Hemant Kumar Bagla, Kolkata v. DCIT, C ircle- 38, Kolkata, Karnataka

ITA 1661/KOL/2010 | 2006-2007
Pronouncement Date: 26-07-2011 | Result: Allowed

Appeal Details

RSA Number 166123514 RSA 2010
Assessee PAN ADPPB9552N
Bench Kolkata
Appeal Number ITA 1661/KOL/2010
Duration Of Justice 11 month(s) 3 day(s)
Appellant Hemant Kumar Bagla, Kolkata
Respondent DCIT, C ircle- 38, Kolkata, Karnataka
Appeal Type Income Tax Appeal
Pronouncement Date 26-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 26-07-2011
Assessment Year 2006-2007
Appeal Filed On 23-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C KOLKATA [ () . .. . . .. . ! '! '! '! '! ] ]] ] [BEFORE HONBLE SRI S.V.MEHROTRA AM & HONBLE S RI MAHAVIR SINGH JM ] !$ !$ !$ !$ /ITA NO.1661/KOL/2010 '%& '(/ ASSESSMENT YEAR : 2006-07 (*+ / APPELLANT ) - % - ( -.*+ /RESPONDENT) SHRI HEMANT KUMAR BAGLA KOLKATA -VERSUS- D.C.I.T. CIRC LE-38 (PAN : ADPPB 9552 N) KOLKATA. *+ / 0 / FOR THE APPELLANT: SHRI R.K.GOEL -.*+ / 0 / FOR THE RESPONDENT: SHRI NIRAJ KUMAR 1 / ORDER ( (( ( '! '! '! '!) )) ) ' PER SHRI MAHAVIR SINGH JM THIS APPEAL BY ASSESSEE IS AGAINST ORD ER OF CIT KOLKATA-XIII KOLKATA PASSED U/S 263 OF THE INCOME-TAX ACT 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE ORDER DATED 16.06.2010 FOR AY 2006-07. ASSESSMENT WAS FRA MED BY D.C.I.T. CIRCLE-38 KOLKATA U/S 143 (3) OF THE ACT FOR A.Y. 2006-07 DAT ED 16.06.2010. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE I S AGAINST ORDER OF C.I.T. REVISING THE ASSESSMENT U/S 263 OF THE ACT. FOR THIS ASSESSEE H AS RAISED FOLLOWING FOUR EFFECTIVE GROUNDS :- 1. FOR THAT THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD. C.I.T.XIII KOLKATA VIDE HIS ORDER U/S 263 OF THE INCOME TAX ACT 1961 D T 16/06/2010 WRONGLY AND ILLEGALLY SET ASIDE THE ASSESSMENT ORDER PASSED BY THE DCIT DATED 29/08/2008 U/S 143(3) OF THE INCOME TAX ACT 1961. 2. FOR THAT THE LD. C.I.T. XIII KOLKATA TREATED AS SESSMENT ORDER PASSED BY THE LD. DCIT IS ERRONEOUS AND PREJUDICIAL TO THE INTERE ST OF REVENUE ONLY ON THE BASIS OF THAT THE DEMAT ACCOUNT AND OTHER INFORMATI ON LIKE THE DETAILS OF UNSECURED LOAN CONTRACT NOTES AND THE DETAILS OF S PECULATION BUSINESS ARE NOT AVAILABLE ON RECORD WHICH HAS ALREADY BEEN PRODUCE BEFORE THE ASSESSING OFFICER AT THE TIME OF HEARING AND THE ASSESSING OF FICER IS SATISFIED AFTER 2 VERIFICATION THE RECORD WHICH IS MOST UNJUSTIFIED A ND THE LD. CIT ORDER IS LIABLE TO BE DISMISSED. 3. FOR THAT THE LD. CIT XIII HAS PROVIDED THE OPPOR TUNITY TO PRODUCE THE RELEVANT INFORMATION/DETAILS LIKE TO THE CONTRACT N OTES DEMAT ACCOUNT DETAILS OF UNSECURED LOANS SUNDRY CREDITORS AND DETAILS OF SP ECULATION BUSINESS FOR VERIFICATION DURING THE REVISION PRECEDING U/S 263 WHICH IS BEYOND HIS POWER. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT ASSESSING OFFICER FRAMED ASS ESSMENT U/S 143(3) OF THE ACT AFTER ISSUING NOTICES U/S 143(2) AND 143(1) OF THE ACT REQUIRING ASSESSEE TO FILE DOCUMENTARY EVIDENCES AND DETAILS. ASSESSEE PRODUCE D COMPLETE BOOKS OF ACCOUNT SUPPORTING DOCUMENTS COPIES OF BANK STATEMENTS AND OTHER VOUCHERS. ASSESSEE EARNED HIS BUSINESS INCOME THROUGH PROPRIETORSHIP CONCERN UNDER THE NAME AND STYLE OF M/S. ELCON INVESTMENT AND ACCOUNTS OF ASSESSEE ARE AUDIT ED. SUBSEQUENTLY CIT-XIII KOLKATA EXAMINED THE ASSESSMENT RECORDS FOR A.Y 200 6-07 WHEREBY ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT. CIT ISSUED SHOW CA USE NOTICE PROPOSING TO REVISE ASSESSMENT U/S 263 OF THE ACT AND FIXED THE CASE FO R 27.08.2009 AS SOUGHT FOLLOWING INFORMATION/DETAILS ON 30.01.2008 DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY AO: I) CONTRACT NOTES II) DEMAT ACCOUNT III) DETAILS OF UNSECURED LOANS IV) SUNDRY CREDITORS V) DETAILS OF SPECULATION BUSINESS CIT NOTED THAT EXCEPT DETAILS OF SUNDRY CREDITORS ASSESSEE COULD NOT FURNISH OTHER INFORMATION. THE CIT NOTED FROM ORDER SHEET ENTRIES DATED 07.08.2008 THAT ASSESSEES REPRESENTATIVE PRODUCED DEMAT ACCOUNT BANK STATEME NTS AND OTHER SUPPORTING DOCUMENTS DEMAT ACCOUNT AND OTHER INFORMATION LIKE DETAILS OF UNSECURED LOAN CONTRACT NOTES AND DETAILS OF SPECULATION BUSINESS ARE NOT AVAILABLE ON RECORD. ASSESSEE IN RESPONSE TO SHOW CAUSE NOTICE REPLIED VIDE DATED 7.10.2009 AND THE RELEVANT REPLY IS REPRODUCED IN REVISION ORDER OF THE CIT IS AGAIN RE PRODUCED FOR THE SAKE OF CLARITY. WITH REFERENCE TO ABOVE I BEG TO SUBMIT IT BEFORE YOUR HONOUR THAT THE ASSESSEE FILED HIS INCOME TAX RETURN FOR THE ASSESS MENT YEAR 2006-07 ON 30. 10. 2006 DECLARING TOTAL INCOME OF RS. 16 92 492/- ALONGWITH TAX AUDIT REPORT BALANCE SHEET & PROFIT AND LOSS ACCOUNT AUDITED BY QUALIFIED CHARTERED 3 ACCOUNTANTS ON 08. 10.2006 OF THE PROPRIETORSHIP CO NCERN UNDER THE NAME AND STYLE OF M/S. ELCON INVESTMENT IN WHICH THE ASSESSE E IS DEALING THE SHARE TRADING BUSINESS. IN RESPONSE THE NOTICE U/S. 143(2) AND 142(1) AND A /R APPEARED FROM TIME TO TIME AND EXPLAINED THE RETURN WITH THE HELP OF VARI OUS DOCUMENTARY EVIDENCES. THE ASSESSEE ALSO FILED ALL SORTS OF DOCUMENTS AS R EQUIRED BY THE A/O AND ALSO PRODUCED THE BOOKS OF ACCOUNTS SUPPORTING DOCUMENT S AND COPIES OF BANK STATEMENT PRODUCED WERE EXAMINED. SOME ASPECTS OF T HE ACCOUNTS WERE VERIFIED IN TERMS OF SECTION 133(6) OF THE ACT. BUT YOUR KIND HONOUR PROPOSE THE INITIATED PROCEED ING U/S 263 FOR NON AVAILABLE ON RECORD OF FOLLOWING PAPERS/DOCUMENTS 1) CONTRACT NOTE 2 ) DEMAT ACCOUNTS 3 ) DETAILS OF UNSECURED LOANS 4) DETAILS OF SPECULATION BUSINESS AND PROPOSED TO INITIATED PROCEEDING U/S. 