TMI Blog2018 (4) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... TANT MEMBER For The Assessee : Shri Tej Mohan Singh For The Revenue : Dr . Gul shan Raj ORDER PER DIVA SINGH, J.M. The present appeal has been filed by the assessee assailing the correctness of the order dated 29/03/2017 of Pr.CIT, Patiala pertaining to 2012 13 assessment year on the following grounds: 1. That the Ld. CIT has wrongly assumed jurisdiction under section 263 of the Act to set aside the assessment order dated 27/03/2015 passed by the Assessing Officer in as much as the order is neither erroneous nor prejudicial to the interest of Revenue and as such the assumption of jurisdiction under section 263 of the Act is beyond his competence. 2. That the assessment order having been passed by the Assessing Officer after due application of mind and taking into consideration the various replies, material on record and books of account, the action restored to by the CIT is unwarranted and uncalled for. 2. The Ld. AR inviting attention to the impugned order submitted that in the facts of the present case the said order is bad in law in view of the fact that on each of the issues addressed by the Pr.CIT the assessing officer admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g which has not been done. Similar proposition of law it was submitted has been laid down by the Delhi High Court in yet another case i.e; in the case of CIT Vs. Sunbeam Auto Ltd. 332 ITR 167. Accordingly it was his submission that the assessment order passed is neither erroneous nor prejudicial to the interests of the revenue. 2.1 Inviting attention to the paper book filed on facts it was submitted that the reply of the assessee before the assessing officer dated 31/10/2014 is placed at pages 1 to 2. The submissions were supported by the copies of confirmed accounts of sundry creditors which are also placed at pages 3 to 66 of the paper book and were made available to the AO. Inviting attention to the paper book pages 67,68 it was submitted that this is the copy of the reply dated 16/03/2015 filed by the assessee also before the assessing officer which was alongwith the following Annexure: a. Details of immovable property acquired during the year. b. Details of stock purchase consumed during the year. c. Calculation of capital gain on sale of share. 2.2 Inviting attention to pages 69 to 79, 80 to 87 and 82 to 122 of the Paper Book it was submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said decisions was specifically referred to. Attention was also invited to the specific finding in para 28 so as to highlight that it is not the case of the Pr.CIT that the relevant books of accounts alongwith supporting facts and evidences were not perused by the assessing officer thus in the circumstances it could not be held by him that it was a case of no enquiry. Reliance was also placed on the decision relied upon in the case of Mumbai bench of the ITAT dated 6/5/2016 in the case of Narayan Tatu Rane Vs. CIT (2016) 70 taxman.com 2 2 7 (Mumbai tribunal) was relied upon copy of the said decision it was submitted is placed at pages 43 to 53 of the paper book on the basis of these facts and decisions it was his submission that the impugned order deserves to be quashed. 3. The Ld. CIT, DR inviting attention to the impugned order submitted that in the facts of the present case he would place reliance upon the show cause notice issued to the assessee which sufficiently establishes the lack of enquiry by the AO. The reply of the assessee has been considered. It was his submission that a speaking order has been passed where the issues are fully discussed in paragraph 4 by the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... howing long term capital gain of ₹ 13,97,948/- in a buy back scheme of company namely M/s Shivam Telecom. The genuineness of this transaction was required to be verified because you had substantial interest in the said company and which is a non listed company. Subsequently you claimed exemption u/s 54F(1) on purchase of residential property amounting to ₹ 1,84,68,500/-. The AO has not verified the exemption claimed u/s 54F as to whether all the formalities were completed on transfer of capital assets i.e. shares which not to be charged to tax in case of investment in residential house. (iv) From the perusal of the information on record with regard to the household expenses, it has been noticed that you have not debited any expenses from your account. All the expenses of the family consisting of 5 members have been met by your father and your wife. The AO has not verified the copy of bank statement of your father and also has not verified the genuineness of income of your wife. It had to be examined whether your wife is actually working as BAMS doctor or not. (v) From the perusal of the account of Mukesh Sharma HUF it has been noticed that you have paid in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and trading in firewood. 1.2 In the course of assessment proceedings, the assessee produced his books of account and all other information s /documents as called for by the Assessing Officer from time to time. The assessee has not only explained queries raised by the Assessing Officer, but has also substantiated them with necessary documentary evidence. 1.3 After verifying the informations submitted by the assessee, the Assessing Officer completed the assessment under section 143(3) of the Act vide order dated March 27, 2015 1.4 Further submitted that the queries raised in your show cause notice had been looked into by the Assessing officer while framing the assessment order and the Assessing officer was fully satisfied with the record produced before him and contention put forth before him by the assessee with regard to these specific issues. 2. With regard to various issues raised by your good self we submit our explanation as under:- i) As regards the issue of verification of Sundry creditors, your kind attention is invited to the fact that the Assessing officer vide his notice dt. 14.07.2014 u/s 142(1) specifically asked the assessee to file confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee also furnished stock records in respect of materials purchased and consumed vide letter dt. 16.03.2015 under page 1-12 annexed therein. Was also placed on record vide letter of even date. No defect has been pointed out in the books of account of the assessee by assessing officer. We are enclosing herewith relevant details/ information for your kind reference as per page no 2-35. ii) iii) As regards sale and purchase of properties and claim of deduction u/s 54F, vide order sheet entry dt. 10.10.2014, A.O asked the assessee to justify claim u/s 54F with documentary evidence. In response to the same assessee vide letter dt. 24.03.2015 submitted as under :- The assessee had capital gains from sale of property as well as on account of buyback of unlisted equity shares during the year. The same has duly reflected in the computation of income. Further documentary evidence in support of sale/purchase of property and buy back of shares is furnished as per page 23-58. For your ready reference we are enclosing herewith calculation sheets of capital gains and allowable deduction u/s 54F. Detail of purchase of unlisted equity shares in the past and buyback ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuineness of sundry creditors as in most of the cases, copies of accounts have been furnished by the assessee himself and AO made the addition by increasing the GP rate without rejecting the books of accounts. The AO accepted the identity and genuineness of the sundry creditors without any application of mind. It is clear from the above that the AO has also failed to verify/enquire about the transactions made with regard to the sale of two properties amounting to ₹ 18 lakhs and ₹ 74.50 lakhs and purchase of house for ₹ 1.84 crores. AO has also not verified the exemption claimed u/s 54F of the Act as to whether all the formalities were completed on transfer of shares which not be charged to tax in case of investment in residential house. AO also failed to verify the copy of bank statement of father of the assessee and has also not verified the genuineness of income of assessee's wife with regard to the issue of household expenses. AO also failed to make investigation with regard to the payments exceeding ₹ 20,000/- made in cash by the assessee. Therefore, the order was passed without any application of mind. Under the aforesaid circumstances, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer can be said to be prejudicial to the interests of the revenue. We have already extracted from the record the show cause notice issued by the Pr. CIT in the earlier part of this order. On a reading therefrom it is seen that five specific reasons were set out by Pr. CIT which were confronted to the assessee to justify why on the specific grounds addressed the assessment order under section 143(3) should not be considered to be erroneous as well as prejudicial to the interests of the revenue. We have gone through the explanation of the assessee offered before the Pr. CIT vide its reply dated 27/03/2017. A perusal of which shows that the assessee vehemently took the stand that each and every aspect had been enquired into by the assessing officer before the passing of the order. It is seen that various order sheet entries were referred to show that queries were raised. None of this has been upset by the Pr. CIT in the order passed. The assessee as per its reply addressed to the Pr. CIT has also referred to replies made before the assessing officer in response to these queries to show that the queries raised in the assessment proceedings were responded to by making books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares reflected in the computation of income supported by documentary evidence made available to the AO which was also filed before the Pr. CIT at pages 23 to 58 calculation sheets of capital gains and allowable claim of deduction under section 54F made before the assessing officer was also filed before the PCI T alongwith evidence in the form of returns etc. filed with the Registrar of Companies evidencing transfer of unlisted shares in the specific firm. We note that the evidences filed have not been upset nor any further enquiry to upset them was carried out by the PCI T. Addressing the issue raised in (iv) by the Pr. CIT it is seen as per submissions extracted in the order itself that the ITRs of the family members available in the assessment file was relied upon. The estimated addition of ₹ 8,78,990/- in the assessment order it was submitted would more than adequately take care of inadequacy if any of the household expenses. Qua the payments of ₹ 20,000/- allegedly made for payment to Mukesh Sharma it was submitted that it pertains to 2013-14 assessment year and the payments made to Rajkumar totalling ₹ 20,000/- it was submitted was made on different dates a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on going through the record we note that he has failed to give any finding as to how and in what manner the order of the assessing officer on the various issues noted by him can be said to be erroneous let alone prejudicial to the interests of the Revenue. We note that no enquiry has been made by the Pr. CIT at his own instance and he has merely directed the assessing officer to pass an order in accordance with law. The law envisages that first the Ld. Pr.CIT is to point out how the order can be said to be erroneous without such an exercise the direction to pass the order in accordance with law becomes meaningless. The responsibility to do so cannot be shunned or abrogated by the said authority whimsically. The law requires that the order passed by the Pr. CIT should be a speaking order pointing out the error as in the absence of the same it is an arbitrary exercise which cannot be countenanced. We find support from the decision of the Hon ble Delhi High Court in the case of DCIT versus Delhi Airport Metro Express private apart from various other decisions cited by the parties. The Court in categoric terms has held that the law envisages before the revisionary authority exercises ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
