Patel Rajeshkumar Maganlal & Co., Surat V. The Pr.CIT, (Central), Ahmedabad

ITSSA 141/AHD/2015

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 2981 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 28-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK R WADEKAR
• Assessee Lawyers: MRS URVASHI SHODHAN
• Keywords: Principle of natural justice
• Section: 143(3); 142(1); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV, JM & SHRI MANISH BORAD, AM. IT(SS)A NO.141/AHD/2015 ASST. YEAR: 2011-12 PATEL RAJESHKUMAR MAGANLAL & CO., 2, POOJA PARK APARTMENT, DHOBI SHERI, HARIPURA, SURAT. VS. PR. CIT(CENTRAL), 1 ST FLOOR, AYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD. APPELLANT RESPONDENT PAN AAFFP 7560F APPELLANT BY MRS. URVASHI SHODHAN, AR RESPONDENT BY SHRI VIVEK R. WADEKAR, CIT,DR DATE OF HEARING: 07/02/2017 DATE OF PRONOUNCEMENT: 08/02/2017 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THIS APPEAL OF ASSESSEE FOR ASST. YEAR 2011-12 IS DIRECTED AGAINST THE ORDER OF PR.CIT(CENTRAL), AHMEDABAD, DA TED 17.03.2015 PASSED U/S 263 OF THE IT ACT, 1961 (IN SHORT THE AC T) ARISING OUT OF ORDER U/S 143(3) R.W.S. 153B(1)(B) OF THE ACT FRAME D ON 11/03/2013 BY ACIT, CENTRAL CIRCLE 1(2), AHMEDABAD. FOLLOWING GRO UNDS HAVE BEEN RAISED BY THE ASSESSEE :- 1. LD. CIT ERRED IN LAW AND ON FACTS IN INVOKING PROVI SIONS OF SECTION 263 OF THE ACT SEEKING TO REVISE SCRUTINY ASSESSMEN T U/S 143 (3)R.W.S. 153 B(L)(B) OF THE ACT HOLDING IT AS ERRONEOUS AND PREJUDICIAL TO THE IT(SS)A NO. 141/AHD/2015 ASST. YEAR 2011-12 2 INTEREST OF REVENUE. THE ORDER OF CIT DIRECTING AO TO REVISE ORDER THAT IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERES T OF REVENUE IS UNJUST, UNTENABLE AND AGAINST PRINCIPLES OF NATURAL JUSTICE THAT DESERVES TO BE QUASHED. IT BE SO HELD NOW. 2. LD. CIT ERRED IN LAW AND ON FACTS IN DIRECTING AO T O MAKE FRESH ASSESSMENT AFTER MAKING PROPER INQUIRY ABOUT THE SO URCE OF CASH OF RS. 40, 21, 000/-INTERCEPTED BY THE POLICE. LD. CIT FAILED TO APPRECIATE THAT AO MADE PROPER VERIFICATION OF DOCUMENTS EXPLA INING SOURCE OF INTERCEPTED MONEY BEFORE PASSING THE ORDER. THE ERR ONEOUS ORDER OF ID. CIT DESERVES TO BE QUASHED. 3. LD. CIT ERRED IN LAW AND ON FACTS IN HOLDING THAT R EVISIONARY PROCEEDINGS ON ISSUES ALREADY EXAMINED BY AO DURING ASSESSMENT IS PERMISSIBLE UNDER LAW IN CASE OF INADEQUATE INQUIRY . LD. CIT ERRED IN NOT APPRECIATING THAT THE ENQUIRY WAS NOT INADEQUAT E AND ALLEGED INADEQUATE INQUIRY IS NOT A GROUND TO HOLD SCRUTINY ORDER AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. 