Shri Sudhir Maheshwari, Indore v. The CIT, Indore

ITA 243/IND/2009 | 2004-2005
Pronouncement Date: 25-01-2010 | Result: Dismissed

Appeal Details

RSA Number 24322714 RSA 2009
Assessee PAN AHXPM3325Q
Bench Indore
Appeal Number ITA 243/IND/2009
Duration Of Justice 8 month(s) 10 day(s)
Appellant Shri Sudhir Maheshwari, Indore
Respondent The CIT, Indore
Appeal Type Income Tax Appeal
Pronouncement Date 25-01-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 25-01-2010
Date Of Final Hearing 25-01-2010
Next Hearing Date 25-01-2010
Assessment Year 2004-2005
Appeal Filed On 15-05-2009
Judgment Text
- 1 - IN THE INCOME TAX APPELATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH AND SHRI V.K. GUPTA AM ITA NO.243/IND/09 A.Y. 2004-05 SUDHIR MAHESHWARI INDORE APPELLANT PAN AHXPM 3325Q VS COMMISSIONER OF INCOME TAX-I INDORE RESPONDENT APPELLANT BY SHRI ANIL KAMAL GARG CA RESPONDENT BY SHRI K.K. SINGH CIT DR O R D E R PER BENCH THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER O F THE LEARNED COMMISSIONER OF INCOME TAX DATED 20 TH MARCH 2009. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PER USED THE MATERIAL ON RECORD. 3. IN THIS APPEAL THE ASSESSEE IS AGGRIEVED BY TH E DECISION OF THE LEARNED COMMISSIONER OF INCOME TAX IN HOLDING T HE ORDER - 2 - PASSED BY THE ASSESSING OFFICER AS ERRONEOUS AND PR EJUDICIAL TO THE INTERESTS OF REVENUE BY INVOKING THE POWERS UND ER SECTION 263 OF THE ACT AND SETTING ASIDE THE ASSESSMENT ORDER. 4. THE BRIEF FACTS ARE THAT THE ASSESSMENT UNDER S ECTION 153A OF THE ACT WAS FRAMED ON 26.12.2006. THE LEARNED C OMMISSIONER OF INCOME TAX SUBSEQUENTLY ISSUED NOTICE UNDER SECT ION 263 OF THE ACT ON 20.2.2007 AS HE WAS OF THE OPINION THAT GIFTS RECEIVED BY THE ASSESSEE AND HIS OTHER FAMILY MEMBERS WERE R EQUIRED TO BE ADDED UNDER SECTION 68 OF THE ACT. THE ASSESSEE MADE DETAILED SUBMISSIONS AFTER EXPLAINING THE FACTS AND CONTENDED THAT THE ASSESSING OFFICER HAD DULY EXAMINED THIS ISSUE IN THE COURSE OF ASSESSMENT PROCEEDINGS HENCE THE ORDER OF THE ASSESSING OFFICER WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO TH E INTERESTS OF REVENUE. IT WAS ALSO SUBMITTED THAT IN THE RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT THE ASSESS EE HAD NOT CLAIMED RECEIPT OF ANY GIFT AND THEREFORE THE QUE STION OF ESTABLISHING THE GENUINENESS OF THE GIFTS DID NOT A RISE. THE LEARNED COMMISSIONER OF INCOME TAX AFTER REFERRING TO THE FACTS COMING TO THE KNOWLEDGE OF THE INVESTIGATION WING I N THE COURSE OF POST SEARCH PROCEEDINGS FOUND THAT THE NATURE O F AMOUNT CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE COMPAN Y WAS - 3 - REQUIRED TO BE EXAMINED. IT WAS ALSO OBSERVED BY TH E LEARNED COMMISSIONER OF INCOME TAX THAT THE FACT OF LAUNDER ING THE FUNDS BY