Shankar Kr. Sharma, Asansol v. ACIT, Circle - 2, Asansol, Asansol

ITA 814/KOL/2010 | 2005-2006
Pronouncement Date: 22-07-2011

Appeal Details

RSA Number 81423514 RSA 2010
Assessee PAN AIXPS9783R
Bench Kolkata
Appeal Number ITA 814/KOL/2010
Duration Of Justice 1 year(s) 2 month(s) 26 day(s)
Appellant Shankar Kr. Sharma, Asansol
Respondent ACIT, Circle - 2, Asansol, Asansol
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Bench Allotted A
Tribunal Order Date 22-07-2011
Assessment Year 2005-2006
Appeal Filed On 26-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE /AND . !' . #$ ) [BEFORE HONBLE SRI MAHAVIR SINGH JM & HONBLE SRI C. D. RAO AM] % % % % / I.T.A NO. 814/KOL/2010 &' () &' () &' () &' ()/ // / ASSESSMENT YEAR: 2005-06 SHANKAR KR. SHARMA VS. ASSISTANT COMMISSIONER OF INCOME-TAX (PAN AIXPS 9783 R) CIRCLE-2 ASANSOL (+ /APPELLANT ) (-.+ / RESPONDENT ) & % % % % / I.T.A NO. 815/KOL/2010 &' () &' () &' () &' ()/ // / ASSESSMENT YEAR: 2007-08 SHANKAR KR. SHARMA VS. ASSISTANT COMMISSIONER OF INCOME-TAX (PAN AIXPS 9783 R) CIRCLE-2 ASANSOL (+ /APPELLANT ) (-.+ / RESPONDENT & % % % % / I.T.A NO. 1143/KOL/2010 &' () &' () &' () &' ()/ // / ASSESSMENT YEAR: 2007-08 ASSISTANT COMMISSIONER OF INCOME-TAX VS. SHANKAR K R. SHARMA CIRCLE-2 ASANSOL (+ /APPELLANT ) (-.+ / RESPONDENT ) FOR THE ASSESSEE: S/SRI D. R. SINDHAL & P. P. S ARKAR FOR THE REVENUE: S/SRI S. K. TULSIYAN & R. N. R AM #/ / ORDER PER MAHAVIR SINGH JM ( ) OUT OF THESE THREE APPEALS TWO BY ASSESSEE AND ONE BY REVENUE ARE ARISING OUT DIFFERENT ORDERS OF CIT(A) ASANSOL IN APPEAL NOS. 123 & 120/ CIT(A)/ASL/CIR-2/ASL/2009-10 DATED 23.03.2010. ASSESSMENTS WERE FRAMED BY ACIT CIRCLE -2 ASANSOL U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS T HE ACT) FOR ASSESSMENT YEARS 2005-06 AND 2007-08 VIDE HIS SEPARATE ORDERS DATED 30.12.2009 A ND 31.12.2009. FIRST WE TAKE UP ITA NO. 814/K/2010 (ASSESSEES A PPEAL) 2 2. THE FIRST ISSUE IN ASSESSEES APPEAL IS AS REGA RDS TO ASSUMPTION OF JURISDICTION BY ASSESSING OFFICER BY INITIATING PROCEEDINGS U/S. 14 7 READ WITH SECTION 148 OF THE ACT. FOR THIS ASSESSEE HAS RAISED FOLLOWING TWO EFFECTIVE GROUNDS : 1.THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) ASANSOL ERRED IN CONFIRMING THE ACTION OF A.O. IN INITIATING PROCE EDING U/S. 148 WHEREAS THE ASSESSMENT WAS ALREADY COMPLETED U/S. 143(3) AFTER CONSIDERING ALL THE RELEVANT MATERIAL WHICH WERE FILED AT THE TIME OF R ETURN OF INCOME AND WHICH WERE ALSO FILED IN COURSE OF ASSESSMENT PROCEEDING AND W HEREAS RELEVANT BOOKS OF ACCOUNTS PAPERS AND DOCUMENTS WERE DULY PRODUCED B EFORE THE A.O. 2. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) ASANSOL ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER OF R EOPENING THE COMPLETED ASSESSMENT ON THE BASIS OF INTERNAL AUDIT REPORT WHICH CANNOT FORM REASONABLE BELIEF FOR REOPENING THE ASSESSMENT AS THE ASSESSING OFFICER H AD COMPLETED THE ASSESSMENT U/S. 143(3) AFTER CONSIDERING THE PAYMENTS OF TRANSPORT CHARGES AMOUNTING TO RS.1 27 97 855/- AND AFTER BEING SATISFIED THAT PRO VISIONS OF TDS WERE NOT ATTRACTED IN THE INSTANT CASE AND WHEREAS ALL THE PROCEEDING OF REASSESSMENT ARE BAD IN LAW AND IS LIABLE TO BE QUASHED. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT ORIGINAL ASSESSMENT WAS FRAMED FOR RELEVANT ASSESSMENT YEAR 2005-06 U/S. 143(3) OF THE ACT BY ACIT CIRCLE-2 ASANSOL VIDE HIS ORDER DATED 23.8.2007. SUBSEQUENTLY ASSESSING OFF ICER IN VIEW OF INTERNAL AUDIT OBJECTION ON ACCOUNT OF TRANSPORT CHARGES AMOUNTING TO RS.1 27 9 7 855/- AS WRONGLY ALLOWED DURING ORIGINAL ASSESSMENT AS ASSESSEE FAILED TO DEDUCT TAX AS REQ UIRED U/S. 194C OF THE ACT. IN VIEW OF AUDIT OBJECTION ASSESSING OFFICER RECORDED REASONS U/S. 1 48 OF THE ACT AND ISSUED NOTICE U/S. 148 ON 07.07.2008 AS UNDER: THE ASSESSEE IS A TRANSPORT CONTRACTOR AND DEBITED TRANSPORT HIRE CHARGES OF RS.1.27 CRORE WITHOUT DEDUCTING OF TAX ON THE PAYMENT OF TRANSPOR TATION CHARGES. ACCORDING TO SECTION 40(A)(IA) OF THE ACT THE ABOVE EXPENSES SHOULD BE ADDED WITH TAXABLE INCOME AS COMPUTED BY THE ASSESSEE. I HAVE REASON TO BELIEVE THAT THE ASSESSEE HAS ESCAPED THE ABOVE INCOME WITHIN THE PERIPHERY OF SECTION 14 7. THE ASSESSEE VIDE LETTER DATED 28.8.2008 REQUESTED ASSESSING OFFICER TO TREAT THE ORIGINAL RETURN AS RETURN SUBMITTED IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. ASSESSING OFFICER DISALLOWED THE EXPENDITURE RELATING TO TRANSPORT CHARGES BY INVOKI NG THE PROVISIONS OF SECTION 194C(2) R.W.S. 40(A)(IA) OF THE ACT. AGGRIEVED ASSESSEE PREFERRE D APPEAL BEFORE CIT(A) FOR ASSUMPTION OF JURISDICTION. THE CIT(A) UPHELD THE VALIDITY OF AS SUMPTION OF JURISDICTION U/S. 147 R.W.S. 148 OF THE ACT BY STATING THAT I HAVE CONSIDERED THE MATTER. THESE JUDGMENTS RELA TE TO ASSESSMENT YEARS PRIOR TO A.Y. 1989-90. THE PROVISIONS OF SEC TION 147 WERE AMENDED BY THE DIRECT TAX LAWS (AMENDMENT) ACT 1987 WITH EFFECT FROM 01.04.89 . THEREFORE THESE DECISIONS WOULD NOT BE APPLICABLE TO THE PROVISIONS OF SECTION 147 AS I T STANDS