4. LD. CIT ERRED IN LAW AND ON FACTS TO HOLD THAT THER E WAS NO APPLICATION OF MIND BY AO TO EVALUATE MATERIAL SUBMITTED FOR SU PPORTING THE CLAIM OF THE APPELLANT. LD. CIT OUGHT TO HAVE APPRE CIATED DETAILED EVIDENCE SUBMITTED BY THE APPELLANT EXPLAINING SOUR CE OF CASH INTERCEPTED BY POLICE BASED ON WHICH AO PASSED THE ORDER. THE ORDER OF ID. CIT DESERVES TO BE QUASHED. 5. LD. CIT OUGHT TO HAVE APPRECIATED THAT NON DISCUSSI ON OF ISSUES VERIFIED AND ACCEPTED BY AO AFTER PROPER SCRUTINY N EED NOT MEAN ORDER AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST O F REVENUE. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, ED IT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL AT THE T IME OF OR BEFORE THE HEARING OF THE APPEAL. 2. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT IN THE CASE OF ASSESSEE CASH OF RS.20,05,000/- WAS SEIZED BY POLICE AUTHORITIES AT INDORE ON 12.3.2010 AND CASH OF RS.4 0,21,000/- WAS SEIZED ON 23.6.2010 BY POLICE DEPARTMENT AT JALGAON . AS OBSERVED IT(SS)A NO. 141/AHD/2015 ASST. YEAR 2011-12 3 BY LD. PR. CIT(CENTRAL)-1, THAT THE SEIZED CASH OF RS.20,05,000/- ON 12.3.2010 WAS ADDED TO THE INCOME OF ASSESSEE BY LD . ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT FOR ASST. YEAR 2010-11. AS REGARDS THE ANOTHER AMOUNT OF RS.40,21 LACS WHICH W AS SHOWN IN THE BALANCE SHEET ON THE ASSET SIDE AS ON 31.3.2011 SEE MS NOT TO HAVE BEEN CONSIDERED BY THE ASSESSING AUTHORITY WHILE PA SSING THE ASSESSMENT ORDER FOR ASST. YEAR 2011-12. ALSO AS PE R AVAILABLE RECORD AS OBSERVED BY LD. PR.CIT, LD. ASSESSING OFF ICER DID NOT ASK THE ASSESSEE TO EXPLAIN THE SOURCE OF THIS AMOUNT OF RS .40.21 LACS. ON THE BASIS OF THESE FACTS NOTICE U/S 263 OF THE ACT WAS ISSUED TO THE ASSESSEE IN REPLY TO WHICH ASSESSEE SUBMITTED AS FO LLOWS :- 3. WE MOST RESPECTFULLY SUBMIT THAT THE RIGHT FROM THE BEGINNING FROM THE DATE OF INTERCEPTION I.E. 23.06.2010 THE INFORMATION AND WHOLE MATERIAL EXPLAINING THE SOURCE OF INTERCEPTION MONEY OF RS. 40.21 LACS WAS FILLED BEFORE THE HIGHER AUTHORITIES OF THE INCOME TAX DEPARTMENT I.E. REFER RED IN OUR ABOVE PARA 2 AND ALL THE EVIDENCES ARE ATTACHED HERE WITH. FURTHER W E HAVE ALSO SUBMITTED BEFORE THE A.O. THE RELEVANT MATERIAL I.E. COPY OF BANK AC COUNT, CONFIRMATIONS OF PARTIES FROM WHOM LOANS AND ADVANCES ARE TAKEN DUR ING THE YEAR ENDING 31.03,2011. FURTHER PI. SEE PG NO. 16 OF OUR SUBMIS SION TO A.O. IN THAT BALANCE SHEET RS. 40.21 LACS HAS BEEN SHOWN AS POLICE DEPAR TMENT JALGAON. PL ALSO SEE PG NO. 48 THAT IS THE LETTER FROM DDI NASIK, THE LE TTER SHOWS THAT PI. FURNISH FURTHER EVIDENCES IN SUPPORT OF SEIZURE OF RS. 40.2 1 LACS BY DHULE POLICE. PI ALSO SEE PG NO. 44 TO 46 THIS IS A COPY OF LETTER F ROM US ADDRESSED TO YOUR GOOD SELF FOR REQUISITION OF INTERCEPTED CASH OF RS. 40. 