BABU LAL SOMANI, Kota V. ITO, Kota

MA 147/JPR/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 6035 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 09-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PREM PRAKASH MEENA JCIT DHK
• Assessee Lawyers: PRAKUL KHURANA
• Keywords: Rejection of books of accounts; Period of limitation; Block assessment; Time period of passing order
• Section: 14A; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ MA NO.147/JP/2017 (ARISING OUT OF ITA NO. 931/JP/2013) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 BABU LAL SOMANI PROP. M/S SOMANI & COMPANY AND SOMANI CARRIER, BUNDI ROAD, KOTA CUKE VS. INCOME TAX OFFICER, WARD-02 (1), KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ATBPS9231K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI PRAKUL KHURANA(ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI PREM PRAKASH MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22/12/2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT: 29/12/2017 VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THE ASSESSEE HAS MOVED THE PRESENT MISC. APPLICATIO N AGAINST THE ORDER PASSED BY THIS BENCH IN ITA NO. 931/JP/2013 DATED 1 8.09.2017 FOR A.Y. 2009- 10. 2. IN ITS APPLICATION, THE ASSESSEE HAS SUBMITTED A S UNDER:- THIS MISCELLANEOUS APPLICATION U/S 254(2) OF THE I NCOME TAX ACT, 1961 IS BEING PRESENTED WITH THE PRAYER TO RECTIFY THE M ISTAKE APPARENT FROM THE RECORD IN THE ABOVE STATED ORDER OF THIS HONBL E BENCH ON THE BACKGROUND OF THE FOLLOWING FACTS:- MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 2 1. IT IS HUMBLY SUBMITTED BEFORE YOUR HONOUR THAT THE ABOVEMENTIONED APPEAL BEARING ITA NO.: 931/JP/2013 WAS FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A), KOT A DATED 30.09.2013 FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, WHICH WAS DECIDED BY THIS HONBLE BENCH ON 18.09.2017. 2. THE HONBLE BENCH VIDE ORDER DATED 27.05.2016, HAS PARTLY ALLOWED THE APPEAL OF THE REVENUE BY HOLDING THAT T HE LD. A.O. HAS NOT REJECTED THE BOOKS OF ACCOUNTS OF THE APPELLANT AND THEREFORE, THE HONBLE BENCH TO THIS EXTENT CONFIRMED THE FIND INGS OF THE LD. A.O. THE HONBLE BENCH ALLOWED GROUND NO. III), IV) , VI) AND IX) OF APPEAL OF THE DEPARTMENT. 3. IT IS HUMBLY SUBMITTED BEFORE YOUR GOODSELF THAT SI NCE, THE ORDER WAS AN EX-PARTE ORDER, CERTAIN FACTS SEEMS TO HAVE BEEN ESCAPED FOR CONSIDERATION IN THE SAID ORDER. YOUR HONOURS, IN T HE ORDER UNDER CONSIDERATION, THE HONBLE BENCH HAS NOT CONSIDERED THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF RITESH KUMAR SOMANI, PROP. M/S. SWASTIKA STONE CRUSHER, BUNDI ROAD, KOTA V. ITO WAR D 2(1), KOTA IN ITA NO. 415/JP/2014 DATED 26.08.2016. THE AFORESAID CASE INVOLVES SAME FACTS AND CIRCUMSTANCES AS IT DOES IN THE INST ANT CASE OF THE RESPONDENT ASSESSEE AND ARISES OUT OF THE SAME SURV EY PROCEEDINGS. IT SHOULD BE APPRECIATED THAT RITESH KUMAR SOMANI I