MADAN LAL AND PARTY,HANUMANGARH vs. PR. CIT, BIKANER

आदेश / O R D E R

Manoj Kumar Aggarwal (Accountant Member): - 1. By way of these appeals, the assessee challenges the validity of revisional jurisdiction u/s. 263 as exercised by learned Pr.

ITA No.233 & 234/Jodh/2018 M/s Madan Lal and Party Assessment Years: 2013-14 & 2014-15 Commissioner of Income-Tax, Bikaner, [Pr.CIT], for Assessment Years [‘AY’] 2013-14 and 2014-15 vide separate orders dated 07/03/2018. The revisional jurisdiction has been invoked on similar facts and therefore, the appeals are being disposed-off by way of this consolidated order for the sake of convenience & brevity. First we take up appeal for AY 2013-14 wherein the effective grounds taken by the assessee read as under :- 1. That the Ld. Pr. CIT Bikaner has erred in law and in fact in passing order under section 263 of the Income Tax Act and treating the assessment order as prejudicial to the interest of revenue. 2. That the Ld. Pr. CIT Bikaner has erred in law and in fact in taking action under section 263 even after first and second appeal against the assessment order has already been decided. 3. That the Ld. Pr. CIT Bikaner has erred in law and in fact in not following the principle of Doctrine of Merger, further Pr. CIT Bikaner has erred in taking the action under section 263 on the issues which are already decided by the H'ble CIT(Appeals) and H'ble ITAT. 4. That the Ld. Pr. CIT Bikaner has erred in law and in fact in taking two actions at a time - one is passing order under section 263 and another is filing appeal before the H'ble Rajasthan High Court against the order of the H'ble ITAT Jodhpur.

3 ITA No.233 & 234/Jodh/2018 M/s Madan Lal and Party Assessment Years: 2013-14 & 2014-15 assessment order takes note of the fact that since entire cash purchases of Rs.13.63 Crores was being disallowed u/s 40A(3), separate addition thereof u/s 40A(2)(b) would not be required. Finally, the income was determined at Rs.28.77 Crores. Upon further appeal, Ld. CIT(A), vide order dated 28/04/2017, deleted the additions of bogus capital and cash purchases. Consequently, the revenue contested the appellate order before this Tribunal vide ITA Nos.302 & 303/Jodh/2017 order dated 13/09/2017 which is common order for AYs 2013-14 & 2014-15. A copy of the same is on record. In the said order, the Tribunal confirmed the deletion of both the additions. In para-25 of the order, a finding has been rendered by the bench that the assessee has satisfactorily demonstrated by way of documentary evidences that no undue benefit was passed on to the related parties u/s 40A(2)(b) as alleged by Ld. AO in the assessment order. 3.2 In the meanwhile, Ld. Pr.CIT, invoking the provision of Sec.263 against assessment order dated 30/03/2016, show-caused the assessee that the directions issued by Ld. Joint Commissioner u/s 144A vide letter dated 29/03/2016 were not complied with by Ld. AO. Hence, the order was erroneous as well as prejudicial to the interest of the revenue. In the said letter dated 30/03/2016, Ld. AO was directed to verify various issues as listed from serial nos.1 to 8. 3.3 The assessee defended the assessment order, inter-alia, by submitting that assessee’s income was already determined at much higher figure as proposed / approved by Ld. Joint Commissioner and therefore, the order could not be deemed to be prejudicial to

4 ITA No.233 & 234/Jodh/2018 M/s Madan Lal and Party Assessment Years: 2013-14 & 2014-15 the interest of the revenue. The assessee also pleaded that doctrine of merger was applicable to the order since the assessment order had already been merged with the order of this Tribunal passed on 13/09/2017 and therefore, invocation of revisional jurisdiction u/s 263 would not be valid one. 3.4 However, rejecting the same, Ld. Pr.CIT opined that the proposed disallowance of Rs.856.70 Lacs u/s 40A(2)(b) was reduced to Rs.268.50 Lacs in the final assessment order which make the order erroneous as well as prejudicial to the interest of the revenue. It was also opined by Ld. Pr.CIT that the revenue was in further appeal before Hon’ble High Court against the order of Tribunal and therefore, if the department succeeds on additions u/s 40A(2)(b), it would not be possible to substitute the disallowance of Rs.268.50 Lacs with Rs.856.70 Lacs. Accordingly, Ld. AO was directed to amend the assessment order. At the same time, keeping in view the order of Tribunal, Ld. AO was directed to keep the total income at the same figures as assessed in order dated 30/03/2016. Aggrieved as aforesaid, the assessee is in further appeal before us assailing invocation of revisional jurisdiction u/s 263. 4. Upon careful consideration of factual matrix as enumerated in the preceding paragraphs, it is quite evident that entire cash purchases were disallowed by Ld. AO and therefore, no separate addition was made u/s 40A(2)(b). The coordinate bench of Tribunal confirmed the deletion of additions so made and also noted that the assessee had satisfactorily demonstrated by way of documentary evidences that no undue benefit was passed on to the related

5 ITA No.233 & 234/Jodh/2018 M/s Madan Lal and Party Assessment Years: 2013-14 & 2014-15 parties u/s 40A(2)(b) as alleged by Ld. AO in the assessment order. This being the case, doctrine of merger would clearly apply to the facts of the case. The whole matter of disallowance u/s 40A(3) as well as 40A(2)(b) was subject matter of adjudication before Tribunal and the same was clearly binding on the revenue authorities. This being the case, the jurisdiction u/s 263 could not be exercised on the principle of doctrine of merger. In the circumstances, the revisional jurisdiction u/s 263 could not be invoked merely to rectify the figures in the assessment order. 5. Therefore, on the facts are circumstances of the case, we do not concur with the stand of Ld. Pr.CIT in invoking jurisdiction u/s 263. By quashing revisional order dated 07/03/2018, we allow the appeal. 6. The facts are identical in AY 2014-15 wherein the assessee was assessed on similar lines. The Ld. Pr.CIT, invoked jurisdiction u/s 263 on similar logic and reasoning and issued similar directions. We find that the Tribunal order is common order for AYs 2013-14 & 2014-15 and the facts as well as issues are identical as they are in AY 2013-14. Therefore, our findings as well as adjudication as for AY 2013-14 shall mutatis-mutandis, apply to this year also. By quashing the revisional order dated 07/03/2018, we allow the appeal.

ITA No.233 & 234/Jodh/2018 M/s Madan Lal and Party Assessment Years: 2013-14 & 2014-15

Sd/- Sd/- (Sandeep Gosain) (Manoj Kumar Aggarwal) �ाियक सद� / Judicial Member लेखा सद� / Accountant Member

मुंबई Mumbai; िदनांकDated : 21/12/2020 Sr.PS:-Jaisy Varghese आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent 2. आयकरआयु�(अपील) / The CIT(A) 3. आयकरआयु�/ CIT– concerned 4. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, जोधपुर / DR, ITAT, Jodhpur 5. गाड�फाईल / Guard File 6.

आदेशानुसार/ BY ORDER,

उप/सहायकपंजीकार (Dy./Asstt.Registrar) आयकरअपीलीयअिधकरण, जोधपुर / ITAT, Jodhpur.