21 LACS. AFTER CONSIDERING ALL THESE EVIDENCES AS ALL THE INFORMATION WAS BEFORE T HE INCOME TAX DEPARTMENT, HENCE IT CAN'T BE SAID THAT THE ORDER PASSED BY THE A. O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. HENCE I N THESE CIRCUMSTANCES WE REQUEST YOUR GOOD SELF PI OBLIGE US BY DROPPING THE PROCEEDING U/S.263' - . 4. THE REPLY OF THE ASSESSEE HAS BEEN CAREFULLY CON SIDERED. AS MENTIONED EARLIER, THE A.O. DID NOT INQUIRE ABOUT THE SOURCE OF CASH OF RS.40,21,000/- SEIZED BY THE POLICE ON 26-03-2010 AT JALGAON. THE ASSESSEE ALSO DID NOT FILE IT(SS)A NO. 141/AHD/2015 ASST. YEAR 2011-12 4 ANY DETAILS REGARDING THIS AMOUNT. AS PER THE BALAN CE SHEET OF THE ASSESSEE AS ON 31-03-2011, THIS SUM OF RS.40,21,000/- IS INC LUDED UNDER THE HEAD, 'LOAN & ADVANCES' BUT THERE IS NO EXPLANATION REGAR DING THE SOURCE OF THIS CASH. 5. AN ORDER PASSED BY THE ASSESSING OFFICER BECOMES ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AS PER P ROVISIONS OF SECTION 263 OF THE I.T. ACT IN THE FOLLOWING CIRCUMSTANCES:- (I) THE ORDER SOUGHT TO BE REVISED CONTAINS ERROR O F REASONING OR OF LAW OR OF FACT ON THE FACE OF IT; (II) THE ORDER SOUGHT TO BE REVISED PROCEEDS ON AN INCORRECT PRESUMPTION OF FACT OR INCORRECT APPLICATION OF LAW OR IS PASSED W ITHOUT APPLYING THE PRINCIPLE OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND, (III) THE ORDER PASSED BY THE ASSESSING OFFICER IS A STEREO-TYPED ORDER WHEREIN HE SIMPLY ACCEPTS WHAT THE ASSESSEE HAS STA TED IN HIS RETURN, OR WHERE HE FAILS TO MAKE THE REQUISITE ENQUIRIES OR E XAMINE GENUINENESS OF CLAIM, WHICH IS CALLED FOR, IN THE CIRCUMSTANCES OF THE CASE. 6. THE COURTS HAVE FURTHER HELD THAT THE COMMISSION ER OF INCOME-TAX WILL BE WELL WITHIN HIS POWERS TO REGARD AN ORDER ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES OF THE CASE THE ASSESSING OFFICER SHOULD HAVE MADE FURTHER INQUIRY BEFORE ACCEPTING THE CLAIM MADE BY THE ASSESSEE IN HIS RETURN. THE ROLE OF THE ASSESSING OFFICER UNDER THE INCOME-TAX ACT IS NOT MERELY THAT OF ADJUDICATION BUT ALSO OF AN INVESTIG ATOR. HE MUST DISCHARGE BOTH THE ROLES EFFECTIVELY. WHERE AN ORDER IS PASSE D ON AN INCORRECT ASSUMPTION OF FACT OR AN INCORRECT APPLICATION OF L AW, IT WILL SATISFY REQUIREMENT OF THE ORDER BEING ERRONEOUS. 