S RESPONDENTS SON AND THEREFORE, THERE IS NO DIFFERENCE IN RESPON DENTS AND RESPONDENTS SONS CASE. IT IS HUMBLY SUBMITTED BEF ORE YOUR HONOUR THAT WHILE ALLOWING THE APPEAL OF THE ASSESSEE IN T HE SAID CASE (SUPRA), THE COORDINATE BENCH CATEGORICALLY HELD AS FOLLOWS : 4.4 ..WE ARE IN AGREEMENT WITH THE FINDING OF ID. CIT(A) AS THE AO APPOINTED SPECIAL AUDITOR WHO RE-CASTED THE ACCOUNTS OF THE MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 3 ASSESSEE, IT IS NOT THE CASE WHEN SPECIAL AUDITOR H AS MERELY CARRIED OUT THE SPECIAL AUDIT. ADMITTEDLY, THE SPECIAL AUDITOR, AFTER RE- CASTING OF BOOKS OF ACCOUNTS HAS ESTIMATED THE PROF IT. IN ESSENCE THE ESTIMATION OF PROFIT IS ON THE BASIS OF REJECTION O F BOOKS OF ACCOUNTS, HENCE THE FINDINGS OF ID. CIT(A) ARE JUSTIFIED. WE DO NOT SEE ANY REASON TO DISTURB THESE FINDINGS OF LD. CIT(A). THE REFORE, THE GROUNDS RAISED IN THIS APPEAL ARE REJECTED. 4. THEREFORE, FROM THE BARE PERUSAL OF THE SAID JUDGME NT IT IS TO BE APPRECIATED THAT IN THE CASE OF RITESH KUMAR SOMANI (SUPRA), THE HONBLE BENCH HAS HELD THAT THE LD. A.O. HAS REJECT ED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND HAS DISPOSED OFF ON TH AT BASIS BY UPHOLDING THE SIMILAR ORDER PASSED BY THE LD. CIT(A ). 5. IT IS HUMBLY SUBMITTED THAT THE JUDGMENT OF RITESH KUMAR SOMANI (SUPRA) SEEMS TO HAVE BEEN ESCAPED ATTENTION OF THE HONBLE BENCH, WHICH RESULTED IN AN INADVERTENT MISTAKE APP ARENT FROM THE RECORDS WHICH CONSEQUENTLY DESERVES RECTIFICATION. THEREFORE, IN LIGHT OF THE MISTAKE APPARENT FROM RE CORD IN THE ORDER OF THIS HONBLE BENCH DATED 18.09.2017 AS POINTED OUT ABOVE, IT IS HUMBLY PRAYED THAT THE SAID ORDER BE RECTIFIED IN THE INTE REST OF JUSTICE. 3. FIRSTLY, IT IS STATED IN THE PRESENT MISC. APPLI CATION THAT SINCE THE IMPUNGED ORDER WAS PASSED EX-PARTE, CERTAIN FACTS S EEMS TO HAVE ESCAPED OUR CONSIDERATION. HOWEVER, THERE IS NOTHING WHICH HAS BEEN STATED AS TO WHICH ALL FACTS HAVE ESCAPED OUR ATTENTION. THE IMP UNGED ORDER WAS DISPOSED OFF ON MERIT THROUGH A DETAILED AND A SPEAKING ORDE R TAKING INTO CONSIDERATION ALL THE RELEVANT MATERIAL ON RECORD AND IN ABSENCE OF ANY SPECIFIC FACTS BEING MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 4 BROUGHT TO OUR NOTICE AS CLAIMED TO HAVE ESCAPED OU R ATTENTION, WE ARE UNABLE TO ACCEPT THE ABOVESAID CONTENTION. 4. IT WAS FURTHER SUBMITTED THAT WHILE PASSING THE IMPUNGED ORDER, THE BENCH HAS NOT CONSIDERED THE DECISION OF THE COORDI NATE BENCH IN CASE OF RITESH KUMAR SOMANI IN ITA NO. 415/JP/2014 DATED 26 .08.2016 WHICH INVOLVES SIMILAR FACTS AND CIRCUMSTANCES OF THE CAS E AND WHERE IT WAS HELD THAT THE AO HAS REJECTED THE BOOKS OF ACCOUNTS OF T HE ASSESSEE WHILE IN THE INSTANT CASE, IT HAS BEEN HELD BY THE BENCH THAT TH E AO HAS NOT REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IT WAS ACCORDIN GLY SUBMITTED THAT THERE IS A MISTAKE APPARENT FROM THE RECORDS WHICH REQUIRE R ECTIFICATION UNDER THE PROVISIONS OF SECTION 254(2) OF THE ACT. 5. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE ABO VE SAID CONTENTION, HOWEVER WE ARE UNABLE TO ACCEPT THE SAME. REGARDIN G REJECTION OF BOOKS OF ACCOUNTS, WE HAVE EXAMINED THE MATTER AT LENGTH AND HAVE GIVEN A DETAILED FINDING AT PARA 5 - 20 OF THE IMPUNGED ORDER AS TO WHY WE HOLD THAT THE BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED BY THE AO IN THE INSTANT CASE. IN PARA 14 OF THE IMPUNGED ORDER, WE HAVE DISCUSSED ABOUT NO S PECIFIC FINDING OF THE AO REGARDING REJECTION OF BOOKS OF ACCOUNTS AND HELD T HAT: THERE IS NO SPECIFIC FINDING WHICH HAS BEEN RECORD ED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER RECORDING HIS SATIS FACTION AS TO REJECTION OF THE BOOKS OF ACCOUNTS AND THE RESULT SO DECLARED BY THE ASSESSEE. IT IS TRUE THAT THE MATTER WAS REFERRED FOR SPECIAL AU DIT U/S 142(2A) BUT THAT BY ITSELF WILL NOT RESULT IN AN IMPLIED FINDIN G OF THE AO ABOUT HIS NON-SATISFACTION ABOUT THE BOOKS OF ACCOUNTS AND RE JECTION THEREOF. AS NOTED BY THE COORDINATE BENCH AS WELL, THE BASIC PU RPOSE FOR SPECIAL AUDIT WAS FOR EXAMINATION OF THE BOOKS OF ACCOUNTS AND TO GIVE SPECIFIC COMMENTS ON SPECIFIC ISSUES AND IT CANNOT BE INFERR ED THAT THE MATTER FOR SPECIAL AUDIT WAS REFERRED FOR GETTING THE WHOL E OF THE BOOKS OF MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 5 ACCOUNT RECASTED AND PREPARATION THEREOF AFRESH. T HE DEFECTS SO POINTED OUT BY THE SPECIAL AUDITOR HAVE BEEN INCORP ORATED IN THE RECASTED BOOKS OF ACCOUNTS EFFECTIVELY MEANS TAKING INTO CONSIDERATION THE RESULTS ALREADY DECLARED BY THE ASSESSEE IN RES PECT OF ITS DECLARED TRANSACTIONS AND THE RESULTS AS PER UNRECORDED TRAN SACTIONS RELATING TO PURCHASE AND SALES AND OTHER INCOME, PRESENTING AN OVERALL POSITION REGARDING THE BUSINESS RESULTS IN RELATION TO ACTIV ITIES CARRIED OUT BY THE ASSESSEE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT MERELY BECAUSE THE MATTER WAS REFERRED FOR SPECIAL AUDIT A ND THE AO HAS MADE CERTAIN ADDITIONS BASED ON THE OBSERVATIONS OF THE SPECIAL AUDITOR, IT CANNOT BE HELD THAT THE AO HAS REJECTED THE BOOKS O F ACCOUNT OF THE ASSESSEE. THERE HAS TO BE A SPECIFIC FINDING GIVEN BY THE AO IN TERMS OF SATISFACTION OF ANY OR ALL OF THE CONDITIONS AS SPE CIFIED UNDER SECTION 145(3) BEFORE HE REJECTS THE BOOKS OF ACCOUNTS OF T HE ASSESSEE. FURTHER, THE AO HAS TO SPECIFY THE REASONS AS TO WH Y HE FEELS THAT THE RESULTS DECLARED BY THE ASSESSEE AS PER THE BOOKS O F ACCOUNTS ARE NOT ACCEPTABLE. 