Income Tax Appellate Tribunal - Pune
Sou. Shankuntala Satyanarayan ... vs Department Of Income Tax on 28 February, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "B", PUNE
Before Shri Shailendra Kumar Yadav, Judicial Member,
and Shri R.K.Panda, Accountant Member.
ITA.No.1276/PN/2011
(Asstt. Year : 1998-99)
DCIT,
Ichalkaranji Circle,
Ichalkaranji. .. Appellant
Vs.
Sou. Shankuntala Satyanarayan Mandhane,
"Yogesh", /668, Thorat Chowk,
Ichalkaranji,
Kolhapur. .. Respondent
PAN: ABNPM0007H
Assessee by : Shri M.K.Kulkarni
Department by : Smt.S.Praveena
Date of Hearing : 28.02.2013
Date of Pronouncement : 28.02.2013
ORDER
PER SHAILENDRA KUMAR YADAV, JM:
This appeal has been filed by the Revenue against the order of the CIT(A) on the following grounds:
1. On the facts and in the circumstances of the case, an in law, the CIT(A) Kolhapur failed to appreciate that a completely new and credible information had come to the knowledge of the AO, establishing that whole transaction was a sham transaction, and therefore, the AO had credible and compelling reasons to believe that the income chargeable to tax has escaped assessment. Therefore, the notice issued u/s.148, was perfectly in accordance with law, and the resultant assessment u/s.143(3) r.w.s. 147 cannot be quashed.
2. On the facts and in the circumstances of the case, and in law, the CIT(A) erred in not appreciating that it had been conclusively established by overwhelming evidence collected by the department in consequence to action u/s.132, that M/s.Galaxy Exports was a nonexistent entity, and no real 2 business activities of purchase and sale of jewellery was ever conducted, and therefore, no particular enquiries were required to be conducted by the AO.
3. On the facts and in the circumstances of the case, and in law, the CIT(A) erred in relying upon the affidavit of Shri.Kamalkumar John, which in effect has no credibility since he himself was one of the key persons of the whole scam and his affidavit was nothing but a unilateral self serving document.
4. On the facts and in the circumstances of the case, and in law, the CIT(A) failed to appreciate the content of para 5.1 to 5.7 of the Assessment order which conclusively establishes that the purchase invoice dated 06-01-1998 issued by M/s.Galaxy Exports to the assessee, and the mode of payment, were just a charade, and were stage managed to provide entries regarding purchase and sale transaction.
5. On the facts and in the circumstances of the case, and in law, the CIT(A) erred in ignoring the ratio of decisions of Hon'ble Supreme Court in the cases of Homi Jehangir Gheesta Vs CIT (41 ITR 135), Sumati Dayal Vs CIT (214 ITR 801) and McDowell & Co.Ltd Vs. CTO(154 ITR 148).
6. The appellant also prays that the order of the Commissioner of Income Tax(Appeals), Kolhapur be vacated and that of the Assessing officer be restored.
2. The assessee filed her original return of income on 29.10.1998 declaring total income of Rs.7,46,940/- and assessment order u/s.143(3) was passed in this case determining total income at Rs.7,59,339/-, inter alia stated that there was a search action conducted in the Sharma and Johari group of cases and finding in consequent block assessments revealed that the assessee was one of the beneficiary of Havala entries. This information was passed on to Assessing Officer by the Investigation Wing, Mumbai. On this information, the Assessing Officer after taking approval from the CIT, Kolhapur, reopened the case. Accordingly, order u/s.143(3) r.w.s. 147 was passed making additions u/s.68 and 69 of the Act which has been contested in the appeal.
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3. First issue before first appellate authority was regarding reopening of the assessment u/s.147, wherein the assessee challenged the reopening of the case. The assessee contended that during assessment u/s.143(3) vide letter dated 05.09.2000, the Assessing Officer has raised specific enquiries in connection with capital gain on sale of gold and diamond jewellery. The clarification given was stated to be accepted while finalizing assessment u/s.143(3). In this background it was contended that in the reassessment proceedings no new facts were brought on record to prove that the allegation levelled against assessee were beyond doubt. In the circumstances, it was argued on behalf of assessee that reassessment order passed should be treated as bad in law. The CIT(A) having considered the submissions on the part of the assessee observed that reopening of concluded assessments or reassessments can be made where records indicate that Assessing Officer has not looked into an item of income, disallowance, deduction, rebate, expenditure etc. In such case there cannot be occasion for Assessing Officer to form an opinion. Whether there is a change of opinion or not has to be determined from the facts and circumstances on record.
4. In case before us, assessment was completed u/s.143(3) on 22.12.2010. All details viz., books, entry extract, copy of valuation report issued by the Government valuer, copies of VDIS declaration certificate, copies of jewellery sale bills were enclosed with original return of income filed on 29.10.1998. Specific enquiries regarding 4 capital gains were also conducted by the Assessing Officer vide letter dated 05.09.2000. The contentions of the assessee in response to these enquiries were considered and found acceptable after which assessment u/s.143(3) was finalized. Thus, Assessing Officer has already concluded the issue of capital gains in his order after making relevant enquiries at relevant point of time. The Assessing Officer's power to look into concluded matter is restrained to the extent that he should not revisit an issue which has been examined in initial assessment proceedings. Accordingly, valid conclusion has been arrived thereon should not be revisited. In such circumstances, there is not enough justification to believe that income has escaped. Under facts and circumstances, the CIT(A) was justified in holding that reopening of assessment was invalid and order passed u/s.143(3) r.w.s. 147 deserves to be annulled. This reasoned and factual finding needs no interference from our side. Since we are upholding the annulment of the assessment as stated above, the issue on merit regarding addition on account of unexplained sale of gold jewellery u/s.68, etc., goes academic.
5. As a result, appeal filed by the Revenue is dismissed.
Pronounced in the open court on this the 28th day of February, 2013.
Sd/- Sd/-
( R.K.PANDA ) ( SHAILENDRA KUMAR YADAV )
ACCOUNTANT MEMBER JUDICIAL MEMBER
gsps
Pune, dated the 28th February, 2013
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Copy of the order is forwarded to:
1. The Assessee
2. The DCIT, Ichalkaranji Circle, Ichalkaranji.
3. The CIT(A), Kolhapur.
4. The CIT, Kolhapur.
5. The DR "B" Bench, Pune.
6. Guard File.
By Order //TRUE COPY// Private Secretary, Income Tax Appellate Tribunal, Pune.