7. FURTHER, A LACK OF ENQUIRY COULD RENDER THE ORDE R OF ASSESSMENT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. LACK OF ENQUIRY COULD INCLUDE NOT ONLY A SITUATION WHERE NO ENQUIRY IS MADE BUT ALSO A SITUATION WHERE NO PROPER ENQUIRY IS MADE CONSIDERING THE FACTS OF THE CASE. A MERE COLLECTION OF THE MATERIAL IS NOT SUFFICIENT OF THE I.T. ACT D ISCHARGE SUCH A DUTY. IT IS ALSO THE DUTY OF THE ASSESSING OFFICER TO EVALUATE THE MATERIAL ON EVIDENCE COLLECTED AND THEN ASCERTAIN WHETHER SUCH MATERIAL IS ENOUGH TO SUSTAIN THE CLAIM OF ASSESSEE. .- IT(SS)A NO. 141/AHD/2015 ASST. YEAR 2011-12 5 8. THE LEGAL POSITION IN THIS RESPECT IS VERY MUCH SETTLED IN VIEW OF MANY JUDGEMENTS ON THE ISSUE SUCH AS IN THE CASES OF RAM PYARI DEVI SARAOGI VS. CIT 167 ITR 84(SC), SMT. TARA DEVI AGARWAL VS. CIT( 88 ITR 325 SCJ, CIT VS. MALABAR INDUSTRIAL COMPANY LTD,(243 ITR 83 -SC) ARVEE INTERNATIONAL VS. ADDL. CIT 290 ITR(AT)8(MUM.), COLOR CRAFT VS. I TO(TECH) 303 ITR 7[AT)(MUM.). 9. IN VIEW OF THE ABOVE AND IN THE LIGHT OF VARIOUS JUDICIAL DECISIONS DISCUSSED ABOVE, THE ORDER PASSED U/S 143(3) R.W.S. 53B (1] (B) ON 11/03/2013 DETERMINING NIL INCOME BY THE ACIT CENTR AL CIRCLE 1(2), AHMEDABAD, IS ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF REVENUE AND NEEDS TO BE REVISED. 3. THE REPLY OF THE ASSESSEE COULD NOT CONVINCE LD. PR.CIT AS HE WAS OF THE CONFIRMED VIEW THAT NO ENQUIRY HAS BEEN CONDUCTED BY LD. ASSESSING AUTHORITY ABOUT THE SOURCE OF CASH OF RS. 40.21 LACS SEIZED BY THE POLICE DEPARTMENT, JALGAON ON 23.6.2010 AND ACCORDINGLY USING HIS POWERS AS PROVIDED U/S 263 OF THE ACT CAN CELLED THE ORDER U/S 143(3) R.W.S. 153B(1)(B) OF THE ACT DATED 11.3. 2013 AND DIRECTED TO MAKE A FRESH ASSESSMENT AFTER MAKING PROPER ENQU IRY ABOUT THE SOURCE OF RS.40.21 LACS. 4. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 5. LD. AUTHORISED REPRESENTATIVE (AR) SUBMITTED THA T ALL THE RELEVANT DOCUMENTS WERE AVAILABLE FOR VERIFICATION WITH THE ASSESSING AUTHORITY WHICH INTER ALIA INCLUDED BALANCE SHEET A S ON 31 ST MARCH, 2011 SHOWING AMOUNT SEIZED BY POLICE DEPARTMENT, JA LGAON AT RS.40.21 LACS UNDER THE HEAD LOANS AND ADVANCES, CO PY OF BANK STATEMENT FURNISHED ON 18.10.2012 ALONG WITH REPLY TO NOTICE U/S IT(SS)A NO. 141/AHD/2015 ASST. YEAR 2011-12 6 142(1) OF THE ACT AND IDENTITY PROOFS AND CONFIRMAT IONS OF ACCOUNTS OF VARIOUS PERSONS FROM WHOM AMOUNT WAS RECEIVED IN TH E BANK ACCOUNT. LD. AR ALSO