Shri Sharadchandra P. Amin, Anand V. The Income Tax Officer, Ward-2, Anand

ITA 972/AHD/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6336 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-09-2019
• Assessment Year: 2004-2005
• Appeal Filed On: 07-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P B PARMAR
• Keywords: Reopening of assessment; Reason to believe
• Section: 147; 148; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 972/AHD/2014 / ASSESSMENT YEAR: 2004-05 SHARADCHANDRA P. AMIN, 10, VAISHNAV TOWNSHIP, LAMVEL ROAD, VALLABH VIDYANAGAR, ANAND-388315 PAN : ABUPA 1574 G VS. THE INCOME TAX OFFICER, WARD-2, ANAND / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P.B. PARMAR, AR REVENUE BY : SHRI MUDIT NAGPAL, SR DR / DATE OF HEARING : 25/09/2019 / DATE OF PRONOUNCEMENT: 15/10/2019 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAI NST THE ORDER OF LEARNED CIT(A)-IV, BARODA DATED 24 TH JANUARY 2014 PASSED FOR ASSESSMENT YEAR 2004-05. THE GROUNDS OF APPEAL TAKEN BY THE AS SESSEE ARE NOT IN CONSONANCE WITH RULE 8 OF INCOME TAX (APPELLATE TRI BUNAL) RULES, 1963; THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. 2. IN BRIEF, IN THE FIRST FOLD OF GRIEVANCE, ASSESS EE HAS PLEADED THAT THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE REOPENING OF ASSESSMENT. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS FILED HIS RETURN OF INCOME ON 29 TH MARCH 2006 DECLARING TOTAL INCOME OF RS.2,29,890/-. AN ASSESSMENT ORDER WAS PASSED UNDER SECTION 144 OF THE INCOME-TAX ACT ON 26.12.2007 WHEREBY THE TAXABLE INCOME OF THE ASSESSEE WAS DETERMINED A T RS.49,84,760/-. THE ITA NO. 972/AHD/2014 SHARADCHANDRA P. AMIN VS. ITO FOR AY: 2004-05 2 LEARNED ASSESSING OFFICER HAS REOPENED THE ASSESSME NT AFTER RECORDING REASONS. A NOTICE UNDER SECTION 148 OF THE INCOME- TAX ACT WAS ISSUED ON 11.03.2011. THE REASONS RECORDED BY THE ASSESSING OFFICER READ AS UNDER:- IN THIS CASE, DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS RECEIVED GOODWILL OF RS.17,00,000/- AND AN AMOUNT OF RS. 26,23,823/- ON ACCOUNT OF SALE OF PROPERTY FROM M/S. HI-SPEED TURBO DRIVE PVT LTD WHICH ATTRACTS PROVISION OF LONG TERM CAPITAL GAIN U/S.45 OF THE ACT. FURTHER, THE UNSECURED LOANS OF RS.1,49,815/- HAS BEEN CREDIT ED IN THE CAPITAL ACCOUNT AND LOANS ACCOUNT DEBITED BY JOURNAL ENTRIES. THI S PROVES THAT THE UNSECURED LOANS WERE PAID BY THE ASSESSEE. HENCE THE PAYMENTS OF UNSECURED LOANS HAVE BEEN MADE OUT OF THE BOOKS OF ACCOUNT. THEREFORE, THE AMOUNT OF RS.1,49,815/- IS REQUIRED TO BE TREATED A S CASH CREDIT U/S.68 OF THE ACT. IN VIEW OF THE ABOVE FACT, I HAVE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX TO THE EXTENT OF RS.44,73,638/- HAS ESCAPED THE ASSESSMENT WITHIN THE MEANING OF SEC. 147 OF THE I.T. ACT AND THEREFORE T HIS IS A FIT CASE FOR ISSUE OF NOTICE U/S. 148. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT THE AMOUNTS SOUGHT TO BE ADDED BY WAY OF THE ABOVE REASONS WERE ALREADY ADDED TO THE TOTAL INCOME OF THE ASSESSEE WHEN AN A SSESSMENT ORDER WAS PASSED UNDER SECTION 144 OF THE INCOME-TAX ACT ON 2 6.12.2007. COPY OF THAT ASSESSMENT ORDER HAS BEEN PLACED ON RECORD AT PAGE NOS. 12-16 OF THE PAPER- BOOK. HE TOOK US THROUGH BOTH THE ISSUES WHICH ARE SOUGHT TO BE EXAMINED BY THE ASSESSING OFFICER BY WAY OF ABOVE REASONS. HE SUBMITTED THAT NOTICE UNDER SECTION 148 WAS ISSUED AFTER EXPIRY OF FOUR Y EARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND, THEREFORE, ACCORDING TO PROVISO APPENDED TO SECTION 147, NO NOTICE UNDER SECTION 148 COULD BE I SSUED UNLESS IT IS ESTABLISHED THAT INCOME CHARGEABLE TO TAX HAS ESCAP ED ON ACCOUNT OF FAILURE OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULL Y AND TRULY. NO SUCH ITA NO. 972/AHD/2014 SHARADCHANDRA P. AMIN VS. ITO FOR AY: 2004-05 3 ALLEGATION HAS BEEN LEVELED BY THE ASSESSING OFFICE R IN THE ABOVE REASONS. THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT S IMPLY FOR THE REASON THAT ORIGINAL ASSESSMENT ORDER WAS QUASHED BY THE C IT(A) ON THE GROUND THAT IT WAS PASSED AFTER EXPIRY OF STATUTORY TIME L IMIT. HE, THEREFORE, PRAYED THAT REOPENING BE HELD AS NULL AND VOID. ON THE O THER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. A PERUSAL OF THE REASONS WOULD I NDICATE THAT THE ASSESSING OFFICER SOUGHT TO VERIFY WHETHER THE LONG TERM CAPI TAL GAIN ON ACCOUNT OF SALE OF PROPERTY, CASH CREDIT AND GOODWILL RECEIVED BY THE ASSESSEE DESERVES TO BE ADDED OR NOT. A PERUSAL OF THE COMPUTATION O F INCOME MADE BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT ORDER WOULD REVEAL THAT ALL THESE ISSUES HAVE BEEN CONSIDERED BY THE ASSESSING OFFICER. IT IS ALSO NOT DISPUTED THAT NOTICE UNDER SECTION 148 OF THE INCOM E-TAX ACT WAS ISSUED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE ASSE SSMENT YEAR, I.E. AY 2004- 05. THE INTERDICTION PROVIDED IN THE PROVISO APPEND ED TO SECTION 147 PUTS AN EMBARGO UPON THE POWERS OF THE ASSESSING OFFICER TO REOPEN AN ASSESSMENT ORDER WHERE ORIGINAL ASSESSMENT ORDER WA S PASSED UNDER SECTION 143(3)/144 OF THE ACT AND FOUR YEARS HAVE E XPIRED. THE ASSESSING OFFICER CANNOT REOPEN SUCH ASSESSMENT ORDER UNLESS IT IS ESTABLISHED THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ON ACCOUNT OF FAILURE OF THE ASSESSEE TO DISCLOSE THE MATERIAL FACTS FULLY AND TRULY. A PER USAL OF THE REASONS WOULD INDICATE THAT NO SUCH ALLEGATION HAS BEEN LEVELED B Y THE ASSESSING OFFICER. THE ORIGINAL ASSESSMENT ORDER WAS PASSED UNDER SECT ION 144 OF THE ACT WHICH IS SCRUTINY ASSESSMENT, AND, THEREFORE, ON TH E BASIS OF THE ABOVE REASONS, HE CANNOT REOPEN THE ASSESSMENT. THE LEAR NED DEPARTMENTAL ITA NO. 972/AHD/2014 SHARADCHANDRA P. AMIN VS. ITO FOR AY: 2004-05 4 REPRESENTATIVE, AT THE TIME OF HEARING, RELIED UPON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF INDUCTOTHE RM (INDIA (P.) LTD VS. M. GOPALAN, DCIT, REPORTED IN [2013] 36 TAXMANN.COM 40 1/[2013]356 ITR 481 HE PLACED ON RECORD A COPY OF THE JUDGMENT. A PERU SAL OF THE ABOVE JUDGMENT WOULD INDICATE THAT THE HONBLE HIGH COURT HAS JUSTIFIED THE REOPENING OF THE ASSESSMENT QUA ONE OF THE ISSUE WH ERE IT FOUND THAT JUSTIFIABLE REASONS ARE AVAILABLE FOR REOPENING OF THE ASSESSMENT. IT IS NOT THAT DIRECTLY ON THE POINT AGITATED BEFORE US. THER EFORE, IT IS NOT APPLICABLE ON THE GIVEN FACTS. IN VIEW OF THE ABOVE DISCUSSIO NS, WE ALLOW THE FIRST FOLD OF GRIEVANCE AND QUASH THE REASSESSMENT ORDER. CON SEQUENTLY, WE DO NOT DEEM IT NECESSARY TO EXAMINE THE OTHER ISSUES. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 15 TH OCTOBER, 2019 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 15/10/2019 BIJU T., SR.PS ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! # / CONCERNED CIT 4. # ( ) / THE CIT(A) 5. & ! , ! , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) ', / ITAT, AHMEDABAD ITA NO. 972/AHD/2014 SHARADCHANDRA P. AMIN VS. ITO FOR AY: 2004-05 5 1. DATE OF DICTATION- 09.10.2019.. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE D ICTATING MEMBER .09.10.2019 OTHER MEMBER 15.10.2019. 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S ./P.S. - 15.10.2019. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DI CTATING MEMBER FOR PRONOUNCEMENT 15.10.2019 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK15.1 0.2019 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER 8. DATE OF DESPATCH OF THE ORDER