Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2019 (9) TMI 549

..... der did not make any discussion in regard to the query made by him and the explanation submitted by the assessee thereto, however from the statutory notices and questionnaire issued by the AO and replies thereto by assessee and documents available on record, it is undoubtedly clear that the AO thoroughly examined and verified the material facts and documents and all the issues raised in the questionnaire including cash deposit in saving bank account No.11321388010 with State Bank of India, Zira, relevant for passing the assessment order u/s 143(3)/147 and therefore it cannot be said that the AO has not made any enquiry and thus such decision of the ITO cannot be held to be "erroneous" simply because in his order he did not make an elaborate discussion in that regard. CIT issued the notice dated 14.03.2017 u/s 263(1). Though the assessee specifically replied the aforesaid notice as well, however the Pr. CIT, without considering the material available on record, facts and circumstances of the case and contentions of the assessee, cancelled the entire original assessment order dated 20.07.2014 with a direction to the A.O. to the frame the assessment fresh after giving due op .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ER REGARDING. DEAR SIR, Kindly refer your letter No.ITO(Intell.,)/BTI/2012-13/699 dated 28.12,2012 vide some information has been called for and the reply which is given seriatim as under: 1. That it is correct that I am having account No. 11321388010 in some transactions have made to the Rs.l1637157/- in this respect it is submitted that I am employee of M/S Mahavir Tractors, Zira who is holding the Agency of Swaraj Tractors. The company during the financial year 2009-2010 had launched a scheme that if the farmers make purchases direct from the company then he would have to pay less ₹ 30,000/- on each tractors to increase the sales. Then firm M/S Mahavir tractors, Zira deputed one of his employee Sh. Babu Singh and said employee used to collect the funds from the farmers directly and make the DD in the name of Mahindra and Mahindra Co., direct and the sale bills were also issued directly by the Mahindra and Mahindra and Co. the photo copies of all the DDs purchased and Bank statement of the State Bank of India, Ferozepur both are also attached. Which will clear the picture of the all the transactions. 2. That the I have duly made the compliance though late on the same letter .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... the bank in the name of company MAHINDERA AND MAHINDERA LTD., (FES), SWARAJ DIVISION af ter deposited the cash in my saving account on behalf of the purchases farmers. (Copy attached). 2. That I have made available the direct purchases from the company Mohinder and Mohindera LTD., (FES), SWARAJ DIVISION on behalf of the 28 agriculturist nearly numbers of 28 tractors. The copy of Bill issued by the company of all the tractors was issued directly in the name of the agriculturist. (Photo copy of bills Issued by the company direct of all the 28 tractors issued are also attached herewith). 3. That I used to receive the cash from the farmers and deposited the same in my account and purchased the DD from the bank in the name of the same Agriculturist from SBI, Basti Machhian, Zira who used to give the cash for the purchase of Tractors. (Copy DD and Copy purchase bills issued by the company are attached herewith) I hope the aforesaid explanation will satisfy your good self , however, if any further information is required that will be dul y supplied. Yours faithfully (U.K.BHOLA) ADVOCATE FOR M/S BABU SINGH, ZIRA The assessee in support of its contention also filed various documents such a .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... g the DD from the STATE BANK OF INDIA for the purchase of Sawraj Tractors from company Mohindera & Mohindera directly from the company by the farmers through me as farmers. I used to collect cash from the farmers and deposited in my saving account No.1132138810 and from this bank account I purchased all the DD in the name of individual farmers in whose name bill of tractors was issued. All the DDs purchased from SBI, Zira were sent to the company, on behalf of the farmers, MOHINDERA AND MOHINDERA LTD. (FES), SWARAJ DI VISION (Photo Copy of DD along with Photo copy of bill issued by the company directly in the name of farmers are attached herewith. Since recipient of cash and payer of cash both are agriculturist and by doing none of the person recipient as well as payer has contrived any of the provisions. 3. That I have made available the direct purchase of SAWRAJ TRACTORS to the farmers from the company Mohinder and Mohindera LTD., (FES), SWRAJ Dl VISION on behalf of the approximately 28 agriculturist/farmers nearly 28 t actors. The copy of Bill issued by the company of all the farmers for the sale tractor were issued directly in the name of the agriculturist. (Photo copy of t .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... 10 to 31.3.2011. 8. Furnish copy of jamabandi/fard in respect of land holdings and also furnish copy of form J. Original these documents be produced for verification. 9. In your submissions dated 25.06.2014, you have made direct purchases of Swaraj Tractors to the farmers from the company Mahindra and Mahindra Ltd. Swaraj Division. Please intimate in which capacity you are doing the business. Are you an agent of the Company or an employee of the company. Are you an employee of any dealer. If so, furnish evidence in this regard. 10. Perusal of the ITR shows that you shown income from other sources. Please give complete details with documentary evidence. Also you have stated that you made direct purchases from a Tractor Company but no business income/ commission income has been reflected. Generally in tractor business, the commission is paid by the Company @ 5% of the cost of the per tractor. Please explain as to why the commission income may not be estimated. 11. Please intimate as to why the provisions of section 44AA and 44AB read with section 271A and 271B of I.T. Act, 1961 may not be applied in your case. Your case is fixed for hearing for 30.06.2014 at 11.00 AM. Notice u/s 142( .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ze agency/agent. Because I have been working with M/s Mahavir Tractors before the financial Year 2009-10 and during the year 2009-2010. Since this scheme of direct purchase by the farmers had been started in the financial year 2009-2010 and then I left the services of M/s Mahavir Tractors ,Zira in the 2008-2009 who have been authorized agency for the sale Tractors Swaraj Tractor and even after the taken over this company by the Mahindra and Mahindra. 5. That Sh. Babu Singh use to receive the money direct from farmers under the scheme direct purchase from Mahindra and Mahindra Tractors and deposits the same his saving account No.l1321388010 and got issued Bank drafts in the name of company Mahindra and Mahindra. Hence all Major deposits in my bank account are on account of amount received from the farmers for purchasing the DD from the STATE BANK OF INDIA for the purchase of Swaraj Tractors from company Mahindra & Mahindra directly from the company by the farmers through me as farmers as lam lone educated person in the sphere. I used to collect cash from the farmers and deposited all the DD in the name of individual farmers in whose name bill of tractors was issued. All the DD S .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... hose used issued Sale Bill of tractors directly in the name of farmers. That Ihave already prepared the accretion statement by explaining each and every entry of deposit and withdrawals and submitted with my previous and what is left in my account in my income from the other sources during the Asst. Year: 2010- 2011 relevant to the previous year 2009-2010 (Saving Account No. 11321388010) 11. That I have already been explained that I received the money and prepared the Bank drafts on behalf of the farmers out of my saving account and sent the Bank drafts to the company who has issued the bills in the names of that farmers. Because receiver and payer both are agriculturist hence none have contravened any provision neither 4AA ,44AB, 269SS AND 269T of the income tax Act, 1961. It is imperative to mention here that neither it is purchase of Sh. Babu Singh nor it is sale of Sh. Babu Singh nor it is loan received by the Sh. Babu Singh nor Babu Singh has repaid the loan to any farmers. I hope the aforesaid explanation will satisfy your good self, however, if any further information is required that will be duly supplied. 2.4 Ultimately, the Assessing Officer passed the assessment order da .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... r Company by way of Demand Drafts and M/s. Mahindra and Mahindra Tractor Company issued bills directly in the names of the farmers. Further i t has been contended that during the period under consideration there was a scheme from M/s. Mahindra and Mahindra Tractor Company that if the farmers directly purchase tractors from the company then it will cost ₹ 30,000/- less each tractor to the purchasers. Thus the benefit of the scheme was directly provided to the farmers and not to the assessee who collected money from the farmers and further paid to the company. Further it has been submitted that the assessee did not get any commission on the sale of these tractors. The AO has just accepted the assessee s version without putting any effort to further enquire into the matter. 4.3 In respect of withdrawals of ₹ 9,00,000/- the ld. AR has submitted two affidavits form Sh. Sukhdev Singh S/o Sh. Malkeet Singh R/o Hamad Wala Dist Ferozepur and Sh. Gurdev Singh S/o Sh. Piara Singh R/o Mehar Singh Wala Dist Ferozepur respectively wherein it has been accepted by them that they handed over the amounts to assessee and get the same back as the model of the tractor for which the payments .