NOW. ATTENTION IS INVITED TO CLAUSE C 3 OF EXPLANATION 2 OF SECTION 147. THIS CLAUSE STATE S THAT INCOME WOULD HAVE DEEMED TO HAVE ESCAPED ASSESSMENT IN CASES WHERE ASSESSMENT HAD BE EN MADE BUT INCOME CHARGEABLE TO TAX HAD BEEN UNDER ASSESSED OR SUCH INCOME HAD BEEN MAD E THE SUBJECT OF EXCESSIVE RELIEF UNDER THE ACT. MOREOVER THE REOPENING IS WITHIN 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. IN VIEW OF THESE FACTS I HOLD THAT THE REOP ENING U/S. 147 AND ISSUE OF NOTICE U/S. 148 WAS VALID. GROUNDS 1 & 2 ARE THEREFORE DISMISSED. AGGRIEVED NOW ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US THE ASSESSEES COUNSEL SHRI S. K. TULS IYAN MADE TWO FOLD ARGUMENTS. FIRST HE ARGUED THAT THE REASSESSMENT IS FRAMED IN VIEW OF I NTERNAL AUDIT OBJECTION AND ON AUDIT OBJECTION NO REOPENING IS POSSIBLE IN VIEW OF THE D ECISION OF HONBLE APEX COURT IN THE CASE OF INDIAN & EASTERN NEWSPAPER SOCIETY VS. CIT (1979) 1 19 ITR 996 (SC) AND I.M.C. LTD & ANR. VS. JCIT (2003) 261 ITR 731 (CAL). HE STATED THAT ASSESSING OFFICER HAS NO INDEPENDENT REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMEN T AND I.E. JUST ON THE BASIS OF AUDIT OBJECTION REOPENING IS NOT POSSIBLE. 5. ON THE OTHER HAND THE LD. CIT DR RELIED ON THE ORDER OF CIT(A) UPHOLDING THE ACTION OF ASSESSING OFFICER IN VALIDATING REASSESSMENT U/S . 147 R.W.S. 148 OF THE ACT. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM REASONS RECORDED AND CASE LAW CITED BY LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSING OFFICER HAS RECORDED REASONS AFTER FRAMIN G A REASONABLE BELIEF AND HE HAS REASONS TO BELIEVE THAT ASSESSEES INCOME HAS ESCAPED ASSESSME NT WITHIN THE PROVISIONS OF SECTION 147 OF THE ACT AND IT IS NOT MERELY ON THE BASIS OF AUDIT OBJECTION AS IS CLEAR FROM REASONS RECORDED REPRODUCED ABOVE. ACCORDINGLY WE ARE OF THE VIEW THAT THIS ARGUMENT OF ASSESSEE WILL NOT STAND AND ASSESSING OFFICER HAS REOPENED THE ASSESS MENT AFTER HAVING REASONS TO BELIEVE AND AFTER RECORDING REASONS TO THAT EFFECT. THE LD. CO UNSEL FOR THE ASSESSEE MADE ANOTHER ASPECT OF ARGUMENT IN RESPECT TO ASSUMPTION OF JURISDICTION T HAT THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING FILED COMPLETE DETAILS AND FOR THIS HE FILED ORIGINAL ASSESSMENT ORDER FRAMED U/S 143(3) VIDE O RDER DATED 23.8.2007. HE REFERRED TO VERY FIRST PARA OF ASSESSMENT ORDER WHICH READS AS UNDE R: RETURN OF INCOME WAS FILED ON 31.3.2006 DISCLOSING TAXABLE INCOME FOR RS.4 22 540/- WHICH WAS DULY PROCESSED U/S. 143(1) ON 17.5.2006 A T RETURNED INCOME. THE ASSESSMENT FOR THE YEAR HAS COME UNDER THE NET OF COMPULSORY S CRUTINY AS PER ACTION PLAN FOR THE FINANCIAL YEAR 2005-2006 AS THE ASSESSEE CLAIMED RE FUND EXCEEDING RS. 5 LAKHS. ACCORDINGLY NOTICE U/S. 143(2) WAS ISSUED ON 25.7. 