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Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,
Before: SHRI B.P. JAIN
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘SMC’ BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER [A.Y. 2010-11] Shri Joginder Singh Kharab Vs. The I.T.O Prop. M/s Joginder Engg. Works Ward 41(5) 15/27, East Punjabi Bagh New Delhi New Delhi PAN : AHAPK 3019 L [Appellant] [Respondent] Date of Hearing : 11.10.2017 Date of Pronouncement : 13.10.2017 Assessee by : Shri Suresh K. Gupta, CA Revenue by : Shri T. Vasanthan Sr. DR ORDER This appeal of the assessee arises from the order of the ld. CIT(A)-14, New Delhi vide order dated 30.11.2016 for assessment year 2010-11.
The assessee has raised following grounds of appeal:
“1. The Ld. CIT has erred both in law and on facts in assuming jurisdiction u/s 147 of the I T Act ignoring the fact that there was no independent application of mind by the AO on the quantum of income escaping assessment and there was no satisfaction by the AO as per the information provided to the appellant that income chargeable to tax has escaped assessment and assessment order has been passed without the appellant being provided the reasons recorded by the AO at the time of issue of notice u/s 148.
2. The order under appeal is bad in law on the ground that the AO has made addition based on the reasons not recorded by him based on the reason recorded u/s 148 of the IT Act and the sustained addition of Rs 4,78,130/- (Rs 6,12,332/- -(minus) Rs 1,34,202/-) is based on no material.
The order under appeal is illegal and without jurisdiction as the same has been passed in consequence of the proceeding u/s 147 without recording reasons for reopening as is evident from the undated copy of the reasons provided post completion of assessment 4. Without prejudice to other grounds the order under appeal is without jurisdiction as the AO has not provided till completion of assessment copy of the reasons recorded at the time o f issue of notice u/s 148.
The AO has erred in law and also in facts in issuing notice u/s148 ignoring the fad that the return of income in response to notice u/s 142(1) was available for scrutiny u/s 143(2) and there was no fresh tangible material before the AO to justify the action u/s 147.
6. The appellant craves leave to add, delete, modify / amend the above grounds of appeal with the permission of the Hon’ble appellate authority.”
3. I have heard both the sides and perused the relevant material on record. At the outset, it was pointed out by the ld. counsel for the assessee that the reasons recorded, copy of which is placed at pages 30 to 32 of the paper book, is relevant and hence reproduced hereunder:
“An intimation in the case of Sh. Joginder Singh Kharab was received from the ADIT(lnv.),Unit- IV(2)r New Delhi by stating therein the following facts:- Survey was conducted in the case of Sh. Joginder Singh Kharab on 13.05.2011 at his business premises at 15/27. Punjabi Bagh, New | Dets-110026 in connection with the search & seizure in the case of M/s. Satya Prakash & Brothers Pvt Ltd.(Date of Search 28.10.2010). The search was conducted in connection with the CWG Games, 2010.The assessee is a truck owner and playing it for loading unloading of building material.
The statement of Shri Joginder Singh was recorded during the course of survey. During the course of statement, Sh. Joginder Singh has stated that he has done work for Rs. 5 to 6 lakh during the year 1.4.2009 to 31.3.2010 and for Rs. 28 lakh during 1.4.2010 to 31.3.2011. He has also stated that he has not done any work for SBP Pvt. Ltd. during 1.4.2009 to31.3.2010 and done work for an amount of Rs. 23 lakh during 1.4.2010 to 31.3.2011. The amount includes cartage, labour and cost of rodi and Bajri etc. Assessee has not shown any delivery challan and stated that h has enclosed these challans with the bills submitted for payment to M/s SPB Pvt. Ltd. the assessee has stated that he is playing truck for the last 30-40 years and purchasing material from stone crashers at Jhunjhnu, Rajasthan and produced copy of bills.
The assessee was further asked to submit any documentary evidence in support of his claim of supply the material(proof of delivery/receipt of material) to M/s. SPB Pvt. Ltd. The assessee failed to produce such evidence. The copy of bank statement, copy of bills, copy of purchase bills are taken as extract. The perusal of copy of account of M/s Satya Prakash & Brothers Pvt. Ltd. in the books of Shri Joginder Singh shows that he has supplied material amounting to Rs. 23 Lacs during financial year 2010-11 whereas M/s Satya Prakash & Brothers Pvt. Ltd. has shown purchase of Rs. 71.08 Lacs. No. explanation was given by the assessee for this discrepancy. Hence, the difference ofJRs.71.08Lacs & Rs.23 Lacs i.e. Rs.48.08 Lacs may be added to the income of the assessee.
M/s Satya Prakash & Brothers Pvt. Ltd. is getting receipts from the Government Agencies but to suppress profit, it is including in introducing fake expense invoices. In view of the precise information, as discussed above, I have reasons to believe income of the assessee has escaped.
Keeping in view of the above facts, it is requested that necessary approval u/s 151(2) may be accorded for initiating proceedings u/s 148 of the I.T. Act in order to book income which has escaped assessment”.
From the perusal of the reasons recorded, it is evident that the main charge is against Shri Satya Prakash & Bros Pvt. Ltd and that too, for the assessment year 2011-12. As regards the charge against the assessee, it is stated that he has not done any work for SPB Pvt. Ltd from 1.4.2009 to 31.03.2010, but has done work during the period 1.4.2010 to 31.03.2011. Accordingly, as per the reasons recorded there is no charge against the assessee and the reasons so recorded are vague and the Assessing Officer has entered into jurisdiction of section 147/148 of the Act without application of mind and therefore, assessment of jurisdiction u/s 147/148 of the Act is bad in law and accordingly, the assessment so made is directed to be quashed.
Since the legal ground of the assessee is allowed and the assessee has succeeded on legal grounds, I do not decide the issue on merits. Accordingly, the appeal of the assessee is allowed.
In the result, the appeal of the assessee in is allowed. The order is pronounced in the open court on 13 .10.2017.