Prasana Kumar Lenka, Bhubaneswar v. ITO, Bhubaneswar

ITA 336/CTK/2015 | 2007-2008
Pronouncement Date: 21-10-2016 | Result: Allowed

Appeal Details

RSA Number 33622114 RSA 2015
Assessee PAN AAJPL0746M
Bench Cuttack
Appeal Number ITA 336/CTK/2015
Duration Of Justice 1 year(s) 3 month(s) 5 day(s)
Appellant Prasana Kumar Lenka, Bhubaneswar
Respondent ITO, Bhubaneswar
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 21-10-2016
Assessment Year 2007-2008
Appeal Filed On 16-07-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH CUTTACK BEFORE SHRI N. S SAINI ACCOUNTANT MEMBER ITA NO.336 /CTK/2015 ASSESSMENT YEAR : 2007 - 2008 SRI PRASANA KUMAR LENKA PLOT NO.229 BAPUJI NAGAR BHUBANESWAR. VS. ITO WARD 1(2) BHUBANESWAR PAN/GIR NO. AAJPL 0746 M (APPELLANT ) .. ( RESPONDENT ) ITA NO.288 /CTK/2015 ASSESSMENT YEAR : 2007 - 2008 ITO WARD 1(2) BHUBANESWAR. VS. SRI PRASANA KUMAR LENKA PLOT NO.229 BAPUJI NAGAR BHUBANESWAR PAN/GIR NO. AAJPL 0746 M (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.R.MOHANTY REVENUE BY : SHRI ABHAY CHARAN ROUT DR DATE OF HEARING : 21 /10 / 2016 DATE OF PRONOUNCEMENT : 21 /10 / 2016 O R D E R THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGA INST THE ORDER OF CIT(A) - 1 BHUBANESWAR DATED 5.3.2015 FOR THE ASSESSMENT YEAR 2007 - 08. 2 ITA NO.336/CTK/2015 ITA NO.288/CTK/2015 ASSESSMENT YEAR :2007 - 2008 2. IN ASSESSEES APPEAL IN ITA NO.336/CTK/2015 THE ASSESSEE HAS CHALLENGED THE REOPENING OF ASSESSMENT U/S.147 OF THE ACT. 3. AT THE TIME OF HEARING LD A.R. OF THE ASSESSEE S UBMITTED THAT IN THE ASSESSMENT ORDER AT PAGE 1 IN PARA 3 THE ASSESSING OFFICER HAS RECORDED THE FOLLOWING REASONS: THAT THE ASSESSEE HAS SOLD MS PIPES AMOUNTING TO RS.28 50 769/ - TO M/S. DILLIP CONSTRUCTION. THE ASSESSEE HAS SUBMITTED DETAILS OF PURCH ASES FROM KHANDELWAL STEELS & PIPES FOR PURCHASE OF RS.8 63 921/ - WHICH HAS BEEN DEBITED TO THE P&L ACCOUNT. IT IS ALSO FOUND THAT AS AGAINST SALE OF MS PIPES OF RS.22 05 527/ - NO CORRESPONDING PURCHASES ARE SHOWN IN THE TRADING PROFIT & LOSS A/C. AS CO RRESPONDING PURCHASES HAVE NOT BEEN REFLECTED IN THE ACCOUNTS AGAINST SALE OF MS PIPES ON 30.3.2007 OF RS.22 50 769/ - IT IS SEEN THAT PURCHASES HAVE BEEN MET OUT FROM THE UNDISCLOSED INCOME OF THE ASSESSEE AMOUNTING TO RS.20 46 153/ - 4. A PERUSAL OF TH E ABOVE REASONS FOR REOPENING OF ASSESSMENT RECORDED BY THE ASSESSING OFFICER SHOWS THAT ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE HAS SOLD MS PIPES FOR RS.28 50 769/ - FOR WHICH CORRESPONDING PURCHASES OF RS.22 05 527/ - ARE NOT SHOWN IN THE TRADING ACCOUNT BY THE ASSESSEE AND THEREFORE HE HAS ADDED RS.22 50 769/ - AS UNDISCLOSED INCOME OF THE ASSESSEE. HE POINTED OUT THAT BY NOT SHOWING THE PURCHASES IN THE TRADING ACCOUNT THE ASSESSEE HAS SHOWN MORE PROFIT TO THE DEPARTMENT AND THEREFORE BY NO T SHOWING THE PURCHASE OF RS.22 50 769/ - 3 ITA NO.336/CTK/2015 ITA NO.288/CTK/2015 ASSESSMENT YEAR :2007 - 2008 BY THE ASSESSEE THERE CAN BE NO ESCAPEMENT OF INCOME OF THE ASSESSEE. HENCE THE REOPENING OF ASSESSME NT ON THIS GROUND IS NOT VALIED . FURTHER WITH REGARD TO LIABILITY TO ITER COLLEGE AS AT THE YEAREND OF RS.6 50 000/ - THE ASSESSIN G OFFICER OBSERVED THAT THE LED GER ACCOUNT OF INUSIND BANK LTDS. SHOWS RECEIPT FROM ITER COLLEGE WHICH HAS NOT BEEN REPAID IN ANY MANNER TO ITER COLLEGE AS AT THE END OF THE YEAR. THIS LIABILITY OF RS.6 50 000/ - WAS NOT AP PEARING IN THE BALANCE SHEET AND THEREFORE THE ASSESSING OFFICER HAS HELD THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. HE SUBMITTED THAT IN THE CASE OF THE ASSESSEE THE ORIGINAL ASSESSMENT WAS MADE U/S.143(3) OF THE ACT ON 11.11.2009 AT TO TAL INCOME OF RS.4 96 680/ - . THEREAFTER NO NEW MATERIAL HAS COME TO THE KNOWLEDGE OF THE ASSESSING OFFICER. THEREFORE THE ASSESSMENT PROCEEDINGS ON THE VERY SAME MATERIAL ON WHICH ASSESS MENT HAS BEEN COMPLETED U/S.143( 3) AMOUNTS TO CHANGE OF OPINION WHICH IS NOT PERMISSIBLE IN LAW. HE PLACED RELIANCE ON THE DECISION DATED 14.3.2015 OF ITAT JODHPUR BENCH IN THE CASE OF THE JALORE CENTRAL CO - OP BANK LTD VS ACIT IN ITA NO.45/JODH/2015 FOR THE ASSESSMENT YEAR 2007 - 08 AND ARGUED THAT ON SIMILAR FACTS AND CIRCUMSTANCES THE REOPENING OF ASSESSMENT U/S.147 WAS HELD TO BE BAD IN LAW. 5. ON THE OTHER HAND LD D.R. RELIED ON THE ORDERS OF AUTHORITIES BELOW. 4 ITA NO.336/CTK/2015 ITA NO.288/CTK/2015 ASSESSMENT YEAR :2007 - 2008 6. I FIND THAT THE JODHPUR BENCH OF THIS TRIBUNAL IN THE CASE OF THE JALORE CENTRAL COOPERATIVE BANK LT D. VS ACIT (ITA NOS. 45 /JODH/2015) FOR A.Y. 200 7 - 08 ORDER DATED 1 4 .3.2016 ON SIMILAR FACTS AND CIRCUMSTANCES HELD AS UNDER: 8. WE FIND THAT THE FULL BENCH OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS USHA INTERNATIONAL LTD (253 ITR 113) HAS HELD AS UNDER: EVEN WITHIN FOUR YEARS IF AN ASSESSEE HAS FURNISHED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT WITH REFERENCE TO THE INCOME ALLEGED TO HAVE ESCAPED ASSESSMENT IF THE ORIGINAL ASSESSMENT WAS MADE UNDER S. 143(3). SO LONG AS TH E ASSESSEE HAS FURNISHED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT WITH REFERENCE TO THE INCOME ALLEGED TO HAVE ESCAPED ASSESSMENT IF THE ORIGINAL ASSESSMENT WAS MADE UNDER S. 143(3). SO LONG AS THE ASSESSEE HAS FURNISHED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT AND SO LONG AS THE ASSESSMENT ORDER IS FRAMED UNDER S. 143(3) IT MATTERS LITTLE THAT THE AO DID NOT ASK ANY QUESTION OR QUERY WITH RESPECT TO ONE ENTRY OR NOTE BUT HAD RAISED QUERIES AND QUESTIONS ON OTHER AS PECTS. SEC. 114(E) OF THE EVIDENCE ACT CAN BE APPLIED TO AN ASSESSMENT ORDER FRAMED UNDER S. 143(3) PROVIDED THAT THERE HAS BEEN A FULL AND TRUE DISCLOSURE OF ALL MATERIAL AND PRIMARY FACTS AT THE TIME OF ORIGINAL ASSESSMENT. IN SUCH A CASE IF THE ASSESSME NT IS REOPENED IN RESPECT OF A MATTER COVERED BY THE DISCLOSURE IT WOULD AMOUNT TO CHANGE OF OPINION. IN A RECENT JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. ICICI SECURITIES PRIMARY DEALERSHIP LIMITED REPORTED IN 253 CTR 305. THE HON'BLE SU PREME COURT UPHELD THE ORDER OF BOMBAY HIGH COURT IN WRIT PETITION NO. 1919 OF 2006 AND HELD THAT THE ASSESSEE HAD DISCLOSED FULL DETAILS IN THE RETURN OF INCOME IN THE MATTER OF ITS DEALING IN STOCKS AND SHARES. ACCORDING TO THE ASSESSEE THE LOSS INCURRE D WAS A BUSINESS LOSS WHEREAS ACCORDING TO THE REVENUE THE LOSS INCURRED WAS A SPECULATIVE LOSS. REJECTION OF THE OBJECTIONS OF THE ASSESSEE TO THE REOPENING OF THE ASSESSMENT BY THE AO VIDE HIS ORDER DATED 23RD JUNE 2006 IS CLEARLY A CHANGE OF OPINION. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE ORDER REOPENING THE ASSESSMENT WAS NOT MAINTAINABLE. FROM THE ABOVE IT IS VERY CLEAR THAT ON ACCOUNT OF CHANGE OF OPINION THE BOMBAY HIGH COURT (UPHELD BY SC) ALLOWED THE WRIT PETITION OF THE ASSESSEE ON A CCOUNT OF CHANGE OF OPINION AT THE STAGE OF DISPOSAL OF OBJECTIONS SUBMITTED BY THE ASSESSEE TO THE REASONS RECORDED.' 5 ITA NO.336/CTK/2015 ITA NO.288/CTK/2015 ASSESSMENT YEAR :2007 - 2008 IN THE INSTANT CASE FROM THE RECORDED REASONS WE FIND THAT THE ASSESSING OFFICER FAILED TO DISALLOW THE PROVISION FOR LOSS DUE TO EMBE ZZLEMENT OF RS. 4 70 000/ - PROVISION FOR INCOME TAX OF RS.24 74 000/ - AND DONATION OF RS. 1 30 000/ - WHILE MAKING THE ORIGINAL ASSESSMENT UNDER SEC. 143(3) OF THE ACT ON 24/12/2009 FOR THIS REASON HE HAS REOPENED THE ASSESSMENT. THE HON'BLE DELHI HIGH CO URT IN THE ABOVE QUOTED DECISION HAS HELD THAT SO LONG AS THE ASSESSEE HAS FURNISHED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT WITH REFERENCE TO THE INCOME ALLEGED TO HAVE ESCAPED ASSESSMENT IF THE ORIGINAL ASSESSMENT WAS MADE UNDER S. 143(3) IN SUCH A CASE IF THE ASSESSMENT IS REOPENED IN RESPECT OF A MATTER COVERED BY THE DISCLOSURE IT WOULD AMOUNT TO CHANGE OF OPINION. RESPECTFULLY FOLLOWING THE SAME WE HOLD THAT REOPENING OF THE ORIGINAL ASSESSMENT IS BAD IN LAW AND THE R EASSESSMENT ORDER DATED 5.12.2012 IS HEREBY QUASHED AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 7. IN THE INSTANT CASE ALSO IT IS AN UNDISPUTED FACT THAT THE ASSESSMENT OF THE ASSESSEE WAS FRAMED U/S.143( 3) OF THE ACT ON 11.11.2009 WHEN THE ASSESSEE HAD DISCLOSED RECEIPT OF RS.6 50 000/ - FROM ITER COLLEGE AND THE LEDGER ACCOUNT IN THE INDUSIND BANK LTD. THE ASSESSEE HAD FILED STATEMENT OF ACCOUNT FOR THE YEAR ENDED ON 31.3.2007 WHICH INCLUDED P&L ACCOUNT AND BALANCE SHEE T OF THE ASSESSEE. THE SAME WAS ACCEPTED BY THE ASSESSING OFFICER IN THE ASSESSMENT U/S.143(3). NOW ON THE VERY SAME BALANCE SHEET THE ASSESSING OFFICER IS ALLEGING THAT THE LIABILITY OF RS.650 000/ - TO ITER COLLEGE HAS NOT BEEN DISCLOSED BY THE ASSESSE E THEREFORE INCOME HAS ESCAPED ASSESSMENT TO THAT EXTENT. THUS THE ASSESSING OFFICER ON THE BASIS OF VERY SAME MATERIAL HAS STARTED PROCEEDINGS U/S.147 WHICH AMOUNTS TO CHANGE OF OPINION AND NOT PERMISSIBLE IN LAW AS HELD BY HONBLE DELHI HIGH COURT IN THE CASE OF USHA INTERNATIONAL LTD (SUPRA). I THEREFORE HOLD THAT 6 ITA NO.336/CTK/2015 ITA NO.288/CTK/2015 ASSESSMENT YEAR :2007 - 2008 THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REOPENING THE ASSESSMENT U/S.147 OF THE ACT . HENCE I HOLD THAT THE REOPENING OF ASSESSMENT U/S.147 OF THE ACT BY ISSUE OF NOTICE 148 IS BAD IN LAW. THEREFORE REASSESSMENT MADE IN PURSUANCE TO SAID NOTICE IS ALSO BAD IN LAW AND ACCORDINGLY I QUASH T HE REASSESSMENT ORDER DATED 16. 1.2013 AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 8. AS I HAVE QUASHED THE REASSESSMENT ORDER IN ASSESSEA APPEAL THE FILED BY THE DEPARTMENT IN ITA NO.288/CTK/2015 HAS BECOME INFRACT U OUS AND THE SAME IS DISMISSED. 9. IN THE RESULT APPEAL FILED BY THE ASSESSEEEE IS ALLOWED THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCE D IN THE OPEN COURT ON 21 / 10 /2016 IN THE PRESENCE OF PARTIES. SD/ - ( N. S SAINI ) A CCOUNTANT MEMBER CUTTACK; DATED 21 /10 /2016 B.K.PARIDA SPS 7 ITA NO.336/CTK/2015 ITA NO.288/CTK/2015 ASSESSMENT YEAR :2007 - 2008 COPY OF THE ORDER FORWARDED TO : BY ORDER ASST.REGISTRAR ITAT CUTTACK 1. THE APPELLANT : SRI PRASANA KUMAR LENKA PLOT NO.229 BAPUJI NAGAR BHUBANESWAR 2. THE RE VENUE: ITO WARD 1(2) BHUBANESWAR 3. THE CIT(A) - 1 BHUBANESWAR. 4. CIT BHUBANESWAR 5. DR ITAT CUTTACK 6. GUARD FILE. //TRUE COPY//