COMM. OF INCOME TAX vs. JITENDRA BHANDARI GANJPARA

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TAXC/24/2009HC ChhattisgarhCGHC01011209200909 December 2013Bench: HON'BLE THE CHIEF JUSTICE,HON'BLE SHRI JUSTICE MANINDRA MOHAN SHRIVASTAVA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that for the first two grounds raised by the CIT, the AO had considered the Assessee's surrender of ₹23,32,510/- and disallowed vehicle maintenance of ₹34,938/- based on the facts. The ITAT had rightly concluded that the CIT's order was merely a change of opinion, and thus, the CIT's order was rightly set aside. Regarding the third ground concerning warranty repair expenses, the High Court noted that this point had already been decided against the Department in a bunch of cases on 12.11.2013, with the leading case being Tax Case-16 of 2008 (Assistant Commissioner of Income Tax vs. M/s Sewa Singh Oberai & Company, Durg). It was also noted that one of the appeals in that bunch, Tax Case-19 of 2008, was against the Assessee in the present case. Therefore, there was no justification to interfere with the ITAT's order. The appeal was dismissed.

What were the facts?

The Revenue (Commissioner of Income Tax, Raipur) filed a tax appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 27.11.2008 passed by the Income Tax Appellate Tribunal (ITAT), Bilaspur Bench. The ITAT had allowed the appeal of Jitendra Bhandari (the Assessee) for Assessment Year 2002-03, setting aside an order passed by the Commissioner of Income Tax (CIT) under Section 263. During a survey under Section 133-A on 20.04.2001, the Assessee surrendered ₹8,50,000/- for AY 2001-02 and ₹14,80,510/- for AY 2002-03. The Assessing Officer (AO) passed an assessment order on 31.03.2004, enhancing the Assessee's income. The CIT, by an order dated 28.02.2006, cancelled the AO's assessment order under Section 263, citing it as erroneous and prejudicial to revenue. The Assessee's appeal to the ITAT was allowed on 20.09.2006 due to lack of opportunity. The CIT again cancelled the assessment order on 21.11.2007. The Assessee's subsequent appeal was allowed by the ITAT on 27.11.2008, leading to the present appeal by the Revenue.

What were the issues?

The High Court admitted the appeal for hearing on the following substantial question of law: 1. Whether the order dated 8-1-2010 passed by this Court in Tax Case (Income Tax Appeal) No.46 of 2008 (Commissioner of Income Tax V Harish Kumar Shah) is applicable to the facts of the instant case? The CIT had held the AO's order erroneous and prejudicial to the interest of revenue on three grounds: (i) The AO accepted the Assessee's explanation for AY 2002-03 without proper verification of accounts. (ii) The AO disallowed vehicle maintenance of ₹34,938/- without examining the personal element of car expenditure. (iii) The Assessee claimed warranty repair expenses of ₹54,63,127/- by making a provision for future expenditure, which the CIT deemed impermissible. The Assessee contended that the AO's order was not erroneous or prejudicial to the revenue. The Revenue argued that the AO failed to properly verify accounts, did not adequately examine vehicle maintenance expenses, and wrongly allowed provision for future warranty repairs.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 133-A,Section 263

AI-generated summary — verify with the full judgment below

»• IN THE HON'BLE HIGH CQURTOF JUDICATURE FOR CHHATTISGARH AT BILASPUR •sae. APPELLANT (Revenue) RESPONDENT (Assessee) TAXCASENo:^ OF 2009 T COMMISSIONER OF INCOME TAX, RAIPUR VERSUS JITENDRA BHANDARI GANJ PAKA, DURG. (C.G) ASSESSMENTYEAR : 2002-03 APPEAL UNDER SECTION 280-A OF THE INCOME TAXACT, 1961 _

