TaxTMI 
TaxTMI 
2012 (11) TMI 1120
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....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 belong to him only and assessee has nothing to do with the those transactions. c) 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 AO of the assessee (person searched) recorded his satisfaction an....
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....sment 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 belong to him only and assessee has nothing to do with the those transactions. c) 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 AO of the assessee (person searched) recorded his satisfaction and forwarded the documents to AO of Sh. Jeetu Keshi for framing assessment in the case of Sh. Jeetu Keshi. d) That conclusion of the Ld. CI....
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....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 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. Mithlesh Kumar to the assessee company is illegal and bad in law since during assessment proceedings of the assessee company Sh. Mithlesh Kumar 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 belong to him only and assessee has nothing to do with the those transactions. c) That conclusion of the Ld. CIT that property transactions made by Sh. Mithlesh Kumar belongs to the assessee is illegal and bad in law since AO of Sh. Parminder Singh, director of the company (person searched) recorded his satisfaction and forwarded the documents to AO of Sh. Mi....
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....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 the residential premises of Sh. Parminder Singh and survey operations at the business premises of M/s. Kapurthala Estates (P) Ltd. and M/s. Kapurthala Promotors & Developers (P) Ltd; on 04.03.2008. All the assessees for different years have filed returns of income for all the assessment years mentioned hereinabove and assessments were completed. The Ld. CIT(Central), Ludhiana, issued show cause notices in all the above mentioned cases asking the assessees why assessment order dated 29.12.2009 passed u/s 143(3)/153A should not be revised/modified/enhanced or set aside with the directions to make the assessments denovo. On perusal of the orders of the Ld. CIT(Central), the facts as stated by the Ld. CIT(Central) and as submitted by the Ld. counsel for the assessee are that in all the cases, case of the Ld. CIT is that investment has been made in various i....
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....r 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 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. 2008-09 to 2008-09 in the case of Kapurthala Estates Pvt. Ltd; and order dated 27.03.2012 for A.Y. 2008-09 in the case of M/s. Kapurthala Promoters & Developers (P) Ltd. 5.1. In the case of M/s. Kapurthala Estates Pvt. Ltd in orders passed u/s 263 of the Act, the Ld. CIT has held: A.Y. 2004-05, 2005-06 & 2006-07: Order is erroneous and prejudicial to interest of revenue 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 assessees own case. A.Y. 2007-08 : Order is erroneous and prejudicial to interest of revenue as per detailed reasons discussed in orders dated 26.03.2012 made u/s 263 of the Act for A.Y. 2008-09 in the case of a....
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....velopers 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 employees of the companies. Since their name neither appear in the attendance register of the assessee companies nor any salaries have been paid to them as per books of accounts, is not tenable since books of accounts were not available at the time of search. ( Para 14 to 16, page 15 & 16 of order). Property transaction carried out by Jeetu Keshi & Mithilesh Kumar on behalf of M/s. Kapurthala Estate Pvt. Ltd. & M/s. Kapurthala Promoters & Developers Pvt. Ltd. are duly recorded in books of accounts but property transaction carried out by them in their individual name have not been recorded by the assessee ( Para 17, Page 16 to 18 of Order). Jeetu Keshi & Mithilesh Kumar in their statements recorded by the Assessing officer u/s. 131 of the Act that they are doing property transactions on their own behalf. Mere admission made by them ignoring their capacity is not sufficient. (Para 18, Pag....
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....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, Ltd. CIT has relied upon various case laws. ( Page 28 to 31, of the order). Submission of the assessee that during assessment proceedings copies of accounts of creditors/depositors & confirmation in respect of few cases of creditors and depositors were filed as per questioner/queries raised which implies that Assessing Officer has applied his mind and as such provision of section 263 of the Act cannot be invoked. It was further stated that items of regular assessment cannot be added back in proceedings u/s. 153A when no incriminating documents were found during search. Assessee further submitted that proceedings u/s. 263 of the Act cannot be initiated on account of inadequate enquiries. These submissions are not acceptable ( Para 36 to 49, page 31 to 36 of the order ). Proceeding u/s.263 have been intiated in the case of M/s. Kapurthala Estates (P) Ltd., M/s. Kapurthala Promoter....
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....ce 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 INCOME-TAX VS. GABRIEL INDIA LTD.203 ITR 108 (Bom). 9. That words erroneous and prejudicial to the interest of revenue have not been defined in the law. An order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law make certain assessment, the same cannot be branded as erroneous simply because, the order should have been written more elaborately. Case may be visualized where the Income-tax Officer while making an assessment examines the accounts makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimates himself. On perusal of the records one may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a high figurer than the one....
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....['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 on : a) Punjab State Civil Supplies Corporation Ltd. vs. CIT, (1993) 200 ITR 536(P&H) (FB). b) CIT vs. Shri Arbuda Mills Ltd (1998) 231 ITR 50 (SC) c) CIT vs. Jayakumar B. Path (1999) 236 ITR 469 (SC) d) Ranka Jewellers vs. Addl. CIT & Anr. (2010) 328 ITR 148(Bom.) e) CIT vs. Shalimar Housing and Finance Ltd. (2009) 320 ITR 157 (MP) This will meet case of the Ld. CIT referred in para 8(e), 8(f), 8(k), 8(m) & 8(p).. 12. That it again is an established law that action u/s 263 of the Act, which results in double taxation is not permitted under the law: Reliance is being placed on: a. Commissioner of Income Tax vs. Smt. Minalben S. Parikh High Court of Gujarat (1995) 215 ITR 81(Guj.) b. Venkata Krishna Rice Co. vs. CIT (19870 163 ITR 129(Mad.) 13. That it is submitted that statement of Parminder Singh recorded u/s 132(40 on 04.03.2008 has been retracted by him and same had been subject matter of appeal for the assessment year 2....
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....ing 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 Ld. CIT in all the above mentioned appeals is that investments have been made in various immovable properties in the form of land in the name of Sh. Jeetu Keshi & Sh. Mithlesh Kumar by above mentioned assessees. Immovable properties purchased by Sh. Jeetu Keshi and Mithlesh Kumar during the assessment year 2004-05, 2005-06, 2006-07, 2007-08 & 2008-09 belong to the above said assessees. In the case of M/s. Kapurthala Estates Pvt. Ltd. and M/s. Kapurthala Promoters and Developers Pvt. Ltd; the Ld. CIT (Central) has further observed that the AO has not conducted proper enquiries with respect to increase in sundry creditors & provisions and advances against plots/depositors. He further observed in his order that admission of Jeetu Keshi & Mithlesh Kumar in their statements recorded by the AO u/s 131 of the Act that they are doing property transactions on their own, assessments framed by the AO of Jeetu Keshi & Mithlesh Kumar wherein all the above said property transactions h....
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.... 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 of search. 9.1. The Ld. counsel for the assessee has drawn our attention to PB 191 to 193 in the case of Sh. Parminder Singh which is copy of notice dated 08.12.2009 issued by the AO of Sh. Parminder Singh during assessment proceedings for the assessment years 2002-03 to 2008-09 in which the assessee has been asked to explain the property transactions carried out by Sh. Jeetu Keshi & Sh. Mithlesh Kumar, as power of attorney holder as well as property transactions in their individual names. Our attention has been drawn to PB 194 in the case of Sh. Parminder Singh which is reply to notice dated 08.12.2009 in which it has been explained that registration deed on power of attorney basis made by Sh. Jeetu Keshi & Mithlesh Kumar are duly recorded in the books of account of M/s. Kapurthala Estates Pvt. Ltd. and M/s. Kapurthala Promoters & Developers Pvt. Ltd.. It has been further explained that the assessee is not responsible for the property transactions carried out by Sh. J....
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....rs 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 aforesaid assessees asking the AO Kapurthala to prepare satisfaction note and make assessments in the case of Sh. Jeetu Keshi & Mithlesh Kumar. 9.6. Our attention was further drawn by the ld. counsel for the assessee to PB 266 to 272 which are satisfaction note in the case of Sh. Jeetu Keshi & Mithlesh Kumar, recorded by the AO Kapurthala in which it has been concluded that assessment proceedings for the assessment 2003-04 to 2008-09 be initiated against Jeetu Keshi & Mithlesh Kumar. Further, our attention was also drawn to PB 273 to 285 which are notices issued to Jeetu Keshi & Mithlesh Kumar during their assessment proceedings. Vide these notices Jeetu Keshi & Mithlesh Kumar have been asked to explain property transactions which are now being considered u/s 263 in the hands of aforesaid three assessees. 9.7. The Ld. counsel for the assessee has submitted that to invoke provisions of section 263 of the Act, order of the A.O. should be erroneous as well as prejudicial to the intere....
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....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 the interest of Revenue. The twin conditions should co-exist. We are convinced with the submissions of the ld. counsel for the assessee that order passed after conducting enquiries in all the matters cannot be held to be erroneous or prejudicial to the interest of revenue because every loss of revenue as a consequence of an order of AO cannot be treated as prejudicial to the interest of revenue. Our views find support by the case laws relied upon by the ld. counsel for the assessee, as stated hereinabove. Accordingly, we are of the view that the AO in the aforesaid case has conducted all the enquiries of the transactions of property carried out by Sh. Jeetu Keshi & Mithlesh Kumar by raising queries during assessment proceedings of Sh. Parminder Singh by issuing summons u/s 131 of the Act to Sh. Jeetu Keshi & Mithlesh Kumar. Not only this AO of the aforesaid assessees wrote letter to the AO Kapurthala to record satisfaction and frame assessment in the case of Sh. Jeetu Keshi & Mithlesh Kumar ....