENT RECORD IT IS OBSERVED THAT POINTS NO. AND 2 RAISED IN THE PROPOSAL HAVE NOT BEEN VER IFIED AND EXAMINED THOROUGHLY AT THE TIME OF SCRUTINY ASSESSMENT. THE ORDER IS ERRONEOU S IN VIEW OF THE DECISIONS IN RAMPYARI DEVI V. CIT (1968) 67 ITR 84 (SC) AND TARA DEVI AGA RWAL V. CIT (1973) 88 ITR 323 (SC). THE A.O. FAILED TO MAKE NECESSARY ENQUIRY. THE ORDER IS ALSO PREJUDICIAL TO THE INTEREST OF REVENUE IN VIEW OF DECISIONS IN MALABAR INDUSTRIAL CO. LTD. 243 ITR 83 (SC). AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE FIRST OF ALL AGITATED THE REVISION ORDER STATING THAT THE ONLY ISSUE THAT THE AO HAS NOT VERIFIED AND EXAMINED THE BALANCE SH EET AND LOAN TRANSACTION OF PSG INFRASTRUCTURE PVT. LTD. AT RS. 25 LAC AND HENCE, T HE PROPOSAL WAS MADE. ACCORDING TO HIM, THE CIT HAS MENTIONED THAT HAVE NOT BEEN VERIFIED AND EXAMINED THOROUGHLY AT THE TIME OF SCRUTINY ASSESSMENT. ACCORDING TO HIM, THE AO HAS VERIFIED THE BALANCE SHEET AS IS EXPLICITLY CLEAR FROM THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT DATED 31.12.2009 THAT THE ASSESSEE APPEARED ALONG WITH BOOKS OF ACCOUNT AT LEAST 13 DA TES AND AO HAS ALSO OBSERVED WHILE MAKING ADDITION OF UNEXPLAINED MONEY U/S. 69A OF THE ACT A T RS.37,48,937/- AS UNDER: 3 ITA NO. 903/K/2012 SHRI PARTHA SARATHI GHOSH, AY:2007-08 THE ASSESSEE IN HIS DISCLOSED A/C. IN THE BALANCE SHEET I.E. UTI A/C. NO. 053082 HAS SHOWN A CLOSING BALANCE OF RS.2,17,212/- WHEREAS AS PER THE BANK STATEMENT THE CLOSING BALANCE IS RS.3966149.09. HENCE RS. (3966149-21721 2) RS.37,48,937/- IS THE UNDISCLOSED MONEY AT THE POSSESSION OF THE ASSESSE E. HENCE RS.37,48,937/- IS DEEMED TO BE THE INCOME OF THE ASSESSEE. 6. ACCORDING TO LD. COUNSEL, ONCE THE AO HAS VERIFI ED THE BOOKS OF ACCOUNT, BALANCE SHEET ETC. HE HAS ALSO NOTICED THE LOAN OF PSG INFRASTRUC TURE PVT. LTD. AND IT IS ALSO A FACT THAT THE AO WAS AWARE THAT ASSESSEE SHRI PARTHA SARATHI GHOSH I S DIRECTOR OF THIS COMPANY. ONCE THESE FACTS WERE BEFORE THE AO AT THE TIME OF ASSESSMENT AND THAT ALSO FRAMED U/S. 143(3) OF THE ACT I.E. SCRUTINY ASSESSMENT THERE WAS NO SCOPE FOR ANY FURTHER EXAMINATION. ACCORDING TO HIM, THE CIT HAS JUST WANTED TO CHANGE THE OPINION OF AO AND JUST FOR MAKING FISHING AND ROVING ENQUIRIES HE WANTS REVISION OF THE ASSESSMENT ORDER . ACCORDING TO HIM, HE HAS NO SUCH POWERS. LD. COUNSEL FOR THE ASSESSEE RELIED ON THE COORDINA TE BENCH DECISION IN THE CASE OF RAKSHIT TRANSPORT VS. CIT IN ITA NO.809/K/2012 FOR AY 2007- 08 DATED 22.05.2013, WHEREIN VIDE PARA 6 IT HAS BEEN HELD AS UNDER: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER DATED 29.12.2009 IN THE PRESENT CASE WHICH IS THE SUBJECT