REFERRED TO THE LETTER DATED 1 7.10.2014 GIVEN TO CIT, CEN.CIR.1 WITH REGARD TO QUESTION OF INTERCEPT ED CASH OF RS.40.21 LACS IN SUPPORT OF HER CONTENTION THAT NEC ESSARY INFORMATION WERE AVAILABLE WITH THE DEPARTMENT WHICH COULD PROV E THAT THERE WERE GENUINE SOURCE OF RS.40.21 LACS. LD. AR ALSO REFER RED TO LETTER DATED 10.8.2010 GIVEN TO DDIT(INV)-1, NASIK, IN REPLY TO THE LETTER DATED 5.8.2010 BEARING NO.NSK/DDIT(INV-1)/CASH SEIZURE/20 10-11/99 EXPLAINING THE SOURCE OF RS.40.21 LACS. LD. AR REFE RRED AND RELIED ON THE DECISION OF CO-ORDINATE BENCH IN THE CASE OF SH ITAL PRIYASHARAN SHAN VS. DCIT IN ITA NO.1454/AHD/2015 FOR ASST. YEA R 2010-11 VIDE ORDER DATED 21/10/2016 AND SUBMITTED THAT NECESSARY INFORMATION WERE AVAILABLE ON RECORD OF THE ASSESSING AUTHORITY AND HE CERTAINLY MADE APPLICATION OF MIND WHILE COMPLETING THE ASSES SMENT AND IT IS NOT MANDATORY THAT ALL THAT WHAT HAS BEEN OBSERVED DURING THE ASSESSMENT PROCEEDINGS NEEDS TO BE MENTIONED IN THE ASSESSMENT ORDER AND, THEREFORE, LD. PR. CIT ERRED IN INVOKING HIS POWERS U/S 263 OF THE ACT. 6. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDER OF LD. PR. C IT AND SUBMITTED THAT LD. ASSESSING OFFICER DID NOT CONSIDER AT ALL TO MAKE ENQUIRIES ABOUT THE SOURCE OF RS.40.21 LACS WHILE PASSING THE ASSESSMENT ORDER. IT(SS)A NO. 141/AHD/2015 ASST. YEAR 2011-12 7 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL PLACED ON RECORD AND GONE THROUGH THE DECISION RELI ED ON BY THE LD. AR. ASSESSEE HAS RAISED 5 GROUNDS OF APPEAL BUT THE SOLE ISSUE ARISING OUT OF THESE 5 GROUNDS IS CHALLENGING THE O RDER OF LD. PR. CIT U/S 263 OF THE ACT CANCELLING THE ASSESSMENT ORDER U/S 143(3) R.W.S. 153B(1)(B) OF THE ACT. WE OBSERVE THAT CASH OF RS.2 0,05,000/- AND RS.40,21,000/- WERE SEIZED ON 12.3.2010 AND 23.6.20 10 BY POLICE AUTHORITIES OF INDORE AND JALGAON RESPECTIVELY. AS OBSERVED BY LD. PR.CIT AND NOT DISPUTED BY THE ASSESSEE THAT CASH O F RS.20,05,000/- SEIZED ON 12.3.2010 WAS ADDED TO THE INCOME OF ASSE SSEE FOR ASST. YEAR 2010-11. WHEREAS RS.40.21 LACS WHICH WAS SEIZE D ON 23.6.2010 WHICH FALLS IN ASST. YEAR 2011-12 WAS NOT ENQUIRED BY THE ASSESSING AUTHORITY AS ALLEGED BY LD. PR. CIT. 8. DURING THE COURSE OF HEARING LD. AR REFERRED TO THE PAPER BOOK SHOWING COPIES OF BALANCE SHEET AS ON 31.3.2011, LE DGER ACCOUNT OF VARIOUS PARTIES ALONG WITH IDENTITY PROOFS FROM WHO M UNSECURED LOAN HAS BEEN TAKEN, REPLY DATED 18.10.12 U/S 142(1) OF THE ACT GIVEN TO ACIT, LETTER DATED 10.8.2010 GIVEN TO DDIT (INV), N ASIK AND