6. IN PARA 15 & 16, WE HAVE DISCUSSED ABOVE IMPLIE D REJECTION OF THE BOOKS OF ACCOUNTS BY THE AO AND HAVE HELD AS UNDER: 15. NOW, LETS LOOK AT THE MATTER FROM ANOTHER PE RSPECTIVE. IN ABSENCE OF THE SPECIFIC FINDING OF REJECTION OF BOO KS OF ACCOUNTS BY THE AO, CAN IT BE INFERRED THAT THE AO HAS REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IN THIS REGARD, WE REFER THE RECASTE D PROFIT/LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009 WHICH IS AVAILABL E ON RECORD. THE ANALYSIS THEREOF IN TERMS OF RECORDED TRANSACTIONS AND UNRECORDED TRANSACTIONS DEPICTS THE FOLLOWING POSITION: PARTICULARS TOTAL AS PER RECASTED UNRECORDED TRANSACTIONS (RS) RECORDED TRANSACTIONS % OF RECORDED MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 6 PROFIT/LOSS ACCOUNT (RS) (RS) TRANSACTI ONS A B C = A-B D= C/A*100 SALES 1,52,64,043 28,73,377 (98,948+14,02,856+ 12,27,248+144,325) 12,390,666 81.18% TRANSPORTATI ON RECEIPTS 35,79,117 195,889 33,83,228 94.52% LOADING RECEIPTS 759,302 10,000 749,302 98.68% TOTAL TURNOVER 1,96,02,462 30,79,266 1,65,23,196 84.29% 16. AS IT IS APPARENT FROM ABOVE TABLE, TURNOVER TO THE EXTENT OF 84.29% IS AS PER THE RECORDED TRANSACTIONS IN THE B OOKS OF ACCOUNTS OF THE ASSESSEE WHICH HAS BEEN CONSIDERED BY THE AO AN D ONLY THE BALANCE TURNOVER TO THE EXTENT OF 15.71% IS AS PER UNRECORDED TRANSACTIONS WHICH HAS BEEN FOUND OUT BASED ON THE IMPOUNDED DOCUMENTS. AND THERE ARE CORRESPONDING EXPENSES AS RECORDED IN THE BOOKS OF ACCOUNTS WHICH HAVE BEEN CONSIDERED BY THE AO OTHER THAN THOSE WHICH HAVE BEEN DISCOVERED AND REPORTED AS PE R SPECIAL AUDIT. IN LIGHT OF THE SAME, CAN IT BE INFERRED THAT THE AO H AS REJECTED THE WHOLE OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IN OUR V IEW, SUCH A CONCLUSION WOULD BE WHOLLY UNTENABLE AND INCORRECT IN THE PRESENT FACTS OF THE CASE. THE REASONS FOR THE SAME IS THAT FIRS TLY, THE AO HAS NOT MADE ANY ADJUSTMENT IN RELATION TO THE BOOKS RESULT S SO DECLARED BY THE ASSESSEE IN RESPECT OF REPORTED TRANSACTIONS AND IN FACT, HAS ACCEPTED THE SAME. WHEN THE BOOK RESULTS RELATING TO MORE T HAN 84% OF MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 7 TURNOVER HAVE BEEN ACCEPTED, CAN IT BE INFERRED THA T THE BOOKS OF ACCOUNTS, BASIS WHICH THE BOOK RESULTS HAVE BEEN SO DECLARED, HAVE BEEN REJECTED AND THE ANSWER TO THE SAME CANNOT BE IN AFFIRMATIVE. IN OUR VIEW, ALL THE AO HAS DONE IS THAT HE HAS ACCEPT ED THE BOOK RESULTS IN RESPECT OF RECORDED TRANSACTIONS AND IN ADDITION , THE UNRECORDED TRANSACTIONS RELATING TO SALES/INCOME, UNRECORDED P URCHASE AND OTHER EXPENDITURE HAVE ALSO BEEN BROUGHT TO TAX. IN ANY CASE, THERE CANNOT BE A PRESUMPTION REGARDING REJECTION OF BOOKS OF AC COUNTS IN ABSENCE OF SPECIFIC EXERCISE OF POWERS UNDER SECTION 145(3) OF THE ACT. 7. IN PARA 17, WE HAVE DISCUSSED ABOUT THE FINDINGS OF THE LD CIT(A) AND HAS HELD AS UNDER: 17. FURTHER WE FIND THAT THERE IS NO SPECIFIC FIND ING WHICH HAS BEEN GIVEN BY THE LD. CIT(A) WHEREIN IN EXERCISE OF HIS CO-TERMINUS POWERS, HE IS OF THE OPINION THAT THE BOOKS OF ACCOUNTS CAN NOT BE RELIED UPON AND DESERVE TO BE REJECTED IN THE INSTANT CASE. ALL THE LD CIT(A) HAS STATED IS THAT THE AO HAS IN SUBSTANCE REJECTED THE BOOKS OF ACCOUNTS AND AFTER DOING SO, THE AO SHOULD HAVE COMPUTED EST IMATED INCOME BY ESTIMATING TURNOVER OF THE ASSESSEE AND SHOULD HAVE APPLIED NET PROFIT RATE FOR COMPUTING THE INCOME OF THE ASSESSEE. 