TMI Blog2012 (11) TMI 1120X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 -do- 2006-07 212(Asr)/2012 -do- 2007-08 213(Asr)/2011 -do- 2008-09 214(Asr)/2011 1. That order u/s 263 of the Act, passed by ld. CIT(Central), is illegal without jurisdiction. 2. That Ld. CIT has grossly erred in holding that assessment order passed by the AO was erroneous and prejudicial to the interest of revenue. Action of the Ld. CIT in invoking the provisions of section 263 of the Act is illegal bad in law. 3. (a) That the Ld. CIT has grossly erred in concluding that property transactions made by Sh. Jeetu Keshi belongs to the assessee. Conclusion drawn by the Ld. CIT is without any material on records and as such is illegal and bad in law. b) That conclusion of the Ld. CIT that property transactions made by Sh. Jeetu Keshi belongs to the assessee is illegal and bad in law since during assessment proceedings of the assessee, Sh. Jeetu Keshi in response to notice u/s 131 of the Act appeared before the AO and in his statement recorded by the AO admitted that all property transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. Kapurthala Estates (P) Ltd; 2004-05 205(Asr)/2012 -do 2005-06 206(Asr)/2012 -do- 2006-07 207(Asr)/2012 -do- 2007-08 208(Asr)/2012 -do- 2008-09 209(Asr)/2012 1. That order u/s 263 of the Act, passed by ld. CIT(Central), is illegal without jurisdiction. 2. That Ld. CIT has grossly erred in holding that assessment order passed by the AO was erroneous and prejudicial to the interest of revenue. Action of the Ld. CIT in invoking the provisions of section 263 of the Act is illegal bad in law. 3. (a) That the Ld. CIT has grossly erred in concluding that property transactions made by Sh. Jeetu Keshi belongs to the assessee. Conclusion drawn by the Ld. CIT is without any material on records and as such is illegal and bad in law. b) That conclusion of the Ld. CIT that property transactions made by Sh. Jeetu Keshi belongs to the assessee is illegal and bad in law since during assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Central) u/s 263 is arbitrary, unjust, is based on assumptions presumptions and that no error existed or prejudice was caused to revenue, therefore, the order of the CIT(Central) Ludhiana passed u/s 263 deserves to be quashed. 10. That the appellant requests for leave to add or amend the grounds of appeal before the appeal is heard or disposed off. Name Asstt. Year ITA No. 3. Kapurthala Promotors Developers (P) Ltd. 2006-07 202(Asr)/2012 -do- 2007-08 203(Asr)/2012 -do- 2008-09 204(Asr)/2012 1. That order u/s 263 of the Act, passed by ld. CIT(Central), is illegal without jurisdiction. 2. That Ld. CIT has grossly erred in holding that assessment order passed by the AO was erroneous and prejudicial to the interest of revenue. Action of the Ld. CIT in invoking the provisions of section 263 of the Act is illegal bad in law. 3. (a) That the Ld. CIT has grossly erred in concluding that property transactions made by Sh. Mithlesh Kumar belongs t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g aside the assessment framed with the directions to make fresh assessment de-novo after property examining the issues. Non issuance of specific directions for assessment to be framed clearly proves that it is a case of only change of opinion and the assessment framed is neither erroneous nor prejudicial to the interest of the revenue. 9. That the order of the Ld. CIT(Central) u/s 263 is arbitrary, unjust, is based on assumptions presumptions and that no error existed or prejudice was caused to revenue, therefore, the order of the CIT(Central) Ludhiana passed u/s 263 deserves to be quashed. 10. That the appellant requests for leave to add or amend the grounds of appeal before the appeal is heard or disposed off. 4. Since the facts in all the above mentioned appeals are identical, which are arising out of the order of the Ld. CIT(Central), Ludhiana, therefore, for the sake of convenience, all the above mentioned appeals are being decided by this consolidated order. 