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TMI Blog2014 (10) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 were not conducted by the Ld. AO during the course of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, 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 issues mentioned in show cause notices. Vide orders under section 263 of the Act d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Source 1 Advance Received against plot at Gurgaon (Copy of Agreement enclosed0 Rs. 6.25 lac 2 Advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (v) Gujrat Industries 100 10 Sept. 92 (vi) IDEA Cellular 172 75 Feb. 0 (vii) IFCI 100 10 Feb. 94 (viii) Kirloskar 100 10 March 94 FERR (ix) Kohinoor 140 10 April 94 Foods (x)L & T. 150 75 March 92 (xi) Morepen lab. 500 10 Aug. 92 (xii) PARASNATH 20 300 Oct. 06 (xiii) Power Grid 134 52 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses. 5. That I do not constitute any HUF. Thus the same may be considered as not applicable. 6. List of Transactions above Rs. One lac is enclosed. Copies of Bank Statements/ Passbook have already been provided to Ld. I.O. 7. Details of Foreign trips made in personal capacity to USA are enclosed. 8. I do not run any firm nor involved as Director on share holding pattern except that I was working with the Era Group as salaried employee. I resigned from Era Group in year 2006. I did not hold any share holding or Capital /Loan with that organization. 9. Details of Property are as under :- 10. There is no capital grain or loss on assets during the year under assessment. 11. I am not actively involved in transaction of Shares/Mutual Funds. 12. I have not shown any exempt Income. Hence it may be treated as NIL. 13. Advance of Rs. 2.50 Lac paid on 08.09.2006 to Triveni Infrastructure and Development Company as booking amount for flat. 14. Information may please be treated as NIL. 15. Information may please be considered as Not Applicable. 16. As far as my knowledge is concerned, no major amount of interest is received in the I.T. refunds. 17. I have already reconciled and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the course of search relating to the husband Shri B K Vinayak, were duly explained before ADIT; they were mentioned in the appraisal report; thereafter they were fully explained before ld AO during the course of 153A assessment proceedings on various occasions. Besides they were fully explained again before ld. CIT during the course of 263 proceedings hearings in response to points raised in show cause notices and personal queries. 9. The record before ld. CIT clearly demonstrates that all the relevant issues were duly inquired, explained and ld. ADIT and ld. AO, after completing a due process of investigation and assessment u/s 153A passed the impugned assessment orders. Therefore the impugned assessment order neither suffer from any error nor they are prejudicial to the interest of revenue. Ld. CIT in the name of 263 power wants to review the assessment orders which is not permissible under the law. Ld. CIT wants to adopt another possible view over the evidence, quantification of income and views adopted by ld. Assessing Officer in due discharge of his statutory power of assessment. The 263 proceedings being for review of a lawfully passed and sustainable order can neither b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e responded to the Assessing Officer's Notice and have given the statement accordingly and confirmed the transactions as stated by us because that is the reality also. 2. I have already submitted to you vide letter dated 11.11.09 that the plot at Saraswati Kunj, measuring 502 square yards was purchase by me in 1996 out of sale proceeds of built up House at Karnal in 1978-79. It was further informed that the plot purchased from Cooperative society was fallen under dispute with local authorities and matter is pending before the High Court of Haryana. It become difficult for me to obtain clearance for the construction of House over the plot that's why I decided to dispose it off. 9. As regard jewelry I have already informed you that the I got that in my marriage and for the valuation for the sake of Wealth Tax, I am enclosing the details of valuation of Wealth for the A.Y. 2008-09. I hope the above details shall serve your purpose and request your goodself to drop the proceedings u/s 263 of the Income Tax, 1961 and oblige. If your goodself require any other details/ clarification, I shall be eager to provide the same to you." 11. Ld. Counsel thus pleads that all the relevant mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 57 of N.K.Vinayak - Ist paper book; last para :page 14 paper book N.K.Vinayak-1; iv. Locker operation proof and affidavit at pages 6 to 12 of supplementary paper book N.K.Vinayak v. Ld CIT in impugned order at page 2 of impugned order made contrarious allegation that assessee filed no reply on above issue in post search proceedings where as facts state otherwise; vi. On conjecture and surmises, assessee's explanation is doubted by Ld CIT whereas Ld AO & Investigation wing has duly applied his mind by taking reply from assessee on the above issue; vii. It is not alleged that cash found during search vis a vis appellant's explanation gives rise to any unexplained income u/s 69A of the Act, in appellant's hands, neither in show cause notice u/s 263 nor in final revision order u/s 263 ; viii. Whereas appellant being house wife not engaged in any trade, given explanation vis a vis cash found, as per SC order in P.K.Noorjahan case 237 ITR 570 is plausible and do not fall for correction u/s 263 of the Act; b. Jewelery found during the course of search proceedings: i. Assessee is a senior citizen ; Married in year 1963 ; ii. Total jewellery weight 940 grams ; iii. CBDT instruct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's two sons one in Siemens at Gurgaon and one is USA as stated before investigation wing during post search proceedings, can very well gift to their parents the meager amount; f. Further, in case on an issue two views are inherently possible, it oust the jurisdiction of CIT on that issue like one here (cash to the extent of Rs. 4.17 lacs) reliance is placed on Hon'ble Delhi High Court in DLF judgment (supra) & Hon'ble AP high court in 354 ITR 35 g. On this issue, making no addition of Rs. 4.17 lacs cash found during search by Ld AO during assessment proceedings, do not make the order of Ld AO unsustainable on that count; ii) Source of FDR's i. Ld CIT- again made factually wrong allegation that source of FDR remained unverified at page 2 of above show cause notice in as much as detailed and extensive inquiry is made as evident from cursory look to detailed show cause issued by Ld AO dated 14/10/2009 replied on 24/10/2009 and 11/11/2009 ii. pages 3, 5,10 for enquiry before Ld AO: N.K.Vinayak)& (pages 5,8,11 to 13, 21, 23 to 28: B.K.Vinayak paper book - assessment stage replies; iii. Assessee's reply on subject issue given the fact that assessee is not is any business and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as erroneous or prejudicial to the revenue warranting exercise of revisional jurisdiction u/s.263 of the Act by the respondent. The respondent had no different or new material to take different view from the one taken by the Assessing Officer and the reasons given by him to reopen the assessment and sustain the revision are totally unacceptable. The respondent is not vested any power u/s.263 to initiate proceedings for revision in every case and start re-examination and fresh enquiries in matters which have already been concluded under the law. The Tribunal in our view had grossly erred in agreeing with the order of the respondent and in upholding it on grounds which have not been found in the show cause notice of the respondent, that too without considering the several issues of fact and law raised by the assessee in his written submissions and grounds of appeal. Both the respondent and the Tribunal have based their orders on preconceived notions, conjunctures and surmises, manifestly misread the facts and twisted them to justify their conclusions. " ii. Lalchand Bhagat Ambica Ram v. CIT (1959) 38 ITR 288 (SC), held at Page 295 for the [proposition: Para 31: (a) The Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising revisional powers to: (i) call for and examine the record, and (ii) give the assessee an opportunity of being heard and thereafter, to make or cause to be made such an enquiry as he deems necessary. It is only on fulfilment of these twin conditions that the Commissioner may pass an order exercising his power of revision. Minutely examined, the provisions of the section envisage that the Commissioner may call for the records and if he prima facie considers that any order passed therein by the Assessing Officer is erroneous insofar as it is prejudicial to the interest of the revenue, he may pass such order thereon as the circumstances of the case justify. After giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary. The twin requirement of the section is manifestly for a purpose. Mere fact that the Commissioner considers on examination of the record that the order has been erroneously passed so as to prejudice the interest of the revenue, will not suffice. The assessee must be called, his explanation sought for and examined by the Commissioner, and thereafter, if the Commissioner still feels that the order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to the interest of revenue, in view thereof the revision proceedings are bad in law. v) AO having done the enquiries as per his understanding and discretion as a quasi judicial authority, it cannot be assumed that he shirked his responsibility and did not carry out the enquiries. 16. Looking from all these angles and parameters, the exercise of power u/s 263 qua the issues raised in 263 notices is bad in law. It is pleaded that the impugned 263 orders passed by ld CIT may be set aside. 17. Ld DR relied on the orders of CIT. It is contended that the assessment procedure has a set protocol and if AO is found not to have adhered to the minimum required for ensuring a fair assessment, the assessment order is erroneous and therefore, prejudicial to the interest of revenue. 18. We have heard the rival contentions, material available on the record and case laws cited by both the parties. From the facts narrated above and the paper books filed it emerges that during the course of assessment proceeding questions, enquiries and explanation on the relevant issues were called for by the ld AO and were replied by the assessee. Thus these are not the assessments where there was no enquiry ..... X X X X Extracts X X X X X X X X Extracts X X X X
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