8. IN PARA 18, WE HAVE ALSO DISCUSSED WHETHER THE R EJECTION OF BOOKS OF ACCOUNTS CAN BE AT THE REQUEST OF THE ASSESSEE AS M ADE IN THE INSTANT CASE AND HAS HELD AS UNDER: 18. BEFORE DEPARTING, WE WOULD ALSO LIKE TO TOUCH UPON ANOTHER PERSPECTIVE WHICH WE HAVE NOTICED IN THE INSTANT CA SE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IN RESPONSE TO EA CH OF THE QUERIES RAISED BY THE AO IN RELATION TO OBSERVATIONS OF THE SPECIAL AUDITOR, THE ASSESSEE HAS REPEATEDLY STATED THAT HIS BOOKS OF AC COUNT SHOULD BE REJECTED AS DONE IN PAST ASSESSMENT YEARS. THE QUE STION THAT ARISES FOR MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 8 CONSIDERATION WHETHER THE POWERS TO BE EXERCISED UN DER SECTION 145(3) CAN BE EXERCISED AT THE REQUEST OF THE ASSESSEE. T O RECAPITULATE, SECTION 145(3) PROVIDES THAT WHERE THE ASSESSING OF FICER IS NOT SATISFIED ABOUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUN TS OF THE ASSESSEE, OR WHERE THE METHOD OF ACCOUNTING PROVIDED IN SUB-S ECTION (1) HAS NOT BEEN REGULARLY FOLLOWED BY THE ASSESSEE, OR INCOME HAS NOT BEEN COMPUTED IN ACCORDANCE WITH THE STANDARDS NOTIFIED UNDER SUB-SECTION (2), THE ASSESSING OFFICER MAY MAKE AN ASSESSMENT I N THE MANNER PROVIDED IN SECTION 144 OF THE ACT. IT IS FOR THE ASSESSEE TO DECLARE ITS RESULTS AND OFFER ITS BOOKS OF ACCOUNTS FOR VERIFIC ATION AND THEN, IT IS FOR AO TO DETERMINE WHETHER THE BOOK RESULTS SO DECLARE D ARE CORRECT OR NOT OR THE BOOKS OF ACCOUNTS HAVE TO BE REJECTED AS NOT DEPICTING CORRECT STATE OF AFFAIRS OF THE ASSESSEE. IN OUR C ONSIDERED VIEW, THERE IS NOTHING IN THE SAID PROVISIONS WHEN EMPOWER THE ASS ESSEE TO REQUEST THE AO TO REJECT HIS BOOKS OF ACCOUNTS. 9. AND IN PARA 19 OF THE IMPUNGED ORDER, WE HAVE AL SO DISCUSSED AS TO WHY WE BELIEVE THE DECISIONS OF THE COORDINATE BENC HES IN ASSESSEES OWN CASE FOR THE PAST YEARS ARE NOT TO BE FOLLOWED. IN TERESTINGLY, IN THE INSTANT PETITION, THE ASSESSEE HAS NOT RAISED ANY GRIEVANCE WHEREBY WE HAVE NOT FOLLOWED PAST ORDERS BY THE COORDINATE BENCHES IN A SSESSEES OWN CASE. 19. FURTHER, EACH YEAR IS SEPARATE YEAR AND THE PR INCIPLE OF RES-JUDICATA DOESNT APPLY IN THE INCOME TAX PROCEEDINGS. AND W E AGREE WITH THE VIEW OF THE AO THAT THE CONTENTION OF ASSESSEE FOR REJECTION OF BOOKS ON THE BASIS OF THE PAST DECISIONS OF THE COORDINATE B ENCH ALSO NOT SEEMS CORRECT BECAUSE THE JUDGMENT OF THE COORDINATE BENC H IS NOT APPLICABLE ON THIS ASSESSMENT AS AO HAS NOT REJECTED THE BOOKS OF THE ASSESSEE AND HAS MADE THE ADDITIONS ON THE BASIS OF REGULAR BOOKS OF ACCOUNT OF ASSESSEE AS WELL AS TAKING INTO CONSIDERATION DOCUM ENTS IMPOUNDED MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 9 DURING THE COURSE OF SURVEY AND THE REPORT OF THE S PECIAL AUDITOR THEREON. 