5. The brief facts as arising from the orders of the Ld. CIT(Central) Ludhiana and on the basis of records before us in all the appeals mentioned hereinabove, are that search operations were carried out at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property transactions made by assessee in the name of Sh. Jeetu Keshi as per detailed reasons discussed in orders dated 26.03.2012 made u/s 263 of the Act for A.Y. 2004-05 to 2008-09 in the case of Kapurthala Estates Pvt. Ltd; and order u/s 263 of the Act for A.Y. 2008-09 in the case of assessee A.Y. 2006-07: Order is erroneous and prejudicial to interest of revenue on the ground of property transactions made by assessee in the name of Sh. Mithlesh Kumar as per detailed reasons discussed in orders dated 26.03.2012 made u/s 263 of the Act for A.Y. 2006-07 to 2008-09 in the case of Kapurthala Estates Pvt. Ltd; and order u/s 263 of the Act for A.Y. 2008-09 in the case of assessee. A.Y. 2007-08: Order is erroneous and prejudicial to interest of revenue on the ground of property transactions made by assessee in the name of Sh. Jeetu Keshi Sh. Mithlesh Kumar as per detailed reasons discussed in orders dated 26.03.2012 made u/s 263 of the Act for A.Y. 2007-08 2008-09 in the case of Kapurthala Estates Pvt. Ltd; and order u/s 263 of the Act for A.Y. 2008-09 in the case of assessee. A.Y. 2008-09: Order is erroneous and prejudicial to interest of revenue on the ground of property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his statement recorded u/s. 132(4) of the Act on 04.03.2008 has admitted that Sh. Jeetu Keshi Mithlesh Kumar were employees of M/s. Kapurthala Estates Pvt. Ltd, M/s. Kapurthala Promoters Developers Pvt. Ltd, ( Para 10, page 11 of order) Documents collected by the Assessing Officer from the office of sub- registrar/tehsildar it is found that various property transaction have been conducted by Jeetu Keshi Mithlesh Kumar. Assessment order is considered to be erroneous and prejudicial to the interest of revenue since no addition on account of Income including investments for property transaction of Jeetu Keshi Mithilesh Kumar have been made. (Para 11, page 12 of the Order ). Parminder Singh in his statement has admitted that registration deeds have been got done by Jeetu Keshi Mithilesh Kumar on behalf of M/s. Kapurthala Estate Pvt. Ltd, M/s. Kapurthala Promoters Developers Pvt. Ltd, ( Para 12, page 13 of Order). Submission of the assessee that assessee retracted from the statement vide his letter dated 10.10.2008 is not tenable. (Pare 13, Page 14 15 of Orders). Contention of the assessee before Assessing Officer that Jeetu Keshi Mithilesh Kumar were never employee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( Para 26 to 28 page 23 24 of the order). Contention of the assessee that assessee can not be held responsible for property transaction of Jeetu Keshi Mithilesh Kumar since their statement were recorded in response to summons u/s. 131 of the Act, they filed their income tax returns of which assessment stood completed wherein all transactions or property have been considered is not tenable, since grave prejudice has been caused to the department by not making addition in the hands of assessee its companies. (Para 29, page 24 of the Order). Submission of the assessee that proceedings u/s. 263 of the Act cannot be initiated since Assessments framed in the case of Jeetu Keshi Mithlesh Kumar stood merged with the order of CIT (A) since all property transacted by them had been subject matter of appeal before CIT(A) Also there should not be double taxation of the income cannot be accepted. ( Para 30 page 24 25 of the Order ). Assessing Officer has not properly applied his mind. ( Para 31, page 25 of the Order ). In Para 32 to 34, Ld. CIT has discussed enquiries to be conducted regarding the truth and genuineness of deposits and loan. ( Page 25 to 28, of the Order ). In para 35, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t orer in case of Jeetu Keshi Mithlesh Kumar are enclosed at page 237 to 261 of the paper book) 4. That copy of letter of ACIT addressed to Income Tax officer Kapurthala for making assessment in the case of Jeetu Keshi Mithlesh Kumar are enclosed at page 262 to 265 of the paper book. 5. Copy of satisfaction note by Income tax officer kapurthala in the case of Jeetu Keshi and Mithlesh Kumar enclosed at page No. 266 to 272 of the paper book. 6. That copies of various notices issued to Jeetu Keshi Mithlesh Kumar enclosed at Page 273 to 285 of the Paper book. 7. Transactions carried out by Jeetu Keshi Mithlesh Kumar explained at page No. 286 to 305 of the paper book. 8. That to invoke provisions of section 263 of the Act order of the Learned. Assessing officer should be erroneous as well as prejudicial to the interest of revenue. Both the conditions must co- exist. Reliance is being placed on : a) MALABAR INDUSTRIAL CO. LTD. vs. COMMISSIONER OF INCOME-TAX 243 ITR 83(Supreme Court.) b) ST. DALJIEET KAUR VS COMMISSIONER OF INCOME-TAX 184 ITR 149(Gau). c) COMMISSIONER OF INCOME-TAX VS. GEORGE WILLIAMSON (ASSAM) LTD 250 ITR 747 (GUJ) d) COMMISSIONER OF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... X vs. MUNJAL CASTING HIGH COURT OF PUNJAB HARYANA (2008) 2 DTR (P H) 20 : (2008) 303 ITR 23: (2008) 168 TAXMAN 241. f. COMMISSIONER OF INCOME TAX vs. MAX INDIA LTD. SUPREME COURT OF INDIA (2007) 213 CTR (Supreme Court) 266: (2007) 295 ITR 282(Supreme Court): (2008) 166 TAXMAN 188 (SC). g. RANKA JEWELLERS vs. ADDITIONAL COMMISSIONER OF INCOME TAX HIGH COURT OF BOMBAY (2011) 238 CTR (Bom) 153 : (2010) 328 IR 148 : (2010) 190 TAXMAN 265 : (2010) 38 DTR 29 h. COMMISSIONER OF INCOME TAX vs. MAHENDRA KUMAR BANSAL HIGH COURT OF ALLAHABAD (2008) 214 CTR (All) 349 : (2008) 297 ITR 99 (All) This will meet case of the Ld. CIT referred in para 8(a), 8(b),8(f), 8 (o) 8(q) 11 That the assessee, vide aforesaid letters, further explained that provision of section 263 of the Act are not attracted since issues raised in the notice u/s. 263 of the Act were subject matter of appeal before Learned Commissioner of Income Tax (Appeals) ['Ld. CIT (A)' ] and on the basis of doctrine of merger, order passed by the AO merged with order of Ld. CIT(A) which is not amenable u/s 263 of the Act in view of provisions of section 263(1)(c). For this proposition, reliance is being placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT has not concluded in whose hands transactions are to be taxed and which transactions are to be taxed. Similar is position about sundry creditors, depositors, advances against plots since Ld. CIT has not pointed out what errors have been committed. Information asked for during assessment proceedings has been provided examined by Assessing Officer. No decision about the erroneous nature of the order has been taken by CIT which is not permitted under the law. Reliance is being placed on: a) CIT vs. Kanda Rice mills 178 ITR 446 (P H) b) CIT vs. Unique Auto Belts (P) Ltd; 30 DTR 231 (P H) This will meet case of the CIT referred to in para 8(t) 8(u). 16. Reliance of CIT on various case laws referred to in para 8(s), it is submitted that facts of the cases relied upon are altogether different. 17. The case of CIT referred to in para 8(h), 8(m) are not relevant for invoking provisions of section 263 of the Act. 8. The Ld. DR, Mr. R.L.Chhanalia, appearing on behalf of the Revenue relied upon the orders of the Ld. CIT passed in each and every case of the assessees. 9. We have heard the rival contentions and perused the facts of the case. We find that case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransactions of Jeetu Keshi Mithlesh Kumar since their statements were recorded, they filed their income tax returns of which assessment stood completed wherein all transactions of property have been considered is not tenable, since grave prejudice has been caused to the department by not making addition in the hands of assessee and its companies. The Ld. CIT has also rejected the submission of the assessee that proceedings u/s 263 of he Act cannot be initiated since assessments framed in the case of Jeetu Keshi Mithlesh Kumar stood merged with the order of the Ld. CIT(A) because all property transacted by them had been subject matter of appeal before the Ld. CIT(A). Submission of the assessee that provisions of section 263 cannot be invoked for double taxation of some income and same issue for different assessees has been rejected