HIGH COURT OF CHHATTISGARH AT BILASPUR CORAM: HON'BLE SHRI YATINDRA SINGH, C.J. HON'BLE SHRI MANINDRA MOHAN SHRIVASTAVA, J. Tax Case No. 24 of 2009 Commissioner of Income Tax, Raipur VERSUS Appellant (Revenue) Respondent Jitendra Bhandari, Durg. Appeal under Section 260-A ofthe Income Tax Act. 1961 Appearance: Shri Anand Dadariya, counsel for the Appellant. Shri MK Sinha, counsel for the Respondent. JUDGEMENT (10"'December,2013) 1. This is a tax appeal under section 260-A of the Income Tax Act, 1961 (the Act) against the order dated 27.11.2008 passed by the Income Tax Appellate Tribunal, Bilaspur Bench, Bilaspur (the Tribunal) in respect of Assessment Year (AY) 2002-03 allowing the appeal filed by Jitendra Biiandari (the Assessee) and setting aside the order of the Commissioner Income Tax (the CIT) under section 263 of the Act. THE FACTS 2. A survey was conducted under section 133-A of the Act on 20.04.2001. During the survey, the Assessee surrendered a sum of ?8,50,000/- for the AY 2001-02 and ?14,80,510/- for the AY 2002-03 (total?23,30,510/-). 3. The Assessee filed a return on 28.10.2002 in which the income for the AY 2002-03 was showed to ?31,02,866/-. 4. The Assessing Offlcer (the AO) passed order dated 31.03.2004 enhanced the income to ?32,86,880/-. 5. The CIT by his order dated 28.02.2006 cancelled the assessment dated 31.03.2004 under section 263 of the Act and send the matter for re-assessment. T mT-i-'

./' Kf""^. "%> f S. "^ ^ ^?^^^'-^*^ •^J^- 6. Aggrieved by the aforesaid order, the Assessee filed an appeal which was allowed by the Tribunal on 20.09.2006 on the ground that reasonable opportunity was not afforded to the Assessee. The matter was sent back to the CIT for fresh decision. 7. The CIT by order dated 21.11.2007, again cancelled the assessment order dated 31.03.2004 and the matter had been sent back for passing fresh assessment order. 8. Aggrieved by the aforesaid order, the Assessee filed an appeal which was allowed by the Tribunal on 27.11.2008. Hence, the present appeal by the Income Tax Department. THE DECISION 9. We have heard counsel for the parties. 10. This appeal was admitted for hearing on 08.02.2010, on the following substantial question of law: 'Whether the order dated 8-1-2010 passed by this Court in Tax Case (Income Tax Appeal) No.46 of 2008 (Commissioner of Income Tax V Harish Kumar Shah) is applicable to the facts of the instant case?' 11. Irrespective of the decision of the case mentioned in the preceding paragraph, in the present case, the CIT has held the order of the AO erroneous and prejudicial to the interest of revenue on the following three grounds: (i) The AO accepted the explanation submitted by the Assessee for the AY 2002-03 without properly verifying the accounts; (ii) The AO had dis-allowed the vehicle maintenance to the extent of ?34,938/-. According to the CIT, the AO ought to have examined» the extent of personal element in the expenditure on car and thereafter, should have considered the question of dis-allowance under the head of vehLcle maintenance; IHW

''•"^•^ ~sc-^ c °) padma (iii)The Assessee had claimed warranty repair expenses of ?54,63,127/- by making provision for future expenditure and this could be done. 12. So far as the first two grounds are concerned, the AO did not consider the detail of the accounts in view of the fact that the Assessee had already surrendered a sum of ?23,32.510/- and dis-allowed the vehicle maintenance of ?34,938/- on the basis of the facts and circumstances of this case. The order of CIT was merely a change of opinion as it has been pointed out by the Tribunal and the order of the CIT was rightly set aside. 13. So far as third ground is concerned, this point has already been decided against the Department in a bunch ofcases on 12.11.2013 in which the leading case was Tax Case-16 of 2008 (Assistant Commissioner of Income Tax vs. M/s Sewa Singh Oberai & Company, Durg). It is relevant to point out that one of the appeals in this bunch namely, Tax Case-19 of 2008 was against the Assessee in this case. 14. In view of above, there is no justification to interfere with the order passed by the Tribunal. The appeal is dismissed. Sd/- Chief Justice Sd/- Manindra Mohan Shrivastava Judge ;:Tn^s.'w^ss'^h'-s'--"'^ ^^^^''- SBW"—""—

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