ALSO LETTER DATED 17.10.2014 GIVEN TO LD. CIT, CC-1 REQUESTING FOR TAKING ACTION U/S 132(A) OF THE ACT AND TREATING THE AMOUNT OF RS .40.21 LACS AS TAX DEPOSIT RELEVANT TO ASST. YEAR 2011-12. LD. AR, HOW EVER, COULD NOT PLACE ON RECORD A COPY OF LETTER OR ANY COMMUNICATI ON FROM LD. ASSESSING OFFICER ENQUIRING ABOUT THE SOURCE OF RS. 40.21 LACS AT ANY STAGE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT(SS)A NO. 141/AHD/2015 ASST. YEAR 2011-12 8 9. WE FURTHER OBSERVE THAT IN ALL THE ABOVE LETTERS AND DOCUMENTS REFERRED AND RELIED ON BY THE LD. AR IT I S NOT EVIDENT THAT AT ANY STAGE SPECIFIC QUERY WAS RAISED BY THE ASSESSIN G AUTHORITY TO ENQUIRE ABOUT THE SOURCE OF RS.40.21 LACS OF CASH S EIZED AT JALGAON. IN THE IMPUGNED ASSESSMENT ORDER IN THE VERY FIRST PARAGRAPH LD. ASSESSING OFFICER HAS ONLY MENTIONED ABOUT THE CASH OF RS.20 LACS SEIZED BY POLICE AUTHORITY INDORE ON 12.3.2010 BUT HAS FORGOTTEN TO MENTION ANYTHING ABOUT CASH OF RS.40.21 LACS SEIZED AT JALGAON ON 23.6.2010 WHICH PROVES THAT NO ENQUIRY WAS CONDUCTE D WITH REGARD TO THE CASH SEIZED OF RS.40.21 LACS. LD. COUNSEL HAS R ELIED ON THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF SH ITAL PRIYASHARAN SHAH (SUPRA) WHICH WILL NOT APPLY ON THE FACTS OF T HE ASSESSEE AS IN THE CASE RELIED ON BY THE LD. AR THE FACTS ARE DIFF ERENT WHEREIN IMPUGNED TRANSACTIONS WERE QUESTIONED BY ADDL. DIRE CTOR INCOME-TAX AND DCIT AND HAVE TAKEN A VIEW WHICH WAS DIFFERENT WITH THE VIEW TAKEN BY LD. CIT. WHEREAS IN THE CASE WE ARE DEALIN G IN NO ENQUIRY HAS BEEN CONDUCTED BY THE ASSESSING OFFICER SEEKING INFORMATION ABOUT THE SOURCE OF RS.40.21 LACS SEIZED AT JALGAON . IN THE BACK DROP OF THESE FACTS WE FIND IT NECESSARY TO GO THROUGH T HE VIEWS EXPRESSED BY LD. PR. CIT IN HIS ORDER U/S 263 OF THE ACT CANC ELLING THE ORDER U/S 143(3) R.W.S. 153B(1)(B) OF THE ACT WHEREIN HE HAS OBSERVED AS FOLLOWS :- 3. THE OPERATING PART OF ASSESSEE'S REPLY IS REPRODUCED AS UNDER: 'WE MOST RESPECTFULLY SUBMIT THAT THE RIGHT FROM TH E BEGINNING FROM THE DATE OF INTERCEPTION I.E. 23.06.2010 THE INFORMATIO N AND WHOLE MATERIAL EXPLAINING THE SOURCE OF INTERCEPTION MONEY OF RS. 40.21 LACS WAS FILLED BEFORE THE HIGHER AUTHORITIES OF THE INCOME TAX DEP ARTMENT I.E. REFERRED IT(SS)A NO. 141/AHD/2015 ASST. YEAR 2011-12 9 IN OUR ABOVE PARA 2 AND ALL THE EVIDENCES ARE ATTAC HED HERE WITH. FURTHER WE HAVE ALSO SUBMITTED BEFORE THE A.O. THE RELEVANT MATERIAL I.E. COPY OF BANK ACCOUNT, CONFIRMATIONS OF PARTIES FROM WHOM LOANS AND ADVANCES ARE TAKEN DURING THE YEAR ENDING 31.03,201 1. FURTHER PI. SEE PG NO. 16 OF OUR SUBMISSION TO A.O. IN THAT BALANCE SHEET RS. 40.21 LACS HAS BEEN SHOWN AS POLICE DEPARTMENT JALGAON. PL ALS O SEE PG NO. 48 THAT IS THE LETTER FROM DDI NASIK, THE LETTER SHOWS THAT PI. FURNISH FURTHER EVIDENCES IN SUPPORT OF SEIZURE OF RS. 40.21 LACS B Y DHULE POLICE. PI ALSO SEE PG NO. 44 TO 46 THIS IS A COPY OF LETTER FROM U S ADDRESSED TO YOUR GOOD SELF FOR REQUISITION OF INTERCEPTED CASH OF RS . 40.21 LACS. AFTER CONSIDERING ALL THESE EVIDENCES AS ALL THE INFORMAT ION WAS BEFORE THE INCOME TAX DEPARTMENT, HENCE IT CAN'T BE SAID THAT THE ORDER PASSED BY THE A. O. IS ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF THE REVENUE. HENCE IN THESE CIRCUMSTANCES WE REQUEST YOUR GOOD S ELF PI OBLIGE US BY DROPPING THE PROCEEDING U/S.263' - . 4. THE REPLY OF THE ASSESSEE HAS BEEN CAREFULLY CON SIDERED. AS MENTIONED EARLIER, THE A.O. DID NOT INQUIRE ABOUT THE SOURCE OF CASH OF RS.40,21,000/- SEIZED BY THE POLICE ON 26-03-2010 AT JALGAON. THE ASSESSEE ALSO DID NOT FILE ANY DETAILS REGARDING THIS AMOUNT. AS PER THE BALAN CE SHEET OF THE ASSESSEE AS ON 31-03-2011, THIS SUM OF RS.40,21,000/- IS INC LUDED UNDER THE HEAD, 'LOAN & ADVANCES' BUT THERE IS NO EXPLANATION REGAR DING THE SOURCE OF THIS CASH. 5. AN ORDER PASSED BY THE ASSESSING OFFICER BECOMES ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AS PER P ROVISIONS OF SECTION 263 OF THE I.T. ACT IN THE FOLLOWING CIRCUMSTANCES:- (I) THE ORDER SOUGHT TO BE REVISED CONTAINS ERROR O F REASONING OR OF LAW OR OF FACT ON THE FACE OF IT; (II) THE ORDER SOUGHT TO BE REVISED PROCEEDS ON AN INCORRECT PRESUMPTION OF FACT OR INCORRECT APPLICATION OF LAW OR IS PASSED W ITHOUT APPLYING THE PRINCIPLE OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND, (III) THE ORDER PASSED BY THE ASSESSING OFFICER IS A STEREO-TYPED ORDER WHEREIN HE SIMPLY ACCEPTS WHAT THE ASSESSEE HAS STA TED IN HIS RETURN, OR WHERE HE FAILS TO MAKE THE REQUISITE ENQUIRIES OR E XAMINE GENUINENESS OF CLAIM, WHICH IS CALLED FOR, IN THE CIRCUMSTANCES OF THE CASE. IT(SS)A NO. 141/AHD/2015 ASST. YEAR 2011-12 10 6. THE COURTS HAVE FURTHER HELD THAT THE COMMISSION ER OF INCOME-TAX WILL BE WELL WITHIN HIS POWERS TO REGARD AN ORDER ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES OF THE CASE THE ASSESSING OFFICER SHOULD HAVE MADE FURTHER INQUIRY BEFORE ACCEPTING THE CLAIM MADE BY THE ASSESSEE IN HIS RETURN. THE ROLE OF THE ASSESSING OFFICER UNDER THE INCOME-TAX ACT IS NOT MERELY THAT OF ADJUDICATION BUT ALSO OF AN INVESTIG ATOR. HE MUST DISCHARGE BOTH THE ROLES EFFECTIVELY. WHERE AN ORDER IS PASSE D ON AN INCORRECT ASSUMPTION OF FACT OR AN INCORRECT APPLICATION OF L AW, IT WILL SATISFY REQUIREMENT OF THE ORDER BEING ERRONEOUS. 