by the Ld. CIT(Central). The contention of the assessee that Sh. Jeetu Keshi Sh. Mithlesh Kumar were never employees of any of the above mentioned three assessees as per books of account and attendance register produced during assessment proceedings has been rejected by the ld. CIT(Central) on the ground that the books were not available at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hree assessees during their assessment proceedings on 18.12.2009 17.12.2009 respectively, wherein both Sh. Jeetu Keshi Mithlesh Kumar have admitted that they are in the business of property dealings and all the transactions of sales and purchases of properties confronted to them have been made by them from their own acount and did not have any interest to these transactions. Sh. Jeetu Keshi Mithlesh Kumar have further confirmed that they are not employees of the aforesaid three assessees. 9.4. It was further argued by the Ld. counsel for the assessee that PB 240 to 243 and 245 to 256 are details of transactions of property considered by the AO of both Sh. Jeetu Keshi and Mithlesh Kumar in their assessment proceedings. The same set of transactions have been referred to by the Ld. CIT(Central) in the proceedings under section 263 of all the aforesaid three assessees. 9.5. It was further highlighted by the ld. counsel for the assessee that PB 262-265 are the copy of letters of ACIT addressed by the AO of the aforesaid three assessees to AO Kapurthala enclosing with these letters and copies of documents found and seized during search and survey operations in the case of afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the interest of the Revenue. Here in the present case, same property transactions of Sh. Jeetu Keshi Mithlesh Kumar, provisions of section 263 of the Act have been invoked in the case of Sh. Parminder Singh, M/s. Kapurthala Estates Pvt. Ltd. M/s. Kapurthala Promoters Developers Pvt. Ltd. Ld. CIT(A) has not come to the conclusion in whose hands transactions are to be taxed and in fact which transactions are really to be taxed. Similar is position about sundry creditors, depositors, advances against plots since ld. CIT has not pointed out what errors have been committed. Information asked for during assessment proceedings has been provided and examined by the AO. No decision about the erroneous and prejudicial nature of the order has been taken by the Ld. CIT. The Ld. counsel for the assessee relied upon the decisions of various courts of law and stated in his written submission reproduced hereinabove. 9.11. On the basis of facts on record and submissions made by the Ld. counsel for the assessee and the Ld. DR appearing on behalf of the Revenue, we are of the view to invoke the provisions of section 263 of the Act, order of the AO should erroneous as well as prejudicial to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transactions of property which were already taxed in the case of Sh. Jeetu Keshi Mithlesh Kumar. Our views find support from the case laws relied upon by the ld. counsel for the assessee. 11. We are convinced with the submission of Ld. counsel for the assessee that direct sales and purchases made by Sh. Jeetu Keshi Mithlesh Kumar cannot be held as transactions of assesse since the same are evidenced by registered sale deeds. We also find force in further submission of Ld. counsel for the assessee that to invoke the provisions of section 263 of the Act, the Ld. CIT had to come to a firm decision that the order of the ITO was erroneous as well as prejudicial to the interest of revenue. In the present case, for the same property transactions of Sh. Jeetu Keshi Mithlesh Kumar provisions of section 263 have been invoked in the case of Sh. Parminder Singh, M/s. Kapurthala Esates Pvt. Ltd. M/s. Kapurthala Promoters Developers Pvt. Ltd. The Ld. CIT has not concluded in whose hands transactions are to be taxed and which transactions are to be taxed. Similar is the position about sundry creditors, depositors, advances against plots. Since Ld. CIT has not pointed out what error ..... X X X X Extracts X X X X X X X X Extracts X X X X
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