10. AND FINALLY, WE HAVE HELD THAT THE BOOKS OF ACC OUNTS HAVE NOT BEEN REJECTED IN THE INSTANT CASE AND THE FINDINGS OF TH E LD CIT(A) TO THIS EXTENT WERE SET-ASIDE AND THE FINDINGS OF THE AO WERE CONF IRMED. DURING THE COURSE OF HEARING, THE LD AR HAS NOT BEEN ABLE TO HIGHLIGH T ANY MISTAKE WHICH HAS OCCURRED IN THE AFORESAID DISCUSSION REGARDING REJE CTION OF BOOKS OF ACCOUNTS. 11. NOW, COMING TO THE DECISION OF THE COORDINATE B ENCH IN CASE OF RITESH SOMANI (ITA NO. 415/JP/2014), FIRSTLY, IT IS TO BE NOTED THAT SAID DECISION WAS NOT CITED OR BROUGHT TO THE NOTICE OF THE BENCH EIT HER DURING THE COURSE OF HEARING OR FORMS PART OF MATERIAL AVAILABLE ON RECO RD IN THE INSTANT CASE WHEN THE MATTER WAS HEARD AND SUBSEQUENTLY DISPOSED OFF. THEREFORE, IT CANNOT BE SAID THAT THE SAID DECISION HAS ESCAPED THE ATTENTI ON OF THE BENCH WHEN IT WAS NOT BROUGHT TO ITS NOTICE AT FIRST PLACE. DURING T HE COURSE OF HEARING, THE LD AR FAIRLY ADMITTED TO THE SAID FACT. NOW COMING TO THE FINDINGS OF THE COORDINATE BENCH IN THE SAID ORDER, WHICH HAVE BEEN RENDERED IN THE CONTEXT OF PECULIAR FACTS OF THE SAID CASE, OUR ATTENTION W AS DRAWN TO THE FOLLOWING FINDINGS: WE ARE IN AGREEMENT WITH THE FINDINGS OF THE LD CI T(A) AS THE AO APPOINTED THE SPECIAL AUDITOR WHO RE-CASTED THE ACC OUNTS OF THE ASSESSEE, IT IS NOT A CASE WHEN THE SPECIAL AUDITOR HAS MERELY CARRIED OUT THE SPECIAL AUDIT. ADMITTEDLY, THE SPECIAL AUD ITOR AFTER RE-CASTING THE BOOKS OF ACCOUNTS HAS ESTIMATED THE PROFIT. IN ESSENCE, THE ESTIMATION OF PROFITS IS ON THE BASIS OF REJECTION OF BOOKS OF ACCOUNTS, HENCE, THE FINDINGS OF THE LD CIT(A) ARE JUSTIFIED. 12. IN OUR VIEW, THE ABOVE SAID FINDING HAS BEEN RE NDERED AFTER APPRECIATION OF PECULIAR FACTS OF THE SAID CASE AND CANNOT BE HELD AS LAYING MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 10 DOWN ANY LEGAL PROPOSITION WHICH WOULD BE BINDING I N THE INSTANT CASE, BEING THE DECISION OF THE COORDINATE BENCH. 13. IN ANY CASE, IN THE IMPUNGED ORDER, WE HAVE DIS CUSSED THE IDENTICAL MATTER AT LENGTH AT PARA 7 & 8 AND FOLLOWING THE CO ORDINATE BENCH DECISION IN ASSESSEES OWN CASE (WHICH APPARENTLY ALSO REFERS T O THE EARLIER COORDINATE BENCH DECISION IN CASE OF RITESH SOMANI) HAS HELD A S UNDER: 7. IN THIS REGARD, WE ALSO REFER TO THE FINDING OF THE LD. CIT(A) WHEREIN HE HAS UPHELD THE ACTION OF THE AO IN REFERRING THE MATTER FOR SPECIAL AUDIT U/S 142(2A) OF THE ACT. THE LD CIT(A) HAS U PHELD THE ACTION OF THE AO RELYING ON THE FINDING OF THE COORDINATE BEN CH IN ASSESSEES OWN CASE IN THE PREVIOUS ASSESSMENT YEARS. THE RELEVAN T FINDINGS OF THE COORDINATE BENCH ARE CONTAINED AT PARA 4.12 OF THE LD. CIT(A) ORDER WHICH ARE REPRODUCED AS UNDER:- 4.12 THIS ISSUE CAME UP BEFORE HONBLE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF IN THE APPEALS OF PREVIOUS ASSESSME NT YEARS. THE HONBLE TRIBUNAL OBSERVED AS UNDER:- THE FACTS IN THIS CASE ARE SIMILAR TO THE FACTS IN THE CASE OF SHRI RITESH SOMANI. WHILE DECIDING THE APPEAL IN THE CASE OF SH