7. FURTHER, A LACK OF ENQUIRY COULD RENDER THE ORDE R OF ASSESSMENT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. LACK OF ENQUIRY COULD INCLUDE NOT ONLY A SITUATION WHERE NO ENQUIRY IS MADE BUT ALSO A SITUATION WHERE NO PROPER ENQUIRY IS MADE CONSIDERING THE FACTS OF THE CASE. A MERE COLLECTION OF THE MATERIAL IS NOT SUFFICIENT OF THE I.T. ACT D ISCHARGE SUCH A DUTY. IT IS ALSO THE DUTY OF THE ASSESSING OFFICER TO EVALUATE THE MATERIAL ON EVIDENCE COLLECTED AND THEN ASCERTAIN WHETHER SUCH MATERIAL IS ENOUGH TO SUSTAIN THE CLAIM OF ASSESSEE. .- 8. THE LEGAL POSITION IN THIS RESPECT IS VERY MUCH SETTLED IN VIEW OF MANY JUDGEMENTS ON THE ISSUE SUCH AS IN THE CASES OF RAM PYARI DEVI SARAOGI VS. CIT 167 ITR 84(SC), SMT. TARA DEVI AGARWAL VS. CIT( 88 ITR 325 SCJ, CIT VS. MALABAR INDUSTRIAL COMPANY LTD,(243 ITR 83 -SC) ARVEE INTERNATIONAL VS. ADDL. CIT 290 ITR(AT)8(MUM.), COLOR CRAFT VS. I TO(TECH) 303 ITR 7[AT)(MUM.). 9. IN VIEW OF THE ABOVE AND IN THE LIGHT OF VARIOUS JUDICIAL DECISIONS DISCUSSED ABOVE, THE ORDER PASSED U/S 143(3) R.W.S. 53B (1] (B) ON 11/03/2013 DETERMINING NIL INCOME BY THE ACIT CENTR AL CIRCLE 1(2), AHMEDABAD, IS ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF REVENUE AND NEEDS TO BE REVISED. 10. FROM GOING THROUGH THE OBSERVATIONS OF LD. PR.C IT AND IN THE TOTALITY OF FACTS AND CIRCUMSTANCES AND DISCUSSION MADE IN PRECEDING PARAGRAPHS WE ARE OF THE CONFIRMED VIEW THAT LD. AS SESSING OFFICER DID NOT MAKE ANY ENQUIRY ABOUT THE SOURCE OF CASH OF RS.40.21 LACS SEIZED ON 23.6.2010 AND THE ISSUE WAS NOT AT ALL AD JUDICATED ON IT(SS)A NO. 141/AHD/2015 ASST. YEAR 2011-12 11 MERITS WHILE FRAMKING THE ASSESSMENT ORDER U/S 143( 3) R.W.S. 153B(1)(B) OF THE ACT AND WE, THEREFORE, FIND NO RE ASON TO INTERFERE WITH THE ORDER U/S 263 OF THE ACT. WE UPHOLD THE SA ME. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH FEBRUARY, 2017 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 08/02/2017 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD IT(SS)A NO. 141/AHD/2015 ASST. YEAR 2011-12 12 1. DATE OF DICTATION: 07/02/2017 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 07/02/2017 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 9/02/17 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: