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2014 (10) TMI 461
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.... that the assessment order passed by the Ld. AO were considered as erroneous and prejudicial to the interest of revenue by the Hon'ble CIT and restored back to the file of the Ld. AO. 3. That the Hon'ble CIT has grossly erred in not considering the details and documentary evidences provided by the assessee in respect of cash seized of the appellant during the course of search proceedings. 4. That the Hon'ble CIT erred in holding that no source of professional fee received has been submitted by the appellant. 5. That the Hon'ble CIT has erred in not considering the information/detail provided by the appellant in respect of opening cash balance and holding that the Ld. AO during the course of assessment proceedings has not examined the opening cash in hand. 6. That on the facts and circumstances of the case, the Hon'ble CIT has grossly erred in holding that the Ld. AO erroneously accepted all the FDRs etc. as submitted by the appellant during the course of assessment proceedings without making any verification, examination and application of mind. 7. That the Hon'ble CIT completely erred on facts and in law in holding that investigation, verification and examination we....
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.... course of assessment proceedings. (v) The Ld. AO accepted all the assets, cash, jewelry, FDRs, etc. on an explanation as submitted by assesses, without making any verification and application of mind. (vi) The LD. AO failed to examine and verify the fact that, Smt. N.K. Vinayak has no source of income, in that situation all the cash, assets and FDRs found during the search and seizure operation did not belonged to her and should have been added in the hands of Shri B K Vinayak. 5. Assessees replied that all these aspects were duly considered by ld. AO during the course of assessment proceedings. All the proper explanation along with all the necessary documents/ evidences were furnished in respect of sources of cash found, interest income, FDR's and other assets found during the search as well assessment. The returned income in 153A returns was accepted by AO after due enquiries and verification, consequently the impugned assessment orders were neither erroneous nor prejudicial to the interest of revenue. 6. According to assessees, ld. CIT did not peruse the record carefully and summarily rejected the explanations and details/documents filed by them in respect of the is....
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....the Private enterprises and have served for more than 50 years and the amount of FDR's is very negligible in view of the length and position of service. (b) That interest income earned on these FDR's has been disclosed in the returns filed in response to the notices u/s 153A as has been rightly mentioned in the show casuse notice and as such it does not call for any interference in the order passed by the Ld. Assessing Officer. (c) I am also enclosing herewith the details of interest income of Rs. 2015144/- from banks during the F.Y. 2007-08. I hope the above details shall serve your purpose and request your goodself to drop the proceedings u/s 263 of the Income Tax Act, 161 and oblige. If your goodself require any other details/clarification, I shall be eager to provide the same to you. Assessee further explained that before ADIT investigation, in response to your summon u/s 131 (IA) of Income Tax Act 1964, all the relevant explanations were filed for both the assesses, summary thereof is as under : "Explanation regarding cash found 1 Cash found in Lockers Rs. 15 lac 2 Cash found in Residence Rs. 92,926 Total 15,92,926 ....
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.... Vinayak&Balram 42884707 (ii) Cairn India Ltd. 245 160 Dec. 06 KrishanVinayak (iii) ESSAR 45 10 Dec. 90 Steel (iv) G.R. Cables 100 10 Feb. 95 (v) Gujrat Industries 100 10 Sept. 92 (vi) IDEA Cellular 172 75 Feb. 0 (vii) I....
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....gaon. Copy of agreement is enclosed. c. Except above, there is no further liability. d. As regards moveable properties, the original FDR' are physically available with the department. These investments are made from personal and salary savings and have been reinvested from time to time on maturity of the same. 10. Copies of Bank Statements are enclosed. For entries in Accounts exceeding. One Lac, a list is enclosed. It is further pleaded that based on ADIT report and appraisal report consequent to search and during the course of 153A assessment, ld. AO raised various queries which were replied by the assesse vide letter dtd. 26-10-2009 as under: 1. I am not involved in any business activity. I have worked with Era Group as a regular employee and left the job there in April 2006. Since I am not in any business and have worked as salaried employee, I do not maintain any Capital Account or Balance Sheet. Returns have duly been filed with the Income Tax Department every year. However returns for the year 2002-03 onwards under section 153 A as asked for have already been submitted to your office on 12.10.2009. 2. Form 16 in support of salary income is already submitted....
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....ring from cancer and was under Treatment at Ganga Ram Hospital at Delhi and his only son was at Bangalore. Unfortunately he had expired last year. Rs. 7.00 Lacs Was advance received against collaboration agreement for development and construction of Plot in Gurgaon. Rs. 6.25 Lac Advance against sale of plot. The deal could not materialize as the party failed to get the registration of plot done. It is still pending as members of the Society has again filed writ in Punjab and Haryana High Court to enforce registration of Plots and the case is sub judice. Fixed Deposits: Total value of FDR's is Rs. 32.52 Lacs instead of Rs. 33.77 lac as shown by Department. All FDR's have been got issued from Savings. Some of these FDR's are in the joint name with my wife. These FDR's have originated since the year 1991 onwards and have been renewed on maturity from time to time. To the extent the information could be collected from different sources, the origin of the FDR's their subsequent renewals and funding is indicated in the statement enclosed. It may however be mentioned that the undersigned has been working in Senior position ....
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....eived in A.Y. 2007-08 and 7 lacs in A.Y. 2008-09. 5. Agreement Dated 02.06.2007:- a) As per your query it is true that agreement has not been registered, but the registration of agreement for transfer of a property is not compulsory as per the provisions of law and also being an old lady it is not possible for me to do so. It would not be out of place to mention that most of the agreement to sell, for transfer of property are not registered in general. b) The case of Registration was pending in the Delhi High Court and also, I was trying for registration otherwise with the Department. The case is still pending in the court. The copy of the petition to High Court is enclosed. 6. Agreement dated 17.10.2007:- a) As per your query it is true that agreement has not been registered, but the registration of agreement for transfer of a property is not compulsory as per the provisions of law and also being an old lady is it not possible for me to do so. It would not be out of place to mentioned that most of the agreement to sell, for transfer of a property are not registered in general. c) As regard to your query the Sale agreement for the plot at SaraswatiKunj was signed ....
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....factually incorrect. This was also re-clarified in our reply to CIT during revision proceedings at PB pages 25, 31,34,40,45 a. Ld CIT- again made factually wrong allegation that source of FDR remained unverified in as much as detailed and extensive inquiry is demonstrated by detailed show cause issued by Ld AO dated 14/10/2009 replied on 24/10/2009 and 11/11/2009 (pages 3, 5,10 for enquiry before Ld AO: N.K.Vinayak)& (pages 5,8,11 to 13, 23 to 28: B.K.Vinayak paper book - assessment stage replies); b. Ld CIT allegation that interest income is not reconciled and checked is again factually incorrect, this can be clarified by a reference to page 2 and (point no. 17) and its reply at page 5/point no. 17 & pages 25, 31,34,40,45 (paper book- N.K.Vinayak-1) : ii) The other issues raised in aforesaid show cause notice are: a. Cash found during the course of search proceedings from joint locker: Rs. 13.25 lacs (pertaining to assessee Mrs. N.K.Vinayak), this aspect is duly examined by AO as is evident from : i. Reply filed to investigating wing at the stage of section 131(1A) proceedings (post search)pages 28 to 32 paper book (B.K.Vinayak) and supplementary paper book (N.K.Vin....
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.... 23 to 28: B.K.Vinayak paper book -at assessment stage proper replies were filed; iii. Assessee's reply on subject issue given the fact that assessee is not is any business and source of fund is husband's money and maturity of earlier FDR's as very well explained in replies to investigation wing at pages 28 to 32 paper book (B.K.Vinayak) and supplementary paper book (N.K.Vinayak) pages 1 to 5 is supported by SC order in P.K.Noorjahan case 237 ITR Page 570; iv. Reply dated 12/11/2009 in case of B.K.Vinayak to Ld AO during assessment proceedings at pages 22 to 27 of paper book in B.K.Vinayak case; In the case of B.K.Vinayak Three issues have been raised by Ld CIT in show cause dated 11.01.2012 viz: i) Source of cash of Rs. 417,926/-: a. which is thoroughly enquired by Ld AO during assessment as visible from pages 6, 8, 22, 29, 30 of paper book (also explained to investigation wing in post search proceedings); b. Ld CIT himself admits that full cash flow statement was given during assessment proceedings reproduced at page 2/3 of impugned revision order, which is sufficient as per Hon'ble Delhi High Court judgment in the case of DLF 350 ITR 555 that revision procee....
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....ice track of assessee; iii) It is vehemently argued that the third issue raised by CIT u/s 263 is beyond the show cause notice issued u/s 263 of the Act and hence deserves to be set aside on this limited count itself as evident from case records below (being claim of expenses against professional income). Further this issue did not emanate from any incriminating material found during the course of search u/s 132 of the Act, on this count also order of Ld AO on this issue do not require interference in limited jurisdiction u/s 263 of the Act . (refer Raj HC Jai Steel 259 CTR 281 & All cargo SB ITAT order 147 TTJ 513); iv) It is pleaded that ld. CIT except holding that proper mind was not applied by AO. Nowhere has given any finding as to how the orders have caused any prejudice to revenue. Without such finding order of revision is bad in law. Reliance in this behalf is placed on- S.S.I. Ltd. vs DCIT 85 TTJ 1049 (para 50) holding: "A proceeding under s. 263 has a very limited scope and can be invoked only under special circumstance and not for the purpose of launching a roving enquiry. Error in assessment resulting in prejudice to Revenue has to be demonstrated while invo....
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....rent opinion in the matter, that it is only in cases of lack of inquiry that such a course of action would be open; that an assessment order made by the Income Tax Officer cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately; there must be some prima facie material on record to show that the tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation, as lesser tax than what was just, has been imposed. (c) The power of the Commissioner under sec. 263(1) is not limited only to the material which was available before the Assessing Officer and, in order to protect the interest of the Revenue, the Commissioner is entitled to examine any other records which are available at the time of examination by him and to take into consideration even those events which arose subsequent to the order of assessment. Further reliance is placed on: i. Malabar Industrial Corpn. 243 ITR83(SC) for the proposition that revision cannot be invoked in cases where the view adopted by AO is one of the possible view and CIT wants to ....
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....d by him that the assessee had not filed certain documents on the record at the time of assessment. Assuming it to be so, that did not justify the conclusion arrived at by the Commissioner that the Assessing Officer had shirked his responsibility of examining and investigating the case. More so, in view of the fact that the assessee explained that the capital investment made by the partners, which had been called into question by the Commissioner, was duly reflected in the respective assessments of the partners who were income-tax assessees and the unsecured loan taken from chit fund company was duly reflected in the assessment order of the said chit fund company which was also an assessee. [Para 18] 14. In view of the aforesaid, the Tribunal was correct, in law, for holding that the provisions of section 263 had not rightly been invoked in the instant case. Max India ltd. 295 ITR 282 (SC) 15. Ld. Counsel for the assessee contends that, looking under the light of all these applicable laws case law following proposition emerge from the assessees case: i) There were proper enquiries by the ADIT during the course of search proceedings and thereafter, by ld AO during the cours....