RI RITESH SOMANI IN ITA NO. 592 TO 597/JP/2011 AND 618 TO 623/JP/2011, VIDE ORDER DATED 30.11.2012, WE HAVE HELD THAT REFERENCE FOR SPECIAL AUDIT IS IN ACCORDANCE WITH THE PROVISIONS OF LAW. FOLLOWING TH AT ORDER WE DISMISS THE ABOVE GROUND OF APPEAL. IN THE CASE OF SHRI RITESH SOMANI, WHILE HOLDING TH AT THE A.O. WAS JUSTIFIED IN REFERRING THE MATTER FOR SPECIAL AUDIT U/S 142(2A) OF THE ACT, THE HONBLE ITAT MADE THE FOLLOWING ELABORATE OBSER VATIONS:- BEFORE US, THE LD. AR HAS RELIED UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BA JRANG TEXTILES (SUPRA). IN THIS CASE, THE A.O. ISSUED THE DIRECTIO NS TO GET THE ASSESSEES ACCOUNTS AUDITED ON 29 TH DECEMBER, 1999 WHEN ONLY ONE DAY WAS LEFT FOR COMPLETION OF THE BLOCK ASSESSMENT . THE A.O. ALSO DIRECTED THE SPECIAL AUDITOR TO PREPARE THE BOOKS O F ACCOUNTS IN THE MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 11 FORM OF CASH BOOK, LEDGER ON THE BASIS OF THE DOCUM ENTS/ PAPERS SEIZED DURING THE COURSE OF SEARCH AS PER HIS DIRECTIONS. THE AUDITOR WAS ALSO REQUIRED TO PREPARE THE TRADING AND PROFIT ACCOUNT AND FURTHER TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIO D. THE HONBLE HIGH COURT OBSERVED THAT APPARENTLY THE ORDER WAS FOR PR EPARING FRESH BOOKS RATHER THAN TO CONDUCT THE SPECIAL AUDIT. HONBLE H IGH COURT OBSERVED THAT NO AUTHORITY HAS BEEN GIVEN TO THE ASSESSEE DI RECT THE PREPARATION OF FRESH BOOKS BY REFERRING THE MATTER TO THE AUDIT OR UNDER SPECIAL AUDIT. THE AUDIT IS FOR THE PURPOSE OF SATISFYING O NE ABOUT THE AUTHENTICITY AND CREDIBILITY OF THE ACCOUNTS PREPAR ED BY THE ASSESSEE BUT NOT FOR PREPARING THE NEW ACCOUNT BOOKS AS PER DIRECTION OF THE A.O. IN THE INSTANCE CASE THE A.O. ASKED THE SPECIA L AUDITOR TO DO THE SPECIAL AUDIT IN VIEW OF THE PROVISIONS OF RULE 14A . RULE 14A SAYS THAT REPORT OF THE AUDIT IS TO BE GIVEN IN THE FORM NO. 6B. FORM NO. 6B MENTIONS ABOUT VARIOUS ITEMS ON WHICH THE SPECIAL A UDITOR HAS TO GIVE HIS REPORT. SUCH ITEMS CONTAINED IN THE FORM NO. 6B WAS ALSO INTIMATED TO THE SPECIAL AUDITOR. IT IS TRUE THAT THE A.O. RE QUIRED THE AUDITOR TO EXAMINE ALL THE ACCOUNT BOOKS, BILLS, VOUCHERS, LOO SE PAPERS, DOCUMENTS, BANK STATEMENT ETC. AND TO PREPARE THE C ASH INFLOW/OUTFLOW STATEMENTS, CASH BOOKS, LEDGER, TRAIL BALANCE, FINA L ACCOUNTS, TRADING AND PROFIT AND LOSS ACCOUNT, BALANCE SHEET ETC. FOR DIFFERENT ASSESSMENT YEARS AS MENTIONED ABOVE WITH THE AIM TO ENABLE THE DEPARTMENT TO ARRIVE AT THE TRUE STATE OF AFFAIRS OF VARIOUS CONC ERNS IN WHICH THE ASSESSEE IS ASSOCIATED EITHER AS A PROPRIETOR OR PA RTNER. THE BASIC PURPOSE WAS FOR EXAMINED OF THE BOOKS OF ACCOUNTS AND TO GIVE THE COMMENTS ON DIFFERENT ISSUES INCLUDING THE VIOLATION OF PROVISIONS OF SECTION 269SS, 269T AND SECTION 40A(3 ) OF THE IT ACT. THE A.O. HAS MENTIONED IN THE LETTER THAT AUDIT IS TO B E CARRIED OUT IN VIEW OF THE PROVISIONS OF RULE 14A. ONE HAS TO READ ENTI RE LETTER TOGETHER AND