MATTER OF THE REVISION U/S. 263 OF THE I. T. ACT, 1961, IT IS NOTICED THAT THE AO H AD DONE A DETAILED EXAMINATION AND HAD APPLIED HIS MIND ON THE ISSUE OF THE DISALLOWANCE O F THE TRANSPORT CHARGES ON WHICH TDS WAS NOT ALLEGEDLY DEDUCTED. A PERUSAL OF THE ORDER SHEET NOTING RECORDED IN THE COURSE OF ASSESSMENT ALSO CLEARLY SUPPORTS THIS VIEW. FURTHE R, A PERUSAL OF THE ORDER PASSED U/S. 263 OF THE I. T. ACT, 1961 CLEARLY SHOWS THAT THE L D. CIT HAS DIRECTED THE RE-EXAMINATION AND RE-VERIFICATION OF AN ISSUE WHICH IS ALREADY BE ING VERIFIED AND ASSESSED BY THE AO. THE POWERS U/S. 263 OF THE I. T. ACT, 1961 CANNOT B E USED FOR DIRECTING A RE-VERIFICATION. ONCE AN OPINION HAS BEEN FORMED BY THE AO THE LD. C IT BY TAKING RECOURSE TO THE POWERS U/S. 263 OF THE I. T. ACT, 1961 CANNOT TAKE A STAND THAT THE EXAMINATION DONE BY THE AO WAS NOT ADEQUATE. ADEQUATE ENQUIRY IS A SUBJECTIVE ISSUE AND JUST BECAUSE THE LD. CIT FEELS THAT THE AO SHOULD HAVE DONE MORE ENQUIRIES D OES NOT MAKE IT A CASE FOR INVOKING THE POWERS U/S. 263 OF THE I. T. ACT, 1961. THIS VI EW OF OURS ALSO FINDS SUPPORT FROM THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N THE CASE OF ELITE SHOE COMPANY IN ITA NO.772/KOL/2011 DATED 22.05.2012 WHERE UNDER SI MILAR CIRCUMSTANCES THE REVISION ORDER PASSED U/S. 263 OF THE I. T. ACT, 1961 HAVE B EEN QUASHED. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT THE REVISION AS DIRECTED BY TH E LD. CIT BY INVOKING HIS POWERS U/S. 263 OF THE I. T. ACT, 1961 CANNOT BE SUSTAINED AND CONSEQUENTLY THE SAID ORDER STANDS QUASHED. 7. ON THE OTHER HAND, LD. CIT, DR SUPPORTED THE ORD ER OF CIT. 8. WE FIND FROM THE ABOVE FACTS AND CIRCUMSTANCES T HAT THE AO HAS DONE A DETAILED EXAMINATION OF BOOKS OF ACCOUNT AS WELL AS BALANCE SHEET AS NOTED IN THE ASSESSMENT ORDER. ACCORDING TO US, THERE IS NO FURTHER SCOPE FOR REVI SION AND THAT ALSO FOR THE PURPOSE OF VERIFICATION AND EXAMINATION AGAIN. THIS ISSUE IS C OVERED BY THE DECISION OF COORDINATE BENCH 4 ITA NO. 903/K/2012 SHRI PARTHA SARATHI GHOSH, AY:2007-08 IN THE CASE OF RAKSHIT TRANSPORT (SUPRA). IN SUCH CIRCUMSTANCES, WE ARE OF THE VIEW THAT THIS REVISION ORDER IS BAD IN LAW AND HENCE, QUASH. APP EAL OF ASSESSEE IS ALLOWED. 9. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 10. ORDER IS PRONOUNCED IN THE OPEN COURT ON 19 TH DEC., 2013. SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19TH DECEMBER, 2013 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT SHRI PARTHA SARATHI GHOSH, 84/3, NARESH MITRA SARANI (BELTALA ROAD), KOLKATA-700 026 2 ./,- / RESPONDENT ACIT, CIRCLE-52, KOLKATA. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .