TaxTMI 
TaxTMI 
2019 (9) TMI 549
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....crutinized by the Assessing Officer. In the assessment proceeding, notice dated 31.01.2012 was issued by the Assessing Officer qua verification of financial transaction of Rs. 1,16,37,157/- in the SBI Bank at Zira, during the financial year 2009-10 relevant to the instant case. Thereafter second notice dated 28.12.2012 was issued for verification of the same facts. The assessee replied the notice as under: To THE INCOME TAX OFFICER, (INTELL.,) ROOM NO.107, C.R. BUILDING, BHATINDA. SUBJECT: REPLY TO FINALANOPPORTUNITY TO FURNISH THE INFORMATION/DOCUMENTS IN RESPONSE TO THIS OFFICE LETTER/NOTICE F.NO. ITO (INTGELL.) BTD/2011-12/749 DATED 31.01.2012-MATTER 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 ....
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....have deposited Rs. 11637157/- in cash in your bank account maintained with the State Bank of India, Basti Machhian, Zira. 2. In this connection you are requested to the attend my office at Ferozepur on 12/07/2013 at 11.30 AM along with documentary evidence explaining the source of cash deposit in the above said bank. Yours faithfully, (L.D. BANSAL) Income Tax Officer, Ward-III(2), Ferozepur. The said notice dated 05.07 2013 was also replied by the assessee vide its reply dated 06.08.2013, which for the sake of brevity and convenience is also reproduced herein below. TO THE INCOME TAX OFFICER WARD-III(2), FEROZEPUR. Subject: VERIFICATION OF AIR/CIB INFORMATION IN THE CASE OF SH. BABU SINGH, V&PO. MAKHAI, TEH., ZIRA - FOR THE ASST. YEAR 2009-2010-REPLY REGARDING. Dear Sir, Kindly refer your notice under the Income Tax Act, l961 for the verif ication of the certain transaction which is known as AIR information. In this respect that I have already supplied the required information to the Income tax officer, (Intelligence), Room No. 107, C.R. Building. However, the same is given as under: 1. That it i....
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....., ZIRA--FOR THE ASST. YEAR 2010-2011, REPLY EGARDING. Dear Sir. Kindly refer your notices under sections 142(1) and 143(2) of the Income Tax Act, 1961 and the reply of which is given as under: 1. That I am an agriculturist and holding seven acres of agricultural land in my name (The copy Jamanbadi and Gardauwri both are attached herewith (See page 1 to 24) I use to use to oblige the farmers on the basis scheme launched by the Newly owned company about the sale of product of Sawraj Tractors directly from the company. And to implement this I use to collect Cash from the farmers deposited in my account and purchased the DD in the name of Company Mohinders and Mohindera Ltd., (FES). On the basis of this Transaction I have received the notice under section 148 of the 1.1'.Act. 1961 for Assessment Year 2010-2011 relevant to the previous year 2009-2010 and in response this notice I have f iled my Income Tax Return for the Asstt. Year 2010-2011 vide your office receipt No. 4135 on 21.10.2013 along with computation chart (Both Photo copies attached See Page 1 to 2) . 2. That it is correct that 1 have prepared a true account and f iled my inc....
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....ever, if any further information is required that will be duly supplied. Dated 25-08-14 Yours Faithfully (U.K. BHOLA) ADVOCATE FOR M/S BABU SINGH, ZIRA 2.3 Thereafter, notice dated 13/18-06-2014 and questionnaire dated 26.06.2014 were also issued to the assessee. For the sake of brevity and ready reference questionnaire is reproduced herein below. To Shri Babu Singh S/o Shri Harminder Singh, V&PO Markhai, Tehsil Zira Distt. Ferozepur. Dear Sir, Subject:- Assessment for the assessment year 2010-11 - Reg. - In conne....
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....ance. Yours faithfully (L.D. BANSAL) INCOME TAX OFFICER WARD-III(2), FEROZEPUR 2.4 The said questionnaire dated 26.06.2014 was specifically replied by the assessee vide its reply dated 30.06.2014, which for the sake of brevity and ready reference is also reproduced herein below. THE INCOME TAX OFFICER WARD-III(2), FEROZEPUR. Subject:- REPLY TO NOTICE UNDER SECTION 142(1) AND 143(2) OF THE INCOME TAX ACTION IN THE CASE OF Sh. BABBU SINGH, V&PO.MAKHAI, THE, ZIRA-FOR THE ASSTT., YEAR 2010-2011 REPLY REGARDING. Dear Sir, Kindly refer your notices under section 142(1 )b and 143(2) of the income Tax Act, 1961 and the reply of which is given as under: 1. That I am an agriculturist and holding seven acres of agricultural land in my name (The Copy Jamabandi and Gardauwri both has already been submitted with previous reply) which the main source of income or amount which left by the farmers out of direct purchase of tractors from Company direct in the name of farmers. 2. That it is correct that I have prepared a true account and filed my income tax returns in response to the notice under section 148 of the....