THE FLAGSHIP COMPANY THROUGH ITS ASSOCIATE COMPA NIES HAD NOT BEEN INQUIRED INTO BY THE ASSESSING OFFICER. THE L EARNED COMMISSIONER OF INCOME TAX FURTHER HELD THAT THE CL ARIFICATION OF GIFTS AND VALIDITY OF THE EXPLANATION REMAINED TO B E CONSIDERED BY THE ASSESSING OFFICER IN THE LIGHT OF SURROUNDING C IRCUMSTANCES. ACCORDINGLY HE OBSERVED THAT THE ASSESSING OFFICER SHOULD HAVE MADE NECESSARY INQUIRIES INSTEAD OF BEING PASSIVE O N THE FACE IN THE COURSE OF ASSESSMENT PROCEEDINGS OF THE ASSESSE E AND THEREFORE THE ASSESSING OFFICERS ORDER WAS BOTH E RRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. ACCORDING LY HE DIRECTED THE ASSESSING OFFICER TO RE-EXAMINE THE ASSESSEES EXPLANATION WITH REGARD TO GIFTS ARRANGED FOR AND DECIDE THE ISSUE ACCORDINGLY. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED T HAT IN THE ORIGINAL RETURN SUCH AMOUNTS WERE SHOWN AS GIFT. HO WEVER IN THE RETURN FILED UNDER SECTION 153A SUCH AMOUNTS WERE N OT SHOWN AS GIFT HENCE THE ASSESSEES RESPONSIBILITY TO GIVE ANY EXPLANATION IN REGARD THERETO DID NOT ARISE. THE LEARNED COUNSE L ON A QUERY - 4 - FROM THE BENCH REGARDING THE NATURE OF INQUIRIES C ONDUCTED BY THE ASSESSING OFFICER AND THE REPLIES THEREAFTER BY THE ASSESSEE REFERRED TO PAGES 43 TO 46 AND 50 OF THE PAPER BOOK AND CONTENDED THAT IT WAS NOT A CASE OF LACK OF INQUIRY . THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER REITERATED THE SUB MISSIONS MADE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX. 6. THE LEARNED CIT DR ON THE OTHER HAND CONTENDED THAT THERE WAS NO DISPUTE THAT THE IMPUGNED AMOUNT HAD B EEN DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE HENC E IT WAS OBLIGATORY ON THE PART OF THE ASSESSEE TO EXPLAIN T HE NATURE THEREOF IRRESPECTIVE OF THE FACT WHETHER SUCH AMOUN T WAS IN THE NATURE OF GIFT OR NOT. HENCE THE ASSESSEES CONTE NTION THAT IT WAS NOT REQUIRED TO EXPLAIN THE NATURE OF ENTRIES WAS N OT CORRECT ESPECIALLY WHEN IN THE STATEMENT OF AFFAIRS ATTACHE D TO RETURN FILED ORIGINALLY SUCH AMOUNTS HAD BEEN SHOWN AS GIFTS. HE FURTHER CONTENDED THAT THE LAST DATE OF HEARING WAS 19.12.2 006 AND THE LETTER OF THE ASSESSEE DATED 19 TH DECEMBER 2006 HAD BEEN FILED ON 21.12.2006. HENCE IF THE ASSESSING OFFICER DID NOT TAKE COGNIZANCE THEREOF THEN NO FAULT COULD BE ATTRIBUT ED TO THE ASSESSING OFFICER. HE FURTHER CONTENDED THAT ON TH E FACTS AND IN THE CIRCUMSTANCES OF THE CASE IT WAS THE BOUNDEN D UTY OF THE - 5 - ASSESSING OFFICER TO EXAMINE THE MATERIAL IN DETAIL AND TO TAKE A COMPREHENSIVE VIEW OF THE MATTER. HE FURTHER PLACED RELIANCE ON THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX . 7. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY THE S IDES MATERIAL ON RECORD AND THE ORDER OF THE LEARNED COM MISSIONER OF INCOME TAX. IT IS NOTED THAT IN THE ORIGINAL RETURN FILED THE ASSESSEE CLAIMED THE IMPUGNED AMOUNTS AS GIFTS. SU BSEQUENTLY THERE WAS A SEARCH ACTION AND IN RESPONSE TO THE NO TICE ISSUED UNDER SECTION 153A THE ASSESSEE DID NOT SHOW THE I MPUGNED AMOUNTS AS GIFTS. IT IS FURTHER NOTED THAT THE INV ESTIGATION WING FOUND SEVERAL DOCUMENTS/MATERIAL INDICATING THE FAC T THAT GIFTS RECEIVED BY VARIOUS GROUP ENTITIES WERE BOGUS. IN T HE LIGHT OF THESE FACTS WHEN WE FURTHER EXAMINE THE MATTER THE N WE OBSERVE THAT THE ASSESSING OFFICER MADE INQUIRY REGARDING T HE TRUE NATURE OF THESE ENTRIES IN THE LIGHT OF THE DOCUMENTS/MATE RIAL SEIZED IN THE COURSE OF SEARCH TO WHICH THE ASSESSEE REPLIED THAT IT WAS NOT REQUIRED TO GIVE ANY EXPLANATION IN THAT REGARD BEC AUSE THE IMPUGNED AMOUNTS HAD NOT BEEN SHOWN AS GIFTS. THERE AFTER SOME MORE EXPLANATIONS HAVE BEEN GIVEN IN THE LETTE R DATED 19 TH DECEMBER 2006 FILED WITH THE DEPARTMENT ON 21.12.2 006 AFTER THE CLOSE OF THE HEARING IN THE MATTER. THE FACTS WHIC H THUS EMERGE - 6 - ARE THAT INSPITE OF HAVING INCRIMINATING MATERIAL A ND RELIANCE ON THE ISSUE WITH REGARD TO OTHER ENTITIES AS WELL TH E ASSESSING OFFICER HAS NOT MADE THE INQUIRIES IN THE MANNER EX PECTED FROM A QUASI JUDICIAL AUTHORITY LIKE THE ASSESSING OFFICER . IN THIS REGARD WE ARE FURTHER OF THE OPINION THAT THOUGH THE ASSES SING OFFICER MAY NOT GIVE ANY POSITIVE FINDING IN THE ASSESSMENT ORDER OR THE ASSESSMENT ORDER MAY BE BRIEF BUT THE MODE AND THE MANNER OF INQUIRY SHOULD BE SO THAT LEADS TO AN INFERENCE OF DUE APPLICATION OF MIND BY THE ASSESSING OFFICER WHICH IN OUR OPI NION IS ABSENT IN THE PRESENT CASE. FURTHER IN OUR OPINION THE ASPECT OF LACK OF INQUIRY BY THE ASSESSING OFFICER NOT ONLY COVERS TH E CASES OF NO INQUIRY BUT ALSO COVERS THE PASSIVE ACCEPTANCE OF T HE SUBMISSIONS MADE BY THE ASSESSEE ESPECIALLY WHEN THE ISSUE DEMA NDS FURTHER INVESTIGATION INTO FACTS. ON THE ASPECT OF LACK OF INQUIRY OUR VIEW IS DULY SUPPORTED BY THE DECISION OF THE HONBLE SU PREME COURT IN THE CASE OF MALABAR INDUSTRIAL COMPANY LIMITED V. COMMISSIONER OF INCOME TAX; 243 ITR 83 AND THE DECISION OF THE F ULL BENCH OF DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INC OME TAX V. KELVINATOR OF INDIA LIMITED; 256 ITR 1. IN THIS VI EW OF THE MATTER WE HOLD THAT THE LEARNED COMMISSIONER OF INCOME TAX HAS CORRECTLY INVOKED THE JURISDICTION UNDER SECTION 26 3 OF THE ACT. - 7 - THUS ALL THE GROUNDS RAISED IN THIS APPEAL ARE DIS MISSED. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 25 TH JANUARY 2010 IN THE PRESENCE OF BOTH THE PARTIES. SD SD (JOGINDER SINGH) (V.K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER JANUARY 25 2010 COPY TO APPELLANT RESPONDET CIT CIT(A) DR GUA RD FILE *DN/-