2006 FIXING THE CASE FOR HEARING ON 22.8.2006 AND WAS DULY SERVED UPON THE ASSESSEE. SU BSEQUENTLY NOTICE U/S. 142(1) ALONG 4 WITH QUESTIONNAIRE WAS ISSUED ON 07.05.2007 FIXING THE CASE FOR HEARING ON 22.5.2007 AND WAS DULY SERVED UPON THE ASSESSEE ON 14.5.2007. SHRI GOUTAM MANNA ADVOCATE AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED WITH BOOKS OF A/C. ON DIFFERENT DATES TO EXPLAIN THE RETURN OF INCOME. THE ASSESSEE IS A TRANSPORT CONTRACTOR AND WORKED UNDER INDIAN OIL CORPORATION AND BHARAT PETROLEUM C ORPORATION LTD. AS PER AUDITED PROFIT & LOSS A/C. FILED ON 31.10.2005 THE ASSESSE E HAS DISCLOSED GROSS BILL RECEIVED AT RS.2 48 32 607/- AND SHOWN NET PROFIT AT RS.52 934/ -. BOOKS OF A/C. AND OTHER RELEVANT PAPERS/DOCUMENTS FILED/PRODUCED WERE EXAMINED WITH REFERENCE TO AUDITED PROFIT & LOSS A/C. AND BALANCE SHEET FILED ON 31.10.2005. I NFORMATION COLLECTED FROM 3 RD PARTIES WAS VERIFIED FROM BOOKS OF A/C. I.E. CASH BOOK AND LEDGER. THE CASE WAS DISCUSSED WITH HIM AND WAS HEARD. IN VIEW OF THIS THE LD. COUNSEL FOR THE ASSESSEE S TATED THAT EVERY DETAIL IN RESPECT TO TRANSPORT CHARGES WERE BEFORE ASSESSING OFFICER AND HE HAS EX AMINED WITH REFERENCE TO AUDITED P&L ACCOUNT AND BALANCE SHEET FILED ON 31.10.2005 ALONG WITH THE RETURN OF INCOME. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO ASSESSEES PAP ER BOOK PAGES 27 TO 79 WHERE COMPLETE DETAILS IN RESPECT TO TRANSPORT CHARGES SHOWING THE REIN THE DETAILS OF PAYMENT WITH VEHICLE NO. NAME OF PARTY WERE IN THE PAPER BOOK AND FILED DURI NG THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. LD. COUNSEL FOR THE ASSESSEE STATED T HAT ORIGINAL ASSESSMENT WAS FRAMED U/S. 143(3) OF THE ACT AND THE ASSESSING OFFICER HAS GON E THROUGH THESE DETAILS WHICH WERE SUBJECT MATTER OF REASSESSMENT U/S. 147 R.W.S.148 OF THE AC T. HE STATED THAT THE REASSESSMENT ON THE SAME FACTS IS NOT PERMISSIBLE IN VIEW OF THE DECISI ON OF HONBLE APEX COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. (2010) 320 ITR 561 (SC ) WHEREIN HONBLE APEX COURT HAS HELD THAT THE CONCEPT OF CHANGE OF OPINION ON THE PART OF THE ASSESSING OFFICER TO REOPEN AN ASSESSMENT DOES NOT STAND OBLITERATED EVEN AFTER SU BSTITUTION OF SECTION 147 OF THE ACT BY DIRECT TAX LAWS (AMENDMENT) ACTS 1987 AND 1989. AFTER TH E AMENDMENT THE ASSESSING OFFICER HAS TO HAVE REASON TO BELIEVE THAT INCOME HAS ESCAPED A SSESSMENT BUT THIS DOES NOT IMPLY THAT THE ASSESSING OFFICER CAN REOPEN AN ASSESSMENT ON MERE CHANGE OF OPINION. THE CONCEPT OF CHANGE OF OPINION MUST BE TREATED AS AN IN-BUILT TEST TO CHECK THE ABUSE OF POWER. HENCE AFTER APRIL 1 1989 THE ASSESSING OFFICER HAS POWE R TO REOPEN AN ASSESSMENT PROVIDED THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASON MUST HAVE A LINK WITH THE FORMA TION OF THE BELIEF AND AFFIRMED THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. (2002) 256 ITR 1 (DEL.) (FB). HONBLE DELHI HIGH COURT HELD AS UNDE R: THE BOARD IN EXERCISE OF ITS JURISDICTION UNDER THE AFOREMENTIONED PROVISIONS HAD ISSUED THE CIRCULAR ON OCTOBER 31 1989. THE SAID C IRCULAR ADMITTEDLY IS BINDING ON THE REVENUE. THE AUTHORITY THEREFORE COULD NOT HAVE T AKEN A VIEW WHICH WOULD RUN COUNTER TO THE MANDATE OF THE SAID CIRCULAR. CLAUSE 7.2 AS REFERRED TO HEREINBEFORE IS IMPORTANT. 5 FROM A PERUSAL OF CLAUSE 7.2 OF THE SAID CIRCULAR IT WOULD APPEAR THAT IN NO UNCERTAIN TERMS IT WAS STATED AS TO UNDER WHAT CIRCUMSTANCES THE AMENDMENTS HAD BEEN CARRIED OUT I.E. ONLY WITH A VIEW TO ALLAY FEARS THAT THE OMISSION OF THE EXPRESSION REASON TO BELIEVE FROM SECTION 147 WOULD GIVE ARBITRARY POWE RS TO THE ASSESSING OFFICER TO REOPEN PAST ASSESSMENTS ON MERE CHANGE OF OPINION. IT IS THEREFORE EVIDENT THAT EVEN ACCORDING TO T HE CENTRAL BOARD OF DIRECT TAXES A MERE CHANGE OF OPINION CANNOT FORM THE BASIS FOR RE OPENING A COMPLETED ASSESSMENT. THE SUBMISSION OF MR. JOLLY TO THE EFFECT THAT THE SAID CIRCULAR CANNOT BE CONSTRUED IN SUCH A MANNER WHEREBY THE JURISDICTION OF THE STATU TORY AUTHORITY WOULD BE TAKEN AWAY IS NOT APPOSITE FOR THE PURPOSE OF THIS CASE. IN UN ION OF INDIAS CASE AIR 1996 SC 849 ; [1996] 11 SCC 701 WHEREUPON MR. JOLLY HAD PLACE D STRONG RELIANCE THE APEX COURT WAS DEALING WITH ADMINISTRATIVE INSTRUCTIONS WHEREB Y NO RIGHT WAS CONFERRED UPON THE RESPONDENTS TO HAVE THE HOUSE RENT AMOUNT INCLUDED IN THEIR EMOLUMENTS FOR THE PURPOSE OF COMPUTING OVER- TIME ALLOWANCE. THE APEX COURT HELD THAT OTHERWISE ALSO THE GOVERNMENTS INSTRUCTIONS HAVE TO BE READ IN CO NFORMITY WITH THE PROVISIONS OF THE ACT. THEREIN THE APEX COURT WAS NOT CONCERNED WITH THE STATUTORY POWERS OF A STATUTORY AUTHORITY TO ISSUE BINDING CIRCULARS. ANOTHER ASPECT OF THE MATTER ALSO CANNOT BE LOST S IGHT OF. A STATUTE CONFER- RING AN ARBITRARY POWER MAY BE HELD TO BE ULTRA VIRES ARTIC LE 14 OF THE CONSTTUTION OF INDIA. IF TWO INTERPRETATIONS ARE POSSIBLE THE INTERPRETATIO N WHICH UPHOLDS CONSTITUTIONALITY IT IS TRITE SHOULD BE FAVOURED. IN THE EVENT IT IS HELD THAT BY REASON OF SECTION 147 IF THE INCOME-TAX OFFICER EXERCISES HIS JURISDICTION FOR INITIATING A PROCEEDING FOR RE ASSESSMENT ONLY UPON A MERE CHANGE OF OPINION THE SAME MAY BE HELD TO BE UNCONSTITUTI ONAL. WE ARE THEREFORE OF THE OPINION THAT SECTION 147 OF THE ACT DOES NOT POSTUL ATE CONFERMENT OF POWER UPON THE ASSESSING OFFICER TO INITIATE REASSESSMENT PROCEEDI NG UPON HIS MERE CHANGE OF OPINION. WE HOWEVER MAY HASTEN TO ADD THAT IF REASON TO BELIEVE OF THE ASSES- SING OFFICER IS FOUNDED ON AN INFORMATION WHICH MIGHT HAVE BEEN RECEIVED BY THE ASSESSING OFFICER AFTER THE COMPLETION OF ASSESSMENT IT MAY BE A SOU ND FOUNDATION FOR EXERCISING THE POWER UNDER SECTION 147 READ WITH SECTION 148 OF T HE ACT. WE ARE UNABLE TO AGREE WITH THE SUBMISSION OF MR. JOLLY TO THE EFFECT THAT THE IMPUGNED ORDER OF REASSESSMENT CANNOT BE FAULTED AS THE SAME WAS BASED ON INFORMATION DERIVED FROM THE TAX AUDIT REPORT. THE TAX AUDIT REPORT HAD ALREADY BEEN SUBMITTED BY THE ASSESSEE. IT IS ONE THING TO SAY THAT THE ASSESSING OFFICER HAD RECEIVED INFORMATION FROM AN AUDIT REPORT WHICH WAS NOT BEFORE THE INCOME-TA X OFFICER BUT IT IS ANOTHER THING TO SAY THAT SUCH INFORMATION CAN BE DERIVED BY THE MAT ERIAL WHICH HAD BEEN SUPPLIED BY THE ASSES- SEE HIMSELF. WE ALSO CANNOT ACCEPT THE SUBMISSION OF MR. JOLLY TO THE EFFECT THAT ONLY BECAUSE IN THE ASSESSMENT ORDER DETAILED REASONS HAVE NOT BEE N RECORDED AN ANALYSIS OF THE MATERIALS ON THE RECORD BY ITSELF MAY JUSTIFY THE A SSESSING OFFICER TO INITIATE A PROCEEDING UNDER SECTION 147 OF THE ACT. THE SAID S UB- MISSION IS FALLACIOUS. AN ORDER OF ASSESSMENT CAN BE PASSED EITHER IN TERMS OF SUB- SECTION (1) OF SECTION 143 OR SUB- SECTION (3) OF SECTION 143. WHEN A REGULAR ORDER OF ASSESSMENT IS PASSED IN TERMS OF THE SAID SUB-SECTION (3) OF SECTION 143 A PRESUMPTION C AN BE RAISED THAT SUCH AN ORDER HAS BEEN PASSED ON APPLICATION OF MIND. IT IS WELL KNOW N THAT A PRESUMPTION CAN ALSO BE RAISED TO THE EFFECT THAT IN TERMS OF CLAUSE (E) OF SECTION 114 OF THE INDIAN EVIDENCE ACT JUDICIAL AND OFFICIAL ACTS HAVE BEEN REGULARLY PERF ORMED. IF IT BE HELD THAT AN ORDER WHICH HAS BEEN PASSED PURPORTEDLY WITHOUT APPLICATI ON OF MIND WOULD ITSELF CONFER JURISDICTION UPON THE ASSESSING OFFICER TO REOPEN T HE PROCEEDING WITHOUT ANYTHING 6 FURTHER THE SAME WOULD AMOUNT TO GIVING A PREMIUM TO AN AUTHORITY EXERCISING QUASI- JUDICIAL FUNCTION TO TAKE BENEFIT OF ITS OWN WRONG. FOR THE REASONS AFOREMENTIONED WE ARE OF THE OPINION THAT THE ANSWER TO THE QUESTION RAISED BEFORE THIS BENCH MUST BE RENDERED IN THE AFFIRMATIVE I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. NO ORDER AS TO COSTS. 7. WE FIND THAT IN THE PRESENT CASE EVERY DETAIL IN RESPECT TO TRANSPORT CHARGES WERE BEFORE ASSESSING OFFICER AND HE HAS EXAMINED WITH REFERENC E TO AUDITED P&L ACCOUNT AND BALANCE SHEET FILED ON 31.10.2005 ALONG WITH THE RETURN OF INCOME. THE ASSESSEE FILED PAPER BOOK AND AT PAGES 27 TO 79 COMPLETE DETAILS IN RESPECT TO TR ANSPORT CHARGES SHOWING THEREIN DETAILS OF PAYMENT WITH VEHICLE NO. NAME OF PARTY WERE IN THE PAPER BOOK AND FILED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. WE FIND THAT ORIG INAL ASSESSMENT WAS FRAMED U/S. 143(3) OF THE ACT AND THE ASSESSING OFFICER HAS GONE THROUGH THESE DETAILS WHICH WERE SUBJECT MATTER OF REASSESSMENT U/S. 147 R.W.S.148 OF THE ACT. WE FIN D THAT EXACTLY THE SIMILAR ISSUE WAS BEFORE HONBLE DELHI HIGH COURT IN THE CASE OF KELVINATOR OF INDIA LTD. (SUPRA) WHEREIN FULL BENCH HAS CONSIDERED THE ISSUE OF REASSESSMENT AND HELD T HAT ONLY BECAUSE IN THE ASSESSMENT ORDER DETAILED REASON HAS NOT BEEN RECORDED AND ANALYSIS OF MATERIALS ON RECORD BY ITSELF MAY NOT JUSTIFY THE AO TO INITIATE PROCEEDINGS U/S. 147 OF THE ACT. HONBLE DELHI HIGH COURT HELD THAT AN ORDER OF ASSESSMENT CAN BE PASSED EITHER IN TERM S OF SUB-SECTION (1) OF SECTION 143 OR SUB- SECTION (3) OF SECTION 143 OF THE ACT. WHEN A REGU LAR ASSESSMENT ORDER IS PASSED IN TERMS OF SUB-SECTION (3) OF SECTION 143 OF THE ACT A PRESUM PTION CAN BE RAISED THAT SUCH AN ORDER HAS BEEN PASSED ON APPLICATION OF MIND. HONBLE DELHI HIGH COURT HAS ALSO DISCUSSED THE IMPLICATION OF SECTION 114(E) OF INDIAN EVIDENCE AC T AND HELD THAT AN ORDER WHICH HAS BEEN PASSED PURPORTEDLY WITHOUT APPLICATION OF MIND WOUL D ITSELF NOT CONFER JURISDICTION TO AO TO REOPEN THE PROCEEDINGS AND IF GIVEN THE SAME WOULD AMOUNT TO PREMIUM TO AN AUTHORITY EXERCISING QUASI JUDICIAL AUTHORITY TO TAKE BENEFIT OF ITS OWN WRONG. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE APEX COURT AND OF HONBLE DELHI HIGH COURT (FB) IN THE CASE OF KELVINATOR OF INDIA LTD. (SUPRA) WE QUASH THE REAS SESSMENT PROCEEDINGS IN THE PRESENT CASE. THIS ISSUE OF ASSESSEES APPEAL IS ALLOWED. 