263 TAKIN G THE VIEWS THAT WITHOUT MAKING THE EXAMINATION OF THE AFORESAID ITEMS I.E. CONTRACT NOTE DEMAT A/C UNSECURED LOANS SUNDIY CREDITORS AND THE SPECULATI ON BUSINESS PASSED THE ORDER U/S. 143(3) DATED 29/08/2008 BY THE DCIT. CIR -38 KOLKATA IS ENORMOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE IT IS T HEREFORE PROPOSED TO PASS A SUITABLE ORDER U/S 263 OF THE I.T.ACT 1961. IN THI S REGARD WE ARE SUBMITTING HEREWITH XEROX COPY OF THE ORDER SHEET IN WHICH CLE ARLY MENTIONED THAT ON 07/08/2008 SRI B. K. RAJGARIA A/R APPEARS AND PRODU CE BOOKS OF ACCOUNT INCLUDING THE DEMAT ACCOUNT BANK STATEMENT AND SUP PORTING DOCUMENTS THE SAME IS EXAMINED CASE IS HEARD & DISCUSSED AND A/S O ON 13/08/2008 SRI B K. RAJGARIA A/R APPEARS THE CASE IS FINALLY HEARD & DI SCUSSED WITH HIM MEANS THE A/O EXAMINED ALL THE SUPPORTING DOCUMENTS BOOKS OF ACCOUNTS DEMAT ACCOUNT BANK STATEMENT AFTER THAT! PASSED THE AFOR ESAID ORDER U/S 143(3) ON 29/08 /2009 WHEN THE RELATED DOCUMENTS EXAMINED BY THE A/O. THE OBSERVATION OF YOUR HONOUR THAT THE DOCUMENTS NOT AVAILABLE ON RECORD AND PRESUME THAT THE AO ALLOWED THE CLAIM WITHOUT VERIF ICATION WHICH IS INCORRECT AND MUST BE POINTED OUT THAT THE REASON THE CLAIM SHOULD NOT BE ALLOWED WHICH IS ALLOWED BY THE A/O. FROM THE ABOVE SUBMISSION IT IS CLEAR THAT THE LD. DCIT AFTER CONSIDERING THE RELEVANT DOCUMENTS PLACED BEFORE HIM COMPLETED THE ASSESSMENT U/S. 143(3). HENCE THE ORDER OF THE DCIT IS NOT ERRONEOUS AMID P REJUDICIAL TO THE INTEREST OF REVENUE. IT IS HUMBLY SUBMITTED THAT IN YOUR SHOW CAUSE NOTI CE I/TAT WHY THE IMPUGNED ASSESSMENT ORDER IS PREJUDICIAL TO THE REVENUE AS A LREADY STATED BOTH CONDITION THAT IS ORDER SHOULD BE PREJUDICIAL AND ERRONEOUS S HOULD BE SATISFIED FOR THE PURPOSE OF PROCEEDING U/S. 263 HAS NOT BEEN SPECIF IED IN THE SAID NOTICE. 4 UNDER THE ABOVE CIRCUMSTANCES OF THE CASE THE PROC EEDING U/S. 263 OF THE I.T.ACT WHICH HAS BEEN INITIATED BY YOUR KIND HONOU R MAY KINDLY BE DROPPED. CIT WAS NOT CONVINCED WITH THE REPLY OF ASSESSEE AN D SET ASIDE THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT DATED 29.8.2008 WITH T HE DIRECTION TO RE-DO THE ASSESSMENT AFTER THOROUGH EXAMINATION AND VERIFICAT ION OF RELEVANT DOCUMENTS IN RESPECT OF TRADING IN SHARES CAPITAL GAINS FROM SA LE OF SHARES SPECULATION BUSINESS AND BUSINESS INCOME. AGGRIEVED NOW ASSESSEE IS IN APPE AL BEFORE US. 4. BEFORE US THE LD. COUNSEL FOR ASSESSEE FILE D WRITTEN SUBMISSIONS AND ATTACHED ORDER COPY OF THE ORDER SHEET ENTRIES OBTAINED AFT ER PAYING THE REQUISITE FEE AND REFERRED FOLLOWING ORDER SHEET ENTRIES:- 22.10.07 THE ABOVE NAMED ASSESSEE HAS FILED THE RETURN O F INCOME FOR THE A.Y. 06-07 ON 30.10.06 SHOWING TOTAL INCOME OF 16 92 492. THE SA ME IS PROCESSED U/S 143(1) OF THE I.T.ACT 1961. THE RETURN HAS BEEN SELECTED FOR SCRUTINY AS PER CA SS ISSUE NOTICE U/S 143(2) OF I.T.ACT 1961 FIXING THE CASE FOR HEARING ON 22.11.07. 22.11.07 SHRI BINOD KR.RAJGARIA A/R OF THE ASSESSEE AP PEARS AND FILES THE VAKALATNAMA. THE CASE HAS BEEN DISCUSSED WITH HIM THE NEXT DT. OF HEARING FIXED ON 19.01.08. 19.01.2008 SRI BINOD KR.RAJGARIA FCA APPARED BEFORE ME. DIS CUSSED THE CASE. HE IS REQUIRED TO SUBMIT THE FOLLOWING DOCUMENT. ON NEXT HEARING TO BE HELD ON DATEFD 18.02.2008 AT 1.00 PM _____CONTRACT NOTES DEMAT A/C DETAILS OF UNSECURED LOAN SUNDRY CREDITORS DETAILS OF SPECULATION BUSINESS. 18.02.2008 SHRI BINOD KR. RAJGARIA FCA APPEARED BEFORE ME SUB MITTED THE FOLLOWING DOCUMENTS I) BANK STATEMENT II) DETAILS OF SUNDRY CREDITORS (ELCON INVESTMENT) III) DETAILS OF DIVIDEND IV) B/S FOR THE AY 205-06 FURTHER SRI BINOD KR. RAJGHARIA WAS RE QUESTED TO SUBMIT THE REMAINING DOCUMENTS AS PER DISCUSSION ON 30.1.2008. NEXT HEARING IS FIXED ON DATED 03.03.2008 AT 10.15 AM. 11.03.2008 SRI BINOD KR.RAJGHARI FCA APPEARED AND SICUSSE D THE CASE. HE IS REQUIRED TO SUBMIT THE FOLLOWING DOCUMENTS ON 15.4.2008 AT 11.0 0 AM- DEMAT A/C OF THESE SHARES WHERE PURCHASE AND SALES HAVE BEEN MADE. 14.07.2008 SRI BINOD KR.RAJGHARIA FCA APPEARED AND DISCUS SED THE CASE. HE HAS GIVEN THE REASON FOR NON-APPEARANCE ON DATED 15.4.2008 WH ICH HAS BEEN CONSIDERED ONLY ON THE FACTS THAT HE WILL NOT BE ABSENT IN FUTURE WITHOUT INTIMATION OR ADJOURNMENT. NEXT HEARING IS FIXED ON DATED 29.7.2008 AT 11.00 AM 29.07.2008 SRI BINOD KR.RAJGHARIA FCA A/R APPEARS AND EXPL AIN THE RETURN. SHRI RAJGHARIA STATES THAT HE HAS NO OBJECTION TO THE AS SESSMENT HEARING BEING CONFIRMED ON IT IS FROM THE LAST DATE OF HEARING. HE IS REQUESTED TO P RODUCE COPIES OF THE DEMAT A/CS AS PER O/S ENTRY OF 11.3.08. CASE IS DISCUSSED. ADJ. TO 5.8.08 AT 11.00 AM. 7.8.2008 SHRI B.K.RAJGHARIA A/R APPEARS AND PRODUCES BO OKS OF A/CS INCL. THE DEMAT A/C BANK STATS AND SUPPORTING DOCUMENTS. THE SAME IS E XAMINED CASE IS HEARD AND DISCUSSED. ADJ. TO 13.08.2008. 13.8.08 SHRI B.K.RAJGHARIA A/R APPEARS. THE CASE IS FI NALLY HEARD AND DISCUSSED WITH HIM. 5 29.8.08 ASSESSED U/S 143(3) AT A 7% OF RS.17 11 490/- AS PER SEPARATE ORDER. GIVE CREDITOR FOR REBATES OF TDS AFTER VERIFICATION. CHARGE INT. AS PER ACT. ISSUE D.N AND A COPY OF THE ORDER. 07.07.09 SEEN THE REVIEW OF THE ASSESSMENT COMMUNICATED VID E NO.CIT.XIII/HQ/REVIEW/III/09-10/947 DATED 16/06/09 AND PLACED ON RECORDS. ON EXAMINATION OF THE RECORDS AND IN COMPLIANCE OF THE ABOVE A PROPOSAL U/S 263 OF THE ACT IS SUBMITTED SEPARATELY. 5. FROM THE ABOVE ORDER SHEET ENTRIES IT IS C LEAR THAT ASSESSEE APPEARED AND PRODUCED BOOKS OF ACCOUNTS DEMAT ACCOUNT BANK STA TEMENT AND SUPPORTING DOCUMENTS AND WERE EXAMINED BY ASSESSING OFFICER AN D DISCUSSED VIDE ORDER SHEET ENTRY DATED 13.08.2008 WHICH IS SRI B.K.RAJGARIA A/R APPEARED THE CASE IS FINALLY HEAD AND DISCUSSED WITH HIM. ONCE IT IS CLEAR THAT ASSESSEE HAS PRODUCED THESE DOCUMENTS RELATING TO SHARE TRANSACTIONS I.E. DEMAT ACCOUNT TRANSACTIONS EXECUTED THROUGH CONTRACT NOTES WHICH WERE VERIFIED BY ASSE SSING OFFICER AND EVEN THE SPECULATION PROFIT FROM SHARE DEALING WAS CONSIDERE D BY ASSESSING OFFICER AS ASSESSEES INCOME CAN NOW CIT TAKE A DIFFERENT VIE W FOR THE PURPOSE OF REVISION U/S 263(3) OF THE ACT. WE ARE OF THE VIEW THAT THE CIT BEFORE EXERCISING POWER U/S 263 OF THE ACT MUST SATISFY THAT ASSESSMENT IS NOT ONLY ER RONEOUS BUT IS ALSO PREJUDICIAL TO THE INTEREST OF REVENUE AND ORDER CANNOT BE TERMED AS E RRONEOUS UNLESS THIS IS NOT IN ACCORDANCE WITH LAW. HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS CIT (2000) 243 ITR 83 HELD THAT WHERE TWO VIES A RE POSSIBLE AND ASSESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE IT CANNOT BE TREATED AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVE NUE UNLESS THE VIEW TAKEN BY ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. 6. EVEN HONBLE GUJARAT HIGH COURT IN THE CA SE OF ARVIND JEWELLERS (2003) 259 ITR 502 AT PAGE 506 HELD THAT THE FINDING OF FACT B Y THE TRIBUNAL WAS THAT ASSESSEE HAS PRODUCED RELEVANT MATERIAL AND OFFERED EXPLANATION IN PURSUANCE OF NOTICE ISSUED U/S 142(1) R.W.S. 143(2) OF THE ACT AND AFTER CONSIDERI NG MATERIALS AND EXPLANATIONS THE ASSESSING OFFICER HAS COME TO A DEFINITE CONCLUSION AND THE MERE FACT THAT A DIFFERENT VIEW CAN BE TAKEN SHOULD NOT BE THE BASIS FOR AN A CTION U/S 263 OF THE ACT AND SUCH ACTION IF TAKEN CANNOT BE HELD TO BE JUSTIFIED BECA USE THE MATERIAL WAS THERE ON RECORD AND THE SAID MATERIAL WAS CONSIDERED BY THE OFFICER AND A VIEW WAS TAKEN. IN THE 6 PRESENT CASE THE FACTS ARE EXACTLY IDENTICAL TO WHA T WAS BEFORE HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. (SUPRA) AND BEFORE HONBLE GUJARAT HIGH COURT IN THE CASE OF ARVIND JEWELLERS (SUPRA). HENCE WE A RE OF THE VIEW THAT IN THE GIVEN FACTS AND CIRCUMSTANCES REVISION ORDER PASSED U/S 2 63 OF THE ACT CANNOT BE SUSTAINED. ACCORDINGLY WE QUASH THE SAME. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- [ .. ] [ '! ' ] [ S.V.MEHROTRA ] [ MAHAVIR SI NGH ] ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (2 2 2 2) )) ) DATE: 26.07.2011. R.G.(.P.S.) 1 / -''3 43'5- COPY OF THE ORDER FORWARDED TO: 1 . SHRI HEMANT KUMAR BAGLA 24B NIMTALA GHAT STREET KOLKATA-700006. 2 THE D.C.I.T. CIRCLE-38 KOLKATA. 3 . THE CIT 4. THE CIT-XIII KOLKATA 5 . DR KOLKATA BENCHES KOLKATA .3 -'/ TRUE COPY 1%:/ BY ORDER DEPUTY /ASST. REGISTRAR ITAT KOLKATA BENCHES