FROM THIS LETTER ONE CANNOT INFER THAT THE A.O. REF ERRED THE MATTER FOR SPECIAL AUDIT FOR GETTING THE BOOKS OF ACCOUNTS PRE PARED. THE FACTS IN THE INSTANT CASE ARE DISTINGUISHABLE FROM THE FACTS OF CIT VS. BAJRANG TEXTILES (SUPRA) IN WHICH THE AUDIT WAS REFERRED JU ST ONE DAY PRIOR TO THE LIMITATION PERIOD. THE FACTS AND CIRCUMSTANCES OF THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2009-10 ARE SIMILAR WITH THE FACTS AND CIRCUMS TANCES OF THE CASE OF MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 12 ASSESSEE FOR A.Y. 2004-05 TO 2008-09 FOR WHICH THE HONBLE ITAT HAS DECIDED AS ABOVE SO FAR AS THIS GROUND IS CONCERNED . FOLLOWING THE DECISION OF HONBLE TRIBUNAL (THE FAC TS BEING IDENTICAL THE ISSUE IS DECIDED IN FAVOUR OF REVENUE AND AGAINST T HE ASSESSEE). THIS GROUND OF APPEAL IS DISMISSED. 8 . IN LIGHT OF ABOVE, IN THE INSTANT CASE, IT IS CLEAR THAT THE BASIC PURPOSE FOR REFERRING THE MATTER TO THE SPECIAL AUDITOR WAS TO EXAMINE THE BOOKS OF ACCOUNTS AND TO GIVE HIS COMMENTS ON VARIOUS ISS UES AND NOT TO GET THE BOOKS OF ACCOUNTS PREPARED. IT IS THEREFORE IN CONSONANCE WITH THE COMMENTS OF THE AO IN THE REMAND PROCEEDINGS AS NOT ED ABOVE THAT THE UNRECORDED EXPENSES/PURCHASE FOUND IN IMPOUNDED DOCUMENTS HAS BEEN CONSIDERED BY THE SPECIAL AUDITOR IN AUDIT REP ORT WITH THE REMARKS THAT THEY HAVE ENTERED THESE EXPENSES/ PURCHASES IN BOOKS JUST TO PREPARE CORRECT CASH INFLOW/ OUTFLOW STATEMENT. 14. IT THEREFORE APPEARS THAT IN CASE OF RITESH SOM ANI (ITA NO. 405/JP/2014), THE EARLIER COORDINATE BENCH DECISION IN CASE OF RITESH SOMANI WAS NOT BROUGHT TO THE NOTICE OF THE BENCH AND IN A BSENCE THEREOF, IT CAME TO A VIEW THAT IN ESSENCE, THE ESTIMATION OF PROFITS W AS ON THE BASIS OF REJECTION OF BOOKS OF ACCOUNTS. HOWEVER, IN THE INSTANT CASE , WE HAVE CONSIDERED ALL THE EARLIER DECISIONS IN ASSESSEES OWN CASE AS WEL L AS CASE OF RITESH SOMANI, EXCEPT THE ONE WHICH HAS BEEN HIGHLIGHTED NOW, AND COME TO A DEFINITIVE CONCLUSION THAT THERE IS NO SPECIFIC OR IMPLIED REJ ECTION OF BOOKS OF ACCOUNTS IN THE INSTANT CASE. 15. IN LIGHT OF ABOVE DISCUSSIONS, WE ARE OF THE CO NSIDERED VIEW THAT THERE IS NO MISTAKE WHICH IS APPARENT FROM RECORD AND WHI CH HAS OCCURRED IN THE IMPUNGED ORDER WHICH CALL FOR ANY RECTIFICATION BY INVOKING THE PROVISIONS OF SECTION 254(2) OF THE ACT. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS HER EBY REJECTED. MA NO. 147/JP/2017 ITO, KOTA V. BABU LAL SOMANI, KOTA 13 ORDER PRONOUNCED IN THE OPEN COURT ON 29/12/2017. SD/- SD/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 29/ 12/2017 *GANESH KUMAR VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ITO, WARD-2(1), KOTA 2. IZR;FKHZ@ THE RESPONDENT- THE BABU LAL SOMANI, KOTA 3. VK;DJ VK;QDR@ CIT I, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-I, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (MA NO. 147/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR