Sh. Vikrant Mehra, Amritsar. v. Income Tax Officer, Amritsar.

ITA 68/ASR/2012 | 2008-2009
Pronouncement Date: 09-04-2014 | Result: Allowed

Appeal Details

RSA Number 6820914 RSA 2012
Assessee PAN AASPM2851M
Bench Amritsar
Appeal Number ITA 68/ASR/2012
Duration Of Justice 2 year(s) 1 month(s) 14 day(s)
Appellant Sh. Vikrant Mehra, Amritsar.
Respondent Income Tax Officer, Amritsar.
Appeal Type Income Tax Appeal
Pronouncement Date 09-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 18-03-2016
Date Of Final Hearing 15-02-2016
Next Hearing Date 15-02-2016
Assessment Year 2008-2009
Appeal Filed On 24-02-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR HONBLE ACCOUNTANT MEMBER [ I.T.A NOS. 67 & 68 (ASR)/2012 ASSESSMENT YEARS: 2007-08 & 2008-09 MR. VIKRANT MEHRA C/O M/S GEETU TRADERS MQBOOL ROAD AMRITSAR. PAN:AASPM2851M VS. ITO WARD-5(4) AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N. ARORA (ADV.) RESPONDENT BY: SH. SH. TARSEM LAL (DR.) DATE OF HEARING: 15.02.2016 DATE OF PRONO UNCEMENT: 18.03.2016 ORDER PER T. S. KAPOOR (AM): THESE ARE TWO APPEALS FILED BY ASSESSEE AGAINST TH E COMMON AND CONSOLIDATED ORDER PASSED BY LEARNED CIT DATED 30. 12.2011 U/S 263 FOR ASST. YEAR 2008-09 & 2007-08. 2. THE ASSESSEE HAS TAKEN SIMILAR GROUNDS OF APPE AL IN BOTH THE YEARS HOWEVER CRUX OF GROUNDS OF APPEAL IS THE ACTION OF LEARNED CIT BY WHICH HE HAD PASSED THE ORDER U/S 263. THE APPEALS WERE E ARLIER DISMISSED FOR NON PROSECUTION VIDE TRIBUNAL ORDER DATED 09.04.201 4 HOWEVER THE SAID ORDER WAS RECALLED VIDE TRIBUNAL ORDER DATED 26.09. 2014 AND THE APPEALS WERE LISTED FOR HEARING ON MERITS. ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 2 3. AT THE OUTSET THE LEARNED AR SUBMITTED THAT ASS ESSMENT IN THESE CASES WAS COMPLETED U/S 143(3) AFTER DUE APPLICATIO N OF MIND BY ASSESSING OFFICER AND LEARNED CIT HAS WRONGLY COMPL ETED PROCEEDINGS U/S 263 OF THE ACT. EXPLAINING THE FACTS OF ASST. Y EAR 2008-09 THE LEARNED AR SUBMITTED THE ORIGINAL RETURN IN THIS CA SE WAS FILED ON 31.12.2008 DECLARING AN INCOME OF RS.1 06 870/- AN D THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 1 43(2) WAS ISSUED ON 17.08.2009. THE ASSESSEE REVISED HIS RETURN OF INCO ME DECLARING AN INCOME OF RS.4 49 510/-ON 24.06.2010 AND INCLUDED I N THE RETURN HIS INCOME FROM TRADING UNDER THE PROVISIONS OF SECTION 44AF OF THE ACT. HE SUBMITTED THAT ASSESSMENT WAS COMPLETED U/S 143(3) ON 30.11.2010 AT AN INCOME RS.5 09.510/- AFTER TAKING INTO CONSIDERA TION THE REVISED RETURN. THE LEARNED AR SUBMITTED THAT REVISED RETUR NS WERE FILED BECAUSE OF THE FACT THAT ASSESSEE HAD FORGOTTEN TO THE INCL UDE HIS INCOME FROM RETAIL TRADE BUSINESS AND THEREFORE BEFORE THE QUE STIONNAIRE WAS ISSUED ON 31.08.2010 THE ASSESSEE VOLUNTARILY REVISED HIS RETURN OF INCOME. THE LEARNED AR SUBMITTED THAT ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE QUESTIONNAIRE 31.08.201 0 RAISED CERTAIN QUERIES INCLUDING FURNISHING DETAILS OF BUSINESS IN RESPECT OF WHICH INCOME WAS DECLARED U/S 44AF AND IN RESPONSE THE AS SESSEE SUBMITTED HIS REPLY VIDE LETTER DATED 14.09.2010. THE LEARNED AR SUBMITTED THAT ASSESSEE FILED ANOTHER REPLY WHEREIN HE SUBMITTED T HAT IN VIEW OF THE PROVISIONS OF SECTION 44AF WHICH OPENS WITH A NON O BSTANTE CLAUSE THE ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 3 PROVISIONS OF SECTION 28 TO 43C FOR COMPUTATION OF INCOME UNDER THE HEAD BUSINESS WERE NOT APPLICABLE TO THE ASSESSEE. THE LEARNED AR FURTHER INVITED OUR ATTENTION TO PAPER BOOK PAGE 68 TO 70 WHERE A COPY OF LETTER DATED 11.11.2010 WRITTEN TO ASSESSING OFFICE R WAS PLACED AND SUBMITTED THAT ASSESSEE HAD RELIED UPON THE DECISIO N OF HONBLE ITAT AMRITSAR BENCH IN ITA 548 (ASR)/2008 FOR THE PROP OSITION THAT WHERE THE ASSESSEE HAD OFFERED FOR TAXATION THE INCOME UN DER THE PRESUMPTIVE PROVISIONS OF SECTION 44AF NO FURTHER INQUIRY WAS N EEDED AND THEREFORE AFTER THE ASSESSING OFFICER WAS SATISFIED WITH THE APPLICABILITY OF THE PROVISIONS OF SECTION 44AF HE PASSED THE ORDER ON 30.11.2010 AND THEREFORE THE INITIATION OF PROCEEDINGS U/S 263 WA S NOT WARRANTED AS ASSESSING OFFICER HAD COMPLETED ASSESSMENT AFTER SA TISFYING HIMSELF FROM ALL ANGLES. THE LEARNED AR SUBMITTED THAT THROUGH A SSESSING OFFICER HAD NOT WRITTEN HIS ORDER ELABORATELY BUT THAT DOES NOT MEAN THAT ORDER WAS ERROENOUES. RELIANCE IN THIS RESPECT WAS PLACED ON THE DECISION OF ITAT DELHI BENCH IN THE CASE OF ADDL. COMMISSIONER OF INCOME TAX VS. SHIPRA ESTATE LTD. 35 SOT 256 (DELHI) FOR THE PROPOSITION THAT WHERE THE ASSESSING OFFICER ACTING IN ACCORDANCE WITH LAW FRA MES AN ASSESSMENT ORDER THE SAME CANNOT BE BRANDED AS ERRONEOUS SIMPL Y BECAUSE ACCORDING TO COMMISSIONER ORDER SHOULD HAVE BEEN WR ITTEN MORE ELABORATELY. RELIANCE WAS ALSO PLACED ON THE CASE L AW OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. DEEPAK M ITTAL 324 ITA 411 FOR THE PROPOSITION THAT WHERE THE ASSESSING OFFICE R HAD EXAMINED THE ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 4 DETAILS AND HAD HELD THAT ASSESSEE WAS ENGAGED IN T HE PROCESS OF MANUFACTURING OF PRODUCTS AND ACCORDINGLY GRANTED D EDUCTION U/S 80-IB THE ORDER OF LEARNED CIT FOR REVISION WAS HELD TO B E NOT VALID. RELIANCE WAS ALSO PLACED ON THE DECISION OF ITAT AMRITSAR BE NCH IN THE CASE OF M/S ROSHAN LAL VEGETABLE PRODUCTS PVT. LTD. VS. ITO IN ITA 06(ASR)/2010 FOR THE PROPOSITION THAT WHERE THE RELEVANT ISSUES HAVE DULY BEEN CONSIDERED AND ADJUDICATED BY THE ASSESSI NG OFFICER WHILE MAKING THE ASSESSMENT THE CIT IS NOT COMPETENT TO RE-ADJUDICATE THE SAME ISSUE BY INVOKING THE PROVISIONS OF SECTION 26 3. THE LEARNED AR FURTHER PLACED HIS RELIANCE ON THE CASE LAW OF CIT VS. KELVINATOR OF INDIA LTD. REPORTED IN 332 ITR 231 FOR THE PROPOSITION THAT WHERE THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEWS WITH WH ICH CIT DOES NOT AGREE THE ORDER CANNOT BE TERMED AS ERRONEOUS AND PREJUDI CIAL TO THE INTEREST OF REVENUE. FURTHER RELIANCE WAS PLACED ON THE CASE LAW OF CIT VS. MAX INDIA LTD REPORTED IN 295 ITR 282 FOR THE PROPOSITION THAT WHERE TWO VIEWS ARE POSSIBLE AND THE AO HAS TAKEN ONE VIEW WI TH WHICH COMMISSIONER DOES NOT AGREE IT CANNOT BE TREATED AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. THE LEARNED AR ALSO PLACED HIS RELIANCE ON THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF MALABAR INDUSTRIAL COMPANY LTD. VS. CIT REPORTED IN 243 IT R 83 FOR THE PROPOSITION THAT EVERY LOSS OF REVENUE IN AN ASSESS MENT ORDER PASSED BY ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF REVENUE AND FURTHER FOR THE PROPOSITION THAT THE PR OVISIONS OF SECTION ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 5 263 CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYP E OF MISTAKE OR ERROR COMMITTED BY ASSESSING OFFICER. 4. AS REGARDS ASSESSMENT ORDER 2007-08 THE LEARNED AR SUBMITTED THAT THE LEARNED CIT HAS NOT PASSED A SEPARATE ORDE R AND HAS PASSED ORDER FOR ASST. YEAR 2007-08 HOLDING THAT THE FACTS OF THE CASE FOR ASST. YEAR 2007-08 ARE SIMILAR TO ASST. YEAR 2008-09 AND THEREFORE THIS ORDER CANNOT BE SAID TO BE VALID ORDER. 5. THE LEARNED DR ON THE OTHER HAND SUBMITTED THA T ASSESSEE AFTER COMING TO KNOW THAT ASSESSING OFFICER HAD CERTAIN I NFORMATION HAD FILED REVISED RETURNS WHICH WERE BEYOND THE STATUTORY PER IOD OF TIME AND ASSESSING OFFICER ACCEPTED THE REVISED RETURN AND A CCEPTED THE SUBMISSIONS OF ASSESSEE THAT HE WAS ENGAGED IN RETA IL TRADE WITHOUT ANY ENQUIRY. THE LEARNED DR SUBMITTED THAT THE ASSESSIN G OFFICER SHOULD HAVE EXAMINED AS TO WHETHER INGREDIENTS OF SECTION 44AF WERE MET AND HE WAS TO SEE AS TO WHETHER THE TURN OVER OF THE AS SESSEE WAS WITHIN THE PRESCRIBED LIMITS AS PER SECTION 44AF. HE SUBMITTED THAT ASSESSING OFFICER DID NOT INITIATE ANY SUCH ENQUIRY AND ALSO DID NOT ENQUIRE AS TO WHETHER THE BUSINESS WAS WHOLE SELLER OR RETAILER. HE FURTHER SUBMITTED THAT NO ENQUIRY REGARDING CO-RELATION BETWEEN THE S O CLAIMED BUSINESS AND DEPOSIT IN BANK ACCOUNT WERE MADE AND THEREFORE ORDER OF ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERE ST OF REVENUE. 6. THE LEARNED AR IN HIS REJOINDER SUBMITTED THAT N ECESSARY ENQUIRY WAS CONDUCTED BY ASSESSING OFFICER AND IN THIS RESP ECT OUR ATTENTION WAS ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 6 INVITED TO COPY OF ORDER SHEET PLACED AT PAPER BOOK PAGE 7 AND 8 FOR ASST. YEAR 2008-09. THE LEARNED AR SUBMITTED THAT VIDE OR DER SHEET ENTRY DATED 18.10.2010 THE ASSESSING OFFICER HAD ASKED T O SUBMIT CASH FLOW STATEMENT AND SALE TAX VAT RETURN FOR WHICH A DETAI LED REPLY WAS FILED VIDE LETTER DATED 11.11.2010 AND AFTER CONSIDERING THE REPLIES AND REPLY FILED ON 11.11.2010 THE ASSESSING OFFICER HAD COMP LETED THE ASSESSMENT. THE LEARNED AR SUBMITTED THAT IN THIS R EPLY DATED 11.11.2010 THE ASSESSEE HAD RELIED UPON THE CASE LA W OF ITAT AMRITSAR BENCH FOR THE PROPOSITION THAT WHERE ASSESSEE CLAI MS INCOME U/S 44AF NO FURTHER ENQUIRIES CAN BE MADE. THEREFORE LEARNE D AR ARGUED THAT ASSESSING OFFICER HAD COMPLETELY APPLIED HIS MIND. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE LEARNED CIT HAS ISSUED NOTICE U/S 263 VIDE SHOW CAUSE NOTICE DATED 25.11.2011. FO R THE SAKE OF CONVENIENCE THE CONTENTS OF THE NOTICE AS REPRODUCE D IN THE ORDER U/S 263 ARE REPRODUCED HEREIN. THE UNDERSIGNED CALLED FOR AND EXAMINED THE RECORD S. A SHOW CAUSE NOTICE DATED 25-11-2011 WAS ISSUED TO THIS ASSESSEE BOTH FOR A.Y. 2007- 08 AND A.Y.2008-09. THE SHOW CAUSE NOTICE IS REPROD UCED AS UNDER IN YOUR CASE TWO SEPARATE ASSESSMENTS FOR THE ASSE SSMENT YEARS 2007-08 AND 2008-09 HAVE BEEN COMPLETED BY THE INCOME TAX O FFICER WARD5(4) AMRITSAR VIDE TWO SEPARATE ORDERS DATED 30.12.2010 AND 30.11.2010 AT AN INCOME OF RS.3 40 197 AND RS.5 09 510 RESPECTIVE LY. THE PROPOSAL HAS NOW BEEN RECEIVED FROM THE INCOME TAX OFFICER WARD 5(4) AMRITSAR UNDER SECTION 263 OF THE I.T. ACT 1961 STATING THAT THE ASSESSMENT FRAMED IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS O F REVENUE. 2 THE REPORT SUBMITTED BY THE ASSESSING OFFICER HA S BEEN CONSIDERED. I HAVE ALSO PERUSED THE ASSESSMENT RECORDS FOR THE ABOVE MENTIONED TWO ASSESSMENT YEARS THE FOLLOWING FACTS EMERGE THEREF ROM:- ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 7 (I) THE ORIGINAL RETURN FOR THE ASSESSMENT YEAR 200 8-09 WAS FILED ON 31.12.2008 DECLARING AN INCOME OF RS.1 06 870/-. (II) THE CASE FOR THE SAID ASSESSMENT YEAR WAS SELE CTED FOR SCRUTINY ON THE BASIS OF CASS AND NOTICE UNDER SECTION 143(2) WAS I SSUED ON 17.08.2009 I.E. TO VERIFY YOUR BANK DEPOSITS IN THE IDBI BANK. (III) YOU HAVE FILED REVISED RETURNS FOR THE ASSESS MENT YEARS I.E. 2007-08 2008-09 ON 24.6.2010 DECLARING AN INCOME OF RS.3 0 0 197/- AND RS.4 49 510/-. THE BASIS OF REVISION OF INCOME HAS BEEN ATTRIBUTED TO THE FOLLOWING REASONS APPENDED TO THE REVISED RETURN AS UNDER: 2). THE REVISED RETURN IS BEING FILED SUO MOTO IN ORDER TO DECLARE THE INCOME WHICH I HAD FAILED TO DECLARE IN THE ORIGINA L RETURN ON ACCOUNT OF PERSONAL AND FAMILY REASONS. I HAVE BEEN GIVEN COUN SEL BY MY WELL WISHERS THAT I SHOULD COME OUT WITH CLEAN CONSCIENC E AND PUT MY TAX AFFAIRS IN ACCORDANCE WITH INCOME TAX ACT 1961. TH E INCOME DECLARED WAS DERIVED FROM RETAIL TRADE OF GERMS AND DIAMOND PIEC ES FROM GUJRAT TOWNS. THE CUSTOMERS OF GEM CAME TO ME TO PURCHASE GEMS FO R ASTROLOGICAL REMEDIES. DIAMOND PIECES PURCHASED BY ME WERE OF LE SS THAN 1 CARAT EACH. (I) INCOME ORIGINAL FILED RS.1 06 872/- (II) SALE OF GEMS & DIAMONDS-CASH DEPOSITED RS.1805250 (OFFERED U/S 44AF)-MAXIMUM EST. SALE RS.2500000. (III) MINIMUM PROFIT @5% U/S.44AF. RS.1 25 000/- (IV) MAXIMUM ESTIMATED PROFIT FROM BUSINESS RS.3 32 000/-. (IV) THE REVISED RETURNS HAVE BEEN FILED ONLY AFTER THE ISSUE OF NOTICE U/S 143(2) FOR THE ASSESSMENT YEAR 2008-09. YOU ATTENDE D THE OFFICE ON 18.06.2010 AND SUBMITTED A WRITTEN REPLY. AT THAT T IME YOU WERE NOT AWARE OF THE FACTUAL POSITION OF THE CASE. ON THAT DATE WHEN YOU CAME TO KNOW THAT DEPOSITS IN YOUR IDBI.A/C.NO.113960 AMOUN TING TO RS.16 85 260 COULD NOT BE REFLECTED IN THE ORIGINAL RETURN OF INCOME YOU IMMEDIATELY FILED THE REVISED RETURNS ON 24.06.2011 FOR THIS YEAR PRECEDING AND SUCCEEDING ASSESSMENT YEARS ALSO. (V) THE BASIS OF FILING THE REVISED RETURN I.E. RE TAIL TRADE OF GEMS HAS AT NO POINT OF TIME BEEN ENQUIRED INTO BY THE ASSESSIN G OFFICER AND WHEREAS YOU HAVE ALSO BEEN BOUND TWISTING FROM THE MAIN ISS UE OF VERIFICATION OF YOUR BUSINESS IN RETAIL TRADE BY SEEKING SHELTER OF SECTION 44AF OF THE INCOME TAX ACT 1961 THAT YOU ARE NOT REQUIRED TO MA INTAIN THE BOOKS OF ACCOUNT. (IV) THE COMPLIANCE TO THE PROVISIONS OF SECTION 14 3(2) I.E.TO PROVE THE CORRECTNESS OF YOUR RETURN REVISED FOR ALL THESE YE ARS WHICH IS THE MANDATORY REQUIREMENT OF THIS SECTION HAS THEREFORE REMAINED UNTOUCHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR BOT H THE ASSESSMENT YEAQRS 2007-08 AND 2008-09 FOR WHICH THE ONUS LAID UPON YOU TO APPEAR AND TO PRODUCE EVIDENCE IN SUPPORT OF YOUR REVISED RETURN FILED 24.06.2011. THE VITAL ISSUE OF THE CASE HAS THEREFORE REMAINED TOTALLY UNTOUCHED AND THE ASSESSMENT HAS BEEN FRAMED IN HASTE. ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 8 3. IN VIEW OF THE ABOVE THE ASSESSMENTS FOR THE ASS ESSMENT YEARS 2007-08 AND 2008-09 FRAMED BY THE I.T.O WARD 5(4) AMRITSA R VIDE ORDERS DATED 30.12.2010 AND 30.11.2010 BEING ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE THEREFORE REQUIRED TO THE REVISED. YOU ARE HEREBY GIVEN AN OPPORTUNITY OF BEING HEARD AND TO S UBMIT YOUR REPLY IN THE MATTER ON 7.12.2011. TO THE ABOVE SAID NOTICE THE ASSESSEE FILED REPLY W HEREIN HE REITERATED THAT IN THE CASE THE INCOME IS OFFERED U/S 44AF NO FURTHER QUESTIONS ARE REQUIRED TO BE ASKED AS NONE OF THE PROVISIONS OF S ECTION 28 TO 43(C) ARE APPLICABLE FOR DETERMINATION OF INCOME FROM PROFITS OF BUSINESS AS THE ASSESSEE IS NOT REQUIRED TO MAINTAIN ANY BOOKS OF A CCOUNTS AS REQUIRED U/S 44AA OF THE ACT. HOWEVER THE LEARNED CIT PASSE D THE ORDER U/S 263 CANCELING THE ASSESSMENT ORDER PASSED BY ASSESSING OFFICER AND DIRECTED THE ASSESSING OFFICER TO MAKE A FRESH ASSESSMENT. F ROM THE CONTENTS OF SHOW CAUSE NOTICE WE FIND THAT OBJECTION OF LEARNED CIT WAS THAT THE BASIS OF FILING OF REVISED RETURN WAS NOT ENQUIRED BY ASSESSING OFFICER. IN THIS RESPECT WE FIND THAT ASSESSING OFFICER FIRST ENQUIRED ABOUT THE INCOME U/S 44AF VIDE NOTICE DATED 31.08.2010 PLACED AT PAPER BOOK PAGE 62 WHEREIN THE ASSESSING OFFICER VIDE QUESTION NO.3 HAD REQUIRED THE ASSESSEE TO THE FOLLOWING QUERY. 3. PLEASE FURNISH THE DETAIL OF BUSINESS IN RES PECT OF WHICH INCOME HAS BEEN DECLARED U/S 44AF EXPLAINING INTER ALIA; T HE SOURCE OF INVESTMENT MADE IN THE SAID BUSINESS. IN REPLY TO THE ABOVE QUESTION THE ASSESSEE FILED REPLY VIDE LETTER DATED 14.09.2010 PLACED AT PAPER BOOK PAGE 66 WHEREIN THE ASSESSEE SUBMITTED AS UNDER: ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 9 KINDLY NOTE THAT I AM NO MAINTAINING ANY REGULAR B OOKS OF ACCOUNTS. HOWEVER MY ALL MY ASSETS AND LIABILITIES ARE EVIDENT FROM MY STATEMENT OF AFFAIRS/BALANCE SHEET. I MAY REPEAT HERE THAT I AM NOT REQUIRED TO MAINTAIN BOOKS REGARDING SALARY AND SHARE OF PROFIT ETC. FROM FIRM. BUT REGARDING INCOME U/S 44AF IT I S OUTSIDE PURVIEW OF SECTION 44AA. WE FURTHER FIND THAT VIDE ORDER SHEET ENTRY DATED 1 8.10.2010 THE ASSESSEE WAS ASKED TO FILE CASH FLOW STATEMENT AND COPY OF SALES TAX/ VAT RETURN AND IN REPLY THE ASSESSEE FILED LETTER D ATED 11.11.2010 WHEREIN AGAIN A DETAILED REPLY WAS FILED AND WHEREI N ASSESSEE RELIED UPON THE DECISION OF ITAT AMRITSAR BENCH IN THE CASE OF SMT. SAVITI ALIA SWEETY SEKHRI VS. ITO IN ITA 548 (ASR)/2008 FOR ASST. YEAR 2005-06. FOR THE SAKE OF COMPLETENESS THE REPLY OF THE ASSESSEE AS PLACED IN PAPER BOOK PAGE 68 TO 70 IS MADE PART OF THIS ORDER AND I S REPRODUCED BELOW. APROPOS OF THE ABOVE THE ABOVE ASSESSMENT PROCEED INGS ARE IN PROGRESS BEFORE YOUR ESTEEMED SELF. THE QUESTIONNAIRE HAD BE EN ISSUED BY YOU WHICH HAVE BEEN DULY REPLIED TO VIDE LETTER DATED 1 4/09/2010 ALONG WITH THE ANNEXURE REFERRED TO THEREIN. ON THE LAST DATE OF THE HEARING IT WAS ENQUIRED BY YOU FROM ME THAT I SHOULD FURNISH CASH FLOW STATEMENT RETURNS OF SALE TAX AND STATEMENT. IN REPLY I AM S UBMIT AS UNDER:- I HAVE ALREADY STATED IN PARA 2 OF MY LETTER 18/10/ 2010 ABOUT THE NON- APPLICABILITY OF SECTION 44AA REGARDING MAINTENANCE OF BOOKS OF ACCOUNT WHICH HAVE BEEN SPECIFICALLY EXCLUDED AS PER SECTIO N 44AF. FURTHER THE NON OBSTANTE CLAUSE AT THE BEGINNING OF SECTION 44A F ALSO EXCLUDES THE APPLICABILITY TO SECTION 28 TO 43C. THEREFORE PERM IT ME TO SAY WITH ALL DUE RESPECT THAT YOUR QUERIES WITH REGARD TO BUSINESS I NCOME OFFERED U/W 44AF ARE NOT LEGALLY CALLED FOR. WE ARE SUPPORTED IN THI S CONTENTION BY THE DECISION OF AMRITSAR BENCH OF INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF SMT. SAVITI ALIAS SWEETY SHEKHIR VS. ITO WARD 2(2) AMRITSAR IN ITA NO.548(ASR)/2008 FOR ASST. YEAR 2005-06. YOUR ATTEN TION IS INVITED TO PARA 4 TO 4.3 OF THE SAID ORDER WHICH IS BEING REPRODUCE D HEREUNDER:- 4. THE LD. COUNSEL DREW OUR ATTENTION TO SECTION 4 4AF OF THE INCOME TAX ACT AND SUBMITTED THAT SECTION 44AF IS APPLICABLE TO THE ASSESSEE ENGAGED IN RETAIL TRADE IN ANY GOODS O R MERCHANDISE ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 10 WHOSE TURNOVER WAS MORE THAN RS.40 LACS AND THE ASS ESSEE IS REQUIRED TO OFFER A SUM NOT LESS THAN 5% OF THE TOT AL TURNOVER AS INCOME OF THE ASSESSEE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OF PROFESSION SUBJECT TO OTHER CONDITIONS LAND DOWN IN THE SECTION. HE SUBMITTED THAT THERE IS NO NECESSITY OF MAINTAINING BOOKS OF ACCOUNT AS ENUMERATED UNDER SECTION 44AA(2 ) OF THE ACT AND IF THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNT SHE IS ENTITLED TO CLAIM DEDUCTION AS PER BOOKS OF ACCOUNT AND THEN THE ASSESSEE NEED NOT OFFER ANY INCOME AS PER SECTION 44AF OF TH E ACT. HE SUBMITTED THAT IN THE PRESENT CASE THE ASSESSEE IS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNT AND THE AO IS NOT JUSTIFI ED IN CALLING THE BOOKS OF ACCOUNT. HE FURTHER SUBMITTED THAT ONCE TH E AO ACCEPTED THE INCOME DECLARED BY THE ASSESSEE U/S 44AF OF THE ACT ONCE AGAIN MADE THE ADDITION WITH REGARD TO THE DEPOSIT IN THE BANK ACCOUNT WHICH IS HIGHLY IMPROPER AND IS LIABLE TO BE DELETED. 4.1 FURTHER HE SUBMITTED THAT THE IMPUGNED DEPOSITS IN THE BANK ACCOUNT AT RS.2438100/- WHICH IS ALREADY INCLUDED I N THE TURNOVER DECLARED BY THE ASSESSEE AT RS.2500000/- AND MAKING ADDITION ONCE AGAIN TOWARDS DEPOSIT IN THE BANK ACCOUNT WILL RESULT IN DOUBLE ADDITION WHICH IS AGAINST THE PRINCIPLES OF SECTIO N 44AF OF THE ACT. 4.2 THE LD. DR. ON THE OTHER HAND RELIED ON THE ORDER S OF THE AUTHORITIES BELOW. 4.3 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL PLACED ON RECORD. THE FIRST QUESTION FOUR OUR CONSIDERATION I S THAT WHETHER THE ASSESSEE CAN BE SAID TO HAVE NOT ENGAGED IN THE RET AIL BUSINESS OF TRADING IN TEXTILE/FABRICS AND APPLICABILITY OF SEC TION 44AF OF THE ACT. ACCORDING TO ASSESSEE SHE IS ENGAGED IN THE R ETAIL TRADE OF THE TEXTILE/FABRICS AND OFFERED THE TURNOVER OF RS.2500 000/- FOR TAXATION AT 5% AND THIS AMOUNT OF 5 ATRS.125000/- IS CONSIDE RED AS INCOME OF THE ASSESSEE. THE FACT OF INCOME AT 5% ON TURNOV ER OF RS.25LACS IS NOT DISPUTED BY THE AO. IN ADDITION TO THIS RS.1250 00/- THE ASSESSEE ALSO OFFERED RS.100000/- TOWARDS PEAK IN T HE SAID BANK ACCOUNT AND THUS THE TOTAL INCOME OFFERED WAS AT RS .225000/-. THE AO AFTER ACCEPTING THIS AMOUNT OF RS.22500/- MADE FURTHER ADDITION OF RS.2438100/-. THE REASON GIVEN BY THE A O IS THAT THE ASSESSEE HAS NOT FURNISHED DETAILS OF PAYMENTS RECE IVED UNDER SECTION 44AF THEN SUCH ASSESSEE HAS TO MAINTAIN BOO KS OF ACCOUNT AND OTHER DOCUMENTS AS REQUIRED UNDER SECTION 44AA OF THE ACT. IN THE PRESENT CASE THE ASSESSEE ADMITTEDLY STATED B EFORE THE LOWER AUTHORITIES THAT THE ASSESSEE IS ENGAGED IN THE BUS INESS OF RETAIL SALE OF TEXTILE/FABRICS AND TURNOVER IS LESS THAN R S.40 LACS AND PROFIT DECLARED AT 5% OF THE TOTAL TURNOVER TO BE A CCEPTED AS INCOME OF THE ASSESSEE. THE AO ACCEPTED THIS PORTION OF TH E ASSESSEE. LATER ON THE AO CANNOT GO AGAINST THIS AND MADE FURTHER A DDITION ON ACCOUNT OF DEPOSIT IN THE BANK ACCOUNT. THE ASSESSE E WHEN SAID THAT THE DEPOSIT IN THE BANK ACCOUNT. THE ASSESSEE WHEN SAID THAT THE DEPOSIT IN THE BANK ACCOUNT REPRESENT THE TURNO VER AND THE ONLY 5% IS INCOME AS PER SECTION 44AF THE AO IS NOT JUS TIFIED IN TREATING ENTIRE DEPOSIT IN THE BANK ACCOUNT AS INCOME OF THE ASSESSEE UNLESS HAVING ANY EVIDENCE THAT THE ASSESSEE IS NOT RETAIL TRADER . THE AO ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 11 NEVER SAID THAT THE ASSESSEE IS NOT ENTITLED FOR BE NEFIT OF SECTION 44AF. AFTER ACCEPTING THE INCOME OF THE ASSESSEE U/ S 44AF IT WAS NOT POSSIBLE FOR AO TO TREAT THE DEPOSIT IN THE BAN K ACCOUNT AS INCOME OF THE ASSESSEE. ONCE THE AO ACCEPTED THE AS SESSMENT OF THE ASSESSEE ON PRESUMPTIVE MANNER AT 5% OF THE TOT AL TURNOVER AS INCOME OF THE ASSESSEE THEN THE AO CANNOT APPLY THE PROVISIONS OF SECTION 28(2) TO SECTION 43 OF THE ACT AND ALSO OTH ER SECTIONS 68 69 69A 69B 69C & 44AF OF THE ACT 1961. ACCORDIN GLY THESE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. HAD THE AO WANTED TO ASSESSEE THE DEPOSITS IN THE BANK ACCOUNT AS UNE XPLAINED INCOME OF THE ASSESSEE HE SHOULD HAVE EXCLUDED THE INCOME DECLARED BY THE ASSESSEE U/S 44AF OF THE INCOME-TAX ACT 1961. HE CANNOT ASSESS BOTH INCOME DECLARED BY THE ASSESSEE U/S 44AF OF THE ACT AND THEREAFTER BRING THE DEPOSIT IN THE BAN K ACCOUNT AS UNEXPLAINED INCOME OF THE ASSESSEE WHICH IS NOTHING BUT DOUBLE ADDITION. REGARDING STOCK TALLY I AM TO SUBMIT THAT I AM NOT REQUIRED ANY DAY TO DAY STOCK TALLY AS ALREADY CLARIFIED ABOVE AND IN THE P REVIOUS LETTER DATED 18/10/2010. THOUGH I AM NOT REQUIRED TO DO SO BUT IN THE SPIRI T OF COOPERATION I AM ENCLOSING HEREWITH THE CASH FLOW STATEMENT FROM 01/ 04/2007 TO 31/03/2008 CORRELATED TO DEPOSITS AND WITHDRAWALS O F CASH TO AND FROM VARIOUS BANK ACCOUNTS MAINTAINED BY ME. I HAVE FURNISHED ALL THE INFORMATION THAT WAS LEGAL LY TENABLE TO BE REQUIRED OF ME AND I AM SURE YOU WILL FIND IT IN ORDER. THEREFORE FROM THE ABOVE QUERIES OF ASSESSING OFFI CER AND REPLIES FILED BY ASSESSEE FROM TIME TO TIME WE FIND THAT ASSESSING O FFICER HAS MADE SUFFICIENT ENQUIRIES IN THIS RESPECT AND ONLY AFTER BEING SATISFIED ABOUT THE CLAIM OF ASSESSEE U/S 44AF AND AFTER GOING THRO UGH THE CASE LAW OF AMRITSAR TRIBUNAL IN THE CASE OF SMT. SAVITI ALIAS SWEETY SHEKHIR VS. ITO (SUPRA) HAD COMPLETED THE ASSESSMENT. THEREFORE THIS IS A CASE WHERE ASSESSING OFFICER HAD MADE SUFFICIENT ENQUIRIES WHI CH TO THE BEST OF HIS KNOWLEDGE AND BELIEF WERE NECESSARY THEREFORE THE ACTION U/S 263 WAS NOT WARRANTED. THE HONBLE ITAT DELHI BENCH IN THE CASE OF ACIT VS. SHIPRA ESTATE LTD. 35 SOT 256 HAS HELD THAT WHERE THE ASSESSING OFFICER ACTING IN ACCORDANCE WITH LAW FRAMES AN ASSESSMENT ORDER THE SAME ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 12 CANNOT BE BRANDED AS ERRONEOUS SIMPLY BECAUSE ACCOR DING TO COMMISSIONER ORDER SHOULD HAVE BEEN WRITTEN MORE E LABORATELY. IN THE CASE OF M/S ROSHAN LAL VEGETABLE PRODUCTS PVT. LTD. VS. IT O IN ITA NO.06 (ASR)/2010 (ITAT AMRITSAR) IT HAS BEEN HELD THAT WHERE THE RELEVANT ISSUES HAVE BEEN DULY ADJUDICATED BY THE A.O WHILE MAKING THE ASSESSMENT THE CIT IS NOT COMPETENT TO RE-ADJUDICA TE THE SAME ISSUE BY INVOKING THE PROVISIONS OF SECTION 263. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MAX INDIA LIMITED REPORT IN 295 ITR 282 HAS HELD THAT WHERE TWO VIEWS ARE POSSIBLE AND AO HAS TAKEN ONE O F THE VIEWS WITH WHICH COMMISSIONER DOES NOT AGREE IT CANNOT BE TRE ATED AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE UNLESS THE V IEW TAKEN BY AO IS UNSUSTAINABLE IN LAW. WE FIND THAT IN THE PRESENT C ASES THE ASSESSING OFFICER HAD MADE SUFFICIENT ENQUIRIES AND ON THE BA SIS OF REPLY OF ASSESSEE AND HIS RELIANCE ON THE CASE OF ITAT AMRI TSAR BENCH IN THE CASE OF SMT. SAVITI ALIAS SWEETY SHEKHIR VS. ITO (SUPRA) HAS COMPLETED THE ASSESSMENT AND HAS ACCEPTED THE CLAIM OF ASSESSEE U /S 44AF OF THE ACT. THE VIEW TAKEN BY ASSESSING OFFICER WAS A PLAUSIBLE VIEW AS IT WAS BASED UPON A JUDGMENT OF ITAT AMRITSAR BENCH IN THE CASE OF SMT. SAVITI ALIAS SWEETY SHEKHIR VS. ITO (SUPRA) AND THEREFORE THESE ARE NOT CASES FIT FOR PROCEEDINGS U/S 263 OF THE ACT. 8. AS REGARDS THE OBJECTION OF LEARNED CIT THAT ASS ESSING OFFICER HAD TAKEN COGNIZANCE OF REVISED RETURNS WHEREAS REVISED RETURNS WERE BEYOND THE SPECIFIED PERIOD WE FIND THAT IN ASST. YEAR 20 07-08 THE ASSESSING ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 13 OFFICER HAD REGULARIZED THE REVISED RETURN BY ISSUI NG NOTICE U/S 148 THEREFORE FOR ASST. YEAR 2007-08 IT CANNOT BE SAID THAT ASSESSING OFFICER HAD TAKEN COGNIZANCE OF REVISED RETURN BECAUSE IN T HIS ASST. YEAR REVISED RETURN ON THE BASIS OF REPLY FROM ASSESSEE HAD BECO ME RETURN FILED U/S 148 OF THE ACT. THE FACT OF ISSUING OF NOTICE U/S 1 48 IS MENTIONED IN THE ASSESSMENT ORDER ITSELF. HOWEVER IN ASST. YEAR 200 8-09 WE FIND THAT NO SUCH REGULARIZATION U/S 148 HAS BEEN MENTIONED IN T HE ASSESSMENT ORDER AND THEREFORE IN THIS YEAR THE REVISED RETUR N WAS AFTER THE PRESCRIBED PERIOD OF TIME. THE DUE DATE FOR FILING REVISED RETURN IN THIS YEAR IS 31.3.2010 WHEREAS REVISED RETURN HAS BEEN F ILED ON 24.06.2010. THEREFORE IT IS CORRECT THAT ASSESSING OFFICER SHOU LD NOT HAVE TAKEN COGNIZANCE OF REVISED RETURN AS ASSESSEE HAD FILED REVISED RETURN BEYOND THE PRESCRIBED PERIOD OF TIME. BUT THE QUESTION REM AINS THAT WHETHER ASSESSING OFFICER COULD HAVE IGNORED SUCH REVISED R ETURN. IT WAS NOT EVEN NECESSARY ON THE PART OF ASSESSEE TO FILE REVISED R ETURN AS HE COULD HAVE CLAIMED DURING ASSESSMENT PROCEEDINGS ITSELF THAT T HE BANK DEPOSITS REFLECTED THE TURNOVER OF ASSESSEE FORM RETAIL TRA DE BECAUSE THE CLAIM OF ASSESSEE BEING ENGAGED IN RETAIL TRADE WAS OPEN TO SCRUTINY AND ASSESSING OFFICER HAD CARRIED SUFFICIENT ENQUIRIES IN THIS RESPECT. THEREFORE THESE ARE NOT THE CASES WHERE NO ENQUIRY HAS BEEN DONE. THERE IS DIFFERENCE BETWEEN LACK OF ENQUIRY AND NO ENQUIRY. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SUNBEAM AUT O LTD. 332 ITR 167 IN THIS RESPECT HAS HELD AS UNDER: ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 14 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE CO UNSEL ON THE OTHER SIDE AND HAVE GONE THROUGH THE RECORDS. THE FIRST ISSUE THAT ARISES FOR OUR CONSIDERATION IS ABOUT THE EXERCISE OF POWER BY THE COMMISSIONER OF INCOME-TAX UNDER SECTION 263 OF THE INCOME-TAX ACT. AS NOTED ABOVE THE SUBMISSION OF LEARNED COUNSEL FOR THE REVENUE WAS T HAT WHILE PASSING THE ASSESSMENT ORDER THE ASSESSING OFFICER DID NOT CON SIDER THIS ASPECT SPECIFICALLY WHETHER THE EXPENDITURE IN QUESTION WA S REVENUE OR CAPITAL EXPENDITURE. THIS ARGUMENT PREDICATES ON THE ASSESS MENT ORDER WHICH APPARENTLY DOES NOT GIVE ANY REASONS WHILE ALLOWING THE ENTIRE EXPENDITURE AS REVENUE EXPENDITURE. HOWEVER THAT B Y ITSELF WOULD NOT BE INDICATIVE OF THE FACT THAT THE ASSESSING OFFICER H AD NOT APPLIED HIS MIND ON THIS ISSUE. THERE ARE JUDGMENTS GALORE LAYING DO WN THE PRINCIPLE THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS NO T REQUIRED TO GIVE DETAILED REASON IN RESPECT OF EACH AND EVERY ITEM O F DEDUCTION ETC. THEREFORE ONE HAS TO SEE FROM THE RECORD AS TO WHE THER THERE WAS APPLICATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION AS REVENUE EXPENDITURE. LEANED COUNSEL FOR THE ASSESSEE IS RIG HT IN HIS SUBMISSION THAT ONE HAS TO KEEP IN MIND THE DISTINCTION BETWEE N LACK OF INQUIRY AND INADEQUATE INQUIRY. IF THERE WAS ANY INQUIRY EVE N INADEQUATE THAT WOULD NOT BE ITSELF GIVE OCCASION TO THE COMMISSION ER TO PASS ORDERS UNDER SECTION 263 OF THE ACT MERELY BECAUSE HE HAS A DIF FERENT OPINION IN THE MATTER. IT IS ONLY IN CASES OF LACK OF INQUIRY TH AT SUCH A COURSE OF ACTION WOULD BE OPEN. IN THE PRESENT CASES THE ASSESSING OFFICER HAS COMP LETED ASSESSMENTS AFTER ACCEPTING THE SUBMISSIONS OF ASSESSEE THAT BA NK DEPOSITS REFLECTED TURNOVER FROM RETAIL BUSINESS WHEREAS IN THE OPINIO N OF LEARNED CIT THE ADDITIONS SHOULD HAVE BEEN MADE U/S 69 OF THE ACT. 9. THE HONBLE SUPREME COURT IN THE CASE OF MAX IND IA LTD. 295 ITR 282 HAS HELD THAT WHERE TWO VIEWS ARE POSSIBLE AND ASSESSING OFFICER HAS TAKEN ONE OF THE VIEWS WITH WHICH COMMISSIONER DOES NOT AGREE IT CANNOT BE TREATED AS ERRONEOUS OR PREJUDICIAL TO THE INTER EST OF REVENUE UNLESS THE VIEW TAKEN BY ASSESSING OFFICER IS UNSUSTAINABL E IN LAW. 10. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND JUDICIAL PRECEDENTS WE ARE IN AGREEMENT WITH THE A RGUMENTS OF LEARNED ITA NOS.67 & 68 (ASR)/2012 ASST. YEARS: 2007-08 & 2 008-09 15 AR THAT ASSESSING OFFICER HAD PASSED ORDERS AFTER D UE APPLICATION OF MIND AND THESE ARE NOT THE CASES FIT FOR ACTION U/S 263. 11. IN VIEW OF THE ABOVE THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED: 18.03.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A) (4) THE CIT (5) THE SR DR I.T.A.T. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.