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....he name of individual farmers in whose name bill of tractors was issued. All the DD'S purchased from SBI, Zira were sent to the company on behalf of the farmers, MAHINDRA AND MAHINDRA LTD., (FES),SWARAJ DIVISION (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 contravened any of the provisions if I.T. Act, 1961. 6. That I have already explained in the para-I of the my reply that I agriculturist and my expenditure are being me out of my agricultural income which I have already explained in the return of my Income Tax Return for Asstt. Year 2010-2010 I use to oblige the farmers on the basis scheme launched by the Newly owned company about the sale of old product of Swaraj Tractors directly from the company Mahindra and Mahindra Ltd. ,(FES). 7. That I have not purchase in any new property during the year under consideration and my immovable property i.e. agricultural are ancestral one. 8. That lam an agriculturist as stated in para one of this reply and hold....
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....lf, however, if any further information is required that will be duly supplied. 2.4 Ultimately, the Assessing Officer passed the assessment order dated 02.07.2014. The said assessment order came under scrutiny before the Ld. Pr. Commissioner of Income Tax, who vide its notice dated 14.03.2017 issued u/s 263(1) of the Act sought the explanation from the assessee by mentioning the following facts. "2. During the examination of assessment record of your case for the assessment year 2012-13, it has been observed that you were maintaining a saving bank account No.11321388010 with State Bank of India, Zira wherein cash amounting to Rs.l,16,37,157/-was deposited by you. During the assessment proceeding you revealed that the amounts so deposited were in the form of cash received from the farmers and subsequently DDs were drawn in favour of the supplier company of Tractors. Further, it has been observed from the statement of the account that nearly 34 tractors were sold under the scheme in which you earned commission. at the rate of Rs. 30,000/- per tractor totaling to Rs. 10,20,000/-. However, there are withdrawals amounting to Rs. 12,39,268/-. Therefore, income has been under-....
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....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 were made were not available under the scheme. But this argument of the id. AR is nothing but mere an afterthought hence cannot be accepted. In any case, affidavits do not qualify as evidence and selfserving documents cannot be accepted. 5 In view of the above, contentions advanced on behalf of the assessee are not acceptable and hence rejected. The AO has made the assessment order without inquiry and in such a casual manner. Thus, the impugned assessment order is held to be erroneous and prejudicial to the interest of the Revenue. 6. In view of the above discussion, the assessment order dated 20.07.2014 is cancelled with the directions to the Assessing Officer to make decide the matter afresh after giving adequate opportunity of being heard to the assessee and examining all relevant evidence. A copy of submissions filed on behalf of the assessee in these proceedings may be transmitted to the Assessing Officer. 3. The assessee, by way of this appeal challenged the impugned order on the....
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....nts 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 nearly 34 Tractors were sold under the scheme in which the assessee has earned commission at the rate of Rs. 30,000/- per Tractor totaling to Rs. 10,20,000/-. However, there are withdrawals amounting to Rs. 12,39,268/-. Therefore, income has been under-assessed at Rs. 10,93,668/- {Rs. 12,39,268- Rs. 1,45,600/-} by not taking the whole of the taxable income. 4.1 While perusing the assessment order dated 02.07.2014, we realize that though the assessment order does not reflects the said transactions as highlighted by the Pr. CIT in its notice dated 14.03.2017, however, it is a fact that the Assessing Officer vide its notices dated 31.01.2012 and 28.12.2012, specifically enquired about financial transaction of Rs. 1,16,37,157/- carried out by the assessee in State Bank of India during the financial year 2009-10. The notice dated 28.12.2012 was specifically replied by the assessee by narrating the facts qua financial transactions of Rs. 1,16,37,157 in State Bank of Indi....
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....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 in the assessment order, that would not, by itself, lead to the conclusion that the order of the Assessing Officer called for any interference and revision". In the case of CIT Vs Sunbeam Auto Ltd. reported in 332 ITR 167 (Del.), has held "We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the Commissioner of Income-tax under section 263 of the Income- tax Act. As noted above, the submission of learned counsel for the Revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied h....
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....he said explanation and on being satisfied that it was revenue expenditure that the Incometax Officer allowed the claim for deduction. It is, however, correct that in his order, he did not make any discussion in regard to the query made by him and the explanation submitted by the assessee thereto". Further in para no: 15 observed "We may now examine the facts of the present case in the light of the powers of the Commissioner set out above. The Income-tax Officer in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assessee. Such decision of the Income-tax Officer cannot be held to be "erroneous" simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expendit....
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.... of scrutiny by the Assessing Officer and which was answered to the satisfaction of the Assessing Officer but neither the inquiry nor the answer to that was reflected in the assessment order, that would not, by itself, lead to the conclusion that the order of the Assessing Officer is erroneous and prejudicial to the interests of the revenue and therefore called for any interference and revision. 4.8 Coming to the instant case, we again perused the documents available on record and realized that though submission of Ld. D R is correct to the effect that the Assessing Officer in the assessment order 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 Assessing Officer and replies thereto by assessee and documents available on record, it is undoubtedly clear that the Assessing Officer thoroughly examined and verified the material facts and documents and all the issues raised in the questionnaire including cash deposit of Rs.l,16,37,157/- in saving bank account No.11321388010 with State Bank of India, Zira, relevant for passing the assessment order u/s....