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... Make, and which is the less price of the company for the sale of Tractors directly farmers. It is, therefore, requested that the orders passed by the Principal Commissioner totally illegal and based on hypothetical assumption and not based of facts and reality. Hence orders passed by the Principal Commissioner of Income Tax, Bhatinda Range, Bhatinda under section 263 may kindly be deleted. 4. That the assessee craves to grant any other relief which this court may deemed fit in the interest of Natural justice. 4. Having heard the parties and perused the material available on record. The Ld. CIT(A) in its notice had noted that during the examination of assessment record in the case of assessee for the assessment year 2010-11, it has been observed that the assessee was maintaining SB Account No.113188010 with SBI, Zira, wherein cash amount of ₹ 1,16,37,157/- was deposited by the assessee. During the assessment proceedings, the assessee has revealed that the amounts deposited were in the form of cash received from the farmers and subsequently Demand Draft were drawn in favour of the supplier company of Tractors. Further, it has been observed from the statement of account that ne .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... er considering the reply and documents thereto, the Assessing Officer passed the assessment order therefore it cannot be said that the assessment order in any sense is perverse and prejudicial to the interest of Revenue. 4.4 No doubt the Assessing Officer has not given details of each and every item in its order however from the notices, questionnaire and replies thereto it clearly reflects that the Assessing Officer before passing the assessment order thoroughly examined all the issues which were subject matters of the assessment proceedings including the issue raised by the Ld. Pr. CIT, on the basis of which the impugned order has been passed by the Ld. Pr. CIT. Therefore the question arise as to whether the assessment order is liable to be cancelled wherein, the A.O. though made the detailed enquiry but did not elaborately discussed the issue in the assessment order. 4.5 The Delhi High Court in CIT vs Vikas Polymers, reported in 341 ITR 537 (Del.) has held "That an inquiry which has been raised during the course of scrutiny by the Assessing Officer and which has been answered to the satisfaction of the Assessing Officer but neither the inquiry nor the answer was reflected i .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ay High Court in CIT vs Fine Jewellery (India) Ltd. reported in 372 ITR 303 (Bombay) has held "That if an inquiry is raised during the assessment proceedings and responded to by the assessee, the mere fact that it has not dealt with it in the assessment order would not lead to a conclusion that no mind had been applied to it". In the case of Commissioner of Income-Tax Vs Gabriel India Ltd. 203 ITR 108, also dealt with identical issue and in para no. 7 has held "We have heard learned counsel for the parties and carefully perused the orders of the Income-tax Officer, the Commissioner and the Tribunal. On perusal of the admitted facts, it appears that the Income-tax Officer in the instant case had examined the allowability of the claim of the assessee for deduction of the above amount of ₹ 99,326. While doing so, he asked for an explanation from the assessee in regard to the nature thereof. The assessee furnished a detailed explanation, vide his letter dated September 19, 1975. It was on a consideration of the said explanation and on being satisfied that it was revenue expenditure that the Incometax Officer allowed the claim for deduction. It is, however, correct .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... anded as erroneous by the commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualize a case of substitution of the judgment of the commissioner for that of the Assessing Officer unless the decision is held to be erroneous. Cases may be visualized where the Assessing Officer examines the accounts, makes enquires, applies his mind to the facts and circumstances of the case and determines the income either by making the accounts or by making some estimates himself. The commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer was on lower side and, left to the commissioner, he would have estimated the income at a higher figure that the one determined by the Assessing Officer. That would not vest the Commissioner with the power to re- examine the accounts and determine the income himself at a higher figure". 4.7 In view of dictum of the aforesaid judgments passed by various High Courts, if an inquiry has been raised during the course of scrutiny by the Assessing Officer and which was answered to the satisfaction of the Assessing Officer but neither the inquiry nor th .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||