9911796707
TMI Blog2022 (8) TMI 1222X X X X Extracts X X X X X X X X Extracts X X X X ..... proper enquiries with evidences - AO has accepted the explanations and completed the reassessment order u/s. 143(3) rws 147 of the Act. It is not the case of the assessee that the A.O. has not conducted necessary inquiry, verification before passing the reassessment order. The same cannot be construed either as Lack of enquiry or as Inadequate enquiry . Thus the ld. PCIT cannot revise the reassessment order merely because he held a different opinion than that is verified by the Assessing Officer during the reassessment proceedings. In the present case, the Assessing Officer has issued a detailed notice u/s. 142(1) calling for various details from the assessee and the assessee also had made detailed replies to the above notice with proper evidences and necessary records which are discussed in para 12 of this order. Thus the Assessing Officer having carried out such detailed enquiries satisfied with the explanation offered by the assessee, it is not open for the Ld. PCIT to thereafter Revise the assessment on mere apprehensions and surmises. We are of the considered view that the Assessing Officer had made detailed enquiries and after applying his mind and satisfied genuinen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee claimed the income derived therefrom shown as agricultural income . After verification of the records and a perusal of ledger account of agricultural income, copies of sales invoices, bills, vouchers related to purchases, copies of salary, bonus account, bank statements, etc and the Assessing Officer satisfied that the plants owned by the assessee are the result of my primary as well as subsequent operations carried for the product of agriculture, therefore the claim of the assessee was accepted and passed detailed assessment order dated 08-12-2011 u/s. 143(3) of the Act. 3. Subsequently this assessment was reopened by issuing a notice under section 148 dated 7.2.2014 on the ground that the assessee failed to disclose fully and truly all material facts namely evidences leading to agricultural operations carried out by the Partners at the agricultural land by engaging themselves or allowing others to carry out the agricultural income on barter system, evidences in the form of incurring necessary expenses such as watering, security, cutting and felling down the trees and bringing them to the marketplace for sale, loading and unloading expenses, etc and also receiving th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year and making a disallowance of Rs.37,22,695/- as unexplained expenses under section 69C of the Act vide reassessment order dated 18-08-2017. 7. As against this the reassessment order the Ld PCIT issued a show cause notice dated 21-01-2019 on the ground that the reassessment order passed by the assessing officer is without conducting suitable, independent inquiries and non-application of mind by the AO, thus it is an erroneous order and prejudicial to the interest of Revenue. Therefore the assessee was requested to show cause as to why the reassessment order should not be set aside under section 263 of the Act, thereby directing a fresh assessment so as to ascertain whether claim of agricultural income of the assessee firm is genuine or not. 8. The assessee challenged the invocation of 263 proceedings is bad in law on two folds namely [a] Revision proceedings could not have been invoked in this case, since the source of agricultural income was examined thoroughly by the assessing officer and made addition of 5% of gross agricultural income which was the subject matter of appeal before CIT [Appeals], and the CIT [Appeals] has confirmed the above addition but accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural income derived from sale of Teak trees, Sevan trees and copy of sale register, sales invoices containing terms and conditions subject to which sale transactions are executed along with copy of challan of Tax Collected at Source (TCS) paid on sale of Teak trees, Sevan trees were standing on land bearing block number 41 at Komad and the same has been sold during the year as Annexure-1. No objection letter dated 18.09.1995 issued by Deputy Conservator of Forest department approving the assessee to carry out plantation of Teak trees in private land at as assessee s own expenditure as Annexure-2. It is only after taking admission of the Forest Department the assessee firm initiated agricultural productivity of cultivating Teak trees and Sevan trees since 1995. The assessee submitted copy of old 7/12 forms of survey no. 80 paiki at Piplaj and survey number 10, 41 at Kamod clearly showing therein that Teak trees and Sevan trees have been cultivated on the said land vide Annexure-3. Confirmation from Kamod Gram Panchayat that Raghuvir Prasad Agarwal has cultivated Sevan trees on the land at Kamod as