7. THE NEXT ISSUE IN RESPECT TO MERITS IS AS REGARD S TO THE ORDER OF CIT(A) NOT ALLOWING DEDUCTION OF PAYMENT OF TRANSPORT CHARGES. SINCE W E HAVE ALREADY ADJUDICATED THE ISSUE ON ASSUMPTION OF JURISDICTION AND THE ASSESSING OFFICE R HAS NOT ASSUMED THE JURISDICTION VALIDLY AND REASSESSMENT PROCEEDINGS ARE QUASHED WE NEED N OT TO GO INTO MERITS OF THE CASE. ACCORDINGLY THIS ISSUE IS NOT ADJUDICATED. 7 8. NOW WE TAKE UP ITA NO.1143/K/2010 (REVENUES AP PEAL) AND ITA NO.815/K/2010 (ASSESSEES APPEAL). 9. THE ONLY COMMON ISSUE IN THESE CROSS-APPEALS IS AS REGARDS TO THE ORDER OF CIT(A) IN RESTRICTING THE NET PROFIT RATE AT 20% AS AGAINST E STIMATED BY ASSESSING OFFICER AT 23% AND DISCLOSED BY ASSESSEE AT 16.68%. FOR THIS REVENUE AS WELL AS ASSESSEE IS IN APPEAL BEFORE US. 10. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF CASE. WE FIND THAT ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS ESTIMATED GROSS PROFIT AT 23% AS AGAINST THE GROSS PROFIT RATE DISC LOSED BY ASSESSEE AT 16.68%. THE ASSESSEES NET PROFIT RATE FOR ASSESSMENT YEAR 2006-07 WAS AT 16.44% AND FOR ASSESSMENT YEAR 2005-06 IT WAS 21%. THE ADMITTED FACTS ARE THAT BOOKS OF ACCO UNT ALONG WITH BILLS AND VOUCHERS WERE LOST IN TRANSIT ON 21.8.2009 AND THUS ANY VERIFICATION IS NOT POSSIBLE AND EVEN BOOK RESULTS CANNOT BE ACCEPTED. BUT A FAIR AND REASONABLE ESTIMATE SHO ULD HAVE BEEN MADE. THE ASSESSEE HAS DISCLOSED THE NET PROFIT RATE AT 16.68% IN THIS ASS ESSMENT YEAR AND IN ASSESSMENT YEAR 2005-06 IT WAS 21% AND IN ASSESSMENT YEAR 2006-07 IT WAS 17 .44%. WE ARE OF THE VIEW THAT TAKING A CONSIDERABLE APPROACH WE AVERAGE OUT THE NET PROFI T OF THREE YEARS AND THAT COMES TO 18%. ACCORDINGLY WE DIRECT THE ASSESSING OFFICER TO ADO PT 18% NET PROFIT OF GROSS RECEIPTS AND ACCORDINGLY ESTIMATE ADDITION. THESE TWO APPEALS A RE PARTLY ALLOWED AS INDICATED ABOVE. 11. IN THE RESULT ITA NO. 814/K/2010 OF ASSESSEES APPEAL IS ALLOWED AND ITA NO.815/K/2010 OF ASSESSEES AND 1143/K/2010 OF REVE NUES APPEAL ARE PARTLY ALLOWED. 12. ORDER IS PRONOUNCED IN OPEN COURT ON 22.7.2011 SD/- SD/- . !' . #$ (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( '$ '$ '$ '$) )) ) DATED 22ND JULY 2011 01 &23 4 JD.(SR.P.S.) 8 #/ 5 -6 7#6(8- COPY OF THE ORDER FORWARDED TO: 1 . + / APPELLANT SHRI SHANKAR KUMAR SHARMA PROP. OF BAR DHAMAN TRANSPORT CORPORATION 279 APCAR GARDEL ASANSOL. 2 -.+ / RESPONDENT ACIT CIRCLE-2 ASANSOL 3 . /& / CIT ASANSOL 4. /& ( )/ CIT(A) ASANSOL 5 . ?@ -& / DR KOLKATA BENCHES KOLKATA .6 -/ TRUE COPY #/&A/ BY ORDER 3 /ASSTT. REGISTRAR .