Annexure-4. Copy of Panchnamu from Talati, Kamod duly confirming that on agri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee] 10.4. Further Reliance is also placed on the jurisdictional High Court judgment in the case of Commissioner of Income Tax vs. Kamal Galani reported in [2018] 95 taxmann.com 261 (Guj.) wherein the Hon ble High Court held as follows: 20. In this context, we may recall, the Assessing Officer had examined two issues. With respect to introduction of the capital, the assessee had pointed out that he was an NRI for over two years and he had made foreign remittances over a period of time. With respect to the unsecured loan of Rs. 3.87 crores received from his brother also, the assessee had provided' necessary details which were called upon by the Assessing Officer. We have reproduced some of the responses of the assessee only to highlight the nature of inquiries carried out by the Assessing Officer and the detailed answers given by the assessee. With respect to his brother, the assessee pointed out that he was running a successful business of trading, was engaged in various commercial and non-commercial activities. He was man of standing and means. In fact, the Commissioner has gone on record to suggest that he neither disputes the identity nor the creditworthiness o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 has dealt with the issue of agricultural income in very detailed manner. As per Explanation 1(c) of Section 263 when a subject matter has been considered and decided by Ld. CIT(A), the same subject matter cannot be reopened u/s. 263 by the PCIT. As it can be seen from the Ld. CIT(A) s order, the issue of income generated from agricultural activity was considered and decided by the ld. CIT(A) and brought our attention to relevant findings as follows: 5.6. On careful consideration of facts, it is undisputed facts that appellant firm has cultivated plantation of teak tree in year 1995 and part of such trees are sold in year under consideration and was having age around 20 years. The appellant firm has not made any new cultivation of such teak trees in current year. The A.O. has not disputed the agriculture income shown by appellant but only dispute is with regards to agriculture expenditure because AO is of the view that 20% of agriculture income need to have been utilized for incurring agriculture expenditure for maintenance and preservation of such teak tree whereas appellant has claimed to have incurred expenditure of Rs. 1,41,250/-. Before dealing with observation of A.O. a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of assessment proceedings appellant has submitted copy of sale bills raised by it wherein it has been clearly stated that responsibility of cutting the trees are on buyers and such facts are admitted buyers in notice issued u/s. 133(6) of the Act. If the buyers have not shown any reasonable expenditure for cutting of trees same no way lead to conclusion that appellant has incurred unexplained expenditure. The A.O. has also referred to photographs furnished by appellant during the course of assessment proceedings and contended that numbers of workers and involved in pruning and cutting of trees and no reasonable expenditure is claimed by appellant. It is observed that appellant has submitted photographs to prove that cutting of trees were made and in fact standing trees were sold. Even such photographs were at the time of cutting of trees and entire responsibility of cutting of trees was on buyers of trees and workers were carrying cut work on behalf of buyer and not on appellant. . .. . . . 5.12. Considering the facts discussed herein above, it is observed that AO has estimated agriculture expenses @ 20% of agriculture income of teak tree sale is on h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income-tax in case of subject matter of any appeal which has been considered and decided in such appeal. In other words, before the Commissioner of Income-tax exercises the jurisdiction under section 263 of the Act, the Commissioner of Income-tax is required to ascertain whether the order referred to in sub-section (1) of section 263 of the Act had been the subject-matter of any appeal, and if yes, the revisional powers shall be available only if such subject-matter had not been considered and decided in such appeal. 10.8. Further reliance is made on the Bombay High Court judgment in the case of Commissioner of Income Tax -Vs.- K. Sera Sera Productions Ltd. [2016] 71 taxmann.com 40 (Bombay) wherein it was held as follows: . The assessee engaged in production and distribution of films had shown certain income from a film. Later it claimed that it was not income from production of film but sum received was share application money. The Assessing Officer did not accept the assessee's claim and considered said amount as income. He also did not accept the assessee's alternative claim of deduction of cost of production of film in terms of rule 9A and granted deductions t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese matters are very much part of the revisional authority's order dated 29th March, 2012. The attempt to reopen them cannot be saved as clause (c) of Explanation below sub-section (1) of section 263 of the Income Tax Act, 1961 had no application. 11. Per contra, the ld. CIT D.R. Mr. A.P. Singh appearing for the Revenue supported the orders of the authorities below and pleaded the revision of assessment made by the Ld. PCIT u/s. 263 is valid in law and no interference is called for and therefore the assessee s appeal is to be dismissed. The Ld DR relied on the judgement of the co-ordinate Pune Bench decision in the case of Ajanta Infrastructure Ltd -Vs- CIT in ITA No. 769 770/PUN/2015 dated 23-12-2021 wherein the invocation of Revision power u/s.263 was upheld by the Appellate Tribunal as the AO has done inadequate enquiry and passed the assessment order, which is clearly is an erroneous and prejudicial to the interest of Revenue. 12. We have given our thoughtful consideration and perused the materials available on record including the paper book and case laws field by the assessee. As has been rightly argued by the ld. Senior Counsel Mr. S.N. Soparkar and his first fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order made proper enquiries with evidences. The Assessing Officer has accepted the explanations and completed the reassessment order u/s. 143(3) rws 147 of the Act. It is not the case of the assessee that the A.O. has not conducted necessary inquiry, verification before passing the reassessment order. The same cannot be construed either as Lack of enquiry or as Inadequate enquiry . Thus the ld. PCIT cannot revise the reassessment order merely because he held a different opinion than that is verified by the Assessing Officer during the reassessment proceedings. 12.2. We are further guided by the Jurisdictional High Court judgment in the case of CIT vs. Arvind Jewellers [2003] 259 ITR 502, wherein the Division Bench referring to the judgment of the Supreme Court in the case of Malabar Industrial Co. Ltd. observed that the provisions of Section 263 cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is only when an order is erroneous that the section will be attracted and incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. The Hon ble Supreme Court jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Explanation 2 to Section 263 of the Act, which are as follows: (a) CIT vs. Nirav Modi [2017] 77 taxmann.com 78 (SC) Section 68, read with section 263, of the Income-tax Act, 1961- Cash credit (Gift) Assessment Years 2007-08 and 2008-09 assessee received certain amount as gifts from his father and sister who were non-residents in India Assessing Officer after making detailed enquiries, took a view that assessee had duly proved identity, source and creditworthiness of donors Commissioner, however, passed a revisional order under section 263 directing Assessing Officer to enquire into capacity of donors and to decide about genuineness of gifts afresh it was noted that Commissioner in his order of revision, did not indicate any doubt in respect of genuineness of evidence produced by assessee Moreover, satisfaction of Assessing Officer on basis of documents produced was not shown to be erroneous High Court by impugned order held that it was a case where a view had been taken by Assessing Officer after making proper enquiry and, thus, Tribunal was justified in setting aside impugned revisional order Whether Special leave Petition filed against impugned order was to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by Commissioner - High Court upheld Tribunal's order - Whether, on facts, SLP filed against High Court's decision was to be dismissed - Held, yes [Para 2] [In favour of assessee] (d) CIT vs. Shree Gayatri Associates [2019] 106 taxmann.com 31 (SC). Section 69A, read with section 263, of the Income-tax Act, 1961 Unexplained moneys (On-money receipts) Pursuant to search proceedings, assessee filed its return declaring certain unaccounted income Assessing Officer completed assessment by making addition of said amount to assessee s income Commissioner passed a revisional order under section 263 on ground that Assessing Officer had not carried out detailed inquiries which included assessee s on-money transactions Tribunal thus set aside revisional order passed by Commissioner High Court upheld Tribunal s order Whether, on facts, SLP filed against decision of High Court was to be dismissed Held, yes in favour of assessee. (e) Pr.CIT vs. Deep Industries Ltd. [2016] 67 taxmann.com 6 (Gujarat) Section 14A, read with section 263, of the Income-tax Act, 1961 and rule 8D of the Income-Tax Rules, 1962 - Expenditure incurred in relation to income not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
